Op-Ed Contributors, Opinion

PPK and the  Collapse of a Government

By Nicholas Asheshov

It seemed natural during the election campaigns in 2011 and 2016 that Pedro Pablo Kuczynski should be the odd man out.  That was what he was selling.  Gangly, he could be relied on to put his foot in his mouth.  Awkward moments were part of this clean-cut product.  He was not just not a typical politician but he was not a politician at all.  Yes, he could handle boardrooms and investment bank offices in Walll St. and Washington, run commercial, financial and industrial organizations.

This was the  21st Century Admin laid-back Latino Lima needed to knock Peru into shape, pick up the baton of a promising economy, and run with it.  Asked in 2016 when he won the election what he hoped to be remembered for, he said, “The president who modernized Peru.”  Couldn’t be better.  A  shoot-from-the-hipster with decades of hands-on experience.  In the 2011 election first round  he got 18.52% of the votes, only five points behind Keiko Fujimori.  If the vapid Toledo had dropped out and left the right field to PPK, he would probably have beaten Humala in the run-off.  A 2011-2016 might have seen PPK, then 73, more flexible.

The 2011 election returned to the headlines a few weeks ago when an Odebrecht employee, Jorge Barata, said the main parties had each received cash from Odebrecht.  The winning Humala group had received $3mn.  The Fujimori people had received $1.2mn.  Toledo, an old connection, $700,000.  PPK had received $300,000.  Alan Garcia’s APRA party had received $200,000 for its successful 2006 campaign.  Susana Villaran, mayor of Lima, had received $3mn for a 2013 recall campaign against her which successfully helped her retain the post.

Although each party’s chief, including PPK, has denied taking Odebrecht money, under Peruvian law there are few limitations on campaign funding, and receiving money from abroad or from private corporations is not a crime.  It is illicit to receive campaign funds without declaring them to the national elections board, ONPE, but it is not illegal.

The hairsbreadth 40,000-votes  victory in 2016, when PPK was 78, was, still, a mandate for efficient, growth-oriented, clean-up government.  But from the beginning he was criticised by friend and foe for being insensitive to politics, meaning he did not join the criollo political sets.  His 20-odd ministers had for the most part the same lack of interest or capacity to connect with their constituencies, much less the wider public.

For instance, there was 100% demand for the top to bottom reshaping of the judicial system, slow, corrupt, medieval at best.  But the lady notary PPK put in as minister of justice rarely appeared in public.  If she did anything, no one was any the wiser.

Worse, the  minister of education, Jaime Saavedra, was a first-rate educationalist who went on to become head of the worldwide education department at the World Bank.  The Fujimori opposition impeached Saavedra five months into the new government.  Instead of meeting this cheap challenge, PPK ignored his advisors and let it pass.  A  weak decision which set the tone for a civil-war-like squabbling that has left the Congress with an approval rating close to single figures, a few points lower even than that of PPK himself.

Three more ministers were similarily badly treated by the Congress, which forced out the prime minister, Fernando Zavala, another technocrat.

This combination of political lack of forcefulness, and what often came across as a colourless Cabinet, seemed accurately to reflect PPK’s own personal style.  He was and is a good public talker, on radio and TV.  But this skill seemed to desert him when he came to power.  A forceful personality that had for decades not suffered fools gladly, seemed to turn sometimes to arrogance in front of the cameras.

He was widely praised for energy and concerned with the effects of floods on the northern Coast in the El Niño of 2017.  But a special office under a competent manager to carry out reconstruction was stymied by local and Lima politics.  The result was demonstrably no better than any other government.

The Brazil Lavaggiato bribery scandal began to break in Peru early in 2017 with thousands of millions of dollars worth of projects, mostly roads and big irrigation projects.  Towards the end of the year the newspapers and TV pinned accusations on PPK that he himself had been involved.  Financial investment and advisory companies of his were said to have profited during his time in 2003-5 when he was minister of finance and Prime Minister.  PPK consistently denied wrongdoing but the denials often came across as confused at best.

The Fujimori opposition forced a congressional impeachment just before Christmas 2017 which failed, followed immediately by the pardon and freeing of 79-year-old former president Alberto Fujimori, convicted of human rights violations to spend the last years of his life in prison.

The combination of corruption accusations against PPK and the controversial pardoning of Fujimori set many of his friends and allies, always in short supply, against PPK.  Some of the most reliable said privately he had thrown them under the bus, taking poor advice or relying on his own judgement, traditionally out of step with the cooler heads of advisors better schooled in the timing and content of Lima politics.

Judicial authorities have barred PPK from leaving the country.  He faces a collection of potential legal and criminal charges revolving round the Lavaggiato scandals.  He may also have to face accusations he and his people tried to buy anti-impeachment votes from congresspeople.

But not without a fight.  PPK threatened this morning to rescind his resignation in order to force impeachment proceedings if Congress persisted in declaring his mandate “vacated” instead of “resigned.”  In is preliminary draft, Congress was also considering declaring him a “traitor to the nation” for his “performance in public office throughout his life.”  PPK’s threat wouldn’t be possible procedurally, but Congress backed down, reworded its proposal, and on Friday voted 105 in favor of accepting his resignation.
Nick Asheshov was editor of the Andean Air Mail & Peruvian Times during the 1970s and 1980s, and of The South Pacific Mail, Santiago during the 1990s.  He was Latin America Editor of Institutional Investor, New York over the same period.  He lives in Urubamba, where he writes a blog and where he has been prominent in the hotel and railway business.

 

7 Comments

  1. Peru needs a new strong and non corrupt President if there is one. They also need to get a new congress, Keiko’s bunch needs to go and new people with new ideas need to be installed. STOP corruption and the people will have new hospitals, much needed water and electric available to them. People be smart who you elect to office, promises are cheap talk and action is what matters.

  2. Paul Calderon

    Dear Mr. Asheshov: A clear, concise and well written recap of PPK’s debacle as President. Many regards from the younger son of Dr. Alfredo Calderon, your neighbor at Carabaya 928 for so many years.

  3. Enrique Woll Battistini

    Good riddance! PPK was widely considered in the press to be a good lobbyist, self-promoter and opportunist who did not hesitate to take advantage of his insider’s knowledge and formal authority as minister of the economy, president of Proinversión -the government’s investment promotion organization- and prime minister during Toledo’s administration, and later, to profit from government contracts he himself issued to corrupt Brazilian construction companies, through his own unipersonal companies or sole-proprietorships set up in Miami and Lima, by also entering into service contracts through them with these same Brazilian companies. Clearly, if true, it doesn’t matter if he knew or not of these back-to-back contracts, or if he managed his companies or not or if the funds his companies thus earned reached his personal bank accounts or not, or even if the funds his companies received were of illicit origin and thus constituted money laundering or not. These activities if carried out by a government official directly or through third parties contravened Peruvian law regarding these conflicts of interest. But he admittedly performed the supposed financial structuring services his companies delivered to the referred Brazilian companies. The issue that remains to be addressed is the motivations he had for running for president. He had everything, and lost everything.

  4. Ruth Morales

    Yes, Paul; Alejandro and I had just been there in his quest to show me the country and I have photos of my young self in the plaza and also on the edges of the lagoon. It was incredibly spectacular and I am so grateful for the respect shown in the area. I somehow feel that I am there in a small way. Hugs. Ruth.

  5. Ruth Morales

    I am sorry, Paul, but my response was in relation to the article on Yungay.
    I also agree with what you wrote to Mr. Ashhov regarding his most concise comments.
    R.M.

  6. christine schmidt

    ppk was tied up to bles and inwithin this to moreno . same way he was tied up to heresi . actual justuice minsiter , i live 22 years here and know country very well on all social level fro, very up to down.
    it was warned that peru ends in deep trouble and i am afraid it is not over . viscarra who took over 3 month ago performes weak and seems to be controlled by those who lifted soros and hos ointrest up . ppk was close freind of soros and peru vbecame a sorocracia lawless and no order . it is fari to tell peru after rirn of terrorism runs in olid way to be the next no go costal area is taken by violence and thisn sopld to peop’le as democracy . peop’le feel it like they country gets ripped and they cant do anything – ppk toledo and humalla all finaced by globlist soros who wants to destroy usa under use of peruvian drugs and mex cartels where he finaced in lopez obrador
    as i see it peru is case for armed forces and 100 000 special forces forkm usa to combat drugs .
    peruvian politicuans are widely corrupt same as justice and there is no order in certain areas . myself i sepnd 5 years in active anti drug battle in san miguel have cancer and combat mara salva truvchas most likely protected by bles
    ppk cover uo for the moreno and other peple and most liekly allwo thyat sanches paredes wash their drugs with odenbrecht . oif not fixed peru has a dark future . 5 mio peruvians live abroad and my self i will leave . there is no security for foreginores hate crime are on uppraise and ppk can be described as senil and corrupt
    toleod is stoill oin usa and looked for stealijng humalla did jail time
    i am in favour ofarmed forces conterol costal area and vraem soros politicianms destroy peru and steal peruvians and use corrupt middle class ti give their gold and gas
    if antairo wins or guzmann they are as well soros paid candidates
    i see bad and leave the comment for spell check after all i was 5 years oin qactuve anti drug battle againt maras where i had to defend me after fresh mastectomy agsint mara salva truchas since toledo i suffer 19 intemps in my live had usa embassy visit and can say peru rigth now is not to be recommended for security sotuation ofr investment
    usa should nail toledo up for tax evation and set a sample . the world has changed
    in peru it almost costed my live

    freedom

  7. Bernard C Scott

    PPK did nothing to help poor people in Peru, in fact poverty in the provencia has risen to 54%, but the real poverty level is around 80%. When PPK left the Toledo government he left “with his pockets full” of all the corrupt officials the evidence of his corruption is the greatest. Under Humala the hired 50 new family medicine doctors per year to provide doctors for essalud and minsa. PPK stopped this and privatised this by hiring a company to provide the doctors for which he received his “lobbying fee” . So Usually doctors attend 15 to 18 patients per 6 hour rotation , under PPK private company they are required to attend 32. Now they can’t find good doctors to work under these conditions. Either you are naive to his corruption or part of it.

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