Peruvian ex-spy chief's $50 million stash uncovered

In the most significant sign to date that Peruvian president Alberto Fujimori has severed ties with his controversial former adviser, the Peruvian government has appointed a special prosecutor to investigate the origins of some $50 million Vladimiro Montesinos has stashed away in Swiss bank accounts.

The decision, announced Thursday, came after the Swiss Embassy in Lima informed Peruvian authorities of the three accounts, which have been frozen.

The Swiss government is considering opening criminal proceedings against the former intelligence chief for money laundering.

President Fujimori has been under international pressure to distance himself from Mr. Montesinos, whose continued presence is seen as destabilizing Peru's already tenuous attempts at democracy.

The Peruvian opposition has long claimed that Montesinos, one of the country's most-feared and -hated men, spent his decade as Fujimori's right-hand man getting rich from drug trafficking, arms dealing, extortion, and other illegal activities.

Despite numerous accusations, Montesinos, widely believed to control key judges and prosecutors, always managed to keep the law at bay. Two previous investigations into his personal fortune were shelved by the attorney general.

In September, prosecutors took less than a week to close an investigation of a bribery scandal that forced Fujimori to cut short his mandate and call new elections, set for next April. The scandal centered on a video showing Montesinos paying an opposition congressman $15,000, apparently to switch allegiance to Fujimori.

This time, Montesinos may not escape unscathed. Attorney General Blanca Nelida Colan, a staunch Montesinos defender, resigned Friday morning.

Meanwhile, the government has appointed a respected independent lawyer to lead the investigation of the multimillion-dollar bank accounts. Analysts say special prosecutor Jose Ugaz, a moderate Fujimori critic, will ensure a credible investigation.

"Fujimori had no other option at this point but to give the green light to a serious investigation of Montesinos," says political analyst Santiago Pedraglio. "It's the only way he can save face and hope to hang on to the presidency through the elections."

Fujmori insists he had "absolutely no idea" that Montesinos had amassed such a fortune - but said he has no doubt that the money came from money laundering.

Analysts voice skepticism over Fujimori's claim of not knowing about Montesinos's millions.

"The Fujimori government was organized around corruption," says political analyst Alberto Adrianzen. "A trial of Montesinos would become a trial of the entire Fujimori regime."

Mr. Ugaz has vowed his investigation will not stop with Montesinos, but will include anyone and everyone implicated in Montesinos' crimes - even President Fujimori - if evidence points in that direction.

Swiss authorities have been investigating Montesinos's accounts since Oct. 5, when Montesinos was seeking asylum in Panama. Since his return from Panama earlier this month, Montesinos has been in hiding. Though there is no warrant for his arrest, government authorities say efforts to locate the fugitive have been redoubled, and they have ordered the country's international airport to bar him from leaving the country.

(c) Copyright 2000. The Christian Science Publishing Society