Cablegate: Brazil Corruption Scandal Update, Week of 14-18
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 BRASILIA 003051
SIPDIS
E.O. 12958: N/A
TAGS: PGOV PREL ECON BR
SUBJECT: BRAZIL CORRUPTION SCANDAL UPDATE, WEEK OF 14-18
NOVEMBER 2005
REF.: A) BRASILIA 3001 B) BRASILIA 3043 C) BRASILIA 3008
1. INTRODUCTION. On Monday, November 14, the political
crisis that has engulfed the Lula administration and
hindered the work of the Brazilian Congress reached the
six-month mark. From the day a Postal Service employee was
caught receiving bribes in the name of a federal deputy,
various corruption scandals have emerged, leading to the
removal or resignation of dozens of government officials,
from ministers to heads of state companies, and to the
installation of three Congressional Inquiry Committees
(CPIs) to investigate the allegations. Nonetheless, many
questions are still unanswered, 12 federal deputies are
awaiting trial by the Chamber - including former Chief of
Staff Jose Dirceu -- and two of the CPIs (Postal Service
and Vote-Buying Scheme) reached the deadlines established
by congressional rule without coming to a final conclusion.
The governing coalition struggled to prevent the extension
of the CPIs in an attempt to abbreviate the crisis, but
were only successful in the case of the Vote-Buying Scheme
CPI, which expired without voting on a final report.
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Postal CPI Extended, Vote-Buying CPI Expires
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2. On November 11, the Postal Service CPI was able to
achieve the necessary number of signatures in order to
extend its deadline until April 11, 2006 (Note: the minimum
required is 171 deputies and 30 senators). However, soon
after the Senate announced the extension of the CPI's
mandate -- and reportedly after the government liberated
funds for various programs supported by various deputies' -
- many deputies removed their signatures from the petition,
leaving it with only 170 names. The opposition requested a
recount of the signatures and achieved the 171 required,
but two deputies from the government coalition are still
appealing to the Chamber's board, stating that they also
requested the withdrawal of their signatures. If the
deadline is not extended, the final report must be voted on
by December 11; however, the Chamber's board is likely to
reject the appeal of the two deputies and extend the work
of the CPI.
3. In the case of the Vote-Buying Scheme CPI, whose
deadline was reached on November 17, the government won the
struggle against the opposition to prevent the extension of
its mandate. In fact, the government coalition also wanted
to end the Postal Service CPI, which is the most active in
bringing to light new revelations about the corruption
scandals. In contrast, the Vote-Buying Scheme CPI, whose
final report was dealt leniently with corrupt congressmen,
had failed to come up with hard evidence of the alleged
vote-buying scheme.
4. Without the necessary number of signatures to approve
the continuation of its investigations, the Vote-Buying
Scheme CPI ended without even voting on the final report
prepared by Deputy Ibrahim Abi-Ackel (PP-MG), which
concluded that, although many congressmen received money
from Marcos Valerio, there was no evidence to prove the
existence of a bribes-for-votes scheme in Congress. The
final report recognized the electoral crimes committed by
the deputies that illegally financed their campaigns, but
did not name names. In sum, the CPI terminated after four
months of investigations without presenting any substantial
conclusion.
5. Since it was the last one to be established, the Bingos
CPI, responsible for investigating the use of bingo houses
for money laundering and corruption allegations in
Brazilian municipalities, has not yet reached its deadline.
During this past week, it once again dedicated its sessions
to the case of Celso Daniel's murder. On November 17, the
CPI heard the testimonies of Ronan Maria Pinto and Klinger
Sousa, accused of participating in the corruption scheme in
Santo Andre, and Sergio Gomes da Silva, known as "Sombra",
supposedly the person that ordered Daniel's assassination.
Sombra, who had been arrested for Daniel's murder, denied
all the accusations against him and stated that he was
another "victim" of the case. In addition, Senator Suplicy
found two additional witnesses to the case. A woman, whose
identity is being kept secret, was interrogated by the
police on November 16, and affirmed that she saw Mayor
Daniel arguing with the kidnappers before being taken, and
that Sombra was not menaced by the bandits and was talking
on the phone during the kidnap.
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CHAMBER MAY AGAIN POSTPONE VOTE ON DIRCEU'S IMPEACHMENT
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6. The Chamber's Constitution and Justice Committee (CCJ)
may approve on November 22 a petition presented by Deputy
Jose Dirceu requesting the postponement of his impeachment
vote in the Chamber, originally scheduled to take place on
November 23. On November 7, Dirceu appealed to the CCJ
arguing that he had not been given adequate chance to
defend himself and, therefore, his case should not be voted
on by the plenary until all of his appeals had been
considered either by the Chamber or by the Supreme Court.
Deputy Sergio Miranda (PDT-MG), responsible for analyzing
Dirceu's request, suggested that the Committee approve
Dirceu's request on November 22. If that happens, the
final impeachment vote may only take place on November 30.
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FINANCE MINISTER TESTIFIES BEFORE SENATE COMMITTEE
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7. On November 16, Finance Minister Antonio Palocci
testified before the Senate's Economic Affairs Committee.
Palocci was scheduled to testify before the Committee on
November 22, but moved his appearance up in the wake of an
increase in rumors that he might be forced to resign
because of new accusations of corruption, involvement in
the irregular financing of the 2002 Lula presidential
campaign and policy disagreements with Lula's chief of
staff, Dilma Rousseff. Those rumors had had a negative
effect on Brazilian financial markets. Following his
appearance, the markets regained the ground lost in the
days before his testimony.
8. While Palocci had previously threatened to resign if he
was called to testify by the Bingos CPI, which has been
investigating corruption schemes in Brazilian
municipalities such as Ribeirao Preto, where Palocci served
as mayor, during his testimony before the Economic Affairs
Committee, he said he was available to appear before any
Congressional body. Refs B and C examine Palocci's
situation in more depth.
CHICOLA