By Anthony Faiola
Washington Post Foreign Service

LIMA, Peru, Nov. 2 –– The Peruvian government named a special prosecutor to investigate revelations today that the country's former spy chief hid more than $48
million in secret Swiss bank accounts--cash that could have come from money laundering, Justice Minister Alberto Bustamante said this evening.

The discovery, which was brought to light by the Swiss government, prompted the administration of President Alberto Fujimori to appoint the special prosecutor, Jose
Carlos Ugaz Sanchez Moreno, a respected independent lawyer, to investigate the accounts held in three separate Swiss banks.

"The Swiss government is inviting us to do everything possible to investigate what could be the existence of money laundering in these accounts, which we knew nothing
about and which are quite staggering," Bustamante said after meeting with Fujimori.

He said the Peruvian government had "ordered the lifting of his bank secrecy both nationally and internationally."

The accounts could be the most significant evidence to date pointing to large-scale criminal activity by Montesinos.

The former spy chief, who helped bring Fujimori to power 10 years ago, is now in hiding in Peru as the president conducts a high-profile search to find and detain him.
Montesinos was long an associate of the the CIA, despite persistent allegations that he was tied to drug money, death squads, political espionage and other illegal
dealings.

In September, Montesinos was cleared in a major bribery scandal by an investigation that lasted less than one week, despite a videotape shown on national television that
showed him paying an opposition congressman $15,000 to switch his allegiance to Fujimori. Analysts said that with the help of the independent prosecutor, who has an
established reputation as a corruption fighter, the investigation into the newly uncovered accounts might prove the legal tool required to prosecute Montesinos.

Montesinos has been in hiding since his surprise return to Peru from Panama last week, a move that was prompted by his fears he would be arrested there on human
rights charges. Montesinos fled the country to Panama amid rumors he was trying to foment a coup.

The spy chief was a key ally of Fujimori 10 years ago, but their close relationship deteriorated in September after Montesinos was tied to the bribery scandal and an
arms-for-drugs deal involving Colombian guerrillas. The public outcry prompted Fujimori to not only sever ties with Montesinos, but call new elections in which the
president promised he would not run.

Bustamante said this evening that the new information on the secret accounts was delivered in a diplomatic communique from the Swiss Embassy in Lima.

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