- The Washington Times - Tuesday, November 28, 2000

LIMA, Peru After the political roller-coaster ride of the past several months that led Alberto Fujimori to resign the presidency, Peruvians are looking toward rebuilding their scandal-weary democracy and setting the sagging economy back on the path to growth.

But the attention to the future is unlikely to let Mr. Fujimori or his shadowy former spy chief, Vladimiro Montesinos, off the hook, as new complaints of corruption and other possible crimes emerge daily against both men.

Mr. Fujimori resigned the presidency on Nov. 19 in a letter from Tokyo, where he stopped after attending an economic summit in Brunei. But legislators in Peru refused to accept his resignation, preferring to vote him out of office Nov. 21 for "moral incapacity."

Interim President Valentin Paniagua, installed last Wednesday, will head the government of this Andean nation until an elected president takes office on July 28, 2001.

The expectations of his eight-month government run high.

Mr. Paniagua and his successor face the difficult task of restoring the independence of Peru's democratic institutions, systematically weakened from a decade of Mr. Fujimori's autocratic rule, reportedly enforced through bribery and blackmail headed by Mr. Montesinos.

A videotape aired in September that appeared to show Mr. Montesinos paying an opposition congressman to switch allegiance triggered the nine-week political crisis that ultimately brought Mr. Fujimori down. Mr. Fujimori's initial response to the damning evidence was to fire Mr. Montesinos and call elections four years early but the spiraling scandal made his continuation in power untenable.

Since the release of the tape, new charges about Mr. Montesinos, once considered the second-most-powerful man in the country, have led to a broad probe that includes accusations ranging from money laundering some $58 million was discovered in overseas accounts to murder.

And a special prosecutor leading the Montesinos investigation has requested authorization to include the ex-president himself, following claims that Mr. Fujimori held some $18 million in offshore accounts and had holdings in two front companies.

But Mr. Fujimori is in Japan, where he said he plans to stay for an unspecified amount of time. As the son of Japanese immigrants to Peru, he can opt to be naturalized there, and Peru has no extradition treaty with Japan.

The whereabouts of Mr. Montesinos, meanwhile, remain a mystery, though Lima is abuzz with theories about where he might be. He has not been seen in public since a private plane brought him back to Peru on Oct. 25 from a failed asylum bid in Panama. Mr. Fujimori launched a spectacular and ultimately fruitless manhunt for his former adviser.

"We've requested in generic terms that an investigation be opened for supposed crimes against public administration," said special prosecutor Jose Ugaz, adding that the probe would cover everything from money laundering to corruption.

But even if neither ever faces a court of law, it is important to continue the investigations, analysts say.

"It's not about revenge, it's about putting an end to impunity," said political analyst Juan Abugattas of the University of Lima.

In the first move to dismantle the so-called "Montesinos mafia" among the armed forces, just hours after being appointed, Peru's new defense minister, Walter Ledesma, dismissed 15 top military leaders seen as loyal to the former spy chief.

Restoring the independence of other democratic institutions will see the removal of judges, prosecutors, and other government officials.

But while Peruvians are anxious to recover their democracy and see crimes punished, their main worry is the economy, analysts say.

While Mr. Fujimori was widely applauded for his free-market policies of the early 1990s that wrestled 7,000 percent inflation down to a single digit and made Peru the darling of international investors, the second half of the Fujimori decade saw the economy slump, leaving over half the country's 24 million people in poverty.

Mr. Paniagua has vowed to make the economy a priority, saying he will seek to reduce Peru's debt burden by renegotiating payments and cutting all but essential social spending to mend the nation's fiscal deficit.

But at the same time, he and newly appointed Economy Minister Javier Silva will have to face increasing pressure from labor unions to create more jobs. Only one in every two Peruvians in the work force has a steady job.

"The people can't take it anymore. We need jobs," said Juan Carlos Falla, 34, who, as a technician with the telephone company, says he is one of the lucky ones to have work.

The onus of economic recovery will fall as well on Mr. Paniagua's successor to be elected in general elections April 8.

While Alejandro Toledo, a former shoeshine boy turned economist, has been the most visible leader of the opposition to Mr. Fujimori in the past year, it was not clear whether he could maintain his popularity with Mr. Fujimori out of the picture.

A survey taken by the Apoyo polling firm on Nov. 18, a day before Mr. Fujimori announced his resignation, showed Mr. Toledo was preferred by only 20 percent, while more than 50 percent of those polled said they would absolutely not vote for him.

Mr. Toledo faced off against Mr. Fujimori in elections this year that observers said were marred with irregularities particularly uneven access to news media then pulled out of a second-round vote that gave Mr. Fujimori his third presidential term.

During the rallies and protests against Mr. Fujimori, many Peruvians saw in Mr. Toledo a rabble-rouser who could lead the nation back to its hyperinflation and terrorism-ridden past.

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