LIMA, June 6 Legal woes grew for the main opponent of Newmont Mining's $5 billion gold mine in Peru on Thursday as a congressional committee urged the attorney general to investigate him for allegedly misusing public funds.
Cajamarca Regional President Gregorio Santos, who led protests that has stalled Newmont's Conga gold project, awarded contracts to a local businessman in violation of rules on transparent bids, according to a report assembled and unanimously approved by the oversight committee in Congress.
Lawmaker Gustavo Rondon, the head of the committee, said the report now faces a floor vote on whether Congress should tell the attorney general to take up the case.
"Our investigation was very thorough and we are confident it will pass," Rondon told Reuters.
Santos, the most high-profile critic of U.S.-based Newmont's stalled $4.8 billion project, could not be reached for comment.
But he has said he is being unfairly targeted by the government of President Ollanta Humala, who has sought to overcome stiff local opposition to what would be Peru's biggest investment ever.
"I reject the accusations. It is a fairy tale orchestrated by the government," Santos said in a Twitter post.
Santos, a member of Peru's communist Patria Roja party who has criticized Humala for drifting to the right, is widely seen as having presidential ambitions for 2016. It is unknown if Santos would get many votes outside his northern region.
Santos has faced other attempts to defrock him politically.
At the height of anti-mining protests in Cajamarca a year ago, officials moved to reopen a years-old case against Santos from when he led so-called peasant patrol groups that function as de facto police force in remote towns across Peru.
That case, which was dropped for lack of evidence, tried to link Santos to violent acts related to the patrols.
The dispute over Conga has arguably been the biggest controversy Humala has faced during his two years in office.
Five anti-Conga protesters were killed in clashes with police last July and Humala has twice shuffled his Cabinet over the project.
Communities say they fear the project, which would be built near a handful of mountain lakes, would deplete and pollute the local lakes and rivers.
Newmont, working with partner Buenaventura, has put construction of the mine on hold as it builds reservoirs high in the Andes to guarantee year-round water supplies for locals.
Peasant patrol groups active in Cajamarca say they will occupy one of the lakes to protest the plans to transfer the town's water from the lake to a reservoir later this year.
Buenaventura Chief Executive Roque Benavides told Reuters last week the mine will not go forward if draining the lake generates broad opposition.