Peru vows to back graft probes as Odebrecht plea shakes country

LIMA (Reuters) - The government of Peruvian President Pedro Pablo Kuczynski said it was helping the attorney general’s office obtain information from prosecutors abroad after Brazil-based Odebrecht said in a global plea deal that it doled out $29 million in bribes to local officials over three presidencies.

Peru's President Pedro Pablo Kuczynski holds a news conference at the conclusion of the APEC (Asia-Pacific Economic Cooperation) Summit in Lima, Peru November 20, 2016. REUTERS/Paco Chuquiure

Kuczynski has not been implicated in any act of corruption, Prime Minister Fernando Zavala stressed on Wednesday after engineering conglomerate Odebrecht acknowledged paying $20 million to benefit a high-ranking official in about 2005, when Kuczynski was finance minister and then prime minister under President Alejandro Toledo.

Prosecutors in Peru have been probing potential wrongdoing in Odebrecht’s local contracts since a massive graft scandal ensnared the company in Brazil, but they have yet to press charges.

“We’re against any kind of corruption and are going to support relevant bodies so those investigations are deepened,” Zavala said in a weekly news conference.

Earlier this month the attorney general’s office reopened a preliminary graft probe into whether Kuczynski and Toledo helped Odebrecht win $500 million in infrastructure contracts in 2005, after concluding the probe had been closed prematurely.

Kuczynski will continue to cooperate with prosecutors, said Zavala, who said the probe stemmed from a law passed during Toledo’s term that was “approved by Congress, not by the president.”

But both Toledo and Kuczynski - then the prime minister - signed off on the law after it was proposed by a ruling party lawmaker. Carlos Huerta, the local attorney who asked prosecutors to probe the contracts, said the law changed bidding rules so Odebrecht could compete.

A massive settlement deal that Odebrecht reached in the United States on Wednesday said Odebrecht made $20 million in payments to companies owned by an intermediary of an official who offered to help it secure an infrastructure contract, part of $29 million in bribes it distributed in Peru from about 2005 to 2014.

The plea bargain has jolted Peru as it threatens to expose high-level corruption during the governments of Toledo and former presidents Alan Garcia and Ollanta Humala.

Prosecutors have alleged Humala took illicit funds from Odebrecht and said in November they have evidence to convict him of money laundering.

Kuczynski, a 78-year-old former Wall Street banker, has been trying to shore up his corruption-fighting credentials after the opposition ousted his education minister over alleged irregularities in a school computer contract on his watch.

Reporting by Mitra Taj and Marco Aquino; Editing by Leslie Adler