BRAZILIAN POLITICAL ROUNDUP, JAN. 29-FEB. 5, 2007

UNCLAS SECTION 01 OF 03 BRASILIA 000208 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV BR SUBJECT: BRAZILIAN POLITICAL ROUNDUP, JAN. 29-FEB. 5, 2007 REF: A. BRASILIA 107 ¶B. BRASILIA 140 ¶C. BRASILIA 149 ¶1. (SBU) Summary. The new Congress took office and each house elected a leader from the pro-government coalition, although the choice in the Chamber of Deputies widened a painful split in the government's base. President Lula da Silva must now find ways to repair the damage, and he may use ministerial appointments to advance the process, or he may reward the faithful. The large party blocs in the Chamber took shape, but it is not clear they will last. The government's bloc is larger than ever, with well over 50 percent of deputies. The opposition lost members, as some deputies switched parties. End summary. 53rd Congress Opens in Atmosphere of "Renewal" -------------- -- ¶1. (SBU) The 53rd Congress of Brazil opened on February 1 with the swearing in of 513 Federal Deputies from 20 parties in the Chamber of Deputies, and 81 Senators, 27 of them newly elected or reelected, from 13 parties. ¶2. (SBU) Media coverage highlighted expectations that the new Congress will be more "ethical" than the 52d Congress, whose four years produced some of the worst and largest cases of official corruption in Brazilian history, resulting in numerous congressional committees of inquiry and the resignations of cabinet ministers and members of Congress. Federal Deputy Ricardo Izar (Brazilian Labor Party - PTB),of Sao Paulo, chairman of the Chamber's Ethics Committee, told the Chamber's news service on February 1 that "the last Congress was the worst in the Chamber's history," and said he hoped the next one would be better because 46 percent of the deputies were new. Congressional Leadership Elections -------------- ¶3. (SBU) The first order of business for the Senate and Chamber of Deputies was the election of the leadership. The Senate and Chamber of Deputies leadership consist of the presidency, six lower positions, and four positions for alternates. A heated contest for the Chamber presidency had developed in the run-up to opening day, revealing a major split in the government's base, which opened up the opportunity for a third candidate from a major opposition party. The Senate contest was a calmer, less divisive exercise, and the opposition candidate never appeared likely to win. Emergence of Two Pro-Government Blocs -------------- ¶4. (SBU) In order to guarantee a position on the leadership, in principle decided on the basis of proportionality, two small parties, the Communist Party of Brazil (PCdoB) and the Brazilian Socialist Party (PSB) ) both supporting incumbent Aldo Rebelo (PCdoB, Sao Paulo) for president of the Chamber -- announced on January 17 they were forming a bloc (ref A). Soon after, the Democratic Labor Party (PDT),and two tiny parties, the National Mobilization Party (PMN),and Party of the Nation's Retirees (PAN),joined them. The bloc's strength is about 68 deputies. (Note: numbers are inexact because some deputies are still in the process of switching parties. We are using official Chamber of Deputies figures.) The two other groups of allied parties soon responded: The result was the formation a "megabloc" of all the parties supporting the candidacy of Arlindo Chinaglia (Workers Party - PT),of Sao Paulo, to be president of the Chamber of Deputies, as well as another smaller bloc of opposition parties. ¶5. (SBU) These parties make up the megabloc: Brazilian Democratic Movement Party (PMDB) Workers Party (PT) Party of the Republic (PR) Brazilian Labor Party (PTB) Progressive Party (PP) Christian Social Party (PSC) Christian Labor Party (PTC) BRASILIA 00000208 002 OF 003 Labor Party of Brazil (PTdoB) (Note: Although in opposition to each other over the leadership, Chinaglia's bloc and Rebelo's bloc are both largely composed of parties officially in, or allied with, the government coalition of President Lula, hence the split in the government base. Political commentator and blogger Fernando Rodrigues is calling Rebelo's bloc the "governistas de oposicao," or the pro-government opposition.) The "megabloc's" strength is estimated at 283 deputies, so large that it was dubbed the "tectonic plate." Opposition Bloc -------------- ¶6. (SBU) The new, real opposition bloc includes the Brazilian Social Democracy Party (PSDB),the Liberal Front Party (PFL),and the Socialist People's Party (PPS),with a combined strength of about 140 deputies. It supported the candidacy of Gustavo Fruet (PSDB, Parana) for the Chamber presidency. The PFL was an eleventh hour addition, as its Chamber leader, Rodrigo Maia, of Rio de Janeiro, had pledged the PFL's support to Aldo Rebelo until January 31. A few parties, notably the Green Party (PV) and Socialism and Freedom Party (PSOL),remain outside the new blocs. Chinaglia Wins Chamber Presidency -------------- ¶7. (SBU) In theory, the Chinaglia bloc should have been able to win the presidency on the first round of voting, since a win requires only a simple majority of 257, and his bloc had 283 deputies. ¶8. (SBU) The result of the first round of voting was Chinaglia, 236 votes, Rebelo, 175, and Fruet, 98. In the second round, Chinaglia won with 261, while Rebelo came in a close second with 243. Some observers said Chinaglia's victory was only possible with PSDB support. Some PSDB figures declared their support for Chinaglia in the second round (including the new PSDB Chamber leader, Antonio Carlos Pannunzio, of Sao Paulo),but blaming the PSDB begs the question of why he didn't get more if his megabloc alone should have garnered him 283 votes. The answer is probably that many PMDB members bucked their party's commitment and voted for Aldo. All sides expected some "treason," in spite of party commitments, since the voting is secret. Senate Presidency ) Pro-Government Incumbent Reelected -------------- -------------- ¶9. (SBU) Incumbent Senate President Renan Calheiros (PMDB), of Alagoas, easily defeated challenger Jose Agripino (PFL, Rio Grande do Norte) by 51 to 28. Agripino was the candidate of the PSDB and PFL, which together have 30 senators. ¶11. (SBU) On February 1, the PFL, PSDB, and PPS formalized an agreement to form an opposition bloc in the Senate, with 31 of the 81 Senators. A small number of Senators from other parties, such as Jarbas Vasconcelos (PMDB),of Pernambuco, are expected to vote with the opposition much of the time. President's Message to Congress: Approve the PAC -------------- --- ¶12. (SBU) On February 2 Congress held its opening ceremony in a joint session in the Senate. Dilma Rousseff, chief of the Civil Household, delivered a message from President Lula that was read by the Chamber's first secretary. (Lula was in Sao Paulo to attend Holocaust Remembrance ceremonies.) Lula's message to Congress focused on the Accelereated Growth Program ("PAC"; refs B and C),and he pledged his personal attention to its success. Senate and Chamber Presidents Calheiros and Chinaglia also spoke in support of the PAC, although they noted that both houses of Congress will make changes as they see fit. PAC: Governors Want Federal Funds in Exchange for Support -------------- -------------- ¶13. (SBU) Twelve of Brazil's 27 governors met in Brasilia on January 29 to draw up a list of financial demands that the federal government would have to satisfy in order to win BRASILIA 00000208 003 OF 003 their support for the Growth Acceleration Program. The price tag comes to 15.5 billion reais (about USD 7 billion), according to press reports. The governors would like to see more federal revenues channeled to their states budgets, certain types of tax relief, and relief for certain state debts to the federal government. The gathering covered the political spectrum, with eight from the government coalition (four PMDB, two PT, one PP, and one PR) and the others from the opposition (three PSDB, one PFL). The non-partisan meeting was more about pork barrel than ideology. The governors will formally present their demands to the Lula administration in late March, according to media reports. (Note: The PAC must be approved by Congress, not governors. Governors can influence the process by controlling funds for legislators' pet projects. End note.) Party Switching: Coalition Wins, Opposition Loses -------------- -------------- ¶14. (SBU) Some deputies and senators switched parties after election day on October 1, adding numbers to the government coalition's side. (Party affiliation, especially in the Chamber of Deputies, is a moving target, and continues to evolve.) Numerically, the chief winner in the Chamber was the Party of the Republic, a new party formed by the fusion of the Liberal Party and the Party of the Reconstruction of the Nation (PRONA). It gained eight or nine deputies. The biggest loser was the PPS, which lost three seats. The opposition bloc of the PSDB, PFL and PPS together lost about eight seats. The most notable switches and those with the greatest impact were in the Senate, where the switches, and the return of one senator on leave, tipped the balance, gave Lula's coalition a majority, and made the PMDB the largest party, with 20 senators. ¶15. (SBU) Comment: The divisive Chamber presidency contest left the coalition with wounds to tend. Lula said he will try to help the healing process. But in practical terms it also left him a dilemma, since there is a new alignment of forces. Lula must choose whether to use his power to name ministers and a government leader in the Chamber to reward or assuage. Pressure from the PMDB and other coalition parties for ministerial appointments has grown, and concessions could likely be at the expense of the PT, which now holds several ministries. It was conventional wisdom in January that Rebelo, if defeated, would be appointed minister of defense. But after Chinaglia's victory, Rebelo told media he would not accept a position in the government. A leader of the Chinaglia forces, Jose Mucio Monteiro (PTB, Pernambuco) is no longer his party's leader in the Chamber, and his name has surfaced in the media as a likely successor to Chinaglia as government leader, a job that Lula himself will decide, unlike other congressional leadership jobs. The alternative would be to make a peace offering to the "pro-government opposition" by selecting the acting government leader, Beto Albuqueque (PSB-RS),who is close to Rebelo. Lula is not giving signs as to how he will parcel out appointments. The immediate impact of the rift on legislative activity may be limited, but the real impact could come later if in 2010 the split has not healed and the PT finds itself running against a strong candidate from the PSB such as Federal Deputy Ciro Gomes, of Ceara, as well as a PSDB candidate. SOBEL