Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 05BRASILIA949, BRAZIL: CHIPPING AWAY AT THE FISCAL RESPONSIBILITY

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #05BRASILIA949.
Reference ID Created Released Classification Origin
05BRASILIA949 2005-04-06 17:46 2011-07-11 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Brasilia
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 03 BRASILIA 000949 
 
SIPDIS 
 
SENSITIVE 
 
NSC FOR BREIER, RENIGAR 
TREASURY FOR OASIA - DAS LEE AND FPARODI 
STATE PASS TO FED BOARD OF GOVERNORS FOR ROBITAILLE 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D 
USDOC FOR 3134/ITA/USCS/OIO/WH/RD/DDEVITO/DANDERSON/EOL SON 
 
E.O. 12958: N/A 
TAGS: ECON EFIN PGOV EINV BR
SUBJECT: BRAZIL: CHIPPING AWAY AT THE FISCAL RESPONSIBILITY 
LAW 
 
REF:  Brasilia 321 
 
This cable is Sensitive but Unclassified, please protect 
accordingly. 
 
1. (SBU) Summary.  Faced with the awkward prospect of 
enforcing the Fiscal Responsibility Law (LRF) against 
former Sao Paulo mayor, friend of Lula and prominent 
Workers' Party (PT) figure Marta Suplicy (reftel), the GoB 
has been less than coherent.  Finance Minister Palocci sent 
to Congress a letter acknowledging that Suplicy had 
violated the law in taking out a loan to finance a public 
lighting program without the Finance Ministry's prior 
approval.  Then, in an apparent about face, the GoB issued 
an executive decree that retroactively created an exception 
to the LRF for public investments of just that sort. 
Despite Lula Administration efforts to shield her, the 
matter may soon be out of the GoB's hands since Suplicy's 
replacement as Sao Paulo mayor, Jose Serra of the 
opposition PSDB, has forwarded to the municipal Accounts 
Tribunal (a fiscal oversight body) the final financial 
report for 2004, Suplicy's last year in office, indicating 
that her administration left uncovered obligations of over 
a billion Reals.  In addition, State Deputy Alberto 
Goldman, the President of the Sao Paulo PSDB party filed a 
complaint with the Federal Public Prosecutor's office 
listing her alleged LRF violations.  Prosecutors, we are 
told, are itching to get their hands on such a high profile 
case.  For her part, Suplicy is reportedly considering a 
run in 2006 under the PT banner for the Sao Paulo state 
governorship.  While the GoB's actions in this case have 
chipped away at the integrity of the LRF system, they have 
not yet struck its foundations.  End Summary. 
 
Marta's Law 
----------- 
 
2. (SBU) Apparent violations of the fiscal responsibility 
law (LRF) by Lula associate and prominent PT member Marta 
Suplicy during her 2001-2004 tenure as mayor of Sao Paulo 
(reftel) have put the GoB on the defensive.  Finance 
Minister Palocci admitted in a January letter to Congress 
that one Suplicy administration action, the contracting of 
debt to fund a public lighting program without prior 
Finance Ministry approval, had violated LRF provisions 
restricting such actions by cities whose debt stock is 
above 120% of revenues.  Shortly thereafter the GoB 
inserted in Provisional Measure (MP) 237, a decree dealing 
primarily with other issues, a few paragraphs that created 
a retroactive exemption to the LRF specifically for the 
type of investment in question.  While four other cities 
also benefited from this rule change, no one doubts that 
the measure was meant to create an exemption for Suplicy's 
Sao Paulo administration.  (Note: Meant to deal with urgent 
problems, provisional measures are a peculiarity of the 
Brazilian system.  They are executive decrees with the 
force of law that take effect immediately upon publication. 
To become permanent legislation, however, they must be 
ratified by Congress, which in turn is required to vote on 
them within a defined time period.  End note.)  The MP has 
not yet been voted out of Congress, where some have 
questioned its constitutionality. 
 
3. (U) The Finance Ministry separately issued a resolution 
changing the interpretation of "mid-course" debt ceilings, 
set by Congress at the same time the LRF was passed, so 
that they would not be binding for another decade.  The 
debt ceilings at issue were set by Congress to limit 
states' and municipalities' ability to take out new debt. 
The GoB's action appears aimed at bypassing a somewhat 
arcane technical miscalculation in the inflation indexing 
that was used to correct state and city nominal debt stocks 
for inflation (reftel).  The LRF uses an exchange rate- 
sensitive inflation index, the IGP-DI, to adjust for 
inflation the debt that states and cities owe the Federal 
Government.  State and municipal revenues, however, tend to 
closely track consumer inflation levels, which are much 
less exchange rate sensitive.  This mismatch makes it 
possible for a state or municipality's debt to the GoB to 
grow much more quickly than its revenues, even without new 
debt.  And, while Sao Paulo did take out some new debt, the 
bulk of growth in its debt stock was due to this indexation 
problem, setting the stage for a somewhat artificial 
violation of the Congressionally-set debt ceilings. 
 
4. (SBU) Raul Velloso, a financial consultant and economist 
linked to new Sao Paulo mayor Jose Serra acknowledged to 
Econoff April 1 that the indexation mismatch needed to be 
addressed.  He argued, however, that the GoB's approach, 
which boiled down to saying the debt ceilings will not be 
enforced in the near term, failed both to address the 
underlying technical problem and created the distinct 
impression that it was doing so to protect Suplicy.  (Note: 
Most media that covered the issue sounded a note of alarm 
on precisely that point.)  Velloso, however, was not 
worried that the vitiation of the debt ceilings would open 
the way for uncontrolled spending by the states and 
municipalities.  He pointed out that the LRF's real 
procedural teeth were the requirements for prior Finance 
Ministry approval for contracting debt and the Federal 
Government's ability to withhold transfer payments to the 
states and municipalities should they miss debt payments. 
 
5. (SBU) Reflecting on the Suplicy case, UN Economic 
Commission economist Carlos Mussi told Econoff that the 
GoB's actions raised clear concerns about its ability to 
maintain fiscal discipline among states and municipalities. 
Now that one exception had been made, he predicted that 
governors and mayors would be lining up at the Finance 
Ministry's door asking that they be given the similar 
treatment.  While concerned, Mussi did not believe the GoB 
had undermined the foundations of the LRF. 
 
Out of the GoB's Hands? 
------------------------ 
 
6. (U) The Serra administration in Sao Paulo, meanwhile, 
has sent to the municipal-level Accounts Tribunal (a 
judicial branch fiscal oversight body) the final report on 
the city's accounts for 2004, the last year of the Suplicy 
administration.  According to the Serra administration's 
calculations, Suplicy left over a billion Reals of bills to 
be paid, but only 379 thousand Reals cash on hand in city 
coffers at the end of 2004.  It is a violation of the LRF 
for elected officials to leave unpaid obligations without 
the resources to cover them at the end of their 
administration.  The Accounts Tribunal has 90 days to 
evaluate the financial accounts before deciding whether to 
accept or reject the annual report.  If irregularities are 
found in the accounts, the Tribunal is expected to refer 
them to the Public Prosecutor's office (Ministerio Publico) 
for action. 
 
7. (SBU) Independently, the state president of the PSDB in 
Sao Paulo last week filed a complaint with the Federal 
Prosecutor's office, with a case file on alleged breaches 
of the LRF under the Suplicy administration.  According to 
Velloso, the primary accusation is that Suplicy did not 
leave funds to cover unpaid bills, a violation of the LRF. 
Velloso felt this alleged breach of the LRF, which includes 
the supplier debt that Suplicy reneged on as she left 
office (reftel), was much more serious than the separate 
violations of the debt ceiling and the procedural failure 
to get Finance Ministry approval for the public lighting 
program loan.  MP 232 and the separate Finance Ministry 
resolution addressing the latter two points do not shield 
Suplicy from prosecution under the former.  Velloso 
believed that the Municipal Accounts Tribunal would forward 
the case to the Public Ministry for prosecution within a 
few months.  Velloso said the prosecutors were salivating 
at the thought of getting their hands on such a high 
profile case, implying that they would move the case to 
trial. 
 
Comment 
------- 
 
8. (SBU) Other than looking the other way, the GoB appears 
not to have a strategy to deal with the Suplicy problem. 
This likely reflects the many directions it is being pulled 
by political forces and, within some parts of the GoB, a 
desire not to undermine the LRF.  Those actions they have 
taken so far to protect Suplicy, however, have been 
unalloyed bad news.  We nevertheless agree with Mussi that 
the foundations of the LRF system have not yet been shaken. 
The LRF system was designed to have a life of its own and 
gave other actors, such as the courts, the ability to press 
enforcement action.  So, Suplicy may yet have her day in 
court.  That alone would help shore up the LRF's 
credibility.  On the parallel political track, the case 
promises to be a practice match for the 2006 elections, 
with the PSDB working to undermine the PT party's, and 
thereby the Lula Administration's carefully cultivated 
image of fiscal responsibility. 
 
9. (U) This cable was coordinated with Consulates Sao Paulo 
and Rio de Janeiro. 
 
CHICOLA