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At Washington's instigation, Panamanian agents later swooped down on a warehouse in the Colon Free Trade Zone, a busy international transshipment center. There they found 17,000 55-gal. barrels of ether, worth about $1 million and enough to process around 200,000 kilos of cocaine. Both the chemicals and the building were apparently owned by Colombia's Ochoa clan. Shortly afterward, Julian Melo, the general secretary of the Panamanian National Defense Forces High Command, was arrested, accused of allowing the Colombians to transport the ether through the country in exchange for a $2 million bribe. Melo was never prosecuted, however, and many Panamanians assumed that he was merely a symbolic victim sacrificed to appease / Washington. "It stretches the imagination," said a Western diplomat in Panama, "to think that nobody but Melo could have been aware of the dealings."
While Colombian and Panamanian authorities have made some headway in the fight against drugs, their counterparts in Bolivia and Peru face problems that seem almost insuperable, as underlined by last week's State Department report. For centuries, Andean natives have chewed coca leaves as freely and frequently as Americans drink coffee. Indeed, most Bolivians, including President Hernan Siles Zuazo, routinely offer visitors coca tea. This is all quite legal because there is no law in Bolivia that prohibits either the cultivation or the marketing of coca. From the law-abiding family that earns $200 for a year's harvest of coca leaves to the young mother who receives $70 for carrying 40 lbs. of paste to a middleman, many Bolivians rely on coca to make the difference between subsistence and poverty. The government, saddled with an annual inflation rate that runs close to 3000% and a crippling foreign debt of almost $5 billion, is equally reluctant about eliminating its most profitable crop. Last year coca accounted for more than $2 billion in unofficial foreign exchange earnings. "Over the past two years," explains a former coca plantation owner, "the only money in the country that counts has been narcodollars."
Above all, Siles, who in 1982 inherited a presidency that had changed hands 13 times in twelve years, is well aware that challenging his people's livelihood could bring about his political demise. Warns an aide to Roberto Suarez Gomez, one of the country's most flamboyant coca suppliers (see box): "U.S. pressures could lead to another revolution and a takeover by another repressive military government or, worse, by the leftists."