Former Peruvian President Alejandro Toledo has been convicted of taking millions of dollars in bribes to award a pair of contracts for the construction of the interoceanic highway two decades ago. The case was part of the “car wash” corruption scandal that engulfed former Brazilian construction giant Odebrecht and other big companies.
Toledo was sentenced to 20 years and six months in prison for money laundering and conspiracy by the country’s national criminal on Monday, October 21. During the year-and-a-half trial, prosecutors alleged that the former president accepted $35 million in bribes from Odebrecht officials in exchange for contracts to build the highway in southern Peru.
The company, now known as Novonor, was subsequently awarded two contracts in 2005 valued at $630 million.
“Since it is public knowledge that Mr. Alejandro Toledo Manrique held the highest position in the public administration of Peru, he accepts the request made by the representative of the Public Ministry,” said judge Ines Rojas during the sentence.
During the trial, Toledo has insisted that he is innocent and that he never made any formalities with Odebrecht officials to award the contracts.
“From the bottom of my heart, I still don’t understand why I’m involved in this,” he told the court before sentencing.
Toledo served as president of Peru from 2001 to 2006. He was extradited from the United States in April 2023 and has since been held in Barbadillo prison in Lima. Two other former Peruvian presidents, Ollanta Humala and Pedro Pablo Kuczynski, as well as several other important political figures in Peru remain under investigation in the case.
After the verdict was announced, Toledo’s attorney, Roberto Su, said the sentence would be appealed. He said prosecutors failed to prove the former president was involved in the highway contracts and criticized the court for not understanding the details of the case.
“The crime of collusion is provided for in the Penal Code and requires that the official participate in procurement, no president of the republic participates in public contracts,” Su said.
Interoceanic Highway
The Interoceanic Highway was built between 2006 and 2012. The project involved the construction and improvement of nearly 2,000 kilometers of road across southern Peru, crossing the Andes Mountains as well as the Amazon rainforest.
When completed, the project connected the highway systems of Peru and Brazil to create a road route spanning South America. Initially estimated to cost $1.3 billion, the final price tag was estimated at over $2 billion.
Odebrecht Peru led the Conirsa Consortium which also included the companies Graña y Montero, and JJ Camet and Enginyers de Camins i Contractors. The consortium was awarded the contracts for sections 2 and 3 of the motorway project in 2005.
Peru’s President Alejandro Toledo, Brazil’s President Lula da Silva and representatives of the Brazilian firm Odebrecht at a 2006 ceremony in Iñapari, Peru to mark the start of work on sections 2 and 3 of the interoceanic road
Photo by CJ Schexnayder/ENR
A fourth section was won by the Intersur consortium led by the Brazilian firm Camargo Correa and included the firms Andrade Gutierrez and Queiroz Galvão. Prosecutors alleged that Toledo also received a $6 million bribe for that award.
The contracts were awarded despite the objections of the General Comptroller of the Government which pointed out that the project lacked an environmental assessment study and did not go through the National System of Public Investments (SNIP).
The former director of Odebrecht in Peru, Jorge Barata, cooperated with investigators and confessed to paying bribes to win highway contracts. The payments were made through the accounts of Peruvian-Israeli businessman Josef Maiman Rapaport, an acquaintance of Toledo.
The case was one element of the “car wash” corruption scandal that engulfed Brazil a decade ago. Odebrecht’s parent company was revealed to have paid $788 million in bribes to South American government officials between 2001 and 2006 to win contracts and favorable terms.
The company, prosecutors discovered, had created a secret financial structure within the company to manage its bribery and bid-calling schemes. The Structured Operations Division, “effectively functioned as an autonomous bribery department within Odebrecht and its related entities,” prosecutors said.
The U.S. Department of Justice fined the company $3.5 billion under the Foreign Corrupt Practices Act in 2017 after Odebrecht pleaded guilty to corruption charges brought by prosecutors in Brazil, the U.S. and Switzerland.
Odebrecht filed for bankruptcy in 2019, one of the largest in South America for a judicial debt restructuring. The company was rebranded as Novonor in 2020.
