Ex-Banker’s Graft Problems Hand Gift to Populists

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Another Latin American president bites the dust amid a swirl of corruption allegations. Peru’s Pedro Pablo Kuczynski resigned ahead of a second impeachment vote, the latest casualty of a gargantuan graft scandal that has rattled governments across the continent for the past four years.

Accused of taking money from Odebrecht, the Brazilian construction giant at the center of the Carwash investigation, the former Wall Street banker known as “El Gringo" was forced out after just 18 months in office. First Vice President Martin Vizcarra, currently ambassador to Canada, will be sworn in tomorrow.

Political turmoil is nothing new to the Andean nation. Its previous four presidents have been under investigation for money laundering, corruption or human rights abuses. One is currently in jail, one has just been released and the country is seeking the extradition of another from the U.S. But Kuczynski promised to be — and was supposed to be — different.

Governments across the region are suffering from a crisis of legitimacy amid rising voter disillusionment with democracy, fueled by seemingly interminable corruption scandals. Nearly two-thirds of Latin Americans will go to the polls in 2018. With confidence in elected officials at a low ebb, anti-establishment candidates look set to prosper, with unpredictable results.

Ex-Banker’s Graft Problems Hand Gift to Populists

Global Headlines

Who’s afraid of President Vladimir Putin? | U.K. Prime Minster Theresa May may find out today at a dinner with European Union leaders, where she’ll ask them to follow London in kicking out Russian diplomats alleged to be spies. Putin will note their replies for further evidence that pressuring a divided West pays dividends for Russia. U.S. President Donald Trump tweeted his view, saying it’s “a good thing” to get on with Moscow, as the battle in the West Wing over how to handle Putin intensifies. 

Upping the trade ante | Trump is set to announce about $50 billion of tariffs against China over intellectual-property violations. The president is considering targeting more than 100 different types of goods in his first trade action directly aimed at Beijing, which he has blamed for the loss of U.S. jobs. The decision comes amid warnings a global trade conflict could undermine the broadest world recovery in years. EU officials expect to win an exemption from U.S. tariffs on steel and aluminum, Jonathan Stearns and Nikos Chrysoloras report.

Deadline pressure | Congressional leaders are hoping to muster the votes needed to pass a wide-ranging $1.3 trillion government spending plan — even though they’re only giving lawmakers a few hours to review the 2,232-page text. With less than two days before government funding is set to expire, the rushed process has raised the risk Congress could trip into another brief government shutdown. 

Enriching uranium | Opposition is growing to a deal that would see the U.S. provide nuclear-power technology to Saudi Arabia. Crown Prince Mohammed Bin Salman has stoked concerns with his insistence the kingdom would develop a nuclear weapon if Iran did. Ari Natter looks at how that comment could sever a potential lifeline to companies suffering from the decline of the nuclear industry in the U.S. 

East Africa troubles | An opposition politician and a campaigner were hacked to death with machetes, while a lawmaker’s car was riddled with bullets. The attacks weren’t in one of East Africa’s war zones, but in Tanzania — which hasn’t seen serious upheaval in decades. They’ve sparked fear among opponents of populist President John Magufuli and prompted the U.S. and EU to voice alarm over a rising tide of politically motivated violence.

And finally… While Mark Zuckerberg is apologizing for the Facebook mistakes that saw some 50 million U.S. profiles allegedly used by the Trump campaign, French President Emmanuel Macron wants Europeans to relax about the use of their data. Macron’s in-house math genius Cedric Villani says his plan to build a powerhouse in Artificial Intelligence requires the EU to get comfortable with sharing information.

Ex-Banker’s Graft Problems Hand Gift to Populists

To contact the author of this story: Bruce Douglas in Brasilia at bdouglas24@bloomberg.net.

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