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RHMFISS/CDR USSOUTHCOM MIAMI FL

UNCLAS SECTION 01 OF 03 SAO PAULO 000276 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
ROME PASS VATICAN 
STATE FOR WHA/BSC, EUR/WE, AND DRL/IRF 
STATE PASS USTR FOR SULLIVAN/LEZNY 
NSC FOR SCRONIN 
DEPT OF TREASURY FOR FPARODI 
USDOC FOR 332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWARD 
USDOC ALSO FOR 3134/USFCS/OIO/EOLSON/DDEVITO/DANDERSON 
STATE PASS EXIMBANK 
STATE PASS OPIC FOR DMORONESE, NRIVERA, CMERVENNE 
DOL FOR ILAB MMITTELHAUSER 
 
TAGS: PGOV PREL SCUL ETRD ECON ELAB BR
SUBJECT: CARDINAL HUMMES DISCUSSES LULA GOVERNMENT, THE OPPOSITION, 
AND FTAA 
 
REF: (A) 05 SAO PAULO 405; (B) 05 SAO PAULO 402 
 
(C) 02 BRASILIA 2670 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY. 
 
------- 
SUMMARY 
------- 
 
¶1. (U) During a March 10 courtesy call by Consul General, Claudio 
Cardinal Hummes spoke at length of the successes and failures of the 
Lula government; shared his views on the competition between Sao 
Paulo Mayor Serra and Governor Alckmin for the presidential 
nomination of the Brazilian Social Democracy Party (PSDB); and 
stressed that contrary to popular belief, the Catholic Church as an 
institution does not oppose the Free Trade Area of the Americas 
(FTAA) and in fact sees such agreements as necessary, but believes 
that any agreement must be thoroughly discussed and equitable for 
all parties.  End Summary. 
 
--------------------------------------- 
LULA GOVERNMENT: 
ACCOMPLISHMENTS, BUT DISAPPOINTMENT TOO 
--------------------------------------- 
 
¶2.  (U) Consul General (CG), accompanied by Poloff, paid a courtesy 
call March 10 on Dom Claudio Cardinal Hummes, Archbishop of Sao 
Paulo and leader of the Catholic Church in Brazil.  When queried on 
his views on the current political scene, Hummes said Lula's 
government has been an important milestone for Brazil: a democratic 
government led by a worker, with major accomplishments to its credit 
such as macro-economic stability, improvement of Brazil's 
international image, and payment of the country's foreign debt. 
Obviously, not all has been so positive.  The Cardinal knew Lula 
from the time when both were working in their respective fields in 
the ABC (Santo Andre, Sao Bernardo dos Campos, Sao Caetano do Sul) 
industrial suburbs south of Sao Paulo during the time of the 
military dictatorship (see ref A for complete biographic 
information), and he knew Lula wanted to do more on the social front 
to improve conditions for workers and the poor.  He knew for a fact 
Lula was disappointed not to have created more jobs.  "Bolsa 
Familia" (which involves conditional transfer payments to the poor) 
was a good program; it was true, as critics had pointed out, that it 
didn't lift people out of poverty, but it was effective as an 
emergency measure for the very needy.  The fundamental problem, 
Hummes said, was that Brazil hadn't grown enough.  High interest 
rates and high taxes had prevented it from keeping pace with other 
emerging economies like China, India, and Mexico.  If this could be 
changed, Brazil would be ready to move forward. 
 
¶3.  (SBU) Then there was the corruption scandal. Lula didn't deserve 
this, said Hummes.  This was not to say that he really hadn't known 
anything of what was going on, as he claimed.  But Lula had been 
badly served by people around him with their own agendas, especially 
former Chief of Staff Jose Dirceu.  That agenda was to maintain the 
Workers' Party (Partido dos Trabalhadores - PT) in power, an 
objective that required a great deal of money.  To Dirceu, the ends 
justified the means.  Dirceu, who is a very rational, astute 
political operator, wanted to be Lula's successor, and he used the 
powers of government, including the more than 20,000 jobs to be 
filled by presidential appointees ("unjustified in a democracy," 
Hummes said) to that end. Ironically, Dirceu's activities were 
eventually exposed by Roberto Jefferson, (a federal deputy in a 
government-allied party who was implicated in corruption and then 
 
SAO PAULO 00000276  002 OF 003 
 
 
began to implicate others, and was himself eventually expelled from 
Congress), "who was himself not a hero of ethics." 
 
¶4. (SBU) Hummes was not certain Lula would even stand for 
re-election.  "There's probably a 70 percent chance he will.  He 
personally opposes re-election and always has.  He thinks it would 
be much better to have a longer term, five or six years, but only 
one term.  I also think this would be much better for our 
democracy."  Hummes also opined that holding elections every two 
years -- federal and state elections alternative with municipal - 
was too disruptive and made it difficult for the government to 
accomplish anything. 
 
---- 
PSDB 
---- 
 
¶5. (SBU) CG noted that Lula's recent resurgence in opinion polls 
posed a serious challenge for the opposition PSDB.  Cardinal Hummes 
agreed, pointing out that there are many similarities between the PT 
and the PSDB.  "Fernando Henrique Cardoso (FHC) brought the PSDB 
closer to the PT in many ways.  And then Lula, when he came to 
power, adopted some PSDB policies.  They have to be in conflict with 
each other for you to be able to see the differences."  The party 
had too many good candidates, Hummes said, an abundance of talent 
that dates back to its founding.  In 2002, the party had trouble 
deciding on Jose Serra as its nominee; finally, FHC had to step in 
and designate him.  The Cardinal knows both PSDB presidential 
pre-candidates and talks regularly with both.  In his view, the 
problem with a Serra candidacy is that if he runs and loses, the 
PSDB will have lost the Mayorship of Sao Paulo, its great window on 
national politics.  Alckmin, though not as well known outside Sao 
Paulo, could be a great national surprise.  Hummes opined that 
Alckmin could give Lula a better run for his money in the 
impoverished northeast, since Alckmin would appeal more that Serra 
to the lower classes.  Even if he should lose to Lula, the PSDB 
would then still hold the Mayorship of Sao Paulo.  Thus, the 
rational decision would be for Alckmin, but the Cardinal recognized 
that politics isn't always rational.  He noted also that Minas 
Gerais Governor Aecio Neves had wanted to run this time, but decided 
not to because he was a sure bet to be re-elected as Governor of 
Minas but was less certain he could beat Lula. 
 
¶6. (SBU) During a second term, Hummes predicted, Lula would be more 
moderate than Serra would if elected.  Lula was not much of an 
adventurer and wouldn't take risks, the way great leaders and 
governments do.  Serra is by temperament much bolder, and has always 
opposed the conventional "neo-liberal" macro-economic policy 
implemented first by FHC and subsequently by Lula. 
 
-------------------------- 
CHURCH DOES NOT OPPOSE FTAA 
--------------------------- 
 
¶7. (SBU) CG raised the issue of the Free Trade Area of the Americas 
(FTAA), noting that the U.S. remains interested in negotiating an 
agreement even though the Lula government is still less than 
enthusiastic, and inquired into the Church's position.  The Cardinal 
replied that there is no institutional opposition on the Church's 
part to this type of agreement.  The world is clearly becoming more 
integrated, and nations can no longer afford to isolate themselves 
or stand on nationalism.  Brazil, for example, is a strong supporter 
of Mercosul, but the community is very fragile, due in large part to 
Argentine economic problems.  The FTAA must overcome traditional 
 
SAO PAULO 00000276  003 OF 003 
 
 
beliefs that it is another vehicle for the U.S. to exploit Latin 
American poverty.  Many in the region are unable to believe that a 
just agreement can be reached.  Nevertheless, though it won't be 
easy, it is necessary for the parties to keep trying.  Hummes 
expressed the view that President Lula is trying to help overcome 
the "old thinking" wherein others, especially the United States, 
were blamed for Brazil's problems.  The Church as an institution, he 
reiterated, has not opposed FTAA and would not do so.  Individual 
Brazilian bishops or groups of bishops might have, or NGOs 
affiliated with the Church.  Perhaps a study group presented 
recommendations to the National Conference of Bishops of Brazil 
(CNBB) opposing FTAA, and these might have been published and 
characterized as an official Church position.  But the CNBB itself 
had never adopted a resolution against FTAA, and the Church does not 
oppose free trade agreements in general or the FTAA in particular. 
The Church, he said in conclusion, does consider it important that 
any negotiated agreement be fully aired and discussed publicly, and 
be fair to all the parties.  CG replied that the USG is aware that 
all such agreements must be acceptable to both (or all) sides, 
because otherwise they will not be sustainable. 
 
------- 
COMMENT 
------- 
 
¶8. (SBU) Over the past six months, numerous Brazilian interlocutors 
from both the government and the private sector have advised us that 
the Church's opposition to an FTAA agreement was an important factor 
in the negative public opinion that in turn influenced the GoB's 
reluctance to move forward with negotiations.  Ref C reported that 
in July 2002 CNBB was spearheading a National Campaign Against the 
FTAA, which, among other things, published a "scurrilous, 
error-filled 42-page pamphlet attacking the proposal and vilifying 
the 'imperialist' United States."  Post is not in a position to 
determine, so long after the fact, whether the campaign and pamphlet 
were the work of the CNBB itself or of some of its more radical 
members.  In September 2002, the Social Pastorate of the Catholic 
Church co-sponsored (along with the Movimento dos Trabalhadores 
Rurais Sem Terra (MST), the PT, and some 30 other NGOs) an 
unofficial anti-FTAA referendum.  If the Cardinal's characterization 
of the Brazilian Church's official position is accurate - and we do 
not doubt his word or his knowledge of Church affairs - then that 
official position has long since been drowned out in the public mind 
by the vocal, negative views on FTAA of some priests, bishops, and 
influential lay people.  That said, the fact that the Church does 
not in fact oppose an agreement may prove useful in the months 
ahead.  More generally, Hummes's insights into the current Brazilian 
political scene are well-informed and lucid, and it is clear he is 
following the situation closely and is in contact with all the major 
players.  End comment. 
 
¶9. (U) This cable was cleared/coordinated with Embassy Brasilia. 
 
McMullen