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Kuczynski Faces Second Peru Impeachment Vote Over Odebrecht

Peru Congress Starts Impeachment Proceedings Against President

(Bloomberg) -- Peru’s Congress voted to start impeachment proceedings against President Pedro Pablo Kuczynski for a second time in three months for allegedly lying about his ties to disgraced Brazilian builder Odebrecht SA.

Lawmakers voted 87-15 in favor of admitting the impeachment motion, with 15 abstentions. Congress will hold a plenary session on March 22 to hear the president’s defense, debate the motion and hold a final vote. If the motion obtains the support of at least 87 lawmakers, Kuczynski will be ousted and replaced by first vice president Martin Vizcarra.

The opposition is seeking to force out the president on the grounds of “permanent moral incapacity” and argues he lied repeatedly to hide contractual ties with Odebrecht before he took office. Yet the renewed push to force Kuczynski out after 20 months in office faces headwinds, with some parties yet to overcome internal rifts caused by the first vote.

Daniel Salaverry, a lawmaker with opposition party Popular Force, said Congress is within its rights to begin proceedings given new information about contracts between Kuczynski’s investment banking firm Westfield Capital Ltd and Odebrecht.

“We want President Kuczynski to come to this plenary and exercise his legitimate right to defense,” Salaverry said before the vote. “We want to see if he has any argument to defeat all the allegations against him.”

The motion fulfills a pledge by leftist parties to push for Kuczynski’s impeachment after he pardoned former autocrat Alberto Fujimori three days after the last attempted ouster.

The first impeachment vote caused a split in Popular Force. While the party’s leader Keiko Fujimori backed impeachment, her brother Kenji and nine others abstained and subsequently quit the party, saying others will follow.

“Don’t be fooled. There are people who don’t agree with the pardon for Alberto Fujimori. That’s the real reason we are here,” said governing party lawmaker Gilbert Violeta. “The question is whether it will be supported by the Popular Force, which says Fujimori is the historic leader of the party.”

Cabinet chief and second vice president Mercedes Araoz said this week the second motion is unwarranted and repeats the arguments of the first. She’s compared the impeachment to a parliamentary coup.

The impeachment vote has loomed large since the start of this year, curbing demand for Peru’s bonds and currency while damping the outlook for economic growth. The sol fell 0.3 percent to 3.263 per U.S. dollar Thursday. Peru’s government bonds maturing 2026 fell 0.28 centimo to 124.70 centimos per sol.

Renzo Massa, head of portfolio management at Prima AFP in Lima, said on Wednesday the motion likely will fail to garner enough support in next week’s vote, which should trigger a rally in bonds and currency.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net.

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Philip Sanders, Matthew Malinowski

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