LIMA, Peru _ Peruvian President Pedro Pablo Kuczynski survived a pell-mell impeachment effort over allegations that he lied about dealings with Brazilian construction company Odebrecht SA, which is at the center of the biggest corruption scandal in Latin America's history.
After a Thursday congressional session that lasted more than 13 hours, lawmakers in the opposition-dominated chamber fell short of the two-thirds vote needed to declare the Wall Street veteran and former finance minister "morally incapable."
The impeachment drive took less than a week from beginning to end. That the opposition came so close to unseating a president in that time demonstrates the potency of the scandal known as Operation Carwash, its Brazilian code name. It also reinforced the perception of Peru's politics as chaotic and unpredictable.
"You have a president who has lost significant political capital, who will struggle to recover that capital," Eurasia Group analyst Maria Luisa Puig said before the vote. "A weak president and corruption allegations will hinder his government's efforts to boost growth."
The tumult arrived amid a slowdown caused by the freezing of civil-works projects amid the investigation, and destructive flooding in the country's north. The government's efforts to revive the economy are focused precisely on attracting the sort of infrastructure investment that engendered the scandal, Puig said.
Peru's economy will grow 4 percent next year, faster than Colombia, Chile, Brazil and Mexico, according to analysts surveyed by Bloomberg. This year it's forecast to expand 2.6 percent. The nation's economy and fiscal position merit a higher credit rating than its current A3 grade, but weak institutions hold it back, Moody's Investors Service analyst Jaime Reusche said Tuesday.
Every living president in the country this century is either in jail, on the run or under investigation. And many of Peru's current mainstream political leaders have been tainted by the continent-wide bribery scandal, which centers on Odebrecht, the Brazilian construction giant.
Prosecutors across Latin America are investigating bribes that Odebrecht paid to public officials in exchange for billions of dollars in contracts. Odebrecht disclosed payments to Westfield Capital Ltd., owned by Kuczynski, of close to $800,000 between 2004 to 2007 for advice on projects that Peru awarded to the Brazilian builder.
Kuczynski told lawmakers he never received a bribe or had any conflict of interests while in office, though said he was careless and sloppy with his business records. He said he had no knowledge of the company's dealings at the time, because an associate was managing the company. He said that, as sole shareholder of Westfield, he later received a dividend and thus "earned some money" from the Odebrecht deal. But he denies granting any favors to Odebrecht when he was finance minister.
"Not impeaching isn't the same as not investigating," Kuczynski's laywer said. "There should be an investigation" and the president will cooperate.
The opposition party, Popular Force, began calling for Kuczynski's immediate resignation just hours after lawmakers made public Odebrecht's payments to Westfield. Polls show the party's leader, Keiko Fujimori, the daughter of a former president, is Peru's most popular political figure.
Popular Force, which controls 71 of 130 seats in Congress, is also seeking to oust the attorney general and to remove justices from Peru's highest court. Kuczynski still isn't out of danger, according to Puig, since there's nothing to stop the opposition from presenting a second motion to impeach him. But Fujimori herself is under investigation in the Carwash case.
The Andean nation is at a point of "seemingly total ungovernability," said Jo-Marie Burt, a senior fellow at the Washington Office on Latin America.
