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C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 001314 
 
SIPDIS 
 
STATE FOR BSC 
 
E.O. 12958: DECL: 09/16/2018 
TAGS: KCRM PGOV PTER PINS BR
SUBJECT: SUPREME COURT WIRETAP SCANDAL CHANGES FACE OF 
BRAZILIAN INTELLIGENCE 
 
Classified By: Deputy Chief of Mission Lisa Kubiske for reason 1.4 (b) 
and (d) 
 
¶1. (C) Summary: Long-running suspicions that phone calls of 
high-level Brazilian officials from all three branches of 
government are being intercepted became the latest front-page 
scandal when Veja magazine reported that the Brazilian 
Intelligence Agency (ABIN) had tapped conversations between a 
Senator and Federal Supreme Court (STF) President Gilmar 
Mendes.  Pressure from the STF and others to take swift 
action to avoid an institutional crisis between the branches 
of government forced Lula to suspend ABIN Director Paulo 
Lacerda until an investigation is completed.  As a result of 
the accusations against ABIN, the Brazilian Congress is 
looking to re-establish the long-dormant intelligence 
oversight committee to try to bring ABIN under control.  Any 
possibility that Congress would heed Lacerda's call to grant 
wiretapping authority in terrorism cases for ABIN is now a 
non-starter, and GOB efforts to increase integration of the 
intelligence system in Brazil have suffered a blow.  The 
scandal stems in part from an identity crisis in ABIN, itself 
a symptom of Brazil's failure to articulate a coherent and 
credible national security strategy that clearly delineates 
the threats ABIN should monitor.  End summary. 
 
--------------------------------------------- -- 
Lula's Hand Forced, Replaces ABIN Leadership 
--------------------------------------------- -- 
 
¶2. (U) An institutional conflict between the branches of 
government was unleashed when the September 3rd edition of 
weekly magazine Veja published transcripts of intercepted 
conversations between STF President Mendes and opposition 
Senator Demonsthenes Torres (DEM-Goias), supposedly conducted 
by ABIN (Note:  ABIN does not have the legal authority to 
conduct wiretaps.  End note.) The explosive revelations moved 
Lula to suspend ABIN Director Paulo Lacerda, his deputy Jose 
Milton Campana, and counter-intelligence chief Paulo Mauricio 
Fortunato Pinto, until the Federal Police (DPF) finished an 
investigation of who conducted the wiretaps.  Minister of 
Institutional Security Jorge Felix -- who oversees ABIN and 
also denies that ABIN had anything to do with the wiretaps -- 
offered to resign after Defense Minister Jobim undermined 
Felix's claims that ABIN lacked the capacity to conduct 
wiretaps when Jobim revealed to Lula that ABIN had allegedly 
purchased such equipment through the Defense Ministry.  Lula 
refused Felix's offer of resignation, although analysts 
believe that the perception that he has failed to reign in 
ABIN has undermined his status within the Government. 
Subsequent press articles have indicated that an initial 
Federal Police investigation did not find evidence suggesting 
that ABIN possesses equipment to intercept communications, 
although the Federal Police has not concluded its 
investigation. 
 
--------------------------- 
A theory: why ABIN did it 
--------------------------- 
 
¶3. (U) Although it remains unclear why Mendes' phone was 
tapped, the prevailing hypotheses -- which poloff contacts 
have deemed credible, but unsubstantiated-- holds that the 
cause of Mendes's wiretaps is traced back to the DPF's four 
year long Operation Satiagraha, an investigation into 
possibly illegal financial transactions between banker Daniel 
Dantas and the government, which started when Lacerda was 
director of the DPF.  After Lacerda moved to ABIN last year 
and was replaced at the DPF by Luiz Fernando Correia, 
Satiagraha's lead investigator -- an ally of Lacerda -- 
attempted to get additional personnel and resources to 
continue the Dantas investigation from the DPF's new 
leadership but did not receive it.   Although Lacerda has 
denied doing anything improper, ABIN apparently lent support 
to the Dantas investigation.  According to several news 
reports, ABIN lent more than 50 officials to Operation 
Satiagraha, in comparison to the 23 that the DPF had assigned 
to the case.  The 12 September edition of daily newspaper 
Estado de Sao Paulo reported that it was upon learning of the 
 
BRASILIA 00001314  002 OF 003 
 
 
extent of ABIN's support for Satiagraha that Lula decided to 
make Lacerda's suspension permanent. 
 
¶4. (U) At the conclusion of Satiagraha, when Dantas was 
finally placed under temporary arrest (a type of arrest that 
is allowable for a maximum of five days in order to prevent 
the suspect from hindering, for example, a search warrant), 
STF quickly granted a habeas corpus motion and ordered 
Dantas' immediate release.  The Sao Paulo money laundering 
judge in the case, Fausto Martin de Sanctis, issued another 
arrest warrant, this time for preventive arrest (another type 
of arrest that can be ordered when the suspect poses a flight 
risk), which was again immediately overruled by the STF, 
slapping de Sanctis on the wrist in the process.   As a 
result of STF's actions, so the theory goes, the Satiagraha 
investigators in the DPF, Lacerda, and de Sanctis, suspected 
improper behavior on the part of Mendes and had his phones 
tapped to investigate whether Mendes had any links to Dantas. 
 So far, however, no proof has surfaced supporting this 
hypothesis. The possibility that rogue elements within ABIN 
conducted the wiretap on their own -- some of whom are 
holdovers from ABIN's precursor, the military era National 
Information Service (SNI) -- still is also a possible 
explanation. 
 
----------------------------------------- 
Congress Taking Action to Rein in ABIN 
----------------------------------------- 
 
¶5.  (C) Another casualty of the wiretapping scandal is the 
effort by Paulo Lacerda to gain wiretap authority for ABIN in 
terrorism cases.  According to Roberto Carlos Martins Pontes, 
a Chamber of Deputies Legislative aide working on the 
Congressional Investigative Committee on Wiretaps, there is 
now no chance that Congress will consider giving it such 
authority any time soon.  Furthermore, it is possible that 
Congress may see a need to impose further restrictions on how 
closely the DPF and ABIN can work together in light of what 
happened in the Dantas case, which is viewed, according to 
Pontes, as either outright illegal or skirting uncomfortably 
close to it.  STF President Mendes, echoed similar thoughts 
when he publicly stated he feared such close cooperation, 
which, in his words, could lead to systematic violations of 
civil rights. 
 
¶6. (C) Joanisval Brito, a Senate legislative advisor and that 
body's leading expert on national defense and intelligence 
issues, told poloff that this was another sign of ABIN's 
weakness within the government, and pointed to the fact that 
with Lacerda's replacement taking office, ABIN had seen five 
directors in the six years since Lula took office.  He added 
that whether the wiretaps were institutional or the result of 
rogues -- he thought the latter more likely -- the crisis 
points to ABIN's continued search for a consolidated place 
within the Brazilian government, something it has been 
struggling to achieve since the feared SNI was tossed aside 
after the end of the military regime.  He further noted that 
a weakened ABIN could halt reform efforts that Lacerda began 
instituting at the agency.  If other entities lack confidence 
in ABIN or if Congress imposes restrictions on how ABIN can 
work with other agencies, as is probable, then Lacerda's 
efforts to better integrate the intelligence system in Brazil 
will suffer a blow (ref b). 
 
¶7. (C) According to Brito, Congress is re-convening the Joint 
Committee for the Control of Intelligence Bodies, which has 
not met in several years. Brito told poloff that Congress is 
now looking at either reinvigorating the committee or 
creating a new one, and is looking at models from other 
countries.  The reason the existing committee does not do its 
work effectively, he noted, is that there are no secure 
facilities within the Congress for the committee to discuss 
classified matters, nor does the committee have any permanent 
staff assigned to it. Brito noted that the Brazilian Congress 
is looking at how other countries' legislatures conduct 
oversight of intelligence as models for Brazil to follow. 
(Note: Brito noted that the Congress is considering a visit 
to the U.S. to meet with SSCI and HPSCI.  Post will follow up 
 
BRASILIA 00001314  003 OF 003 
 
 
with Brito and other key people in the Brazilian Congress. 
End note.) 
 
------------- 
Comment: 
-------------- 
 
¶8.  (C) ABIN, never a heavyweight to begin with, has now 
suffered a devastating blow.  ABIN's failure to adjust to 
post-military regime realities and find for itself a 
comfortable balance between competing interests in the 
security sphere of the Brazilian government, has reduced it 
to an institutional bantam-weight player.  Any chance that 
ABIN could regain a measure of prestige under Lacerda's 
leadership is gone.  Along with the hope that ABIN could take 
on a more robust role in countering terrorism, reform and 
renewal at ABIN will have to await new leadership, and may 
now be more than the agency can hope for. 
 
¶9. (C) ABIN's identity crisis is in part a symptom of a 
larger issue, the failure of Brazil's leaders, harkening back 
to the end of the military regime, to articulate a coherent 
and credible national security strategy that delineates the 
threats Brazil's intelligence agency should monitor. 
Politically, Lula seems to have contained this new scandal by 
acting quickly in getting rid of ABIN's leadership, although 
the Supreme Court and many in Congress have begun looking at 
the larger issue of wiretaps (septel) and may be holding 
their fire in this case with the expectation that the Lula 
government will take further action to stop the apparent 
politicization of ABIN's activities.  End comment. 
SOBEL