American states render such guarantees illusory. Their words guarantee what their actions make impossible.

Coupled with the dissolution of the Panama Canal Zone, which makes all of the territory of the Canal Panamanian, Panama is almost certain to bring into the immediate area of the Canal its ill-considered ventures in international guerrilla warfare. The Department of State knows full well that when the terms essential to a treaty are rendered impossible of performance by one of the parties to the treaty, that treaty ceases to be of any force and effect. When that breach of the terms of the treaty has occured prior to the entry into force of the treaty, the treaty is of no force and effect. It is to all intents and purposes, null and void.

EVIDENCE

(1) Affidavit filed Tuesday, May 1, 1979 in Miami Federal Court-Panamanian intelligence officials directed airline officials/Panamanian consul in Miami to smuggle arms to the Sandanista guerillas in Nicaragua-Affidavit by BATF Special Agent Donald Kimbler.

(2) Grand Jury indictments against: Jose A. Pujol; Miami air cargo manager for Air Panama. Jose Antonio (Tony) Alvarez; Miami gun dealer/exporter. Carlos Wittgreen; President of Caza y Pesca, partnership with Colonel (Brigadier General) Manuel Noriega-head of Panamanian G2; company is a front for Panama intelligence; reported Panama intelligence agent. James Allen Howell; diplomatic security analyst and former lecturer in electronic security and police subjects at the National Intelligence Academy in Fort Lauderdale, a private police training and equipment research firm. Walter Donald McComas; Miami Exporter.

May 15-Grand jury indictments:

The four-count indictment says all five conspired with the former Panamanian Consul in Miami, Edgardo Lopez to ship surplus military weapons to Panama without export licenses. All released on $25,000 bond.

(3) Kimbler's affidavit stated that Pujol acted as the middleman for Lopez in making gun deals with the Garcia National Gun Shop. Garcia employees stated that Pujol was prepared to make a $2 million purchase. Pujol said he would personally put the guns on an airplane without a license.

(4) Pujol purchased guns-paying cash-September 20, 1978. September 29, 1978. October 9, 1978. November 7, 1978. November 9, 1978.

(5) Kimbler interviewed Lopez and he admitted directing seven arms purchases on orders of intelligence officers in Panama.

(6) 1975 payroll records of the Panamanian National Guard show Lopez as a G2 agent with a salary second only to Colonel Noreiga.

(7) March 13 and 16, 1979 two vans equipped with false compartments were intercepted at Penas Blancas on the Costa Rica-Nicaragua border by the Nicaraguan National Guard. 70 M1 Carbines were traced to Universal Arms of Florida and Johnson Arms of New Jersey, manufacturers of these arms, which had then been shipped to the non-existent Caza y Pesca S.A. In Panama.

(8) On May 4, 1979, CRITICA, the government-backed Panamanian newspaper published an open call for recruits to join the Panamanian_international brigade. The call was made by Dr. Hugo Spadafora, former Vice-Minister of Health in Panama, and a close friend, former roomate of Panama's President Aristedes Royo. (9) On May 3, 1979, BATF agents in Texas arrested 4 men in a gun-running conspiracy involving 1,000 machine guns. Bail for one of the defendants was set at $1 million. BATF agents seized a shipment of machine gun parts on January 12, 1979. A Federal Grand Jury at Brownsville, Texas indicted the 4 men on April 24, 1979. It was reported that machine guns and parts had been shipped to Panama. (10) President Royo on May 11, 1979 stated that he had received no pressure from the U.S. to stop "any kind of aid" to the Nicaraguan terrorists.

(11) On November 28, 1978, State Department spokesman, Hodding Carter, said the Carter Administration had been unable to confirm reports that Cuba and other Latin American governments had been supplying weapons to the Sandinistas.

(12) The AP on May 5, 1979 quoted extensively from an unnamed Nicaraguan official as saying that the Carter Administration clearly had full knowledge that Panama was trafficking in arms on behalf of the Sandinistas but had taken no action to alert the Nicaraguan Government for fear of placing the Panama Canal treaties in jeopardy.

Mr. HANSEN. And also for the record I would like to introduce two Congressional Records and reports that were made during the time of the identification of the gun running, which I feel is perti

nent to the testimony before the committee, along with my testimony.

Mr. HUBBARD. Thank you.

[The following was received for the record:]

[From the Congressional Record, Vol. 125, No. 64, Monday, May 21, 1979]

A LAKE OF FIRE AND BRIMSTONE?-Panama GUN RUNNING IN THE CARIBBEAN (Mr. Hansen asked and was given permission to revise and extend his remarks.) Mr. HANSEN. Mr. Chairman, the Panamanian G-2 intelligence arms-smuggling operation on behalf of the Nicaraguan Marxist terrorists has now resulted in five persons being indicted in Miami on May 15. The operation was first made public by a sworn affivdavit filed in the Miami Federal Court on May 1, by the U.S. Bureau of Alcohol, Tobacco, and Firearms. This affidavit said that José A. Pujol, cargo manager of Air Panama, and Edgardo Lopez, "then Consul" of Panama in Miami, had shipped weapons to "Nicaraguan guerilla forces." Pujol was stated as seeking to buy $2 million in arms.

On May 16, the Miami Herald reported the following as having been indicted by the Miami Federal grand jury in connection with the case.

José A. Pujol, 36, Miami air cargo manager for Air Panama.

José Antonio (Tony) Alvarez, 31, a Miami gun dealer and exporter.

Carlos Wittgreen, president of Caza y Pesca, a Panamanian company and reported G-2 intelligence agent.

James Allen Howell, 33, diplomatic security analyst and former lecturer in electronic security and police subjects at the National Intelligence Academy in Fort Lauderdale, a private police training and equipment research firm.

Walter Donald McComas, 41, a Miami exporter.

According to this newspaper report, Special Agent Donald Kimbler of the Bureau of Alcohol, Tobacco, and Firearms asked Judge Palermo to place a $100,000 bond on Alvarez because of the latter's close connection with Col. (sic) Manuel Noriega, head of the Panamanian G-2 intelligence, Antonio (Tony) Alvarez is a Cuban exile married to a Panamanian closely linked to Carlos Wittgreen, also indicted.

The four-count indictment says all five conspired with the former Panamanian consul in Miami, Edgardo Lopez, to ship surplus military weapons to Panama without export licenses.

Questioned on the role of consul Edgardo López in this affair, Panama President Arístedes Royo said in Washington, D.C. on May 11 that López was not consul at the time he was interviewed by Alcohol, Tobacco and Firearms agents on November 10, 1978 and, therefore, acted in a private capacity. President Royo said López had been replaced as consul on October 11, U.S. State Department records, however, show that Edgardo López remained on as consul until December 1 or later. The State Department is unclear on the exact date. To the Alcohol, Tobacco and Firearms agents, López admitted, on November 10, 1978, to supervising seven shipments of arms to Panama on direct orders of officers in the Panamanian G-2 Intelligence. 1975 payroll records of the Panamanian National Guard show López as a G-2 agent. Carlos Wittgreen indicted on May 15 in absentia, is described as President of Caza y Pesca S.A., of Panama. According to Nicaraguan intelligence, this is a front operated by the Panamanian G-2 Intelligence, Nicaraguan intelligence also stated that Wittgreen was in Miami in February of this year attempting to buy 5,000 weapons. Arrested on February 22 as he attempted to leave the country with 22 weapons for which export licenses had not been issued, he was almost immediately released "on orders from higher up." The State Department has since indicated that he had a valid license for the export of 150 carbines.

On March 13 and 16, 1979, two vans equipped with false compartments were intercepted at Peñas Blancas on the Costa Rica-Nicaragua border by the Nicaraguan National Guard. Seized were 90 M-1 carbines, 34 FĂL 7.62 cal rifles, and large quantities of ammunition and material. According to Nicaragua sources, 70 M-1 carbines were traced to Universal Arms of Florida and Johnson Arms of New Jersey, manufacturers of these arms which had then been shipped to the nonexistent Čaza y Pesca S.A. in Panama.

On May 10, the Nicaraguan Ministry of Foreign Affairs expressed its serious concern over public events which show the involvement of the Government of Panama in the supply of arms to subversive forces attempting a takeover of the Government of Nicaragua. The Nicaraguan authorities have repeatedly protested the interference of the Government of Panama in the internal affairs of the country which has contributed to subverting public order in Nicaragua. This has included

the organizing in Panama of international brigades to join the ranks of the Marxist Frente Sandinista de Liberación National (FSLN) terrorist movement, attempting to overthrow the government of President Somoza.

Critica, the government-backed Panamanian newspaper of May 4, published an open call for recruits to join the Panamanian international brigades.

The call was made by Hugo Spadafora, former Vice Minister of Health in Panama, and close friend and one-time roommate of Panama's President Aristedes Royo. Spadafora is also known for his participation on behalf of the terrorist movement led by Amilcar Cabral in Guinea-Bissau.

On May 3 the U.S. Bureau of Alcohol, Tobacco and Firearms announced that its agents in Texas had arrested 4 men indicated in an alleged gunrunning conspiracy involving 1,000 machineguns. Bail for one of the defendants was set at $1 million. The Alcohol, Tobacco and Firearms agents seized thousands of machinegun parts on January 12 at a location in Devine, Tex., and a Federal grand jury at Brownsville indicted the four men on April 24. It is reported that machineguns and parts had been shipped to Panama.

President Aristedes Royo of Panama said at his press conference on May 11 in Washington, D.C.:

"We have enough intelligence, first, not to assign a consul to buy arms; second, not to put its arms in a commercial flight to Air Panama. I would say that if I am going to smuggle arms, as a head of government, in my account, we have planes in the Panamanian Air Force."

At the U.S. State Department press briefing on May 16, spokesman Hodding Carter asked whether the Department planned to investigate or give information on the Miami grand jury indictments, in view of the possible effect this could have on U.S. aid to Panama said simply that he would "take the question."

President Royo on May 11, said he had received no pressure from the United States to stop "any kind of aid" to the Nicaraguan terrorists, despite the fact that in January, Carter administration officials had to dissuade Torrijos from sending troops to aid the Sandinista guerrillas.

Yesterday, May 20, the Miami Herald printed the following complaint by Nicaraguan President Somoza:

SOMOZA SAYS COMMUNISTS LEAD UNREST

MANAUGA, NICARAGUA.-President Anastasio Somoza has accused Panama-based Communists of joining with several past and present presidents of neighboring nations in an attempt to overthrow him.

Somoza went on nationwide television and radio Friday after moderate opposition leader Alfonso Robelo called for a three-year provisional government to end what he called the "bloodbath in which Nicaragua is drowning.'

Somoza attacked President Aristides Royo of Panama, Panama military strongman Gen. Omar Torrijos, President Rodrigo Carazo of Costa Rica and former President Carlos Andres Perez of Venezuela.

"We will call Royo a liar when he says in Washington that he knows nothing about the battalions that have arrived in Nicaragua, battalions of mercenaries trained in Panama . . Somoza said.

"Eleven Panamanians, five Costa Ricans and three Spaniards, fooled by Omar Torrijos, have died in fighting with the national guard in Nueva Guinea (in southeastern Nicaragua)," he said. "They were all members of an international Communist ring."

Somoza called Carazo a "puppet" and said guerrilas, supported by Venezuela, Panama and Costa Rica, were crossing into Nicaragua from Costa Rica.

"Nicaraguans must be aware that there are messianic individuals like Carlos Andres Perez, with only a high school education . . . who, crazed by Venezuelan money, have thrown away millions trying to stir up the peaceful people of Nicaragua," Somoza said.

In an earlier speech, Luis Pallais Debayle, editor of the Somoza-owned newspaper Novedades, accused the nation's clergy of "openly supporting subversion."

Robelo, a leader of the Broad Opposition Front recently released from 10 days in jail, urged opposition groups to unite and form a provisional government to replace the regime of Somoza.

With the recent terrorism in El Salvador and revelations of Soviet missile and submarine activity in Cuba. Latin America is becoming a real hotbed of military activity. Today we find the President of Mexico in company with the President of Costa Rica breaking diplomatic relations with Nicaragua just after a visit from Fidel Castro of Cuba. The Washington Post of May 21 tells the story:

MEXICO TO CUT TIES TO SOMOZA REGIME

Cancun, Mexico.-President Jose Lopez Portillo announced today that Mexico is breaking diplomatic relations with Nicaragua because of the "horrendous genocide" committed by the government of President Anastasio Somoza. He called on other Latin American countries to take the same action.

In Nicaragua, reports reaching the capital of Managua said an estimated 300 guerrillas had seized the town of Jinotega and Samoza's National Guard was fighting block-by-block to retake it. One refugee from Jinotega, 100 miles north of Managua, said, "There is fighting in all parts of the city," but he did not know how many persons had been killed.

Lopez Portillo made his surprise announcement at a luncheon honoring Costa Rican President Rodrigo Carazo, who is in Cancun on a one-day visit to discuss purchasing oil from Mexico.

"It was something that we knew about and we didn't want to believe that in Nicaragua a hateful attack is being carried out against the Nicaragua people, a horrendous genocide," Lopez said.

Costa Rica, of course, is the nation which has continually lent itself to Panama's support activities of Sandanista revolutionaries against Nicaragua.

Today's Miami Herald of May 21 provides the best overview of the Panamanian gun trafficking to date with the key question of whether gun running can wreck the Panama Canal treaties. The article is as follows:

IS MIAMI U.S. CAPITAL FOR GUNS?

SMUGGLED WEAPONS FLOWING FROM CITY

(By Joe Crankshaw and Sam Jacobs)

Don Kimbler used to wreck moonshine stills in Georgia. It was his job. He was a government revenuer.

Kimbler now works in Miami as a federal agent, and some people hope that Kimbler, just doing his job, will wreck something else: the Panama Canal treaties. It is an odd story.

Miami is known these days for its Cubans, its drug traffic, its gay rights rhubarb and its no-smoking election.

What isn't so well known is its gun smuggling. Miami may well be Gun Smuggling Capital, U.S.A.

Smugglers here have been caught sneaking out guns in refrigerators, air conditioners, boxes of automobile transmissions and even industrial rubber glovers.

"We're supplying all the banana republics with the instruments of war," says Lee Waldron, a chief in the government's Bureau of Alcohol, Tobacco and Firearms (ATF).

Waldron is Kimbler's boss. It is Kimbler's job to watch over places like the Garcia National Gun Shop in Little Havana.

It is a large white building. Inside are racks and racks of rifles. The walls are lined with what look like shoeboxes. The boxes are filled with ammunition.

On a wall outside is a sign: "Take your boy hunting. You'll never have to hunt for your boy."

On the front door are stickers for Master Charge, Visa, American Express and Diners Club. But most customers pay cash.

Agent Kimbler is gray-haired, square-faced, tanned and muscular. He looks uncomfortable in a suit and necktie. He is a stickler for the rules. He goes by the book. It is his job to make sure that gun dealers fill out forms correctly, especially on multiple sales of pistols.

Last October Kimbler thumbed through sales logs at the Garcia National Gun Shop. Everything seemed to be in order-as far as the gun shop was concerned. But on a hunch, Kimbler decided to check records on "long guns"-rifles and shotguns. They aren't regulated as closely as handguns.

They never have been. One of Florida's early governors, Napoleon Bonapart Broward, even smuggled weapons to Cuba before the Spanish-American War. Broward County is named after him.

Kimbler wasn't exactly surprised when he kept finding the same names again and again.

One was Jose Antonio Alvarez, a one-time pawnshop salesman. Alvarez, 31, held a federal license to deal in firearms. He was married to a Panamanian. He made frequent trips to Panama. And he shipped a lot of weapons to Panama.

All this was perfectly legal. Alvarez would later insist, "I only sold legal weapons. The State Department issued an export license for all my weapons."

And he was right-except for one thing. On the forms at the gunshop, he had failed to say that the guns were for shipment to Panama.

And if the forms were incorrect, so Kimbler believed, "somebody had broken the law."

His investigation intensified. Others became suspects.

Just where were the weapons going? Nervous gun shop owners, afraid they would lose their licenses, volunteered information.

Court documents now provide a plot.

Col. Manuel Noriega, Panama's intelligence chief, it seems, had an assignment for his Miami consul: Buy 1,000 weapons. Ship them to a private hunting-and-fishing club in Panama.

The consul, Edgardo Lopez Grimaidi, accepted the mission. He also earned an under-the-table 10 percent commission on deals.

Initially, Kimbler and the ATF folks weren't positive about where the guns were going.

Last Nov. 9 they seized a shipment before export. They confiscated 12 Colt .45caliber pistols, 10 Remington Woodmaster 30.06 rifles with telescopic sights and 8,000 rounds of ammunition. Value: $25,000.

The next day, Kimbler and John Spidell, an ATF supervisor, marched into the Panamanian consulate in Miami. They wanted to know what was up. They had lots of records.

Lopez, the consul, admitted he knew about seven shipments. He said he had received his instructions from "an official of the Panamanian G2," the agency supervises spies, secret police and military intelligence.

Lopez doesn't live in Miami anymore. He left in a hurry the day after the interview.

The G2 official, it turned out, was Col. Noreiga. It is easy to tell that he is in the spy business. The insignia on his stationery is a pair of binoculars.

The colonel wrote a formal letter of protest to Washington. He said the arms were for the Panama National Guard.

The State Department rejected the protest. With diplomatic tongue in cheek, the U.S. government announced it was pleased that the guns were intended for use by the Panama National Guard.

It didn't believe it. Although it didn't say so, the U.S. figured the guns were destined for the Sandinista guerrillas in Nicaragua.

The Sandinista guerrillas are fighting the regime of Gen. Anastasio Somoza in Nicaragua.

They are a well-armed Marxist cadre numbering more than a thousand. They ambush Somoza troops, occupy towns and raid government outposts.

Technically, the Panama government professes neutrality. But President Aristides Royo makes no secret about his sympathy. He likes the guerrillas.

The guerrillas lost one in March. An undercover agent had picked up a smuggling tip on an arms shipment. Watch for the Firestone Rubber Co. trucks, he said. So the Nicaraguan National Guard watched. And sure enough, one by one vans began to cross the Costa Rica-Nicaragua border at Sapoa.

They got them all. Hidden under the tires, the guardsmen found carbines, rocket launchers, hand grenades, pistols, machine guns, dynamite and ammunition.

Serial numbers on the carbines matched sales made by Johnson Firearms in New Jersey and Universal Firearms in Miami.

Alvarez, the Miami exporter, had shipped them to the Panama hunting and fishing club, records showed.

Since then a federal grand jury in Miami has indicted Alvarez for illegal shipment of arms.

Also indicted are Jose A. Pujol, 36, the Miami cargo manager for Air Panama, and Carlos Wittgreen, the president of the hunting and fishing club, Caza y Pesca. He, too, is G2, it now develops.

The grand jury also charged Walter Donald McComas, 41, another Miami exporter, and James Allen Howell, 33.

Howell used to be an instructor at the National Intelligence Academy in Fort Lauderdale, sometimes known as Wiretap U. It is a private school for teaching policemen electronic bugging. Howell calls himself a "diplomatic security analyst' and lives in a plush house.

The indictments, the gunsmuggling and the Panamanian commotion are a joy to some congressmen who don't like the Panama Canal treaties.

In Washington last week, Rep. George Hansen (R., Idaho) cited the smuggling episode as proof that Panama is not a "model international citizen." To turn over the canal to Panama is foolish, he says.