Political moderate heads interim government in Peru, ending Fujimori era

LIMA, Peru - Ending a decade of authoritarian rule, Valentin Paniagua became interim president Wednesday and set out to restore credibility to the country's tattered democracy, naming a former U.N. chief who's Peru's most prestigious public figure as prime minister.

Paniagua, a political moderate who is widely respected for his honesty and his conciliatory style, took the oath of office to the cheers of his supporters in Congress, two days after Alberto Fujimori resigned, forced out by a corruption scandal involving his top adviser.

Faced with a rising clamor for greater democracy, Paniagua named as his Cabinet chief former U.N. Secretary-General Javier Perez de Cuellar, who lost to Fujimori in the 1995 elections. The announcement drew loud applause from lawmakers and the gallery.

''Today we close one stage and open another in the history of Peru,'' Paniagua declared after donning the red-and-white presidential banner in Congress. ''There is much to be done in the months ahead.''

Paniagua, 64, will head a caretaker government until a new, elected president is sworn in next July. By law, Paniagua cannot run in those elections.

Marking a sharp break with Fujimori's autocratic regime, Paniagua pledged honesty and impartiality as the hallmarks of his caretaker government.

Paniagua was born and raised in Cuzco, the ancient capital of the Inca empire, and speaks the Indian language Quechua as well as Spanish, English and French. Paniagua, who has Spanish and Indian ancestry, said he would look to Peru's ancient Andean roots for inspiration.

''We will make the Inca ethic of hard work, truthfulness and honesty ours,'' he said.

About eight in 10 Peruvians are of Indian or mixed-race ancestry. The country was long ruled by a European-descended elite until Fujimori, the son of Japanese immigrants, took power.

Paniagua, described by colleagues as calm, levelheaded and slow to anger, steps into a job that Fujimori had an iron grip on until only a few months ago.

Outraged lawmakers dismissed Fujimori in a raucous session of Congress late Tuesday night, refusing to accept his resignation and declaring him morally unfit for office. Fujimori fled last week to Japan, where he says he plans to stay indefinitely.

Fujimori on Wednesday left the posh Tokyo hotel where he had holed up since arriving in Japan, said a secretary at the Peruvian embassy in Tokyo, speaking on condition of anonymity. The secretary declined to say where Fujimori had moved to, but Japanese public broadcaster NHK reported that he was moving to a friend's Tokyo home.

Fujimori's grip on power was weakened by a corruption scandal that engulfed his fugitive ex-spy chief, Vladimiro Montesinos.

''I am happy, and many Peruvians must be overjoyed tonight, knowing that Fujimori's dictatorship has fallen, fallen under the weight of its own corruption,'' opposition congressman Jorge del Castillo said.

Fujimori was initially popular for bringing Peru back from the brink of collapse in the early 1990s, when leftist guerrillas terrorized the country with assassinations, car bombings and blackouts.

But Peruvians grew tired of his autocratic ways, the corrupting influence of Montesinos, lingering poverty and high unemployment.

Paniagua, who had served as president of the opposition-led Congress for six days during the crisis of succession, faces the enormous challenge of supervising a clean election of a new president in April.

He also has the mandate of those who propelled him into the presidency to root out the deep-seated influences of Montesinos in the army and judiciary.

In another major challenge, Paniagua will have to deal with a deepening economic crisis.

He vowed to investigate why only $543 million remained from $9.2 billion in proceeds from privatization of state enterprises in the past decade - one of many investigations demanded after Fujimori's downfall.

''Paniagua is honest. He doesn't have any scandals on his political record,'' said Luis Jochamowitz, a historian and author of a biography of Fujimori. ''The election of Paniagua is a prize for his loyalty to the party system after a 10-year period in which the past administration vilified professional politicians, whether they were good or bad.''

Paniagua has served as education minister and justice minister in two past governments of former President Fernando Belaunde, who was overthrown in a military coup in 1968. That experience turned Paniagua into an ardent defender of democracy.

The inauguration of a new president signaled a reawakening of Peruvian democracy after years of Fujimori domination of Congress, the courts and most of Peruvian society from an all-powerful presidency, with his shadowy spy chief working behind the scenes.

Cheering Peruvians gathered outside Congress to celebrate Paniagua's appointment.

''I am happy because we are returning to freedom after 10 years of oppression during which we have been governed by a Japanese,'' said Julio Quinteros, a 40-year-old office manager. ''There is new hope, a new future, because Peru is on the road to legality and justice.''