Guatemalan president refuses to quit over graft scandal

GUATEMALA CITY - Guatemalan President Otto Perez said Sunday that he will not resign and rejected allegations that he was one of the ringleaders of a corruption scandal shaking the country.

Prosecutors and officials from a UN investigative commission said Friday they had uncovered extensive evidence implicating Perez and ex-vice president Roxana Baldetti in a massive, highly organized scheme to reduce importers' customs duties in exchange for bribes.

With two weeks to go to general elections, Perez made a statement to the nation in which he pledged to abide by legal processes - but said he would not quit.

"I declare categorically that I reject my link to it (the bribery scheme) and having received any money from the operation of customs fraud," said Perez.

He added: "I will not resign. But with the same strength and character with which I reject my involvement, I cannot fail to recognize that this has happened in my government and to officials close to me or that I appointed, so this forces me to make a public apology." The multimillion-dollar fraud case has upended Guatemalan politics since it erupted in April, felling numerous high-ranking officials, forcing Baldetti's resignation and now reaching the country's highest office.

The allegations come as Guatemala prepares for general elections on September 6.

Perez, a 64-year-old retired general and conservative whose term ends in January, cannot run for re-election.

The investigation is based on some 86,000 wire-tapped phone calls that uncovered a scheme dubbed "La Linea" (the line), named for the hotline used by businesses to contact the corrupt network of customs officers.

Thousands of Guatemalans have hit the streets in recent weeks calling for Perez to go and several of his cabinet members have stood down in an act of no-confidence in the president.