BRAZIL'S STRUGGLE WITH CORRUPTION

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FM AMEMBASSY BRASILIA
TO SECSTATE WASHDC 0484
INFO AMEMBASSY ASUNCION
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USCINCSO QUARRY HTS PM
C 0 N F I D E N T I A L SECTION 01 OF 06 BRASILIA 05514
E.O. 12356: DECL: OADR
TAGS: KPRP, AINF, PGOV, PINR, SOCI, BR
SUBJECT: HOW CORRUPT IS BRAZIL?
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1. C — ENTIRE TEXT.
SUMMARY/INTRODUCTION
2. PRESIDENT COLLOR'S DRAMATIC APRIL RESHUFFLE OF HIS
CABINET DEFUSED THE POLITICAL DAMAGE INFLICTED BY A
SUCCESSION OF CORRUPTION CHARGES AGAINST MEMBERS OF HIS
GnvvRNMFNT vrtE ALLEGAvvnws RY PEDRO COLLOR AGAINST HIS
UNITED STATES DEPARTMENT OF STATE
REVIEW AUTHORITY: ADOLPH H KISNKR
CLASSIFICATION: CONFIDENTIAL REASON: 1.4(B), 1.4(D)
DECLASSIFY AFTER: 26 MAY 2017
DATE/CASK ID: 30 APR 2009 200503114
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UNCLASSIFIED U.S. Department of State ~ase i~o. r-~uuo-uo i ie r)oc No. C18590845 Date: 08/16/2012

UNCLASSIFIED U.S. DePartrrpgppggg[p[pg5-03114 Doc No. C18590845 Date: 08/16/2012
BROTHER, PRESIDENT FERNANDO COLLOR, RETURN THE CORRUPTION
ISSUE TO THE FOREFRONT. RATHER THAN A PROBLEM LIMITED TO
COLLOR, IT REFLECTS A WIDER AMBIVALENCE AND CHANGING
ATTITUDES IN BRAZIL TOWARD CORRUPTION.
3. "THE POLITICAL CLASS IS CORRUPT, " IS A COMMON
ASSERTION IN BRAZIL, TO THE EXTENT THAT POLITICIANS IN
GENERAL HAVE AN APPROVAL RATING OF ABOUT TEN PERCENT AND
INCUMBENTS ARE WIDELY REJECTED FOR RE-ELECTION.
PRESIDENT COLLOR, ELECTED ON AN ANTI-CORRUPTION PLATFORM,
HAS NOT RUN A SQUEAKY-CLEAN ADMINISTRATION, ALTHOUGH
COLLOR HAS RESPONDED QUICKLY WHEN THE ALLEGATIONS BECAME
TOO FREQUENT AND HIT TOO CLOSE TO HOME. SEPTEL REPORTS
ACCUSATIONS MADE BY COLLOR'S BROTHER, PEDRO, THAT THE
PRESIDENT HIMSELF USED A SHADY ALAGOAS BUSINESSMAN AS A
FRONT MAN FOR ELECTION-FIXING AND PRIVATE DEALINGS.
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BUT THE DEFINITION OF CORRUPT PRACTICES IN
BRAZIL DIFFERS SUBSTANTIALLY FROM THAT OF THE U. S.; MANY
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PRACTICES CONSIDERED CORRUPT BY AMERICANS ARE CULTURALLY
INGRAINED IN BRAZIL, AND IN MANY CASES ARE NOT ILLEGAL.
THE "CORRUPT" POLITICAL CLASS REFLECTS A SOCIETY THAT IS
DEFINED BY THE "JEITINHO, " OR INFORMAL WAY OF GETTING
MATTERS TAKEN CARE OF. FOR THIS REASON THERE IS LITTLE
BROAD-BASED REVOLT OR INDIGNATION AGAINST POLITICIANS.
THE MORE TYPICAL REACTION IS CYNICISM OR INDIFFERENCE.
4. THE AMOUNT OF CORRUPTION IN BRAZIL HAS PROBABLY BEEN
RELATIVELY CONSTANT IN THE PAST FEW DECADES. WHAT
APPEARS TO BE CHANGING IS THE EXTENT TO WHICH ELITES
RECOGNIZE THE PROBLEM AS UNACCEPTABLE AND INCOMPATIBLE
WITH STILL-EVOLVING DEMOCRATIC INSTITUTIONS. EVEN MORE
UNACCEPTABLE IS THE SPECTER OF GOVERNMENT OFFICIALS OR
THEIR CRONIES ENRICHING THEMSELVES WHILE THE REST OF THE
COUNTRY SUFFERS THROUGH A GOB-INDUCED RECESSION--WITH
HIGH UNEMPLOYMENT AND DEPRESSED WAGES. FREE AND
AGGRESSIVE MEDIA HAVE EXPOSED MUCH CORRUPTION AT HIGH
LEVELS OF GOVERNMENT. SOME BIG FISH HAVE EVEN BEEN
CAUGHT AND "FRIED." THERE IS A HIGH-LEVEL CORRUPTION
COMMISSION AT WORK AND BILLS IN CONGRESS THAT AIM TO
ADDRESS SUCH ISSUES AS FIXED BIDDING, ELECTORAL FRAUD AND
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SO ON. SEVERAL EX-MINISTERS MAY EVEN BE TRIED FOR RECENT
CH ICANE RY . BUT IN BRAZ IL THERE ARE LAWS, AND EVEN
PROVISIONS IN THE CONSTITUTION, THAT TAKE EFFECT AND
THOSE THAT DO NOT. WHAT HAS TO TAKE PLACE FOR THE LAWS
TO BE FULLY IMPLEMENTED IS A GENERATIONAL CHANGE IN
CULTURAL ATTITUDES. WE MAY BE SEEING MOVEMENT IN THAT
DIRECTION. HOWEVER, IN A COUNTRY WHERE THE
OVERWHELMINGLY POOR MAJORITY BELIEVES LAWS PROTECT ONLY
THE RICH, AND ELITES ACT AS THOUGH THEY ARE ABOVE THE
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LAW, SIGNIFICANT CHANGE WILL NOT COME EASILY. END SUMMARY.
FORMS OF CORRUPTION
5. ELECTORAL FRAUD: THIS IS ONE AREA WHERE THERE ARE
LAWS ON THE BOOKS THAT GENERALLY ARE IGNORED OR WEAKLY
ENFORCED. CULTURAL TRADITIONS, PARTICULARLY IN THE
IMPOVERISHED NORTHEAST, DICTATE THE COURSE OF A CAMPAIGN,
AND INCLUDE BUYING OF VOTES WITH CASH, OR MORE TYPICALLY
WITH BASKETS OF GOODS, T-SHIRTS, SHOES, OR EVEN MEDICAL
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SERVICES (TUBAL LIGATION OF WOMEN IS COMMON). THE 1989
PRESIDENTIAL ELECTIONS WERE GENERALLY FREE AND FAIR, BUT
THE 1990 CONGRESSIONAL AND GUBERNATORIAL ELECTIONS WERE
FRAUGHT WITH PROBLEMS IN THE NORTHEAST. FOR EXAMPLE, AT
THE HEIGHT OF THE CAMPAIGN, THE BLACK-MARKET DOLLAR RATE
IN ALAGOAS' STATE CAPITAL MACEIO WAS 60 CRUZEIROS TO ONE,
WHILE IN RIO AND SAO PAULO THE GOING RATE WAS 90 TO ONE.
AT THE TIME, NEW CRUZADO ACCOUNTS WERE BLOCKED, SO
ALAGOAS POLITICIANS BROUGHT IN BAGS OF DOLLARS TO BUY
VOTES FOR THEMSELVES AND ALLIES. THE RECENT BARRAGE OF
ACCUSATIONS BY PEDRO COLLOR AGAINST HIS BROTHER, THE
PRESIDENT, INCLUDES ALLEGATIONS ABOUT THE LATTER'S
INVOLVEMENT IN SABOTAGING THE 1990 ALAGOAS ELECTIONS.
ADDITIONALLY, LAWS CONCERNING PROCEDURES FOR TRANSPORTING
VOTERS AND CAMPAIGNING NEAR POLLING STATIONS WERE NOT
OBSERVED GENERALLY ACROSS THE COUNTRY.
6. THERE ARE MANY UNFAIR PRACTICES BUILT INTO THE
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ELECTORAL SYSTEM THAT, WHILE NOT CORRUPT PER SE, ARE
DEMORALIZING TO THE ELECTORATE. APPORTIONMENT IS SO
SKEWED THAT A FEDERAL CONGRESSMAN IN SAO PAULO STATE
REPRESENTS 30 TIMES MORE CONSTITUENTS THAN HIS
COUNTERPART IN A SMALL STATE IN THE AMAZON REGION. THE
PROPORTIONAL VOTING SYSTEM PRODUCES WINNERS WITH VOTE
TOTALS GREATLY INFERIOR TO SOME OF THE LOSERS —-DUE TO THE
COATTAIL EFFECT WHEN A PARTY HAS A BIG NAME AT THE TOP OF
ITS TICKET. CANDIDATE NOMINATION PROCEDURES ARE
TYPICALLY UNDEMOCRATIC, ESPECIALLY AT THE STATE AND
MUNICIPAL LEVEL. FINALLY, ELECTED OFFICIALS COMMONLY
HAVE QUESTIONABLE WORK HABITS: THEY SHOW UP TWO TO THREE
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DAYS PER WEEK, AND SOMETIMES COVER FOR EACH OTHER BY
ILLEGAL PROXY VOTING.
7. MIDDLEMEN: IT WAS COMMON AT THE BEGINNING OF THE
COLLOR ADMINISTRATION FOR MAYORS OF SMALL TOWNS SEEKING
FEDERAL LARGESSE TO HAVE TO GO THROUGH INTERMEDIARIES
BEFORE EARNING THE RIGHT TO SEE ANY BUDGETED FUNDS. A
POLITICIAN FROM COLLOR'S HOME STATE OF ALAGOAS TOLD
POLOFF AT THE TIME THAT COLLOR'S AND MRS. COLLOR'S
ALAGOAS CRONIES HAD ESTABLISHED A COTTAGE INDUSTRY IN
BRASILIA AS MIDDLEMEN. THE MINISTRY FOR SOCIAL ACTION,
RUN BY ONE ALAGOAS CRONY, MARGARIDA PROCOPIO, WAS THE
MOST NOTORIOUS FOR SURROUNDING ITSELF WITH MIDDLEMEN;
OTHERS WERE THE REGIONAL DEVELOPMENT SECRETARIAT, RUN BY
EGBERTO BATISTA, AND THE STRATEGIC AFFAIRS SECRETARIAT OF
PEDRO PAULO LEONI RAMOS, A BUSINESS CONTACT OF THE
PRESIDENT. COLLOR SACKED ALL THREE OFFICIALS IN RECENT
ROUNDS OF CABINET CHANGES —— RESPONDING TO A TORRENT OF
CHARGES OF INFLUENCE-PEDDLING BY THEM.
8. BRIBERY: FORMER LABOR/SOCIAL SECURITY MINISTRY MAGRI
WAS TAPE-RECORDED IN LATE 1991 EXPLAINING TO AN ASSOCIATE
HIS ACCEPTING A USDOLS 30,000 BRIBE FROM A PRIVATE
COMPANY. BRIBERY IS CLEARLY ILLEGAL AND MAGRI IS BEING
PROSECUTED. SOME COMMENTARY ON THE CASE HAS SOUGHT TO
PORTRAY MAGRI AS STUPID FOR HAVING GOTTEN CAUGHT--AND FOR
A RELATIVELY SMALL BRIBE BY LOCAL STANDARDS. (30,000
DOLLARS HAS NOW BECOME A NEW UNIT OF BRAZILIAN CURRENCY:
"ONE MAGRI. ") ALSO IMPORTANT IN THIS CASE WAS THE
DIFFICULTY THE "WHISTLE-BLOWER" HAD IN GETTING THE STORY
TOLD. COLLOR HAS BEEN CRITICIZED FOR KEEPING MAGRI IN
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OFFICE TOO LONG AFTER HE MISBEHAVED AT THE JUNE, 1991
I.L.O. CONFERENCE IN GENEVA.
9. NEPOTISM/SINECURES: NEPOTISM IS NOT ILLEGAL PER SE,
ALTHOUGH THE PRESS FREQUENTLY EMBARRASSES POLITICIANS WHO
HIRE MANY FAMILY MEMBERS FOR THEIR PRIVATE STAFFS. THIS
OCCURS IN ALL BRANCHES OF GOVERNMENT, AND AT ALL LEVELS,
ALTHOUGH COLLOR HAS NOT ABUSED THE PRACTICE IN HIS
PRESIDENCY. HIS BROTHER-IN-LAW, MARCOS COIMBRA, HAS BEEN
HIS "PRESIDENCY SECRETARY-GENERAL" SINCE THE BEGINNING OF
THE ADMINISTRATION, AND HIS WIFE, ROSANE, SERVED AS
UNPAID PRESIDENT OF THE LEAGUE OF BRAZILIAN CHARITIES.
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COLLOR HAS BEEN SEVERELY CRITICIZED FOR HIRING MANY
ALAGOAS CRONIES FOR HIGH-LEVEL POSITIONS FROM WHICH THEY
BENEFITED PERSONALLY OR IN WHICH THEY PERFORMED
INCOMPETENTLY. HOWEVER, THOSE JOBS WERE NOT SINECURES.
PAULO CESAR FARIAS, COLLOR'S CAMPAIGN TREASURER IN 1989,
HAS HAD NO APPOINTIVE POSITION IN THE ADMINISTRATION, BUT
HAS USED HIS ACCESS TO COLLOR AND TO INSIDE INFORMATION
TO BENEFIT HIS PRIVATE BUSINESSES. COLLOR'S CONTINUING
BUSINESS RELATIONSHIP WITH PAULO CESAR FARIAS, AS ALLEGED
BY COLLOR'S BROTHER PEDRO, HAS RESULTED IN BOTH
INFLUENCE-PEDDLING AND MISUSE OF PUBLIC FUNDS.
10. RIGGED BIDDING: BIDDING ON GOVERNMENT CONTRACTS
PROBABLY IS THE MOST WIDESPREAD FORM OF CORRUPTION.
EXISTING LAWS PROHIBIT "FIXING" BIDDING AND ALLOW
SOLE-SOURCE BIDS IN CASES OF EMERGENCY OR NATIONAL
INTEREST, BUT THOSE ARE THE KINDS OF LAWS THAT ARE RARELY
ENFORCED. IT IS NOT EASY TO PROVE THAT A TENDER WAS
GRANTED TO A CERTAIN BIDDER FOR REASONS OTHER THAN PRICE
AND QUALITY. THE USG VIEWED THE 1989 AWARD TO NEC FOR
THE CELLULAR TELEPHONE SYSTEM CONTRACT IN RIO AS A RIGGED
BID. THEN-COMMUNICATIONS MINISTER ANTONIO CARLOS
MAGALHAES (CURRENTLY GOVERNOR OF BAHIA) WAS HIMSELF IN
PARTNERSHIP WITH NEC'S AFFILIATES IN BRAZIL, AND TURNED
DOWN A MORE COMPETITIVE BID FROM AT & T. (MAGALHAES
APPARENTLY DOES NOT HAVE THIS KIND OF CONDUCT IN MIND
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WHEN HE OFFERS PRONOUNCEMENTS ABOUT CORRUPTION IN THE
COLLOR ADMINISTRATION. )
11. THE RECENT RIGGED-BIDDING CASE INVOLVING PURCHASE OF
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22, 000 OVERPRICED BICYCLES FROM A CURITIBA RETAILER (WITH
NO COMPETITIVE BIDS) WAS GIVEN SUFFICIENT PUBLICITY TO
CAUSE FORMER HEALTH MINISTER ALCENI GUERRA TO RESIGN.
THE STORE IN QUESTION HAD NEVER BEFORE EVEN DEALT IN
BICYCLES, BUT DID HAVE AN IMPORTANT CONNECTION TO THE
HEALTH MINISTER--WHICH AT THE TIME MATTERED MORE. GUERRA
(AND SOME OF HIS AIDES) MAY NOW FACE CRIMINAL PROSECUTION.
12. THE AWARDING OF A BID FOR A WATER TREATMENT PROJECT
AND A SEWAGE DISPOSAL CANAL IN RIO BRANCO, ACRE, TO
NORBERTO ODEBRECHT INC. IS CURRENTLY THE OBJECT OF A
CONGRESSIONAL INVESTIGATION. SOME OF THE FINANCING IS
ALLEGED TO HAVE COME ILLEGALLY FROM AN UNEMPLOYMENT
COMPENSATION FUND ADMINISTERED BY THEN LABOR MINISTER
ANTONIO MAGRI. ACRE GOVERNOR EDMUNDO PINTO WAS TO
ADDRESS THE ISSUE IN PUBLIC TESTIMONY IN BRASILIA MAY 18,
BUT WAS MURDERED IN A HOTEL ROOM IN SAO PAULO ON MAY 17.
ODEBRECHT OFFICIALS WERE ALSO AT THE HOTEL. A FEW WEEKS
EARLIER, SOME EVIDENCE ON THE ODEBRECHT CONTRACT WAS
CONSUMED BY A FIRE AT THE ACRE LEGISLATIVE ASSEMBLY--A
FIRE SUSPECTED TO HAVE BEEN IGNITED BY ARSON.
13. NARCOTICS MAFIAS: INVOLVEMENT OF NARCOTICS
TRAFFICKING ORGANIZATIONS IN POLITICS WAS ILLUSTRATED
GRAPHICALLY DURING THE RONDONIA GUBERNATORIAL ELECTION
CAMPAIGN IN 1990 AND ITS AFTERMATH. CANDIDATE OLAVO
PIRES, LONG ASSOCIATED WITH DRUG TRAFFICKING, WAS GUNNED
DOWN GANGLAND-STYLE IN OCTOBER, 1990, IN FRONT OF HIS
CAMPAIGN OFFICE. ALTHOUGH THE CASE HAS NOT BEEN
RESOLVED, AVAILABLE EVIDENCE SUGGESTS THAT HE WAS KILLED
BY A RIVAL TRAFFICKING ORGANIZATION. A WINNING
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CONGRESSIONAL CANDIDATE ON PIRES' TICKET, JABES RABELO,
WAS IMPLICATED IN DRUG TRAFFICKING AND EXPELLED FROM THE
CONGRESS IN 1991. CIRCUMSTANTIAL EVIDENCE LINKS MANY
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OTHER POLITICIANS AND MEDIA MAGNATES IN RONDONIA TO THE
DRUG TRADE. AS BRAZIL BECOMES INCREASINGLY INVOLVED IN
THE REGIONAL NARCOTICS TRADE WE CAN EXPECT MORE DRUG
MONEY TO FIND ITS WAY INTO CAMPAIGN COFFERS IN A BROAD
SWATH OF STATES--NOT JUST RONDONIA. DRUG TRAFFICKERS
OPERATE WITH RELATIVE IMPUNITY IN RIO DE JANEIRO STATE,
BASED ON A MUTUALLY BENEFICIAL MODUS VIVENDI THEY HAVE
DEVELOPED WITH THE RULING DEMOCRATIC WORKERS PARTY
(PDT). THE HIGH VOLUME OF MONEY-LAUNDERING ASSOCIATED
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WITH NARCOTICS ACTIVITIES IN RIO AND ELSEWHERE MUST ALSO
INVOLVE CORRUPTION ON ALL LEVELS OF GOVERNMENT--BUT
ESTIMATING THE ORDER OF MAGNITUDE IS NOT POSSIBLE FROM
THE FRAGMENTARY INFORMATION AVAILABLE.
14. OTHER FORMS OF CORRUPTION NOT FULLY DETAILED ABOVE
BUT ALSO COMMON IN BRAZIL INCLUDE: OVER OR UNDER-BILLING
INVOICES, PARTICULARLY FOR FOREIGN-EXCHANGE TRANSACTIONS
(E.G. , EXPORTS); INTERVENING TO GET CERTAIN CONTRACTS
PAID WHEN THERE IS A GENERAL SLOWDOWN DUE TO BUDGET
STRINGENCIES; AND A WHOLE SERIES OF COMPLEX DEVICES
RELATED TO REAL-ESTATE DEVELOPMENT. THE FACT THAT 30-40
BILLION DOLLARS WORTH OF THE BLOCKED NEW CRUZADOS WERE
"LIBERATED" BEFORE THE OFFICIAL RETURN OF THE MONEY
STARTED LAST AUGUST SUGGESTS EVEN MORE CORRUPTION. WE
WOULD CONSIDER PIRACY OF PATENTS AND COPYRIGHTS AS
CRIMINAL; BUT UNTIL BRAZIL PASSES A NEW INDUSTRIAL
PROPERTY LAW, THE PRACTICE IS NOT ILLEGAL.
EFFORTS TO ADDRESS THE PROBLEM
15. SENATOR PEDRO SIMON (PMDB/RG DO SUL) REPRESENTS THE
LEGISLATIVE BRANCH OF GOVERNMENT IN A HIGH-LEVEL WORKING
GROUP (ALSO INCLUDING PRESIDENTIAL PALACE, JUSTICE
MINISTRY, POLICE AND SUPREME COURT REPRESENTATIVES)
SEEKING TO REWRITE THE RULES ON CORRUPTION-FIGHTING.
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17. IN FACT, IN THE WEEK AFTER
~FEE CONGRESS PASSED A BILL YEAS DEFINES
EMBEZZLEMENT BY PUBLIC OFFICIALS, AND INCLUDES A
PROVISION THAT WOULD FORCE CONVICTED EMBEZZLERS TO
SURRENDER THEIR ILL-GOTTEN ASSETS, AND/OR PAY FINES. THE
NEW LAW ALSO INCREASES THE INVESTIGATORY POWERS OF THE
"TRIBUNAL DE CONTAS DA UNIAOU (TCU--A BRAZILIAN JUDICIARY
EQDIPALENY YQ QDR GENERAL ACCQDNYING OFFICE) .~~YRllDIYIQNALLY, A CQBRDPYIQN CASE EAS
CONSIDERED SUCCESSFULLY CONCLUDED IF THE PUBLIC FIGURE
COULD BE FORCED TO RESIGN. UNDER THE NEW LAW (STILL TO
BE SIGNED BY PRESIDENT COLLOR), MAGRI WOULD HAVE TO GIVE
BACK THE 30,000 DOLLARS, PLUS ANY OTHER ASSETS HE
OBTAINED ON THE SLY--ESTIMATED BY UVEJAU MAGAZINE TO BE
WORTH OVER A MILLION DOLLARS. ANOTHER BILL MAKING ITS
WAY THROUGH CONGRESS WOULD TIGHTEN THE RULES ON
COMPETITIVE BIDDING.
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18. EVEN UNDER CURRENT LAW, A JUDGE IN RIO DE JANEIRO,
NESTOR JOSE DO NASCIMENTO, IS BEING PROSECUTED FOR
ORGANIZING A SCHEME TO DEFRAUD THE BRAZILIAN SOCIAL
SECURITY SYSTEM OF ROUGHLY 150 MILLION DOLLARS. THE
JUDGE AND SIX OF HIS COLLABORATORS ARE ALREADY BEHIND
BARS AWAITING TRIAL. THE TOTAL NUMBER OF BENEFICIARIES
OF THE SCHEME IS UNKNOWN. VISAO MAGAZINE REPORTS THAT
THIS IS THE FIRST TIME THAT A JUDGE OF NESTOR DO
NASCIMENTO'S STATURE HAS SAT IN THE DEFENDANT'S SEAT IN A
COURTROOM, ALTHOUGH A NUMBER OF LOWER JUDGES AND LAWYERS
WERE JAILED LAST YEAR FOR SIMILAR OFFENSES INVOLVING THE
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BADLY-LOOTED SOCIAL SECURITY SYSTEM.
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19. THE MEDIA CONTINUE TO REPORT AGGRESSIVELY ON CASES
OF CORRUPTION, EVEN WHEN THE EVIDENCE IS ONLY
CIRCUMSTANTIAL. RECENT CASES INCLUDE AN ALLEGATION THAT
FEDERAL POLICE SECRETARY ROMEU TUMA TURNED A BLIND EYE TO
A SMUGGLING OPERATION IN FOZ DO IGUACU, AND THAT FORMER
STRATEGIC AFFAIRS SECRETARY PEDRO PAULO LEONI RAMOS HAD
SET UP AN ELABORATE SCHEME WITHIN PETROBRAS THAT WOULD
AUTOMATICALLY SKIM OFF A PERCENT OF PROFITS FROM OVERSEAS
OPERATIONS. THE FREQUENCY OF REPORTS OF CORRUPTION
DURING THE COLLOR ADMINISTRATION CAN IN PART BE
ATTRIBUTED TO AN UNFETTERED FREEDOM OF THE PRESS, RATHER
THAN A MORE CORRUPT GOVERNMENT THAN ITS PREDECESSORS.
THE MEDIA ALSO FINDS CORRUPTION REPORTING IRRESISTIBLE IN
AN ADMINISTRATION RUN BY A PRESIDENT WHOSE PRINCIPAL
CAMPAIGN THEME WAS CORRUPTION-FIGHTING.
COMMENT
20. THE SIMON COMMISSION IS A SERIOUS EFFORT TO ADDRESS
CORRUPTION IN BRAZIL, PARTICULARLY THE ISSUE OF
IMPUNITY. THE CONGRESS AND PUBLIC PROSECUTOR'S OFFICE
HAS ALSO RESPONDED CORRECTLY, AND QUICKLY, TO THE CURRENT
SPATE OF ALLEGATIONS MADE BY THE PRESIDENT'S BROTHER.
MOST POLITICIANS UNDERSTAND THAT THE LONG-TERM SURVIVAL
OF DEMOCRACY IN BRAZIL REQUIRES AUTOMATIC, CONSTITUTIONAL
MEANS FOR ADDRESSING CASES OF CORRUPTION.
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WAIVED IF THEY ARE A HINDRANCE. IT IS THIS ATTITUDE THAT
MUST CHANGE IF CORRUPTION IS TO BE FUNDAMENTALLY
ADDRESSED IN BRAZIL.
21. THE OTHER SIDE OF THE COIN IS THAT CORRUPTION IN
BRAZIL DOES NOT APPROACH THE KIND AND MAGNITUDE WE
UNDERSTAND EXISTS IN VENEZUELA AND PERU. THE "CORRUPTION
ISSUE" HERE HAS NOT SPAWNED ANTI-DEMOCRATIC PLOTTING.
NOR IS THERE SUPPORT FOR THE NOTION THAT COLLOR'S MARKET
OPENING POLICIES HAVE CREATED NEW OPPORTUNITIES FOR
ILLEGITIMATE ACTIVITIES. HOWEVER, DURING A RECESSION
CAUSED BY THE GOB'S OWNAUSTERITY PLAN, NEWS OF
CORRUPTION BY POLITICIAN AND THEIR ASSOCIATES HAS
GENERATED WIDESPREAD YNICISM. POLLS INDICATE THAT THIS
YEAR'S MUNICPAL ELECTIONS WILL HAVE A RECORD HIGH
ABSTENTIO RATE--DESPITE LAWS THAT MAKE VOTING OBLIGATORY.
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NSCE —00 OIG-01
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INR-01 L-03 ADS-00
OIS-01 PM-01 P-01
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R 272033Z MAY 92
AMEMBASSY BOGOTA
AMEMBASSY CARACAS
AMEMBASSY LA PAZ
AMEMBASSY LIMA
AMEMBASSY MEXICO
AMEMBASSY SANTIAGO
AMCONSUL RECIFE
AMCONSUL SAO PAULO
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BRAZIL'S STRUGGLE WITH CORRUPTION

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