VZCZCXRO6151
OO RUEHRG
DE RUEHSO #0873/01 2211948
ZNR UUUUU ZZH
O 091948Z AUG 06
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5570
INFO RUEHBR/AMEMBASSY BRASILIA 6646
RUEHRG/AMCONSUL RECIFE 3068
RUEHRI/AMCONSUL RIO DE JANEIRO 7345
RUEHAC/AMEMBASSY ASUNCION 2707
RUEHBU/AMEMBASSY BUENOS AIRES 2385
RUEHMN/AMEMBASSY MONTEVIDEO 2098
RUEHLP/AMEMBASSY LA PAZ 2950
RUEHSG/AMEMBASSY SANTIAGO 1822
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
RUMIAAA/USCINCSO MIAMI FL
RUEAWJC/DEPT OF JUSTICE WASHDC
RUEABND/DRUG ENFORCEMENT ADMIN HQ WASHDC

UNCLAS SECTION 01 OF 04 SAO PAULO 000873 
 
SIPDIS 
 
DEPARTMENT FOR DS/IP/WHA, DS/ICI/PII, DS/DSS/OSAC, WHA/BSC 
NSC FOR FEARS 
DEA FOR OEL/DESANTIS AND NIRL/LEHRER 
DEPT ALSO FOR WHA/PDA, DRL/PHD, INL, DS/IP/WHA, DS/DSS/ITA 
BRASILIA FOR RSO AND LEGAT; RIO DE JANEIRO FOR RSO 
SOUTHCOM ALSO FOR POLAD 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV KCRM CASC ASEC SNAR SOCI BR
SUBJECT:  FEWER PCC ATTACKS IN SAO PAULO BUT NEW POLITICAL BATTLES 
AMIDST TALK OF ARMY INTERVENTION 
 
REF: (A) SAO PAULO 869; (B) SAO PAULO 865; (C) SAO PAULO 771; (D) 
SAO PAULO 742; (E) SAO PAULO 573 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY. 
 
¶1.  (SBU) SUMMARY:  The third day of what is being called the third 
wave of PCC-led attacks in Sao Paulo state brought only a few new 
incidents on Wednesday morning, August 9.  The newest attacks, 
however, included targets in upper-scale neighborhoods and the 
greater use of homemade bombs.  Meanwhile, the state's crime and 
security problems are becoming increasingly politicized, as civic 
leaders of different parties level accusations of ineffectiveness 
and even collaboration with criminals.  Amidst renewed and louder 
calls for military intervention to combat organized crime in Sao 
Paulo, the state's governor and public security secretary stand firm 
in resistance, with some analysts suggesting that either way, 
President Lula gains political strength as problems in Brazil's most 
populous and affluent state - governed by rival political parties - 
are highlighted in the news daily.  Appearing to enter the fray 
personally, it appears Lula himself will visit an Army installation 
in Sao Paulo this Friday, but will leave the state on the eve of the 
Father's Day holiday, during which many fear the PCC will launch new 
attacks.  END SUMMARY. 
 
------------------------ 
URBAN WARFARE, DAY THREE 
------------------------ 
 
¶2.  (SBU) Elements of the organized crime gang First Capital Command 
(PCC) orchestrated few attacks against government and private sector 
targets in the early morning of Wednesday, August 9, in what is 
being called the Third Wave of PCC-led attacks since May (reftels). 
Early morning attacks on Wednesday occurred in the cities of Itu and 
Sumare, approximately 65 and 75 miles northwest of Sao Paulo 
respectively.  Homemade bombs were tossed at a police station and 
the house of a police officer.  A bus was also torched inside a 
municipal garage. 
 
¶3.  (SBU) In greater Sao Paulo, homemade bombs were tossed at bank 
outlets in the fashionable Pinheiros and Morumbi neighborhoods.  The 
bank in Pinheiros was on Avenida Teodoro Sampaio, which, during the 
daytime, is a long, bustling, reduced-price shopping district.  A 
car was also torched in a court parking lot.  The bomb squad of the 
Military Police unit called "GATE" (Special Actions and Tactics 
Group) also detonated a suitcase or briefcase left unattended on 
Avenida Paulista in the city's main business district, but it was 
found to be harmless.  In all, there have been 150 attacks in Sao 
Paulo state since early Monday morning (August 7).  Perhaps due to 
increased security around police and public security facilities, the 
attacks this week seem to be targeting "softer" targets in more 
upscale neighborhoods, and involve the use of homemade bombs versus 
the Molotov cocktails and drive-by shootings that were more common 
during the previous waves of attacks. 
 
---------------------------- 
POLITICAL WARFARE IN EARNEST 
---------------------------- 
 
¶4.  (SBU) Politicization of Sao Paulo's crime and prison problems 
has taken off in earnest with this third wave of PCC attacks, as 
President Lula's Workers Party (PT) challenges the effectiveness of 
opposition party leadership of Sao Paulo state under current 
Governor Claudio Lembo of the Liberal Front Party (PFL) and former 
governor and current presidential candidate Geraldo Alckmin of the 
Brazilian Party for Social Democracy (PSDB).  In an interview with 
the daily newspaper Folha de Sao Paulo, Governor Lembo admitted that 
his government was surprised by this third wave of PCC attacks, but 
he said this did not indicate fault in police intelligence or public 
security. He once again dismissed the increasingly vociferous calls 
from Ministers and politicians in Brasilia for Army units to be 
dispersed in Sao Paulo.  When asked what he thought of federal 
 
SAO PAULO 00000873  002 OF 004 
 
 
Justice Minister Marcio Thomaz Bastos's renewed offer of Army troops 
to combat the PCC, Lembo said, "I would very much like to see the 
Army on the borders.  But this issue is between the borders."  Lembo 
also said the issue is being politicized, but not by him (ref B). 
 
¶5.  (SBU) Justice Minister Bastos admitted that Sao Paulo never 
received the 100 million reals (approximately $500,000) of federal 
funds it was promise for public security upgrades, at first 
faultingbureaucratic snafus, and then admitting that 13 milion 
reals of the allotment went to a prison proect in Santa Catarina 
state in southern Brazil. He defended this diversion of funding, 
saying theSanta Catarina project was ready and under way whie Sao 
Paulo still needs to submit project plans or use of prison 
construction funds.  The Ministr promised to release 35 million 
reals as early s this week for two "large and important" projects 
in Sao Paulo, as long as the State Prison Authoriy (SAP) provides 
his office with solid plans.  Te remaining 65 million reals is 
earmarked for imroving intelligence-sharing with the Federal 
Polce, and Bastos said this will also be released when 
documentation is in order. 
 
¶6.  (SBU) Meanwhil, political opponents turned up the heat on Sao 
aulo's Secretary for Public Security Saulo Abreu, aying he is full 
of "pyrotechnics," and the PT sid it will sue Abreu for comments he 
made during  live television program.  During the show, Abreu 
accused the PT of collaborating with the PCC in oder to make Sao 
Paulo's state government appear eak.  While several other 
politicians have insinated such a link, Abreu stated on air 
yesterday tat he had proof of a connection between the PT and 
efforts to destabilize Sao Paulo's government fo political gain in 
the run-up to national electins.  He also accused a former 
PT-aligned transportation secretary of similar collusion with the 
criminal gang, alleging that the only buses burned in Sao Paulo this 
week belonged to cooperatives with ties to the ex-secretary. 
 
¶7.  (SBU) President Lula himself appears to have entered the fray. 
The daily newspaper Estado de Sao Paulo reported that the president 
will visit Sao Paulo on Friday, August 11, to review newly minted 
troops at the Army's Southeast Military Command (CMSE).  He has 
never visited the CMSE, and Estado reported that he only informed 
the base's commander of his visit this last Monday morning, just as 
news outlets were reporting that the PCC had launched a new wave of 
attacks across Sao Paulo state.  His visit is scheduled for 11:00 am 
on Friday, and he will leave that same day, before the Father's Day 
weekend furlough of thousands of prisoners brings the threat of 
renewed violence (refs A-B). 
 
¶8.  (SBU)  Leading dailynewspaper Estado suggested that if violence 
breaks out this weekend and the state government finally succumbs to 
pressure to call in the Army, Lula will score a "triple victory," by 
1) exposing weakness on the part of the Sao Paulo government if the 
streets quiet down after the dispersal of federal troops, 2) linking 
a sense of security amongst the populace to federal action, and 3) 
enhancing the image of federal effectiveness (and, by extension, of 
Lula's) if violence returns after a short-term Army intervention. 
But the newspaper Folha suggested a completely opposite intention on 
the part of the Lula Administration: Lula and his top aides are 
happy that Governor Lembo continues to resist the use of the Army on 
the streets of Sao Paulo, because the tension allows the federal 
government to appear beneficent and at the ready while the state 
government appears arrogant and hapless, and Lula's team does not 
want to risk failure in confronting the PCC during an election 
campaign. 
 
------------------- 
CALLING IN THE ARMY 
------------------- 
 
¶9.  (SBU) Various top members of the Lula Administration continue to 
press the need for Brazilian Armed Forces to intervene in Sao Paulo 
state security, including Vice President Jose Alencar, who compared 
 
SAO PAULO 00000873  003 OF 004 
 
 
the situation to one that occurred while he was Defense Minister and 
federal troops successfully restored law and order in the state of 
Espirito Santo at the request of its governor. 
 
¶10.  (SBU) Intervention in Sao Paulo by Brazilian federal forces 
would likely come in two forms, and possibly in two stages.  The 
National Force for Public Security (FNSP) would likely be called in 
first; then, if needed, members of the Brazilian Armed Forces.  In 
his rejection of federal troops on the streets of Sao Paulo, 
Governor Lembo routinely says 200 men will not have an effect on a 
massive criminal organization in a city of 18 million inhabitants 
and a state of 42 million.  In this argument, Lembo focuses on the 
FNSP, which is a relatively new and unknown entity in Brazil. 
 
¶11.  (SBU) President Lula created the National Force for Public 
Security in 2004, in an effort to support states' efforts at 
combating riots and crime sprees.  The National Force is essentially 
a reserve unit comprised of elite police officers from every state 
in Brazil.  The Force receives special training for rapid reaction 
and deployment during times of mass disturbances.  The National 
Force was first deployed in the state of Espirito Santo in November 
2004, after several nights of bombings and vehicle burnings -- 
similar to the PCC-led attacks in Sao Paulo of late -- left the 
state's security forces overwhelmed.  150 members of the FNSP were 
deployed to replace Army troops originally sent in to quell the 
violence.  More recently, a contingent of the National Force was 
used in July 2006 to move five inmates thought to be leaders of a 
recent prison riot from a prison in the interior of Mato Grosso do 
Sul to a maximum-security facility in the state's capital, Campo 
Grande. 
 
¶12.  (SBU) The Estado article quotes a protected source in the 
capital as saying that on a scale of 1 to 10, the chances of the 
Army being called into Sao Paulo are "close to 10."  The article 
lays out options for the use of several infantry and airborne 
brigades situated in Sao Paulo state that could be mobilized 
quickly.  These units have experience with urban discord through 
recent peacekeeping tours in Haiti.  Justice Minister Bastos is 
quoted as saying that up to 10,000 men could be deployed in Sao 
Paulo within 48 hours, suggesting these locally-based units would be 
tapped. 
 
¶13.  (SBU) The countervailing argument made by Folha is that 
Brazilian military leaders are not nearly as anxious to enter Sao 
Paulo to combat organized crime as some of the civilian leadership 
seems to be, in part because they will not subordinate command of 
their troops to state Secretary of Public Security Abreu.  While 
Brazilian constitutional law seems to confer to the president full 
control over the mobilization of the military in a crisis, political 
disputes would likely arise, particularly given Secretary Abreu's 
forceful presence (considered arrogant and abrasive by opponents) 
and Governor Lembo's prolific use of the bully pulpit.  The Estado 
article also suggested that while both the Army leadership and 
Governor Lembo concur that deploying federal troops in Sao Paulo 
would likely cause a diminution of street crime, the real and 
long-term problem lies in the overcrowded and undisciplined prisons. 
 Lembo also complains that the cost of any federal presence will be 
enormous and will be billed to the state government.  Referring to 
the recent agreement for the State to lease two Cougar HM-3 
helicopters from the Army (ref B), the Governor quipped, "The 
helicopters will cost us $50,000 [per use].  How much with the Army 
cost?" 
 
------------------ 
CRIME AND POLITICS 
------------------ 
 
¶14.  (SBU) COMMENT:  Crime and public safety have long been 
troubling societal issues in Sao Paulo and across Brazil.  But as 
the presidential candidates swing into full campaign mode, crime and 
public safety are now taking on renewed political significance, such 
 
SAO PAULO 00000873  004 OF 004 
 
 
that every attack by the PCC in Sao Paulo will be viewed not only in 
terms of the injury and damage caused, but through the prism of 
party politics.  The commander of the Sao Paulo Military Police (PM) 
noted in an interview Tuesday that Sao Paulo residents should expect 
ongoing PCC attacks up until the presidential elections in October. 
How and when federal forces will be called in to help combat 
organized crime in Sao Paulo - if at all - and whether those forces 
will be effective against the well-armed and organized PCC, is yet 
another calculation both state and national leaders must make in 
both their policy and political strategies.  By playing the role of 
the wild-card, it seems the PCC might still have the strongest hand 
in this game.  END COMMENT. 
 
¶15.  (U) This cable was coordinated/cleared by Embassy Brasilia. 
 
MCMULLEN