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Viewing cable 07BRASILIA1670, SCANDAL INDICTMENTS AGAINST EX-OFFICIALS SEEN AS A

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Reference ID Created Released Classification Origin
07BRASILIA1670 2007-08-31 16:44 2011-07-11 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Brasilia
VZCZCXRO6095
RR RUEHRG
DE RUEHBR #1670/01 2431644
ZNR UUUUU ZZH
R 311644Z AUG 07
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 9862
INFO RUEHAC/AMEMBASSY ASUNCION 6266
RUEHBU/AMEMBASSY BUENOS AIRES 4979
RUEHMN/AMEMBASSY MONTEVIDEO 7001
RUEHSG/AMEMBASSY SANTIAGO 6400
RUEHRG/AMCONSUL RECIFE 7092
RUEHRI/AMCONSUL RIO DE JANEIRO 5030
RUEHSO/AMCONSUL SAO PAULO 0707
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
UNCLAS SECTION 01 OF 02 BRASILIA 001670 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV BR
SUBJECT: SCANDAL INDICTMENTS AGAINST EX-OFFICIALS SEEN AS A 
STEP AGAINST IMPUNITY 
 
REF: A. 06 BRASILIA 1996 
 
     B. 06 BRASILIA 2027 
     C. 06 BRASILIA 2064 
     D. 06 BRASILIA 2246 
 
1.  (U) Summary.  In rulings seen by Brazilians as an 
important step forward in countering impunity, the Brazilian 
Supreme Court has allowed prosecution to proceed against all 
40 individuals accused in the "mensalao" ("monthly payola") 
political scandal that rocked the Lula presidency in 2005. 
In hearings and multiple rulings over several days, 
concluding on August 28, the Court ruled against former 
presidential palace minister Jose Dirceu, along with former 
senior Workers Party (PT) officials and current and former 
federal deputies from five parties in the government 
coalition.  A blow to the PT and President Luiz Inacio Lula 
da Silva (Lula), the decisions ensure that a series of 
long-lasting high profile court cases will keep the mensalao 
and its defendants in the news for a long time - probably 
into the 2010 national elections cycle.  Although President 
Lula has always escaped incrimination in the scandal and his 
personal popularity remains high, many Brazilians believe he 
approved the illegal congressional vote-buying scheme.  With 
convictions widely expected, the Supreme Court's image and 
reputation are now also at stake before the public.  End 
summary. 
 
2.  (U) The mensalao, which broke two years ago with 
revelations of PT payoffs to congressmen in exchange for 
their votes on key legislation, reached a turning point in a 
week of hearings in which the Supreme Court (Supremo Tribunal 
Federal), issued multiple rulings that put all 40 of the 
accused in the defendant's dock.  Jose Dirceu, chief of the 
Civil Household during Lula's first term; Delubio Soares, 
former PT treasurer; Jose Genoino, former PT president and a 
sitting federal deputy; Silvio Pereira, former PT executive 
secretary; Marcos Valerio, a publicist who handled financial 
 
SIPDIS 
transactions; Roberto Jefferson, the former federal deputy 
who revealed the vote-buying scheme; Anderson Adauto, former 
Transportation Minister; Luiz Gushiken, former Government 
Communications Secretary; and a number of current and former 
federal deputies now face multiple charges that include 
embezzlement, active and passive corruption, undeclared 
international financial transactions, money laundering, and 
fraudulent public administration.  The most dramatic aspect 
) and potentially the most politically damaging ) was the 
Court's unanimous acceptance of rapporteur Judge Joaquim 
Barbosa's recommendation that Dirceu, Soares, Genoino, and 
Pereira be charged with forming a criminal gang. 
 
3.  (SBU)  The trials could take three years, according to 
Marco Aurelio Mello, one of the STF judges.  In conversations 
with poloffs, political analysts and a judge agreed that a 
"short" three-year process was likely.  Moreover, the PT may 
push for early verdicts, as a three-year process would have 
verdicts being handed down during the final stretch of the 
presidential campaign. 
 
4.  (U)  The Court has tried political corruption cases 
before, but it has never convicted anyone.  This time, 
however, even though Lula appointed seven of the eleven 
judges, many informed observers expect convictions.  During 
the hearings last week, a photo scoop by a photographer from 
O Globo, a leading national daily, revealed an embarrassing 
instant message thread between two judges.  The revelation 
was a wake-up call for the Court.  The judges apparently were 
in violation of rules prohibiting prior discussion and 
agreement on decisions.  As a result of the slip and the high 
profile of the case there is a sense here that the Court 
itself is on trial before the public. 
 
5.  (SBU) Comment:  The Court's decision to go ahead with 
prosecution guarantees years of mensalao trial reporting, a 
constant reminder to the public that the leaders of the PT -- 
which once touted itself as untainted by corruption -- 
conceived and carried out a massive, multi-million dollar 
congressional vote-buying scheme.  While the scandal did not 
affect Lula's re-election last year (refs A, B, C, and D) and 
he remains personally popular, the trials will be a thorn in 
the government's and the PT's side, and could hurt the PT in 
October 2008 municipal and state elections and October 2010 
national elections, heralding a change in public expectations 
 
BRASILIA 00001670  002 OF 002 
 
 
of politicians and the courts.  In a country where impunity 
is considered one of the top social evils, contributing to 
the high crime rate and tolerance for political corruption, 
convictions in the mensalao trials could also increase public 
confidence in the courts, and would be widely seen as a legal 
and political watershed. 
 
Chicola