Pubdate: Fri, 03 Aug 2001 Source: Austin American-Statesman (TX) Copyright: 2001 Austin American-Statesman Contact: http://www.austin360.com/statesman/editions/today/ Details: http://www.mapinc.org/media/32 Author: Kevin G. Hall, Knight Ridder Newspapers CIA PAID PERUVIAN SPY AGENCY $10 MILLION LIMA, Peru -- The Central Intelligence Agency paid the Peruvian intelligence organization run by fallen spymaster Vladimiro Montesinos $1 million a year for 10 years to fight drug trafficking, despite evidence that Montesinos was also in business with Colombia's big drug cartels, Knight Ridder has learned. Montesinos, 56 and in jail near Lima on corruption charges, is now dragging the CIA into his legal battles. He is asking Peruvian court officials to interrogate two CIA officers as part of his defense against charges that he helped smuggle guns to guerrillas who allegedly provided protection to big drug cartels. Despite attempts by the U.S. government to distance itself from the powerful Peruvian intelligence chief, years of cooperation with Montesinos dating to the mid-1970s may be coming back to haunt the United States. New documents show how the CIA and the State Department cultivated Montesinos as early as 1974 and how the U.S. government maintained a relationship with him for a quarter-century despite warnings that he was working for both sides in the drug war. In a July 27, 1991, document, the U.S. Army Intelligence and Threat Policy Center reported that Peruvian Gen. Luis Palomino Rodriguez had showed up at a U.S. defense attache's home wearing a bulletproof vest and warned that Montesinos was trying to "frustrate joint U.S.- Peruvian counterdrug efforts." Judge Jimena Cayo Rivera-Schreiber, one of six judges on a special Peruvian court that's looking into alleged illicit activity by Montesinos, said last week that the former intelligence chief has given court officials the names of two CIA officers who can provide him with an alibi. Cayo said Montesinos claims that the officers can vouch that he had nothing to do with a ring that smuggled arms from Jordan through Peru to guerrillas in the Revolutionary Armed Forces of Colombia. Officials confirmed that the CIA has told Peruvian investigators that the agency gave Montesinos' National Intelligence Service $1 million annually from 1990 to 2000. The CIA declined to comment. Investigators are trying to determine whether Montesinos diverted any of the money the CIA provided for anti-drug efforts into his own pockets. At least $270 million allegedly belonging to Montesinos has been found in secret bank accounts in Miami, New York and elsewhere. Former Justice Minister Diego Garcia-Sayan, Peru's new foreign minister, charges that Montesinos may have stolen $800 million. Once a key ally of former Peruvian President Alberto Fujimori and the architect of Peru's successful war against leftist rebels, Montesinos now faces 57 cases against him and at least 168 criminal investigations. The inquiries cover 24 crimes from money laundering, illicit enrichment and corruption to organizing death squads, protecting drug lords and trafficking illegal arms. Since his capture, speculation has been intense that Montesinos would try to link the United States to his illicit activities. The CIA and the U.S. Drug Enforcement Administration have privately defended him against detractors in the past. Former Secretary of State Madeleine Albright and former anti-drug czar Barry McCaffrey have both publicly said they tried to distance the Clinton administration from Montesinos and Fujimori but lost out to the CIA and the DEA. A declassified DEA document from Aug. 27, 1996, shows that U.S. authorities were aware of allegations that Montesinos and the chairman of Peru's joint chiefs of staff, Gen. Nicolas Hermoza Rios, also in jail now, were taking protection money from drug traffickers. - --- MAP posted-by: Larry Stevens