Peru's President Stares Down Second Impeachment Vote: QuickTake
Peru's President Stares Down Second Impeachment Vote: QuickTake
(Bloomberg) -- Peru’s president, Pedro Pablo Kuczynski, is facing his second impeachment vote in three months, raising the possibility he could be ejected from office before the end of this week. Opposition lawmakers accuse him of lying to conceal his ties to Odebrecht SA, the Brazilian builder at the center of the continent-wide kickback and corruption investigation dubbed Carwash. He’s also accused of receiving campaign donations from Odebrecht. He won some new allies after pardoning the former president, Alberto Fujimori, following the Dec. 21 vote in which Kuczynski narrowly avoided impeachment. But he’ll need broader support now to save his 20-month-old presidency.
1. What is Kuczynski accused of, exactly?
Opposition lawmakers allege the 79-year-old Wall Street veteran lied repeatedly last year about payments from Odebrecht to Westfield Capital Ltd., a boutique investment bank he owns. Westfield was hired by Odebrecht from 2004 to 2007 to advise on financing for infrastructure projects it won from the Peruvian government. Kuczynski was finance minister and cabinet chief between 2004 and 2006.
2. What’s the new evidence?
The impeachment motion admitted for debate last week cites recent news reports that suggest Kuczynski may have known about Odebrecht’s contracts with Westfield and First Capital, a company owned by the president’s former business associate, Gerardo Sepulveda. A confidential report on Kuczynski’s bank accounts was leaked to local media, which have reported that payments went from Westfield to Kuczynski from 2005 until after he assumed the presidency in 2016.
3. How did Kuczynski respond?
He’s said he had no knowledge of Westfield’s dealings with Odebrecht while he held office because he handed over the firm’s running to Sepulveda. He acknowledged that, as sole shareholder of Westfield, he received a dividend from the services it provided to Odebrecht after he left government in 2006. He acknowledged advising First Capital on an Odebrecht project in 2012 before he ran for the presidency, but he denies granting the company any favors while he was in government. He says the report on his bank accounts has inaccuracies.
4. What might the opposition be after?
The government accuses the leftist parties leading the impeachment push of seeking to punish Kuczynski for freeing Fujimori and to position themselves ahead of local elections in October. The largest party in Congress, Popular Force, has been pressing for Kuczynski’s resignation since before December’s impeachment vote and says it would support vice president Martin Vizcarra should he assume the presidency. The government accuses Popular Force of seeking to take control of the executive branch. The party is also seeking to oust the attorney general and to remove justices from Peru’s highest court.
5. Are the campaign donations a problem?
Yes, for Kuczynski but also for the opposition. Odebrecht’s former Peru head, Jorge Barata, told prosecutors in February that the company paid into the campaigns of four presidential hopefuls in the 2011 race, including Kuczynski and the leader of Popular Force, Keiko Fujimori, who is the daughter of the former president. They all deny receiving money, though recent opinion polls suggest the public doesn’t believe them.
6. How does impeachment work in Peru?
The opposition is using an article of Peru’s constitution that allows Congress to force out the president if it declares him “permanently morally incapable.” The motion was admitted for debate on March 15 with 87 votes in favor, 15 against and 15 abstentions. Lawmakers will hold a debate and a final vote on March 22 after the president has made his defense in Congress. The motion needs 87 votes to pass. The ouster takes effect as soon as Congress informs the president or the cabinet chief.
7. Will the opposition win this time?
It may come down to just a few votes. While the two leftist parties that initially proposed the impeachment motion are all for it, other opposition parties lack a consensus and haven’t made a final decision. Not all the lawmakers who voted to admit the motion last week are in favor of impeachment. Popular Force, which has 59 of the 130 seats in Congress, is largely in favor, though a few of its members are reported to be planning to abstain and eventually quit the party. Teneo Intelligence, a U.S.-based political risk adviser, said March 16 there’s a 70 percent chance Kuczynski will be impeached.
7. Who takes over if the president is ousted?
First Vice President Martin Vizcarra is entitled to take over as Peru’s leader until 2021, when the government’s mandate expires. If he declines, the responsibility would pass to the second vice president, Mercedes Araoz. If she also declines, the speaker of Congress would call a general election and lead the government on a temporary basis. While Araoz has said she would quit in protest if Kuczynski is forced out, Vizcarra hasn’t, prompting some ruling-party lawmakers to question his loyalty to the president.
The Reference Shelf
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, Paula Dwyer
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