The Fujimori Regime
Soon after winning the elections, Fujimori reversed his campaign promises and implemented an economic austerity program that had been championed by his opponent, Vargas Llosa. His plan aimed to stimulate foreign investment by slashing trade tariffs and simplifying taxes. Fujimori also began the process of privatizing the state-owned companies that President Velasco had nationalized in the late 1960s–early 1970s. This program, which was nicknamed “Fuji-Shock,” caused widespread misery among Peru’s poor populations as food prices shot through the roof. Fortunately, the program also sparked an economic recovery. Inflation dropped from 7,650 percent in 1990 to 139 percent in 1991.
After struggling to convince Peru’s congress to pass legislation in 1992, Fujimori strained international relations with the United States and other countries after he dissolved the congress in his famous autogolpe or “self-coup.” That same year, Peru’s level of terror reached a high point when Shining Path detonated two car bombs in Tarata street, right in the heart of the middle-class Miraflores neighborhood, killing 25 people and injuring more than 250.
That same year, Fujimori’s popularity shot through the roof when the Peruvian military captured both Shining Path leader Abimael Guzmán and the main leaders of the MRTA. The economy began to pick up and, by 1993, was one of the fastest-growing in the world. Fujimori launched a new constitution and recovered international credibility by reopening Peru’s congress.
Having tackled Peru’s twin nightmares of terrorism and inflation, Fujimori was riding a wave of public support and easily beat former U.N. secretary-general Javier Pérez de Cuéllar in the 1995 elections. The following year, 14 MRTA terrorists led by Néstor Cerpa took hundreds 800 prominent hostages after storming a cocktail party at Lima’s Japanese ambassador’s residence. After releasing most of the hostages, the terrorists held 72 prisoners and maintained a tense standoff with the military for four months, until April 1997. As the situation grew desperate, Fujimori authorized Peruvian commandos to tunnel under the embassy and take it by surprise. The operation was an amazing success. One hostage died during the operation—of a heart attack—and one military commando was killed under fire. Except for human rights organizations, most Peruvians raised few objections to the fact that all 14 MRTA members were shot to death—including the ones who had surrendered.
Fujimori ran for a controversial third term in 2000, even though he himself had changed the constitution to allow presidents to run for only one reelection. Once again, Fujimori fell out of favor with the international community when he strong-armed his way into the elections against economist Alejandro Toledo. After alleging vote fraud in the main election, Toledo refused to run in the May 2000 runoff election, and the international community also threatened sanctions. Fujimori went ahead with the election anyway and was, despite the flawed process, elected president.
A huge scandal broke in September, however, when hundreds of videos were leaked to the media. The videos showed Fujimori’s head of intelligence, Vladimiro Montesinos, bribing a huge cross-section of elite Peruvian society, including generals, journalists, politicians, and business executives. The resulting investigation uncovered more than US$40 million in bribes paid to subvert the three key institutions of democracy: the judiciary, the legislature, and the media.
Montesinos’s grip on the media was so tight that he even held daily “news meetings” with their editors to formulate news headlines and decide which stories should be covered. In the judiciary branch, 21 top justices, including members of the Supreme Court, received bribes. Montesinos also bribed a range of politicians, even those within Fujimori’s own party, for as much as US$10,000–20,000 per month. Others received cars or houses.
To make matters worse, Peruvian investigators also concluded that both Fujimori and Montesinos amassed huge personal fortunes through extortion, arms trafficking, and the drug trade.
Fujimori conveniently resigned from the presidency, via fax, while on a state visit to Japan. Back in Peru, an international warrant for his arrest was issued because of his involvement in paramilitary massacres of left-wing political activists in the early 1990s. In 2005, when Fujimori left Japan to return to Peru and launch a campaign for the presidency, he was arrested in his stopover city of Santiago, Chile. He was held for six months in jail, on charges of corruption and human rights’ violations, and was extradited to Peru. At the end of a 15-month trial, Fujimori was sentenced in April 2009 to 25 years in prison for ordering security forces to kill and kidnap civilians.
Montesinos was also arrested in Venezuela after being on the run for eight months and is in a high-security prison near Lima—one he helped design to house Peru’s most feared criminals. About US$250 million in his funds have been recovered from bank accounts in the Cayman Islands, Panama, and Switzerland. Following Fujimori’s departure, congressman Valentín Paniagua became interim president before Alejandro Toledo was elected in 2001.
© Ross Wehner and Renée del Gaudio from Moon Peru, 3rd Edition