The situation changed abruptly in June 1987. A long-time power struggle within the FDP between Noriega and his chief of staff, Colonel Roberto Díaz Herrera, led to the forced retirement of Díaz Herrera on June 1. Six days later, the colonel responded by a series of public denunciations, accusing Noriega of involvement in the deaths of Torrijos and Spadafora and of using massive fraud to ensure the victory of Ardito Barletta in the 1984 elections. The result was widespread rioting. The opposition demanded that both Noriega and Delvalle resign, and numerous civic and business groups formed the National Civic Crusade (Crusada Civilista Nacional-- CCN) to press for changes in the government. As demonstrations spread, the government declared a state of emergency, suspending constitutional rights and instituting censorship. The CCN responded by calling a national strike that paralyzed the economy for several days. Violent actions by government forces and antigovernment demonstrators further polarized public opinion. The leadership of Panama's Roman Catholic Church joined in criticism of the government but urged a peaceful solution to the national crisis. Such calls were ignored by the government, which, instead, threatened to arrest those involved in the protests and seize the property of businesses that joined in the strike, closed the schools, and unleashed a virulent propaganda campaign accusing its opponents of being linked with United States interests that wanted to abort the Panama Canal treaties.
The general strike collapsed after a few days, but protests did not end. Periodic protests, strikes, and demonstrations continued throughout the summer and fall of 1987. Relations with the United States deteriorated rapidly as the government charged the United States embassy with supporting the opposition and bitterly protested a United States Senate resolution calling for an investigation of the charges made by Díaz Herrera. An attack on the embassy by a mob and the arrest of United States diplomatic and military personnel by the FDP led to a suspension of military assistance by the United States. At the end of 1987, relations were more strained than at any time since the 1964 riots.
The continued civil strife also badly damaged Panama's economy. The future of the banking sector seemed especially imperiled if the deadlock between the government and its opponents should be prolonged.
In late 1987, it seemed clear that the CCN and the opposition political parties could not, by themselves, force a change in either the military or civilian leadership.
...sentiment has grown increasingly within CONEP [National Free Enterprise Council (Consejo Nacional de la Empresa Privada--CONEP)] and many of its affiliated organizations that the problems facing the private sector extend beyond specific issues to growing problems within the political system as a whole. Resentment over continued military domination of the political system, a perception of increased corruption and inefficiency within the government, and a feeling that political conditions were increasingly unfavorable for business all combined to make many business leaders willing to join, and even lead, open opposition to the government when the June 1987 crisis erupted.
During the June 1987 crisis, business groups played a key role in the organization and direction of the CCN, which spearheaded protests against the regime. Many of the major bodies within CONEP, such as the Chamber of Commerce and Panamanian Business Executives Association, became formal members of the CCN. A total of more than 130 business, professional, civic, and labor groups joined the crusade, which undertook the task of organizing, directing, and coordinating the campaign to force Noriega out of power and to reduce the role of the military in government. The crusade deliberately excluded political parties from its membership and active politicians from its leadership. The presidents of CONEP and of the Chamber of Commerce took major leadership roles within the crusade, which emphasized peaceful demonstrations, economic pressures, and boycotts of government enterprises as means of forcing change on the government. The FDP responded with a campaign of measured violence and intimidation against the crusade's leaders and supporters. By the fall of 1987, most of the original leadership had been driven into exile and the effort appeared to have lost much of its impetus...
Students and some teachers' groups played a major role in the 1987 protests. At least one university student was killed by the FDP [Panama Defense Forces (Fuerzas de Defensa de Panamá--FDP)], and the government closed the University of Panama twice and closed all secondary schools during the June protests. Periodic student protests took place throughout the year, frequently producing violent confrontations with the security forces. Although most student organizations were not part of the CCN, their growing opposition to the political role of the FDP and the policies of the government made the task of restoring order and stability even more difficult...
When the 1987 disturbances began, the church stepped up its criticism of the government, accusing the military of having "beaten civilians without provocation" and of using "tactics to humiliate arrested individuals." Priests were frequently present at CCN rallies and demonstrations, and masses downtown became a focal point for some CCN activities. Priests also stayed with Díaz Herrera in his house after he issued his June 1987 charges against Noriega and the government, and when the house was stormed by the FDP and Díaz Herrera arrested, the bishops demanded his release and denounced government restrictions on the press. But the church stopped short of endorsing the CCN or calling for specific changes in the government and the FDP. Instead, it stressed the need for dialogue and reconciliation. The archbishop's insistence on pursuing a moderate, neutral course in the conflict did not satisfy all of the church leadership. In November, two assistant bishops and a large number of clergy issued their own letter, denouncing government actions and urging changes in the conduct of the military. In late 1987, the church was becoming more active but was finding it difficult to agree on the manner and nature of that activity.