President Garcia orders 48-hour shutdown of state-run Materials Bank amid corruption allegations

President Alan Garcia ordered a 48-shutdown Monday of the state-run Materials Bank and fired its entire board of directors after the Sunday night TV news magazine Cuarto Poder revealed that top executives had been awarding themselves credits for subsidized housing meant for Peru’s poor.

Garcia said any bank officer, no matter what his or her level, would be booted out of their state jobs and face criminal prosecution if it is determined they improperly obtained housing credits.

“We are working hard to bring running water to two million Peruvians, housing for sixty thousand, but there are always some scoundrels who want to reap in the benefits for themselves,” Garcia told reporters.

Housing Minister, Enrique Cornejo announced that there would be a full investigation Sunday, just before Cuarto Poder (or “Fourth Estate”) ran its segment.

“The Housing Ministry fulfills an important role, but in a transparent manner,” affirmed Cornejo, adding that heavy sanctions would be applied to all those involved in the affair, even if it meant the dismissal of high-ranking staff and members of the Materials Bank board of directors.

Cornejo said two investigation committees would be established: one to probe the alleged improper distribution of 7.4 million soles (more than $2 million) allocated to Materials Bank workers; the second would investigate supposed favoritism in housing loan access to state employess for properties in the Los Alamos district of Lima.

According to daily El Comercio, this government-funded housing estate cost 20 million soles (or more than $7 million) and will provide 380 apartments to families of middle to lower-range income. The Ministry workers who have benefited from the scheme already own properties and earn more than the permitted limit, and thus were not entitled to the loans.

Jorge Aparicio Moselli, general manager of the Materials Bank, denied favoring his workers, affirming that they are entitled to housing loans “like any other Peruvian.” He also maintained that the alleged seven million soles hand-out to workers only totaled 1.5 million and was carried out lawfully.

Peru president shuts down subsedized housing bank
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