Strong Prosecution, Fragile Parties Convolute Lava Jato in Peru

By Richard Mann, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Peru’s most traditional party, APRA, sits five of the 130 members of Parliament. This fact partly accounts for the devastating effect of Lava Jato in the country which had its last four presidents affected. Operation Car Wash (Lava Jato) is a criminal investigation being carried out by the Federal Police of Brazil.

On Friday (19th) while Alan Garcia, one of the MPs, was being cremated – two days after he had killed himself following corruption reports – another, Pedro Pablo Kuczynski (PPK), heard he would serve three years in pre-trial detention. At 80 years of age.

The weakening of the parties in Peru occurred in parallel with the economic boom and increased demand for infrastructure works. Since the year 2000, opportunistic politicians like Alejandro Toledo, García himself and Ollanta Humala have taken turns in power, with little support in Congress, low popular approval and campaign donations in exchange for millionaire concessions.

Lacking political force to oppose the allegations, the former presidents fell one after the other. Pedro Pablo Kuczynski, the last elected president in 2016, conceived a slogan from his own initials (Peruanos Por el Cambio) to win the dispute.

On a bench in a garden bearing the busts of the founders of APRA, a weakened Germán Luna, one of the party leaders, observed the trail of flowers left by Garcia’s coffin at the end of his wake on Friday. His almost centennial party has become a foreign body in Peruvian politics, marked by a hypertrophied Executive and countless corruption scandals since the dictatorship of Alberto Fujimori. “We are still a political organization. The last one left in Peru, with cadres and militancy”, he maintains.

Parties Lack Strength to Impose Themselves

Political scientist Arturo Maldonado says that since Fujimori, parties lack the strength to impose themselves. “As presidents go discredited and without an organization to back them, they become an easy target,” Maldonado told the State. “Following the death of García, the political class now tries to invalidate the work of the Public Prosecutor’s Office, trying to characterize it as partial, mainly against APRA and pro-Fujimori, the political forces still organized in the country.”

Investigations were only possible due to leniency agreements signed between the Public Prosecution and Odebrecht and to the cooperation with the Lava Jato task force in Brazil. Odebrecht is a giant construction firm based in Brazil, that has been accused of paying over US$800 million in bribes to politicians and government officials in countries across South America over the past two decades.

“All former presidents are under investigation because there is evidence against them. Consequently, politicians teamed up to criticize the task force and the methods we have used, such powers granted to the Public Prosecution by Parliament itself”, one of the prosecutors who controls Operation Lava Jato in Peru told the State.

He believes prosecutors are acknowledged by the people because the political class is discredited. The prosecutor asked not to be named as he was forbidden to speak to the press after Garcia’s suicide.

Odebrecht and OAS are Everywhere

International cooperation between Brazilian and Peruvian prosecutors made it possible to detect illegal campaign donations made by Odebrecht to Ollanta Humala in 2011. The closed leniency agreement between Odebrecht and the US Department of Justice in December 2016 motivated the company to cooperate with the authorities of countries in which it was involved in scandals. The first one was Peru.

This enabled the Peruvian Public Prosecutor’s Office to open two lines of investigation: one involving irregular campaign donations and another on corruption of public officials. Marcelo Odebrecht’s revelations showed that all the country’s top political actors received money in exchange for the promise of infrastructure works.

The agreement to transfer information in exchange for a permit for the company to continue operating in Peru enabled investigations into irregularities in works such as the construction of the Lima subway in which Garcia was involved.

This week, prosecutors from Peruvian Lava Jato will be in Curitiba in cooperation with the Brazilian task force to hear one of Odebrecht’s main informers in Peru, the corporate executive Jorge Barata.

Prosecutors hope that Barata will provide definitive evidence to prove Garcia’s irregular involvement. Another focus is the negotiation of an agreement with the construction company OAS. “While Odebrecht participated in many of Garcia’s government works, OAS did so in the management of Humala. There is also suspicion of irregularities in works contracted by the Municipality of Lima, under the administration of Susana Villarán and Luis Castañeda”, added the attorney heard by the State. “We are close to confirming our chances of an investigation against Alan García. We rely on the testimony of Mr. Jorge Barata in Brazil.”

APRA militants, however, do not believe in the allegations, only in persecution. “They never found anything against Alan. Prosecutors are all left-wing and complicit with the press”, accuses the leader Germán Luna. “They have forgotten that during our government we reduced poverty from 52 percent to 27 percent and, for the first time in Peru, we began erecting buildings instead of houses.”

For Maldonado, this new phase of the investigation is a sign that Lava Jato in Peru intends to show its nonpartisan position. “It would be a way of contradicting APRA and Fujimori’s persecution arguments”, he says.

“May they all leave”

“May they all leave.” This is how the vast majority of Peruvians express themselves when questioned on the impact of corruption in the country. The request is reinforced by the numbers. According to the Datum Institute’s latest survey on the impact of Lava Jato in Peru, nearly nine out of ten Peruvians consider former presidents guilty of involvement in corruption allegations. The work of the Public Prosecution is supported by 63 percent of the population.

Historically, Peruvians have a difficult relationship with their former presidents. Since the fall of Alberto Fujimori, approval of the presidents to follow has rarely exceeded 50 percent. According to the CPI Institute, Alejandro Toledo left the position positively rated by 36 percent of Peruvians. Ollanta Humala, by 24 percent. Alan Garcia, who killed himself last week after receiving an arrest warrant, was the best rated by 46 percent.

Lava Jato, which began to affect the country in 2016, exacerbated the passivity of Peruvians in relation to politics. “Since the time of Fujimori everyone steals. The Crazy Horse (Garcia’s nickname) must be the one who stole the most. And, besides, he was very arrogant. Therefore, I no longer care about politicians”, says Juan César Toche, manager of a shoe store in Lima. “Now, at least they are doing something, but I doubt they will convict anyone.”

Garcia and Toledo are the worst regarded among the population: 93 percent and 92 percent see them as corrupt, according to Datum. Humala follows with 88 percent and Pedro Pablo Kuczynski (PPK) with 85 percent. Analysts see the risk of this passivity further aggravating the country’s political crisis.

Congress is the Worst Graded Institution in the Country

“The Congress is the home of democracy and is the worst graded institution in the country,” says analyst Arturo Maldonado. “This reaction – that everyone should leave – is turning into a complete rejection of politics, risking the chance of a “gambler’s” ascension in the upcoming elections.”

Pedro Pablo Kuczynski resigned last year amid charges related to the Odebrecht case. He was elected in 2016 in a vote-to-vote dispute with Keiko Fujimori, daughter of the former president, who is also behind bars on suspicion of corruption related to Lava Jato. Even regional political figures such as the former mayors of Lima, Susana Villarán and Luis Castañeda, are also targeted by the Public Prosecutor’s Office. The succession of President Martín Vizcarra, who replaced Pedro Pablo Kuczynski, is more uncertain than ever.

“Two years in Peruvian politics is an eternity. Here things are defined at the last moment”, says analyst Hugo Guerra, recalling the last two elections in which Keiko was defeated by a small margin by Pedro Pablo Kuczynski and Humala, in the last days of the campaign.

Businessmen, prosecutors, lawyers and political scientists interviewed by the ‘State’ have said that the border between bribery and extortion in Peru is tenuous. A Peruvian source at Odebrecht claimed to have been under pressure during the tenure of Pedro Pablo Kuczynski by the government and other local companies after the deal was closed.

According to this official, in all accounts of the company’s informers, approach for illicit payments came from politicians or authorities. The official mentions that in a construction in Cuzco, the Odebrecht executive refused to pay and the company was disqualified from the competition for “lack of technical skill”. Odebrecht acknowledged having paid bribes in the country and guarantees that it is cooperating with Peruvian authorities.

Source:  O Estado de S. Paulo