VZCZCXRO7740
RR RUEHRG
DE RUEHRI #0144/01 1641516
ZNR UUUUU ZZH
R 121516Z JUN 08
FM AMCONSUL RIO DE JANEIRO
TO RUEHC/SECSTATE WASHDC 4497
INFO RUEHBR/AMEMBASSY BRASILIA 0839
RUEHSO/AMCONSUL SAO PAULO 5155
RUEHRG/AMCONSUL RECIFE 3427

UNCLAS SECTION 01 OF 02 RIO DE JANEIRO 000144 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG EIND EAIR ECON PGOV PHUM KCRM KOCI SOCI SNAR BR
 
SUBJECT: Rio de Janeiro Pol-Econ Round-Up April-May 2008 
 
Summary 
------- 
 
¶1.  The following are highlights of Political/Economic activity in 
Rio de Janeiro's reporting district during the months of April-May 
¶2008. 
 
- Rio's Former Governor Indicted, Former Police Chief Arrested 
- Militias Torture Journalists 
- Brazil Plans for More Nuclear Power Plants 
- Rio Official Targets Police Weaknesses 
- Rio de Janeiro State To Become Major Steel Export Center 
- Police Operation Targets Sex Tourism in Rio de Janeiro 
- Middle Class Crack Consumption On the Rise 
- International Drug Traffickers Arrested in Minas Gerais 
- U.S.-Brazil Continue Technical Cooperation on Global Positioning 
Technology 
 
Rio's Former Governor Indicted, Former Police Chief Arrested 
------------------------ 
¶2.  Former Rio Governor and current President of the Brazilian 
Democratic Movement Party (PMDB), Anthony Garotinho, was charged 
with smuggling, passive corruption and money laundering by the 
Federal Public Ministry in late May.  His former Civil Police Chief 
and current Rio de Janeiro State Deputy Alvaro Lins was arrested on 
related charges, and released one day later after the Rio de Janeiro 
Legislative Assembly (ALERJ) issued a decree ordering his release. 
In a statement from the public prosecutor's office, Garotinho is 
cited as being politically responsible for guaranteeing that a 
"gang" led by Lins remained in charge of Rio's Civil Police.  The 
gang used the infrastructure of the State Public Security 
Secretariat to support an illegal slot machine network and to 
maintain a scheme of bribes.   Prosecutors also ordered the arrest 
of seven high-ranking police officers allegedly linked to the 
slot-machine scandal.  This latest episode has strengthened calls 
for a crackdown on corruption within the state and local 
government. 
 
Militias Torture Journalists 
---------------------------- 
¶3.  A news crew from O DIA newspaper claimed it had been detained 
and tortured by local militia (off-duty law enforcement officers who 
control poor areas of Rio de Janeiro) in mid-May, after it was 
discovered living undercover inside one of Rio's slums for two weeks 
while preparing an article about the militias.  A journalist, 
photographer, and their driver claim they were tortured for seven 
hours, including asphyxia and electric shocks.  Milictas started in 
Rio de Janeiro in the 1980s as a part of a local community effort to 
take back neighborhoods from drug traffickers.  Over time, milicias 
have themselves turned into increasingly corrupt and violent 
organizations.  The State Government is investigating this latest 
incident; the Special Rapporteur for Reprehensible Criminal Actions 
Dr. Claudio Ferraz announced that he would gather more information 
and ask for support from U.S. authorities such as the FBI. 
 
Brazil Plans for More Nuclear Power Plants 
------------------------------------------ 
 
¶4.  During a speech to the Brazilian Senate on May 8 about the GOB's 
"Plan to Accelerate Growth" (PAC), Minister Chief of Civil House 
Dilma Rousseff announced that construction of Angra 3 nuclear power 
plant will move ahead and said that more nuclear plants will follow. 
 The GOB's National Energy Plan calls for completion of Angra 3 by 
2014 and as many as eight additional nuclear plants by 2030.  Angra 
3 is expected to generate 1.350 megawatts and it construction will 
cost USD 4.6 billion.  Environmental licenses to resume construction 
may be granted as early as June 2008. 
 
Rio de Janeiro State To Become Major Steel Export Center 
-------------------------------- 
 
¶5.  Companhia Siderurgica Nacional (CSN), a major Brazilian steel 
company, announced plans to invest approximately US$ 3.5 billion in 
the construction of a new steel mill and a private port in Itaguai, 
Rio de Janeiro (70 kilometers west of Rio de Janeiro).  CSN plans to 
produce 5 million tons of steel per year at the Itaguai plant, which 
would be built adjacent to another planned steel mill owned by the 
Companhia Siderurgica do Atlantico (CSA) syndicate, a joint venture 
between German multinational ThyssenKrupp and Brazilian Companhia 
Vale do Rio Doce (Vale).  CSA plans to invest approximately US$ 4.7 
billion in a thermo-electric steel plant and a private port, 
producing 5.4 million tons of steel plates per year.  According to 
Rio State Secretary of Economic Development, Julio Bueno, the 
construction of these two plants, in addition to other investments 
in the steel sector, will result in the creation of over 30,000 
jobs. 
 
Police Operation Targets Sex Tourism in Rio de Janeiro 
------------------------------- 
 
 
RIO DE JAN 00000144  002 OF 002 
 
 
¶6.  In a special operation called Castelo de Areia (Sand Castle) in 
April, Rio de Janeiro police arrested two sand sculptors on 
Copacabana beach for brokering sexual encounters between visiting 
tourists and underage children.  Local press reported that Michael 
Joseph Clifford, an American DHS official from Rhode Island, while 
in Rio, used the sand sculptors to arrange an encounter with an 
11-year old boy in his Copacabana hotel room in March.  Papers 
reported that Clifford was placed on administrative leave, pending 
an investigation. 
 
Middle Class Crack Consumption On the Rise 
-------------------------- 
 
¶7.  According recent reports, crack consumption is increasing among 
the homeless and the middle class.  The Brazilian Center of 
Information of Psychotropic Drugs (CEBRID) as well as the Center of 
Studies and Research in Attention to Drug Users at the State 
University of Rio de Janeiro (NEPAD-UERJ), reported that crack 
addicts now account for 30 percent of their patients.  Rio's 
Military Police reported a 160 percent increase in crack seizures in 
2007 over 2006.  Another indicator of the drug's new popularity with 
the middle class, according to the study, is the increase in 
consumption despite its relatively high price.  Its street price in 
Rio is about 180 percent higher than it is in Sco Paulo.  According 
to Consulate contacts, middle and upper class drug consumers can 
easily order drugs by phone for home delivery (much like ordering a 
pizza). 
 
International Drug Traffickers Arrested in Minas Gerais 
---------------------- 
 
¶8.  In an operation called "Operagco Muralha" (Operation Wall), the 
Brazilian Federal Police dismantled an international drug 
trafficking organization based in Governador Valadares, Minas 
Gerais.  After eighteen months of investigations, the police seized 
almost 2 tons of cocaine and marijuana.  The drugs came from 
Bolvia, Colombia, Peru and Paraguay and were sent by the 
organization to Europe and Africa through the Port of Santos. 
Rodrigo Alves de Marco, the group's leader, created a fake travel 
agency for the purpose of money laundering and facilitating travel 
for traffickers.  Some drug shipments sent from Brazil to Angola and 
Nigeria, where the drugs are then re-exported to the U.S. in small 
quantities by air. 
 
U.S.-Brazil Technical Cooperation on Global Positioning Technology 
---------------------------- 
¶9. .S. Federal Aviation Agency (FAA) and Brazil's Department of Air 
Space (DECEA) officials met in Rio de Janeiro April 3-8, to review 
the status of various projects related to the implementation of 
Global Navigation Satellite Systems (GNSS) technology in Brazil. 
They agreed to cooperate on future activities including the 
promotion of an academic prize for Brazilian universities on the 
scientific, economic, social, transport, environmental protection, 
public security systems, and other related applications using GPS; a 
workshop at two major universities in Rio de Janeiro to educate 
about and promote GPS technology; and organizing a GPS/helicopter 
safety workshop. 
 
 
MARTINEZ