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Wednesday, February 21, 2018

Peru: The Odebracht Web

PERU

The Odebrecht Web

Construction projects have ground to a halt in Peru, where a scandal involving the Brazilian contracting giant Odebrecht threatens to cause an economic and political crisis.
The name Odebrecht should ring bells for anyone who has been following the string of corruption cases involving former Brazilian President Luiz InĆ”cio Lula da Silva as well as a host of other Latin American politicians listed recently in the Washington Post.
In Peru, as in many other countries in the region, Odebrecht allegedly paid bribes to companies linked to public officials – including President Pedro Pablo Kuczynski – in exchange for government contracts.
Kuczynski, who has denied accepting bribes, narrowly avoidedimpeachment in December on charges related to Odebrecht’s payments to his investment firm.
But, as the Economist explained, many Peruvians believe Kuczynski pardoned Alberto Fujimori, a former president who was serving 25 years for human-rights abuses, as part of a deal with one of Fujimori’s sons, a lawmaker, in order to survive the impeachment vote.
Now the opposition is considering another impeachment push, noted Stratfor, the security consultancy, as the president’s popularity ratings have plunged.
The problem for Peru now, however, is whether the political crisis can resolve itself fast enough to avoid an economic calamity.
Finance Minister Claudia Cooper said investments in companies tangled up in the web of corruption charges are equivalent to around 4 percent of Peru’s gross domestic product, reportedReuters.
“Fear is affecting the whole investment process,” Gonzalo Priale, chairman of the National Association for Infrastructure Promotion, a trade group, told Bloomberg. “We need to fight corruption, but keep investing.”
Kuczynski has proposed legislation that would allow companies that cooperate with prosecutors to keep operating, Reuters said. The new law would replace an expiring anti-graft rule that said companies convicted of corruption couldn’t bid on public contracts. The old law discouraged executives from cooperating with authorities.
But it’s not clear if lawmakers would want to give that power to an administration accused of being overly cozy with dishonest businesspeople.
Chinese news service Xinhua reported that Peruvian prosecutors have demanded $1.1 billion in reparations from Oderbrecht for the bribes.
Meanwhile, prosecutors are seeking to extradite from the US another former president, Alejandro Toledo, whom they accuse of taking kickbacks from Odebrecht. Toledo, an anti-Fujimori activist who was president from 2001 to 2006, denies the charges.
The Herald, a Scottish newspaper, recently revealed that nearly $6 million of the money that Toledo allegedly got is said to have been funneled through a shell company based at one of Scotland’s biggest law firms.
The Odebrecht web stretches far, indeed.

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