JAILED U.S. ALLIES SHOW SEAMY SIDE OF PERU'S DRUG WAR

Perils Of Partnership: The Generals Reminisce

LIMA: Inside a dilapidated central prison, a gaggle of former President
Alberto Fujimori's top generals sulked around a green concrete jail yard on
a hot afternoon. The recently arrested generals whittled away their
recreation time halfheartedly, playing soccer and reminiscing about the
days when Mr. Fujimori's finest could count on at least one steadfast
friend: Uncle Sam.

General Juan Miguel del Aguila, head of Peru's National Anti-terrorism
Bureau until last year and, later, the security chief of the National
Police, recalled frequent meetings with American intelligence agents right
up to the moment when Mr. Fujimori abandoned the presidency and fled to
Japan in November.

"The U.S. was our partner in every respect, giving us intelligence,
training, equipment and working closely with us in the field," said General
del Aguila, who was charged with conspiracy in the state-sponsored bombing
last year of a bank in central Lima, an act meant to look like the
handiwork of Mr. Fujimori's opponents to portray them as radicals. "The
United States was our best ally."

Less chatty, General Nicolas Hermoza Rios, an honors graduate from the U.S.
Army's School of the Americas at Fort Benning, Georgia, shooed away a
foreign journalist. The former head of Mr. Fujimori's joint chiefs during
most of the 1990s - a decade when Peru vied with Colombia as the largest
recipient of U.S. military aid in South America - General Hermoza had just
pleaded guilty to taking $14 million in illicit gains from arms deals. He
was still fighting more potent charges of taking protection money from the
same drug lords the United States was paying Peru to fight.

The arrests of 18 generals in the six months since Mr. Fujimori's fall
- -among more than 70 of his government's high ranking military and
intelligence officials against whom criminal charges have been brought -
have lifted a curtain on the dark side of Washington's partnership with
Peru during the 1990s. Hailed as a model for U.S. military cooperation with
Latin America, the alliance was part of a quest to crush leftist rebels and
drug traffickers. To that end, the United States provided Peru not only
with cash, but also with training, equipment, intelligence and manpower
from the CIA, the Drug Enforcement Administration and U.S. armed forces.

But a purge under way here since Mr. Fujimori's disgrace has shown that
many of the people the United States worked with most closely to accomplish
its goals - especially in the drug war - appear to have been working both
sides of the street, forming a network of corruption under the noses of
their American partners. For many Peruvians, this has raised the question
of whether American officials working here were duped or just averted their
gaze.

"The United States was working with people involved in massive criminal
activity in Peru," said Anel Townsend, the head of a Peruvian congressional
subcommittee probing government links to drug trafficking in the 1990s. "If
U.S. intelligence did not know what was going on, it certainly should have.
You can't just offer that kind of assistance to a government like
Fujimori's and then take no responsibility for the consequences."

The underside of cooperation in Peru underscores the difficulties and
compromises of American military partnerships in Latin America. Echoes of
Peru's problems can already be seen in Washington's $1.3 billion aid
package to Plan Colombia, instituted during the Clinton administration.
Critics warn that American officials may be repeating the mistake of
cooperating with a corrupt military establishment to meet their ends in the
drug war.

The former chief of the secret police, Vladimiro Montesinos, for instance,
was for years Peru's top liaison with Washington and Mr. Fujimori's
intelligence chief. He is now a fugitive with a $5 million price on his
head. Continuously defended by U.S. officials and the CIA as a staunch ally
in the drug war, Mr. Montesinos is now facing 31 criminal counts, including
charges that he ordered civilian massacres in 1991 and 1992 and that he
protected drug smugglers while aiding in capturing others.

The American officials insist that until recently, evidence indicating
high-level corruption was largely hearsay, and they point out that, for a
while, Mr. Fujimori was one of the most popular presidents in Peruvian
history. Unlike the corrupt, repressive Latin American governments
Washington supported out of strategic interest during the Cold War, Mr.
Fujimori was democratically elected in 1990 and re-elected in 1995. And
when Mr. Fujimori appeared to be robbing a new term through fraudulent
elections last year, these officials say, the United States began
distancing itself from his government.

"While everyone is now trying hard to forget it, Mr. Fujimori did have a
reputation for being relatively honest, and it remains to be proven to what
extent he was corrupt," said a former State Department official who worked
for years in Peru. "For instance, in the privatization of some $17 billion
worth of state-run enterprises, I never heard that the process was corrupt.
Many businessmen compared it very favorably in that regard to Argentina."

The authoritarian-style former president sought asylum in his parents'
native Japan last November amid allegations of corruption and signs that
Congress would move to impeach him. Mr. Fujimori, who briefly closed the
Congress in 1992 and seized almost total control of the judiciary and the
media, is now being probed for theft of gold bars from the Central Bank and
ordering the assassinations of leftist guerrillas. But he has yet to be
brought up on formal charges.

Some American officials concede that they lapsed in not taking a stronger
line on dominant figures in Mr. Fujimori's government, especially Mr.
Montesinos. An army deserter who sold state secrets to the CIA in the
1970s, Mr. Montesinos was at one time a lawyer for drug traffickers. In the
early 1980s, he signed illegal documents on behalf of a Colombian client
for the purchase of buildings in Lima that were later discovered to harbor
cocaine processing equipment.

His background, as well as continuing allegations of misdeeds throughout
the 1990s, did raise concerns at the American Embassy in Lima as well as in
Washington. But the CIA argued that rumors of his corruption were
exaggerated and it called him a vital asset. He continued to be
Washington's chief liaison, holding repeated meetings with top American
figures, including the former White House drug policy coordinator, Barry
McCaffery, and General Charles Wilhelm, the former head of the U.S.
Southern Command.

Critics here say the relationship flourished despite evidence available
since the early 1990s that painted a broad, if incomplete, picture of
high-level official corruption. That evidence included testimony taken
during congressional hearings on corruption in 1993, when a government
witness who had worked with Peru's most notorious drug trafficker, Demetrio
(El Vaticano) Chavez, testified that General Hermoza had been receiving
$50,000 to $100,000 a month in protection money. The witness also said that
Mr. Montesinos "is the one who is making the most from 'El Vaticano,'"
according to transcripts of her testimony.

Mr. Chavez was finally arrested in Colombia and extradited to Peru. During
his trial in 1996, he testified that he had paid Mr. Montesinos $50,000 a
month. Several days after Mr. Chavez's testimony, he recanted his story.
But Mr. Chavez now says he was tortured and ordered to recant.

Mr. Fujimori's former anti-drug officials say American drug enforcement and
CIA officials were reassured by promises of efforts to root out the
corruption. "I'm not going to defend an administration that we now know was
rotten, but I can tell you that most of us working in counternarcotics were
honest people who didn't know what was going on," said General Dennis del
Castillo, who headed the National Police Counter Narcotics Bureau until
last year.