NORIEGA DENIES LAUNDERING DRUG MONEY

General Manuel Noriega, Panama's ex-dictator, dismissed charges of
laundering drug money as an "imaginary banking scheme" concocted by
the United States as he took the stand yesterday in a French court.

The 76-year-old general denied taking payments from Colombian drug
lords in the 1980s, testifying the cash deposited in French banks came
from his legitimate businesses and the Central Intelligence Agency.

"I say with much humility and respect that this is an imaginary
banking scheme," he said in Spanish through his interpreter on the
second day of his trial.

"I will have the opportunity to produce documents that show that I was
a victim of a conspiracy mounted by the United States against me."

Gen. Noriega, who ruled Panama in 1983-89, spent 20 years in a Miami
prison cell for drug trafficking and money laundering and now faces
the prospect of another decade in a French prison if convicted. He was
extradited to Paris two months ago.

His lawyers argue the charges hinge on dodgy testimony from former
drug traffickers who were paid and given protection by U.S.
authorities.

Once a close U.S. ally, Gen. Noriega testified that Washington turned
against him in the 1980s when he refused to allow Panama to become a
staging ground for operations against leftists across Central America.

"That's when the propaganda started against me after so many years of
co-operation with the United States," he told the court as his three
daughters sat nearby.

Presenting himself as a "professional soldier," he strongly denied
dealings with Colombian drug cartels and said on the contrary he had
battled narco-traffickers while in power in Panama.

"I energetically fought against the drug trade and for this I received
praise from the United States, Interpol and many other countries," he
said.

Waving his hands at times to underscore his arguments, Gen. Noriega
recounted how he had ordered a raid against a cocaine laboratory and
waged other drug-fighting campaigns.

"Based on these actions, I could not be friends with these gangs," he
said, referring to the Colombian drug cartels.

The general was arrested by U.S. troops that invaded Panama in
December 1989 on a mission to bring him to trial in the United States.

He was extradited to France in April 26 to answer charges of
laundering the equivalent of US$2.8-million from the Medellin cartel.

In 1999, a French court sentenced him in absentia to 10 years in
prison and fined him US$16-million, but for years he fought
extradition from his prison cell in Miami.

French prosecutors say Gen. Noriega's wife and a shell company used
the drug money to buy three luxury apartments in Paris.

Asked about the source of the cash, he explained the funds came from
successful business ventures, including duty-free sales at Panama
airport and life insurance policies.

"These funds were acquired in a transparent way. They come from my
personal earnings," Gen. Noriega replied.

"And from the CIA?" added Olivier Metzner, his lawyer, to which Gen.
Noriega responded by nodding.

The former military strongman who was a key CIA ally in the early
1980s fell out with Washington after turning Panama into a hub for
narco-trafficking.

He was convicted in Miami of drug-trafficking and money-laundering and
sentenced to 40 years in prison. His time was reduced to 17 years for
good behaviour.