updated 10/19/2008 2:07:38 PM ET 2008-10-19T18:07:38

A former radical leftist once imprisoned as an alleged guerrilla sympathizer may have handed a political lifeline to President Alan Garcia, a free-market booster.

Garcia propelled Yehude Simon to the powerful post of chief Cabinet minister last week after a bribery scandal cost the outgoing Cabinet chief and five other ministers their jobs — and this after Garcia's popularity nose-dived to 19 percent, shedding support from leftists in particular.

Polls show that nearly half of Peruvians think Garcia himself was involved in a bribes-for-contracts scandal involving a Norwegian oil company. And in a country where two in five live on less than US$2 a day, many Peruvians say Garcia's business-friendly policies haven't let them share in record economic growth.

The president has turned to Simon, a center-leftist known for honesty and negotiating skills, to attack those weaknesses. He might also blunt the appeal of Ollanta Humala, the radical populist who nearly beat Garcia in 2006 and still has presidential ambitions.

Simon will get national prominence
Analysts say the prominent new post will give Simon himself the national presence to make a run at the presidency in 2011.

Simon says his time as governor of the northern coastal province of Lambayeque prepared him for his primary tasks of fighting corruption and poverty, and his pedigree will open the door to dialogue with the left.

"I've faced tougher challenges," Simon said in a radio interview after his swearing-in last week.

The son of Palestinian and Italian immigrants, Simon studied veterinary medicine before he was elected to Congress in 1985 with a now-defunct party of communists and socialists. His party did not seek to overthrow the government, but Simon did support dialogue with guerrilla groups.

In 1991, he formed a political party that right-wingers claimed was the political arm of Marxist Tupac Amaru guerrillas. Simon denied the charge.

Arrested after President Alberto Fujimori shut down Congress in 1992, Simon was sentenced to 20 years as a terrorist sympathizer. He was pardoned 8 1/2 years later after Fujimori fled the country in a corruption scandal — one of 740 Peruvians determined to be wrongly imprisoned.

Now it's Fujimori and his intelligence czar Vladimiro Montesinos who are on trial for alleged human rights abuses. Seven members of a death squad allegedly organized by Montesinos have testified that Simon was marked for political murder in the early 1990s — and that the sharpshooter didn't fire only because he never got the "green light" to shoot.

Recast himself after leaving prison
When Simon emerged from prison, he recast himself as a moderate leftist, won two terms as governor and became head of Peru's governors association. In Lambayeque, he oversaw an influx of private investment that fueled a real-estate boom and helped boost tourism.

And despite his leftist credentials, he joined Garcia in backing Peru's free trade pact with the U.S., arguing it would benefit farmers.

Unlike Garcia, however, he favors sharply increasing spending on social services to aid the poor. His provincial government had one of the highest public spending levels in Peru, investing in roads, schools and fertilizers and credit for farmers.

But a boost in social spending will be a tough sell with returning Economy Minister Juan Valdivieso, who is planning anti-inflationary spending cuts, and Garcia, who still carries the cross of hyperinflation that marred his first, populist presidential term in the 1980s.

Simon says economic growth, projected to hit 9 percent this year, is not trickling down to the poor. As governor he called on Garcia to deliver on promises to fund provincial health and education.

"Public spending cannot be cut, by any means," Simon said. "I prefer to live with one more point of inflation than enter a recession, worse in a poor country."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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