In the case of at least two (Liu and Revilla), those who left did so under a cloud because of matters to do with Odebrecht. Odebrecht still hangs over the government like a bad smell. Liu was the first to be sacked over a meeting he had attended in January with Revilla, along with the procurator general Jorge Ramírez (also sacked last week), with executives of the Brazilian construction firm.
The ministers might still be in place but for the announcement earlier in the week that Odebrecht intends to take Peru to the SICAD, the World Bank’s office for the resolution of investment disputes, in pursuit of payment of US$1.2 billion claim over the cancellation of the contract with Odebrecht to build the Southern Peru Gas Pipeline. The project was suddenly aborted when the Lavo Jato corruption scandal burst in 2018.
Not surprisingly, the SICAD suit is strongly resisted by Peru, which feels it has been the victim of Odebrecht’s corruption, not the author of its problems. Both Vizcarra and Prime Minister Vicente Zeballos responded angrily to the announcement.
The reason for Liu’s exit was also that he had acted as consultant for Odebrecht before becoming a minister. Though he had resigned from his consultancy firm on being appointed minister last October, he had put his niece in to run the business in his absence. Apparently, this was not made known to Vizcarra at the time.
Vizcarra is clearly highly sensitive to any suggestion that members of his government are in any way linked to Odebrecht or other Brazilian companies held to be guilty of buying influence in Peru. Having seen his popularity ratings rise to over 60% in recent opinion polls, he would like to keep it that way. He has benefitted greatly from the success of his gambit in closing down the Congress last September and the holding of new elections on 26 January.
But it remains unclear whether the cabinet reshuffle will improve things. It is claimed by Liu that Vizcarra knew about the meeting with Odebrecht.
Also, the cost of repeatedly firing ministers and hiring new ones is that it is disruptive to the normal administration of government. Since 2016, there have now been six ministers of justice, six ministers of energy and mines, six transport ministers and six ministers of education. The relative political stability of the presidency may come at the expense of sub-presidential instability.
Another notable political casualty last week, also linked to Lava Jato, was former Lima mayor Luis Castañeda Lossio. He was convicted by a court to serve a 24-month prison sentence whilst the investigation takes place into money he allegedly received from Odebrecht and OAS to help fund his political campaigns in 2014. Even before Lava Jato broke, Castañeda was widely viewed as one of Peru’s more corrupt politicians. Twice mayor, he succeeded Susana Villarán in 2014 who is herself in jail for allegedly receiving illicit campaign contributions.