As Ex-Spy Chief's Videos Reveal Payoffs, Broadcasters Face Loss of Licenses

By Scott Wilson
Washington Post Foreign Service

LIMA, Peru -- Peru's national media, traditionally a fractious, partisan bunch known for giving better than they get, have suddenly become the target of a vigorous
investigation into the country's corrupt recent past.

The latest releases from former spy chief Vladimiro Montesinos's vast collection of home movies feature top television executives taking dizzying amounts of cash to
slant news coverage and savage the political enemies of Montesinos and his boss, disgraced former president Alberto Fujimori.

Many of Peru's most powerful people have long dreaded the consequences of their secret business alliances with Montesinos, who during a decade at Fujimori's right
hand won friends and influenced people by distributing tens of millions of dollars in bribes -- and secretly videotaping most of the payoffs. Now a half-dozen
broadcasting licenses hang in the balance as Congress and the nation get grainy glimpses of media barons on the take.

Take Ernesto Schutz, owner of Panamericana Television, whose October video debut before Congress prompted his flight to Argentina. Schutz, whose Channel 5
has the highest-rated national newscast, was the star of two Montesinos videos. One was made in October 1999, showing him accepting stacks of cash totaling
$350,000. A second, recorded a month later, highlighted his negotiating skills.

"I have big needs -- at least $12 million," Schutz tells Montesinos on the second video. The spy chief responds with an offer of $9 million. "With that, brother," Schutz
tells him, "I can't make it."

Now in a military prison in Lima awaiting trial on charges of corruption, drug trafficking, arms dealing and human rights abuses, Montesinos fled the country in
September 2000 after one of his videos, which showed him bribing an opposition congressman, was made public. His disappearance, followed two months later by
Fujimori's flight, prompted an eight-month manhunt that culminated in June with his arrest in Venezuela.

Earlier this month, Fujimori's elected successor, President Alejandro Toledo, weighed in on how he might clean up the media as part of the broader accounting of
Peru's recent past. Whether the government has the right to pull the licenses -- and how it intends to redistribute them if it does -- has occupied much of Toledo's
time and attention lately and has become a test of his commitment to an independent judiciary.

All six of Peru's commercial television stations are under investigation, and so far Toledo seems in favor of allowing a judge to decide whether to revoke the licenses.
Much of the media treated Toledo harshly during his 2000 run against Fujimori, for reasons becoming increasingly clear, but the new president is hoping to avoid
accusations that he is meddling to punish old enemies.

So far the television stations have found few defenders. The owners of at least three channels have fled the country. "These channels sold their editorial lines to
Montesinos -- before and after the election -- to destroy moral character, to commit fraud and to cover up fraud," said Roberto Danino, Toledo's appointed prime
minister. He is helping draft legislation that would create an oversight panel to handle future licensing issues.

Since the investigation of Montesinos's dealings began a year ago, 1,300 people have come under scrutiny, and 117 are in jail pending trial. Peruvian investigators
working with the FBI have discovered $65 million in cash and $30 million in cars and houses belonging to Montesinos -- assets that have been returned the Peruvian
treasury. Another $150 million has been frozen in accounts found in Luxembourg, Grand Cayman, Mexico, Switzerland and the United States, where the Peruvian
inspector general has two agents working with federal prosecutors.

Venezuelan authorities have not been able to shed much light on Montesinos's time there, Peruvian investigators say, but have turned over e-mails he sent in the days
before his capture that could help identify his protectors.

Jose Ugaz, Peru's special prosecutor for the case, said Montesinos stopped cooperating with investigators in August when he changed lawyers. Now, Ugaz said,
Montesinos is looking for political support to help secure immunity in return for providing evidence against Fujimori. The former president lives in Japan, which has
rejected extradition petitions.

Ugaz acknowledged that Montesinos's alleged drug trafficking has been difficult to trace. Certain police records have disappeared, perhaps stolen by authorities who
did business with Montesinos in Peru's eastern jungles.

"And we also haven't been able to find Fujimori's accounts that we believe hold hundreds of millions of dollars," said Ugaz, acknowledging that only one check has
been found with Fujimori's name on it -- in the amount of $200,000, drawn on a Brazil-based Bank of Tokyo account.

Part of the problem is that resources are slim. Saul Peña Farfan, an anti-corruption magistrate who works on the case behind a huge steel door in the Palace of
Justice, said that despite Toledo's promise to devote more money to the case, his office has not received any additional resources apart from an agency-wide budget
increase. Meanwhile, he said, Montesinos's stalling tactics are coinciding with more political debate over how his case is being handled.

"What he is doing is looking for political and economic help to break apart his case," Peña said. "There are many political, business and military men of high rank that
still owe him many favors."

Ugaz joined the debate over the broadcast licenses by saying the government could revoke them as "an administrative, not judicial" matter. He said it seemed
apparent that the station owners did not comply with rules requiring impartiality and violated national election laws.

Despite the Montesinos cash, Peru's television stations are broke. Shareholders have argued that this proves the money did not benefit the channels, only their
owners, so they should be allowed to keep the licenses. In addition, much of the stations' revenue is from government advertising, which added to Montesinos's
leverage. Investigators say his influence was such that at times he personally wrote newscast scripts and had troublesome reporters fired.

Mario Vargas Llosa, a renowned Peruvian novelist, who lost to Fujimori in the 1990 presidential election, has said that allowing the television stations to keep their
licenses would be like allowing a thief to keep his weapon. But his son, Alvaro Vargas Llosa, a prominent journalist, said his father's position was part of Toledo's
attempt to take over the media.

Reports that Toledo is hoping to transfer the license held by Channel 4 to a media group owned by La Republica, a pro-Toledo Lima newspaper, recalled for many
here Fujimori's heavy-handed tactics.

In 1997, Fujimori revoked the broadcast license and citizenship of Baruch Ivcher, owner of Channel 2, after the station's news reports implicated the president in
domestic espionage and military torture. The license was awarded to Samuel and Mendel Winter, who now stand accused of accepting $500,000 a month from
Montesinos. Ivcher returned to Peru after Fujimori fled. Today he is back in charge of his station.

                                               © 2001