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C O N F I D E N T I A L SECTION 01 OF 04 SAO PAULO 000601 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/BSC AND NEA/ELA 
TREASURY FOR JHOEK 
 
E.O. 12958: DECL: 07/11/2017 
TAGS: PGOV PREL PINR KISL SCUL BR LE
SUBJECT: CONVERSATION WITH AN OLD FRIEND OF LULA 
 
REF: A. SAO PAULO 496 
     ¶B. BRASILIA 1034 
     ¶C. SAO PAULO 254 
 
Classified By: ACTING CONSUL GENERAL LISA L. HELLING.  REASON: 1.4(D) 
 
  ------- 
SUMMARY 
------- 
 
¶1.    (C) At a June 26 lunch with poloff and econoff, 
businessman and lobbyist Mohamad Ali Laila (protect) shared 
his views on President Lula, the PT, Brazil,s relations with 
Venezuela, and the Lebanese and Muslim communities in Sao 
Paulo.  Laila, who is President Lula,s neighbor in Sao 
Bernardo do Campo and has known the president and his family 
well for many years, said that Lula,s oldest brother Genival 
(&Vava8), recently accused by the Federal Police of 
influence peddling, is a &donkey8 who got mixed up in 
things he didn,t understand, a view apparently shared by 
Lula himself.  Laila suggested that Lula,s generally 
acquiescent attitude towards Hugo Chavez is based more on 
personal friendship than ideological kinship and is 
emblematic of Lula,s &live and let live8 philosophy 
towards other leaders.  Laila does not believe there is much 
sympathy for Chavez among Brazilians.  He said that Lula,s 
Workers Party (PT) has no viable candidate to succeed him in 
2010, and predicted that Minas Gerais Governor Aecio Neves 
will soon switch from the opposition PSDB to the 
pro-government PMDB and run for President with Lula,s 
support, though others discount this possibility.  Laila has 
prepared a ¬e of protest,8 signed by Lebanese Christian 
and Muslim leaders, over the recent cooperation agreement 
between the PT and the Baath Party (ref A), which he plans to 
present to Lula and the PT,s National Directorate.  Laila 
said many Brazilian-Lebanese avoid all interaction with 
Syrian representatives and officials here, and he expressed 
concern about activities of the Shiite community in the 
tri-border area.  End Summary. 
 
¶2.    (SBU) Mohamad Laila (please protect) is a 
Vice-President of the Brazil Future Institute, a 
Brazilian-Lebanese organization composed of moderate Sunni 
Muslims representing the interests of the late Prime Minister 
Rafik Hariri,s family and political organization in Brazil 
(ref C).  He is also a partner in Braven, an import-export 
company that specializes in trade with Venezuela, and in 
Newbrasil Assessoria, a political and commercial consulting 
firm.  He joked that he doesn,t call himself a lobbyist 
&because lobbying is illegal in Brazil,8 but intimated that 
he is active in advocating on behalf of clients doing 
business with the GoB, playing on his personal connection to 
Lula and his long association with the PT.  (Comment: 
Lobbying is not illegal in Brazil, but there is a widespread 
public perception, encouraged by the media, that all 
lobbyists are crooks.  Brazilians cannot bring themselves to 
believe that government officials make decisions based on 
merit, and thus assume that lobbyists, success on behalf of 
their clients depends on their skill in making payoffs.  For 
this reason, many individuals and firms use &consulting8 or 
&advising8 as a euphemism for their lobbying activities. 
End Comment.) 
 
----------------------- 
LULA AND THE SUCCESSION 
----------------------- 
 
¶3.    (C) Laila did not specify his exact role in the PT, 
noting at one point that he is &affiliated8 with the party 
while at the same time taking issue with many of the party,s 
positions, especially the ones he considers radical or 
leftist.  He is clearly not a fan of the social and popular 
movements that make up an important part of the PT,s base. 
However, he is evidently on friendly terms with a great many 
party leaders.  He predicted that Ricardo Berzoini will be 
 
SAO PAULO 00000601  002 OF 004 
 
 
re-elected PT President in internal elections later this 
year.  Jose Dirceu, he said, still retains influence in the 
party, but not as much as he would like.  Because the PT, in 
Laila,s view, has no viable candidate to aspire to be 
Lula,s successor ) he said nobody wants Tourism Minister 
Marta Suplicy, and that there is no one else of sufficient 
stature ) Lula will look outside the party to someone from 
his governing alliance.  He predicted with some confidence 
that Minas Gerais Governor Aecio Neves will switch from the 
opposition Brazilian Social Democracy Party (PSDB) to the 
centrist, pro-government PMDB and will then receive Lula,s 
blessing for his presidential bid. 
 
¶4.  (SBU) (Note: the expectation that Neves will desert the 
PSDB is a favorite media theory, but one that may have little 
basis in reality, and it is early to make such a prediction 
with any seriousness.  PSDB Senator Sergio Guerra of 
Pernambuco, the likely next president of the PSDB, absolutely 
dismissed the possibility of a Neves defection in a 
conversation with Brasilia poloff in late May.  Guerra, a 
manager of Geraldo Alckmin,s 2006 presidential campaign, is 
a "neutral" in the PSDB: he is not identified with any 
faction in a party that is somewhat divided between 
"nevistas" and "serristas," that is, supporters of Neves and 
Sao Paulo Governor Jose Serra.  End Note.) 
 
-------------------- 
LULA AND HIS BROTHER 
-------------------- 
 
¶5.    (C) Laila disparaged Lula,s oldest brother, Genival 
Inacio da Silva (&Vava8), who was recently caught up in the 
Federal Police,s &Operation Checkmate8 investigation into 
illegal slot machine operators and accused of influence 
peddling.  Vava was allegedly trying to obtain favors or 
special consideration from GoB officials for friends in the 
gaming industry in return for cash.  Laila commented that 
Vava is a &donkey8 who got involved in something he didn,t 
understand.  He expressed no opinion as to whether Vava or 
Lula,s friend Dario Morelli Filho, who was implicated in the 
same activity, had done anything illegal or not.  However, he 
noted that while Lula is not against bingo parlors, he does 
oppose slot machines on the grounds that poor people get 
addicted to them, and he believes that the gaming industry is 
used to launder money. 
 
¶6.    (C) Laila opined that Justice Minister Tarso Genro 
should have been able to deal with Vava,s problem in a way 
that would have avoided his detention and the embarrassing 
publicity surrounding it.  For this reason, he said, Lula is 
now irritated with Genro and may replace him soon.  Laila 
also predicted that Federal Police Chief Paulo Lacerda will 
soon be replaced.  (Comment: Tarso Genro is unpopular with 
many of his PT colleagues, who consider him divisive, and 
Lula could gain points within the party by replacing him, if 
indeed he is disenchanted with Genro,s performance. 
However, he might have a harder time getting rid of Lacerda, 
given that he has cited the Federal Police,s energetic 
investigations as a sign of his government,s effectiveness 
in fighting endemic corruption.  End Comment.) 
 
--------------- 
LULA AND CHAVEZ 
--------------- 
 
¶7.  (C) Laila,s company does a great deal of trade with 
Venezuela and he apparently knows Hugo Chavez well.  He has a 
picture in his office of himself with both Lula and Chavez 
and he talks about Chavez with familiarity, albeit not in a 
complimentary vein.  He believes Lula,s posture towards 
Chavez is motivated largely by personal friendship.  Lula 
does not share Chavez,s radical or populist ideology ) he 
resorts sometimes to populist rhetoric but has governed as a 
pragmatic centrist ) but he takes a &live and let live8 
approach to leaders of other countries and expects others to 
 
SAO PAULO 00000601  003 OF 004 
 
 
do the same.  Only when he thinks Chavez is directly 
threatening Brazil,s interests will he push back, as for 
example with Chavez,s efforts to organize opposition to 
biofuels.  Similarly, when Chavez denounced Brazil,s 
Congress after its Senate passed a resolution asking the BRV 
to reconsider its decision concerning RCTV (ref B), Lula 
calmed the waters by defending Brazilian institutions while 
at the same time defending the BRV,s right not to renew the 
broadcaster,s concession.  Laila said that Lula, as a friend 
of both Chavez and President Bush, wanted to broker a truce 
or understanding between the two, but made no headway because 
Chavez just isn,t interested.  Another important factor in 
the GoB,s reluctance to criticize the BRV and its continuing 
support for Venezuela in international fora is the influence 
of Lula,s foreign affairs advisor, PT first Vice-President 
Marco Aurelio Garcia, who is personally and ideologically 
close to Chavez. 
 
¶8.  (C) Laila does not see any efforts under way to develop a 
Bolivarian movement in Brazil, nor any prospects for such 
activity.  The ground is simply not fertile; most Brazilians 
are either actively opposed to Chavez,s &Bolivarian8 
program or just not interested.  The only Brazilians who 
admire and follow Chavez, in his view, are the militants of 
the Landless Movement (MST). 
 
--------------------- 
LULA AND THE LEBANESE 
--------------------- 
 
¶9.  (SBU) The Lebanese and Muslim communities, Laila said, 
have a variety of perspectives on Brazilian politics.  No one 
political party or tendency enjoys their support.  There are 
a few, though not many, who support the PT.  However, Lula 
has long been popular in the communities, and their support 
for him was enhanced by the GoB,s energetic assistance 
during the July-August 2006 Hizballah conflict, when it 
facilitated delivery of emergency supplies, helped evacuate 
vacationing Lebanese-Brazilians who were caught up in the 
violence, and admitted some Lebanese with Brazilian family 
ties with few questions asked. 
 
------------------ 
PT AND BAATH PARTY 
------------------ 
 
¶10.   (SBU) Laila brought up the recent visit to Syria by two 
PT leaders and the signing of a friendship accord between the 
PT and the Baath Party (ref A).  He gave Poloff a copy of a 
protest letter he had prepared.  Leaders of the Brazil Future 
Institute, the Islamic Federation of Brazil, and the Maronite 
League of Brazil have signed it, and he is seeking more 
signatures.  The letter contrasts the democratic history of 
the PT with the Syrian dictatorship and highlights the human 
rights violations perpetrated by the Baath Party in Syria and 
Iraq.  It also accuses the Baath-led Syrian government of 
trying to destroy Lebanon.  Laila plans to deliver the letter 
to the PT,s National Directorate and to President Lula in 
the hope of dissolving the agreement, which he blamed on the 
PT,s International Relations Secretary, Valter Pomar, who 
leads one of the PT,s small leftist factions. 
 
¶11.   (C) The continued instability in Lebanon is having a 
terrible effect on the economy, which depends heavily on 
tourism, Laila said.  He blamed all the recent violence on 
Syria and especially Iran for funding Hizballah and other 
terrorist groups.  Most of the Sunni Muslim and Lebanese 
Christian communities in Brazil, he said, avoid interaction 
with Syrian government representatives and boycott official 
Syrian events.  Laila also said that when a 
Hizballah-affiliated Lebanese former Labor Minister visited 
Sao Paulo and Curitiba, large segments of these communities 
boycotted the visit.  Laila, who accompanied President Lula 
on his December 2003 visit to Syria, doubts that President 
Assad will visit Brazil, and said that if he does, the 
 
SAO PAULO 00000601  004 OF 004 
 
 
Lebanese community here will use the occasion to denounce 
Syrian human rights violations and continued interference in 
Lebanese affairs. 
 
----------------------- 
TRI-BORDER AREA CONCERN 
----------------------- 
 
¶12.   (C) The Future Institute has opened a small chapter in 
Foz de Iguacu in the Tri-Border Area, Laila said, and hopes 
to expand its presence there.  The Sunnis in Foz, he said, 
have been receptive to the Institute,s efforts to instill 
moderation and mutual tolerance, but the Shiite community has 
been less so.  Laila estimated that about 80 percent of 
Muslims in Foz are Sunni and 20 percent Shiite, but the 
numbers are reversed in Ciudad del Este across the river in 
Paraguay.  The situation in the tri-border is serious, he 
said, and much work is needed to stop the Hizballah funding 
going on there. 
 
¶13.   (C) Comment: Post,s contacts in the Lebanese community 
and in the PT confirm that Mohamad Laila is well-connected in 
the party, a long-time friend of Lula,s, and extremely 
knowledgeable about Venezuela and Hugo Chavez.  That said, he 
no doubt has his own agenda and his own reasons for talking 
so freely with emboffs.  Some of his comments arouse 
skepticism ) it appears doubtful, for instance, that Lula 
would be planning to dismiss his Justice Minister or Chief of 
Police ) but most of them are not only plausible but on 
track with what others are saying.  Post will continue to 
reach out to members of the Arab and Muslim communities in 
Sao Paulo.  End Comment. 
 
¶14.   (U) This cable was coordinated with Embassy Brasilia. 
 
HELLING 
MCMULLEN