Lima, Tuesday 21 de November del 2017
Book: Assault on Banco Nuevo Mundo
The truth about the persecution of the Levy Family

The Montesinos Conspiracy

Vladimiro Montesinos was one of the country’s most powerful men in the 1990s. From presidential advisor he rose to become the de facto head of Peru’s National Intelligence Service, where he turned into a nefarious political operator. His offices were visited by many to talk politics and business, or to plot some corrupt scheme.

Obsessed by espionage, Montesinos systematically recorded on video tape hundreds of private meetings, many of which were devoted to discussing illicit affairs. In September 2000, when Alberto Fujimori had already been elected for a third term in office, a video clip was disclosed showing Montesinos personally handing over wads of bank bills to Perú Posible political party congressman Alberto Kouri in exchange for crossing party lines and voting in line with Montesinos’ instructions.

The release of the video triggered a huge political crisis in Peru and eventually led to the fall of Alberto Fujimori’s administration and the caretaker government led by Valentín Paniagua.

An enormous corruption network was unveiled that ultimately resulted in the processing and subsequent imprisonment of Fujimori, Montesinos and several dozen politicians, government officials and members of the armed forces for crimes ranging from government officials’ corruption to drug dealing, through arms sales and murder.

After his capture, Montesinos said he had over 30 thousand undisclosed recordings featuring “powerful people and politicians”. These video clips, he said, were an insurance policy to protect his and his family’s lives.

The video clips were transcribed by experts and published by the Peruvian Congress Publishing Office in six volumes called “In the Corruption Room. Video and Audio Recordings by Vladimiro Montesinos (1998-2000).”

Published in 2004, the first volume of this compilation mentions in its general introduction a fact of singular importance:

“Actors in the ‘vladivideos’ are many and include both government officials and private individuals. The reader will find among the visitors to the infamous ‘SIN little room’ business tycoons, with Dionisio Romero to begin with, and the owners of major media, in particular private television moguls. But they are not the only ones. Other scenes show high ranking armed forces officials, judges, ministers, advisors and politicians from various persuasions. We find here a very broad range of political actors and private players enveloped by central power in a large scale illicit operation. To various degrees, most of Vladimiro Montesinos Torres’ interlocutors were asked to support efforts to reelect Fujimori in exchange for private favors. Their cunning shows corruption happens through the interaction of political and economic power acting for private benefit.

After stepping down as Chairman of Banco de Crédito del Perú, BCP, in April 2009, Dionisio Romero talked as follows about Montesinos in an interview with El Comercio newspaper.

Do you regret having visited Montesinos in his office?
No.
Do you think it was right?
I was there for a specific issue. I regret that visit because of all the problems it created for me, but a client needed help. They were harassing him and closing his factories. And in this hallway just outside that door, Raymundo Morales told me: “You have a connection with Vladimiro. You can get that favor.” And I said: “Of course. I will do it for the bank.”
Did you have a connection with Montesinos?
Yes, because of Palmas del Espino. And because he wanted to establish a relationship with me.
Did you talk at the time?
He called me, but rather to talk about the war with Ecuador. He called Arturo (Woodman) and me. He didn’t talk about anything else. He had a very straightforward relationship with me.
El Comercio, April 5th, 2009.
Ibárcena, Jose Villanueva, Elesván Bello and with Vladimiro Montesinos, Dionisio Romero made the following statement, as reported verbatim in the publications of the Congress Anti-corruption Library:

“When Jorge Camet was minister, he managed the ministry. I mean, he gave the instructions and pulled the strings everyday for things to happen. Now, with Víctor Joy Way as minister, I don’t have any influence. He may want to do something but he can’t or he doesn’t have the advisors or secretaries to give orders to get things done. That’s why I’m terribly concerned. We are only one year from elections, less than one year, 11 months only, and we are not taking the measures to restart the economy that will give the President an additional five, six or seven percent. That would be a good precedent.” Volume I, page 151.

“Mr. Dionisio Romero.- Can we revisit an unlikely scenario where Andrade leaves behind his ambitions so we can have a more certain winner in 2005, compared to the unlikely certainty of winning in 2000?

Do you think if I talk to Javier Silva Ruete about this issue…? I do it because we’re good friends, but he will reply: “No, not in the first round, unless he is given the Ministry of… in Fujimori’s cabinet.”

Vladimiro Montesinos.- Silva Ruete?

Dionisio Romero.- Yes.

Vladimiro Montesinos.- As Minister of Economy?

Dionisio Romero.- I don’t know.

Vladimiro Montesinos.- We can give him a ministry.

Dionisio Romero.- If you give him… If you promise him a cabinet position, if it’s the Ministry of Economy, I think he would desert Alberto right now.

Volume I, page 168.
On November 26th, 1999, Carlos Boloña who was Minister of Economy at the time, met General Bello, Almirante Ibárcena, Samuel Winter and Vladimiro Montesinos. The following conversation took place:

“Carlos Boloña (CB): We have to find where to give him money. Not as a gift, because eventually that doesn’t last long. I think that’s important. And make sure they don’t go under… the banks’ fall was foreseeable.

Winter Zuzunaga: I was already checking. I had… But I called, so… because I have to give…

CB: Don’t touch the banks, because that makes people nervous.

Vladimiro Montesinos: We just have to leave them so, quiet. Don’t touch the banks.

CB: I… the sooner the smaller banks merge, the better. Let them get together and somebody can buy them. Let’s keep the broad shouldered banks and they will not give us any trouble.

Volume 4, page 2261.

Does this conversation prove anything? Not necessarily. What matters is that as these conversations took place, other more specific events were taking place.

On July 28th, 2000, Carlos Boloña was sworn in as Minister of Economy. He appointed Luis Cortavarría Checkley as Bank Superintendent. The relation between the two was not new. On June 24th, 1992, the “National Reconstruction Government” led by Fujimori with Boloña as Minister of Economy had appointed Cortavarría to the same position. Before that, Cortavarría had had a private working relationship with Boloña.

In August 2000, the financial system was in dire straits because of the political uncertainty created by President Fujimori’s attempts to get reelected a third time. However, Banco Nuevo Mundo was a sound and renowned bank and the sixth largest in the financial system. Its equity figures matched those appearing in the December 31st, 1999 balance sheet audited by Price Waterhouse, for a total 72.3 million dollars.

Other figures demonstrated the Bank’s health:

Normal portfolio: 79.1% vs. 63.8% system average.
Doubtful portfolio: 8.8% vs. 16.1% system average.
Past due rate: 8% vs. 15% system average.

It’s important to underscore SBS usually inspects banks once annually. It had visited BNM in the first half of 2000. Its findings were satisfactory. But between August and October 2000, SBS inspected BNM again and found its provisions insufficient. This was a debatable finding but, at worst, the gap could have been filled by reducing the Bank’s equity by a few million dollars.

In September 2000, the Bank’s shareholders increased its capital by 7.5 million dollars, including a 2.5 million premium which further strengthened the Bank’s equity. That same month, Apoyo y Asociados Internacionales SAC, a risk rating agency, awarded Banco Nuevo Mundo its “B” rating while its financial instruments received A and A+ ratings.

In October 2000, the Government of Peru withdrew its deposits from the so-called “small” banks.

In November 2000, Arthur Andersen concluded its due diligence of Banco Financiero, and the details were finalized for its acquisition by Banco Nuevo Mundo with support from Bank of America Security.

Also that month, a suspicious e-mail campaign triggered panic about an inexistent Banco Nuevo Mundo insolvency after SBS’s long and bizarre inspection visit to our organization.

Also that month, the Peru’s state-owned second tier bank, the Corporación Financiera de Desarrollo S.A., COFIDE, asked to be returned the portfolio of loan collaterals and Banco de la Nación withdrew its support to Banco Nuevo Mundo. Meanwhile, the Central Reserve Bank (BCR) refused to re-discount the Bank’s portfolio, although it was still below the legal limits. In sum, a gun was pointed against our heads, and the countdown started. Curiously enough, other banks that were in truly bad condition received a very different and more benevolent treatment.

On November 22nd, Valentín Paniagua took office as President of Peru and Javier Silva Ruete was sworn in as Minister of Economy. Luis Cortavarría remained as Banks’ Superintendent.

SBS blocked then the acquisition of Banco Financiero, which would have demonstrated the strength of Banco Nuevo Mundo and halted the mysterious financial terrorist campaign unleashed by mysterious hands and fueled by the Government itself. Why wasn’t that financial terrorism stopped, instead of blocking our acquisition?

On December 4th, 2000, CONASEV –the Companies and Securities Commission– after examining our financial stability and strong equity position, authorized Banco Nuevo Mundo to list in the Lima Stock Exchange.

On December 5th, 2000, SBS intervened Banco Nuevo Mundo, arguing BNM was no longer supported by the Central Reserve Bank Compensation Fund, because of “insufficient liquidity” (sic). The Bank, which my father had helped to create with much effort and love, was being robbed under our own noses. Strangely, other banks that were worse liquidity problems were not touched and are still operating.

In August 2000, I talked to Manuel Custodio, an official who had previously been with Banco Wiesse, then with Banco Sudameris and finally at SBS under Martín Naranjo. Manuel told me: “I have been told there is an SBS plan to take your bank away from you”.

I didn’t believe him because our Bank was financially healthy and I couldn’t imagine they would try to sideline us. I was wrong. The attack not only went on but was devastating. When the Paniagua caretaker administration was over and Alejandro Toledo was sworn in as President with Pedro Pablo Kuczynski as Minister of Economy, Cortavarría strangely kept his position as Bank Superintendent. Strangely enough, Cortavarría held on to his position as a political appointee through three different administrations and economy ministers, until he signed the fraudulent liquidation resolution and finally left his post.

The SBS’s resolution liquidating Banco Nuevo Mundo was anomalous, illegal and fraudulent. Figures were transformed and reality altered. After its last inspection visit, when they stayed in our offices for two months, the SBS reported a debatable provisioning deficit for 18.8 million dollars. When the Bank was put out for liquidation, the presumed deficit had risen to 217 million dollars. These two extremely different figures were produced in a very short time, with the apparent single objective of blowing up the results and warrant the assault on the Bank.

The real motivation became even clearer when we were denied by every possible means the information about that liquidation. Such secrecy was obdurate and tenacious. Even though a court had ordered delivering the information after Nuevo Mundo Holding S.A. (NMH) won an Habeas Data appeal before the Constitutional Court, SBS refused delivering it resorting to all possible arguments. Why the refusal to disclose how the liquidation took place and its details? Who bought or kept the banks’ portfolio and at what price? Why did SBS pay millions of dollars worth of legal fees to file appeals and refuse disclosing information to which we all have a right?

Interbank and Crédito Banks, the latter through “Consorcio Define, Dirige y Soluciones en Procesamiento S.A.”, were appointed as BNM’s liquidators. “Consorcio Define S.A. Dirige S.A. y Soluciones en Procesamiento S.A.”, meanwhile, appears as a passive financial system company.

As soon as they started to perform their very convenient role, Interbank and Crédito liquidators started another business; they distributed the Bank piecemeal among them together with its clients, savings and equity. The details of this liquidation have not been disclosed until now.