Supreme Court declines case about $5 million reward from Peru

The US Supreme Court on Monday declined to take up an international dispute over whether the government of Peru welshed on a $5 million reward it offered for information leading to the capture of the fugitive head of Peru’s National Intelligence Service.

The action leaves in place an appeals-court decision dismissing the case as outside the jurisdiction of the US courts to decide.

The issue in Guevara v. Peru was whether the US courts have authority to enforce payment of a reward offered by a foreign country for an arrest that takes place in a different foreign country.

In November 2000, amid allegations of widespread abuse of power, authorities in Peru issued arrest warrants for Vladimiro Montesinos. The intelligence chief was allegedly involved in arms trafficking, drug dealing, money laundering, extortion, and murder.

Rather than go before the Peruvian justice system, Mr. Montesinos promptly boarded a yacht and disappeared.

Dealing with a cold trail and a fugitive savvy in the arts of deception, Peru offered a $5 million reward for “accurate information that will directly enable the locating and capturing” of Montesinos.

Montesinos made his way to Caracas, Venezuela, where he underwent facial reconstruction surgery. He also struck a deal with a former Venezuelan intelligence officer named Jose Guevara.

For the next seven months, Mr. Guevara provided a safehouse and served as protector and emissary for Montesinos, according to Guevara’s lawyer.

Lawyers for Peru portray this period in a different light. They say Guevara and others extracted $55 million from Montesinos as protection money. Guevara traveled to Lima, Peru; Bogotá, Colombia; Miami; and Nassau, Bahamas, to tap into secret accounts set up by Montesinos.

Then in June 2001, Guevara made a mistake. He was arrested by the Federal Bureau of Investigation in Miami for allegedly threatening a banker to gain access to a $3.7 million Montesinos account.

Rather than press their case, federal agents wanted to make a deal with Guevara. They would drop the extortion charges in Miami if he would cooperate in the capture of Montesinos. Guevara agreed.

According to Peru, as part of the deal, Guevara was to have his associates in Caracas deliver Montesinos to the Peruvian ambassador’s residence. It never happened.

Instead, that night Venezuelan officials found and arrested Montesinos.

Guevara’s lawyers insist that it was their client’s cooperation that led to Montesinos’s capture. Without Guevara’s monitored phone calls from Miami to Caracas, the authorities would not have located him.

Peruvian officials disagree. They say Venezuelan authorities made the capture independent of Guevara’s cooperation. The timing was mere coincidence, they say.

In addition, they point to two sworn affidavits by a Guevara accomplice that during a monitored phone call, Guevara secretly signaled him to murder Montesinos.

Guevara’s request for the $5 million reward was denied.

Guevara sued. A federal judge in Miami threw the case out. But an appeals court reinstated it. The federal judge then ruled in Guevara’s favor, finding that his information led to Montesinos’s arrest.

But that decision was overturned by the appeals court, which ruled that US courts lack jurisdiction to hear such disputes involving a sovereign foreign country.

In urging the high court to take up the case, Guevara’s lawyers argued that Peru’s refusal to pay the reward money undermines the vital interest of all countries offering rewards for crucial information.

The case also highlights a disagreement between the FBI, which favors paying the reward to Guevara, and the US State Department, which has expressed concern that the case might hurt diplomatic relations between Peru and the United States.