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UNCLAS SECTION 01 OF 03 BRASILIA 000041 
 
SIPDIS 
 
SIPDIS 
 
FOR WHA, WHA/BSC, AND INL 
 
E.O. 12958: N/A 
TAGS: PGOV KCRM KCOR KDEM BR
SUBJECT: BRAZIL: LITTLE HOPE OFFERED ON INTERNATIONAL 
ANTI-CORRUPTION DAY 
 
BRASILIA 00000041  001.2 OF 003 
 
 
¶1.  (U) Summary:  In commemoration of International 
Anti-Corruption Day, the regional office of the United 
Nations' Office on Drugs and Crime together with the 
University of Brasilia sponsored a roundtable with senior 
Brazilian government officials from the judicial and 
legislative branches, media members, academics, and civil 
society leaders to discuss the status of corruption in Brazil 
and the fight against it.  The panelists offered a mixed 
picture of Brazil's struggle, with some offering praise for 
the steps Brazil has taken in the last few years while others 
focused on the persistent challenges Brazil faces.  A few 
positive signs emerged from the roundtable, but overall the 
picture remains bleak.  In addition to pointing a finger at 
the usual suspects--self-interested politicians, systemic 
inefficiencies, an unhelpful private sector--perhaps 
surprisingly, panelists cast blame on an apathetic Brazilian 
public for tolerating the current level of corruption.  End 
Summary. 
 
--------------------------------------------- ----- 
The Government's View: More Aggressive than Ever 
--------------------------------------------- ----- 
 
¶2.  (U) On December 10, poloff attended a roundtable on 
corruption sponsored jointly by the regional office of the 
United Nations' Office on Drugs and Crime (UNODC) and the 
University of Brasilia (UnB).  Panel participants included a 
broad range of government officials and representatives from 
the media, academic, and civil society spheres: 
Comptroller-General of Brazil (CGU) Jorge Hage; Superior 
Court (STJ) Justice Gilson Dipp; Federal Deputy and leader of 
the Congressional Anti-Corruption Caucus Paulo Rubem Santiago 
(PDT, Democratic Labor Party, government coalition; of 
Pernambuco); highly influential O Globo commentator Miriam 
Leitao; UNODC's Giovanni Quaglia; UnB Professor Ricardo 
Caldas; "Instituto Ethos de Responsabilidade Social" (a 
private sector institute created to fight corruption) 
President Ricardo Young; Gil Castelo Branco of "Contas 
Abertas" (an anti-corruption NGO); Juliette Gaasenbeek of the 
Christian Movement against Corruption (CRISCOR), and Joao 
Geraldo Piquet Carneiro, president of the Helio Beltrao 
Institute (a good governance NGO), who moderated the 
roundtable. 
 
¶3.  (U) Making the government's case, Comptroller-General 
Hage asserted that corruption is fought vigorously in Brazil. 
 According to Hage, "there is no scientific evidence that 
corruption is increasing."  Rather, perception of it is on 
the rise because there are more investigations than ever. 
One aspect of the government's fight against corruption that 
is not well publicized because it does not lead to court 
cases, according to Hage, is the 1500 public officials who 
have suffered some form of administrative punishment. (Note: 
A December 9, 2007 article in "Correio Braziliense" reported 
the figure as 1,382.  End note.) 
 
¶4.  (U) According to Hage, the government made a decision in 
2003 to strengthen the government's instruments to fight 
corruption.  These measures included beefing up the CGU and 
the Tribunal de Contas da Uniao (TCU - the government's 
accounting and auditing office), placing a comptroller in 
each government entity, establishing an anti-money laundering 
lab within the Ministry of Justice and formulating a national 
Strategy to Combat Money Laundering (ENCLA), and opening the 
government's books to the independent Public Ministry (the 
constitutionally established autonomous body of prosecutors). 
 Under this government, according to Hage, the Federal Police 
was given a free hand to investigate corruption and has 
undertaken over 400 anti-corruption operations over the last 
few years.  It also established a transparency portal on the 
internet (www.portaltransparencia.gov.br) that purports to 
track all government expenditures by the federal government. 
For Hage, this government has been more open and transparent 
than any previous government. 
 
--------------------------- 
Others Beg to Differ 
--------------------------- 
 
¶5.  (U) Most of the other participants at the roundtable took 
a less sanguine view of the challenges Brazil faces. 
According to Federal Deputy Santiago, Brazil continues to 
 
BRASILIA 00000041  002.3 OF 003 
 
 
tolerate corruption at all levels.  The problem is 
particularly acute in the states.  There is little 
transparency at the state level, and since more than 70% of 
state funds come from federal transfers, it does not matter 
how much the federal government keeps its accounts clean, 
corruption will persist. 
 
¶6.  (U) The federal budget process also needs to be reformed, 
particularly earmarks, which often go to finance enrichment 
schemes for Members of Congress.  According to Santiago, many 
NGOs are a faade for corruption, and there is little 
oversight of them. It is common practice among federal 
deputies to set up NGOs and staff them with family members 
and associates and then include earmarks in the federal 
budget for them.  Santiago stated that any effort at reducing 
corruption has to include more transparency in the budget and 
greater oversight of NGOs.  (Comment: a CPI, or special 
congressional investigative committee, was convened last year 
to investigate NGOs, but has not finished its work.  Post 
will report on the CPI's work septel.  This high-profile 
problem adds an additional hurdle to efforts to encourage the 
GOB to work more with NGOs.  End Comment.) 
 
¶7.  (U) Santiago called for curtailing or altogether ending 
the "foro privilegiado," a privilege granted to all Senators 
and Federal Deputies, state governors, and most high-level 
executive and judiciary branch officials, which entitles them 
to have any accusations against them heard by either the 
Federal Supreme Court (STF) or the Superior Court of Justice 
(the highest appellate court on non-constitutional matters). 
As both courts are severely backlogged, the cases take years 
to be decided. Unless the "foro privilegiado" is drastically 
curtailed, Brazil will not be able to do much about 
corruption, Santiago said.   (Comment: according to the 
Associacao dos Magistrados Brasileiros, in 2006 the STF 
rendered judgments on 110,284 cases in 2006, and STJ 262,343. 
 End comment.)  In one recent case, as an eight-year process 
against a member of congress in the "foro privilegiado" drew 
to a close with the finding almost certainly against the 
member, the deputy in question resigned, which automatically 
moved the case back into the regular court system, where it 
was to begin from scratch. 
 
--------------------------------------------- ----------------- 
Private Sector Also a Factor, But is it Taking Responsibility? 
--------------------------------------------- ----------------- 
 
¶8.  (U) For O Globo's Leitao, a missing element in the fight 
against corruption is the private sector.  She decried what 
she called the complicit role of corporations that complain 
to her about solicitations for bribes, while doing little to 
stop it--such as recording phone calls.  The private sector 
representative, Young from Instituto Ethos, partly agreed 
with Leitao, but added that the private sector is taking 
action.   In 2005, the entrepreneurial sector banded together 
and launched the "Corporate Pact for Integrity and Against 
Corruption," which currently has 1,289 companies and other 
entities as signatories, as well as a website 
(www.empresalimpa.org.br). Signatories participate in 
seminars on private practices to discourage corruption and 
agree to abide by the pact's guidelines which, according to 
Young, were praised by World Economic Forum as one of the 
best such documents produced by the private sector anywhere 
in the world. 
 
--------------------------- 
Civil Society Missing 
--------------------------- 
 
¶9.  (U) Despite public opinion polls that consistently show 
that combating corruption is one of the issues that registers 
atop the list of concerns for Brazilians, Castelo Branco 
claimed that in the corruption debate, "society is the 
missing element", as it is simply not mobilized against 
corruption.  His organization, "Contas Abertas", was started 
two years ago to help change this, but it remains an uphill 
struggle.  UnB's Caldas cited polls reinforcing Castelo 
Branco's points.  He cited a poll of Federal District 
residents showing that 25% claimed to have directly 
participated in corrupt acts.  Furthermore, according to 
Caldas the general public's lack of civic involvement is a 
widespread phenomenon not limited to the issue of corruption. 
 
BRASILIA 00000041  003.2 OF 003 
 
 
 According to the same poll only 7% of those polled claimed 
they participated in some community or civil society 
organization. 
 
--------------------------- 
Much Work to be Done 
--------------------------- 
 
¶10.  (U) There was wide consensus among the group on the 
persistence of corruption in Brazil, even if there was 
divergence on whether the trend was improving or worsening. 
Participants cited a number of reasons to be pessimistic. 
Castelo Branco cited a "Correio Braziliense" headline from 
that day's paper discussing the long delays in resolving 
cases of corruption and misappropriation of funds handled by 
the TCU.  These often take between 5-10 years to resolve, and 
in almost 200 cases took between 10-18 years.  Another 
participant cited a recent TCU finding that 33% of the 
audited projects funded by the government's key 
infrastructure initiative, the Accelerated Growth Program 
(PAC), contained enough irregularities to merit halting the 
projects. 
 
¶11.  (U) Federal Deputy Santiago called attention to 
proposals the anti-corruption caucus he heads has made before 
the Chamber leadership.  Some of these include limiting the 
scope of the "foro privilegiado"--which currently goes into 
effect even on accusations related to events prior to the 
accused official's public service-- imposing harsher 
penalties for acts of corruption, calling for greater 
transparency and greater access for the public of government 
data on spending, forcing government agencies to divulge its 
expenditures over the internet in real time, prohibiting 
private parties from gaining public contracts for 15 years, 
and establishing specialized courts to deal with corruption 
cases.  Unfortunately, noted Santiago, despite a commitment 
from the Chamber leadership, no action has been taken on the 
proposals. 
 
------------ 
Comment: 
------------ 
 
¶12.  (SBU) Despite consensus on the consequences of rampant 
corruption--loss of confidence in government institutions, 
erosion of faith in democracy, costs to the economy, 
etc.--and the measures needed to reduce corruption, the 
roundtable did not leave much ground for optimism.  Clearly, 
perception of corruption among the public has not changed 
much over the last several years, or has worsened (Brazil's 
ranking in Transparency International's perceptions index has 
fallen from 62 to 70 to 72 over the last three years). 
Whether that is despite of or because of what the government 
claims is their more aggressive approach remains in dispute. 
What is not in dispute is that any credit the Lula government 
deserves for its anti-corruption actions--the transparency 
portal, administrative actions against government employees, 
giving free hand to the Federal Police--is undermined by 
scandals that have stained the PT's image as the 
anti-corruption party.  Unrelenting coverage of political 
scandals and lack of action on anti-corruption proposals will 
continue to reinforce the public's cynicism and belief that 
the corruption problem is intractable, which will impede the 
already difficult task of mobilizing society to demand 
actions from the government.  Such mobilization seems to be 
the essential, but as yet missing, component of an effective 
effort to reduce corruption and impunity in Brazil. 
 
SOBEL