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Your Guardia Nationale is supposed to be small. But what if there was a government that declared itself Marxist-Leninist, loyal to the great revolution of Fidel Castro, and they abrogated the neutrality treaty?

It is a new ball game, as Mao and Hitler declared. What would be the status of the United States then? Would it not be similar to Guantanamo and Cuba?

Mr. GROVE. You posit a major assumption in the question with Panama in a hypothetical way. One would have to look at that very specific legal action of the successor government to see precisely what it was they had done with respect to the agreements between us, and where that left the coming into force of the treaties as scheduled for October 1.

We obviously would have to come to an assessment of what the possibilities would be with that government, and how our interests might be affected by such a drastic and unwelcome change.

We would have to, I have no doubt, seek to enter into discussions with such a new government to find out what was really on their minds, or what was in the realm of the possible.

We would secure the advice of General McAuliffe and Ambassador Moss and others on the scene whose assessments would be fundamental.

Mr. DORNAN. But isn't it possible that we could go into a mold, as we did with Cuba, don't breathe, don't move?

We recognized that Guantanamo Bay 9-year treaty; don't touch that. Castro decided to go low key and let it sit that way for several decades.

Isn't that true that could happen?

Mr. GROVE. I am sure there are a number of possibilities. This is so complex. It is hard to say yes or no. I should think the possibilities are many, and I would think, again on this question, because we are talking about the treaty, it does have legal aspects to it. We would have to examine what occurred step by step, and analyze its implications for us in that fashion.

Mr. DORNAN. But you both, General McAuliffe and you, have given this deep thought, and before the debate comes on the House floor, I will have to ask the help of some constitutional and international lawyers as to exactly how to accept this.

We are, in the House, either going to like it or lump it, or let the money go up to $5 billion, $6 billion or $7 billion. It is not a deliberate misrepresentation, but bad bookkeeping.

Suppose this goes to $8 billion. You should have a break point. So we find out next week on the House floor.

Mr GROVE. I appreciate the difficulties. They are certainly real. Mr. HUGHES. Just one thing: I know the hour is late, but I cannot resist the temptation.

Who was the one vote? Was that our chairman, Carroll Hubbard?

Mr. DORNAN. When Pearl Harbor was destroyed, there was one vote that we would not declare war. In this case, it was a woman. There is always one person who will say, I vote against the rule.

Mr. HUGHES. I am sorry I asked.

I do have a couple of serious questions. First of all, I am not familiar with the manual that was introduced into evidence. Can you tell me a little bit about the manual?

Mr. GROVE. I can try to describe it to you. I am not familiar with it. It has a red cover. It is called, Panama Committee for Human Rights, Panama, November 1976. It has no attribution.

Mr. HUGHES. I was trying to determine the nature of it.

Mr. O'BRIEN. That was submitted to the subcommittee approximately 2 years ago, Congressman. It was purportedly a payroll-a copy of a payroll record. What I was trying to confirm was whether or not in fact

Mr. HUGHES. Who prepared it?

Mr. O'BRIEN. A citizen group that identifies itself as the Panama Human Rights group.

Mr. HUGHES. I wonder if the Secretary mentioned is the same Lopez that was the Panama consul?

Mr. GROVE. I am unable to answer that question. I would be glad to take the question. It is not all that uncommon a name, and I just do not know how we could pursue that.

[The following information was supplied in response to the above:]

PANAMANIAN CONSUL PURCHASE OF AMMUNITION AND GUNS

I have no information indicating that it is or is not the same Lopez, i.e., the one who was Panama's Consul in Miami.

Mr. HUGHES. On the assumption it is the same individual, is there any suggestion, or do you have any evidence, that he was indeed acting on behalf of the Panama Government?

Mr. GROVE. No, nor is this comprehensible. I don't know what this matrix is, looking at it. I am just having difficulty.

[The following information was supplied in response to the above:]

Yes. On December 11, 1978, the Panamanian Embassy in Washington informed us by diplomatic note that "the Panamanian Consul in the City of Miami, Mr. Edgardo Lopez Grimaldo, was given official instructions to acquire through purchase and sale the ammunition and guns referred to herein above". The note stated further that "the said weapons and ammunition have been received by the National Guard of Panama. (and) are for the exclusive use of the National Guard . . . and the same are within the territory of Panama . . .”.

Mr. HUBBARD. Mr. O'Brien would like to introduce this booklet for the record. Without objection, it is so ordered.

Mr. O'BRIEN. On page 6 of the document, there is a narrative, and it refers to the government payroll of the G2, which includes Edgardo Lopez, an employee of the Government of Panama, G2. It is worthy to note that his salary is B/447.00, when another employee had a salary of B/16.79.

It goes on to say, Mr. Lopez holds now the post of Panama consul in the city of Miami, Fla., to cover the large Panamanian community there.

There is a narrative that complements the name that gave staff reason to believe that perhaps it is the same man.

Mr. HUGHES. I would just repeat my question, whether there is any evidence that he was acting on behalf of the Panamanian Government at the time he involved himself?

Mr. GROVE. I am sorry, I will have to ask for your understanding. Because there is an indictment, I cannot be responsive. I cannot go beyond the perception that we have of this as a Department and the Panamanian response.

So those are the two considerations I have addressed.

Mr. HUBBARD. Thank you, Congressman Hughes, for your questions.

Are there any other Members of Congress? I hate to cut this off. I would like to say, I know Mr. Grove and General McAuliffe have earned their pay this afternoon. I want to call on Congressman Carney, and then Carl Perian, chief of staff of our full committee, and then we will conclude.

Mr. CARNEY. Would it be fair to say that you are prepared for a rejection of H.R. 111?

General MCAULIFFE. Yes, I think we are prepared for any contingency. It raises many questions as to how we will handle some of the issues.

But in terms of trying to protect U.S. lives and property, and to keep that canal at least protected, yes, we would be prepared. Mr. PERIAN. General, in negotiations during the day with our staff I understand that for you to be more forthcoming in terms of some of the classified material relating to alleged gunrunning into Nicaragua, that only a few of the paragraphs of your DOT briefing would be top secret, and that the rest of your briefing would be at a higher S-1 level?

General MCAULIFFE. Yes.

Mr. PERIAN. And while staff is not cleared at that level, you would be able to make a presentation to the members of the committee?

General MCAULIFFE. That is correct.

Mr. PERIAN. We would ask you to begin the preparation for such a briefing. We can inform you perhaps tomorrow of time, place and date.

Mr. HUBBARD. Thank you very much, again, to General McAuliffe and Brandon Grove of the State Department.

You have been cooperative and patient and it has been an effort to answer the complex questions. As chairman of this subcommittee, I express my appreciation to you for being with us and for your presentation, though at times we did not all agree.

We try to reach the right conclusions in the best interests of our country.

Thank you both.

At this point we have one Member of Congress and one witness under subpena who will testify.

The Member of Congress, incidentally, will be testifying eagerly, voluntarily, and again, we do have one witness under subpena. I predict we can be through by 6 o'clock.

If you could be patient, those of you who are with us and those who are interested, we now will call on Congressman Hansen. Mr. Hansen says he will wait.

Can we ask Mr. Armando Selva to come to the witness stand? Mr. Selva is here under subpena to our committee. It is the choice of his as to whether or not any photographs are taken or television cameras.

It is up to you, Mr. Selva.

Mr. SELVA. No photographs.

Mr. HUBBARD. That is his privilege, CBS, and the Mayfield, Ky., Messenger, and other media that are present.

Would you please stand and raise your right hand?

Do you swear to tell the truth, the whole truth, and nothing but the truth, so help you God?

Mr. SELVA. I do.

STATEMENT OF ARMANDO SELVA

Mr. SELVA. Mr. Chairman and Members of Congress, thank you for giving me the opportunity to appear before you today. I am a U.S. citizen living in Miami Beach, Fla.

Until last April, I worked at the Garcia Gun Shop in Miami. My Dade County registration as a gun salesman is No. E78-70. I had been a gun salesman for Mr. Garcia ever since he bought the store, 13 months earlier.

Before that time, I worked for 4 years at the same location in the same capacity for the National Gun Traders Co., the owners before Mr. Garcia.

I am here today to testify with regard to the sales of weapons by Mr. Garcia to citizens of Panama under circumstances which formed the basis for criminal prosecutions against the buyers in Florida.

I was a witness to the sale of the following weapons: 10 cases of 30-06 ammunition, 10 cases of shotgun ammunition and 10 Remington 30-06 rifles. Mr. Fernandez, the manager of the store, told me at that time, told me that that was the consul of Panama that was making the purchase.

At that time I offered Mr. Fernandez assistance in filling out the registration papers which are required by law when firearms sales are made, and Mr. Fernandez' reply was, no thanks, I will take them to the consul of Panama myself.

I had met Mr. Pujol during one of these visits to the shop. I was very surprised at the size of the sales that were made, since I had never seen sales of large quantities made to one particular individual before.

It also seemed to be very unusual to see sales being conducted under such unusual conditions. They were made like a personal sale, rather than a personal sale which would be normally made with normal procedures.

I was present when Mr. Pujol came to pick up the firearms which, at that time, he was arrested by the ATF.

This ends my prepared statement I will be happy to answer any questions which you may have in regard to this.

Mr. HUBBARD. Thank you.

Our staff counsel, Larry O'Brien, will ask the questions that I would ask otherwise.

Mr. O'BRIEN. Can you just give me a little background. Have you ever been affiliated with the Nicaraguan Government in any way? Mr. SELVA. No.

Mr. O'BRIEN. And you have not-you have been subpenaed to testify here today?

Mr. SELVA. Yes; I have.

Mr. O'BRIEN. You testified that you were an employee of the National Gun Traders Co. in Miami, and subsequently the Garcia Gun Shop.

What was the period of your employment with that establishment?

Mr. SELVA. The period of my employment with National was 11 months.

Mr. O'BRIEN. And who were the managers of the Garcia Gun Shop?

Mr. SELVA. Juan Fernandez.

Mr. O'BRIEN. Did you leave of your own violition or were you asked to leave?

Mr. SELVA. No, I was asked to leave.

Mr. O'BRIEN. Why do you think you were asked to leave?

Mr. SELVA. I was in charge of records for Mr. Garcia and when I saw the large amount of ammunition and guns which came in, it caused interest, because I had never seen this large amount of ammunition coming for one particular person.

So I made inquiries of Mr. Fernandez, I asked, who is all this ammunition for? He told me it was for the consul of Panama, and not to ask any more questions because he would answer them because it was none of my business.

Mr. O'BRIEN. What was the inventory of the store? What kinds of guns did they normally sell?

Mr. SELVA. I would say 80 percent of the stock is-40 percent of the stock is hunting rifles; 40 percent is handguns; 20 percent are guns which would be classified as military weapons.

Mr. O'BRIEN. And this type of ammunition coming in all of a sudden, was this similar to-what kind of supplies?

Mr. SELVA. The ammunition could be classified as military, because it was 30-06 ammunition which is commonly used in military weapons.

Mr. O'BRIEN. How many representatives did you see, or employees of the Panamanian Government, enter the Garcia Gun Shop? Mr. SELVA. I saw Mr. Pujol. He was later identified to me as the consul. I didn't know he was at the time.

About five, six times.

Mr. O'BRIEN. Were any of these individuals carrying distinctive papers or any other device or identification which could confirm their employment with the Panamanian consul?

Mr. SELVA. They were never shown to me. The times Mr. Pujol came to the door, he always asked for Mr. Garcia or Mr. Juan Fernandez, and they always went to the office and talked privately. I was never allowed in the room.

Mr. O'BRIEN. You indicate that they did have permits or forms from the consulate; isn't that correct?

Mr. SELVA. I was told that by Mr. Juan Fernandez.

Mr. O'BRIEN. Were you ever a witness to any conversations or transactions involving weapons to be conveyed to these people? Mr. SELVA. I was witness to the time that the consulate himself and Pujol came to the store. That was the time that I offered my help to Juan Fernandez, and they told me he was the consul, and he would take care of it.

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