SCENESETTER FOR SECRETARY RUMSFELD'S TRIP TO

C O N F I D E N T I A L SECTION 01 OF 06 BRASILIA 002781

SIPDIS

E.O. 12958: DECL: 11/08/2014
TAGS: PREL MARR MCAP BR POL MIL
SUBJECT: SCENESETTER FOR SECRETARY RUMSFELD'S TRIP TO
BRAZIL, NOVEMBER 15, 2004

REF: BRASILIA 2763

Classified By: Deputy Chief of Mission Philip Chicola, reasons
1.4 (b &
d)

INTRODUCTION
--------------


1. (C) The United States Mission in Brazil warmly welcomes
your visit to Manaus. Your arrival comes on the heels of a
major shakeup in Brazil's Ministry of Defense. The
resignation of Minister Jose Viegas and his replacement on
November 8 by Vice President Jose Alencar is intended to
repair a relationship between the civilian minister and the
force commanders that in recent months had suffered from
tensions and disagreements. (Reftel describes the stress
between Minister Viegas and senior military commanders
leading to his resignation.) You are the first senior USG
official to meet with Vice President Alencar in his new
capacity as Defense Minister. (Note: Embassy has requested
the bilateral meeting with Alencar, but no official GOB
response has been given as of 8 November COB. End Note)
Being new to his posting, Alencar, we suspect, will
appreciate words of support for the bilateral mil-mil
relationship and will be interested in suggestions for
enhancing those ties. While he will be cool to our
entreaties on Article 98, he may be interested in exploring a
Defense Cooperation Agreement through which we may be able to
achieve our overall policy objectives.

CHANGE AT THE TOP
--------------


2. (C) Although Viegas' departure had been anticipated in
President Lula's next cabinet shake-up, expected in early
2005, the timing could not be postponed any longer. Recent
publication of alleged photos of prominent journalist
Waldomir Herzog, widely thought to have been tortured and
murdered by the military in 1975, led to a ham-handed
Brazilian army defense of its behavior during the military
period (1964-1985). A communiqu released without Viegas'
concurrence by the army appeared to justify human rights
violations during that era and brought down the wrath of
President Lula and other government officials -- many of whom
had been imprisoned or exiled during the dictatorship.
Minister Viegas' inability to control senior military
leadership, and at the very least prevent the embarrassment
caused by the army's letter, could not be ignored any longer.


3. (C) In taking over the defense portfolio, Vice President
Alencar faces some immediate challenges. While Viegas could
at least claim political-military expertise from a long
foreign service career during which he held critically
important assignments, Alencar has no such experience. The
Brazilian military remains totally apolitical. However,
senior military leadership has never been happy with the
civilian supervision that came with the creation of the
Ministry of Defense in 1999. Alencar will have to assert his
authority over the uniformed services, but he knows he must
do it in a way that does not lead to further rancor.


4. (C) Almost immediately, the new minister will face the
issue of possibly opening the sealed archives from the
military period. In light of the publicity over Herzog,
public clamor for release of these files has risen. The
military asserts that many files have been disposed of
following proper legal procedures. A decree signed by former
President Fernando Henrique Cardoso lengthened to 60 years
the period these archives are to remain sealed. Changes may
also have to be made in the senior uniformed services,
beginning with Army Commander Francisco Albuquerque, Viegas'
adversary. Alencar will also have to consider how to resolve
the long-standing $700 million competition for next
generation fighter aircraft (F-X). Under Viegas, an
announcement on a decision on selection of an F-X had been
postponed numerous times. However, given the sticker shock
of new F-X aircraft, the GOB may postpone a decision
indefinitely.

POLITICAL AND SOCIAL LANDSCAPE
--------------


5. (SBU) Brazil's democracy is less than two decades old,
having succeeded the military regime that ruled from
1964-1985. Lula da Silva, the country's first working-class
president, took office in January 2003. He passed important
tax and pension reforms but has made little progress on his
social agenda, including his flagship Zero Hunger project.
Lula's Workers' Party (PT) leads an eight-party coalition
that holds a majority in both houses of Congress, but the
coalition is undisciplined, and Lula must make compromises to
pass his legislation. In October nationwide municipal
elections were held to select the country's mayors and city
councils. The PT lost some key races, including the mayor of
Sao Paulo, but is still in a leading position to contest the
2006 presidential race.


6. (SBU) Under President Lula, Brazil has achieved a higher
international profile, reflected in its leading role in South
America, its push for a UNSC permanent seat, its spearheading
of a "G-20" group of developing nations, its revitalization
of Mercosul, and its constructive roles in Haiti and
Venezuela. Brazil is an important player on global issues
such as hunger (witness the September 20 New York
Conference),HIV/AIDS and the environment. U.S./Brazilian
cooperation has been key to progress on the WTO Doha round.
Brazil and the U.S. are co-chairs of the FTAA negotiations.
The GOB has focused on South America and developing
countries, engaging intensively with Mercosul and forging a
regional approach to trade talks. Brazilians are committed
to the UN and other multilateral institutions. The majority
of Brazilians oppose the war in Iraq. Lula has voiced strong
opposition to the war, but this has not prejudiced his
approach to broader bilateral relations.

CRIME, TERRORISM, NONPROLIFERATION
--------------


7. (C) On counter-terrorism operational issues, cooperation
between the USG and Brazilian law enforcement and security
services is good. The GOB remains hypersensitive to
allegations that terrorist groups are active on Brazilian
territory, particularly in the Tri-border region. Senior GOB
officials maintain that there is no evidence to support
claims that terrorists operate on Brazilian territory and the
GOB has repeatedly asked us for specific information to
support such allegations. GOB police and security officials
acknowledge that fundraising, money laundering, and related
criminal activities are likely ongoing, but again, they
request solid intelligence that would link funding with
terrorist groups. Brazil has a sizable population with
ethnic origins in the Middle East, including many who are
economically and politically influential. The USG is
concerned that these communities contain persons who
financially support terrorist organizations.


8. (C) Crime remains a severe problem in Brazil's large
cities. In Rio, where violence has become endemic, a gang
war earlier this year in Rocinha, a favela notorious for
crime and drugs, culminated with bloodshed and revealed the
depth of criminal druglord control over the favelas. The
police reacted by launching a highly publicized incursion
into Rocinha. In the countryside, the Landless Movement (MST)
illegally occupies land, causing confrontations with
landowners and the GOB. A role for the Brazilian military in
dealing with crime and public security is being reviewed, and
President Lula appears to favor some increased military role.
Recent legislation has been passed giving troops in remote
areas of the Amazon arrest powers when apprehending someone
committing an illegal act. Many field-grade officers regard
some armed forces involvement in law enforcement as
inevitable; however, most senior officers, sensitive to the
legal ramifications that could result from civilian
casualties, increased corruption, and the residual legacy of
21 years of military rule, remain strongly opposed.


9. (C) Brazil has recently found itself in an uncomfortable
spotlight regarding its non-proliferation credentials. The
IAEA is working closely with the GOB over the institution of
a suitable inspection regime for the new enrichment facility
at Resende. The GOB expects to have an agreement with the
IAEA regarding Resende in place soon. In addition, the IAEA,
the U.S., and many other countries have asked Brazil to sign
the Additional Protocol (AP) to the NPT, a measure the GOB
has resisted so far. Brazil argues that the nuclear weapons
states need to accelerate their disarmament even as the
nonweapons states consider additional compliance measures.
Brazil is not expected to sign the AP until at least mid

2005. Meanwhile, Brazil is considering signing onto the
International Code of Conduct for missile technology but
remains unenthusiastic about the Proliferation Security
Initiative and the Australia Group.

THE ARMED FORCES IN BRAZIL
--------------


10. (C) Since the end of military rule in 1985, the armed
services have supported Brazil's civilian leadership and
adapted to their new apolitical status, despite the problems
noted above with the new civilian Ministry of Defense,
created in 1999. The officer corps is professional and
dedicated to defending Brazil's constitution.


11. (C) Public esteem does not translate, however, into
funds. Military budgets have decreased steadily for 15
years, with the severest cuts introduced over the last four
years. This has naturally had a negative impact on the
readiness of the armed forces. As President Lula stresses
social priorities while working within tight fiscal
constraints, the prognosis for the military's budget is for
more of the same. The military grumbles that it is entitled
to pay raises. The lack of money dampens the force
projection capability. Procurement programs for new weapons
systems to replace outmoded equipment are also starved for
funds, while programs such as the development of a Brazilian
nuclear-powered submarine and maintenance of antiquated
vessels drain resources that could be better directed
elsewhere.


12. (C) As Viegas' resignation shows, a major internal issue
is the relationship between the armed services and the
civilian-led Ministry of Defense. Minister Viegas created,
for example, a four-star level secretariat of cooperative
studies headed by a diplomat. Many officers felt such senior
civilian placements within the Ministry diminished the
military's access and rendered it less effective in fighting
important bureaucratic battles. In addition to the problems
noted above with the MOD, within the Ministry there are
problems in the chain of command. Although the Chief of
Defense and the Secretary for Strategy, Policy and
International Affairs are four-star generals with direct
advisory roles to the Minister, their positions are
unofficially subordinate to the service commanders. Their
ability to impose jointness is compromised. Morale among the
senior military grades has been negatively affected, leading
to transfers and some retirements.


13. (C) The services maintain close ties with counterparts
in neighboring countries and there are no identifiable
trouble spots in these relations. Each service conducts
annual or more frequent dialogue at various levels of command
with neighboring militaries. Army-to-army relations with
Brazil's neighbors, for example, are conducted at the chief
of staff, regional command, brigade, and battalion levels.
Despite a troubled history, relations between the Argentine
and Brazilian militaries have never been closer. Brazil is
also doing some regional intelligence sharing, and there is
steady improvement in this field with Colombia and Peru.

SPECIFIC ISSUES
--------------


14. (C) Army Issues: Brazil's army has the lead in MINUSTAH
and a 1200 man PKO force has been on the ground since June.
While army leadership is confident in its ability to conduct
such PKO missions, its troops are being stretched to the
limit. Foreign Minister Amorim is pressing hard for other
countries to fill their UN commitments for MINUSTAH. The
army is attentive to Brazil's borders, particularly in the
Amazon Basin where it has relocated 5,000 troops and
established several new frontier platoons. There continues
to be concern with the spillover effects of the Colombian
conflict and some skirmishes with the FARC have been
reported. While the army does not anticipate a direct
confrontation with the FARC, there is recognition that FARC
gunrunning and narcotics smuggling activities will eventually
have to be challenged. While the various commands may lack
hardware and support, they are keenly aware of their mission
and seem prepared to carry it out.


15. (C) Navy Issues: In recent years, the navy procured 23
A-4 Skyhawk attack aircraft from Kuwait and bought the former
French aircraft carrier Foch, renamed the Sao Paulo. Several
pilots have already become carrier qualified in the U.S. The
Navy is sending on average two officers a year to the U.S.
for flight training. In March 2004, the navy signed an LOA
for the FMS LINK 11 case to upgrade their secure
communications. In a program plagued by technological and
design flaws, the navy's nuclear submarine program has
swallowed about $1 billion in R&D costs. The navy claims it
is still 20 years, and $500 million, away from final
development and delivery of a nuclear sub. (We believe it
would be much longer and cost much more.) Meanwhile, the
navy is in dire need of escort vessels, and is hard pressed
to maintain its aging fleet. Navy command is interested in
submarine rescue, diesel submarine, and UNITAS training and
exercises.


16. (C) Air Force Issues: The air force desperately wants
to replace its aging Mirages. President Lula has continued
to postpone a decision on a new generation fighter (F-X),an
understandable decision given the cost involved. New
Lockheed F-16 Block 50 aircraft were offered in the
competition. However, recognizing that other competitors
might be preferred by FAB, Lockheed-Martin also decided to
offer used F-16s in a deal that would provide the air force
with capable aircraft at a fraction of the cost of new
planes. However, FAB continues to focus on the procurement
of new, not used, aircraft. Regardless of the decision, GOB
funding of the F-X will be difficult. FAB is also looking to
replace its aging UH-1 helicopter fleet. In February 2004,
the FAB sent a delegation to Alabama to discuss possible
modifications needed on the 6-10 Black Hawks they are
interested in purchasing. Congressional approval is expected
this month with the final LOR valued at $166M for 10
BLACKHAWK Helicopters. FAB will put initial investment of
$100M against a new FMS case for purchase of the BLACKHAWKS.
First delivery is expected in June 2005 for two helicopters.


17. (C) SIVAM (Amazon Surveillance System): Now essentially
complete, the SIVAM system built by Raytheon consists of
ground, aerial, and space-based sensors, communications and
patrol aircraft. Raytheon has had contractual differences
with the GOB, but the company reports the situation has
improved and its support for the project will not stop.
Brazil has indicated its willingness to share data with
neighboring countries under certain conditions.


18. (C) Article 98: Brazil has not signed an Article 98
agreement and is subject to ASPA sanctions. The GOB, in
keeping with its long-standing multilateralism, insisted it
was committed to the International Criminal Court and that
signing our Article 98 waiver would weaken this commitment.
The Government also asserted that it could conceive of no
circumstances under which it would subject U.S. citizens to
extradition to The Hague. The GOB calculated that the
projected loss annually under ASPA sanctions of $500,000 of
IMET funds was tolerable. However, the imposition of full
FMS pricing for training, an unforeseen consequence of ASPA,
caught the GOB by surprise and has caused additional
frustration and friction. Despite this additional blow, the
loss of access to EDA grant funds, the withdrawal of the
Spruance destroyer offer (combination sale and grant
transfer),and the financial impact on the training portion
of procurement offers such as the F-16, we do not expect
Brazil to reverse its position on Article 98. In fact, the
MOD has indicated that it will continue training at the same
level as pre-ASPA sanctions, just with other countries. The
armed services have already shifted training to Great Britain
and France and has new programs with Russia, China, and even
Vietnam.


19. (C) Airbridge Denial/Shootdown: Following extensive
USG-GOB consultations to develop strict interdiction
parameters for protecting innocent lives, on October 17
Brazil began implementation of its 1998 law permitting the
shootdown/forcedown of civil aircraft suspected of illicit
trafficking. On October 16 President Bush signed a
Presidential Determination to waive liability under U.S. law
owing to the extraordinary threat trafficking poses to
Brazil's sovereignty.


20. (SBU) Despite irritants in the relationship, we consider
ties between the U.S. and Brazilian militaries good. Brazil
and the U.S. will continue to participate in joint exercises
such as Cabanas and UNITAS. In June, the aircraft carrier
Ronald Reagan made a port visit to Rio. In July 2005 Brazil
will host PKO-South and the annual Unitas exercise. The MOD
still views the U.S. military relationship as important and
the U.S. a dependable, if sometimes irritating, partner.
Brazil, as a strategic partner, remains important to the U.S.
Beyond ASPA, there remain many areas of defense cooperation
and interaction, as well as areas of cooperation that remain
untapped. Many in the Brazilian Armed Forces recognize that
they must expand their role in counter narcotics and counter
terrorism. As the MOD proceeds with the development of a
National Military Strategy for Brazil, the U.S. can offer its
perspectives on the process.


21. (C) Maintaining the U.S.-Brazil pol-mil relationship
requires constant attention and, perhaps, more effort than
with any other bilateral relationship in the hemisphere.
Within Brazil, there is no institutional propensity to curry
favor with the U.S. Given its size, Brazil views itself as a
regional leader and global player, even if it sometimes
appears to fall short of what is expected from a world power.
The GOB will be eager for ways to enhance the bilateral
relationship, overcoming the obstacles created by ASPA and
Brazil's rejection of an Article 98 agreement. The GOB has
expressed interest in negotiating an umbrella Defense
Cooperation Agreement (DCA) that would replace the former
Mutual Defense Assistance Treaty, unilaterally abrogated by
the GOB in 1980 due to our human rights policies. But the
GOB will also remain sensitive that it not appear too eager
to consummate deals with us that could backfire politically.

Danilovich