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By DAVID ADAMS
© St. Petersburg Times, published March 26, 2000
A drug case in Bolivia involving sex, lies and videotape is conspiring to upset relations between the United States and Bolivia, one of its principal allies in the war on drugs.
At the center of the scandal is Marino Diodato, an Italian accused of drug trafficking, who allegedly videotaped Bolivian politicians and businessmen in bed with prostitutes in order to protect himself from prosecution. Last week the government's chief spokesman and information minister was forced to resign after accusations by Washington that he influenced a court ruling that dismissed charges of drug trafficking against Diodato.
The United States is demanding a "full investigation" into the prosecution of Diodato, who is married to a niece of President Hugo Banzer. Relations between the two countries have been tense since the U.S. ambassador, Donna Hrinak, warned that the acquittal was a green light to those "who want to do business with the Mafia."
Oscar Hassenteufel, the president of Bolivia's Supreme Court, called the ambassador's remarks "offensive."
Interior Minister Walter Guiteras added: "We don't accept pressures, nor American interference, and much less the subjugation to mafias."
But Bolivia's economic dependence on the United States means that the government has no option but to swallow its pride.
Bolivia is one of the poorest countries in Latin America, and last month Banzer was obliged to write to President Clinton seeking funds to crack down on drug production.
Diodato has long been suspected by anti-drug agents of being a key player in the Italian Mafia's expanding interests in the drug trade, exporting cocaine and heroin, as well as laundering drug profits through illegal casinos in the Caribbean and South America.
Diodato was arrested last year along with several other Italians and prominent businessmen Santa Cruz, Bolivia's crime-ridden second city, and accused of crimes ranging from cocaine smuggling to illegal casino gambling, phone piracy and espionage.
At the time, his arrest was hailed as an example of international cooperation in the drug war.
But his prosecution was never expected to be easy. His political connections run so deep that his detention caused open squabbling in the government, leading to the resignation of three Cabinet members including the minister of justice.
Diodato made an unusual offer last week to end the government's embarrassment. "I ask the president to end this infamy by extraditing me to the United States so that it's a court in that country that finally judges me for what I haven't done," he said.
The offer surprised U.S. officials who say Diodato has not been indicted in this country.
The deputy minister of defense, Guillermo Canedo, said this month that Diodato rented rooms at a five-star hotel in Santa Cruz where he lured influential figures for sexual trysts with prostitutes.
Information including photos and videos, on the people tempted into the trap is now in the hands of counter-narcotics investigators.
"Diodato considered them his friends by taking them to these suites, but he filmed them with the intention of blackmailing them," Canedo said.
A former army paratroop trainer, Diodato came to Bolivia as part of a small group of Italian mercenaries hired to help train paramilitary groups in counterinsurgency tactics against left-wing guerrillas.
He was arrested last year after a local telephone company accused him of cloning telephones and mobile phones.
He was later linked to a series of cocaine labs and illegal casinos.