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By Canadian Press

Peru’s president fights back against calls to resign

Dec 15, 2017 | 7:17 AM

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.

In a televised address to the nation shortly before midnight Thursday, Kuczynski offered his first explanation of the $782,000 that his consulting firm received between 2004 and 2007 from consortiums led by Odebrecht, much of them while he was a Cabinet minister in a previous government that awarded the Brazilian company a major highway contract.

Surrounded by his Cabinet, he 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.

“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.”

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 $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 Kuczynski 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 Popular Force party.

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 $800 million in bribes that Odebrecht acknowledged paying in a 2016 plea agreement with the U.S. Justice Department. The graft 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 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 — until recently the darling of foreign investors — had its biggest tumble 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.

Kuczynski said all of his earnings from Westfield were duly reported to Peru’s tax authority. Of the $4 million in payments to First Capital, he 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.

“I’m an honest man and have been all my life,” he said.

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, which had been quietly dogging him for some time, broke into the open.

“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.”

Reflecting his tenuous grip on power, Kuczynski on Wednesday agreed to meet with a congressional committee investigating Odebrecht’s ties to politicians — something he had earlier refused. Peru’s chief prosecutor’s office also said Thursday it was initiating an investigation although it can’t indict a sitting president.

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.”

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Goodman reported from Bogota, Colombia.

Franklin Briceno And Joshua Goodman, The Associated Press

by Canadian Press