PERU SPYMASTER'S SWISS ACCOUNTS

Montesinos Allegedly Hid Away $50 Million -- Prosecution Vowed

Buenos Aires -- Swiss authorities froze about $50 million yesterday in
Swiss bank accounts that they believe belong to Vladimiro Montesinos,
Peru's fugitive ex-spy chief, and President Alberto Fujimori responded
by promising to bring his former right-hand man to justice.

The Peruvian president issued his first unabashed condemnation of
Montesinos since ousting the all-powerful adviser and calling for
early elections seven weeks ago amid a political crisis.

``This money is surely illicit,'' Fujimori told reporters. ``I want to
emphasize and clarify that I knew absolutely nothing about an act of
corruption of this nature.''

The president spoke after Swiss justice officials said five accounts
in three banks in Zurich were frozen in an investigation of suspected
money laundering. The Swiss Embassy in Lima, the Peruvian capital,
informed Fujimori's government Thursday that the accounts were
discovered Oct. 5. They were registered to apparent front companies
controlled by Montesinos.

Fujimori's announcement after the Swiss revelation was the latest
offensive in his power struggle with Montesinos, 56, who has spent
nearly two weeks in hiding after returning from exile in Panama.

In a move critics have demanded for weeks, Fujimori said authorities
have issued an arrest warrant for the fugitive spymaster.

A commando unit hunting him has been reinforced, and police guarding
highways, borders and airports are on alert. The president disclosed
that searchers believe Montesinos is being accompanied by two retired
military officers, one a lawyer and the other a telecommunications
expert.

In addition, a special prosecutor has been appointed to investigate
the Swiss accounts and what Peru's justice minister called a
``significant imbalance'' in Montesinos' finances. Montesinos may have
used two front companies to conceal illicit enrichment, according to
Justice Minister Alberto Bustamante.

The Swiss accounts offer potential support for accusations that
Fujimori's former right-hand man, a longtime CIA ally, got rich on
corruption, the drug trade and arms trafficking.

Montesinos suffered another blow yesterday when Attorney General
Blanca Nelida Colan resigned. The political opposition has accused her
of repeatedly blocking investigations into the spy chief's activities
and of ensuring that Montesinos controlled the justice system.

During recent days, a heavily guarded Fujimori removed other
Montesinos allies from military commands and put on combat boots to
lead the manhunt for his former adviser. But Montesinos' ability to
elude pursuers -- and the dearth of information on his whereabouts --
suggests that he retains considerable influence.