President Alan Garcia swore in a new Cabinet headed by a leftist governor on Tuesday amid an oil bribery scandal that has shaken his already unpopular government and forced his previous team of ministers to resign en masse.
Yehude Simon, who was imprisoned in the 1990s for his alleged ties to a rebel group, replaced outgoing Cabinet chief and longtime Garcia ally Jorge del Castillo.
The president accepted the resignations of all 17 Cabinet members on Friday after audiotaped conversations surfaced that allegedly revealed members of del Castillo’s political party discussing bribes to steer business to Norwegian oil company Discover Petroleum.
At Tuesday’s swearing-in ceremony, Garcia told Simon that his main challenges will be fighting corruption and poverty, and defending Peru’s economy from the effects of the global financial crisis.
Ten ministers retained their posts in the Cabinet shake-up, among them Trade Minister Mercedes Araoz, Economy Minister Juan Valdivieso and Foreign Minister Garcia Belaunde.
Retaining Belaunde was seen as critical for next month’s annual Asia-Pacific Economic Cooperation summit, in which Peru will host leaders from 21 countries.
Among the new faces is Energy Minister Pedro Sanchez, who replaced Juan Valdivia, one of the first casualties in the oil scandal.
Simon, 61, served as a lawmaker for the United Left party from 1985 to 1990 before he was accused of ties to Tupac Amaru Revolutionary Movement, or MRTA, rebels by Alberto Fujimori’s government. He was arrested in 1992.
Simon served more than eight years in prison before being pardoned in 2000. He was elected governor of Lambayeque province in 2003.
His appointment was contested by members of Fujimori’s party.
Congressman Carlos Raffo accused Simon of being an MRTA leader and said his party is “outraged” at the pick.
“I’ve got nothing to hide,” Simon said, rejecting the accusations.
Opposition lawmakers and business leaders largely supported Simon’s appointment.
Jose Luis Silva, president of Peru’s Exporter’s Association, said as governor Simon “worked with businesses to promote development, without abandoning the people with less resources.”
Garcia, whose approval ratings hit 19 percent prior to the scandal, will now rely on the popular Simon to restore public confidence in his battered administration and open dialogue with opposition groups.
The oil kickback scandal is the worst political crisis of Garcia’s two-year-old administration.
The scandal broke last week with the release of audiotapes on which two members of Garcia’s APRA party allegedly discussed kickbacks for government contracts.
Garcia suspended five contracts with Discover. The company denies any wrongdoing and has terminated its operations in the country.
New tapes surfaced on Tuesday and yesterday in which one of the party members allegedly told a Discover representative that del Castillo would be open to supporting the company’s bids for contracts. Del Castillo denies the claim.
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