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

UNCLAS SECTION 01 OF 02 BRASILIA 003382 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON BR
SUBJECT:  BRAZIL CORRUPTION SCANDAL UPDATE, WEEKS OF 19-29 
DECEMBER 2005 
 
REF.: BRASILIA 03286 AND PREVIOUS 
 
¶1. (U) Introduction:  A controversial decision to call an 
extraordinary session of Brazil's congress during the 
traditional holiday recess facilitated the continued 
investigation of Brazil's interlocking political scandals, 
now approaching their seven month in the headlines (ref). 
Prime developments follow below. 
 
CPI REPORT CONFIRMS BRIBE SCHEME 
--------------------------------- 
 
¶2. (U) On December 21, the rapporteur of the Post Service 
CPI (the lead congressional committee investigating 
Brazil's illegal election finance/bribery scandals), Deputy 
Osmar Serraglio, released a preliminary report confirming 
the existence of the vote-buying scheme in the Brazilian 
Congress.  The 411-page document concludes that PT moneyman 
Marcos Valerio was favored by the government in public 
contracts, and, in return, used the money from these public 
contracts to finance the party-switching and vote-buying 
schemes that the PT party and GOB used to shore up its 
congressional base.  Serraglio publicly stated that he is 
convinced that a corruption system was implemented in the 
Congress and presented a list of payments regularly made by 
Valerio as evidence to support his claims.  However, 
members of the governing coalition criticized his report: 
the Minister of Institutional Relations, Jacques Wagner, 
and the President of the Chamber of Deputies, Aldo Rebelo, 
continued to insist that the scheme's existence had not 
been proven.  President Lula da Silva also stated that 
there is no proof that the vote-buying scheme existed.  In 
response, the President of the Postal Service CPI, Senator 
Delcidio Amaral, said that the President should read the 
committee's report. 
 
CONGRESS CALLED INTO SPECIAL SESSION: PLENARY REMAINS EMPTY 
--------------------------------------------- -------------- 
 
¶3.  (U) The Brazilian congressional recess period begun on 
December 16 and will last until February 14, but for a cost 
of almost 100 million reais (approximately 40 million 
dollars), both houses called their congressmen into special 
session.  The purpose of the "extraordinary convocation" 
was to allow the functioning of the House Ethics Committee, 
the Postal Service CPI, the technical committees, and the 
Joint Budget Committee.  Only after January 13 will the 
plenary start voting on pending bills and impeachment 
processes.  According to congressional rules, deputies and 
senators will receive two extra salaries during the period 
of special sessions; however, those who miss sessions 
forfeit their pay, and those who miss a third or more of 
the sessions are liable to loss of mandate.  Nonetheless, 
during the first two weeks of the special session, few 
congressmen worked and, for the first time since 1999, the 
government will start the year without approving the annual 
budget.  In addition, the Ethics Committee decided to go on 
recess until January 9.  Salaries have not been forfeited. 
 
CPI INVESTIGATES LIST OF 700 PEOPLE INVOLVED IN THE VOTE- 
BUYING SCHEME 
--------------------------------------------- ------------- 
 
¶4.  (U)  On December 28, Postal Service CPI rapporteur 
Osmar Serraglio announced that the committee is 
investigating a new list with 700 names of current and 
former congressional aides that established telephone 
contacts with Marcos Valerio or withdrew money from his 
accounts in the past 5 years.  According to Serraglio, the 
CPI will not release the list, as currently there is no 
evidence that listed were involved in the corruption 
scheme.  However, Serraglio said that other congressmen are 
likely to be implicated in the vote-buying scheme, and 
their cases will be forwarded to the Ethics Committee. 
 
BROTHER OF FORMER PT PRESIDENT ACQUITTED OF CORRUPTION 
CHARGES 
--------------------------------------------- --------- 
 
¶5.  (U) On December 20, the Legislative Assembly of the 
State of Ceara decided to fully absolve State Deputy Jose 
Guimaraes (PT) of corruption accusations.  Guimaraes is the 
brother of former PT president Jose Genoino -- who was 
forced to step down because of the corruption scandal -- 
and was himself accused of receiving illegal funds after 
his aide was arrested by the police in a Sao Paulo airport 
hiding 100 thousand dollars in his underwear.  In addition, 
Guimaraes was cited as one of the beneficiaries of Marcos 
Valerio's illegal campaign financing scheme.  Guimaraes 
stated that he requested money from former PT treasurer 
Delubio Soares and was not aware that its source was 
illegal.  The Assembly's Ethics Committee recommended 
Guimaraes' impeachment, but the plenary contradicted its 
verdict and decided to fully absolve him. 
CHICOLA