The surveillance scandal

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, Maranhăo 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 Assumpçăo.

The transcript details conversation regarding the
SIVAM project, specifically the frustration that Assumpçăo 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

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 Assumpçăo, have kept a
friendship for the past 10 years. During a three-day stay at
Assumpçăo’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

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 Assumpçăo, 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
Assumpçăo. Assumpçăo 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
Automaçăo 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

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

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

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.


  • Aerial Traffic Control: capable of monitoring all
    flights over the Amazon region. The radars presently installed in the
    region are only capable of monitoring zones next to major airports.
  • Surface Area Monitor: will help map the region that
    is rich in minerals and consequently patrol the area for illegal mining
  • Traffic Control: 18 permanent radar units will aid
    aerial traffic control and clandestine operations and 6 transportable
    radar units will be available to be installed in areas in need of
    additional surveillance. Routine checks will be provided by five planes
    which will exclusively patrol the area.
  • Weather Station: weather radar system and automated
    weather station will serve as important source of meteorological data
    such as rainfall and changes in the water level of rivers. Three turbo
    prop-planes equipped with radars and two hundred collection centers
    will collect data to be used in forecasting and climate studies. The
    planes will be equipped with state-of-the-art infrared and optic
    sensors that will capture meteorological images.
  • Environmental Monitor: monitor brush fires, river pollution and general pollution levels.
  • Planning Center: serve as a centralized
    communication center to collect, analyze and disburse information to
    various government agencies such as the Agency for Agriculture and
    Environment, the Amazon Region Ministry, the federal police, the
    military, the National and Indian Foundation and state and local

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