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Viewing cable 06BRASILIA1255, BRAZIL'S CPI DOS BINGOS ENDS WITHOUT A BANG

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Reference ID Created Released Classification Origin
06BRASILIA1255 2006-06-22 16:01 2011-07-11 00:00 UNCLASSIFIED Embassy Brasilia
VZCZCXRO7694
PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHNG
RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHBR #1255/01 1731601
ZNR UUUUU ZZH
P 221601Z JUN 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 5853
INFO RUEHRI/AMCONSUL RIO DE JANEIRO 2331
RUEHSO/AMCONSUL SAO PAULO 7255
RUEHRG/AMCONSUL RECIFE 5009
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
UNCLAS SECTION 01 OF 02 BRASILIA 001255 
 
SIPDIS 
 
PLEASE PASS TO BPOPP WHA/BSC 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON BR
SUBJECT: BRAZIL'S CPI DOS BINGOS ENDS WITHOUT A BANG 
 
REF: A) BRASILIA 877 
 B) BRASILIA 551 
 C) 05 BRASILIA 3106 
 D) 05 BRASILIA 2902 
 
BRASILIA 00001255  001.2 OF 002 
 
 
1.  Summary:  The series of Congressional investigations into 
corruption within President Lula's government came to an 
anticlimactic end on Monday with the issuance of the final report of 
the last investigative commission, the CPI dos Bingos.  While 
calling for the indictment of several figures close to the 
President, it did not ask for further action against former chiefs 
of staff Dirceu and Carvalho, despite the frequent citations of 
their names in the final report.  The end of a process that at one 
time appeared to threaten Lula's re-election, if not impeachment, 
came as Lula's approval ratings and re-election prospects continue 
to rise, and Brazilians -- long since weary of the whole affair -- 
are much more focused on the weight and age problems of star soccer 
players than on the financial shenanigans of Lula's government and 
political party.  End Summary. 
 
2.  After close to a year of testimony and 80 meetings, the 
Brazilian Congress' Commission of Public Inquiry (CPI) dos Bingos 
(reftels) closed in unsensational fashion on Monday, June 19, with 
the issuance of a final report, calling for the indictment of 79 
individuals and 4 businesses.  Originally intended to investigate 
illegal PT campaign financing via diversions of funds from bingo 
houses in 2002, the Commission ended up scrutinizing a variety of 
activities linked to members of the government including corruption, 
coercion and abuse of public authority.  Many of the individuals 
were closely linked to President Lula da Silva, although he was 
never directly implicated in the myriad of "plausible" wrong-doing. 
 
 
3.  While the opposition scored a nominal victory with the inclusion 
of such PT stalwarts as ex-finance minister Antonio Palocci and 
ex-campaign treasurer and Lula confidante, Paulo Okamotto, the 
report failed to call for indictments against ex-Minister/Chief of 
Staff Jose Dirceu and ex-Chief of Staff Gilberto Carvalho.  The 
report is being forwarded to the Brazilian Public Ministry (Attorney 
General's Office) which has the power to indict the individuals 
based on the Commission's recommendations. 
 
4. The Committee suggested indicting Palocci for a variety of abuses 
committed during his tenure as the mayor of Ribeirao Preto, not the 
least of which includes forming a criminal organization, stealing 
public funds, money laundering and general administrative 
impropriety.  Okamotto, despite a dearth of evidence against him, 
was recommended for indictment for money laundering, tax evasion and 
paying dividends to Lula during his tenure as the PT's campaign 
treasurer.  The CPI had previously tried unsuccessfully to gain 
access to Okamotto's bank records, but was rebuffed by the courts 
for lack of evidence supporting the request. 
 
5.  Lula's name was left off of the list of recommended indictments 
due to a lack of reliable evidence tying him to any of the crimes. 
For their part, Dirceu and Carvalho were spared as part of a 
political compromise to win votes for the final report.  Garibaldi 
Filho, the report's author, clarified that he was not defending 
their innocence, he was just not able to qualify the mens' actions 
as public graft.  Their names, however, were cited throughout the 
report in connection to multiple crimes. 
 
6.  While the CPI has ended, it awaits to be seen, how the Public 
Ministry will handle the report.  Often called the CPI of the End of 
the World because it highlighted such a large scope of purported 
abuses within Lula's administrative hierarchy, the extent of the the 
report's undertaking may be a loophole that various figures can use 
to escape further inquiry.  While Tiao Viana, one of the Committee's 
two PT members, noted that it is not the government's intention to 
send the verdict to the Brazilian Supreme Court (STF), he said that 
it would be justified in doing so.  The argument against forwarding 
the report is that the CPI failed to restrict its investigations to 
crimes associated with the bingos finance scandal and, therefore, 
overstepped its jurisdiction.  Indeed, at one point several months 
ago, President Lula scornfully observed that he was still waiting 
for the CPI dos Bingos to take testimony from a bingo house 
operator.  Okamotto, it is expected, will appeal to the STF, "to 
prove my innocence against calumny and the political fight that has 
transformed this CPI". 
 
7.  Comment:  The general lack of heat or light surrounding the 
release of the CPI's final report stands in stark contrast to the 
situation only six months ago, when the three ongoing Congressional 
investigations, buttressed by unending press revelations of alleged 
wrongdoing, seemed to have doomed President Lula's re-election bid. 
There was even a time when the prospect of impeachment seemed not 
that unlikely.  That is all a distant memory now, as President 
Lula's approval ratings continue to climb and his negative ratings 
 
BRASILIA 00001255  002.2 OF 002 
 
 
continue to fall.  With the press and public focusing the majority 
of its attention on the minutia (or lack thereof on the part of one 
star player) of every vagary of the Brazilian World Cup team, we do 
not expect the latest report to have a significant impact on the 
future of President Lula or his workers party. 
 
CHICOLA