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Peru's Humala faces first political crisis of term

Tue, 18 Oct 2011 17:57 GMT

Source: reuters // Reuters

* Humala's VP denies corruption allegations

* Lawmakers demand explanations

* Scandal could hurt Humala's lofty approval rating

By Omar Mariluz

LIMA, Oct 18 (Reuters) - Peru's popular President Ollanta Humala faced his first political crisis just three months into his term on Tuesday as one of his vice presidents was ensnared in an alleged corruption scandal.

Prominent lawmakers urged Vice President Omar Chehade to explain himself or step down after allegedly asking a police general to help his brother evict workers from a cooperative farm that a private company wanted to take over.

Though no favors were handed out, the emerging scandal could hurt Humala, who campaigned on promises to stamp out corruption and whose lofty 62 percent approval rating has helped him quickly move legislation through Congress.

Augusto Alvarez Rodrich, a newspaper columnist, said the Chehade case could be "lethal" for Humala's presidency unless it is dealt with quickly.

General Guillermo Arteta, who says he was fired in a broader purge of senior police generals because he refused to evict the workers, said Chehade and his brother made their request at a fashionable restaurant in Lima.

Arteta said the eviction would have helped a company owned by the wealthy Wong family, which used to run supermarkets in Peru and now invests in agriculture. The family has been locked in a legal tussle for control of the farm, known as Andahuasi, for about a year and did not respond to a request for comment.

"The meeting happened and the issue dealt with by Chehade ... was the eviction in favor of the Wong family," Arteta told reporters.

Chehade, a lawyer known for fighting corruption, said Arteta is pursuing a political vendetta because he lost his job last week in a broader reshuffling of police generals.

The vice president said the meeting was held with a group of friends and acquaintances from work.

"We talked about everything, even soccer," Chehade said on local radio on Tuesday. "An eviction was never discussed and my brother has nothing to do with the sugar cane plantation."

Chehade's brother, Miguel Chehade, could not be reached for comment.

Humala appeared at a religious procession on Tuesday but did not address the growing scandal or take the opportunity to publicly defend Chehade.

"I haven't thought of resigning because I have a clear conscience," Chehade said.

If he steps down, which still appears unlikely, Humala would be left with one vice president, Marisol Espinoza, instead of the two afforded by Peru's constitution.

"If what happened is true it would be a disaster for the country," said lawmaker Victor Garcia Belaunde. (Additional reporting by Marco Aquino; Writing by Terry Wade and Bill Trott)