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BBC's Claire Marshall in Lima
"There are many reports that the two had close, almost daily contact"
 real 28k

Friday, 3 November, 2000, 23:47 GMT
Peru's attorney- general resigns
The search for the former spy chief is still on
Peru's Attorney-General Blanca Nelida Colan has resigned following criticism of her handling of the investigation into the country's former spy chief Vladimiro Montesinos.

Former intelligence chief Vladimiro Montesinos
Montesinos: Still in hiding
The move is a further blow to scandal-hit Mr Montesinos, who is in hiding in Peru following a bribery scandal.

It was widely believed that Ms Colan, a close ally, protected him in past investigations.

Her decision came shortly after the Swiss authorities froze some $50m in bank accounts linked to Mr Montesinos.

Opposition Congress members welcomed her resignation, citing her close links to the former spy chief.

Money laundering

There is no doubt that its origin is illicit, from money laundering

President Fujimori
President Alberto Fujimori also announced on Friday that security at airports and border crossings would be stepped up to prevent Mr Montesinos escaping.

He said the $50m in Swiss bank accounts had come from money laundering.

"I am the first to deplore these illegalities," he said.

"I knew absolutely nothing about an act of corruption of this nature."

The Swiss Justice Ministry said the money was in three Zurich banks. It has asked other banks to reveal any other funds connected to Mr Montesinos.

Swiss authorities - who are trying to dispel the country's image as a haven for hot money - are conducting a probe over suspected money-laundering.

Alberto Fujimori
The scandal has forced Mr Fujimori to call for new elections
The current crisis, which led Mr Fujimori to announce that he would not seek reelection, began when Mr Montesinos was caught on video offering a $15,000 bribe to an opposition lawmaker.

Mr Montesinos - a top aide to Mr Fujimori for 10 years - then fled Peru.

After a failed asylum bid in Panama, he returned on 23 October and has been in hiding since.

Investigations shelved

Ms Colan said her resignation was necessary for Peru's democratic development.

Peruvian soldiers
The loyalty of the military is under question

Ms Colan - who was widely believed to have been handpicked for her job by Mr Montesinos - has previously shelved investigations into his wealth.

In 1996, she ignored testimony from a high-profile drug trafficker who claimed that he had paid Mr Montesinos $50,000 a month for use of a jungle air strip to ferry drugs.


Mr Montesinos' return to Peru has prompted fears that he would attempt to engineer a coup.

During his time in power, he helped choose many top military leaders.

But so far there has been no indication that the military will come to Mr Montesinos's aid and some of the top guards who were his former allies have been replaced by President Fujimori.

There has been a only small uprising in the south of the country, led by Lieutenant Colonel Ollanta Humala.

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See also:

18 Sep 00 | Americas
Q & A: Fujimori resignation
02 Nov 00 | Americas
Bid to end Peru rebellion peacefully
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