Peruvian President Pedro Pablo Kucyznski on Thursday scrambled for his political survival as opponents demanded he resign over revelations of decade-old payments from a Brazilian construction company at the center of Latin America’s biggest graft scandal.
In a televised address to the nation shortly before midnight on Thursday, Kuczynski offered his first explanation of the US$782,000 that his consulting firm received between 2004 and 2007 from consortiums led by Odebrecht, much of them while he was a Cabinet minister in a previous government that awarded the Brazilian company a major highway contract.
Surrounded by his Cabinet, the president he had no management role in the consulting firm, Westfield Capital, while in public office and all of the payments were for contracts signed by a business partner.
“I’m not running and I’m not hiding because I have no reason to,” the former Wall Street investor said, vowing to produce his personal banking records for public scrutiny. “I’m not going to abdicate my honor, my values or my responsibilities as president of all Peruvians.”
Kuczynski’s defiant address ended a 24-hour period of political turbulence that started on Wednesday as opposition lawmakers presented documents provided by Odebrecht showing payments to Westfield as well as US$4 million to another firm, First Capital, owned by the same business partner.
Peru’s two biggest parties, which between them have enough seats in congress to remove Kuczynski, said lawmakers could initiate impeachment proceedings unless Kuczynski steps down. “The country right now can’t afford the luxury of having a president that is so questioned,” Popular Force party spokesman Daniel Salaverry said.
As recently as last month, Kuczynski had denied having any professional or political ties to Odebrecht while at the same time wagging his finger at three predecessors accused of taking bribes from the company.
Authorities across Latin America have moved swiftly to charge politicians accused of taking about US$800 million in bribes that Odebrecht acknowledged paying in a plea agreement last year with the US Department of Justice. The graft including about US$29 million paid in Peru during the 2001 to 2006 administration of former Peruvian president Alejandro Toledo and two of his successors.
Kuczynski served as Toledo’s minister of economy and finance, and prime minister.
Kuczynski spent most of Thursday holed up in the presidential palace with top aides trying to devise a strategy to fight back.
As rumors swirled he would resign, Peru’s stock exchange — until recently the darling of foreign investors — had its biggest tumble in two years, falling 3.5 percent.
Kuczynski, 79, was elected president last year after a lucrative career in business.
He campaigned on a pledge to clean up corruption and provide much-needed stability in one of South America’s most politically volatile nations.
Kuczynski said all of his earnings from Westfield were duly reported to Peru’s tax authority. Of the US$4 million in payments to First Capital, he said only a single transaction, for which he held up an invoice, was for financial consulting services he provided the firm in 2012 as part of its work on an Odebrecht-owned irrigation project.
“I’m an honest man and have been all my life,” he said.
Peruvians are unlikely to be convinced by his reassurances that he did nothing wrong, analysts said.
Harvard University political scientist Steve Levitsky said Kuczynski was already a weak president with little legislative or popular support before the corruption allegations, which had been quietly dogging him for some time, broke into the open.
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