Peru's President Faces Lawmakers in Bid to Save Presidency

(Bloomberg) -- Pedro Pablo Kuczynski told Peru’s Congress Thursday that allegations linking him with a continent-wide bribery scandal are false, as he fights to save his 17-month presidency from today’s impeachment vote.

Peru's President Faces Lawmakers in Bid to Save Presidency

The 79-year-old Wall Street veteran and former finance minister addressed lawmakers in Lima shortly after 9 a.m., accompanied by his lawyer Alberto Borea, seeking to block a motion to declare him “morally incapable.” Lawmakers will vote later in the day on whether to oust him; such a motion needs 87 votes to pass.

“Those who accuse me don’t want their accusations to be subjected to corroboration, debate, due process, which are the pillars of democracy,” Kuczynski said in his address. “Don’t support a baseless ousting because the population doesn’t forgive or forget.’’

The vote caps a whirlwind week for the Andean nation after opposition lawmakers called for Kuczynski to resign after the revelation a firm he owned took money from Brazilian builder Odebrecht SA, which doled out hundreds of millions in bribes across the region. His supporters accuse the opposition of attempting an "express" coup, while the president sought court injunctions to block the vote and asked the Organization of American States to send observers to the country.

“Congress came to a very hasty conclusion without even giving the president a chance to defend himself, without there being a complete, thorough investigation,” said Jaime Reusche, Peru sovereign analyst at Moody’s Investors Service. “Congress’s action are extremely worrisome.”

Prosecutors across Latin America are investigating bribes that Odebrecht paid to public officials in exchange for billions of dollars in contracts. The company disclosed payments to Westfield Capital Ltd., owned by Kuczynski, of close to $800,000 between 2004 to 2007 for advice on projects that Peru awarded to the Brazilian builder.

The president on Sunday said he had no knowledge of the company’s dealings at the time, because an associate was managing the firm. He said that, as sole shareholder of Westfield, he later received a dividend and thus "earned some money" from the Odebrecht deal. But he denies granting any favors to Odebrecht when he was finance minister.

"Undemocratic Maneuver"

According to Peru’s constitution, if Kuczynski loses the vote, Vice President Martin Vizcarra, a 54-year-old civil engineer, is first in line to take over. If he declines, Second Vice President Mercedes Araoz could take the job. If both refuse, new presidential elections would be called. Vizcarra, who’s also ambassador to Canada, returned to Peru on Wednesday and called for “calm” and “reason,” and both vice presidents reaffirmed their loyalty to Kuczynski.

During a televised address on Wednesday, Kuczynski warned that “neither of the two (vice presidents) want to be part of a government born out of a unjust and undemocratic maneuver.’’

The president’s departure could dissuade investment just as the economy was rebounding after corruption investigations froze civil-works projects and floods wreaked destruction in the country’s north.

Kuczynski’s Peruvians for Change party has a mere 18 of the 130 seats in Congress and only one other party has said it will vote against the motion. The president held talks this week with some lawmakers from the remaining parties to win their support.

Eurasia Group said Congress is 60 percent likely to oust Kuczynski. BTG Pactual said the positive outlook on Peruvian equities would remain largely intact unless new elections are called.

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