Impeachment of Peru’s president fails
Peruvian President Pedro Pablo Kuczynski survived a pell-mell impeachment effort over allegations that he lied about dealings with Brazilian construction company Odebrecht SA, which is at the center of the biggest corruption scandal in Latin America’s history.
After a Thursday congressional session that lasted more than 13 hours, lawmakers in the opposition-dominated chamber fell short of the two-thirds majority needed to declare the Wall Street veteran and former finance minister “morally incapable.” The president’s escape was narrow: 78 lawmakers voted for his impeachment, 19 against, and 21 abstained.
“Tomorrow, a new chapter in our history starts,” Kuczynski said in a tweet after the vote. “Reconciliation and reconstruction of our country: One strength. One Peru.”
That the opposition came so close to unseating a president in less than a week demonstrates the potency of the probe known as Operation Carwash, its Brazilian code name. Attention will now turn to how the 79-yearold Kuczynski will reorganize his government while fending off any renewed efforts to undermine his presidency that’s slated to last until 2021.
“We need to learn the political lesson from this,” said Vicente Zeballos, a lawmaker with the ruling Peruvians for Change party. He added that the president needs to make changes to his Cabinet. “There needs to be a shakeup that raises consensus — a broad-based Cabinet.”
Yet Kuczynski has lost significant political capital and will struggle to recover it, Eurasia Group analyst Ma- ria Luisa Puig said before the vote.
“A weak president and corruption allegations will hinder his government’s efforts to boost growth,” she said.
The political turbulence hit Peru just as the economy recovered from the freezing of civil-works projects amid the Odebrecht investigation and destructive flooding in the country’s north. The government’s efforts to revive growth are focused precisely on attracting the sort of infrastructure investment that engendered the scandal.
Peru will grow 4 percent next year, faster than Brazil, Chile, Colombia and Mexico, according to analysts surveyed by Bloomberg. This year it’s forecast to expand 2.6 percent. The nation’s economy and fiscal position merit a higher credit rating than its current A3 grade, but weak institutions hold it back, Moody’s Investors Service analyst Jaime Reusche said Tuesday.
The sol strengthened the most among the world’s 31 most-traded currencies on Friday, recovering part of scandal-related losses. It gained 0.6 percent to 3.244 per dollar in the beginning of the trading session, after weakening to 3.3 per dollar a weak earlier.
Every living president in the country is either in jail, on the run or under investigation. And many of Peru’s current mainstream political leaders have been tainted by the continent-wide bribery scandal. By Odebrecht’s admission, it doled out hundreds of millions of dollars in bribes in Brazil and 11 other countries to secure contracts. The builder has signed leniency deals with a handful of nations to settle the cases, and prosecutors across Latin America are investigating.
Odebrecht disclosed payments to Westfield Capital Ltd., owned by Kuczynski, of close to $800,000 from 2004 to 2007 for advice on projects that Peru awarded to the construction firm. Popular Force began calling for Kuczynski’s immediate resignation just hours after lawmakers made the payments to Westfield public. If successful, it would have been the second impeachment of a South American president in less than two years after Brazil’s Dilma Rousseff was removed from office in mid-2016.
Kuczynski told lawmakers that he never received a bribe or had any conflict of interests while in office, though he was careless and sloppy with his business records. He said he had no knowledge of the company’s dealings at the time because an associate was managing the firm. As sole shareholder of Westfield, he later received a dividend and thus “earned some money” from the Odebrecht deal, he said. But he denied granting any favors to the Brazilian company when he was finance minister.