Monday, April 6, 2020

LATIN AMERICA | 16-12-2017 12:04

Peru president refuses to resign, impeachment looms on horizon

A handout picture distributed by the Peruvian Presidency shows President Pedro Pablo Kuczynski delivering a televised message to the nation on Thursday night, surrounded by members of his Cabinet.

Peru’s President Pedro Pablo Kucyznski is scrambling for his political survival after opponents demanded he resign or face impeachment proceedings over revelations of decade-old payments from Brazilian construction firm Odebrecht. In a televised address to the nation shortly before midnight on Thursday, Kuczynski offered his first explanation of the US$782,000 that his consulting firm received between 2004 and 2007 from consortiums led by Odebrecht, the company at the heart of Latin America’s biggest graft scandal. 

Many of the payments were made while he was a Cabinet minister in a previous government that awarded the Brazilian company a major highway contract.

Surrounded by his Cabinet, Kucyznski said he had no management role in the consulting firm, Westfield Capital, while in public office and all of the payments were for contracts signed by a business partner. He promised to cooperate with investigations by Congress and the attorney general. 

“I’m not running and I’m not hiding because I have no reason to,” the former Wall Street investor said, vowing to produce his personal banking records for public scrutiny. “I’m not going to abdicate my honour, my values or my responsibilities as president of all Peruvians.” “I’m an honest man and have been all my life,” he said. 

Kuczynski’s defiant address ended a 24-hour period of political turbulence that started Wednesday as opposition lawmakers presented documents provided by Odebrecht showing payments to Westfield as well as US$4 million to another firm, First Capital, owned by the same business partner.

Peru’s two biggest parties, which between them have enough seats in Congress to remove Kuczynski, said lawmakers could initiate impeachment proceedings as early as Friday unless the centrist president, who took office in July 2016, stepped down. 

“The country right now can’t afford the luxury of having a president that is so questioned,” said Daniel Salaverry, a spokesman for the right-wing Popular Force party. “It’s obvious that him staying on in the nation’s highest office is untenable.” 

As recently as last month, Kuczynski had denied having any professional or political ties to Odebrecht while at the same time wagging his finger at three predecessors accused of taking bribes from the company. Authorities across Latin America have moved swiftly to charge politicians accused of taking some US$800 million in bribes that Odebrecht acknowledged paying in a 2016 plea agreement with the US Justice Department. 

The graft including some US$29 million paid in Peru during the 2001-2006 administration of President Alejandro Toledo and two of his successors. Kuczynski served as Toledo’s economy and finance minister and prime minister. 
The president spent most of Thursday holed up in the presidential palace with top aides trying to devise a strategy to fight back. As rumours swirled he would resign, Peru’s stock exchange had its biggest tumble in two years, falling 3.5 percent. Kuczynski, 79, was elected president in 2016 after a lucrative career in business. He campaigned on a pledge to clean up corruption and provide muchneeded stability.

The president said all of his earnings from Westfield were duly reported to Peru’s tax authority. Of the US$4.05 million in payments to First Capital – a company that Kuczynski worked for that belonged to a former business partner – the president said only a single transaction, for which he held up an invoice, was for financial consulting services he provided the firm in 2012 as part of its work on an Odebrecht-owned irrigation project. Odebrecht also confirmed it paid US$782,000 to a firm owned by Kuczynski, Westfield Capital. 

Kuczynski said Westfield Capital did belong to him, but said, “I never was in charge of the company’s management or administration when I held public office.” He said both companies’ contracts were managed by Gerardo Sepulveda, a Chilean. Peruvians are unlikely to be convinced by his reassurances that he did nothing wrong, analysts said. Steve Levitsky, a Harvard University political scientist who has spent years studying Peru, said Kuczynski was already a weak president with little legislative or popular support before the corruption allegations.

“He definitely seems to be dead in the water,” said Levitsky. “It’s not that what he did was necessarily illegal, but the fact that he swore over and over again that he had no ties to Odebrecht and that was proven to be nakedly false.” 
Impeachment proceedings against Kuczynski could begin as early as Friday. Launching proceedings to remove him from office would require the votes of 87 of the Congress’ 130 legislators, a hurdle the opposition is positioned to surmount.  

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