LATIN AMERICA : Did Peru Army Alter Case to Hide Drug Role? : Critics say trafficker was tried in secret on trumped-up charge to conceal his links with corrupt military officers.

Demetrio Chavez Penaherrera, known as Vaticano (Vatican), was the patriarch of Peruvian cocaine trafficking. The U.S. Drug Enforcement Administration helped Colombian authorities capture him in January and deport him to Peru. After a swift trial, Vaticano is serving a life sentence--not for trafficking but for “treason against the fatherland.”

Critics of the secret and summary military trial say charges against Vaticano--that he collaborated with Maoist terrorists--were trumped up to cover up his collaboration with corrupt military officers. The controversy has reinforced discouraging doubts about whether the international flow of cocaine can be stopped at its source if Peru, the biggest source of raw cocaine paste, lets such corruption go unpunished. But U.S. officials say there are grounds for optimism.

For years, Vaticano conducted business in the Huallaga Valley of eastern Peru, operating landing strips for drug planes and putting together big shipments of crude cocaine paste, which was flown to Colombia for refining. Headquarters of his “firm” in recent years was Campanilla, a town on the main road skirting the eastern foothills of the Andes. His landing strip there was a widened section of the road.

An anti-guerrilla army battalion based in Punta Arenas, a five-minute march away, often posted detachments in Campanilla. Numerous sources have told of a business relationship between Vaticano’s firm and the officers at Punta Arenas. “If this guy is sending out tons after tons of dope right under the nose of an army contingent, obviously someone is getting paid off,” a U.S. law enforcement official said.

In March, 1992, Vaticano moved to Cali, Colombia, home of the notorious Cali cartel, now the biggest cocaine-smuggling network. Meanwhile, Vaticano’s firm continued to operate in the Huallaga Valley.

DEA agents knew that Vaticano was in Cali, but they did not know where. In late December, an informant told them where, charging $50,000 for the information.

Colombian authorities arrested Vaticano in January and deported him to Peru for trial in a civilian court on trafficking charges. But then the army charged him with treason against the fatherland under a 1992 anti-terrorist decree, accusing him of giving arms and military information to Maoist guerrillas of the Sendero Luminoso (Shining Path). He was tried in a closed courtroom by an anonymous military judge, who convicted and sentenced him Feb. 19.

Vaticano, 40, is now imprisoned in the same navy base where Abimael Guzman, the head of the Sendero Luminoso, is serving a life sentence, also for treason against the fatherland.

According to the anti-terrorist decree, Vaticano is to be held incommunicado for the first year of his term, which presumably would prevent anyone from hearing what he might have to say about military links with drug traffickers. But since his capture, information has leaked out that implicates army officers in his trafficking business.

Evaristo Castillo, a cashiered army major who conducted a surprise raid on Campanilla in 1992, has said that an army platoon there was protecting drug traffickers and refused to cooperate in the raid. Castillo said his commander, Gen. Eduardo Bellido, berated him for raiding Campanilla. “I know a lady in Lima who is the contact between Bellido and practically all of the drug-trafficking people,” Castillo has told Peruvian human rights workers.

Raul Pena Cabrera, Vaticano’s lawyer, said in an interview that military commanders apparently fear that Vaticano “could compromise certain military officials in high positions.” Pena said that, in legal testimony, Vaticano “implicated a commander, majors, captains and lieutenants” stationed at the Punta Arenas army base at different times during two years. “They charged $3,000, $4,000, $5,000 per flight” of cocaine paste, Pena said.

Gen. Nicolas Hermoza, the army commander, has denied that any military officers collaborated with Vaticano. But Hermoza acknowledged that 32 members of the army have been expelled for involvement in drug trafficking.

While Vaticano’s case has battered the army with a punishing storm of publicity, there are indications that the military is getting tougher on traffickers. In late February, an army and police task force aided by DEA agents made Peru’s biggest drug seizure ever, grabbing about three tons of cocaine paste in a raid on a secluded airstrip in the Manu national park.