United States General Accounting Office

GAO Report to Congressional Committees

August 1995 PANAMA

DOD’s Drawdown Plan

for the U.S. Military in

Panama

GAO/NSIAD-95-183

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-258691 

August 2, 1995

The Honorable Herbert H. Bateman

Chairman, Subcommittee on Military Readiness

The Honorable Joel Hefley

Chairman, Subcommittee on Military

 Installations and Facilities

Committee on National Security

House of Representatives

In 1977, U.S. President Jimmy Carter and Panamanian leader General

Omar Torrijos signed treaties that called for the transfer of the Panama

Canal to Panama and the withdrawal of U.S. military presence from

Panama by December 31, 1999. Earlier this year, we issued a classified

report to you on issues related to the U.S. military drawdown in Panama.

Since that time, most of the classified information has been declassified.

On the basis of discussions with your staff and because of the likelihood

that U.S. military drawdown issues will come before the Congress in the

near future, we have updated the information in our earlier report and are

issuing this unclassified report. Specifically, we are providing information

on (1) the potential for a post-1999 U.S. presence, (2) the status of

transfers of Department of Defense (DOD) properties and Panama’s

preparedness to accept them, (3) the coordination to address

treaty-related issues, (4) DOD environmental and property valuation

policies, (5) DOD efforts to address employee terminations due to the

drawdown, and (6) the cost of the U.S. military drawdown. This report

does not deal with the transfer of the Panama Canal to Panama.

Background The Panama Canal Treaty and the Treaty Concerning the Permanent

Neutrality and Operations of the Panama Canal went into effect on

October 1, 1979. These treaties now serve as the primary basis for

U.S.-Panamanian relations. Treaty provisions require that the United

States transfer, without charge, all U.S. military real property and

nonremovable improvements in Panama to the Panamanian government.

The treaties also call for the continued neutrality of the canal but specify

that by December 31, 1999, all U.S. military forces will be withdrawn from

Panama and only Panama will operate and maintain military forces,

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defense sites, and military installations within its national territory.1

However, a 1978 protocol2 states that

nothing in the [Neutrality] Treaty shall preclude the Republic of Panama and the United

States of America from making . . . any agreement or arrangement between the two

countries to facilitate performance at any time after December 31, 1999, of their

responsibilities to maintain the regime of neutrality established in the Treaty, including

agreements or arrangements for the stationing of any United States forces or the

maintenance of defense sites after that date in the Republic of Panama . . . .

DOD’s treaty implementation plan, approved by the Secretary of Defense in

1992 and revised most recently in October 1993, includes plans to

(1) relocate or deactivate about 10,050 military personnel, 3,000 U.S.

civilians, and 5,200 non-U.S. civilian personnel; (2) consolidate DOD

operations primarily onto a few bases on the Pacific side of the isthmus by

1995 and transfer all DOD facilities to Panama by the end of 1999; and

(3) relocate U.S. Southern Command (SOUTHCOM) headquarters. SOUTHCOM,

a regional unified command, oversees U.S. military operations in

19 countries in Central and South America and is responsible for carrying

out the treaty implementation plan. Funding to implement the plan is

provided through the normal DOD budget process, and each military

service is responsible for estimating budgetary requirements.

DOD plans to transfer to Panama about 77,000 acres of property and 

4,272 buildings that have an investment cost of about $538 million.3

 These

facilities include major military installations such as Howard Air Force

Base (5,282 acres) on the Pacific Ocean side of the isthmus, from which air

operations throughout South and Central America are conducted; Fort

Sherman (23,100 acres) on the Atlantic Ocean side, where the Army’s

Jungle Operations Training Center is located; and several other bases

located throughout Panama that are primarily used for housing and

training military personnel. Panama believes that the properties to be

transferred can be put to good economic use if they can be developed

quickly, and Panamanian officials have discussed various proposals for

using the properties. For example, Fort Amador, located next to 

1

Panama’s combined military-police forces—known since 1983 as the Panamanian Defense

Forces—were dissolved following the December 1989 U.S. military intervention. In its place, Panama

created a National Police Force, which, in addition to its policing responsibilities, has responsibility for

protecting Panama’s borders. Panama does not currently have military forces.

2

Protocol of Exchange of Instruments of Ratification Regarding the Treaty Concerning the Permanent

Neutrality and Operation of the Panama Canal and the Panama Canal Treaty, June 16, 1978.

3

This figure was reported in June 1991 by the Assistant Secretary of Defense in a study done in

response to the National Defense Authorization Act for Fiscal Year 1991 (P.L. 101-510).

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B-258691 

Panama City, is considered to be prime property, and plans are to develop

it for tourism.

Results in Brief In 1979, and again in 1991, the Congress stated that the best interests of

the United States would be served by retaining a U.S. military presence in

Panama after 1999 and that the President should begin negotiations with

the government of Panama to consider whether the two countries should

allow permanent stationing of U.S. forces in Panama. Some members of

the current Congress have reiterated that the President should begin such

negotiations. Officials of both the United States and Panamanian

governments have publicly indicated a willingness to consider a post-1999

U.S. military presence. However, negotiations have not begun and U.S.

executive branch officials have not reached agreement among themselves

on (1) what U.S. interests would be served by keeping U.S. forces in

Panama or (2) how or when to proceed on this matter. In its drawdown

schedule, DOD is positioning itself to retain some forces in Panama after

1999 if instructed to do so by the President under any negotiations that

may occur. According to DOD officials, an early decision on this matter is

important to maintain an orderly process and avoid incurring unnecessary

costs.

Although DOD’s treaty implementation plan has been revised several times,

generally to postpone some transfers, DOD is proceeding with the

drawdown according to its revised schedule. The transfer of Fort Davis

and Fort Espinar to Panama, planned for October 1995, will end the U.S.

military presence on the Atlantic Ocean side of the isthmus, except for the

Jungle Operations Training Center at Fort Sherman and operations at

Galeta Island. The transfer of some properties on the Pacific side,

including Fort Amador and Fort Clayton, has been postponed from the

originally scheduled date because U.S. requirements have changed and

Panama does not have a plan for using these properties. In addition, Miami

has been selected as the new location for SOUTHCOM headquarters with the

move planned for 1998.

A number of committees, some with only U.S. officials and others with

both U.S. and Panamanian officials, have been established to coordinate

specific treaty implementation matters. Both SOUTHCOM and U.S. Embassy

officials noted, however, that as a number of critical issues pertaining to

the transfer of properties need to be resolved, the need for all parties to be

kept fully informed and engaged on treaty implementation actions will

become more important.

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B-258691 

DOD has approved policy guidance for the transfer of DOD installations to

the government of Panama, including property condition and valuation.

Also, DOD has been planning for its employee termination liability in

Panama since 1989, and incentives such as early retirement and job

placement offered by the U.S. Panama Area Personnel Board should help

minimize the effects of severance pay and other potentially costly

personnel issues.

DOD reported that as of September 30, 1994, its cumulative treaty-related

cost was $813 million, and it expects future treaty-related costs to be

about $554 million. However, these costs are not offset by estimated

savings that may accrue as a result of transferring properties to Panama.

Plans for a Post-1999

U.S. Presence in

Panama

The Panama Canal treaties specify that by December 31, 1999, all U.S.

military forces will be withdrawn from Panama and that all U.S. military

real and nonremovable property will be transferred without charge to

Panama. Department of State and DOD officials have stated that the United

States would fully implement all provisions of the treaties. However, treaty

implementation documents do not preclude the United States from

negotiating an agreement with Panama for the permanent stationing of

U.S. military forces in Panama after 1999. Officials from both Departments

said that if such an agreement is not negotiated with Panama, all U.S.

forces will be withdrawn as specified by the treaties.

The Panama Canal Act of 1979 (P.L. 96-70), enacted to implement the

Panama Canal treaties, expressed the sense of the Congress that “the best

interests of the United States require that the President enter into

negotiations with the Republic of Panama for the purpose of arranging for

the stationing of United States military forces” in Panama after 1999. The

Panama Canal Commission Authorization Act for fiscal year 1992 

(P.L. 102-190, sec. 3505) states, among other things, that “the Panama

Canal is a vital strategic asset to the United States and its allies,” and that

“the presence of United States Armed Forces offers a viable defense

against sabotage or other threat to the Panama Canal.” The act expressed

the sense of the Congress that the President should negotiate, at a

mutually agreeable time, with the government of Panama to consider

whether the two governments should allow the permanent stationing of

U.S. military forces in Panama after 1999.

In June 1994, the Secretary of Defense said that the United States would

consider keeping forces in Panama if the Panamanian government

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B-258691 

requested it to do so. Likewise, Panama’s newly elected President, who

took office in September 1994, stated that any request on the part of the

United States to have military forces remain in Panama would be carefully

studied. According to U.S. Embassy officials in Panama, as of October

1994, the U.S. government had no plans to request that the Panamanian

government permit U.S. forces to remain in Panama after 1999. In

June 1995, executive branch officials noted that they had not agreed

among themselves on (1) what U.S. interests would be served by keeping

U.S. forces in Panama or (2) how or when to proceed on this matter.

According to Department of State and DOD officials, a presidential review

of U.S. policy toward Panama is underway, and the process should, among

other things, determine what national interests would be served by having

U.S. military forces stationed in Panama after 1999. The review, which was

to have begun in early 1994, has been repeatedly delayed. In January 1995,

we were told that position papers had been circulated among executive

branch agencies and that the review would be completed early in 1995.

However, as of June 1995, the review had not been completed, and DOD

and State officials told us it was on hold.

Any decision to seek a post-1999 presence would be followed by

negotiations with the Panamanian government if it agrees to participate in

such negotiations. According to DOD officials, an early decision on a

post-1999 presence is important if the services are to maintain an orderly

process and avoid incurring unnecessary costs. In its 1995 strategic

assessment,4

 the National Defense University asserts that the executive

branch must decide soon if U.S. foreign policy and security interests

require a continued military presence in the hemisphere outside the

United States. The assessment states that a decision on a continued U.S.

military presence in Panama cannot be deferred much longer, noting that

units are being deactivated as a part of the overall downsizing of the

armed forces and budgetary decision windows affecting construction and

relocation are about to close.

Status of the Transfer

of DOD Facilities

According to its treaty implementation plan, DOD will consolidate

operations at a few locations primarily on the Pacific side of the isthmus

by 1995 and transfer all DOD facilities to Panama by December 1999. The

first step in this consolidation occurred in June 1994 when DOD transferred

the Coco Solo Medical Clinic on the Atlantic side of the isthmus to

4

Strategic Assessment 1995: U.S. Security Challenges in Transition, National Defense University,

Feb. 1995, p. 96.

Page 5 GAO/NSIAD-95-183 Panama
B-258691 

Panama. The consolidation of U.S. troops on the Pacific side is planned for

Howard Air Force Base, Fort Kobbe, and Rodman Naval Station. DOD

officials stated that these facilities are among those the U.S. military would

want to retain if the United States and Panama agree on a post-1999 U.S.

presence in Panama.5

DOD officials believe 1995 will be a key year in consolidating forces from

the Atlantic to the Pacific side. The transfers of Fort Davis and Fort

Espinar, expected to occur in October 1995, appeared to be on schedule as

of June 1995. These transfers will mark the end of U.S. military presence

on the Atlantic side of the isthmus, except for the Jungle Operations

Training Center at Fort Sherman, and operations at Galeta Island, both

scheduled for transfer in 1999. About 1,200 military and 650 civilian

personnel on the Atlantic side will be relocated or deactivated by the end

of 1995. At that time, only 154 military and 116 civilian personnel are

scheduled to remain on the Atlantic side to staff the Jungle Operations

Training Center and Galeta Island.

Although some minor properties on the Pacific side of the isthmus have

already been transferred, Panama’s lack of a plan for using DOD properties

has delayed some transfers. For example, Fort Amador was scheduled for

transfer in late 1995, but in January 1994 SOUTHCOM and the government of

Panama negotiated a postponement of the transfer until early 1996. In

June 1995 they negotiated a further delay to late 1996. Panama favored the

postponement because it had not awarded a contract to formulate an

economic development plan for Fort Amador, which is to be developed for

tourism.6

 A U.S. Agency for International Development official told us that

the development plan would take at least 8 months to complete. SOUTHCOM

officials told us they can use the housing on Fort Amador and agreed to

the postponement to accommodate Panama’s planning needs.

5

The 1992 treaty implementation plan stated that Howard Air Force Base, Rodman Naval Station, Fort

Kobbe, and Fort Sherman would be the final bases transferred to Panama in 1999. In 1994, Fort

Clayton was added to the list of bases to be transferred in 1999.

6

This $1 million contract is to be paid by the government of Panama with funds generated from the

repayments of loans made under a grant agreement by the U.S. Agency for International Development.

These funds had been previously earmarked by Panama to repay nonmilitary bilateral debt to the

United States.

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B-258691 

Figure 1: DOD Installations to Be

Transferred to the Republic of Panama

(as of June 1995)

Fort Sherman

Pina Range

Balboa West Range

Empire Range

Rodman

Gorgas Hospital 1998

Fort Clayton 1999

Corozal 1999

Albrook 1997

Curundu
 Quarry Heights 1998

Fort Amador 1996

Howard AFB

Fort


Kobbe

N

Atlantic Ocean

Pacific Ocean

Panama Canal

Panama Canal

Fort Espinar 1995

Fort Davis 

1999

1999

1997

1999

1999

1996 


1995

Coco


Solo Clinic 1994

Colon

Panama City

Galeta Island 1999

Note: Dates indicate planned reversion to Panama.

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B-258691 

Other transfers have been postponed due to changing U.S. requirements.

For example, Fort Clayton was originally scheduled for transfer in 1997. In

mid-1994, SOUTHCOM officials decided to postpone the transfer to 1999

based on a continuing need for housing and office facilities. SOUTHCOM

headquarters, originally scheduled to be moved in 1995, is now scheduled

to be moved to Miami in 1998. Figure 1 on page 7 shows the scheduled

dates for the transfers of all DOD properties to Panama.

Coordination of

Treaty Issues

SOUTHCOM and the U.S. Embassy have interrelated responsibilities for

implementing the Panama Canal treaties. The U.S. Ambassador to Panama

has overall responsibility for (1) effecting the diplomatic notes that

transfer U.S. properties to Panama, (2) generally providing authoritative

treaty interpretations, and (3) negotiating bilateral agreements with

Panama on behalf of U.S. agencies that fall outside the purview of the

treaty-mandated Joint Committee.7 SOUTHCOM is responsible for planning

and coordinating activities affecting the U.S. forces and military-related

aspects of the treaties.

Various committees assist with implementing the treaties. A key

committee, known as the Joint Committee, is comprised of representatives

of the U.S. military and the government of Panama. It addresses

treaty-related matters pertaining to the U.S. military and Panama. Most of

the committee’s work to date has dealt with matters other than the

reversion of lands, and U.S. Embassy and SOUTHCOM officials believe that

the committee has worked effectively. However, they told us that in the

near future, the committee would be handling an increased number of

reversion issues, for which the procedures had not been fully tested. Some

of the critical issues that will require close coordination include the

approval of property transfer procedures and the resolution of issues on

health, safety, and the removal of hazards before the transfer of properties.

The Joint Committee does not have a representative from the U.S.

Embassy as a permanent member, but an Embassy official may attend

meetings as an observer. The committee met formally in 1990 but did not

formally convene again until September 1994, when it met to discuss the

use of U.S. facilities for housing Cuban migrants. A SOUTHCOM official told

us that most of the committee’s work has been conducted by telephone,

letters, and memorandums of understanding.

7

The Ambassador’s position has been vacant since February 1994. As of July 19, 1995, the President’s

nominee was awaiting Senate confirmation.

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B-258691 

The Panama Review Committee is comprised of the U.S. Ambassador,8 the

SOUTHCOM Commander-in-Chief, and the Panama Canal Commission

Administrator and meets quarterly to discuss U.S. government positions

on various matters, including those related to treaty implementation.

Minutes of these meetings are provided to the Secretary of State, the

Secretary of Defense, and heads of other interested agencies.

An unofficial, binational planning working group comprised of SOUTHCOM

and Panamanian officials was established to help Panama with

treaty-related activities, to include the sharing and coordination of

turnover timeliness, reutilization workshops, and the exchange of

computer-aided information. This committee is working with the

Panamanian Regional Authority to plan for the reversion of military

properties, since the Authority is responsible for developing land use plans

for reverted properties.

The Joint Commission on the Environment was established as a binational

commission comprised of Americans and Panamanians. This commission

does not represent the U.S. or Panamanian governments. Its function is to

advise both governments on matters pertaining to safety, health, and the

environment. The U.S. Embassy provides an executive secretary to the

commission’s U.S. delegation.

Both SOUTHCOM and U.S. Embassy officials said they believed that overall

coordination at the working level has been effective. However, as the end

of the treaty implementation period nears and increasing numbers of

properties are prepared for turnover, officials from both SOUTHCOM and the

U.S. Embassy noted that all participants will need to be kept fully

informed on actions being taken and on U.S. policy decisions.

DOD Environmental

and Property

Valuation Policies

According to an agreement implementing the Panama Canal Treaty, before

the United States transfers properties to Panama, the two countries must

consult with each other concerning the properties’ condition, including the

removal of hazards to life, health, and safety. We previously reported that

DOD experienced high termination costs for bases closed in Germany and

that the U.S. military withdrawal from the Philippines involved high costs

for relocation and potentially high costs for environmental damage.9

8

The charge d’affaires represents the United States in the absence of an ambassador.

9

European Drawdown: Status of Residual Value Negotiations in Germany (GAO/NSIAD-94-195BR,

June 23, 1994) and Military Base Closures: U.S. Financial Obligations in the Philippines

(GAO/NSIAD-92-51, Jan. 22, 1992).

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B-258691 

DOD has approved a policy for the transfer of DOD properties to the

government of Panama. The policy specifies that DOD will eliminate known

imminent and substantial hazards to human health and safety and will

attempt to maintain the usefulness of facilities transferred to Panama.

SOUTHCOM is developing implementing procedures and is expected to

prepare and maintain records of all facility transfer consultations and

agreements.

DOD has several firing ranges among the properties it will transfer to

Panama. They present the most problematic environmental concerns due

to the potential for unexpended ordnance below and on the surface. Other

potential environmental concerns involve fuel spills and leaks from

underground storage tanks. The President of Panama’s Interoceanic

Regional Authority stated that the Panamanian government has been

studying contamination on U.S. bases to document contamination levels.

He said that the Panamanian government would ask the United States to

decontaminate all military bases before turning them over to Panama and

noted that the total cost of decontamination might be in the hundreds of

millions of dollars.

Although the Panama Canal Treaty states that U.S. properties will revert to

Panama at no charge, an agreement to implement the treaty requires that

the United States and Panama consult with each other concerning

compensation for the properties’ residual value. To comply with the

agreement, DOD’s policy on the valuation of transferred facilities to

Panama states that the adjusted book value (that is, the original cost

adjusted for age, inflation, and condition) of the nonremovable property or

improvements will be used as the starting point for discussion of residual

value with the government of Panama. Accordingly, DOD is recording the

accumulated residual value of these properties, and DOD officials have

noted that such figures could be used to offset Panamanian claims for

environmental damage.

Personnel Issues One SOUTHCOM objective is to maintain a high quality of life for military

members and their families in Panama. SOUTHCOM’s Commander-in-Chief

has stated that he believes military forces stationed in Panama should

continue to be accompanied by their families as long as possible. He has

also stated that on-base housing should be provided to the extent possible

to all military members who want to live on base. As the transfer of DOD

properties occurs, SOUTHCOM’s Commander-in-Chief has also made it a

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B-258691 

priority to maintain a full range of community services for U.S. military

personnel and their families, including the education of dependents.

The drawdown of U.S. military troops in Panama will result in the

termination of civilian employees’ jobs. As of June 1995, DOD employed

more than 6,350 U.S. and Panamanian and other non-U.S. civilians in

Panama, about 1,800 of whom were temporary employees. Permanent

employees, who are eligible for severance pay, will receive a basic

severance and an age adjustment allowance when their jobs are

eliminated.

The U.S. Panama Area Personnel Board is responsible for coordinating

civilian personnel policy in Panama. The Board’s Executive Director told

us that DOD and the Board have been planning for the DOD drawdown by

implementing several programs to reduce the costs of treaty

implementation. For example, the Board administers interagency

placement and referral programs to help displaced DOD civilian employees

find jobs with other federal agencies and the Panamanian private sector.

Also, the Board has approved policies that encourage the use of

treaty-related retirements for pre-treaty employees covered under the Civil

Service Retirement System. Both of these programs encourage voluntary

separations and in turn decrease the adverse effects of reductions-in-force.

We previously reported that in other countries DOD had not always

anticipated the full extent of its termination liabilities for displaced host

country personnel. These liabilities have been significant.10 In anticipation

of the drawdown in Panama, all locally hired DOD civilians have been

appointed on a temporary basis since November 1989. As of June 1995,

26 percent of DOD’s Panamanian and other non-U.S. civilian employees

were temporary hires. Temporary employees are not eligible for severance

pay or reduction-in-force rights when displaced, which will help reduce

the budgetary impact of a reduction-in-force on the U.S. government.

Under 5 U.S.C. 8348 (i)(l), the Panama Canal Commission is responsible

for that portion of any estimated increase in liability resulting from the

early retirement of pre-treaty Commission and DOD employees. According

to a Panama Area Board official, the Office of Personnel Management

confirmed that the special retirement costs for all pre-treaty DOD

employees have been included in the Commission’s monthly payments to

the U.S. Civil Service Retirement Fund. Our audit of the Commission’s

10Base Closures: Long and Costly Process of Reducing the Local National Work Force in Germany

(GAO/NSIAD-92-62, Apr. 17, 1992) and Army Force Structure: Personnel, Equipment, and Cost Issues

Related to the European Drawdown (GAO/NSIAD-92-200BR, Apr. 9, 1992).

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B-258691 

1993 and 1994 financial statements found that early retirement costs are

being funded from Canal revenues on an accelerated basis in order to be

fully funded by 1999.11

Treaty

Implementation Costs

DOD reported that as of September 30, 1994, its cumulative treaty-related

cost was $813 million, and officials believe that DOD’s future treaty-related

costs will be about $554 million.12 These costs are for relocating units,

turning over properties, consolidating forces into fewer sites, and funding

other planning considerations. However, these costs are not offset by

estimated savings such as reduced maintenance and civilian personnel

costs that may accrue as a result of transferring properties to Panama.

About $447 million of the $554 million in estimated DOD future costs is

related to the Army. The Army’s future costs include the following:

• Relocation costs of $292.9 million include transportation of personnel,

families, and equipment; civilian personnel severance pay; procurement of

communication equipment for SOUTHCOM headquarters; and construction

for units remaining in the force structure.

• Turnover costs of $51.7 million include repair and maintenance to facilities

before turnover, environmental compliance and hazardous waste disposal

requirements, deinstallation or removal of equipment from facilities and

transportation to a disposition area, and security of facilities before

turnover.

• Consolidation costs of $44.3 million include local transportation of

equipment from one site to another; upgrade of base communications and

design and construction of an information facility at Howard Air Force

Base, Rodman Naval Station, and Fort Kobbe; and facility renovation to

accommodate consolidating units.

• Other costs of $58.4 million include operation of treaty implementation

offices at SOUTHCOM and DOD headquarters, travel allowances for military

police to provide security, and transfer of supplies to other locations.

The Air Force and the Navy estimated that they will need $82.9 million and

$23.9 million, respectively, for treaty implementation requirements from

1996 to 2000.

11Financial Audit: Panama Canal Commission’s 1994 and 1993 Financial Statements (GAO/AIMD-95-98,

Mar. 31, 1995).

12This figure does not include funding to fully decontaminate the firing ranges and military bases,

which the President of the Interoceanic Regional Authority said the government of Panama might

request.

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Agency Comments In commenting on a draft of this report, DOD generally concurred with the

information included in this report (see app. I). DOD provided some

technical points of clarification, which we incorporated where

appropriate. The State Department provided oral comments, which we

have also incorporated where appropriate.

Scope and

Methodology

We interviewed and obtained relevant documents from officials at DOD, the

State Department, the Panama Canal Commission, the Agency for

International Development, the U.S. Embassy in Panama, and SOUTHCOM.

We also visited a number of DOD properties in Panama. We conducted our

review from February 1994 to January 1995 and updated the information in

June 1995 in accordance with generally accepted government auditing

standards.

We are sending copies of this report to the Chairman and Ranking

Minority Member, Senate Committee on Armed Services, and other

appropriate congressional committees; the Secretaries of Defense and

State; and other interested parties.

If you or your staffs have any questions concerning this report, please call

me on (202) 512-4128. Major contributors to this report were Lawrence L.

Suda, Assistant Director; Oliver G. Harter, Evaluator-in-Charge; and Jay A.

Scribner, Evaluator.

Harold J. Johnson, Director

International Affairs Issues

Page 13 GAO/NSIAD-95-183 Panama
Appendix I 

Comments From the Department of Defense

Note: GAO comments

supplementing those in the

report text appear at the

end of this appendix.

See comment 1.

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Appendix I 

Comments From the Department of Defense

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Appendix I 

Comments From the Department of Defense

See comment 2.

See comment 3.

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Appendix I 

Comments From the Department of Defense

See comment 4.

Page 17 GAO/NSIAD-95-183 Panama
Appendix I 

Comments From the Department of Defense

See comment 4.

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Appendix I 

Comments From the Department of Defense

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Appendix I 

Comments From the Department of Defense

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Appendix I 

Comments From the Department of Defense

See comment 5.

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Appendix I 

Comments From the Department of Defense

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Appendix I 

Comments From the Department of Defense

The following are GAO’s comments on the Department of Defense’s letter

dated January 28, 1995.

GAO Comments 1. As stated in the report, we updated the information in our classified

report, and verified this information with the appropriate agencies.

2. Our draft report did not state that any arrangement between Panama

and the United States for stationing forces after 1999 would require a

treaty modification; nonetheless, we modified our report to clarify this

point.

3. The report text has been modified to reflect this information.

4. See page 8 for updated information on the SOUTHCOM’s scheduled move

to Miami.

5. See page 12 for updated cost estimates.

(711066)(711141) Page 23 GAO/NSIAD-95-183 Panama
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