CIA Gave $10 Million to Peru's Ex-Spymaster

The Central Intelligence Agency gave ex-Peruvian spymaster Vladimiro Montesinos at least $10 million in cash over the last decade, as well as high-tech surveillance equipment that he used against his political opponents, the Center for Public Integrity has learned.

Montesinos, who now faces trial on murder, arms and drug trafficking charges, among others, had founded and personally controlled a counter-drug unit within Peru's National Intelligence Service, known by its Spanish acronym SIN.

It was to that Narcotics Intelligence Division, known as DIN, that the CIA directed at least $10 million in cash payments from 1990 until September 2000, U.S. officials told the Center's International Consortium of Investigative Journalists. Most of the money was to have financed intelligence activities in the drug war, though officials acknowledged a small part was for antiterrorist activities.

The CIA knew the money was going directly to Montesinos and had receipts for the payments, the sources said. "It was an agency-to-agency relationship," said one U.S. official, speaking on condition of anonymity in Lima, the capital, "with Vladimiro Montesinos as the intermediary.... Montesinos had the money under his control."

The new information on Montesinos is part of an extensive soon-to-be-released report by the International Consortium of Investigative Journalists (ICIJ) on U.S. aid to Latin America. The material on Montesinos is based on multiple interviews with U.S. and Peruvian officials.

A CIA spokesman in Washington refused to confirm or deny that the agency had helped fund DIN, and that part of those funds went into Montesino's pockets.

However, an intelligence official who asked not to be further identified confirmed that Montesinos had pocketed some, but not most, of the funds. He said that the CIA had been fully aware that Montesino was involved in corrupt deals and that the CIA had briefed the National Security Council, State Department and Pentagon about the alleged corruption. He said the agencies directed the CIA to continue to work with Montesinos because he was Peru's designated chief of counternarcotics and the only game in town.

Montesinos disappeared in October as the regime of Peruvian President Alberto Fujimori collapsed under wide-ranging corruption allegations and was seized in Venezuela on Saturday night, June 23. Montesinos was returned to Peru on June 25 to face an array of government charges.

U.S. Shrugged Off Reports

Over the years, the United States accumulated plenty of evidence of corruption, human rights abuses and other anti-democratic actions by Montesinos, but it shrugged off the reports because Montesinos -- the unofficial head of the National Intelligence Service -- was a CIA asset deemed key to Washington's drug war in the Andes.

But the final blow appeared to be Montesinos double-dealing in Colombia. In what is surely among the most embarrassing turns in post-Cold War U.S. foreign policy, Montesinos used his CIA-backed position of influence to get rich and to betray his benefactors. He arranged an arms deal that sent at least 10,000 AK-47 assault rifles from Jordan to Colombia's leftist FARC guerrillas, collectively public enemy number one in the U.S. war on drugs in Latin America and the main target of Washington's $1.3 billion counternarcotics aid package to Colombia.

Montesinos had long been fingered as corrupted by drug money, although many of the earlier claims that surfaced came from arrested drug dealers. But by 1997, the State Department began to document Montesinos' questionable activities in its annual human rights reports. The Senate Appropriations Committee noted in 1999 that it had "repeatedly expressed concern about U.S. support for the Peruvian National Intelligence Service" and requested that it "be consulted prior to any decision to provide assistance to the SIN."