Peru’s president faces calls to resign over Odebrecht fees

FILE: President Pedro Pablo Kuczynski’ (Photo: Pedro Pablo Kuczynski/ Facebook)

LIMA, Peru — President Pedro Pablo Kucyznski scrambled for his political survival Thursday as opponents demanded he resign over revelations of decade-old payments from a Brazilian construction company at the centre of Latin America’s biggest graft scandal.

Lawmakers from Peru’s two biggest parties said congress would initiate impeachment proceedings as early as Friday unless Kuczynski stepped down in the next 24 hours.

The threat came a day after evidence emerged that Kuczynski’s consulting business received payments of $782,000 from consortiums led by Odebrecht, much of it while he was a Cabinet minister in a previous government that awarded the firm a major highway contract.

“The country right now can’t afford the luxury of having a president that is so questioned,” said Daniel Salaverry, a spokesman for the Popular Force party, which has a majority in the legislature.

Peruvians are still coming to grips with the shock revelation, which carried more impact because as recently as last month Kuczynski had denied having any professional or political ties to Odebrecht while at the same time criticizing three predecessors accused of taking bribes from the company.

Odebrecht acknowledged in a 2016 plea deal with the U.S. Justice Department that it paid $800 million in bribes in exchange for business in 12 mostly Latin American nations, including some $29 million paid in Peru during the 2001-2006 administration of President Alejandro Toledo and two of his successors. Kuczynski served as Toledo’s finance chief and prime minister.

Kuczynski spent most of Thursday out of view in meetings with his closest aides. Local media reported that his first vice-president, Martin Vizcarra, who would assume the presidency in the event of Kuczynski’s removal, was travelling home early for the Christmas holidays from Canada, where he is also Peru’s ambassador.

Amid the turbulence, Peru’s stock exchange — until recently the darling of foreign investors — had its biggest tumble Thursday in two years, falling 3.5 per cent.

Kuczynski, 79, was elected president in 2016 after a lucrative career in business. He campaigned on a pledge to clean up corruption and provide much-needed stability in one of South America’s most politically volatile nations.

But many Peruvians weren’t convinced by his reassurances offered in a televised address Wednesday night. The former Wall Street investor said that in five decades in business he earned his compensation honourably and that as a public official he never favoured any single company.

“I’m ready to clarify everything that needs to be clarified before congress and the public prosecutor’s office, as I have nothing to hide,” he said in agreeing to meet with a congressional committee probing politicians’ ties to Odebrecht. Previously he had refused to meet with the lawmakers.

Kuczynski’s troubles kicked off suddenly when over the weekend he acknowledged in an interview having worked for another consulting business, First Capital, that received over $4 million in payments from an Odebrecht-owned irrigation project and other companies between 2005 and 2013.

Then on Wednesday lawmakers presented documents provided by Odebrecht showing Kuczynski’s one-man consulting company, Westfield Capital, had also billed the Brazilian firm.

El Comercio, the nation’s largest newspaper, summed up the uncertainty threatening to plunge Peru into a period of political instability in an editorial Thursday.

“The undesirable scenario of a presidential vacancy . is dangerously close,” said the newspaper, which supported Kuczynski in the 2016 election. “And unfortunately the person who most contributed to putting us in this ominous trance — taking with it loyal collaborators who trusted him blindly — is the head of state himself with his ambiguous, drip-drip revelations.”