US embassy cable - 05BRASILIA2601

C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 002601 
 
SIPDIS 
 
TREASURY FOR PARODI; STATE PASS TO USTR AND USAID/LAC 
 
E.O. 12958: DECL: 09/29/2015 
TAGS: PGOV, PREL, BR, Domestic Politics 
SUBJECT: STAINED VICTORY: LULA'S MAN WINS THE CHAMBER 
PRESIDENCY 
 
REF: BRASILIA 2539 AND PREVIOUS 
 
Classified By: POLITICAL COUNSELOR DENNIS HEARNE. REASONS: 
1.4(B)(D). 
 
1. (C) Summary.  In an extremely close race on 28 September, 
Aldo Rebelo, a communist party legislator with close ties to 
President Lula Inacio da Silva, won the Presidency of the 
Chamber of Deputies, the lower house in Brazil's congress. 
Lula's government pulled out all the stops to win votes for 
Rebelo, including freeing up substantial funds for pork 
barrel amendments and reportedly offering other incentives, 
especially to the small, mercenary parties that are at the 
center of the PT vote-buying scandal, one element in the 
five-month political crisis rocking Brazil (ref a).  This 
overt political action that echoes the PT's earlier covert 
bribery has been a prominent and negative aspect of media 
reporting, staining the victory for the GOB.  It is also 
unlikely that Rebelo will be able to help press a substantive 
legislative agenda or provide significant help to Lula in 
dealing with the continuing political crisis.  End summary. 
 
TIGHTEST RACE IN HISTORY 
------------------------ 
 
2. (SBU) Aldo Rebelo, a Communist Party legislator from Sao 
Paulo closely allied with the Lula government, is the new 
President of the Brazilian Congress' Chamber of Deputies 
(U.S. Speaker of the House equivalent). Rebelo won out over 
opposition PFL deputy Jose Thomaz Nono by just 15 votes after 
two close rounds of voting on 28 September, the tightest 
Chamber Presidency race in history.  Rebelo emerged in recent 
days as the Lula administration's man in the race when it 
became clear the PT party -- torn internally by the scandals 
that have rocked the government and devastated the party's 
image and unity -- would not be able to put a viable 
candidate forward.  The race locked into a two-way contest 
early on 28 September when the PMDB's Michel Temer withdrew 
his candidacy and offered support for Nono, and the campaign 
of the PP party's Ciro Nogueira -- a little-known disciple of 
Severino Cavalcanti, the Chamber President who resigned in 
disgrace last week amidst bribery allegations -- fizzled. 
Temer's withdrawal came accompanied by his bitter charges 
that his PMDB colleague and Senate President Renan Calheiros 
had "violated congressional decorum" and betrayed Temer and 
the party by publicly supporting Aldo Rebelo.  The angry 
statements point up the rift between the pro- and anti-Lula 
wings of the catch-all PMDB, a rift that will likely grow in 
size and effect as next year's general election nears. 
 
3. (SBU) Rebelo is well-regarded within the congress, a 
gentlemanly and self-effacing pragmatist with good access 
across the spectrum of parties.  These qualities helped make 
him the government's leader in the lower house in 2003-early 
2004 and then brought him into Lula' cabinet as minister for 
political coordination (a liaison between the GOB and 
congress).  But his poor performance in that role contributed 
to the GOB's inability to move its congressional agenda and 
the devastating blow to the GOB and PT seen in the rise of 
the obscure Severino Cavalcanti to the Chamber Presidency 
last February.  Indeed, Rebelo left the cabinet a few months 
ago to return to congress amidst criticism from the PT and 
other cabinet officials, making his re-emergence now as 
Lula's champion in the Chamber ironic. 
 
4. (SBU) Coming from a small leftist party (the PC do B has 
only nine seats in the lower house), Rebelo will work to be 
both a rallying figure for the pro-government block (at 
present a shaky collection of PT members, other leftist 
sectors in congress that include those spawned by atomization 
of the PT, the pro-Lula PMDB and now infamous collection of 
mercenary parties) -- and a bridge to an opposition block 
(PSDB, anti-Lula PMDB, PFL, Green Party) that is of roughly 
equal strength.  Rebelo is a reputable congressional figure 
(unlike the ludicrous Cavalcanti) who will try to facilitate 
work on key legislation, and he is promising "independence in 
relationship to the Government."  Nonetheless, the continuing 
crisis environment in the GOB and congress, the roughly even 
balance of power between pro-government and opposition 
blocks, and the proximity of the election season beginning in 
mid-2006 do not suggest much potential for progress on 
substantive issues in the legislature for the balance of 
Lula's term. 
 
STAINED VICTORY FOR LULA 
------------------------ 
 
5. (C) Despite reports of a late night of partying at 
President Lula's residence in celebration of the big win, the 
spin on the day after in most major media outlets has been 
largely negative and skeptical.  Rather than portray Rebelo's 
victory as a sign of a resurgence of Lula's political clout, 
the focus has been on the GOB's blatant campaign of 
deal-making and pork distribution used to win support for 
Rebelo from the same small, mercenary parties -- e.g., PTB, 
PP and PL -- that are also implicated in the allegations of 
vote-buying by the PT, one of the interlocking scandals 
roiling Brazil (ref).  Most newspapers are using a figure of 
reals 1.5 billion (roughly USD 80 million) in reporting on 
funds promised in recent days by the GOB for pork barrel 
amendments and other budgetary favors distributed lavishly to 
garner votes. Leading newspaper "Estado de Sao Paulo" also 
reports rumors that the GOB has promised to replace some 
small-party officials tossed from their positions because of 
scandal fall-out with new faces from the same parties.  And 
there are inevitably suspicions being raised that the GOB may 
have made other backroom promises to ease the pressure on 
deputies from the small parties who are under threat of 
formal expulsion from congress for their alleged role in the 
vote-buying scandal -- promises that may be more plausible 
with a government ally in the Chamber President's chair. 
 
6. (C) Hence the "steam roller" approach used in this contest 
by the GOB appears to many to be less a sign of Lula getting 
back on top of his political game than a shamelessly overt 
analogue to the covert "mensalao" vote-buying scheme.  As 
such, it can appear to be evidence of a philosophy of ends 
justifying means that fostered the earlier scandalous conduct 
by some PT and GOB officials, with at least a degree of tacit 
acceptance by Lula himself.  Influential op-ed writer Dora 
Kramer in her 29 September column expressed this view 
bluntly: " (The Rebelo victory) also shows why, to this day, 
President Lula Inacio da Silva has made no self-criticism, 
nor presented excuses, nor pointed to those responsible... he 
simply did not believe there was anything wrong in the fact 
that the PT doled out money to parties in exchange for their 
presence in (his) base of support in the parliament.  This is 
so much the case that it was no big deal (for Lula) to do the 
same now:  Free up money for congressional amendments to the 
budget, promise the return of positions taken from parties 
owing to corruption allegations, promise a billion reals ... 
and dive into the mud just to win a few moments of relief, 
getting his head up out of the swamp (of the continued 
scandals).... " 
 
COMMENT 
------- 
 
7. (C) The bottom line at this moment is whether Rebelo will 
be in a position to assist the government in dealing with the 
scandals that have devastated Lula's standing and 
administration for nearly five months.  Our view is that he 
will not be able to influence events profoundly in this 
regard.  While it is unquestionably better for the GOB to 
have its man in the Chamber's leadership at this volatile 
time, Rebelo is not a figure with broad political influence 
or a pugnacious personality that relishes defying the odds. 
He is loyal to Lula, but he is also a political survivor and, 
we think, an honest man and true believer in Brazilian 
institutions, especially the congress.  He seems unlikely to 
resist strong currents or passions that could be unleashed in 
the lower house should even more explosive revelations 
afflict the government in coming months. In the face of a 
broad uproar in the congress and public, he may not be able 
or even inclined to protect the president in the 
still-unlikely event of impeachment proceedings, despite the 
crucial institutional role of the Chamber President in such 
circumstances. He might slow-role some procedures, but in the 
end, we think he would fulfill his responsibilities. In sum, 
this week's win by Rebelo is encouraging to some degree for 
Lula, but Rebelo is not likely to lead dramatic progress on 
key legislation, and there is real revulsion in the media and 
public to use of methods in his GOB-backed Chamber campaign 
that are redolent of those that brought unprecedented scandal 
and disgrace to Brazilian politics.  Moreover, Rebelo may be 
Lula's man today, but in an extreme future scenario brought 
on by a deepening crisis, he could not be counted on to be 
his savior. 
 
 
BIO NOTE -- OUR FAVORITE COMMUNIST 
---------------------------------- 
 
8. (C) A native of Alagoas state and four-term deputy for Sao 
Paulo, Rebelo is a life-long leftist intellectual, affiliated 
clandestinely and later openly with the Communist Party of 
Brazil (PC do B) since the 1970s.  The PC do B today is tiny, 
witness its representation in the congress, but remains true 
to the cause on a theoretical level (its views have been 
influenced over the years by Trotsky and Mao) while 
presenting itself in the contemporary scene as a pragmatic 
champion of honest and responsive governance, especially on 
the municipal level.  Rebelo's early writings are critical of 
aspects of U.S. and western society, and he has more recently 
taken some anti-globalization positions.   Yet Rebelo 
professes to be an admirer of American democracy, is a 
student of U.S. history, and he has consistently pursued 
close and friendly relations with the Embassy (though he 
speaks no English).  Courtly and amiable, he is a regular at 
Embassy events, has had periodic contact with POL Counselor 
for years, has dined on a number of occasions with Ambassador 
and DCM, and while in Lula's cabinet, actively sought to 
assist the Mission with bilateral issues, including a thorny 
management problem related to sale of excess USG properties 
in Brazil.  We suspect he may be the first Chamber President 
with whom the Mission has had such established ties. 
Whatever Rebelo's impact on the congress or Lula's fortunes, 
it is interesting that we now should have, at this dynamic 
moment, a high degree of access and engagement with the 
Chamber's president, the third in line in succession to the 
President in Brazil's hierarchy. 
 
CHICOLA