Informant Told Noriega Prosecutors Cali Drug Cartel Paid Their Witness -- But $1.25 Million Payoff Denied

MIAMI - In what looms as a potential embarrassment for the U.S. government, federal prosecutors acknowledged yesterday that informants told them the Cali cocaine cartel paid $1.25 million to a witness to testify against Manuel Noriega.

Moreover, prosecutors have conceded in court papers that they used a high-ranking Cali smuggler as an "intermediary" to help persuade the witness, former Panamanian diplomat Ricardo Bilonick, to come to Miami and tell what he knew. In return, the smuggler won a nine-year reduction in a 23-year sentence.

None of the above was ever disclosed to Noriega's lawyers, who are demanding a new trial for the deposed Panamanian leader. In late 1989, more than 20,000 U.S. troops invaded Panama to topple Noriega. In 1992, he was convicted and sentenced to 40 years for protecting U.S.-bound cocaine shipments from the Medellin cartel in Colombia.

Despite the allegations of payoffs, and the previously undisclosed sentence reduction for Cali smuggler Luis "Lucho" Santacruz, the government insisted in court papers yesterday that a federal jury would have convicted Noriega anyway.

Noriega lawyers Frank Rubino and Jon May assert that the government's failure to disclose its dealings with Santacruz deprived them of a chance to fully examine Bilonick's credibility in front of the jury.

Payment from Cali?

In a 71-page response to Noriega's motion for a new trial, the government had said it wasn't told anything about payments until September of this year.

But in court papers yesterday, the government said an unidentified informant had told the DEA that Miami attorney Joel Rosenthal, who represented Santacruz, met in Cali with cartel members "to discuss avenues through which Santacruz might obtain a sentence reduction."

"In return, the Cali cartel would pay Bilonick $1.25 million, on condition that Bilonick give truthful testimony at Noriega's trial," the government papers say.

One day before Bilonick surrendered, the informant says, he received $250,000. The balance - $1 million in certificates of deposit - was placed in a Panamanian bank.

No one in the U.S. government knew about the transaction, the informant said.

Prosecutors say Bilonick assured them in 1991 that he received no money. In an accompanying affidavit, Bilonick calls the payment allegation "idiotic."

Partner with Pablo Escobar

Bilonick, himself a Noriega co-defendant, was courted for months by U.S. drug agents and prosecutors, according to court papers. After serving as a diplomat, he had turned to the drug trade, eventually co-owning the cargo airline Inair with Medellin drug chief Pablo Escobar.

Bilonick testified that in the mid-1980s, Inair hauled 20 tons of Colombian cocaine through Panama to Miami under Noriega's protection.

This year, Rosenthal himself pleaded guilty to a money-laundering-related charge in the government's case against top leaders of the Cali cartel. Neither Rosenthal nor his lawyer, Norman Moscowitz, would comment for this article.

A "fairly high-ranking" Cali cartel operative in the United States, Santacruz was related to other cartel operatives "by family and blood and marriage," said Michael Sullivan, lead prosecutor in the Noriega case.