Identifier
Created
Classification
Origin
07SAOPAULO36
2007-01-17 10:18:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Sao Paulo
Cable title:  

AMBASSADOR AND SAO PAULO GOVERNOR DISCUSS CRIME, PUBLIC

Tags:  PGOV SNAR EINV ASEC PREL BR 
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VZCZCXRO9909
PP RUEHRG
DE RUEHSO #0036/01 0171018
ZNR UUUUU ZZH
P 171018Z JAN 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC PRIORITY 6280
INFO RUEHBR/AMEMBASSY BRASILIA 7363
RUEHAC/AMEMBASSY ASUNCION 2896
RUEHBU/AMEMBASSY BUENOS AIRES 2588
RUEHMN/AMEMBASSY MONTEVIDEO 2249
RUEHLP/AMEMBASSY LA PAZ 3179
RUEHSG/AMEMBASSY SANTIAGO 1958
RUEHRG/AMCONSUL RECIFE 3312
RUEHRI/AMCONSUL RIO DE JANEIRO 7709
RHEHNSC/NSC WASHDC
RUCPDOC/USDOC WASHDC 2681
RUEATRS/DEPT OF TREASURY WASHDC
RUEAWJC/DEPT OF JUSTICE WASHDC
RUEAHLC/HOMELAND SECURITY CENTER WASHINGTON DC
RUEABND/DRUG ENFORCEMENT ADMIN HQ WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL
UNCLAS SECTION 01 OF 04 SAO PAULO 000036 

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/FO, WHA/BSC, P, INL, EB/CBA
STATE ALSO FOR DS/IP/WHA, DS/DSS/ITA, DS/DSS/OSAC
STATE PASS USTR FOR SULLIVAN/CRONIN
STATE PASS EXIMBANK
STATE PASS OPIC FOR DMORONESE, NRIVERA, CVERVENNE
STATE ALSO PASS TDA FOR ANGULO AND MCKINNEY
NSC FOR FEARS
DOJ FOR BRUCE SWARTZ
TREASURY FOR OASIA, DAS LEE AND JHOEK
DHS HQ FOR PLCY/OIA - KEVIN O'REILLY
DHS ALSO FOR TSA
USDOC FOR 4332/ITA/MAC/WH/OLAC
USDOC FOR 3134/ITA/USCS/OIO/WH/RD
SOUTHCOM ALSO FOR POLAD
USAID FOR LAC/AA

E.O. 12958: N/A
TAGS: PGOV SNAR EINV ASEC PREL BR
SUBJECT: AMBASSADOR AND SAO PAULO GOVERNOR DISCUSS CRIME, PUBLIC
SECURITY, INVESTMENT ISSUES

REF: (A) SAO PAULO 6; (B) 06 SAO PAULO 899;

(C) 06 SAO PAULO 1131; (D) 06 SAO PAULO 355

SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY

-------
SUMMARY
-------

UNCLAS SECTION 01 OF 04 SAO PAULO 000036

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/FO, WHA/BSC, P, INL, EB/CBA
STATE ALSO FOR DS/IP/WHA, DS/DSS/ITA, DS/DSS/OSAC
STATE PASS USTR FOR SULLIVAN/CRONIN
STATE PASS EXIMBANK
STATE PASS OPIC FOR DMORONESE, NRIVERA, CVERVENNE
STATE ALSO PASS TDA FOR ANGULO AND MCKINNEY
NSC FOR FEARS
DOJ FOR BRUCE SWARTZ
TREASURY FOR OASIA, DAS LEE AND JHOEK
DHS HQ FOR PLCY/OIA - KEVIN O'REILLY
DHS ALSO FOR TSA
USDOC FOR 4332/ITA/MAC/WH/OLAC
USDOC FOR 3134/ITA/USCS/OIO/WH/RD
SOUTHCOM ALSO FOR POLAD
USAID FOR LAC/AA

E.O. 12958: N/A
TAGS: PGOV SNAR EINV ASEC PREL BR
SUBJECT: AMBASSADOR AND SAO PAULO GOVERNOR DISCUSS CRIME, PUBLIC
SECURITY, INVESTMENT ISSUES

REF: (A) SAO PAULO 6; (B) 06 SAO PAULO 899;

(C) 06 SAO PAULO 1131; (D) 06 SAO PAULO 355

SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY

--------------
SUMMARY
--------------


1. (SBU) During an hour-long meeting with the Ambassador, Jose
Serra, Governor of Sao Paulo state, said that his most immediate
priority upon taking office was public security, especially in the
metropolitan public transportation system, which is the state
government's responsibility. Though statistics show a steady
decline in crimes of violence, the state and the metropolitan area
continue to be plagued by common street crime, and concerns about
the organized criminal organization First Capital Command (PCC)
continue unabated. Serra stressed that to fight crime, the state
does not need money so much as technology, training, and technical
expertise, and asked if DHS and U.S. metropolitan transit
authorities could help Sao Paulo subway and commuter rail personnel
learn to deal with bomb threats and other threats to public safety.
Serra indicated he was extremely interested in meeting with Attorney
General Gonzales in February but that he did not know if he would be
able to travel to Brasilia for that purpose, though he will try.
The Ambassador raised with Serra a complicated tax credit problem
affecting U.S. telecommunications manufacturers. Serra said he is
prepared to implement a quick fix but that a durable, long-term
solution will be more difficult to achieve. End Summary.


2. (U) Ambassador Sobel, accompanied by Consul General (CG) and
poloff, met January 10 with Sao Paulo Governor Jose Serra. The

Governor was accompanied by Civil Household Chief Aloysio Nunes
Ferreira; Public Security Secretary Ronaldo Marzagao; Transportation
Secretary Mauro Arce; Metropolitan Transport Secretary Jose Luiz

SIPDIS
Portella; Colonel Marco Antonio Moises, Security Coordinator,
Metropolitan Transport Secretariat; Conrado Garva, Director of
Operations for the Metro system; and foreign affairs advisors Helena
Gasparian and Jose Roberto de Andrade. Everyone on the Brazilian
side was new to the state government, since Serra was inaugurated on
January 2; however, some have served in previous administrations.

SECURITY IS THE TOP PRIORITY...
--------------


3. (SBU) Governor Serra asked about the upcoming visit to Brazil of
Attorney General Gonzales. Ambassador replied that AG is currently
planning to visit Brazil but would not have time to visit Sao Paulo.
Thus, the Ambassador expressed hope that Serra and other
reform-minded governors could meet with him in Brasilia. Serra
replied that this would be difficult for him to travel to Brasilia
but he would try. Ambassador added that U/S Burns will be visiting
at around the same time in early February, and that Serra should
also meet with him to discuss his priorities and ways the U.S. could
work with the state government. In addition, Ambassador is
expecting a visit to Brazil by DEA Administrator Tandy in late
February. The Ambassador noted that the U.S. has extensive
experience and expertise to share in the areas of public security
and prison administration and currently provides Brazil with

SAO PAULO 00000036 002 OF 004


equipment and training.


4. (SBU) Foreign affairs advisor Gasparian pointed out that the USG
has a strong cooperative relationship with Brazil's federal
government but that Sao Paulo state would like to have direct
collaboration with USG. The Ambassador replied that this question
is under discussion. Governor Serra said money is not the problem;
the state has money. Rather, it needs equipment, technology,
training and technical expertise. It needs experts to show how
things are done in various areas of security.

...ESPECIALLY IN PUBLIC TRANSPORTATION
--------------


5. (SBU) Nunes Ferreira raised the issue of security in
metropolitan Sao Paulo's subway system, which has recently
experienced several bomb scares. Several weeks ago, a real bomb was
found one real bomb in a station. In addition, a recent explosion
at a military police station (ref A) was caused by a technician
trying and failing to defuse an explosive device that had been found
in a metro station. The metro area's commuter rail system is also
subject to possible attack. (Note: Though nobody mentioned them,
metropolitan buses are also at significant risk for violent crime,
including bombs. End Note.) State officials believe the First
Capital Command (PCC) may be responsible for recent incidents. The
state government has 5,000 people working on transportation
security, but they are poorly trained and don't know how to respond
to bomb threats. Serra mentioned that the New York subway system
has a sophisticated security apparatus, which has no doubt been
greatly strengthened since the terrorist attacks of 9/11. Secretary
Portella (Metropolitan Transit) said his office was eager to learn
about operational routines of the New York and Washington public
transit systems in the event of bomb threats and other security
incidents. He shared a list of questions his staff had developed.
(List has been faxed to DHS/O'Reilly and WHA/BSC.) The Ambassador
and CG suggested that we might be able to arrange for experts from
major U.S. cities' transit systems and/or USG agencies (e.g., FBI,
DHS, ATF) to visit Sao Paulo and share their experiences, or for
Secretary Portella and some of his security personnel to visit U.S.

SIPDIS
cities and meet with public transportation authorities. The
Ambassador also stressed the importance of developing effective
communications between agencies - federal, state, and local - in
addressing security problems.


6. (SBU) Gasparian said state officials would like to develop a
cooperative relationship with DHS. The Governor was not familiar
with the agency, but after the Ambassador described its and history,
mission, and functions, agreed that he would greatly appreciate any
help DHS could provide. CG suggested the Governor familiarize
himself with the Container Security Initiative DHS has been
operating in the Port of Santos for the past year and a half.
Ambassador added that he expects DHS Secretary Chertoff to visit
Brazil later this year, and that the Governor should meet with him.



7. (SBU) The Ambassador noted that when he met in August with then
Governor Claudio Lembo (ref B),Lembo was extremely concerned about
narcotics and drug trafficking. Serra concurred that drugs are the
big problem and that trafficking in weapons is also a major concern,

SAO PAULO 00000036 003 OF 004


as is illegal trade (contraband and pirated and counterfeit
merchandise). The Ambassador suggested that the U.S. and Brazil
could cooperate more on combating money laundering.

SERRA HAS SHORT-TERM FIX FOR INVESTMENT ISSUE
--------------


8. (SBU) Turning to another subject, the Ambassador expressed
concern about a tax credit problem that affects certain U.S.
businesses operating in Brazil. A lawsuit between the states of
Parana and Sao Paulo could result in the abolition of Sao Paulo's
ICMS (equivalent of value added tax) credits to manufacturers of
telecommunications technology. Post was approached recently by
Motorola executives, who said an adverse ruling could cost them
hundreds of millions of dollars and might force them to withdraw
from Brazil. Deputy PO and Commercial Attache met with then
Governor Lembo in December, and the Ambassador spoke to Lembo as
well. The Sao Paulo state government succeeded in having the case
continued until at least February, when the Supreme Court returns
from leave. Serra was familiar with the problem and agreed it was
in the state's interest, and Brazil's as well, to find a solution.
There is an unfortunate history of "fiscal wars" between Brazil's
states; Sao Paulo is usually the victim, he said, but has on
occasion been the instigator, which complicates the issue. Serra
plans to implement a short-term solution: to revoke the decree
governing the ICMS credit system, essentially vacating the lawsuit,
and then issue a new decree restoring ICMS credits. It may be a
crude work-around, but it will solve the immediate problem. He
suggested post and Motorola contact Lieutenant Governor (and
Secretary of Development) Alberto Goldman to discuss possible

SIPDIS
longer-term solutions. (Note: CG has requested a meeting with
Goldman to follow up. End Note.)


9. (U) In response to a question by Ambassador Sobel, Serra said he
may travel to the U.S. in March. He visited Washington and New York
in November and met with World Bank and IDB officials to discuss
assistance in expanding the Sao Paulo subway system and completing
the "beltway" around metropolitan Sao Paulo.


10. (U) In closing, Ambassador and CG expressed appreciation for
Serra's assistance in combating IPR piracy when he was Mayor, and
said we would continue to work closely with the state government on
anti-piracy initiatives.

COMMENT
--------------


11. (SBU) Jose Serra (see refs C-D) ran for President in 2002 and
lost to Lula in the second round. He had hoped to be the opposition
Brazilian Party of Social Democracy's (PSDB) nominee again in 2006,
but was out-maneuvered by former Sao Paulo Governor Geraldo Alckmin
and opted to run for Governor instead. He handily defeated Aloizio
Mercadante of Lula's Workers' Party (PT),the government's leader in
the Senate. Serra remains a figure of national stature; he and
Aecio Neves, newly re-elected Governor of Minas Gerais, are already
competing for the PSDB's 2010 presidential nomination. He clearly
has his work cut out for him in Sao Paulo and needs to show results
quickly if he hopes to run for president again.


SAO PAULO 00000036 004 OF 004



12. (SBU) This week's meeting among security officials of Brazil's
four southeastern states - Rio de Janeiro, Espirito Santo, Minas
Gerais, and Sao Paulo - to discuss cooperation and
information-sharing in the battle against crime represents a new
approach for Brazil that may offer opportunities for the United
States. Mission Brazil believes that USG should seek ways to assist
the state government in the area of transportation security as
requested, and in other priority areas as they are identified. End
Comment.


13. (U) This cable was coordinated with Embassy Brasilia and
cleared by Ambassador Sobel.

MCMULLEN