Peru's Expanding Judicial Probe Ensnares New Attorney General

(Bloomberg) -- Peru’s justice system slid further into crisis after the new attorney general was included in a corruption probe that has ensnared supreme court judges and lawmakers.

Prosecutors allege Gonzalo Chavarry, who began a three-year term as attorney general last month, may be part of a group that negotiated judicial appointments in exchange for cash and favors, El Comercio reported Friday.

Chavarry said via Twitter late Thursday he’s waiting to see the allegations against him, adding that while he knows some of the alleged members of the group, he never did them any favors. El Comercio also reported that the group includes four supreme court judges, two supreme prosecutors and five members of the national magistrates council.

The probe, which became public last month with the publication of taped phone recordings in which judges could be heard appearing to negotiate appointments and sentences, triggered the resignation of the head of the judiciary and the justice minister. President Martin Vizcarra said July 28 he’ll preside over a new body to oversee a deep reform of the justice system and said some of the changes will be included in a referendum.

Economic Fundementals

Somewhat lost in the swirl of corruption allegations and political infighting at the national level in Peru over the last few years -- Vizcarra became president in March after Pedro Pablo Kuczynski resigned on the eve of an impeachment vote -- has been the economy’s strong and steady performance. The South American country is forecast to post the fastest growth and lowest inflation among the region’s major economies this year, according to the International Monetary Fund.

Transparencia, a Lima-based organization that campaigns for measures to strengthen Peru’s democracy, said on Friday Chavarry should step aside “immediately” while prosecutors investigate him. The government and some lawmakers previously called on Chavarry to quit after he was featured on a tape talking with one of the supreme court judges, Cesar Hinostroza, at the center of the probe. The attorney general’s office couldn’t be reached for comment. Peru’s public sector is observing a holiday Friday.

The case threatens to increase tensions between the government and opposition party Popular Force, which has defended Chavarry in the face of criticism in recent weeks.

Testimony prosecutors obtained as part of a plea deal allege the head of the party, Keiko Fujimori, met with Hinostroza in May, according to El Comercio. Fujimori denied the allegation late Thursday.

Fujimori is under investigation for money laundering during her 2016 bid for the presidency. She denies the allegations. The accusations against Fujimori are part of a campaign by the government to discredit and weaken her party, Popular Force lawmaker Karina Beteta told state broadcaster Radio Nacional.

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, Robert Jameson

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