Former Peruvian president Alejandro Toledo has been convicted for taking millions of dollars worth of bribes to award a pair of contracts to construct the InterOceanic Highway two decades ago. The case was part of the sweeping "Car Wash" corruption scandal that engulfed former Brazilian construction giant Odebrecht and other major firms.

Toledo was sentenced to 20 years and six months in prison for money laundering and collusion by the country’s national criminal court on Oct. 21. Over the course of the 18-month trial, prosecutors alleged the former president accepted $35 million in bribes from Odebrecht officials in exchange for contracts to build the highway across 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 within Peru's public administration, it assumes the request made by the representative of the Public Ministry," said Judge Ines Rojas at sentencing.

During the trial, Toledo has insisted he is innocent and that he never made any arrangements with Odebrecht officials to award the contracts. 

"From the bottom of my heart, I still do not understand why I am involved in this," he told the court in advance of the sentencing.

Toledo served as Peru’s president from 2001 through 2006. He was extradited from the U.S. in April 2023 and since then has been detained at the Barbadillo Prison in Lima. Two other former Peru presidents, Ollanta Humala and Pedro Pablo Kuczynski, as well as several other major political figures 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 did not prove the former president was involved in the highway contracts and criticized the court for not understanding details of the case. 

“The crime of collusion is provided for in the Penal Code and requires that the public servant participate in the contracting, no president of the republic participates in public contracts," Su said.

The InterOceanic Highway

The InterOceanic Highway was built between 2006 and 2012. The project involved construction and upgrading of almost 2,000 kilometers of road across southern Peru, the Andes mountains and the Amazonian jungle. 

When completed, the project connected Peru and Brazil’s highway systems to create a road route spanning South America. Initially estimated to cost $1.3 billion, the final price tag was estimated in excess of $2 billion.

Odebrecht Peru led the Conirsa consortium that also included firms Graña y Montero and JJ Camet e Ingenieros Civiles y Contratistas. The consortium was awarded the contracts for sections 2 and 3 of the highway project in 2005.

Peru President Alejandro Toledo, Brazil Presdient Lula da Silva and representatives of Brazilian firm Odebrecht at a 2006 ceremony in Iñapari, Peru to commemorate the start of work on sections 2 and 3 of the InterOceanic Highway.
Photo by C.J. Schexnayder/ENR

A fourth section was won by the Intersur consortium led by Brazilian contractor Camargo Correa and included firms Andrade Gutierrez and Queiroz Galvão. Prosecutors alleged that Toledo also received a $6 million bribe for that award.

The contracts were awarded despite objections by the government’s Comptroller General who noted that the project lacked an environmental assessment study and did not go through the National Public Investment System.

Odebrecht’s former director in Peru, Jorge Barata, cooperated with investigators and confessed to paying the bribes to win the highway contracts. The payments were made through the accounts of Peruvian-Israeli businessman Josef Maiman Rapaport, an acquaintance of Toledo.

The case was an element of the sweeping “Car Wash” corruption scandal that engulfed Brazil a decade ago. Odebrecht’s parent company was revealed to have paid $788 million in bribes to government officials across South America between 2001 and 2006 to win contract awards and favorable terms. 

The firm, prosecutors discovered, had created a secret financial structure internally to handle its bribery and bid-rigging schemes. The Division of Structured Operations “effectively functioned as a stand-alone bribe department within Odebrecht and its related entities,” prosecutors said.

The U.S. Justice Dept. fined the firm $3.5 billion under the U.S. 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 ever in South America for an in-court debt restructuring. The firm reformed as Novonor in 2020.