DRUG LORD SAYS MONTESINOS TIPPED HIM OFF ON U.S. RAID

LIMA, Peru (Reuters) - A jailed drug lord has testified that Peru's
fugitive former spy chief Vladimiro Montesinos once tipped him off
about a planned U.S. anti-drug operation.

Peruvian drug lord Demetrio Chavez, known by the nickname
''Vaticano'', also said that he cut links with the spy chief when
Montesinos asked him to double to $100,000 the monthly sum he received
to give free rein to cocaine traffickers in Peru's Campanilla central
jungle drug heartland, the head of a congressional commission probing
Montesinos said on Thursday.

``He told me by radio to get out of there urgently because an
operation was planned within 10 or 12 days,'' Vaticano said in his
interview with the commission last month. A tape of the interview was
aired at a news conference in Congress.

Vaticano, arrested in Colombia in 1994, made waves in 1996 when he
accused Montesinos of accepting $50,000 a month between July 1991 and
June 1992, as well as $15,000 per drug flight. He later retracted the
allegation in confused and incoherent testimony at his trial.

``During that year, Vaticano said he gave Montesinos an extra $100,000
in November,'' David Waisman, head of the congressional commission
investigating the fortune Montesinos stashed in overseas bank
accounts, told the news conference.

Investigators say much of the cash in Montesinos' secret accounts came
from illicit arms operations. Authorities have frozen $70 million in
Swiss banks alone and are investigating a string of other accounts.

The cash Vaticano gave him came from bribes paid by drug traffickers
in the area. ``The groups made 280 flights a year,'' Waisman said.

Investigators say Montesinos, who was the right-hand man of disgraced
ex-President Alberto Fujimori (news - web sites) for a decade, ran a
mafia penetrating Peru's military, courts, Congress and media.

He sparked an unprecedented scandal last September when a video was
aired showing him apparently bribing a congressman. The crisis
eventually toppled Fujimori in November. Since then, a string of
``Vladivideos'' secretly taped by the ex-spy chief have compromised
politicians, judges and business leaders.

Flash Jewelry, Gun

Vaticano said he gave Montesinos silver jewelry, expensive watches and
gold chains as well as money. The ex-spy chief's taste is already
known -- Fujimori seized diamond encrusted watches and jewelry worth
$1 million from his home.

``In return, Montesinos gave Vaticano a pistol engraved with his
(Montesinos') initials,'' Waisman said.

The commission chief said Vaticano and Montesinos ended their alliance
at the end of 1992 when the ex-spy chief tried to up the price of his
protection to $100,000 a month.

``The answer was no and Vaticano told us that Montesinos said, 'That's
done it. You've blown it now,''' Waisman said.

Vaticano, who is serving a life sentence for drugs and guerrilla
collaboration charges, was held in a military jail until last week
when he was transferred to a civilian prison.

According to the congressional commission, Vaticano said he was
tortured by the military to change his testimony in order not to
implicate Montesinos.

``He has a visible scar on his head, probably from specialized surgery
to affect his memory,'' Waisman said.