Cablegate: Brazil Looking to Implement Political Reforms To

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



E.O. 12958: N/A

1. SUMMARY. In 2003, the Brazilian Chamber of Deputies
(lower house) restarted discussions on "Political Reform" -
- a catch-all term covering proposals to strengthen
political parties, reform campaign financing, and improve
the country's electoral system. Many proposals have been
debated since the 1988 Constitution was passed, and they
were distilled into two bills voted out this year by the
Chamber's Ad Hoc Committee on Political Reform. While the
proposals are the subject of intense political maneuvering
among the parties, there is a growing consensus here that
Political Reform is a good idea for the parties, the
voters, and democracy. The current bills may pass into law
next year, and they must pass by October 2005 if they are
to be in effect for the October 2006 presidential and
congressional elections. END SUMMARY.

2. Since Brazil returned to civilian rule and passed the
1988 Constitution, its multi-party system has been
criticized for its vulnerability to corruption in campaign
financing, its institutionally weak parties, and its
personalized culture in which parties more often revolve
around individuals than ideology or substantive positions.
Twenty-seven parties are currently registered in Brazil,
with politicians jumping from one to another for short-term
advantage. There were nearly 200 party switches in the
Federal Chamber of Deputies in the first 18 months of the
52nd Congress (2003-2005). Since 1992, at least six
congressional committees have been created in both the
Senate and Chamber to discuss the shortcomings of
democratic institutions. In early 2003, the Chamber
reopened the debate and established an Ad Hoc Committee
that presented two bills that have now gone to the
Chamber's Justice Committee. They will eventually be voted
out to the floor and then go to the Senate for final
passage. President Lula da Silva supports the effort. He
has said repeatedly that he sees political reform as
"urgent and necessary to promote democratization in both
Brazilian society and State".

3. The primary bill now under discussion is: Bill 2679/03,
drafted by Deputy Ronaldo Caiado (PFL-Goias), passed by the
Ad Hoc Committee in December 2003 and sent to the Justice
Committee, where it is still under consideration. Caiado's
bill addresses:
- campaign and party financing, to combat the mounting cost
of electoral campaigns and candidate dependence on special
interest money for campaign financing;
- closed-list system, aimed at strengthening the link
between politicians and their parties (Brazil now uses open
lists to select its legislatures);
- party federations, to replace short-term alliances of
- lowering of thresholds (i.e., the percentage of votes in
how many states each party must win in order to maintain
its party status), to protect small parties that could be
damaged by the new federation rule.

4. Two other bills are also part of the package: Bill
1712/03 (also sponsored by Deputy Caiado and also waiting
to be voted out by the Justice Committee), addresses party
switching by mandating that candidates must be members of a
party for a fixed period before they can run for any office
under that party's banner; and a Constitutional amendment
proposal that would put all of Brazil's elections on
concurrent four-year cycles instead of the alternating two-
year cycles as now. The two Caiado bills will likely be
debated together and pass in some form in the coming
months. The third bill, dealing with election cycles, has
less support. In addition, President Lula recently
mentioned that he would support a single six-year term for
Brazil's President, to replace the current system of four-
year terms, with a President limited to serving no more
than two terms consecutively. This idea is not now in any
of the bills, but could be attached in the future.

5. The two Caiado bills have languished in the Justice
Committee because of opposition from the conservative
parties in Lula's coalition (PL, PTB, and PP). But that
opposition may now be overcome: in a December meeting with
Federal Deputies, President Lula highlighted political
reform as his top legislative priority for 2005. Once they
get to the floor, the bills could have greater support from
the opposition than in Lula's own coalition. But the bills
as written would significantly change the rules of the
game, so they will generate fierce debate and may well be
watered-down before becoming law. The most controversial
elements of the reforms are public campaign financing and
closed lists --the very heart of the reforms. According to
the caucus leader of the coalition's PL party, Deputy
Sandro Mabel: "If they insist on closed lists and public
finance, bye-bye reform".

6. For many Brazilians, Political Reform is an opaque and
complicated topic fit only for politicians. There has been
little public discussion, press analysis, or dissemination
of information on how these bills could fundamentally
impact Brazil's democracy. Post is developing a project to
sponsor a conference in early 2005 to discuss various
elements of the proposed political reform and to bring
together key Brazilian stakeholders, including politicians,
journalists, academics, and representatives of civil
society organizations, to inform and expand the national

7. In early 2004, a scandal involving one of Lula's senior
advisors, Waldomiro Diniz, made clear the need to reform
the Brazilian electoral and political parties system,
especially campaign and party financing. Diniz was caught
on tape allegedly soliciting illegal campaign contributions
from a numbers racketeer. In addition, the long-running
"Banestado" money-laundering investigation has uncovered
evidence that several parties are financing campaigns with
undeclared funds. The Political Reform now in the Chamber
of Deputies, (in the words of one Deputy) may not be the
"one Brazil wants, but the one Brazil can do", yet these
bills represent a significant first step in strengthening
the electoral process.

8. The current system of open lists and private campaign
financing has the support of many in Congress, including
many in Lula's coalition. This system makes the parties
dependent on the candidates, rather than the other way
around, while candidates become reliant on private
interests for funding. Thus, the lack of public
participation and discussion on political reform make it
easier for politicians to approve laws that will benefit
themselves rather than the whole country or even their
party. Transparency and public participation are key to
passing good political reform laws and key to making
Brazil's democracy more responsive to the public.

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