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Peru judge orders international arrest warrant for ex-president Toledo

Reuters

LIMA (Reuters) - A Peruvian judge issued an international arrest warrant on Thursday for former president Alejandro Toledo and said he should spend up to 18 months in jail while prosecutors investigate him for allegedly taking $20 million in bribes from Brazilian builder Odebrecht SA.

Judge Richard Concepcion said evidence uncovered so far in a graft probe, including testimony from an Odebrecht executive and bank records, warranted putting Toledo in "preventive prison" while charges of influence peddling and money laundering were prepared.

In issuing an arrest warrant, Concepcion said Toledo appeared to have used the "high office of the presidency" to "make an illegal pact" to sell off a highway project that promised to integrate the region.

Toledo, who rose to power denouncing the corruption of his predecessor, has repeatedly denied taking bribes from Odebrecht. Toledo was in France last week and absent from the hearing.

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If found guilty, he could be sentenced to up to 15 years in prison, lead prosecutor Hamilton Castro said.

Toledo "laughed at Peruvian society, he laughed at the expectations Peruvian society had for ... clean public work projects," Castro told the court hearing into the prosecutor's request for "preventive prison" for Toledo.

Toledo's attorney Heriberto Benitez accused the judge of having a "vengeance" and said he would appeal against the ruling.

"He can't come back ... I wouldn't recommend it," Benitez told reporters. "With judges like this, careful!"

The government of President Pedro Pablo Kuczynski, who served as Toledo's finance minister and prime minister a decade ago when the contracts were awarded, said it would offer a reward for information leading to Toledo's capture if he did not turn himself in.

Odebrecht has been at the center of a growing graft scandal in Latin America since admitting to doling out hundreds of millions of dollars in bribes from Peru to Panama.

The revelation, made in U.S. courts in December, threatens to implicate presidents and former presidents who once promoted the hydroelectric plants, highways and irrigation canals that Odebrecht has built in the past two decades.

Toledo, a shoeshine boy turned economist who plays up his indigenous roots, inspired scores of Peruvians to vote for him in 2001 as an antidote to widespread graft in the government of Alberto Fujimori, who is now serving a 25-year prison sentence for corruption and human rights abuses.

Prosecutor Castro opened his case, that Toledo be jailed while investigations continue, quoting the Incan law "ama sua" or "do not steal."

He said Toledo met the head of Odebrecht Peru, Jorge Barata, in a luxury hotel in Rio de Janeiro in 2004 and promised to help the firm win two highway contracts in exchange for $35 million.

Odebrecht only paid $20 million because Toledo did not change the bidding terms to exclude competitors, Castro said, citing testimony from Barata. Toledo did, however, change laws to pave the way for Odebrecht's bid and pressured the tendering committee to pick its proposal, Castro said.

Some $10 million in transfers from Odebrecht have been traced to offshore companies linked to Yosef Maiman, an Israeli businessman and longtime friend of Toledo tasked with receiving the bribes, Castro said.

Maiman did not respond immediately to requests for comment.

The contracts helped pave a highway from the Andes through the Amazon to connect Peru's Pacific ports and Brazil's Atlantic shores. Originally requiring an investment of $658 million, cost overruns pushed the final price tag for the two contracts to $1.34 billion, according to the comptroller.

Odebrecht and its junior partner on the projects, Peru's biggest construction conglomerate, Grana y Montero, still maintain a 656 km (400 miles) stretch of the highway.

(Reporting By Mitra Taj; Editing by Michael Perry)