Deceased Panamanian dictator Manuel Noriega was said to have turned his country into one of the most emblematic examples of a “narco-state” in Latin American history, and his dealings with Colombia’s biggest drug bosses laid the groundwork for Panama’s role in the global drug trade for decades after his 1989 arrest by US troops. We explore why Panama remains a drug trafficking haven for the successors of the Colombian criminals that Noriega helped make rich.

Notorious former Panamanian dictator Manuel Noriega died in a Panama City hospital on May 29 due to health complications. The 83-year-old former strongman had been under house arrest in his native country after serving time in both the United States and France on drug-related charges.

Noriega climbed to power in 1981 following the untimely death of Panama’s military leader, Omar Torrijos. Noriega was Torrijos’ right-hand man, but both Noriega and the US government have been accused of being behind Torrijos’ death in an airplane crash.

As Panama’s de facto ruler, Noriega opened the door for drug traffickers to safely move their drugs through the country in exchange for a cut of the earnings — reportedly upwards of $100,000 per load.

One of his key collaborators was notorious Colombian drug lord Pablo Escobar, whose Medellín Cartel at the time controlled the majority of the world’s cocaine trade.

Noriega was later accused in a US court of accepting up to $60 million in bribes from cartel members, who apparently also paid Panamanian banks 2 percent of proceeds to launder their drug money. Up to $2 billion belonging to the Medellín Cartel may have been “cleaned” in these banks.

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Colombian drug bosses also used neighboring Panama as a hideout. When Escobar’s group assassinated Colombian Justice Minister Rodrigo Lara Bonilla in 1984, several drug lords in Escobar’s network sought refuge across the border, allegedly under the protection of Noriega.

The US invasion of Panama was soon blamed for worsening trafficking and money laundering problems, with locals commenting: “They took Ali Baba and left us with the 40 thieves.”

Panama appears to be the place where the Medellín Cartel sealed its deal to move drugs with Mexican traffickers, according to academic reports. This landmark collusion was the first step in the ascent of the Mexican cartels that today dominate the business of trafficking cocaine to the United States.

As a result, Noriega has been accused of turning Panama into a “narco-state” or “narco-kleptocracy,” running a government so corrupt that following his extradition from the United States to France in 2010, it was speculated that Panama had intentionally avoided repatriating him for trial as his testimony would have compromised many national elites.

Yet Noriega’s criminal activities were far from secret to his US allies. He was a CIA operative from the 1960s until 1988, according to reports, feeding the United States intelligence on drug cartels and assisting in covert operations.

Ultimately, Noriega’s downfall was more motivated by the political troubles he was giving the United States than by his apparent corruption. It became clear to Washington that Noriega was more interested in selling his services to the highest bidder — including the United States’ political enemies — than maintaining good relations.

The dictator’s luxurious life of drug-fueled parties and lavish mansions was abruptly cut short in 1989, when the US military invaded Panama. The controversial move was publicly justified as a response to Noriega’s drug ties, which by then had become too brazen for the US government to tolerate. Noriega was captured during the operation, and later was separately tried and sentenced by US, French and finally Panamanian justice.

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While the days of the Medellín Cartel have long passed, a new generation of Colombian drug trafficking organizations still value Panama for business. Indeed, the US invasion of Panama was soon blamed for worsening drug trafficking and money laundering problems, with locals commenting: “They took Ali Baba and left us with the 40 thieves.”

Panama’s attractiveness for criminals is largely due to its geography. Acting as a gateway between cocaine-producing South America and overland trafficking routes that run through Central America and into the United States, Panama is inherently strategic, in particular for criminal groups in neighboring Colombia.

The 57th Front of the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia – FARC) maintains a presence on the border between the two countries, as do the so-called BACRIM (a Colombian term meaning “criminal groups”). Both of these groups have come to dominate cocaine production and exportation in Colombia, and Panama remains a thriving trafficking transit point for these groups, as illustrated by a recent map of transnational smuggling activity.

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But perhaps Panama’s most famed appeal for criminals, present and past, is its secretive banking sector, which has placed the country on and off international money laundering watch lists. As last year’s Panama Papers scandal revealed, Panama City is still a good place to funnel dirty money into legitimate institutions, for the benefit of crime bosses and politicians alike.

On the other side of the Panama Canal, the country’s second city of Colón’s is home to a bustling free trade zone. This contraband hub is where drug money has historically bought everyting from cigarettes to electric appliances, turning dirty narco-dollars into clean Colombian pesos.

While narco-corruption has not reached the levels seen during Noriega’s rule, the co-opting of state actors by criminals still greatly hinders anti-narcotic efforts. There have been cases of security officers moonlighting for drug gangs, and one former Panamanian police officer left the force to become a commander of the FARC’s 57th Front.

Due to these factors, and Panama City’s renowned tourism industry, the capital is still a refuge and meeting point for criminals. Only last year, one of Colombia’s most wanted men was captured in the country, apparently fleeing a security force crackdown at home.

Yet as Colombian criminal groups have evolved, so too have their activities in Panama. Colombia’s biggest BACRIM group, the Urabeños, has been diversifying its sources of criminal revenues to include illegal mining, and it has been selling illegal gold in Panama. In addition, the group apparently runs legal businesses as well as prostitution networks in the country.

Furthermore, in the decades since the Medellín Cartel first brought Mexican traffickers into the cocaine market, Panama has increasingly come under the influence of Mexican actors. Now, the fracturing of Mexican groups may be catalyzing yet another criminal evolution, with Panamanian gangs moving up the criminal ladder as the Mexicans did before them.

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