CIA paid millions to Montesinos

Miami Herald -- 3 August 2001

by Kevin G. Hall

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 Colombian narcotraffickers, The Herald has learned.

Montesinos, 56 and in jail near Lima on corruption charges, is now dragging the CIA into his legal battles, asking Peruvian court officials to interrogate two CIA officers as part of his defense against charges that he helped smuggle guns to guerrillas who provide protection to Colombian narcotraffickers.

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 obtained by The Herald show how the CIA and State Department first cultivated Montesinos decades ago, 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 document dated July 27, 1991, the U.S. Army Intelligence and Threat Policy Center reported that Peruvian Gen. Luis Palomino Rodríguez 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 counter-drug efforts.''

By then Montesinos was already receiving large sums of CIA cash. Officials speaking on condition of anonymity said 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.

Now Montesinos is looking for CIA help again to defend himself against charges of selling arms to narcotrafficking guerrillas in Colombia. Judge Jimena Cayo Rivera-Schreiber, one of six judges on a special Peruvian anti-corruption court that's probing alleged illicit activity by Montesinos, said the former intelligence chief has given court officials the names of two CIA officers who can provide him with an alibi.

Cayo would not name the officers, but said Montesinos claims they 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.

``He says it's the CIA that told him about this,'' Cayo said, adding that court officials are trying to get sworn statements from the CIA officials.

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 around the globe.

The judges who are investigating Montesinos, and are able to provide some of the first public glimpses of this highly secretive man, describe him as compulsive, orderly and accustomed to stature.

In prison, he has insisted on dining on Gerber baby food -- to soothe his gastritis -- with fancy cutlery brought by his family. Appearing to forget that he is in prison, he sought unsuccessfully to persuade his keepers to allow him a different menu each day, and to be served separate courses.

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, divided among the six anti-corruption judges.

The probes cover 24 crimes from money laundering, illicit enrichment and corruption to organizing death squads, protecting drug lords and illegal arms trafficking.

Since his capture, speculation has been intense that Montesinos would try to link the United States to his illicit activities. The CIA and U.S. Drug Enforcement Administration have privately defended him against detractors in the past.

A declassified DEA document written on Aug. 27, 1996, shows U.S. authorities were aware of allegations that Montesinos and the chairman of Peru's joint chiefs of staff, Gen. Nicolás Hermoza Ríos, also in jail now, were taking protection money from drug traffickers.

Newly declassified U.S. government documents provided to The Herald show that the State Department and the CIA cultivated Montesinos as early as 1974.

State Department documents obtained under the Freedom of Information Act by the National Security Archive, a Washington foreign policy research center, indicate that the U.S. Embassy in Lima identified Montesinos as a potential ally and took him to Washington in 1976 when he was an obscure army captain.

Documents show Montesinos was a political operative in the dictatorship of Juan Velasco when the U.S. government first sought him out. When the left-wing general was toppled in 1975, Montesinos managed to remain in the government led by Gen. Francisco Morales Bermúdez and other conservative generals.

Despite Montesinos' low rank, he was brought to the United States from Sept. 5 to Sept. 21, 1976, and met with Robert Hawkins in the CIA's Office of Current Intelligence along with military officials and the State Department's longtime Latin America policy-planning chief, Luigi Einaudi, now the assistant secretary general of the Organization of American States.

``In those days, it was a big deal to get one of these paid trips to Washington. It had to be someone identified by the agency or embassy as a potential recruit for U.S. interests. You didn't nominate yourself,'' said Riordan Roett, director of the Western Hemisphere Program at the Johns Hopkins University School of Advanced International Studies in Washington.

Roett appears in a declassified State Department document on a list of people said to have been visited by Montesinos during his first trip. Roett said he has no recollection of meeting the then-obscure army captain.

Also on the list was Abraham Lowenthal, a well-known Latin America expert who now teaches at the University of Southern California. Lowenthal also said he did not remember meeting Montesinos.

Montesinos was jailed in 1976, not long after his return. He was tried by the military on charges of selling secrets to the CIA and cashiered from the army in 1977. Then-U.S. Ambassador to Peru Robert W. Dean intervened on Montesinos' behalf with Peru's foreign minister, and Montesinos asked his lawyer to contact the State Department's Einaudi, according to declassified State Department documents.

Einaudi was vacationing in Europe this week and could not be reached for comment, an OAS spokesman said.

Declassified State Department documents suggest why the CIA may have sought out Montesinos. At the time, Peru was the only left-wing regime in a continent largely run by right-wing governments, and the United States was locked in the Cold War with the Soviet Union. Montesinos had information about a potential attack by the Peruvian generals against Chile, which was then run by Gen. Augusto Pinochet, an archconservative U.S. ally.

Reached by telephone in Dallas, Dean said he is 81 and no longer remembers Montesinos or much of anything else about his days as a diplomat. But his recollections of the Velasco government, which was hostile to the United States, point to why Montesinos would have been a valuable asset.

``One day my CIA chief came in and said, `Mr. Ambassador, I have some bad news. Velasco wants everything the American ambassador does to fail.' If you get that message you get a chill up your spine,'' Dean recalls about his efforts to promote democracy. ``He didn't like that kind of breeze blowing in on his frozen system.''