Identifier
Created
Classification
Origin
05BRASILIA1660
2005-06-22 15:41:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Brasilia
Cable title:  

LULA'S RIGHT-HAND WOMAN - DILMA ROUSSEFF BECOMES

Tags:  PGOV PINR PREL ECON BR 
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UNCLAS SECTION 01 OF 02 BRASILIA 001660 

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PINR PREL ECON BR
SUBJECT: LULA'S RIGHT-HAND WOMAN - DILMA ROUSSEFF BECOMES
CHIEF OF STAFF

REF: BRASILIA 1631

UNCLAS SECTION 01 OF 02 BRASILIA 001660

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PINR PREL ECON BR
SUBJECT: LULA'S RIGHT-HAND WOMAN - DILMA ROUSSEFF BECOMES
CHIEF OF STAFF

REF: BRASILIA 1631


1. (SBU) SUMMARY. On June 21, Brazilian President Lula da
Silva named Minister of Mines and Energy Dilma Rousseff to be
his new Chief of Staff, replacing Jose Dirceu, who resigned
last week amid an unfolding corruption scandal. Rousseff was
an opposition militant who was jailed and tortured by
Brazil's military regime. She earned degrees in economics
and spent years in senior posts in city and state governments
in the state of Rio Grande do Sul. Rousseff joined Lula's
Workers' Party in 2001 and worked on Lula's 2002 transition
team. She is a blunt and demanding manager who will seek to
improve the administration's policy implementation. She will
be far less of a political lightning rod than Dirceu, more
focused on pushing the bureaucracy than political infighting.
More cabinet moves are expected in the coming days, with the
allied PMDB party likely to get a larger role in the
administration. END SUMMARY.

"JOAN OF ARC OF SUBVERSION" BECOMES CHIEF OF STAFF
-------------- --------------

2. (SBU) On July 21, President Lula named Mines & Energy
Minister Dilma Rousseff, 57, as his new Chief of Staff
("Minister-Chief of the Civilian Household"). She replaces
Jose Dirceu, who stepped down last week because of an ongoing
corruption scandal (reftel). Dirceu was deeply involved in
all the administration's political strategies, but Rousseff
announced at her swearing-in ceremony that she intends to
focus more on moving the administration's policy agenda
forward. She noted that --contrary to press assessments--
this does not mean she is a technocrat. "This is not a
technical job, but a political one", she announced,
"Political in the best sense of the word. I am no longer an
executor (at the Ministry of Mines and Energy) but a
facilitator of the projects of my cabinet colleagues."


3. (SBU) Dilma Vana Rousseff Linhares was born 14 December
1947 in the state of Minas Gerais. Her father was a
Bulgarian attorney who had naturalized Brazilian citizenship.
She became actively involved in opposition to the military
dictatorship in 1967, at age 19, while studying economics in
Minas Gerais. Joining various underground groups, she
organized three bank robberies and then co-founded the

guerilla group "Armed Revolutionary Vanguard of Palmares".
In 1969, she planned a legendary robbery popularized as the
"Theft of Adhemar's Safe". The operation broke into the Rio
apartment of the lover of former-Sao Paulo Governor Adhemar
de Barros, netting US$2.5 million that Adhemar had stashed
there. Rousseff separated from her first husband, Claudio
Linhares, who in January 1970 hijacked a plane to Cuba and
remained there. That same month, she was captured by the
regime and jailed for over three years (the prosecutor called
her "the Joan of Arc of Subversion"),including 22 days of
brutal electro-shock torture.


4. (SBU) Freed in late 1973, Rousseff moved to the southern
state of Rio Grande do Sul. When her rights were restored by
the 1979 general amnesty, she joined the PDT party of leftist
leader Leonel Brizola, serving in various city and state
positions: Secretary of Finance of the city of Porto Alegre
(1986-1988); President of the Economy and Statistics
Foundation of the state of Rio Grande do Sul (1991-1993);
State Secretary of Energy, Mines and Communications
(1993-1994). She served again as State Secretary of Mines
under Workers' Party (PT) Governor Olivio Dutra (1999-2002),
and switched to the PT in 2001. She was a key member of
Lula's transition team in the weeks before he took office in
January 2003, and Lula named her Minister of Mines & Energy
days after his inauguration.


5. (SBU) Rousseff has a Masters degree in economic theory
from the University of Campinas and an uncompleted doctorate
in economics. In 1992, she participated in an International
Visitor program in the US. She is now separated from her
second husband (who was also an opposition militant). She
has a daughter, Paula, in Porto Alegre, where she spends her
weekends. She enjoys movies and classical music. She has
lost weight recently, reportedly after adopting President
Lula's diet.

NO-NONSENSE STYLE
--------------

6. (SBU) With her technical background and no-nonsense
style, Rousseff has earned grudging respect from the energy
sector. While U.S. companies were initially wary when she
was appointed Energy Minister, they now admit that she has
done a competent job. In particular, they praise her for her
willingness to listen and respond to their views, even when
she is inclined to a different conclusion. She has a
reputation as being stubborn, a tough negotiator, and
detail-oriented. Adjectives used here by those who know her
include "demanding" and "workaholic". Her greatest
accomplishment as Minister has been the development of
Brazil's new "Electricity Sector Model", which seeks to
reduce consumer prices by establishing long-term supply
contracts between generators and distributors. Other
programs developed during her tenure include "Lights for
Everyone" and a focus on biodiesel development. Unlike Jose
Dirceu, Rousseff never held elective office and her contacts
in Congress are limited, which suggests the administration's
political coordination will be handled by others. The press
notes that Lula hopes she will produce a "management shock"
within the administration, which --because of managerial
inefficiencies, bureaucratic gridlock, and most recently
because of the raft of corruption scandals-- finds its agenda
treading water.


7. (SBU) Some in Congress complain that Rousseff does not
understand party politics. In April, the Senate rejected her
nominee to head the national oil agency in retaliation for
her opposition to a nominee from the allied PMDB party to
head a subsidiary of Eletrobras, the state-owned electricity
company. (Rousseff instead opted to give the position to
Adhemar Palocci, brother of FinMin Antonio Palocci.) Her
senior advisors tell us that she sometimes disregards
hierarchy, directly tasking technical employees, bypassing
their supervisors. In addition, they note, her event horizon
at the Ministry has been no more than two to three weeks in
the future, thus making long (or even medium) term planning
difficult.

COMMENT: MAKING ROOM FOR THE PMDB
--------------
8.(SBU) The large allied PMDB party is likely to get a higher
profile in the Lula administration as the cabinet shuffle
continues to unfold in the coming days. One rumor has
Rousseff being replaced at Mines & Energy by Silas Rondeau,
currently the president of Eletrobras, whose political
sponsor is influential PMDB Senator Jose Sarney. As for
Lula's office, with Rousseff as Chief of Staff, it is unclear
what will happen with the separate cabinet-level position of
Political Coordinator. The incumbent, Aldo Rebelo, has not
been successful in pushing the administration's agenda in
Congress or unifying the fractious coalition. He is expected
to step down and return to his congressional seat. Thus,
Lula may either replace Rebelo or fold his duties into
another office, such as that of Economic and Social
Development Secretary Jaques Wagner.
DANILOVICH