Panama: Cashing A Check

Payless paydays hardly help a government win the loyalty of its citizens -- or employees. A cash squeeze was in fact one element in the pressure that Washington put on Manuel Noriega by freezing Panama's bank accounts in the U.S. But at year's end the Bush Administration had to throw that process into reverse, when the U.S.-installed administration of President Guillermo Endara was due to pay out $50 million in government salaries and had no money in the till.

Panama found $50 million in an unfrozen account in the U.S., and Washington permitted its withdrawal. Then a snag developed. "Did you...