PANAMA Although there has been no change in the legal framework in which the news media operate, certain events this year demonstrate a deplorable official hostility toward a free press and the right to know. Laws dating from the military dictatorship remain on the books; they contain provisions sharply restricting press freedom, allowing prior censorship and empowering the Ministry of the Interior and Justice to impose sanctions on journalists and news media, ranging from fines to shutting publications down. These laws have not been applied in recent times, but they are there, ready to be used against the media whenever there is a political will to do so. The most significant recent events include: In January, the National Banking Commission took over the Banco Agroindustrial y Comercial bank and ordered it to be closed. La Prensa ran a series of articles reporting on alleged irregularities to the benefit ofJose Castrill6n Henao and the bank's links with a businessman involved in raising funds for Ernesto Perez Balladares' successful presidential campaign. Castrill6n Henao is currently under arrest on suspicion of drug trafficking and money laundering. As a result of the reports, several major newspapers in Europe and the United States carried stories with allegations that the Perez Balladares presidential campaign had been financed by drug money. The government reacted by blaming La Prensa for these reports and warned it would take legal action. The newspaper had smeared the international reputation of Panama, it charged. Shortly afterward, in a surprise announcement, President Perez Balladares admitted that his campaign headquarters had received two checks from Castrill6n Henao for a total of $51,000 and said he was dropping his plan to sue. In July, La Prensa published what was said to be a photocopy of a check from a company accused of money laundering as a campaign contribution for Jose A. Sossa in his bid for re-election to Congress. Sossa was not re-elected, but he was named attorney general. Before printing the story, La Prensa interviewed Sossa; he went through his campaign accounts and said he could find no record of the alleged contribution. However, at his repeated request, the story was run with the photocopy of the check and his statement. The issuing bank declared that on the date the check was drawn, the company had no account with it, and this is what La Prensa published. The Interior Ministry soon afterward initiated libel action against the attorney general and since then has called in La Prensa reporters, photographers and executives to testify and in some cases tried to pressure them into disclosing their sources. In September, La Prensa reporters were summoned to the Interior Ministry and questioned about published reports saying that an electronic newsletter on the Internet called El Filibustero (The Freebooter) was selling Panamanian passports and those of other countries and other official documents. Legal proceedings were begun in September by the interior minister against another La Prensa reporter as a result of a story about an investigation into alleged embezzlement involving the national savings bank Caja de Ahorros when the current minister was head of the state-owned telephone company. The minister was granted a presidential pardon, which the Supreme Court ruled was constitutional, and the matter ended there. The Housing Minister is suing an associate editor of La Prensa for libel. The Panamanian president recently appealed the associate editor's acquittal on other libel charges he himself had filed. There are other such cases. The common denominator is that all the plaintiffs are government officials who La Prensa says are waging a constant legal battle against it. The right to information has suffered a serious setback: a circular sent to editors by the presidential communications department said the only questions that may be asked at the president's news conferences are those announced in advance. The executive branch sent a bill to the Legislative Assembly seeking to repeal existing legislation that restricts press freedom, decriminalize libel and make it a civil offense. The Assembly passed the bill on first reading but the legislative session ended before it could go to second and third readings. It now needs to be taken up again in the new session.