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DE RUEHBR #2578/01 3422000
ZNR UUUUU ZZH
R 082000Z DEC 06
FM AMEMBASSY BRASILIA
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INFO RUEHAC/AMEMBASSY ASUNCION 5838
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RUEHMN/AMEMBASSY MONTEVIDEO 6646
RUEHSG/AMEMBASSY SANTIAGO 5987
RUEHRG/AMCONSUL RECIFE 5995
RUEHRI/AMCONSUL RIO DE JANEIRO 3527
RUEHSO/AMCONSUL SAO PAULO 8835
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 02 BRASILIA 002578 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV BR
SUBJECT: GOVERNMENT DEFEAT IN CHAMBER VOTE MAY FORETELL 
SHAKY COALITION 
 
 
¶1.  (SBU) Summary.  President Lula suffered a defeat in the 
Chamber of Deputies on December 6 when his candidate to the 
National Accounting Court, Federal Deputy Paulo Delgado, a 
well-respected Workers Party (PT) deputy from Minas Gerais, 
was soundly defeated by Federal Deputy Aroldo Cedraz (PFL - 
Liberal Front Party ) Bahia state).  Poloff spoke with 
several deputies and journalists who unanimously agreed this 
reveals significant weakness in the government's attempt to 
construct a watertight coalition.  They also thought the race 
for the presidency of the Chamber of Deputies, a job second 
in line of succession to the president, is unpredictable. 
Two traditions are set to clash: the largest party chooses 
the president of the house, and the same party does not hold 
both the Chamber and Senate presidencies.  By most counts, 
the Brazilian Democratic Movement Party (PMDB) will be the 
largest party in both houses in the next Congress.  The party 
has not chosen its candidate yet.  Federal Deputy Michel 
Temer, PMDB president, told poloff the PMDB would not refrain 
from running a candidate in the Chamber even though it is 
well-positioned to hold on to the Senate presidency.  Temer 
also said he would be the candidate only if drafted.  The 
current Chamber President and Lula's declared favorite, Aldo 
Rebelo, Communist Party of Brazil (PCdoB) from Sao Paulo, can 
run again thanks to a December 7 Supreme Court ruling that 
unanimously struck down the party threshold law that would 
have disqualified him.  But the leading coalition party, the 
PT, put forward Arlindo Chinaglia, government leader in the 
Chamber.  The presidential palace promises there will be only 
one government candidate in the end.  End summary. 
 
¶2.  (SBU) Federal Deputies rebelled against the Lula 
government on December 6 by electing Federal Deputy Aroldo 
Cedraz to the National Accounting Court.  Voting was by 
secret ballot, as it always is, and afterward there were 
 
SIPDIS 
recriminations and accusations of betrayal, according to 
press reports.  Most finger-pointing by pro-government forces 
was in the direction of the PMDB and the Liberal Party (PL). 
(Note: The large but diffuse PMDB has both pro-Lula and 
anti-Lula wings and is the biggest element in the coalition 
Lula is trying to build.  The small PL is supposedly 
pro-Lula, but is unreliable.  End note.)  The victory was 
interpreted by media analysts as revenge for the group around 
Bahia's PFL Senator Antonio Carlos Magalhaes (the 
"carlistas"), whose gubernatorial candidate, incumbent Paulo 
Souto, suffered a humiliating and surprising defeat at the 
hands of the PT's Jaques Wagner on October 1. 
 
¶3.  (SBU) The National Accounting Court (TCU) is not a true 
court, but a fiscal oversight body with broad decisional and 
advisory authority.    Fernando Rodrigues, political affairs 
writer for leading national daily Folha de Sao Paulo, told 
poloff the TCU is shot through with partisanship, its 
analyses are not reliable and its nine ministers, six of whom 
are elected by Congress for life terms, are often senators or 
federal deputies who failed in their reelection bids and are 
then elected by their colleagues to carry on the partisan 
battle in another forum.  Cedraz is a "carlista" who was not 
reelected in October. 
 
¶4.  (SBU)  A number of coalition deputies had thrown their 
hats in the ring for the TCU job, only to withdraw them later 
to rally around Delgado, making his defeat even more of a 
bitter pill, since it was clear from the numbers that many in 
the government coalition had defected in the secret balloting. 
 
¶5.  (SBU) The defeat of the government's candidate now casts 
doubt on whether the government can elect the Chamber 
President, be it incumbent Aldo Rebelo or Arlindo Chinaglia 
(PT), who is also the government leader in the Chamber.  The 
PT announced Chinaglia's candidacy just days ago, to the 
apparent annoyance of the presidential palace, which firmly 
backs Rebelo.  The PMDB, although part of the coalition, will 
almost certainly also run a candidate instead of backing 
Rebelo.  The coalition's cohesiveness is in doubt.  Federal 
Deputies Pauderney Avelino (PFL - Amazonas), Andre De Paula 
(PFL- Pernambuco), and journalist Fernando Rodrigues told 
poloff that Rebelo will be named Minister of Defense if he 
loses. 
 
¶6.  (SBU) Poloff spoke on December 6 with Deputy De Paula 
about the Chamber presidency before the TCU vote.  He said it 
is unlikely the PMDB could win the Chamber presidency because 
 
BRASILIA 00002578  002 OF 002 
 
 
of the tradition that the same party does not hold the 
presidency of both houses of Congress, and the Senate 
President, Renan Calheiros (PMDB), is steadfastly determined 
to retain the post and has President Lula's full support.  De 
Paula thinks Chinaglia has a good chance of being elected. 
 
¶7.  (SBU) The Senate presidency traditionally goes to the 
party with the largest delegation, which by number of sitting 
senators is the now the PMDB.  The second largest, the PFL, 
just nominated Jose Agripino Maia, of Rio Grande do Norte, to 
run for the Presidency and the PSDB has pledged to back him. 
(Note: There is no unanimity over which is the largest party 
because there are two ways of counting, by winning parties on 
election day, or by current party membership of sitting 
senators, whether principals or alternates. By the first 
method the PFL is the largest, by the second, the PMDB.)   De 
Paula said he did not think Agripino's candidacy was viable 
through February 2, when voting takes place.  The swing votes 
may be in the smaller parties and the six PMDB senators who 
have declared themselves independent or in opposition, but it 
may be several weeks before the picture is clearer. 
 
¶8.  (SBU) Comment:  The PMDB is flexing its muscles and 
reminding the government it must be reckoned with.  With 89 
deputies, it has the largest Chamber delegation, it won seven 
governorships -- more than any other party -- and is arguably 
the largest party in the Senate. But the PMDB is, in the 
words of PMDB maverick Jarbas Vasconcelos, a "sack of cats," 
riven by internal divisions, with six senators openly 
independent or in opposition, and a tradition of choices 
based on spoils.  As a whole, it is a sack of cats that 
always lands on its feet.  The Cedraz case reveals that the 
PMDB and other coalition parties are not reliably in the 
government camp.  Andre de Paula told poloff that Lula said 
he will not make cabinet decisions until after the Congress 
elects the leaders on February 2, and Lula is therefore 
exerting unfair and corrupting pressure on the parties to 
make the "right" choices.  Lula may have great difficulty 
maintaining discipline in the coalition and getting the PMDB 
to cooperate, and it may come at great cost in terms of 
cabinet level appointments. 
 
¶9.  (SBU)  Comment, continued.  The unanimous Supreme Court 
decision to strike down the party threshold law is a 
lifesaver for scores of politicians.  The members of Congress 
elected from the smaller parties had been nicknamed "zombies" 
because they were to lose so many political rights.  Some 
parties had already merged in order to retain their full 
rights.  Many people hoped the party threshold law would 
eliminate the conditions that led to massive corruption in 
Lula's first term, when bribery was the glue that held the 
small mercenary and non-ideological parties in the coalition. 
 But now the rules will remain unchanged and Lula wills till 
need some sort of glue to keep the coalition together.  End 
comment. 
 
CHICOLA