PPKrisis: president hangs by a thread

18 December 2017

Last week the Odebrecht revelations reached the president, making his situation increasingly precarious. Congress has voted to proceed with impeachment procedures. Kuczynski will meet his accusers face to face in Congress on 21 December.

This latest chapter began on 14 December when Rosa Bartra, the Fujimorista president of the Lava Jato congressional commission, received a letter from Odebrecht’s Lima office stating that First Capital and Westfield Capital (firms set up by Kuczynski) had received up to 4.1 million dollars in consultancy fees.

The week before, Kuczynski had conceded that he had carried out a consultancy for Odebrecht through First Capital in 2012 when he was no longer working for the government. He has consistently denied receiving money when acting as a minister. The situation became more problematic as it emerged that Westfield Capital, which he owns, had carried out more consultancies, and some of the work had been undertaken while he was economy minister and prime minster during the Toledo administration (2001-2006).

The Odebrecht representative in Lima has declared that he offered to pay Toledo a US$35 million bribe to win the contract for the Inter-oceanic highway in 2005 (see PSG article) and Marcelo Odebrecht has added that Kuczynski was not amenable to the process until he was hired as a consultant.

The Fujimorista Fuerza Popular (FP) majority in Congress immediately demanded Kuczynski’s resignation, threatening him with forcible removal from the office if he refused to go willingly. Kuczynski spent 14 December in tense meetings with his ministers and members of Congress from his political party (Peruanos por el Kambio, PPK). He emerged close to midnight for a press conference, surrounded by most of his ministers and PPK members of Congress, denying any wrongdoing and refusing to resign.

He explained that while he had been a minister he had not carried out any work at his firm Westfield Capital, which had been run by his Chilean associate. He offered to have his banking information scrutinised and agreed to meet the congressional commission (which he had previously refused to do).

The next morning, on 15 December a motion was presented in Congress asking for him to be removed from his post due to ‘permanent moral incapacity’. There was even discussion that this would be carried out in an ‘express’ fashion and that he might be out of his post by nightfall. However, many legislators called for calm and for a proper discussion of the situation, enabling Kuzynski to present his side of events, either on his own or with an attorney.

The date for the congressional hearing has now been set for 21 December; it is quite possible that he will be forced out of office on this day. If so, the constitution states that the first vice president, Martín Vizcarra, currently Peru’s ambassador in Canada, would take over the presidency until the 2021 elections.

There has been much speculation as to whether Vizcarra would be allowed to govern, or if a procedure against him would be initiated as well, leaving power then to Mercedes Aráoz, the second vice-president and current prime minister. If she were to be impeached too, the presidency would fall to the serving Fujimorista president of Congress, Luis Galarreta. He would be obliged to call for elections within a year. Vizcarra was obliged to resign as transport minister earlier this year over contractual irregularities to the Cuzco airport project; Aráoz has been cited as one of those responsible for the 2009 Bagua killings.

The leftist Frente Amplio presented the motion for impeachment, calling also for a new constitution to be written. The Fujimorista majority discarded any discussion of the constitution, but voted for the motion to begin impeachment proceedings, as did APRA.

It is noteworthy that these are the political parties that would have most to win if new elections were to be called, as the current electoral rules would prevent most other groupings to take part since they lack official electoral registration. This would be a problem, for example, for the dissident leftists in Nuevo Perú who broke away earlier in the year from the Frente Amplio and are struggling to comply with the rules for registration.

At the same time, on 15 December, the Fujimorista majority in Congress voted to expel four members of the Constitutional Tribunal. As we have previously reported, this was to be expected; the Fujimoristas and Apristas are keen to deny access to any judicial authority that might question them. On 17 December, the Inter-American Court ordered the Peruvian state to halt the process against the magistrates.

Also, as we have seen, next on the Fujimorista hit-list is the Chief Public Prosecutor (Fiscal de la Nación) Pablo Sánchez. Sánchez is seen as promoting the investigation into Keiko Fujimori’s election finances during the 2011 presidential campaign. Marcelo Odebrecht has made clear that money was offered and paid to her campaign. Unlike former president Ollanta Humala, Keiko has not been subject to arrest for failure to declare payments from Odebrecht. But it is possible that Keiko could be taken into custody if more evidence emerges from the documents seized last week by the Fiscalía from FP party offices. These are currently being analysed. The Fiscalía has also opened proceedings against FP legislators who ostensibly sought to obstruct the raid on the FP offices.

Kuczynski’s situation remains highly problematic but, on 16 December, Odebrecht presented more documents showing that the payments it had made had not been from the Caja 2 (from which bribes were paid) but from its regular account. Odebrecht gave assurances that the contracts had not been arranged with Kuczynski, but with his associate. The following day, 17 December, the president organised an hour-long televised meeting with journalists to explain his situation. It was widely considered to be a failure; his defence was that he knew nothing of the works carried out while he was in government and that he simply received dividends as a company owner.

Meanwhille, Kuczynski and his supporters are trying to turn the tide by arguing that his removal would be highly damaging both to Peru’s democratic institutions and to its economy. Such arguments will probably not deflect the Fujimoristas, adamant as they appear to be that they will vote against the president on 21 December regardless of what he has to say. They want to act fast, ensuring that the president does not have the space in which to engineer a come-back. Those who will judge Kuczynski in Congress have already made severe accusations against him and clearly desire to wield their constitutional power.

Several street demonstrations have been called for. The first one took place on 16 December and was quite large, showing substantial numbers of those who do not accept the Fujimoristas’ tactics. Another was due to take place on 17 December, and yet another will be held on 20 December. It is unclear what these will achieve, or what chance Kuczynski has of fighting back. But it is evident that the struggle for power in Peru has shifted into a new gear.

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    The Peru Support Group exists to promote social inclusion, sustainable development and the observance of human rights in Peru. To that end the PSG highlights shortcomings in observance of established norms, whether international or local in nature, in its research, advocacy and publications. In so doing, it underscores the relationships that exist within the political system, how institutions work, and the effectiveness of policies that aim to reduce poverty and inequality within the context of sustainable development.

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