Date: Wed, 11 Jan 1995 18:57:01 -0500 (EST)
From: ODIN <>
Subject: The Peruvian Narco-State
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From: Luis Quispe <>
Subject: The Peruvian Narco-State

From El Diario Internacional, November 1994
English Translation: Ediciones La Nueva Bandera, 01/95.

The Peruvian Narco-State

From El Diario Internacional, November, 1994

Experts generally agree that more than 50% of the income from Peruvian exports come from the drug trade. Peruvian economists now talk about the "narco-economy." The coca growing regions are estimated to be over 200,000 hectares.

Fujimori's advisor Vladimiro Montesinos is accused of being the broker between the drug traffickers and the military. Dozens of military officers, among them army generals that keep Fujimori in power have been denounced for having ties to the drug Mafia.

The drug trafficker Demetrio Chavez, who is known as the "Vatican", heads up a drug empire in the Peruvian jungle. He recently denounced that his multimillion dollar business functioned with the protection of military garrisons stationed in Alto Huallaga.

The "Vaticano" revealed that he used the army's helicopters and landing strips to transport thousands of tons of drugs.

All of this has made Peru, along Haiti, Surinam, Morocco, Nigeria, Pakistan, Burma and Equatorial Guinea, as one of the leading countries of the world considered as "narco- states."

This article comes from the Geopolitical Drug Observatory (OGD), an institution based in Paris-France that investigates drug trafficking and its links to governments.


Here we will analyze the relationship between the state and drug trafficking. The civil-military regime of Fujimori is driven by drug deals and drug dollars. The article is also based on a valuable testimony that show the link between armed forces and the narcotraffickers. We present a summary of the statements of a former U.S. Drug Enforcement Agency (DEA) agent and major Evaristo Castillo Aste. The latter is an active army officer, who formerly had a high post in the military. He was close aid to general Torres Aciego when this was the minister of defense. From there, he went to Alto Huallaga where at various times he was chief of military operations, chief of political warfare, and chief political-military officer of the Sauce zone. Major Castillo in his position with the high ranking officer saw first hand the tentacles of the drug traffickers that reached into the armed forces and the Fujimori government.

Major Castillo Aste made explosive accusations before the inspector general office of the army. As a result, he was accused of a petty theft of having "stolen $200 from a general" and was expelled from the army in February of 1994. The substantiated accusations he made brought him persecution and death threats. To save himself from the government's hatchet men and death squads he had to go into hiding. He never spent more than one night in the same house. On the door of his house, they hung a butchered dog with death threats. They tried to kidnap one of his sons, and another was told to urge his father to shut-up. His wife was subjected to constant harassment. None of this stopped major Evaristo Castillo, who courageously denounced the generals and Fujimori's ministers who were linked to international drug trafficking. Major Castillo now lives in exile in Spain. He merely escaped and saved his life.


Fujimori has declared on many occasions that he will "frontally attack drug trafficking." Nevertheless, he has made the state the principal money launderer of drug money.

The Peruvian economy survives thanks to the $1.5 to $2.0 billion dollars that are earned annually from the drug trade. The Central Reserve Bank of Peru (BCR) is the principle financial organization of the Peruvian drug business. The government has turned the principal avenues of Lima into drug dollar selling agencies. The chief advisor of Fujimori is the ex-captain and lawyer Vladimiro Montesinos, an individual who for many years was dedicated to the legal defense of drug dealers. He was the lawyer for Evaristo Porras, second to the powerful drug lord nicknamed the "Minister." Montesinos was denounced by the media of being the connection between the drug Mafia and the military commanders. In the parliamentary list presented by Fujimori in 1990, two people linked to drug trafficking were posted: Carmela Polo Loayza, nicknamed "Madame Carmeli", who was sentenced to 10 years in prison for the crime of drug trafficking, and the lawyer Alcides Salomon Zorrilla, defender of the known drug trafficker Carlos Lamberg (semanario Caretas).


At the beginning of January 1994, the Colombian police captured the drug trafficker Demetrio Chavez Penaherrera ("Vatican") and turned him over to the Peruvian authorities. This "gift" from the Colombians was a time-bomb for Fujimori and his military gang. "Vatican" led one of the most powerful drug Mafia in the Peruvian jungle. He moved 30 tons of basic cocaine paste (PBC) a month. At the time of his capture he was reputed to be worth $500 million. "Vatican" had built up his empire with the support of the armed forces and the official authorities established in Alto Huallaga. The big profits of Chavez Penaherrera were shared with the high command of the army that in return gave him the use of military patrols and army columns to protect his drug business. "Vatican" rented the helicopters and airfields of the government to move thousands of tons of drugs. High officials, judges, mayors and other authorities had been turned into employees of the Peruvian mafioso.

The capture of "Vatican" rocked the Peruvian regime to its foundations. Any public declaration by the drug trafficker could open-up a can of worms and create serious political problems for the military leadership. The government and the top military leaders tried various maneuvers to white- wash the scandal. Fujimori and the official press were in the lead of giving false leads and with the aim of creating a smokescreen that many famous men and women were implicated. In the midst of a spectacular circus Demetrio Chavez was presented as a "terrorist", dressed in a striped prison uniform and summarily judged in secret by hooded military judges. In this way, "Vatican" the narcotrafficker and mafioso was converted into a "dangerous terrorist", "a collaborator with Sendero Luminoso." The official propaganda signaled that "Vatican's" gang gave money and armed to the Maoist guerrillas. He was accused of "treason to the fatherland" and condemned to 30 years in prison without any visitation rights, much less from journalists that could get information from him.

On May 9, 1994, when the scandal had already blown-up in the face of the government, "Vatican" met with an investigating commission of the lame-duck Constitutional Congress where he confirmed his close relationship with top military commanders. The narcotrafficker indicated that between 1990 and 1993 he had distributed large sums among the leaders of the Military-Political Command in Alto Huallaga and that in return he received their protection and complete freedom of action to carry out his business. He revealed that the army's airfields and helicopters were used in the transport of drugs. He said that every month there were 12 secret flights and that he paid the military $5,000 for each use of the airfields. He also admitted that he bought drugs that were seized by the military from other drug traffickers. He denied having collaborated in any way whatsoever with the Maoist guerrillas. Furthermore, he confirmed that with the support of the army he had organized a paramilitary force of 200 gunmen that served to protect his "interests", and who participated in joint counterinsurgency operations with the military.


"The taxes are $70,000, $50,000 for you and your leaders and $20,000 for the ground crew... he started a transfer of 800 kilos from one site to another." This is the testimony of major Evaristo Castillo on the narcotrafficker's offer for him to order the use of helicopters. In response to his refusal, one of the mafia bosses replied threateningly: "I fixed this with your leaders." Evaristo Castillo told of this incident to general Eduardo Bellido, head of the Political-Military Command of Alto Huallaga. The official responded in a patronizing tone: "Well, it will be on your conscience, only you will know if you accept it or not." After this, he proposed to general Bellido to "carry out a special operation to discover who ordered the helicopter flights and how the drugs were transported. He was never interested in the plan." (Caretas, No. 1295, January 1994, pp. 30-31).

For his part, Augusto del Rio, ex-DEA agent who worked for many years in Alto Huallaga, made powerful revelations on the link between drug traffickers and the military on an interview with channel 9 TV in Lima: "... I have seen with my own eyes that the military leaders are compromised in the protection of narcotraffickers, especially with `Vatican'... It started with general Alberto Arciniega and continued with general Bellido, I only need to show a photograph where they could be seen, but their gunmen search everyone who goes to the airfields and it was impossible to take pictures. If they found cameras on you they would kill you..." According to the ex-DEA agent, the high officials that were in charge of guaranteeing the security of the narcotraffickers received between $400,000 and $500,000 periodically.

The preceding article was published by The New Flag, a newsletter reporting on contemporary Peruvian politics, especially the developments of the People's War. Should you like to subscribe, please contact to:

La Nueva Bandera
30-08 Broadway, Suite 159
Queens, NY 11106


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