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Cablegate: Lula Finally Makes His Big Cabinet Shuffle

This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 04 BRASILIA 000181

SIPDIS

DEPT FOR WHA/BSC AND EB:ALEWIS/JCOOPER

E.O. 12958: DECL: 01/23/2014
TAGS: PGOV PREL ECON ECPS SOCI BR
SUBJECT: LULA FINALLY MAKES HIS BIG CABINET SHUFFLE

REF: A. 02 BRASILIA 3516
B. 02 BRASILIA 3447

Classified By: POLOFF RICHARD REITER FOR REASONS 1.5 B AND D.

1. (SBU) SUMMARY. Thirteen months into his term, Brazilian
President Lula da Silva on January 23 announced his
long-awaited first cabinet shuffle. The changes affect
twelve of 35 cabinet posts and address all three of Lula's
goals: bringing the PMDB party officially into the governing
coalition, replacing weak performers and streamlining the
social assistance portfolios, and improving the workflow in
the Presidency. Key changes include bringing the coalition's
floor leader in the Chamber of Deputies, Aldo Rebelo, into
Lula's office as the newly-created Minister of Political
Coordination --taking some weight off Chief-of-Staff Jose
Dirceu; and creating a new unified Social Development
Ministry headed by Federal Deputy Patrus Ananias (meaning
Zero Hunger chief Jose Graziano and Social Assistance
Minister Benedita da Silva will lose their jobs). The PMDB
will get two ministries as it has long demanded --settling on
Social Security and Communications. This shakeup should
smooth the administration's ability to pass legislation and
carry out the social assistance programs expected to be at
the heart of the coming year's political agenda. (Full
cabinet list is at paras 8-9.) END SUMMARY.

PMDB GETS COMMUNICATIONS AND SOCIAL SECURITY
--------------------------------------------
2. (SBU) The wait is over (ref A). President Lula announced
his cabinet shuffle on January 23, thirteen months into his
administration --the longest any modern Brazilian
administration has gone without cabinet changes. The first
goal was to cement the large centrist PMDB party in the
governing coalition. The PMDB has been an ally of Lula's
Workers' Party (PT) since May, and it has clamored for
cabinet slots to reflect its size (78 Deputies and 23
Senators). Weeks of painfully public negotiations yielded up
two ministries. PMDB Federal Deputy Eunicio Oliveira from
Ceara will take over the Communications Ministry, while
Senator Amir Lando of Rondonia will become Minister of Social
Security. Social Security is a big-budget portfolio, but
with most of the money earmarked there is little room for
creativity --no doubt what Lula had in mind. The heavy
lifting on passing pension reforms has already been done, so
Lando's role will be to implement the changes. In addition,
the PMDB will also get to name the head of the Postal
Service.

SOCIAL PORTFOLIOS STREAMLINED
-----------------------------
3. (C) The second goal was to weed out underperformers and
streamline the social portfolios. After spending 2003
focused on fiscal austerity and reforms, Lula is now expected
to turn his attention to education, employment, and poverty
alleviation. To that end, longtime Lula friends Jose
Graziano (Minister of Food Security and head of the "Zero
Hunger" program) and Benedita da Silva (Minister of Social
Assistance) --both of whom have been criticized for weak
performances and assorted gaffes-- will lose their jobs.
Federal Deputy Patrus Ananias, a PT stalwart and former mayor
of Belo Horizonte (Brazil's third largest city) will head the
new Ministry of Social Development that will merge the
portfolios of Benedita and Graziano as well as programs
consolidated under the Presidency in October (ref B). A PT
Deputy commented approvingly to us that Ananias is
well-respected, low key, and has executive experience. The
Deputy also noted that Lula feels personally committed to
both Graziano and Benedita, and that Graziano is mulling an
offer to remain as an "advisor" while Benedita, a PT icon,
may go back and run for the Rio city council in October's
elections.

ALDO REBELO MOVES TO THE EXECUTIVE BRANCH
-----------------------------------------
4. (C) Federal Deputy Aldo Rebelo (PCdoB-Sao Paulo) will move
into Lula's office, relieving Chief-of-Staff Jose Dirceu of
some of his duties. Rebelo will get cabinet rank as
"Secretary of Political Coordination and Institutional
Affairs", with responsibility to coordinate the
administration's projects with Congress, governors, mayors,
and the judiciary. The overworked Dirceu is unlikely to lose
real authority, though he will be freed to focus on internal
administration affairs. Rebelo, a leading moderate in the
Communist Party of Brazil in his fourth Congressional term,
is widely-praised for his consensus-building over the past
year as the coalition's floor leader. The leading candidate
to take over that post is Miro Texeira, who was forced out as
Minister of Communications because his PDT party pulled out
of Lula's coalition last month. Texeira will take up the
Chamber seat (from Rio de Janeiro) to which he was elected in
2002. Texeira has now left the PDT to sign on with the PT,
and in his January 23 announcement, Lula endorsed him for
coalition floor leader.

DOMINOS FALL AT LABOR, CDES, EDUCATION, AND SCIENCE
--------------------------------------------- ------
5. (SBU) The fact of PMDB Senator Amir Lando's replacing
Ricardo Berzoini at Social Security created a domino effect,
as Lula was intent on keeping Berzoini in the cabinet. As a
result, Berzoini will replace Jaques Wagner as Minister of
Labor, Wagner will replace Tarso Genro as head of the Council
for Economic and Social Development (a public-private talk
shop attached to the Presidency), and Tarso Genro moves to
the Ministry of Education, replacing Cristovam Buarque, one
of the "academics" who lost Lula's confidence. (Lula was
quoted saying he wants fewer "academics writing theses" and
more concrete results in the coming year.)

6. (C) Another unhappy minister will be replaced at Science
and Technology, as Federal Deputy Eduardo Campos replaces
Roberto Amaral. In addition to his weak performance and
verbal gaffes, Amaral was linked to a faction of the PSB
party that recently lost an internal power struggle. Campos,
38, grandson of the party's founder, legendary leftist Miguel
Arraes, was on the winning side and so gets the party's
cabinet post. (One unimpressed PT politician told us Campos
is a "professional grandson" who has accomplished little in
his nine years in Congress.) Finally, Nilceia Freire, Rector
of the State University of Rio de Janeiro and best-known for
introducing minority admissions quotas there, takes over from
Emilia Fernandes as Secretary for Women's Affairs, the
smallest-budget post in the cabinet.

COMMENT
-------
7. (C) There is palpable relief that the shuffle is done.
The process has been grindingly slow and emotionally taxing
for Lula, who felt great anguish at having to give longtime
colleagues the axe. Over the past five months, the constant
begging from the PMDB and the unhappy existences of lame-duck
Ministers had become major distractions. In the end, Lula
addressed his obvious needs, and (aside from the odd
four-ministry domino effect designed to keep Ricardo Berzoini
in the cabinet) much of the public speculation was borne out.
Lula keeps intact his well-regarded economic team as well as
his closest group of advisers (the so-called "hard core" of
Dirceu, Gushiken, Dulci, and Palocci). With three leading
Deputies and a Senator moving from Congress to the cabinet,
there will also be repercussions in the congressional and
party leaderships. Overall, the cabinet shakeup is
promising. Satisfying the PMDB (and bringing Aldo Rebelo
onto Lula's staff) should ease the government's ability to
pass legislation, while unifying the social affairs
portfolios recognizes the need for a single point of contact
as Lula turns his attention to the country's poor and
unemployed.


LULA'S NEW CABINET
------------------
8. (SBU) The twelve Minister-rank officials attached to the
presidential Planalto Palace, with party affiliation and
state of origin. "p" signifies a non-party professional
appointment.

Planalto Ministers affected by the shuffle:
- Minister-Chief of the Civilian Household (Chief of Staff),
Jose Dirceu (PT-Sao Paulo). Will off-load some duties to
Aldo Rebelo.
- Secretary of Political Coordination and Institutional
Affairs, Aldo Rebelo (PCdoB-Sao Paulo). Newly-created
portfolio to coordinate administration policies with
Congress, governors, mayors, and the judiciary.

- Secretary for Economic and Social Development, Jaques
Wagner (PT-Bahia), the outgoing Labor Minister, replaces
Tarso Genro, who moves to Education.

- Secretary for Women's Affairs, Nilceia Freire (PT-Rio)
replaces Emilia Fernandes.

Planalto Ministers unaffected by the shuffle:
- Secretary General, Luiz Dulci (PT-Minas Gerais)
- Communications Secretary, Luiz Gushiken (PT-Sao Paulo)
- Institutional Security, Gen. Jorge Armando Felix (p-Rio)
- Inspector General, Waldir Pires (PT-Bahia)
- Secretary for Fishing, Jose Fritsch (PT-Santa Catarina)
- Secretary for Human Rights, Nilmario Miranda (PT-Minas
Gerais)
- Secretary for Racial Equality, Matilde Ribeiro (PT-Sao
Paulo)
- Solicitor General, Alvaro Ribeiro Costa (p-Ceara)

Extraordinary Secretary for Food Security, Jose Graziano
(PT-Sao Paulo) will lose his job. His office will be folded
into the new line Ministry of Social Development.

LINE MINISTRIES:
----------------
9. (SBU) Of the 23 line ministries, six will get new
ministers:

- Minister of Communications, Eunicio Oliveira (PMDB-Ceara)
replaces Miro Teixeira, who goes to the Federal Chamber of
Deputies.

- Minister of Education, Tarso Genro (PT-Rio Grande do Sul)
replaces Cristovam Buarque, who goes to the Senate.

- Minister of Labor, Ricardo Berzoini (PT-Rio Grande do Sul),
replaces Jaques Wagner who becomes Secretary for Economic and
Social Development in the Planalto.

- Minister of Science and Technology, Eduardo Campos
(PSB-Pernambuco) replaces Roberto Amaral.

- Minister of Social Development, Patrus Ananias (PT-Minas
Gerais). Newly-created portfolio will merge several existing
social programs, including those run by outgoing Ministers
Jose Graziano and Benedita da Silva.

- Minister of Social Security, Amir Lando (PMDB-Rondonia)
replace Ricardo Berzoini, who moves to Labor.


Seventeen of 23 line ministers will remain in place:
- Minister of Agrarian Development, Miguel Rossetto (PT-Rio
Grande do Sul)
- Minister of Agriculture, Roberto Rodrigues (PP-Sao Paulo)
- Minister of Cities, Olivio Dutra (PT-Rio Grande do Sul)
- Minister of Culture, Gilberto Gil (PV-Bahia)
- Minister of Defense, Jose Viegas (p-Mato Grosso do Sul)
- Minister of Development, Industry and Trade, Luis Furlan
(p-Sao Paulo)
- Minister of Environment, Marina Silva (PT-Acre)
- Minister of Finance, Antonio Palocci (PT-Sao Paulo)
- Minister of Foreign Affairs, Celso Amorim (p-Sao Paulo)
- Minister of Health, Humberto Costa (PT-Pernambuco)
- Minister of Justice, Marcio Thomaz Bastos (PT-Sao Paulo).
- Minister of Mines and Energy, Dilma Rousseff (PT-Rio Grande
do Sul
- Minister of National Integration, Ciro Gomes (PPS-Ceara)
- Minister of Planning, Guido Mantega (PT-Sao Paulo)
- Minister of Sports, Agnelo Queiroz (PCdoB-Brasilia)
- Minister of Tourism, Walfrido Mares Guia (PTB-Minas Gerais)

- Minister of Transportation Anderson Adauto (PL-Minas
Gerais). Adauto is a poor performer dogged by old
allegations of corruption. He may resign in April to run for
mayor of his hometown in the October elections.
HRINAK

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