Humala Urges Peru Vice President to Resign Amid Graft Probe

Peruvian President Ollanta Humala called on Vice President Omar Chehade to resign in order to defend himself properly against allegations that he abused his office.

“He’d do well to step down, but that has to come from him,” Humala told reporters in comments broadcast on state-run TV Peru yesterday. “We’re not going to protect or support” Chehade, he said. “We support the truth.”

The attorney general’s office and Congress are separately investigating allegations that Chehade sought to use his influence to help an agricultural company gain control of a sugar plantation. Chehade also allegedly tried to persuade the previous government to award a contract to a construction company while he was vice-president elect. He denies the allegations.

Chehade, a first-term congressman and one of Humala’s two vice presidents, resigned Oct. 27 from a committee that plans to investigate corruption in the previous government. He cited “strictly personal reasons” for the move.

In the remarks on state television, Humala said resigning would allow Chehade, who was previously his lawyer, to defend himself better as the investigations into his conduct are carried out.

Mediator

Humala took office in July after pledging to root out corruption in Peru’s political and judicial system. The allegations may undermine the government’s drive to become a mediator in disputes between investors and local communities, said Diego Moya-Ocampos, a political risk analyst at IHS Global Insight in London.

The government last week intervened in a dispute between Newmont Mining Corp. and villagers opposed to the company’s $4.8 billion Minas Conga gold and copper project. The mine would be Peru’s biggest ever investment project.

“A corruption scandal at such a high level attacks Humala’s popularity and undermines his legitimacy to mediate and prevent these social conflicts from escalating,” Moya-Ocampos said in a telephone interview.

Chehade’s resignation “would provide more legitimacy to the government to deal with social conflicts, and in particular in the case of Minas Conga,” he said.

To contact the reporter on this story: John Quigley in Lima at jquigley8@bloomberg.net.

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net.

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