December 20, 2017 / 4:35 PM / 3 months ago

UPDATE 4-Peru president, crying 'coup,' signals VPs would quit if he ousted

* Resignation of VPs would trigger new general elections

* President says Congress seeking to sabotage democracy

* Govt expects president to survive vote to unseat him

* OAS regional bloc sends delegation to observe crisis (Recasts with Kuczynski’s message to nation)

By Mitra Taj and Marco Aquino

LIMA, Dec 20 (Reuters) - Peru’s President Pedro Pablo Kuczynski on Wednesday signaled both his vice presidents would resign if Congress forced him from office, calling an opposition bid to remove him a “coup” attempt that had to be resisted.

The rightwing populist party that controls Congress, Popular Force, aims to oust Kuczynski in a vote on Thursday on grounds he is “morally unfit” to govern, after finding he once had business connections with a company at the center of Latin America’s biggest graft scandal.

Kuczynski, who denies anything improper or illegal, said Popular Force was misusing its majority to attempt a power grab.

“The constitution and democracy are under attack. We’re facing a coup dressed in supposedly legitimate legal interpretations,” he said in a late night speech on national television.

“This is a conviction that my two vice presidents share, because neither wants to be part of a government born of an unjust and anti-democratic maneuver,” Kuczynski said.

He was flanked by First Vice President Martin Vizcarra and Second Vice President Mercedes Araoz.

If Kuczynski loses Thursday’s congressional vote to remove him and his two vice presidents depart as well, new presidential and legislative elections would be called.

A 79-year-old former Wall Street banker, Kuczynski has struggled to govern since winning last year’s presidential election but only a small share of congressional seats for his center-right party.


Popular Force says its efforts to remove him are well within the bounds of the constitution and key to its fight against corruption.

“He simply doesn’t care about the country,” Popular Force lawmaker Luz Salgado said after Kuczynski’s address. Earlier this week, Salgado called for Vizcarra to govern the country through 2021, when Kucyznski’s term ends.

Vizcarra and Araoz both pledged their loyalty to the center-right president on Wednesday but declined to comment on whether that meant they would resign if he was removed from office.

Araoz told Reuters on Sunday that she and Vizcarra would not quit.

In recent days, Kuczynski’s supporters have increasingly called for his vice presidents to refuse to replace him. They believe new elections would cost Popular Force its majority amid widespread contempt for elected officials as a graft scandal taints much of the country’s political class.

But investors worry a new ballot could sweep anti-establishment candidates to power in one of Latin America’s most stable economies.

Kuczynski’s government does not think it will come to that, said a government source. It expects about a dozen opposition lawmakers to oppose the motion or abstain from voting, said the source, who spoke on condition of anonymity.

Eighty-seven votes are needed to oust Kuczynski. Congress passed the motion to start “presidential vacancy” proceedings last week with 93 votes.


On Wednesday, thousands of Peruvians marched in front of Congress to denounce what they saw as Popular Force’s bid to exploit the crisis to sabotage country’s democratic institutions, pointing to its recent efforts to also oust the attorney general and a justice in the Constitutional Court.

Popular Force emerged from the rightwing populist movement started in the 1990s by former President Alberto Fujimori, who is serving a 25-year-sentence for graft and human rights crimes during his autocratic 1990-2000 government.

The United States, where Kuczynski once held citizenship, said Peru was a “strong democracy.”

“We are confident that the Peruvian people and institutions will address this situation according to Peru’s constitutional norms,” the U.S. State Department’s Bureau of Western Hemisphere Affairs said.

The political crisis stems from a disclosure by Brazilian builder Odebrecht, which has landed elites in jail from Colombia to the Dominican Republic since acknowledging bribing officials across the region for much of the century.

Responding to a request by Congress, Odebrecht said it paid more than $4 million to consulting companies owned by Kuczynski or a close business associate for about a decade starting in 2004. Some deposits were made to a company Kuczynski owned while he was minister in a government that awarded Odebrecht lucrative contracts.

Odebrecht said Saturday that there was no indication the transactions were part of its past corrupt dealings with politicians, which it can only discuss with prosecutors.

Kuczynski once strenuously denied ever having any ties with Odebrecht. He has since apologized to Peru for not disclosing his connections with the company, blaming forgetfulness and poor organization of his personal records after decades of work in finance and public administration.

But he said there was nothing improper about the payments.

“Being careless and sloppy is a defect but it is not...a tool for dishonesty and much, much less, for crime,” Kuczynski said.

Kuczynski had once raised hopes that his decades of finance and public administration experience would usher in a new period of investments to spur faster economic growth in the world’s No.2 copper producer.

But in a sign of how the crisis has engulfed his government, Peru postponed an auction of a $2 billion copper project, scheduled for Wednesday, until February. (Reporting by Mitra Taj and Marco Aquino; Additional Reporting by Teresa Cespedes; Editing by Frances Kerry and John Stonestreet)

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