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Peru's cabinet offers to quit amidst oil scandal

Latest update : 2008-10-10

The Peruvian cabinet said it was considering stepping down over an oil concessions scandal after audio tapes implicated members of President Alan Garcia APRA party in a plan to give lucrative oil deals in exchange for bribes.

LIMA - Peruvian President Alan Garcia's entire cabinet will offer to quit in a widening corruption scandal over oil concessions, Prime Minister Jorge del Castillo said on Thursday.

Garcia is facing calls from opposition leaders to shake up his cabinet after audio tapes emerged this week linking members of his APRA party to a plan to steer lucrative petroleum contracts to favored bidders in exchange for bribes.

"We are going to the presidential palace to offer our posts to the president so he can decide," del Castillo said as he left Congress, flanked by the rest of the cabinet members.

The former mines and energy minister, Juan Valdivia, has already been forced to quit, along with two other energy officials.

Garcia's right-hand man, del Castillo, is mentioned in the taped conversations as someone who would provide favors in a plan to rig auctions of oil and gas concessions. Del Castillo also had lengthy meetings with APRA party members who were working as lobbyists and involved in the auctions, but he has denied wrongdoing.

Peru's Congress has voted to investigate all oil and gas concessions granted since 2006, and will scrutinize dozens of contracts signed between Peru and foreign oil companies for signs of irregularities in the country's growing petroleum sector.

Garcia is a former leftist whose first term as president in the 1980s ended in economic disaster. He has since become a champion of free-markets and foreign investment, and was elected to lead Peru for a second time in 2006.

But voters cite corruption as one of their top complaints about Garcia, whose approval rating has fallen to 19 percent despite an economic boom, according to polling firm Ipsos Apoyo.

Opposition leaders eyeing presidential elections in 2011, including Ollanta Humala, the ultra-nationalist leader who spooked markets when he nearly beat Garcia in 2006, have led calls for the firing of del Castillo.

Date created : 2008-10-10