June 21, 2017 / 5:18 PM / a month ago

Peruvian Congress ousts finance minister in blow to president

3 Min Read

Peruvian Finance Minister Alfredo Thorne attends a session at the Congress in Lima, Peru, June 16, 2017.Mariana Bazo

LIMA (Reuters) - Peru's Congress dismissed the finance minister on Wednesday following revelations that he asked the comptroller to green light a controversial project, a fresh blow to centrist President Pedro Pablo Kuczynski and his efforts to jumpstart the faltering economy.

The single-chamber Congress voted 88-11 against embattled Finance Minister Alfredo Thorne, who had asked for a vote of confidence amid threats of censure and resigned within hours of the outcome.

"I thank Thorne for his outstanding work in the Finance Ministry and lament the decision taken by Congress," Kuczynski said on Twitter.

The vote ended the crisis over one of Kuczynski's closest cabinet members, but the dispute further strained relations between the opposition-dominated Congress and the executive.

Lawmakers railed against Thorne for refusing to accept wrongdoing after an audio recording surfaced in which he appeared to ask the comptroller to approve a modification to a $520 million airport contract in exchange for a bigger budget.

Thorne, whom Kuczynski has defended, denied using funding for the comptroller's office to try to secure a favourable review of the contract modification, which the government had promised to rescind on the comptroller's recommendation.

The vote marked the first time in decades that Congress has rejected a finance minister - an embarrassing rebuke for Kuczynski after he campaigned on promises to strengthen the economy and clean up government as a former Wall Street banker and World Bank economist.

Peruvian Finance Minister Alfredo Thorne attends a session at the Congress in Lima, Peru, June 16, 2017.Mariana Bazo

Thorne "decided not to step down and the government decided to prolong" the controversy, said Luis Galarreta with the right=wing party Popular Force, which has a majority of congressional seats. "This parliament must withdraw the confidence to a minister who doesn't want to join us in making the country better."

Kuczynski's party has 17 congressional seats out of 130 and his year-old government has been dogged by clashes with Popular Force, led by his rival in last year's election Keiko Fujimori.

In a sign of growing political tensions, shortly after the vote on Thorne, opposition lawmakers began questioning the interior minister in a process that could lead to a censure motion.

Three ministers have already left Kuczynski's original cabinet amid controversy, including his transportation minister, who, like Thorne, was a friend and former campaign adviser.

Prime Minister Fernando Zavala said a plan for the ministry would be announced in coming days.

It was not clear who would replace Thorne, but Kuczynski is widely expected to appoint another business-friendly minister to try to revive slumping investments following a graft scandal and heavy flooding that knocked growth prospects.

The central bank now expects a 2.8 percent economic expansion this year, down from 3.9 percent in 2016.

Reporting by Mitra Taj; Editing by Lisa Shumaker and Bill Trott

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