
About LADB Subscription Archive Search Econ Search SourceMex Noticen Notisur


ISSN 1060-4189	Volume 8, Number 43	November 20, 1998

Copyright 1996, Latin America Data Base (LADB) Latin American and Iberian Institute, University of New Mexico http://ladb.unm.edu
Director: Rebecca Reynolds Bannister
Editor: Patricia Hynds
Staff Writers:
Carlos Navarro, Robert Sandels

In This Issue: BRAZIL: PRESIDENT FERNANDO HENRIQUE CARDOSO'S ADMINISTRATION IMPLICATED IN ECONOMIC SCANDAL * Accusations fly about who is behind tapes and documents * Accusations could derail economic reforms * Federal police say they will investigate COLOMBIA: DRUG-LADEN PLANE POINTS TO MILITARY ROLE IN DRUG TRAFFICKING * Drug bust called an indictment of military * Illegal cargo test US-Colombian relations BUENOS AIRES HOSTS FOLLOW-UP TO U.N. GLOBAL-WARMING MEETING AT KYOTO * Plan of Action sets deadlines * Emissions credits a key US goal * Argentina sees emissions reductions as source of revenue * Controlling greenhouse gases also a health issue ____________________________________________________________ ********************* BRAZIL ********************* BRAZIL: PRESIDENT FERNANDO HENRIQUE CARDOSO'S ADMINISTRATION IMPLICATED IN ECONOMIC SCANDAL As Brazil's President Fernando Henrique Cardoso was in final negotiations with the International Monetary Fund (IMF) for a US$42 billion financial bailout for the nation's troubled economy, he was hit by two potentially damaging scandals involving the privatization of Telecomunicacoes Brasileiras (TELEBRAS). Cardoso has dismissed the allegations of corruption in his administration as politically motivated fabrications, but they nevertheless threaten to distract congressional attention from the task of passing IMF-required legislation. In early November, the magazine Epoca published reports that some government officials had received anonymous calls demanding million-dollar payments to avoid release of documents damaging to Cardoso. The documents supposedly prove that the president, Health Minister Jose Serra, Sao Paulo Gov. Mario Covas, and the late Sergio Motta, former communications minister, have had a secret bank account in the Cayman Islands since 1994 with a balance of US$368 million. Government spokesman Sergio Amaral called the charges "blackmail" and a "lack of respect for the office of the presidency." He said Cardoso's assets, including personal bank accounts in Brazil and New York, have been declared publicly. Cardoso has had a reputation for honesty since his 1994 election, at a time when Brazil was still reeling from the corruption charges that forced former president Fernando Collor de Mello to resign in 1992 (see NotiSur, 11/10/92, 01/05/93). About the same time that the Cayman Island-account story broke, the press also reported that extortionists had offered political opponents of Cardoso illegally taped conversations of Communications Minister Luiz Carlos Mendonca de Barros, recorded while Mendonca was in charge of the US$19 billion privatization of TELEBRAS. The conversations indicated that Mendonca and Andre Lara Resende, president of Brazil's national development bank (Banco Nacional do Desenvolvimento Economico e Social, BNDES), were trying to help a consortium of their friends obtain one of the TELEBRAS companies. Both Barros and Resende have denied any wrongdoing--and the consortium they allegedly favored lost the auction. Accusations fly about who is behind tapes and documents While most observers and the Brazilian media believe the documents were fabricated, who is responsible remains unclear. Suspicion has fallen on Cardoso's political rivals because the documents surfaced shortly before the October general elections. Opposition politicians said they were sent copies of the documents during the election campaign, but did not use them because they appeared false. Leonel Brizola, who was the vice presidential candidate on the ticket with Luiz Inacio Lula da Silva, said they were offered the documents, but their lawyers warned them it could be a trap. Brizola said the documents supposedly offered proof that the bank account in the Cayman Islands received millions of dollars in deposits from Spain during the TELEBRAS privatization. Some of the TELEBRAS component companies were acquired by Telefonica de Espana (see NotiSur, 08/07/98). Government officials have also blamed right-wing politician Paulo Maluf, the former mayor of Sao Paulo and a failed gubernatorial candidate in last month's elections (see NotiSur, 10/09/98). "Maluf is as crooked as a three-dollar bill," said Health Minister Serra. Cardoso said the letters were fabricated by political rivals with "absolutely no credibility," an apparent reference to Collor de Mello and Maluf. He angrily told journalists to show him more respect and not ask more questions. "At the exact moment that I spend days and nights defending our currency, the dignity of the presidency is indispensable," Cardoso said. Both Collor and Maluf have denied knowledge of the documents and have threatened to sue for defamation and slander. Accusations could derail economic reforms Opposition politicians are calling for a full congressional investigation, which analysts say could hamper the administration's efforts to pass legislation on the budget and economic reforms. Silvio Camargo with Banco Fator, a Brazilian investment bank, said so far "the tapes offer no conclusive evidence of wrongdoing. If solid evidence of irregularities emerges, then the momentum for a congressional probe will grow, jeopardizing the austerity measures." The IMF rescue package is contingent upon the austerity measures and a reduction in Brazil's budget deficit, now 7% of GDP. Support for the measures is in doubt, however, since they are expected to worsen the economic slowdown and increase unemployment, estimated at nearly 20%. Analysts fear the allegations could stall congressional action and hand opponents ammunition to dilute the more onerous measures. "The government's worst nightmare at the moment is a congressional probe into the tapes," said Brasilia-based consultant Alexandre Barros. "It will draw attention away from the austerity measures and possibly weaken them." Some politicians would support an inquiry committee "so they can later do some horse trading with the government," said Barros. "They'll negotiate withdrawal of their support in exchange for approval of projects that can dilute the fiscal austerity package." Aware of the danger, the government is hoping to delay a possible congressional investigation--at least until after Congress approves the belt-tightening measures. Meanwhile, Mendonca de Barros testified before Congress on Nov. 19 regarding the recorded conversations. He went on the offensive, saying the illegally recorded tapes were edited and are "an attempt to create a climate of illegitimacy" in the TELEBRAS privatization. His testimony failed to satisfy his critics and he offered to resign. Federal police say they will investigate Vicente Chelotti, director of the federal police, said he will investigate the accusations about the Cayman Islands corporate account. Chelotti said he would question everybody mentioned in the documents. "The president will also be called to testify," Chelotti said at a news conference. The police will also investigate the illegally recorded telephone conversations. The tapes could also be part of a blackmail plot, government officials say. If the allegations against Cardoso and the other government officials were proven, the case would be turned over to Congress as a possible impeachment matter. If they are false, those responsible could be charged with blackmail and defamation. [Sources: Spanish news service EFE, 11/10/98; Associated Press, 11/12/98, 11/13/98, 11/17/98; Reuters, 11/12/98; Clarin (Argentina), 11/17/98; Inter Press Service, 11/18/98; Notimex, 11/16/98, 11/17/98, 11/19/98; The New York Times, 11/19/98] ********************* COLOMBIA ********************* COLOMBIA: DRUG-LADEN PLANE POINTS TO MILITARY ROLE IN DRUG TRAFFICKING Colombian President Andres Pastrana has accused the US of mishandling a drug bust on a Colombian air force plane, saying US officials should have told his government before the plane took off from Colombia that it carried illegal narcotics. Nevertheless, the incident questions how involved the military is in drug trafficking. Customs officials at the international airport in Fort Lauderdale, Florida, found 743 kg of cocaine aboard a Hercules C-130 aircraft belonging to the Colombian air force (Fuerza Aerea Colombiana, FAC). They impounded the plane and detained the six crew members. The next day, authorities reported finding an additional 6 kg of heroin in the plane. The drugs had a street value of more than US$12 million. Colombia produces about 80% of the world's cocaine and has become an increasingly important source of high-quality heroin sold on US streets. Mike Sheehan, a spokesman for the US Customs Service in Miami, said the drugs were discovered in "a routine inspection, like those we have conducted many times in the past." The plane's crew were released after questioning turned up no evidence involving them in the incident. "We could make no association between them and the drugs," Sheehan said. The incident has been an international embarrassment for Pastrana's administration. "Why, if they knew about this cargo...didn't they tell us first?" Pastrana said. He also questioned why US authorities seized the plane at the Florida airport rather than tracking the shipment to its final destination. Drug bust called an indictment of military In Colombia, the seizure has led to multiple arrests and a command shakeup in the 12,000-member air force. Federal prosecutor's agents arrested six air force members, including Maj. Gonzalo Noguera, security chief of the CATAM military base near Bogota where the plane took off. Noguera and two other officers were forced into retirement. Air force commander Gen. Jose Manuel Sandoval resigned following the incident. Sandoval was the first branch commander to quit because of a drug scandal. The drugs were seen as more proof of corruption in the Colombian military. The Colombian media called the drug bust a confirmation of a "blue cartel," referring to the color of the air force uniforms. Nevertheless, Gen. Sandoval, a 36-year career office, denied the existence of a military cartel, blaming instead "corrupt elements" that should be expunged from the service. Pastrana had more problems from the cocaine seizure when the chief of the air base, Col. Arturo Duenas, defiantly refused to step down, saying the president would have to fire him. "In a symbolic act to support my men and the sacred right of [legal] defense that still protects us military men, I refuse to offer my resignation," Duenas said. He said "two or three people" in the air force sold out to the drug trade, but the rest of the force shouldn't have to pay for it. The Miami Herald reported that Colombian prosecutors have evidence that the FAC has been infiltrated by drug cartels at a high level. A secret document--shown to the Herald following the cocaine seizure--was prepared by a "faceless judge" whose identity is kept secret to prevent reprisals. It urged prosecutors to speed up an inquiry into the military cartel. The judge said prosecutors have evidence from anonymous sources linking two air force colonels, two lieutenant colonels, and at least six majors to drug trafficking. Moreover, "high-ranking officers" appear linked to Jairo Correa Alzate, a drug lord who served as a top aide to a founder of the Medellin Cartel, the judge said. The judge's comments were included in an addendum to a secret 72-page verdict issued last week, convicting three air force mechanics for a 1996 smuggling incident that humiliated then president Ernesto Samper. The mechanics were sentenced to 7 1/2 years for stashing heroin in an air force jetliner about to take Samper to New York to address the UN. An air force spokeswoman dismissed the judge's allegations. "He's a faceless judge, and he's basing all this on anonymous letters," she said. Defense Minister Rodrigo Lloreda agreed, however, that the FAC is seriously compromised by drug trafficking. In interviews published Nov. 15, Lloreda referred to the Hercules C-130 and its implications. "A serious and dangerous infiltration of the drug cartels exists in this institution," said Lloreda to the daily El Tiempo. And, Lloreda told El Espectador of Bogota that this incident "confirms that an internal organization [in the FAC] supports drug trafficking, which is inconceivable and unacceptable in a state institution, and even more so in the military." Illegal cargo test US-Colombian relations The US State Department said, given Colombia's cooperation in the case, bilateral relations--which have improved following Pastrana's taking office--would not be affected. Foreign Relations Minister Guillermo Fernandez said the government is willing to extradite the officers implicated in the case, if their complicity is proven and if the US requests it. FAC flights to the US have been curtailed for the time being. A FAC spokesperson said the FAC makes frequent flights to Florida to pick up "military supplies." On Nov. 15, Julio Garcia Camargo, head of the FAC Technical Division, said all flights of military planes to the US were suspended until further notice. "With the exception of the presidential plane, from now on whatever cargo that goes to the US will be by ship or in US Air Force planes," said Garcia Camargo. Although Garcia Camargo did not specify the reasons for the decision, he repeated that more than 20 investigators from the attorney general's office are on the case and until their investigation is finished, the flights will not resume. He said the action was not the result of US pressure. [Sources: Associated Press, Notimex, Reuters, The Miami Herald, 11/13/98; Spanish news service EFE, 11/14/98; El Nuevo Herald (Miami), 11/15/98] ********************* GENERAL ********************* BUENOS AIRES HOSTS FOLLOW-UP TO U.N. GLOBAL-WARMING MEETING AT KYOTO Eleven months after the Kyoto agreement to reduce greenhouse-gas emissions, representatives of 160 countries came together in Buenos Aires for a two-week UN-sponsored follow-up meeting. After working past the deadline, the world community endorsed an ambitious timetable to fight global warming, giving itself until 2000 to devise specific steps to implement the Kyoto Protocol. In December 1997, the US and 37 other industrial nations agreed to reduce their greenhouse-gas emissions by 2012-- setting a binding target of 5% below 1990 levels. Going into the Buenos Aires meeting, the Kyoto protocol had been signed by 57 countries, including every major industrial nation except the US. It has been ratified only by the island nation of Fiji (see NotiSur, 07/04/97). The US finally signed the Kyoto agreement during the Buenos Aires meeting, but it was mostly a symbolic gesture since the treaty must be ratified by Congress, unlikely any time soon. The Clinton administration has said it will not ask the Senate to consider the treaty until developing countries like India and China agree to participate--which could take years. Ratification by the US, which is responsible for about 25% of global carbon-dioxide (CO2) emissions, is important because reduction targets will only become legally binding if countries responsible for at least 55% of the industrialized world's emissions in 1990 ratify the accord. Although the signing by the US energized last-minute talks on cutting pollutants, critics said US plans remained vague. US chief negotiator Stuart Eizenstat told the representatives in Buenos Aires that Washington was promoting new energy-efficiency standards for appliances and cleaner technologies for industry but gave few other specifics on how the US would cut emissions. Alden Meyer of the Washington-based Union of Concerned Scientists praised the signing but said the US needs to do more to cut pollution from coal-burning power plants and cars. "If we had to grade Eizenstat, we'd give him an 'incomplete' on [cleaning up] power plants," Meyer said. "And he does nothing to deal with our gas-guzzling passenger- vehicle fleet." Plan of Action sets deadlines The Buenos Aires talks focused on how to implement the Kyoto pledge to cut greenhouse-gas emissions. The Buenos Aires Plan of Action set 2000 as the deadline to resolve issues such as how to transfer climate-friendly technology to developing countries and whether developed nations can buy or trade emissions credits from other countries. The deadline also applies to settling how to gauge compliance and whether penalties can be levied against violators. "We've won a significant victory," said Maria Julia Alsogaray, chair of the Fourth Conference of Parties (COP 4) to the UN Convention on Climate Change. "This action plan will fill in the details that were missing from the protocol and pave the way for it to be implemented quickly." Emissions credits a key US goal Between now and the 2000 deadline, much work remains. The Clinton administration wants approval for its plan to allow countries to buy and sell emission allowances--which it says would use the marketplace to find the cheapest ways to cut emissions and make the Kyoto deal palatable to industries and to the Republican-led Congress. Emission trading means that if a country reduces its emissions by more than the agreed amount, it can sell this surplus as "emission rights" to a country that has fallen short of the target. The US wants unfettered trading of credits, while the European Union (EU) wants limits on trading, saying the priority should be actual greenhouse-gas reductions, not just reductions on paper. The EU and some US environmentalists say the US plan would be difficult to police and could result in little actual reduction of emissions. Argentina sees emissions reductions as source of revenue At the meeting, Argentine President Carlos Saul Menem announced that Argentina will voluntarily seek emissions reductions. It is the first developing country to agree to voluntarily cut emissions. Menem called Argentina a model for other developing nations. "Not only can highly advanced countries contribute to a new world order, but also emerging nations," Menem said. Menem said his country would establish "goals" for carbon-dioxide emissions and in about a year would announce its commitment to those goals for the period 2008 to 2010. Several other countries, including South Korea and Chile, are considering similar steps, said Argentine delegation chief Raul Castellini. Argentina is in informal talks with more than 20 developing countries about joining it in the fight against global warming, he said. Argentina's announcement was hailed by the US. But others, such as China and India, argue that they are too poor to limit burning fossil fuels that emit gases like carbon dioxide and that rich nations who contribute most to global warming should pay to clean up the environment. The Argentines see emissions reduction as a potentially huge source of capital inflow. Under emissions-trading rules proposed by the US, Argentina believes it could earn US$700 million a year as payment for maintaining carbon-dioxide absorbing forests alone. Argentina has 10 million hectares of territory, mainly grassland, which could attract US$4 billion in investment to turn it into gas-absorbing forests, Merenson said. Controlling greenhouse gases also a health issue Scientists warn that unless emissions are reduced, the atmosphere will heat up, producing consequences ranging from the spread of disease to floods and droughts. Scientists also say that, even if all potential loopholes in the Kyoto Protocol are closed, the emission-reduction targets are too low to prevent further fast global warming. A report released the first day of the Buenos Aires conference by the World Wildlife Fund (WWF) said climatic changes related to global warming could increase outbreaks of cholera, dengue fever, and malaria. Children and the elderly would be particularly vulnerable. "There are strong indications that a disturbing change in disease patterns has begun and that global warming is contributing to them," said the report's author, Dr. Paul Epstein, associate director of the Harvard Medical School's Center for Health and the Global Environment. The WWF report said the spread of infectious diseases has accelerated not only because the world is warming but because nighttime temperatures are rising faster than daytime temperatures. This has disturbing implications for human health because the range of many disease-transmitting insects is limited chiefly by nighttime temperatures. Diseases like dengue and malaria are infecting new populations as warmer conditions allow mosquitoes to survive in a wider area and at higher altitudes. Malaria currently kills up to 2 million people each year and over 2 billion people are considered at risk of contracting the disease. Analyses show malaria outbreaks outside tropical regions becoming more common in the future. Scientists and governments agree the world has warmed by up to 0.6 degree Celsius (1.1 degree Fahrenheit) this century. The seven warmest years since scientists began keeping records almost 150 years ago have all occurred in the past decade, with 1997 being the warmest. Every month from January to August in 1998 broke the previous record for that month. Added to the effects of the warming trend are more frequent and extreme weather events such as droughts, floods, and storms that directly cause death and injury and open the door to other serious health problems, said the WWF. [Sources: Spanish news service EFE, 11/10/98; Reuters, 11/01/98, 11/04/98, 11/11/98; CNN, 11/11/98; The New York Times, 11/12/98; Associated Press, 11/10/98, 11/12/98, 11/14/98; Inter Press Service, 11/14/98; The Miami Herald, 11/12/98, 11/15/98; Environmental News Network, 11/16/98]