Peru Spy Chief’s Fall Reminiscent of Noriega Saga

It is fitting that Vladimiro Montesinos, Peru’s fallen spy chief, has taken refuge in Panama.

After all, Panama is known as a haven for fugitive generals and disgraced dictators. It is also the homeland of Gen. Manuel A. Noriega, the former strongman whom Montesinos has come to resemble in his current plight.

Like Noriega, Montesinos used his intelligence service to gain power and a close relationship with U.S. security forces, despite accusations of corruption and brutality. Like with Noriega, now serving a prison sentence in Florida for drug trafficking, the U.S. government finally broke with Montesinos when his excesses outweighed his usefulness.

The apparent catalyst for Montesinos’ exile--and the political crisis racking Peru--was a video that showed him handing a congressman stacks of cash, allegedly in exchange for his allegiance. But as Peruvians try to shake off Montesinos’ influence, another scandal seems increasingly important: the allegations that Montesinos and Peruvian military officials were involved in smuggling rifles to Colombian narco-guerrillas.

The allegations recall the way Noriega double-dealt his way through relationships with Washington, Cuban spies and Colombian cartels. The possibility that Montesinos or his handpicked military commanders--self-described stalwart U.S. allies in the drug war--ran guns to narco-guerrillas suggests that the unfortunate history of U.S. policy in Latin America repeated itself, critics say.

For years, international human rights groups questioned the U.S. alliance with a mysterious Peruvian spy chief accused of death squad activity and other misdeeds. As in Panama and in Chile, where Gen. Augusto Pinochet’s coup in 1973 had CIA backing, the U.S. government helped create a monster, critics say.

U.S. intelligence priorities prevailed over democratic niceties in the Peru of President Alberto Fujimori, according to Jose Miguel Vivanco, director of the Americas division of Washington-based Human Rights Watch.

“Montesinos was untouchable as a key ally and had to be protected at all costs,” Vivanco said. “That follows the pattern of the CIA with these key fellows.”

Nonetheless, different U.S. agencies had diverse attitudes toward Montesinos. Even former U.S. Embassy officials who express distaste for the ex-spy chief say the image of a villainous partnership between Montesinos and his U.S. counterparts oversimplifies reality. Espionage is an inevitably shady game that depends on dubious characters, they say.

Bill Harlow, a CIA spokesman, declined to comment on Montesinos’ alleged relationship with the agency. But a U.S. intelligence official, who spoke on condition that he not be further identified, said it was “not uncommon for us to have intelligence relationships with heads of foreign intelligence services.”

Under CIA regulations, the hiring of those accused of drug running, human rights abuses or other crimes requires the approval of senior officials in the agency’s operations division and clandestine service.

“It’s always a judgment call,” the official said. “We deal with people with our eyes open. If there’s a questionable human rights record, that’s factored in when we decide whether to have a relationship or not. But we’re tasked to stop terrorism and steal secrets. If we just hang out with Boy Scouts, we couldn’t do our job.”

A retired senior CIA official, who has left government but asked not to be identified, expressed similar sentiments about the agency’s ties to Montesinos.

“You’re basically out there suborning individuals. And you’re working on the assumption they’re subornable--that they’re corrupt, . . . that they want to get their kids into college in the U.S. By definition, they’re not honest. We deal in a world of slimeballs.”

A Classic Foreign Policy Dilemma

Montesinos posed a classic foreign policy dilemma, according to a U.S. official who asked not to be named.

“You are looking at a microcosm of foreign policy in Latin America,” the official said. “What’s more important? Counter-terrorism? Counter-drugs? Or transparency? The hard-core [U.S. government] elements will say that in 1990 you had [Maoist guerrilla group] Sendero Luminoso on the verge of taking over Lima. If you have a guy who can help you stop that, we’ll press democracy on another track.”

Montesinos’ National Intelligence Service, or SIN, led the crackdown on Sendero Luminoso guerrillas and other rebels. Some Peruvians, however, think that the real heroes were peasant militias and police anti-terrorist units known for their skill and restraint.

And Montesinos’ ironfisted methods inflicted lasting damage on the democracy: pervasive domestic surveillance, draconian anti-terrorist courts, the military shutdown of Peru’s Congress in 1992.

The same U.S. government that pushed Montesinos’ departure to Panama reportedly established contact with him through the CIA in the 1970s, when he was an army captain. In 1976, he was accused of stealing Peruvian military secrets for the U.S. government and eventually expelled from the army.

As the spy chief’s notoriety increased in the 1990s, his relationship with the CIA provoked disputes in the U.S. Embassy here, according to former embassy officials.

“He was always a controversial issue at the embassy,” said a former U.S. Embassy official who asked not to be named. Diplomats agonized over Montesinos’ eagerness to meet with high-level delegations from Washington, he said: “The question was always who should be seen with Montesinos and who shouldn’t.”

The reclusive Montesinos angered Barry R. McCaffrey, the White House anti-drug czar, by using McCaffrey’s visits to Peru for rare public appearances that seemed aimed at improving the spy chief’s image. McCaffrey complained that Montesinos exploited him in 1998 by editing video images to give the false impression that the spy chief had chaired anti-drug meetings.

Montesinos also worked with the Drug Enforcement Administration, but mutual suspicion strained that relationship. He clashed with the DEA once because he thought that anti-drug agents were spying on him, the former embassy official said.

And the DEA investigated allegations of drug corruption dating to Montesinos’ work as a lawyer for traffickers in the 1980s. In the mid-1990s, the DEA detected multimillion-dollar transfers overseas of money “from Peruvian government coffers,” the official said. The transfers, one totaling about $200 million, moved through Europe while being converted into different currencies--a textbook money-laundering pattern, the official said.

“We felt the SIN or Montesinos was orchestrating it,” he said. “It looked suspicious.”

But the investigation bogged down. So did the case of a drug lord who testified in 1996 that he personally paid $50,000 in monthly protection fees to the spy chief. The recent video of Montesinos casually paying an apparent bribe makes that allegation noteworthy.

But convincing proof of drug corruption didn’t emerge, the former embassy official said. Although he took a dim view of the CIA’s ties to Montesinos, the official acknowledged that the spy chief contributed to Peru’s progress against drugs.

“He was a necessary evil,” the official said.

The U.S. government has acted with typical ambivalence, said Javier Valle Riestra, who briefly served as a reformist prime minister in 1998.

“With its hypocritical policy . . . the U.S. could say, ‘Yes, we want democracy on the surface, but we want this underneath,’ ” Valle Riestra said. “American imperialism is not that interested in democracy in Latin America. It is interested in stability.”

Yet over the years U.S. diplomats have consistently criticized alleged abuses by the SIN and the weakening of democratic institutions, human rights activists acknowledge. The State Department insistently criticized this year’s troubled presidential elections. After Fujimori refused to postpone a runoff vote and won election to a third term, the U.S. led the international condemnation.

Announcement on Arms Ring Backfired

The final straw for Montesinos might have come last month when he and Fujimori announced that the SIN had broken up a smuggling ring that had bought 10,000 AK-47 assault rifles from Jordanian generals and airdropped them to the Revolutionary Armed Forces of Colombia, or FARC.

The announcement backfired, increasing tension between the advisor and the president. Fujimori was reportedly taken aback by the reactions of Jordan, Colombia and the United States, which cast doubt on the official version that low-ranking former Peruvian soldiers had masterminded the complex deal. The suspects accused Montesinos and high-level military officials of involvement in the smuggling.

Fujimori met early last month with Secretary of State Madeleine Albright and National Security Advisor Samuel R. “Sandy” Berger in New York. They urged him to reform the SIN and said there was no place in that agency for people who abused power.

A week later, Peruvian navy officials leaked to opposition legislators the explosive videotape. The most conspiratorial minds think that the U.S. government played a clandestine role in that blow to Montesinos.

The less melodramatic theory is that the embarrassing allegations of gun-running finally distanced Montesinos from his powerful U.S. allies, paving the way for his fall.

“It’s not a secret that Montesinos had a so-so relationship with the DEA, that the State Department and White House didn’t like him, but that the CIA always protected him,” said Raul Gonzalez, a Peruvian expert on the security forces. “If the CIA removes that protection, he becomes easy prey.”

It seems hard to believe that Montesinos would do something as self-destructive as running guns to the top U.S. enemy in the hemisphere, said Jorge Trelles, the pro-Fujimori director of Peruvian national television.

“Montesinos was so close to the Americans,” Trelles said. “And when you talked to him, he was a sworn enemy of the guerrillas.”

But Montesinos’ conduct on the videotape aggravates suspicions about him, critics say.

“Why does he record a criminal act instead of sending a henchman to do the deal?” Valle Riestra said. “Why does such a shrewd man allow the videotape to be stolen from him? Therefore, why wouldn’t he act out of greed in a deal with the FARC?”

Montesinos has stayed silent since the news conference about the arms ring--except for a letter last week to Panamanian authorities claiming that he had suffered political persecution in Peru. It may be up to the U.S. to clarify the mysteries surrounding the man in Panama who was once an ally.

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Times staff writer Bob Drogin in Washington contributed to this report.