Ever since Marcelo Odebrecht, the former CEO of Latin America’s largest construction company, confessed that his firm had paid US$788m in bribes in 12 countries in Latin America and Africa; the spotlight has turned to campaign financing and political corruption, affecting several politicians.

Peru is no exception to this: all of the country’s presidents since 2001 – and, as of recently, the incumbent too – are under investigation for corruption.

An analysis made by The Economist notes that Latin Americans are becoming increasingly cynical about democracy – with strong anti-establishment undertones rippling through the region – and that political fragmentation is worsening with elections on the horizon in several countries.

In the case of Peru, even when elections are not scheduled to take place any time soon, there is cause for concern. A weak executive branch faces an opposition with a majority in Congress; politicians from different parties and representing different ideologies are losing legitimacy over corruption cases; and President Pedro Pablo Kuczynski narrowly survived impeachment proceedings brought against him.

To compound the fallout from a chaotic period in a country that is no stranger to political turmoil, PPK, as the president is widely known, almost immediately granted a pardon to Alberto Fujimori, an ex-President imprisoned on account of numerous humanitarian crimes committed under his administration. Serious questions are now being asked of Peru’s political future.

The “Odebrecht effect” in Peru

According to case notes, Odebrecht are alleged to have spent US$29m in bribes in Peru alone. However, it would appear that the firm also paid more than US$40m to presidents, candidates, vice-ministers, regional authorities and other intermediaries. The complete list of those under investigation is damning.

The most salient cases have been those involving former presidents, candidates and well-known businessmen. Currently, Alejandro Toledo (2001-2006) is fighting extradition from the US, charged with accepting US$20m in bribes.

Marcelo Odebrecht scandal speech
Disgraced construction mogul Marcelo Odebrecht has quickly become the most infamous name in Latin American politics. Photo credit: Flickr.

In addition, Ollanta Humala (2011-2016) and his wife are in pre-trial detention, pending charges of money laundering after receiving US$3m for Humala’s presidential campaign. Recently, four prominent businessmen related to Peruvian construction firms that had worked with Odebrecht were also arrested.

Former President Alan Garcia (2006-2011) is under investigation, while four public officials from his time in office are now in jail for corruption cases related to Odebrecht.

Furthermore, Keiko Fujimori – the daughter of recently-pardoned ex-president Alberto, and the losing 2016 presidential candidate – and her party are being investigated in relation to allegations of ‘double counting’ and failing to identify donors.

A number of Marcelo Odebrecht’s notes have been presented as evidence, stating that his company should increase its ‘donation’ to Keiko Fujimori’s campaign and make her a personal visit. Finally, the current president is also under investigation.

The political climate under Kuczynski

When Kuczynski came to power in July 2016 many celebrated his personal qualities and experience. Nevertheless, he only won by a small share of the total votes cast, and mainly due to anti-fujimorista sentiments in the country.

The Fuerza Popular (Keiko Fujimori’s party) won 72 out of 130 seats in Congress – an absolute majority – while the President’s party only managed 18. This has marked a very tense relationship between the executive and legislative powers. In addition, heavy flooding in early 2017 meant that many reconstruction works have diverted attention and funds from Lima’s political struggles.

It didn’t take long for fujimoristas to aggressively challenge the President. In December 2016, they impeached the successful Minister of Education Jaime Saavedra, the only minister that survived the change of government, after a rather shameful session in Congress. Saavedra is now the World Bank’s Director of Education Global Practice.

For many, this was a golden opportunity that Kuczynski missed to launch a counterattack. By asking for a vote of confidence in his Cabinet from Congress, he could have constitutionally dissolved Congress if confidence had been denied twice, but he chose not to exercise this provision.

He recently stated that this had been a mistake. Indeed, up until his own impeachment battle, five ministers were either impeached or somehow forced to quit by Congress.

Keiko Fujimori pardon father speech
Keiko Fujimori leads a powerful congressional majority in opposition to President Kuczynski. Photo credit: Wikipedia Commons.

Salvation and pardon

Amid political tension and the relentless advance of the Odebrecht case, the Lava Jato Commission – the team investigating Odebrecht’s many misdemeanours – in Congress (led by fujimoristas) published information from Odebrecht that showed the firm paid almost US$800,000 thousand in advisory fees to an investment banking firm owned by Kuczynski while he was Minister of Economy and Finance, more than a decade ago.

Kuczynski had previously claimed – incorrectly – that he had had no direct or indirect relationship with Marcelo Odebrecht or his company. The president claimed that he was not involved in the management of the firm while he was a minister (and thus didn’t know of the contracts), but admitted that year later he received money as a shareholder.

While there are still a number of clarifications to be made in this regard, Congress was in no mood to hear Kuczynski’s protests; in less than three days, lawmakers voted to begin impeachment proceedings on the grounds of “permanent moral incapacity”.

This was taken by many as an assault on democracy – a coup attempt from Congress and a violation of due process – especially given that the Fuerza Popular was also trying to oust the attorney general and members of the highest court. Many politicians and journalists, in the name of institutions and governance, defended the President.

Surprisingly, the Kuczynski was “saved” from impeachment after 10 members of the opposition Fuerza Popular rebelled in the congressional vote, deciding to abstain from voting in favour of impeachment.

Alberto Fujimori walks free

Just two days after being saved from impeachment, Kuczynski granted humanitarian pardon to Alberto Fujimori, prompting strong criticism given both the timing and legitimacy of the process.

Having made the announcement, the President released a video stating it had been the most difficult decision of his life, asking people not to be led by hatred while calling Fujimori’s extensive record of humanitarian crimes “mistakes”, and failing to mention the victims.

A video then surfaced of Alberto Fujimori thanking Kuczynski and asking for forgiveness from the people he had “let down” under his mandate. None of this, predictably, was enough to calm demonstrations and international condemnation.

“More than 15 years after the collapse of his decade of autocratic rule, Alberto Fujimori continues to divide his country. His supporters say he saved Peru from hyperinflation and Maoist terrorism and set it on the path of sustained economic growth. For his critics, he was a dictator who shut down congress, destroyed checks and balances, engaged in bribery and was complicit in a death squad.

Both are right. But what is indisputable is that Mr Fujimori broke the law. He was found guilty in trials that were legally impeccable.”

The Economist, “The troubling pardon of Alberto Fujimori

Furthermore, Kuczynski has lost three congressmen and three ministers over this crisis, and many other public officials.

Peru had gone from fast-track impeachment to a fast-track pardon. Saved in the name of institutions, the general perception is the President hit institutions from the back to remain in power, undermining the rule of law.

However, as unpredictable as Peruvian society is, surveys show that even when most Peruvians believe the pardon was negotiated, Kuczynski has seen a small rise in his popularity. Popular support for pardoning Fujimori has declined, but still remains relatively high (from 65% to 56%).

What will happen next?

This whole turbulent episode has proliferated the already plentiful political analyses and raised more questions than answers as to what will – or can – happen next.

The main tool being pushed by the government is “reconciliation”. It is, however, not clear what they mean by it and how it is to be achieved. Given this crisis there are many pairs of actors yet to reconcile: executive and legislative powers; Keiko and Kenji Fujimori – the son and daughter of the pardoned Alberto – and their respective followers); Fujimoristas and the victims; and the Peruvian people and those politicians caught up in the Odebrecht scandal.

Whichever form of “reconciliation” is to be used, the truth is that reconciliation cannot be forced. The proof of this is that from the day the pardon was announced until today, the President has been unable to assemble a new cabinet that unites the various political factions.

The next steps for the government mainly depend on the expected “Reconciliation Cabinet”, and what kind of power restructure will take place within the Fuerza Popular now that Alberto Fujimori is free.

It is not yet clear if the party will divide in two: those that support Keiko and those that support Kenji and Alberto. This would result in the loss of its absolute congressional majority, however if they can set their differences aside and join forces, then a strengthened fujimorismo could result – the weakest scenario for Kuczynski.

So far, Fuerza Popular has released a statement celebrating the liberty of Alberto Fujimori but disagreeing with how it was achieved. They also state that their congressmen won’t be available to join the cabinet, keeping their cards close to their chests with regard to reconciliation.

Furthermore, the Odebrecht case will continue its course, and it is also not yet clear if any of the current political forces – fujimorismo included – will be affected further. The main problem is that, while everyone keeps arguing about politics, the difficulties faced by Peru – especially the poorest Peruvians without access to public services – are not going anywhere, and projects will continue to be stuck.

With or without the crisis, there is a lot of work to be done, and Peru is in dire need of its politicians making the people their priority.

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