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Peru Leader Could Be Biggest to Fall in Latin America Graft Scandal

In this seaside capital, the tales of graft were multiplying like the potholes.

There was the unfinished highway to the airport that had left a trail of indictments and protected witnesses instead. There was the light rail line that prosecutors say was built with $8 million in bribes.

Not even the statue of Christ the Redeemer standing above the ocean was untouched: It was donated as a gift by the Brazilian construction giant that had doled out the bribes.

The company, Odebrecht, has been at the center of Latin America's biggest corruption scandal in a generation, with government officials jailed in Ecuador and Brazil and dozens under investigation in Venezuela and Colombia.

In Peru, the scandal may be taking down its biggest figure yet: President Pedro Pablo Kuczynski. Peru's Congress is set to open impeachment proceedings against Mr. Kuczynski on charges that he improperly received $782,000 from Odebrecht through a company he owned. The president admits to receiving the money but says he did nothing wrong.

On Thursday, Mr. Kuczynski will have 60 minutes to defend himself before the country's Congress. His critics say they could oust him by the weekend – and that they have the votes.

It is the latest in a wave of corruption charges that has roiled the region, and appears to have signaled a turning point.

For years, many Latin Americans ruefully accepted corruption to be as inevitable as voting itself, as officials from the presidential palace to the mayor's office enriched themselves from public coffers. "Roba, pero hace obras," – "he robs, but he builds," in Spanish – was a common refrain.

Now politicians are on the run – in some cases literally. Alejandro Toledo, who served as Peru's president in the early 2000s, remains at large after being indicted by prosecutors, accused of having accepted $20 million in payments from Odebrecht. Another former Peruvian president, Ollanta Humala, and his wife, Nadine Heredia, are in jail awaiting trial. In Ecuador, a former vice president was sentenced to six years in jail for accepting payments.

President Kuczynski's case, however, highlights a dilemma haunting many of the investigations: how to oust politicians in governments where few judging them are considered any more clean – and in some cases far less so.

In some ways, Mr. Kuczynski's case echoes that of Dilma Rousseff, Brazil's former president who was impeached in 2016 for having manipulated the federal budget to conceal economic problems. At the time of her trial in Congress, scores of lawmakers were under investigation themselves. Her successor, Michel Temer, narrowly avoided an impeachment trial for corruption.

"As in Brazil, they're not pursuing corruption charges to clean Peru of corruption, they're using the charges to remove their enemies from power," said Jo-Marie Burt, a political scientist who studies Latin America at George Mason University in Virginia.

The charges against Mr. Kuczynski have been aggressively promoted by Keiko Fujimori, a right-wing politician who lost to Mr. Kuczynski in 2016. Ms. Fujimori was under investigation on corruption charges until her party tried to remove the attorney general. She has steadily amassed more power in Congress since, threatening top judges with dismissal and forcing Mr. Kuczynski's ministers to resign.

Ms. Fujimori's father, Alberto Fujimori, is currently serving a 25-year jail sentence for corruption and human rights abuses that occurred after he dissolved Congress and the judiciary and ruled Peru as an autocrat for a decade. Ms. Fujimori has said that if she gains power, she would grant her father amnesty.

Mr. Kuczynski has warned of a deeper crisis afoot should he be ousted.

"I see an assault against the democratic order," warned Mr. Kuczynski in a televised speech on Sunday. "There are no formal charges, no accusation under the Constitution – they say 'you're out' and that is not the Peru that we want."

The projects in Peru were only the tip of the iceberg for Odebrecht, which admitted last year to bribes of around $800 million from Mexico to Angola, even maintaining a separate division that managed the payoffs. Odebrecht then took over construction for costly infrastructure projects like bridges, highways and dams, sending exorbitant bills to pliant officials.

The capital's failed Costa Verde project typified the graft.

For residents of the capital, the project sounded like a godsend: a stretch of highway meant to cut down traffic to the country's main airport, accessible only on streets that can back up for hours during the morning commute. An initial contract was awarded to Odebrecht for just under $100 million in 2014.

In April this year, with construction only partly complete and the project running over budget by millions of dollars, prosecutors accused a local governor of accepting $4 million in bribes. Much of the highway is still dirt now, and the local government has placed security guards to ward off squatter encampments on the empty stretches.

Antonio León, a 56-year-old owner of a convenience store overlooking the construction, spent a recent day choking on dust from the unfinished road.

"There isn't even lighting, the mayor has forgotten us," he said. "We thought Kuczynski would be different, but now we are disappointed and waiting with anxiety for Thursday to see what they tell us."

In comparison to the $4 million for the road, the payments the president's company is accused of accepting appear relatively small. The transaction was revealed last week in a disclosure to Congress which said Westfield Capital, a company owned by Mr. Kuczynski, had taken the money from Odebrecht in exchange for consulting services.

Some found the revelation damning at a time when so many other politicians have been caught in the Odebrecht dragnet.

"He knew this was kryptonite," said Eduardo Dargent, a political scientist at the Pontifical Catholic University of Peru, of Mr. Kuczynski. "He knew he'd go down if they found these kind of links to his private activities."

Still, Mr. Dargent agreed with the president that the impeachment process appeared rushed given the magnitude of the outcome if Mr. Kuczynski is ousted.

"Here they can put you on political trial and within a week you win or they throw you out," said Mr. Dargent.

[Source: By Andrea Zarate and Nicholas Casey, The New York Times, Lima, 19Dec17]

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small logoThis document has been published on 21Dec17 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.