Peru Cabinet resigns over oil scandal

Oct. 11, 2008 at 12:38 PM

LIMA, Oct. 11 (UPI) -- Peruvian President Alan Garcia says he has accepted the resignation of his full Cabinet over a scandal involving oil concessions.

The government crisis began last week when a television station broadcast a tape of an executive of the state oil company Petroperu and a prominent oil lobbyist allegedly discussing payments to help Discover Petroleum, a Norwegian firm, win oil allocation contracts, the BBC reported Saturday.

A day after the broadcast, Garcia suspended five contracts with Discover Petroleum. Officials for both Discover Petroleum and Petroperu have denied any wrong doing.

Garcia ordered an investigation amid protests this week by thousands of people in several Peruvian cities who called for the Cabinet to resign and accused the ruling government party Apra of stealing money from struggling tax payers, the BBC reported.

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