Peruvians wash flag as spy scandal grows

The controversial tape: Kouri, left, signs a paper, top, and later receives an envelope from Montesinos

LIMA (Reuters) -- Some 200 people washed red and white Peruvian flags outside the presidential palace on Friday to protest "dirty politics" and demand the head of spy chief Vladimiro Montesinos after a video alleged he bought votes.

U.S. Ambassador John Hamilton urged President Alberto Fujimori to take "clear and energetic steps to restore public confidence in the intelligence services" after the video, aired on television on Thursday night, revealed Montesinos apparently bribing an opposition congressman to join government ranks.

Opposition parliamentarians said the mounting scandal proved Fujimori, who has been under pressure to clean up his international image since winning reelection in a runoff vote in May widely condemned as flawed, should go too.

The video, made public by an opposition parliamentarian who said he had got it from "patriots," showed Montesinos, Fujimori's right hand man, apparently giving Luis Alberto Kouri an envelope of cash, and Kouri pocketing it.

Opposition leaders alleged Montesinos gave him $15,000 and a transcript of the tape suggested it had been recorded on May 5 -- before the May 28 runoff vote. Kouri denies the charges.

Protesters have been washing the flag every week since the election but the protest took on extra significance on Friday.

Luis Bambaren, head of Peru's Bishops Conference, added his voice, blasting the scandal in a statement as "shameful" and saying: "The cancer of corruption must be cut out."

VIDEO CNN's Tim Lister reports on the impact of a video tape on Peruvian politics Play video (QuickTime, Real or Windows Media)

Investors twitched and Peruvian debt and currency weakened as calls snowballed for Fujimori to ditch the man, officially described as a "presidential adviser," who has been a key behind-the-scenes adviser during his entire 10 years in power.

Montesinos has been overshadowed by allegations of corruption and human rights abuses, but is widely believed by Peruvians to wield as much power as Fujimori, if not more.

Even the newspaper Expreso, usually a government stalwart, said that, if proved, the vote-buying affair would be "a scandalous case of corruption of public officials."

What will Fujimori do?

The government's respected ombudsman, Jorge Santistevan, told CPN radio "public ethics have been ripped to shreds."

He called on Fujimori to strip Montesinos of all office immediately, to hold a full public investigation and to offer guarantees that witnesses could come forward without fear.

"The hidden power that is not accountable to anyone has to be investigated," he said. "This is a first step in an investigation that cannot be delayed any longer."

An opposition Congress member brandishes the video tape shortly before the session was suspended

A respected ex-army general said the video caused "shame" and potential divisions in the military, which Montesinos is widely believed to have kept in line behind Fujimori.

All eyes were on how Fujimori, who reportedly met ministers for nine hours on Thursday, would react. He was expected to hold a news conference and analysts said he would have to sacrifice Montesinos sooner or later to survive himself.

Prime Minister Federico Salas told reporters Montesinos had "made himself available" to the state prosecutor's office but a group of opposition politicians said that was not enough.

They said he should be investigated by parliament since Peruvians did not have faith in a judicial system they widely believed Fujimori controlled. They added that Montesinos should not be allowed to leave the country, and should be arrested.

"President Fujimori has been illegitimately elected because he supported the bribing of parliamentarians," opposition legislator Patricia Donayre told a news conference.

"He is responsible and he should be removed from his job as leader of the nation."

But Salas sprang to his defense saying: "I have full confidence in the honesty which he has to govern our country."

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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