LIMA:Thousands of protesters denounced Peruvian president Alan Garcia on Tuesday, a day after his energy minister quit in a widening scandal over steering oil concessions to favoured bidders.
Members of Peru's largest labour confederation, the CGTP, demanded President Garcia shake up his cabinet and change his free-market economic model, which critics say has caused growth to surge, but failed to lift people out of poverty quickly.
"Something stinks," said Mario Huaman, leader of the CGTP. Marchers held signs calling Mr Garcia's party "Corrupt as ever".
The protests, held in large cities across the country, were planned weeks before the scandal broke on Sunday night. But they reflected frustration about corruption in the administration and fears the international financial crisis will spread to Peru.
Voters cite corruption as one of their top complaints about Mr Garcia, whose approval rating has fallen to 19 per cent, according to polling firm Ipsos Apoyo. Ollanta Humala, the ultra-nationalist leader who nearly beat Mr Garcia in 2006 and hopes to win the presidency in 2011, called on the president to fire his entire cabinet.
The scandal has forced out mines and energy minister Juan Valdivia, along with two other high-ranking energy officials in Peru, which has a growing petroleum industry.
Alberto Quimper, a board member of state energy agency Perupetro, which organises auctions of exploration lots and awards contracts, and Cesar Gutierrez, president of state oil and gas company Petroperu, were fired.
Late on Sunday, audio tapes surfaced on an investigative television news show that included a conversation between Mr Quimper and Romulo Leon, a prominent member of Mr Garcia's APRA party, in which they apparently agreed to favour Discover Petroleum, a small company from Norway, in a round of energy auctions. Discover, which partnered with Petroperu, was awarded five blocs for exploration last month, which the government has suspended. Congress then voted late on Tuesday to investigate all oil contracts awarded since 2006 to scrutinise dozens of pacts signed with foreign companies.
"I have no doubt there's more. Nobody should think this is an isolated case," Fernando Rospigliosi, a former interior minister and journalist, who obtained the audio tapes, said.
Mr Garcia moved quickly to contain the damage and demanded harsh punishment for any corrupt officials. But on Tuesday, Discover added fuel to the scandal, releasing a statement saying that it made payments to Mr Leon and Mr Quimper, who was subcontracted by Discovers law firm to provide tax advice. Between May and October, Discover reported paying $63,750 to Mr Leon, and $60,000 to the law firm that hired Mr Quimper. The company did not say if it knew that Mr Quimper, who was providing its law firm with tax advice, was also a board member at Perupetro. Still, it denied having paid bribes.
"The application process was completely open and transparent, and could not possibly have been influenced by any bribes," Discover said. - ( Reuters)