Pubdate: Wed, 22 Nov 2000
Source: Los Angeles Times (CA)
Copyright: 2000 Los Angeles Times
Contact:  Times Mirror Square, Los Angeles, CA 90053
Fax: (213) 237-7679
Author: Sebastian Rotella, Times Staff Writer


Officially Abolished, The Spy Agency Known As The Sin Remains A 
Force--And A Reminder Of Its Fugitive Master, Montesinos.

LIMA, Peru--The raiders struck before dawn, 10 well-armed agents of 
the Peruvian intelligence service descending on a house here.

The target was not a terrorists' hide-out. It was a secret 
"intelligence house" operated by the U.S. Drug Enforcement 
Administration with approval of the Peruvian government.

The military judge leading the raid threatened to arrest the 
U.S.-trained Peruvian police officers inside who were using high-tech 
equipment to intercept communications by drug traffickers.

Alarmed DEA agents rushed to the scene and confronted the raiders, 
who had tried to remove computer data. The Peruvian agents said they 
were acting on orders of Vladimiro Montesinos, the chief of the 
National Intelligence Service, known by its initials in Spanish: SIN.

U.S. officials called Montesinos. He apologized, explaining that his 
agents thought the house was a base for Ecuadorean spies. But the 
U.S. officials were dubious. The message of the raid was clear to 
them: The SIN ruled Peru.

"They wanted to show they knew what we were doing and that there was 
no such thing as a unilateral operation in Peru without the SIN being 
aware of it," said one of the former U.S. Embassy officials who 
described the 1996 raid to The Times. "It was a show of power. And 
they wanted to intimidate their own people."

Power and intimidation: That is the story of the SIN. Although 
Montesinos has fallen and Peruvian President Alberto Fujimori 
resigned Monday, the two men who ruled Peru for a decade left behind 
a suffocating culture of secrecy and paranoia. The spy agency, 
spawned by the interwoven threats of cocaine trafficking and the 
Sendero Luminoso (Shining Path) guerrilla movement, became a behemoth 
that turned on the very citizens it was supposed to protect.

"I was very scared of Sendero," said reformist Congressman Luis 
Iberico. "When the enemy became the SIN, I was even more scared. They 
had money, resources, people--they could do whatever they wanted."

A vital step in Peru's transition to genuine democracy is fulfilling 
Fujimori's vow to "deactivate" the SIN. Valentin Paniagua, who is 
expected to become Peru's new president, inherits the challenge of 
dismantling an army of spies in high and low places, a political 
machine that has dominated the government.

Part of the problem is Montesinos, who remains a fugitive. Even if he 
is caught or exiled, his mystique will make many Peruvians suspect 
that his invisible empire lingers.

Officially, the spy agency has been shut down, and opposition leaders 
hope to use its budget to pay for presidential elections next April. 
But critics allege that some SIN operations continue, shifted to the 
headquarters of the army intelligence service.

Further complicating reforms, most leaders here agree that Peru still 
needs a crack spy agency because of the nation's history of terrorism 
and drug trafficking.

The Peruvian spies "were good," said former U.S. Ambassador Dennis 
Jett, who served from 1996 to 1999. "There were legitimate reasons, 
between drugs and terrorists. You have to give Fujimori credit. He 
did not wake up one morning to discover that 40% of his country was 
in the hands of somebody else, like in Colombia. But because there 
were no institutional constraints, no real courts or Congress, a 
limited press, it was inevitable that the power would get abused."

Terrorist Threat Shaped Spy Agency

The SIN was shaped largely by the threat of Sendero Luminoso, which 
waged war on the state in the 1980s and early '90s. So too were 
journalists and politicians such as Iberico who once risked their 
lives covering and supporting the fight against terrorism, only to 
realize that the government had decided they were the new enemy.

Iberico, a 41-year-old former television journalist elected to 
Congress in April, does not seem like a man who has spent 15 years 
looking over his shoulder. But he carries a gun and a two-way radio. 
As he talked recently in a restaurant here, two bodyguards hovered 
nearby--part of the security team that protects him and his family.

And with good reason. Iberico brought down Montesinos. He obtained a 
videotape recorded by SIN cameras of Montesinos paying a congressman 
$15,000, an apparent bribe. The broadcast of the video in September 
led Fujimori to oust his spy chief and announce early elections.

During their battles against the regime, Iberico and fellow 
opposition legislators became fluent in the spy jargon that is now 
commonplace here. Most Peruvians can tell you about deceptive media 
stunts known as "psychosocial operations," or about the eavesdropping 
apparatus that "sucks up" telephone conversations.

"This country has lived 20 years of paranoia," Iberico said. "It is a 
culture of fear. Curing these wounds will take time."

In the late 1980s, Iberico covered the war against Sendero Luminoso 
in jungle villages and dusty shantytowns for the Frecuencia Latina 
television station. The guerrillas, inspired by the messianic Maoism 
of their guru, Abimael Guzman, seemed on the verge of destroying the 

Iberico's close ties to the security forces were partly professional, 
partly patriotic. Especially after the 1990 election of Fujimori, who 
was initially admired by the TV station's owner, Baruch Ivcher, there 
was a sense of a common cause against terrorists. The coverage was 
unabashedly pro-government.

"I never felt a conflict about doing propaganda against terrorism," 
Iberico said. Iberico ranked high on the terrorists' hit list. He 
feared Sendero Luminoso's low-tech but far-flung spy network, known 
as "a thousand eyes, a thousand ears." It used street vendors and 
other sympathizers to stalk victims and set up assassinations and 
bombings. The guerrillas infiltrated spies into the television 
station as menial employees, Iberico said.

In June 1992, a guerrilla car bomb barreled into the station's 
entrance and blew up, killing three people and damaging the building.

By this time, Fujimori had enacted a "self-coup" that temporarily 
shut down Congress and gave Montesinos carte blanche against 
terrorism. The beefed-up SIN became an umbrella agency over the 
disparate intelligence services of the armed forces.

The U.S. Embassy valued Montesinos as the point man who could 
overcome inter-service rivalries. Peruvian critics allege that he was 
a paid agent of the CIA, the official U.S. liaison agency with the 
SIN. The CIA has declined comment. But former embassy officials say 
they were told that Montesinos was never on the CIA's payroll.

In any case, the spy chief clearly benefited from his ties to the 
CIA. The SIN's tentacles spread in every direction.

"Montesinos had the same philosophy as [guerrilla leader] Abimael 
Guzman: 'Except power, everything is an illusion,' " said Francisco 
Loayza, a former SIN agent and estranged friend of the spy chief. 
"They are very comparable personalities."

Montesinos filled the leadership of the military with intelligence 
officers and army school classmates. He surrounded himself with a 
praetorian guard of about 700 commandos, the Jupiter Group.

As Fujimori admitted recently, Montesinos--a former attorney for drug 
lords--placed allies in the justice system to manipulate the courts. 
Even conspiracies acquired a legalistic air: During the videotaped 
payoff and other scandals, Montesinos allegedly required partners to 
sign and fingerprint contracts attesting to their misdeeds.

Spies also infiltrated the tax agency, provincial bureaucracies and 
neighborhood police stations, and patrolled rivers in the Amazon 

Wiretapping became an industry. Agents diverted telephone company 
lines to SIN headquarters, according to the former U.S. Embassy 
official. The agency later acquired computerized frequency-hopping 
gadgets made in Israel, according to the official, who like others 
interviewed for this story requested anonymity because of the 
sensitive topic.

Montesinos took pride in the SIN's telephone interception talents, 
judging from another incident in his wary relationship with U.S. 
anti-drug agents. In 1996, Montesinos sent a cassette to the DEA 
through an intermediary. It was a recording of a U.S. drug agent 
talking to an informant on an embassy phone, according to the former 
embassy official.

"He made it known he was monitoring the phones," the official said. 
SIN agents "were tapping journalists, politicians, businesspeople, 
anyone they could use, anyone they thought could harm them."

An Army of Paid Informants

The official described watching a military officer who was the SIN's 
operations manager work his well-compensated roster of informants. 
"He was throwing out money like gangbusters. He had everything from 
peasants to high-level attorneys."

The official number of agents of the SIN was about 2,000. But its 
full army of agents, informants and occasional allies is believed to 
number in the tens of thousands.

With power came abuse. Many Peruvians, however, were so exhausted by 
the guerrillas' cruelty that they initially tolerated the SIN's 

Intelligence services "develop their own objectives which are not 
necessarily those of the government," said sociologist Raul Gonzalez, 
an expert on the security forces. "Agencies like the CIA, the Mossad, 
the KGB sometimes believe their mission puts them above the 

And in a society with an official minimum wage of $100 a month and 
where many make less, the growing intelligence sector offered 
government salaries and a respected mission.

The SIN became an avenue of advancement for women, who were 
especially useful for clandestine assignments in which men would 
attract suspicion. However, the female agents suffered harassment and 
sexual exploitation typical of a militaristic culture. A group of 
women became disgusted during the mid-1990s as the war on terrorism 
gave way to a terroristic war on dissidents.

"They had put up with the mistreatment during the fight against 
Sendero, they could think they were doing something patriotic," 
Iberico said. "But now they were spying on journalists. They were 
resentful, disillusioned."

The women became double agents. Using code names such as Little 
Kisses and Living Encyclopedia, and elaborate precautions, they 
provided the media with explosive scoops. Among their revelations: 
Montesinos was accused of masterminding the Colina death squad, an 
army intelligence unit that allegedly massacred 15 suspected 
terrorist sympathizers in the Barrios Altos slum here in 1991 and 
nine students and a professor at La Cantuta University a year later.

Iberico led Frecuencia Latina's investigative team at a time when the 
station grew critical of the regime. Their sources--the disgruntled 
spies and police officers, along with repentant guerrillas--taught 
them the arts of gathering information, holding clandestine meetings 
and detecting surveillance.

In October 1996, after Frecuencia Latina broadcast stories linking 
Montesinos and the military to a drug lord, the SIN developed Plan 
Octavio, which designated a list of journalists as enemies with code 
names: Iberico was Doll, others were Shorty, Skinny and Fox.

According to copies of the plan later leaked to the media, the spy 
agency targeted Ivcher, the Israeli-born Peruvian who owned 
Frecuencia Latina, as the "principal objective" for retaliation. The 
document described him as "highly dangerous to national security." It 
accused him of using "his economic power, his influences, his double 
nationality, and [of] demonstrating an absolute lack of love for Peru 
with his boundless eagerness to smear the armed forces."

Television Station Crew Takes On the SIN

Casualties turned up in April 1997. A Frecuencia Latina crew sneaked 
into a military hospital and broadcast a secret interview with Leonor 
La Rosa, a military intelligence agent who had been tortured in the 
basement of army intelligence headquarters. Two superior officers 
later were convicted of brutalizing La Rosa in retribution for her 
contacts with the media.

La Rosa was permanently crippled. Co-worker Mariela Barreto, the 
ex-girlfriend of the alleged chief of the Colina death squad, was 
slain, mutilated and dumped by a roadside.

But Iberico's reporters did not back down. The team broadcast reports 
about Montesinos' mysterious fortune and SIN wiretaps of opposition 
figures, including former U.N. Secretary-General Javier Perez de 
Cuellar, who ran for president against Fujimori in 1995.

The station came under siege by the spy agency. Agents posed as 
secretaries and maintenance workers. Military helicopters hovered 
over a mattress factory owned by Ivcher. A station journalist brought 
in one of his top intelligence sources, Little Kisses, to tell the 
station owner firsthand of the danger.

"I will never forget when I met that brave young woman in the 
basement," Ivcher recalled in a recent interview in Miami. "She said, 
'Take care of yourself, sir. They want to kill you.' And she asked me 
for nothing in return."

Within months, Ivcher was forced into exile. In a case that drew 
international condemnation, the regime stripped him of his Peruvian 
citizenship in 1997 and engineered a station takeover by minority 
shareholders. (Two weeks ago, in a conciliatory gesture by the 
government, Ivcher's citizenship was restored.)

Iberico, meanwhile, went into politics on an anti-corruption 
platform. This summer, another intelligence service insider provided 
him with the political equivalent of a nuclear weapon: the video of 
Montesinos allegedly bribing the congressman.

Today, Montesinos is the all-purpose villain of the moment. His world 
has come crashing down on him. A Peruvian special prosecutor is 
investigating the origin of at least $58 million in overseas bank 
accounts linked to Montesinos and allegations that the former spy 
chief transformed the SIN into a giant mafia linked to drug lords, 
arms traffickers and judicial corruption.

But others share the blame. The U.S. government ignored longtime 
allegations against Montesinos, critics say.

"The CIA has great responsibility," Iberico said. "The democratic 
system was battered with the permission of the CIA."

Meanwhile, former U.S. Ambassador Jett said Montesinos was 
fundamentally a creation of Fujimori.

"We could have come out and said Montesinos is a bad guy and Fujimori 
would have made the same calculation: Is he useful to me or not?" 
Jett said. "Was there controversy about the relationship with 
Montesinos? Yes. But everyone agreed that success on counter-drug 
operations was important. We continued the relationship but kept our 
side of it as clean as possible."

Beyond personalities, the challenge now is to finish dismantling the 
spy machine. The painful transition to full democracy here will 
resemble that of East Germany and other nations once dominated by 
secret police forces.

"I'm afraid after 10 years of a government by spies in which 
blackmail and treachery were part of politics, of the economic 
transition, of the way the news was reported, that the country was 
totally poisoned by that," said journalist Gustavo Gorriti.

"When the files of the SIN become known, the amount of mystery they 
will reveal, I'm not sure how the country will metabolize that," he 
added. "It has become a place in which things are conducted in a 
crooked and gangster-like way."
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