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Jungle bungle

Police wire-tap tapes suggested that bribery was used to hasten Brazilian Senate ratification of a radar surveillance system for the Amazon. The affair became the first scandal of Fernando Henrique Cardoso's presidency. Despite the President's opposition a Senate committee called for scrapping the contract with US defense firm Raytheon. President Bill Clinton had applied personal pressure to win the close to $1.5 billion contract for the US.


Deforestation, slash-and-burn farming, illegal mining, drug trafficking and pollution are destroying the planet Earth's lungs the Amazon. Shared by six countries, the Amazon region is the source of 20% of the world's fresh water and it is also the home to half of the Earth's species. A badly needed surveillance system has been conceived, the SIVAM (Sistema de Vigilância da Amazônia), but not yet implemented.

Also called the Amazon Radar Defense Network, the five year contract, was awarded to an American contractor, Raytheon Co. in May, but current allegations of illegal kick-backs involving Brazilian politicians has not only postponed the realization of this project, but has also cost Brazil, so far, penalty fines worth $7 million in foregone interest payments.

With a planned cost of $1.4 billion, the SIVAM project will utilize state-of-the-art technology that will employ radar, satellites and sensors that will cover a span of over 2 million square miles. The Ministry of Space and Technology will oversee the implementation of the project with the aid of three supervision centers, CRVs. The CRVs are located in Manaus, Belém and Porto Velho.

The SIVAM, which should be functioning by the year 2000, will employ two million persons due to the immensity of the Amazon region. In Brazil, nine states comprise the legal boundaries of the Amazon region. These states are: Acre, Amapá, Amazonas, Pará, Rondônia, Roraima, Tocantins, Maranhão and Mato Grosso.

The Brazilian senate is currently conducting hearings to review recorded conversations between the major parties involved in this case. During the first week of November, newsmagazine Isto É published transcripts of a conversation between newly nominated Ambassador to Mexico, Julio César Gomes dos Santos, and his friend and Brazilian representative to Raytheon, José Afonso Assumpção.

The transcript details conversation regarding the SIVAM project, specifically the frustration that Assumpção felt with Senator Gilberto Miranda who had been stalling the implementation of the project. The Ambassador's response, as published is Isto É, is "Why? You have already paid him off".

This is the first scandal of the Cardoso administration. Upon receiving knowledge of the Isto É news-breaking story, President Fernando Henrique Cardoso arranged for an emergency meeting to be held at the Palácio do Planalto (the Brazilian White House).

Cardoso received a transcript of the recorded conversation, that happened between September and October, by a division of the Federal Police. The Federal Police had obtained permission from an unnamed judge to conduct the telephone call recordings. The reasons for the initial suspicions that led to the telephone bugging weren't released.

The Cabinet's emergency meeting, held on November 17th, involved the following officials: President Cardoso, Minister of Foreign Relations Luiz Felipe Lampreia, Minister of Justice Nelson Jobim, Speaker of the House Sergio Amaral and Press Secretary Ana Tavares.

Shortly after the magazine article and the emergency cabinet hearings, Júlio César Gomes dos Santos resigned his post of Presidential Aide, but he retained the appointment as Ambassador to Mexico. However, the final approval for all foreign service posts needs to be granted by the Senate.

This is Brazilian soap-opera-style politics at its best. Ministers, Senators and representatives are previous friends and now foes.

Minister of Space and Technology Mauro Gandra and Raytheon's Brazilian representative, José Afonso Assumpção, have kept a friendship for the past 10 years. During a three-day stay at Assumpção's house in Belo Horizonte, Minister Gandra admitted to discussing SIVAM.

Senator Gilberto Miranda, who had initially voiced opposition to the SIVAM project, is a special guest at the hearings. Senator Miranda gained knowledge regarding surveillance systems from his tour to Russia and Ucrania and his visit to Raytheon's headquarters.

Miranda has kept his private plane and helicopter in Lider's hangar for the past four years, but is now concerned that something might happen to his planes. Senator Miranda's publicly voiced concerns prompted Assumpção, President of Lider, to request for a letter from Miranda saying that if anything happened to the planes Lider couldn't be blamed. Miranda said that he will first wait for the SIVAM ordeal to be resolved and then write the disclaimer.

Appointed Ambassador to Mexico, Gomes dos Santos, traveled to Miami during the last week of September. From Miami he boarded the Learjet PT-JAA which belongs to Raytheon representative Assumpção. Assumpção and Santos traveled to Las Vegas to attend an Aviation Convention and then to New York to visit the Ambassador's daughter. This plane ride and the wine that was served aboard were key issues to be discussed.

As a public official Santos is aware that he can't accept this sort of benefits. He claims that he was on vacation and not on official business, therefore these rules don't apply. Santos said that he did "hitchhike" on the plane ride, but that he paid all of the other bills with his own credit cards. The receipts were turned in along with his letter of resignation.

The fate of SIVAM implementation awaits clarification of this issue through current Senate hearings. At the close of this issue there were indications that the contract with Raytheon would die of natural death on December 25. The document had been signed contingent on Senate approval and had its deadline extended from November, to the end of December. The military, however, were showing discontent with these maneuvers that could mean a postponement of the project for at least one year.

The concept of a surveillance system to monitor the Amazon started three decades ago. In 1972, the Brazilian government created a private agency, Engenharia de Sistemas de Controle e Automação S.A. (Esca), to receive technological information from its French partner, the Thompson Company. Esca and Thompson intended to create the System Dacta whose aim would be to control forest fires and drug trafficking.

Unfortunately, the idea never materialized mainly due to Esca's financial difficulties such as its $1 million tax liability. Only during the Itamar Franco administration there was a revival of this idea fueled by interest from other world powers. And Raytheon was one of the first companies to meet with Esca to discuss a SIVAM-like project.

An ex-executive of Esca told Isto É that when Raytheon first approached Esca, he was certain that the Brazilian government would grant the French partner Thomson the project especially after Thompson had provided Brazil with some technological improvements.

Neither Esca nor Thompson were chosen as the contractors for the SIVAM project. Raytheon was granted the project on December 1994. Esca was originally chosen and then later disqualified by Minister Gandra. There was fierce competition provided by both, the Americans and the French. The United States sent Commerce Secretary Ron Brown and Vice President Al Gore to discuss SIVAM.

The American visitors alluded that if Raytheon won the nomination, the US would purchase $4 billion worth of fighter planes used in training from the Brazilian aviation company Embraer. The French didn't make any tempting offers, but they did send their Commerce Minister Gérard Longuet on a visit to Brazil to discuss the project.

The Raytheon company did offer the best financing agreement. The US Export-Import Bank agreed to lend 85% of the funds with Raytheon and its subcontractors financing the rest. Raytheon's incentive is that it might build similar surveillance projects for other countries.

An unnamed government official told Isto É magazine that the offers by Thompson and Raytheon were similar in technical and financial manners but the government seemed to lean towards the Americans. Several months later, Commerce Sub Secretary Jeffrey Garten told The New York Times that the White House pressured Brazil to choose Raytheon.


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