Corruption in Peru
A Widening Web
May 24, 2013 - The Economist
by L.C. – LIMA
AS CANDIDATES start to jockey for position in a presidential contest due in 2016, corruption allegations are swirling. Of the five main potential runners, four have faced accusations of graft, which they deny. The scandals make depressing reading for voters, who appear to be losing faith in politics.
Alan García, who was president from 1985-90 and then from 2006-11, and Alejandro Toledo, who led the country from 2001-06, are both hoping to return to office. Both are caught up in scandals involving the purchase of homes in two of Lima’s priciest neighbourhoods. The attorney general’s office has called for banking secrecy laws to be lifted in the case of Mr García, who earlier this year acknowledged the purchase of an $850,000 home. He says the money came from speaking engagements and book sales, among other sources, and claims that the investigation is part of a plan by Ollanta Humala, the current president, to keep him out of the 2016 race.
Earlier this month a congressional commission was given extra time to look into allegations of misappropriation and misuse of funds in infrastructure projects during Mr García’s second term. There are also questions about the hundreds of pardons granted to drug traffickers during his first term, in which he granted more than 5,000 pardons in total. A member of the presidential-pardons commission served time for drug trafficking. Mr García has denied allegations of kickbacks, claiming that the only help he received in making decisions on the pardons came from God, whom he claims to have consulted on each case.
Mr Toledo, meanwhile, announced on May 21st that he would make his financial records public in a case involving his mother-in-law, Eva Fernenbug, who recently shelled out nearly $5m for a house and office in Lima. Mr Toledo says that his mother-in-law used her own cash for the transactions and that he has no involvement in how she spends her money. He blamed the media for a “political witch-hunt” to derail his political comeback. Congress is considering setting up a special investigative commission.
Keiko Fujimori, a former congresswoman who lost the 2011 presidential race to Mr Humala and is the current front-runner to win in 2016, is doing her best to persuade Peruvians that she has inherited none of the faults of her father, Alberto Fujimori, who was president from 1990-2000. Mr Fujimori was sentenced in 2009 to 25 years for human-rights violations. He received additional sentences in several corruption cases. Transparency International has ranked him among the ten most corrupt leaders in recent history. Ms Fujimori, who served as first lady during her father’s second term, was investigated and cleared of any wrongdoing.
Luis Castañeda, who ran unsuccessfully for president in 2011 and may now run again, continues to face questions over service contracts during his two terms as mayor of Lima from 2002-10. A case against Mr Castañeda involving alleged kickbacks has been opened and closed by different judges several times in the past three years.
The local media and political pundits are having a field day, with the property scandals and other corruption allegations making headlines for more than a month. Pedro Pablo Kuczynski, a former prime minister, is the only major candidate not facing corruption allegations, and the only one with a negative rating below 50%, according to a poll by Datum.
The scandals sell papers, but they are also lowering Peruvians’ opinion of politics and politicians. “I think we are going to see this circus play out for a long time. These scandals are going to reinforce the idea that all politics is corrupt,” says Cecilia Blondet, head of the anti-corruption group Proética, the Peruvian chapter of Transparency International, a Berlin-based graft watchdog.
A side attraction is Congress, nearly a quarter of whose members have faced ethical hearings on corruption charges. Congressmen have been suspended for pirating and reselling cable-TV access, laundering illegally harvested wood and gold, running a brothel and lying about educational achievements on sword affidavits filed to run for office. Among those suspended was Omar Chehade, a former anti-corruption prosecutor and one of Mr Humala’s two vice-presidents. He resigned his vice-presidential post in early 2012, but retained his congressional seat.
Proética says that corruption is the second-biggest concern among Peruvians, following crime. Its survey also found that 90% of people do not report graft. “People don’t react, because they have no faith in the authorities, institutions or the law,” says Ms Blondet. “The perception is that nothing would change.” Whoever becomes Peru’s next president faces an uphill struggle to convince people otherwise.