June 21, 2017 / 5:03 PM / a month ago

Peru Congress expected to oust finmin in blow to president

3 Min Read

LIMA, June 21 (Reuters) - Peru's Congress was widely expected to oust the finance minister on Wednesday following revelations that he asked the comptroller to green light a controversial project, and ending a dispute over one of President Pedro Pablo Kuczynski's closest cabinet members as the economy has faltered.

The embattled Finance Minister Alfredo Thorne on Monday asked the opposition-controlled Congress for a vote of confidence amid threats of a censure, and promised to step down immediately if he did not win support.

If confirmed, Thorne will become the first Peruvian finance minister in decades to fail to secure a vote of confidence from Congress - a blow to Kuczynski, who won last year's election as a former Wall Street investor and World Bank economist promising to deliver stronger economic growth and a cleaner government.

Representatives of the rightist opposition party Popular Force that holds a majority of seats in Congress said they would not renew their confidence in Thorne in a vote scheduled for the plenary, starting at 2:30 p.m. local time (1930 GMT).

"Everything is pointing to us having a new finance minister (Thursday)," said Carlos Bruce, a ruling party congressman.

It was not immediately clear who would replace Thorne, a former JPMorgan executive who tried to cut taxes and revive infrastructure projects before heavy flooding and a corruption scandal set back the country's growth prospects.

Kuczynski, a centrist, is widely expected to appoint another business-friendly finance minister.

Thorne was accused of interfering in an autonomous institution after a leaked 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 denied he used funding for the comptroller's office to secure a favorable review of the contract change, which Kuczynski's government had promised to nix on the comptroller's recommendation.

Markets in Peru have been largely calm throughout the Thorne controversy. But the political battle has laid bare the hostilities between the executive and Congress that have dogged Kuczynski's first year in government and could disrupt his plans going forward.

Three ministers have already left Kuczynski's original cabinet amid controversy, including his transportation minister, who, like Thorne, had been a top campaign advisor when he won last year's presidential election.

Shortly after voting on Thorne, Congress will question the interior minister amid concerns that he has not done enough to curb street crime.

Reporting By Mitra Taj

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