Perupetro-Discover oil kickback scandal: thousands of protesters march on Congress

President Alan Garcia faced nationwide mass protests against his political and economic policies and widespread government corruption as thousands of Peruvians marched on Congress to demand the ouster of his Cabinet three days after his administration was rocked by an oil kickback scandal.

Planned weeks before the scandal involving state officials taking bribes in exchange for oil concessions broke late Sunday night, the protests, organized by Peru’s largest labor union, the National Confederation of Workers, or CGTP, picked up on the theme of corruption.

The march had originally been planned to protest last year’s free trade agreement with the United States, the rise in the cost of living spurred by subsidized U.S. agricultural products, the criminalization of social protest and to demand better working conditions.

In Lima, thousands of Peruvians, including construction workers, teachers, miners, fruit vendors, bus drivers, and merchants marched on Congress, demanding that García’s Cabinet step down.

“It’s been proved, Apra is corrupt!” protesters chanted holding up signs that read: “With Alan (García) corruption moves forward,” and “the people are struggling and Apra is stealing.”

Though Garcia moved quickly to contain the damage and demanded harsh punishment for the corrupt officials he called “rats,” it may not be enough to salvage the image of an administration that was panned across the board in recent nationwide polls. García’s approval rating stands at around 19 percent — an all-time low since he took office in July 2006.

“Christ, who brought a kingdom of love and peace, also refused to give in to corrupt, hypocritical individuals,” said García in comments to Radio Programas radio Wednesday. “He condemned them: ‘Generation of rattlesnakes, whitewashed sepulchers, the grinding of your teeth will be heard in hell.’”

On Sunday, investigative TV news program Cuarto Poder (“Fourth Estate”) broadcast audio recordings purportedly of Perupetro Vice President Alberto Quimper and Romulo Leon Alegría, a prominent member of Garcia’s ruling Aprista party, discussing under-the-table payments conditioned on Norwegian Discover Petroleum obtaining oil concessions.

According to the recordings, Quimper, Leon and Ernesto Arias-Schreiber, the legal representative of Discover in Peru, were to receive $10,000 monthly in exchange for steering lucrative oil contracts to explore the offshore oil blocks and gas field.

The scandal led the government to suspend five joint exploration and development contracts recently awarded to state-owned oil company Petroperu and Discover Petroleum of Norway, and forced the ouster of Peru’s Energy and Mines Minister Juan Valdivia, fugitive Leon and Quimper, who was taken into custody Tuesday after he checked into a private medical clinic seeking treatment for hypertension.

Then, on Tuesday, Discover added fuel to the scandal by releasing a statement denying involvement in the oil bribes but acknowledging that it made direct payments to Leon and indirect payments to Quimper.

“A total of $63,750 has been paid during the period from May to this day to Romulo Leon for assistance in connection with preparation of meetings and procedures in connection with the license application process,” Discover’s press release reads, and “$10,000 per month from May through October – a total of $60,000, has been paid to (Quimper’s) law firm to cover legal assistance in connection with pre-qualification, establishing a local branch and the license application process.”

“The fact that these individuals were being monitored under the suspicion of corruption already before we had any business interests in Peru, indicates that we are the ones that have been deceived,” said Jostein Kjærstad, CEO and Chairman of Discover.

“The application process has in addition been completely open and transparent, and could not possibly have been influenced by any bribes,” he added.

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