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By Eric Sabo

Dec. 12 (Bloomberg) -- Former Panamanian dictator Manuel Noriega, who spent 22 years in U.S. and French jails, returned to the Central American nation to face his first prison sentence at home.

Noriega, 77, landed late yesterday in Panama City aboard an Iberia jet after France agreed to his extradition. The ex- general was taken to a detention center along the Panama Canal, where he awaits murder and embezzlement charges connected to his six-year rule.

Ousted from power in 1989 by U.S. troops, Noriega still provokes fear among Panamanians who remember his so-called “Dignity Battalions” attacking opponents with baseball bats. Officials from Noriega’s Democratic Revolutionary Party, now the largest opposition group, have distanced themselves from the former dictator over concerns President Ricardo Martinelli will use the case to embarrass critics.

“Those who used to work for Noriega are very nervous that he may speak,” Miguel Bernal, a law professor at the University of Panama, said in a Dec. 10 phone interview.

Martinelli told reporters yesterday that Noriega “must pay for all the horror” he caused as the government plans to keep him in jail instead of house arrest, which is granted for accused criminals over 70 years of age. A court will decide if Noriega should stand trial to contest a 60-year sentence handed down in Panama while he was imprisoned in Miami, Foreign Minister Roberto Henriquez told reporters Dec. 7.

No Threat

Noriega’s lawyer in Panama, Julio Berrio, said his client poses no threat and has been a victim of political tricks.

Noriega “wants to return to his country and live a quiet life,” Berrio said in a Dec. 8 interview at his Panama City office. “Very few Panamanians remember what he did.”

Citing the country’s emergence as a regional banking hub, dollarization and political stability, the International Monetary Fund in a Nov. 21 report projected 2011 economic growth of 8.5 percent, which would make Panama “among the fastest- growing countries in the Western Hemisphere.”

Moody’s Investors Service in June 2010 raised Panama to Baa3, which is the rating company’s lowest investment grade rating. A month earlier, Standard & Poor’s had raised Panama one level to an investment grade rating of BBB-. Fitch Ratings also rates Panama as an investment grade credit.

CIA, Drug Cartels

Carmenza Spadafora, whose brother was killed and beheaded by Noriega forces, said her family wanted to keep the former leader out of Panama for fear that he may be released from jail.

“We don’t know how many people owe him favors,” Spadafora said in a Dec. 9 interview at an anti-Noriega rally in Panama City. “It was better for the whole country that he never return.”

As head of the military, Noriega gathered information for the Central Intelligence Agency while also taking money from Colombian drug cartels, according to 1988 U.S. congressional hearings.

U.S. President George H.W. Bush sent troops to invade Panama on Dec. 20, 1989, following disputed presidential elections. Noriega surrendered two weeks later as American soldiers blasted rock music outside his refuge in the Vatican embassy.

Convicted for drug trafficking, racketeering and money laundering in 1992 by a U.S. court, Noriega was extradited to France in 2010 to serve a separate money-laundering sentence.

--Editors: Robert Jameson, Bill Faries, Sylvia Wier