Cablegate: Allegations of Farc Funding to Lula's Election

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

S E C R E T SECTION 01 OF 03 BRASILIA 000785

SIPDIS

NOFORN

E.O. 12958: DECL: 03/22/2015
TAGS: PGOV PREL PINR BR
SUBJECT: ALLEGATIONS OF FARC FUNDING TO LULA'S ELECTION
CAMPAIGN

REF: REITER-WHA/BSC E-MAILS OF 3/15-22/2005

Classified By: POLOFF RICHARD REITER FOR REASONS 1.4B AND D.

1. (C) SUMMARY. In recent issues, Brazilian weekly
newsmagazine VEJA ran stories outlining an alleged plan by
Colombia's FARC to funnel US$5 million to the 2002 election
campaign of Brazilian President Lula da Silva and his
Workers' Party (PT). While the timing and sourcing of the
VEJA stories suggest that they were planted for political
reasons, the stories are not wholly fabricated. It seems
likely that the reported April 2002 meeting between a FARC
representative and PT party members took place and that the
Brazilian Intelligence Agency (ABIN) conducted an extensive
inquiry. However, it does not appear that any money changed
hands. The fact that the story is being leaked now, instead
of during the tense 2002 campaign when it could have caused
the most damage to Lula's campaign, suggests that it is a
product of current bureaucratic infighting within ABIN and
the GoB. END SUMMARY.

VEJA BREAKS FARC STORY
----------------------
2. (C) In its March 16 issue, Brazilian newsmagazine VEJA ran
a cover story ("FARC's Tentacles in Brazil") that described
an April 13, 2002 meeting on a ranch near Brasilia between a
FARC representative in Brazil, Francisco Antonio CADENAS (aka
Father Oliverio Medina), and some thirty "leftists" --mostly
members of Brazil's Workers' Party (PT). At this meeting,
Cadenas reportedly laid out a plan to funnel US$5 million
into PT coffers by laundering it through Trinidad and Tobago
and into the accounts of 300 Brazilians linked to the PT, who
would then turn the money over to the Workers' Party as
private contributions. The article states that the Brazilian
Intelligence Agency (ABIN) had an operative at this meeting
and developed a secret file, part of which the VEJA reporters
saw. The story notes that there is no evidence that the
money was ever transferred, and that several of those who
were at the meeting, including the FARC's Cadenas, denied to
reporters that money ever changed hands.

3. (C) The article also notes that in 2003, Federal Deputy
Alberto Fraga (PTB-Brasilia) announced in the Chamber of
Deputies that unnamed ABIN officers had come to him with
secret information about the April 2002 FARC-PT meeting.

SIPDIS
Fraga, who is not widely-respected in Congress, attempted to
open a congressional inquiry but could not round up enough
signatures on the floor.

SENATE HEARS FROM INTELLIGENCE CHIEFS
-------------------------------------
4. (C) In response to the first VEJA article, the Joint
Intelligence Oversight Committee in the Brazilian Congress
held hearings on March 17, convoking ABIN chief Mauro Marcelo
and General Jorge Armando Felix, President Lula's chief
intelligence advisor. They testified that ABIN was aware of
the April 2002 meeting and had investigated it, but the
investigation ultimately was shelved when nothing substantial
turned up. General Felix dismissed the report about the $5
million as "a rumor" and said the agency classified it as
"secret" to avoid leaks that, in the heat of the 2002
campaign, would have appeared purely political. The two also
testified that the internal ABIN documents referred to in the
VEJA article were forged, as they did not comply with agency
formatting rules. Marcelo noted, "What was published is a
mixture of half-truths and half-lies. We do not have any
official documents that the meeting took place." Felix noted
that, the April 2002 meeting aside, ABIN will closely monitor
FARC activities in Brazil.

5. (C) Federal Deputy Fraga later admitted that the documents
provided to him by his ABIN source could have been forged,
but that he had further secret documents in his possession.
(Note: Fraga is now being forced out of the PTB party in part
because party leaders are unhappy with his activities in this
case. End note.) Opposition party leaders were circumspect
at day's end and seemed disinclined to open a formal inquiry
in Congress. The committee chairman, Senator Cristovam
Buarque (PT-Brasilia), will consider whether to hold a
closed-door hearing to review the other documents Deputy
Fraga says he has in his possession and possibly to hear
testimony from ABIN officers and operatives.

SECOND VEJA ARTICLE
-------------------
6. (C) In its next edition, dated March 23, VEJA ran a second
article ("They Know Everything") indicating that ABIN's
knowledge of the April 2002 meeting was more detailed than
previously disclosed. VEJA interviewed the operative ABIN
had infiltrated into the 2002 meeting as well as the ABIN
officer who handled the case and reported that the whole case
was taken very seriously by the agency, came to the attention
of senior officials, and was investigated thoroughly.
However, this article also did not find evidence that the
FARC money had ever changed hands, though the ABIN case
officer, Colonel Eduardo Adolfo Ferreira, is quoted saying
that with help from the Federal Police, ABIN got copies of
three payment orders adding up to US$1 million that may have
been part of a FARC transfer. Separately, Colombian Vice
President Francisco Santos was reported to have said that
FARC shipped cocaine through Brazil but he had no information
about any transfer of the US$5 million in question.

COMMENT - BUREAUCRATIC SMOKE AND FIRE
-------------------------------------
7. (S/NF) This story has both smoke and fire, stoked by a
press that does a good job of digging up facts (and turning
up hidden witnesses) but also has papers to sell. From the
first revelation in VEJA magazine, the story has had the feel
of a political plant. What seems uncontested is that the
FARC official and PT members met in April 2002 and that ABIN
knew about the meeting and investigated it, as ABIN sources
have confirmed to mission elements. These same sources say
no direct evidence was developed that the US$5 million was
transferred by FARC to the PT. Financial scandals break
every week in Brazil --accompanied by great clamor from
opposition parties and law enforcement officials. Banking
transactions and financial documents are quickly splashed
across the front pages. The fact that this case is three
years old and no financial smoking guns have emerged, while
opposition politicians and the other press outlets seem
remarkably uninterested in pursuing what should be a
high-profile case, suggests that the VEJA articles may be
exaggerating the real level of FARC-PT contacts. Yet nobody
is ruling anything out. Lula's Communications Secretary,
Luiz Gushiken, pointed out that "It is impossible to know
what every one of 800,000 PT members is doing".

8. (S/NF) The FARC-PT meeting occurred as campaigning for the
2002 elections was heating up and Lula's campaign gained
steam. This raises the question, if ABIN and the
then-Cardoso administration were aware of something as
explosive as a FARC-PT link in the run-up to the election,
why was this not leaked immediately to damage Lula's campaign
against their preferred candidate? After all, the Cardoso
administration is believed to have torpedoed another
candidate, Roseana Sarney, in April 2002 by ordering a police
raid on her husband's office. Thus, the Brazilian political
questions are less explosive than the original story: why
the case was not made public in the midst of the 2002
campaign, why it was made public now, and why senior ABIN
officials are publicly indicating that they did not take the
case terribly seriously in 2002, when other ABIN sources tell
mission elements that there was in fact a thorough
investigation. Post believes part of the answer is
bureaucratic infighting. ABIN chief Mauro Marcelo was
appointed by Lula after a career as a Sao Paulo police
officer, and he is still distrusted by some in the military
and ABIN, who may have leaked the story to discredit him and
Lula. (Note, a few weeks ago there was a similar leak that
ABIN agents would travel to Cuba for professional exchanges.)
Other animosities have been stoked because the
administration allows FARC to send representatives to Brazil
(including a delegation at January's World Social Forum in
Porto Alegre) over the objections of the Colombian
government. Unless there are further, concrete disclosures,
this case may go the way of most Brazilian mini-scandals and
be forgotten in a few weeks.
9. (C) This cable has been cleared with Embassy ORA.
DANILOVICH

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