Identifier
Created
Classification
Origin
05BRASILIA1544
2005-06-08 18:37:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Brasilia
Cable title:  

BRAZILIAN PRESIDENT AT GLOBAL FORUM VOWS TO CRACK

Tags:  PGOV PREL KCRM SOCI BR 
pdf how-to read a cable
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS BRASILIA 001544 

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PREL KCRM SOCI BR
SUBJECT: BRAZILIAN PRESIDENT AT GLOBAL FORUM VOWS TO CRACK
DOWN ON CORRUPTION

REF: BRASILIA 1494

UNCLAS BRASILIA 001544

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PREL KCRM SOCI BR
SUBJECT: BRAZILIAN PRESIDENT AT GLOBAL FORUM VOWS TO CRACK
DOWN ON CORRUPTION

REF: BRASILIA 1494


1. (SBU) Brazilian President Lula da Silva used the occasion
of the Fourth Global Forum Against Corruption, being held
this week in Brasilia, to announce a firm response to the
wave of corruption scandals that has been battering his
administration in recent weeks. As noted in reftel, the GoB
has been beset by corruption allegations reaching into
several cabinet ministries and allied parties since mid-May.
Lula's impulse has been to react slowly and not to "respond
to the headlines". In the case of Congressman Roberto
Jefferson, president of the allied PTB party, Lula became
involved in machinations to quash a congressional inquiry
into charges that Jefferson appointees at the Postal Service
and the Brazilian Reinsurance Institute (IRB) took kickbacks
and skimmed money for PTB party slush funds. Another bomb
dropped this week as Jefferson, now in a purely defensive
mode, alleged to the press that the treasurer of Lula's own
Workers' Party (PT) paid US$12,000 per month to buy votes in
Congress over the past year.


2. (SBU) This allegation appears to have been the final
straw for President Lula. Giving the opening remarks at the
Global Forum on June 7, Lula seemed galvanized to put an end
to press criticism and the bickering within his
administration and coalition. Speaking before his entire
cabinet (who reportedly got last minute command invitations)
and the hundreds of assembled Forum participants, Lula
announced that the presidents and directors of both the
Postal Service and the IRB have been sacked, and that he and
the PT party will welcome Congressional and law enforcement
investigations into all allegations. Lula's tepid response
to the serial corruption had been alienating to many old-line
PT members who are still committed to the party's reputation
for probity. In an effort to regain their confidence, he
announced that the government "will not protect anyone" even
if that means "cutting its own flesh". Beyond the Postal
Service and IRB officials fired, the PT party treasurer,
Delubio Soares, seems likely to lose his job. Left hanging
are the fates of two cabinet officers: Central Bank
President Henrique Meirelles and Social Security Minister
Romero Juca who, separately, have criminal corruption charges
pending before the Supreme Court. Lula is reportedly
reluctant to remove Meirelles for fear of the impact on
financial markets; though he is looking for a deal with his
coalition that would allow him to fire Juca, of the allied
PMDB party. Post will follow with further reporting on
Global Forum events via septel.
DANILOVICH