Repercussions of the latest Odebrecht revelations

12 November 2017

On Thursday 9 November Marcelo Odebrecht, the ex-CEO of the disgraced Brazilian company, was questioned by Peruvian public prosecutors. They were in Brazil to hear his responses to questions sent to him on 20 September dealing with many of the revelations made by him back in May. These had to do mainly with the phrase found in his electronic diary, “raise Keiko to 500”, as well as the annotations he used, 'AG' and 'OH'. The repercussions have been immediate and have led to a direct confrontation between Keiko Fujimori and her party and the newspaper empire led by the El Comercio group.

Public prosecutor José Domingo Pérez Gómez had travelled from Lima to be present in the judicial procedure. Keiko Fujimori’s defense lawyers had done the same as much of the discussion hinged on whether the Brazilians had financed her presidential campaign in 2011. Odebrecht confirmed that the phrase concerning Keiko meant that her campaign was already being financed, as this was to raise the amount by 500. If this were to be further confirmed and it was proven that Keiko herself received the funds, she would find herself in a similar predicament to the Humalas, who are presently in prison accused of having received funds from Odebrecht.

It was also confirmed that Alan Garcia was the person referred to by the initials AG. Marcelo Odebrecht said he had paid bribes during the government of Alejandro Toledo (2001-2006) to get access to contracts. He said that from 2005 he invested in financing presidential campaigns including Alan Garcia’s in 2006, as well as those of Ollanta Humala and Keiko Fujimori in 2011. He also revealed that his firm had been in direct discussions with Alan Garcia over what investments to support and that the Odebrecht partners in Peru, Graña y Montero, knew of the money that was being paid to have access to the contracts.

Although Aprista Congressman Mauricio Mulder declared that these accusations did not prove anything, it is now possible to investigate the ex-president and he could be implicated by other witnesses. Peruvian construction giant Graña y Montero saw an immediate collapse of their share prices both in the Lima and the New York stock exchanges and more explanations will be required from their managing board. The family who owns it is deeply connected to the newspaper El Comercio, which ran as its front-page headline the accusation that Odebrecht funded Keiko Fujimori’s 2011 presidential bid. Her reaction was immediate. She produced a video accusing El Comercio of lying in an attempt to deflect attention from the accusation being levied at the directors of Graña y Montero. She was defiant in protesting her innocence and threatened the most prestigious newspaper in the country with legal action.

Veronika Mendoza has entered the fray, declaring that Keiko Fujimori’s desperation was obvious, as during the previous week she had directed her legislators to try to remove four judges from the Constitutional Tribunal. They are currently being investigated for having changed a 2013 ruling allowing for a fresh judicial process for the unlawful killing of prisoners who had mutinied at El Fronton in 1986. A member of Fuerza Popular also presented this week a constitutional accusation against the National Public Prosecutor Pablo Sanchez (Fiscal de la Nacion), asserting that there had been procedural mistakes in the way anti-corruption investigations were being conducted and that he should be removed from his position.

There is still much to know on the way the funds were actually transferred to Keiko Fujimori. Odebrecht mentioned that his representative in Lima, Jorge Barata, had done this and that he would be able to provide more information. Fujimori’s lawyers did not seem unduly worried, possibly because in contrast with Humala, Odebrecht himself ordered the payment. Because his subordinates in Lima did not want to do it, Keiko was paid directly by Barata. The entry only mentions that funds ‘should be increased by 500’, but there is no mention of the original amount given. They are also probably aware that Barata is in no mood to collaborate with the Peruvian Justice as his assets and funds have been frozen and there seems to be no incentive for him to cooperate. 

On 11 November, El Comercio printed a long editorial response noting that the accusations of Mrs. Fujimori did not hold water. They first pointed out they had never accused her of receiving the funds directly from Marcelo Odebrecht. Secondly they acknowledged in their piece that José Graña, the Director of Graña y Montero, had been accused as having known Odebrecht and being involved in the illegal payments. They noted that he and his daughters hold only a little over 6% of the total of El Comercio's shares and that there are no connections with their investigation or reporting. The directors of the oldest newspaper in the country reaffirmed their conviction in accusing Fujimori and noted her desperation in her defense.

These latest revelations will have deep repercussions, and having started a fight against the oldest and strongest media bloc in the country, Keiko Fujimori may find she has bitten off more than she can chew.

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