This record is a partial extract of the original cable. The full text of the original cable is not available.

S E C R E T SECTION 01 OF 03 BRASILIA 000785 
 
SIPDIS 
 
NOFORN 
 
E.O. 12958: DECL: 03/22/2015 
TAGS: PGOV PREL PINR BR
SUBJECT: ALLEGATIONS OF FARC FUNDING TO LULA'S ELECTION 
CAMPAIGN 
 
REF: REITER-WHA/BSC E-MAILS OF 3/15-22/2005 
 
Classified By: POLOFF RICHARD REITER FOR REASONS 1.4B AND D. 
 
¶1. (C) SUMMARY.  In recent issues, Brazilian weekly 
newsmagazine VEJA ran stories outlining an alleged plan by 
Colombia's FARC to funnel US$5 million to the 2002 election 
campaign of Brazilian President Lula da Silva and his 
Workers' Party (PT).  While the timing and sourcing of the 
VEJA stories suggest that they were planted for political 
reasons, the stories are not wholly fabricated.  It seems 
likely that the reported April 2002 meeting between a FARC 
representative and PT party members took place and that the 
Brazilian Intelligence Agency (ABIN) conducted an extensive 
inquiry.  However, it does not appear that any money changed 
hands.  The fact that the story is being leaked now, instead 
of during the tense 2002 campaign when it could have caused 
the most damage to Lula's campaign, suggests that it is a 
product of current bureaucratic infighting within ABIN and 
the GoB.  END SUMMARY. 
 
VEJA BREAKS FARC STORY 
---------------------- 
¶2. (C) In its March 16 issue, Brazilian newsmagazine VEJA ran 
a cover story ("FARC's Tentacles in Brazil") that described 
an April 13, 2002 meeting on a ranch near Brasilia between a 
FARC representative in Brazil, Francisco Antonio CADENAS (aka 
Father Oliverio Medina), and some thirty "leftists" --mostly 
members of Brazil's Workers' Party (PT).  At this meeting, 
Cadenas reportedly laid out a plan to funnel US$5 million 
into PT coffers by laundering it through Trinidad and Tobago 
and into the accounts of 300 Brazilians linked to the PT, who 
would then turn the money over to the Workers' Party as 
private contributions.  The article states that the Brazilian 
Intelligence Agency (ABIN) had an operative at this meeting 
and developed a secret file, part of which the VEJA reporters 
saw.  The story notes that there is no evidence that the 
money was ever transferred, and that several of those who 
were at the meeting, including the FARC's Cadenas, denied to 
reporters that money ever changed hands. 
 
¶3. (C) The article also notes that in 2003, Federal Deputy 
Alberto Fraga (PTB-Brasilia) announced in the Chamber of 
Deputies that unnamed ABIN officers had come to him with 
secret information about the April 2002 FARC-PT meeting. 
 
SIPDIS 
Fraga, who is not widely-respected in Congress, attempted to 
open a congressional inquiry but could not round up enough 
signatures on the floor. 
 
SENATE HEARS FROM INTELLIGENCE CHIEFS 
------------------------------------- 
¶4. (C) In response to the first VEJA article, the Joint 
Intelligence Oversight Committee in the Brazilian Congress 
held hearings on March 17, convoking ABIN chief Mauro Marcelo 
and General Jorge Armando Felix, President Lula's chief 
intelligence advisor.  They testified that ABIN was aware of 
the April 2002 meeting and had investigated it, but the 
investigation ultimately was shelved when nothing substantial 
turned up.  General Felix dismissed the report about the $5 
million as "a rumor" and said the agency classified it as 
"secret" to avoid leaks that, in the heat of the 2002 
campaign, would have appeared purely political.  The two also 
testified that the internal ABIN documents referred to in the 
VEJA article were forged, as they did not comply with agency 
formatting rules.  Marcelo noted, "What was published is a 
mixture of half-truths and half-lies.  We do not have any 
official documents that the meeting took place."  Felix noted 
that, the April 2002 meeting aside, ABIN will closely monitor 
FARC activities in Brazil. 
 
 
¶5. (C) Federal Deputy Fraga later admitted that the documents 
provided to him by his ABIN source could have been forged, 
but that he had further secret documents in his possession. 
(Note: Fraga is now being forced out of the PTB party in part 
because party leaders are unhappy with his activities in this 
case.  End note.)  Opposition party leaders were circumspect 
at day's end and seemed disinclined to open a formal inquiry 
in Congress.  The committee chairman, Senator Cristovam 
Buarque (PT-Brasilia), will consider whether to hold a 
closed-door hearing to review the other documents Deputy 
Fraga says he has in his possession and possibly to hear 
testimony from ABIN officers and operatives. 
 
SECOND VEJA ARTICLE 
------------------- 
¶6. (C) In its next edition, dated March 23, VEJA ran a second 
article ("They Know Everything") indicating that ABIN's 
knowledge of the April 2002 meeting was more detailed than 
previously disclosed.  VEJA interviewed the operative ABIN 
had infiltrated into the 2002 meeting as well as the ABIN 
officer who handled the case and reported that the whole case 
was taken very seriously by the agency, came to the attention 
of senior officials, and was investigated thoroughly. 
However, this article also did not find evidence that the 
FARC money had ever changed hands, though the ABIN case 
officer, Colonel Eduardo Adolfo Ferreira, is quoted saying 
that with help from the Federal Police, ABIN got copies of 
three payment orders adding up to US$1 million that may have 
been part of a FARC transfer.  Separately, Colombian Vice 
President Francisco Santos was reported to have said that 
FARC shipped cocaine through Brazil but he had no information 
about any transfer of the US$5 million in question. 
 
COMMENT - BUREAUCRATIC SMOKE AND FIRE 
------------------------------------- 
¶7. (S/NF) This story has both smoke and fire, stoked by a 
press that does a good job of digging up facts (and turning 
up hidden witnesses) but also has papers to sell.  From the 
first revelation in VEJA magazine, the story has had the feel 
of a political plant.  What seems uncontested is that the 
FARC official and PT members met in April 2002 and that ABIN 
knew about the meeting and investigated it, as ABIN sources 
have confirmed to mission elements.  These same sources say 
no direct evidence was developed that the US$5 million was 
transferred by FARC to the PT.  Financial scandals break 
every week in Brazil --accompanied by great clamor from 
opposition parties and law enforcement officials.  Banking 
transactions and financial documents are quickly splashed 
across the front pages.  The fact that this case is three 
years old and no financial smoking guns have emerged, while 
opposition politicians and the other press outlets seem 
remarkably uninterested in pursuing what should be a 
high-profile case, suggests that the VEJA articles may be 
exaggerating the real level of FARC-PT contacts.  Yet nobody 
is ruling anything out.  Lula's Communications Secretary, 
Luiz Gushiken, pointed out that "It is impossible to know 
what every one of 800,000 PT members is doing". 
 
¶8. (S/NF) The FARC-PT meeting occurred as campaigning for the 
2002 elections was heating up and Lula's campaign gained 
steam.  This raises the question, if ABIN and the 
then-Cardoso administration were aware of something as 
explosive as a FARC-PT link in the run-up to the election, 
why was this not leaked immediately to damage Lula's campaign 
against their preferred candidate?  After all, the Cardoso 
administration is believed to have torpedoed another 
candidate, Roseana Sarney, in April 2002 by ordering a police 
raid on her husband's office.  Thus, the Brazilian political 
questions are less explosive than the original story:  why 
the case was not made public in the midst of the 2002 
campaign, why it was made public now, and why senior ABIN 
officials are publicly indicating that they did not take the 
case terribly seriously in 2002, when other ABIN sources tell 
mission elements that there was in fact a thorough 
investigation.  Post believes part of the answer is 
bureaucratic infighting.  ABIN chief Mauro Marcelo was 
appointed by Lula after a career as a Sao Paulo police 
officer, and he is still distrusted by some in the military 
and ABIN, who may have leaked the story to discredit him and 
Lula.  (Note, a few weeks ago there was a similar leak that 
ABIN agents would travel to Cuba for professional exchanges.) 
 Other animosities have been stoked because the 
administration allows FARC to send representatives to Brazil 
(including a delegation at January's World Social Forum in 
Porto Alegre) over the objections of the Colombian 
government.  Unless there are further, concrete disclosures, 
this case may go the way of most Brazilian mini-scandals and 
be forgotten in a few weeks. 
¶9. (C) This cable has been cleared with Embassy ORA. 
DANILOVICH