US embassy cable - 04BRASILIA3105

UNCLAS SECTION 01 OF 02 BRASILIA 003105 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV, SOCI, BR, Domestic Politics 
SUBJECT:  BRAZIL LOOKING TO IMPLEMENT POLITICAL REFORMS TO 
PROMOTE DEMOCRATIZATION 
 
 
1. SUMMARY.  In 2003, the Brazilian Chamber of Deputies 
(lower house) restarted discussions on "Political Reform" - 
- a catch-all term covering proposals to strengthen 
political parties, reform campaign financing, and improve 
the country's electoral system.  Many proposals have been 
debated since the 1988 Constitution was passed, and they 
were distilled into two bills voted out this year by the 
Chamber's Ad Hoc Committee on Political Reform.  While the 
proposals are the subject of intense political maneuvering 
among the parties, there is a growing consensus here that 
Political Reform is a good idea for the parties, the 
voters, and democracy.  The current bills may pass into law 
next year, and they must pass by October 2005 if they are 
to be in effect for the October 2006 presidential and 
congressional elections. END SUMMARY. 
 
THE NEED FOR POLITICAL REFORM 
----------------------------- 
2.  Since Brazil returned to civilian rule and passed the 
1988 Constitution, its multi-party system has been 
criticized for its vulnerability to corruption in campaign 
financing, its institutionally weak parties, and its 
personalized culture in which parties more often revolve 
around individuals than ideology or substantive positions. 
Twenty-seven parties are currently registered in Brazil, 
with politicians jumping from one to another for short-term 
advantage.  There were nearly 200 party switches in the 
Federal Chamber of Deputies in the first 18 months of the 
52nd Congress (2003-2005).  Since 1992, at least six 
congressional committees have been created in both the 
Senate and Chamber to discuss the shortcomings of 
democratic institutions.  In early 2003, the Chamber 
reopened the debate and established an Ad Hoc Committee 
that presented two bills that have now gone to the 
Chamber's Justice Committee.  They will eventually be voted 
out to the floor and then go to the Senate for final 
passage.  President Lula da Silva supports the effort.  He 
has said repeatedly that he sees political reform as 
"urgent and necessary to promote democratization in both 
Brazilian society and State". 
 
SEVERAL BILLS NOW IN THE WORKS 
------------------------------ 
3.  The primary bill now under discussion is: Bill 2679/03, 
drafted by Deputy Ronaldo Caiado (PFL-Goias), passed by the 
Ad Hoc Committee in December 2003 and sent to the Justice 
Committee, where it is still under consideration.  Caiado's 
bill addresses: 
- campaign and party financing, to combat the mounting cost 
of electoral campaigns and candidate dependence on special 
interest money for campaign financing; 
- closed-list system, aimed at strengthening the link 
between politicians and their parties (Brazil now uses open 
lists to select its legislatures); 
- party federations, to replace short-term alliances of 
convenience; 
- lowering of thresholds (i.e., the percentage of votes in 
how many states each party must win in order to maintain 
its party status), to protect small parties that could be 
damaged by the new federation rule. 
 
4.  Two other bills are also part of the package: Bill 
1712/03 (also sponsored by Deputy Caiado and also waiting 
to be voted out by the Justice Committee), addresses party 
switching by mandating that candidates must be members of a 
party for a fixed period before they can run for any office 
under that party's banner; and a Constitutional amendment 
proposal that would put all of Brazil's elections on 
concurrent four-year cycles instead of the alternating two- 
year cycles as now.  The two Caiado bills will likely be 
debated together and pass in some form in the coming 
months.  The third bill, dealing with election cycles, has 
less support.  In addition, President Lula recently 
mentioned that he would support a single six-year term for 
Brazil's President, to replace the current system of four- 
year terms, with a President limited to serving no more 
than two terms consecutively.  This idea is not now in any 
of the bills, but could be attached in the future. 
 
5.  The two Caiado bills have languished in the Justice 
Committee because of opposition from the conservative 
parties in Lula's coalition (PL, PTB, and PP).  But that 
opposition may now be overcome: in a December meeting with 
Federal Deputies, President Lula highlighted political 
reform as his top legislative priority for 2005.  Once they 
get to the floor, the bills could have greater support from 
the opposition than in Lula's own coalition.  But the bills 
as written would significantly change the rules of the 
game, so they will generate fierce debate and may well be 
watered-down before becoming law.  The most controversial 
elements of the reforms are public campaign financing and 
closed lists --the very heart of the reforms.  According to 
the caucus leader of the coalition's PL party, Deputy 
Sandro Mabel: "If they insist on closed lists and public 
finance, bye-bye reform". 
 
POST ENCOURAGING DEBATE 
----------------------- 
6.  For many Brazilians, Political Reform is an opaque and 
complicated topic fit only for politicians.  There has been 
little public discussion, press analysis, or dissemination 
of information on how these bills could fundamentally 
impact Brazil's democracy.  Post is developing a project to 
sponsor a conference in early 2005 to discuss various 
elements of the proposed political reform and to bring 
together key Brazilian stakeholders, including politicians, 
journalists, academics, and representatives of civil 
society organizations, to inform and expand the national 
debate. 
 
COMMENT: DEMOCRACY HAS TO BE STRENGTHENED 
----------------------------------------- 
7.  In early 2004, a scandal involving one of Lula's senior 
advisors, Waldomiro Diniz, made clear the need to reform 
the Brazilian electoral and political parties system, 
especially campaign and party financing.  Diniz was caught 
on tape allegedly soliciting illegal campaign contributions 
from a numbers racketeer.  In addition, the long-running 
"Banestado" money-laundering investigation has uncovered 
evidence that several parties are financing campaigns with 
undeclared funds.  The Political Reform now in the Chamber 
of Deputies, (in the words of one Deputy) may not be the 
"one Brazil wants, but the one Brazil can do", yet these 
bills represent a significant first step in strengthening 
the electoral process. 
 
8.  The current system of open lists and private campaign 
financing has the support of many in Congress, including 
many in Lula's coalition.  This system makes the parties 
dependent on the candidates, rather than the other way 
around, while candidates become reliant on private 
interests for funding.  Thus, the lack of public 
participation and discussion on political reform make it 
easier for politicians to approve laws that will benefit 
themselves rather than the whole country or even their 
party.  Transparency and public participation are key to 
passing good political reform laws and key to making 
Brazil's democracy more responsive to the public. 
DANILOVICH