The Miami Herald
May 3, 2001

Lead in Peru presidential runoff gives ex-leader García a clear shot at comeback

 From Herald Wire Services

 LIMA, Peru -- After a decade reviled by most Peruvians as the president who drove their economy into the ground, a slick orator returned from exile appears near to completing a remarkable electoral comeback that has left business leaders shaken.

 Alan García, 51, has risen in the polls ahead of a presidential runoff against Alejandro Toledo. García stunned Peruvians by finishing second in the first round of voting April 8, topping six other candidates with promises to open the state's purse strings to help the poor.

 Just months ago, few would have believed it possible, especially businessmen who remember four-digit inflation, collapsing production, surging guerrilla violence and a failed attempt to nationalize the banks during his 1985-1990 administration.

 Economists say García has assembled many people from his previous administration and fear another exodus of capital from Peru should he win.

 Polls show García trailing Toledo by about 10 percentage points, but nearly a third of those questioned say they are either undecided or are considering casting spoiled or blank ballots. The vote likely will be held in early June.

 Francisco Pardo, director of the Central Reserve Bank, denied reports that Peruvians are transferring assets out for fear of García.

 "I suppose it's true that a lot of people have their finger on the button'' to send their assets abroad, he conceded. ``It's probably true people will take their money out, but it's also true that if he governs well, that money will come back.''

 Toledo, meanwhile, has been fending off reports he misappropriated campaign funds during his last run for the presidency.

 He said Tuesday that his nephew had deposited some $600,000 in a North Carolina bank to cover expenses in case he was forced to leave the country by former
 President Alberto Fujimori.

 Toledo told the newspaper Correo that the money his nephew, Jorge Toledo, deposited in a First Union bank came from a donation received before the 2000 runoff election, which Fujimori won amid protests of electoral fraud.

 The money was not used for the second-round campaign because he withdrew his candidacy after accusing Fujimori of rigging the election and spearheading instead a campaign against the Fujimori government.