Political uncertainty continues to reign in Peru

January 2, 2018

Latin News

On 30 December 2017, Peru’s attorney general Pablo Sánchez denied any responsibility for the leaking of an audio recording of testimony given to Peruvian prosecutors by Marcelo Odebrecht implicating Peruvian political leaders in the corruption scheme centred around the Brazilian engineering firm, Odebrecht. 

Significance: The audio recordings further complicate the situation of various prominent politicians including Keiko Fujimori, the leader of Peru’s main right-wing opposition Fuerza Popular (FP, Fujimoristas) party. The risk for the Peruanos por el Kambio (PPK) government led by President Pedro Pablo Kuczynski, who has also been implicated in Odebrecht corruption himself, and has just managed to survive an impeachment vote against him in the FP-controlled congress, is that suspicion that the leak might form part of a government-backed plan to tarnish Fujimori could lead the FP to move to impeach Sánchez, or promote a vote of no confidence in the cabinet. The deep political divisions produced by the Odebrecht corruption investigations in Peru look set to make governability a major problem for the Kuczynski administration that could potentially affect the rest of its term ending in 2021.

The audio recording leaked to the local press is of the testimony given in November to Peruvian prosecutors investigating the Odebrecht case by Marcelo Odebrecht. In the recordings, Marcelo Odebrecht confirms that Odebrecht “certainly” paid bribes and made irregular campaign contributions to various prominent politicians in Peru including former presidents Alan García (1985-1990; 2006-2011), Alejandro Toledo (2001-2006), and Ollanta Humala (2011-2016), as well as Fujimori.

Marcelo Odebrecht said that he personally approved providing campaign financing for Fujimori in 2011 and 2016 on the advice of Odebrecht’s former representative in Peru, Jorge Barata, who identified Fujimori as the potential next president on both occasions. Marcelo Odebrecht said that Barata had told him that he personally knew Fujimori and could establish a good rapport with her. Until now Fujimori has denied receiving any irregular campaign financing from Odebrecht and has said that she does not know Barata.

Fujimori reacted to the leaking of the audio by seeking to discredit the allegations. Noting that this was an illegally obtained excerpt, Fujimori said that Marcelo Odebrecht was “only speculating” about Odebrecht having contributed to her electoral campaigns and insisted that this was not proof that this had actually happened. Fujimori added that she was prepared to prove otherwise to prosecutors. Other FP national legislators were more menacing, accusing Sánchez of being behind the leak in an attempt to discredit Fujimori and undermine the FP.

The FP legislators once again threatened to subject Sánchez to an impeachment process. They also called for prosecutors to make public all of Marcelo Odebrecht’s testimony, in which he reportedly also confirmed that Odebrecht had business dealings with Kuczynski when he was a minister in the Toledo administration and that these dealings continued after he left office and until he was elected in 2016.

Kuczynski escaped impeachment for allegedly lying about his dealings with Odebrecht to congress last month after FP legislators led by Fujimori’s brother and in-party rival, Kenji Fujimori, unexpectedly decided to abstain and not vote in favour of Kuczynski’s impeachment. After being spared by congress, Kuczynski granted a presidential pardon on humanitarian grounds to disgraced former president and father to Keiko and Kenji, Alberto Fujimori (1990-2000), on 24 December 2017. The pardon is widely seen as forming part of a backroom deal struck by Kuczynski with Kenji to ensure that he would not be impeached and as such it has sparked public protests around Peru organised by the relatives of the victims of those that suffered human rights violations during the Alberto Fujimori government, which have further undermined the image of the already unpopular Kuczynski

Looking Ahead: In denying having anything to do with the leaking of the Marcelo Odebrecht audio, Sánchez said that this would be investigated and that this should not affect the ongoing Odebrecht investigations. Indeed, the local press has noted that Peruvian prosecutors have now requested their Brazilian counterparts’ permission to once again quiz Barata. The speculation is that Barata could provide more damming evidence against Keiko Fujimori and potentially Kuczynski as well.       

Contributor Biography

Latin American Newsletters (LatinNews) was founded in London in 1967 to provide expert political, economic, and security analysis on Latin America and the Caribbean. For nearly 50 years, it has been acknowledged as the foremost authority on the region.

Tags: economy, latin, latin america, news, peru, political risk, politics
Posted in LatAm, Politics Risk, Politics Risk