LIMA, Peru (Reuters) -- Peru's disgraced ex-President Alberto Fujimori
                  paid his spy chief Vladimiro Montesinos $15 million "compensation" after he
                  caused the country's worst political crisis last year, newspapers reported on
                  Wednesday.

                  The daily El Comercio said the ex-spy chief demanded the payment in exchange
                  for leaving his post and the country.

                  Citing testimony from former Defense Minister Carlos Bergamino to a
                  prosecutor who is studying corruption charges against the former president, El
                  Comercio and La Republica dailies said Fujimori paid Montesinos with cash that
                  had been earmarked for defense of Peru's border with Colombia.

                  State attorney Jose Ugaz, who is probing what he calls the "mafia" run by
                  Montesinos, has already filed corruption charges against Fujimori with the
                  prosecutor's office based on testimony from a senior official. The prosecutor
                  must decide whether to go ahead and charge him formally.

                  The charges, for misuse of state funds, would be the first to implicate him directly
                  in corruption. No one was immediately available at the prosecutor's office to
                  confirm the reports.

                  Fujimori allegedly authorized the cash via a special decree, a copy of which El
                  Comercio printed. La Republica said the $15 million was $1.5 million a year
                  compensation for Montesinos' 10 years service as Fujimori's top aide -- a position
                  he used to manipulate Peru's courts, Congress, media and military.

                  Montesinos' behind-the-scenes empire came crashing down after a video was
                  broadcast on television last September showing him allegedly bribing a
                  congressman. The alleged $15 million payment was made days later, before
                  Montesinos fled to Panama on a failed asylum bid.

                  He is on the run and was last heard of in Venezuela. Fujimori, who was fired by
                  Congress last November as "morally unfit" to rule, is in Japan, where he is
                  protected from extradition by dual Japanese and Peruvian citizenship.

                     Copyright 2001 Reuters.