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.
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MAP posted-by: Larry Stevens