Better Than Kissinger: How Wall Street Recolonized Brazil. Part Four.

In September 2019, Brazilian Minister for Foreign Affairs Ernesto Araújo met US Secretary of State Mike Pompeo in Washington D.C. and the pair announced a new U.S.-Brazil bilateral agreement to open up the Amazon Rainforest to private sector development. Araújo called the agreement “…the Holy Grail of Brazil’s foreign policy, at least for the private sector”.

Behind this announcement is the story of how U.S. state and corporate power successfully captured political processes in the South American giant in order to deliver a submissiveness necessary for such a neocolonial project.

Part Four: “Better than Kissinger”

One morning in Washington D.C., sometime between October 2010 and April 2013, President of the United States Barack Obama would sit down for his daily National Security Briefing in the Oval Office.

Delivered and talked through by his National Security Advisor, it would contain an overview of the current challenges facing U.S. hegemony and stability around the world.

According to a slide from the Edward Snowden cache obtained by the Intercept but as yet unreleased, this particular day’s briefing included the countries one would expect: the likes of North Korea, China, Iran, Russia, Libya, Syria, Ukraine, and so on.

It also included one surprising addition: Brazil.

There is no further information available about that NSA document, nor more details of the briefing to which it referred, and with the closure of the Intercept’s programme to release the Snowden files, it is unlikely to ever see the light of day.

The man who talked Obama through such daily briefings from 2010 to 2013 was Tom E. Donilon, Chief of Staff in Bill Clinton’s State Department, and now Chairman of $6.52tn Council of the Americas elite member BlackRock’s Investment Institute, which “leverages the firm’s expertise and generates proprietary research to provide insights on the global economy, markets, geopolitics and long-term asset allocation…”

CFR distinguished fellow Donilon was privy to the intimate secrets of the Obama White House, to its foreign policy goals, to the full range of U.S. intelligence, and to the ambitions and demands of United States corporate power – a world in which he is an insider.

Former member of the Bilderberg steering committee and Trilateral Commission, a 2010 profile of Donilon in the Washington Post explained:

“Vice President Biden said that when it came to understanding the balance of tactics and strategy, of policy and politics, ‘Tom does better than anyone I have ever dealt with, and I am going to say something outrageous-sounding to you, including Kissinger.’”

“Now he has a seat at the table and the ear of a president. According to Biden, after a presentation of the key choices and positions of the principals, Obama will turn to ask, ‘Well, what’s your opinion, Tom?’ Asked if the president turns to Donilon often, Biden said with a chuckle, ‘Yes, yes, he does.’”

In April 2013 Donlion would be a surprise speaker at Columbia University Center on Global Energy Policy: “It is a bit unusual for a National Security Advisor to address an energy conference like this one. So let me begin with a straightforward proposition: energy matters profoundly to U.S. national security and foreign policy. It matters because the availability of reliable, affordable energy is essential to our economic strength at home, which is the foundation for our leadership in the world.”

Donilon had accompanied President Obama on an official visit to Brazil, following Dilma Rousseff’s inauguration in early 2011. But he would be practically invisible: “National Security Adviser Tom Donilon I am told was there. (To Ambassador Shannon) maybe you saw him, no one else did. He was in the secure communications facility all the time dealing with Libya and turmoil in the world, I think. So, he has to come back to Brazil to enjoy the country more.” remarked former Ambassador Anthony S. Harrington.

In his speech at the Teatro Municipal in Rio de Janeiro on March 20, Obama charmed the assembled crowd with some prepared Portuguese, talked about that night’s Vasco-Botofogo football derby, and evoked what he called the Brazilian spirit.

There was not a dry eye in the house as he told a story about his first impressions of Brazil being formed when shown the film credited with introducing it to the world, Marcel Camus’ 1959 ‘Black Orpheus’ (Brazilian title: Orfeu do Carnaval), as a very young child by his late mother, and how she would have never imagined that his first visit to Brazil would be as President of the United States.

Obama seemed to have a particular fixation with Black Orpheus, yet in his 2009 autobiography Dreams of my father, he recounts his first encounter with the movie quite differently to how he depicted it for a Brazilian audience two years later.

In his book, he instead describes himself as a Columbia undergrad being practically forced to watch the film with his visiting Mother: “We took a cab to the revival theatre where the movie was playing. The film, a groundbreaker of sorts due to its mostly black, Brazilian cast, had been made in the fifties. The storyline was simple: the myth of the ill-fated lovers Orpheus and Eurydice set in the favelas of Rio during carnival, in Technicolor splendour, set against scenic green hills, the black and brown Brazilians sang and danced and strummed guitars like carefree birds in colourful plumage. About halfway through the movie I decided I’d seen enough, and turned to my mother to see if she might be ready to go.”

Such overtures to the Brazilian public, his efforts to go beyond the boundaries of regular diplomacy exposed Barack Obama to deeper scrutiny, and his needless white lies about a fifty year old film was emblematic of the gulf between the words and foreign policy actions of his administration further down the line.

Despite this, it is difficult to envisage any visiting head of state bettering Obama’s performance that night in Rio. Brazil was smitten. A later poll showed 93% of Brazilians backing him over Mitt Romney for the coming election. Another would show a majority favouring Barack Obama to lead Brazil over its actual President.

In contrast his predecessor George W. Bush’s visits to Brazil, in 2005 and 2007, were marked by violent protest.

Obama moved on to talk about the so-called Arab Spring, then in full flight.

“Today we are seeing the struggle for these rights unfold across the Middle East and North Africa, we’ve seen a revolution borne out of a yearning for basic human dignity in Tunisia, we’ve seen peaceful protesters pour into Tahir Square, men and women, young and old, Christian and Muslim. We’ve seen the people of Libya take a courageous stand against a regime determined to brutalise its own citizens. Across the region, we’ve seen young people rise up, a new generation demanding the right to determine their own future. From the beginning we have made clear that the change they seek must be driven by their own people.”

“But for our two nations, for the United States and Brazil, two nations that have struggled over many generations to perfect our own Democracies, the United States and Brazil know that the future of the Arab World will be determined of its people.”

Beneath the surface on the visit, things were rather more tense between the Obama administration and Rousseff’s Government over what was happening in the Middle East, the U.S. role in it, and in particular the issue of Libya.

Addressing the media in Rio de Janeiro, Donilon would remark: “The United States will continue to provide whatever support and assistance we can as Egypt continues on its path towards additional free and fair elections and a government that reflects the aspirations of its people.” whilst talking through the ongoing U.S. Military operations in Libya. He would not mention Rousseff, nor her Government’s perspective.

Historian Greg Grandin wrote in Al Jazeera: “Obama’s visit just after Dilma’s election offered a chance for a reset. Rousseff, it was reported, would be eager to use the trip to distance herself from her political patron, Lula. Though she was a member of a Marxist-Leninist guerrilla organisation opposing a US-backed dictatorship during her youth in the 1970s, Brazil’s new leader had, according to the Washington Post, a “practical approach to governance and foreign relations after eight years of the flamboyant Luiz Inacio Lula da Silva”. “She’s a different person and has a different style,” remarked the chairman of Goldman Sachs asset management. Unfortunately for Washington the reality has departed from the narrative. Brazil, under Rousseff, continues largely to follow its own diplomatic lights.”

In an interview from jail, Lula has since recounted a phone call with Barack Obama, regarding talk of a new BRICS currency: “The US was very afraid when I discussed a new currency and Obama called me: ‘Are you trying to create a new currency, a new euro?’. I said, ‘No, I’m just trying to get rid of the US dollar. I’m just trying not to be dependent.’”

Former Foreign Minister and Defence Minister during these periods, Celso Amorim, would remark that he couldn’t even be sure how informed Obama even was of what was being done to Brazil: “You have to see these things as part of a two-fold movement. Part of it is this deep government in the United States which of course has links to financial capital, which has links with the military establishment and of course the intelligence agencies which I mentioned. You have to see this also in the light of this very passive, even submissive attitude of the Brazilian elite which doesn’t want Brazil to be assertive in international affairs. Which prefers to see Brazil like a good subordinate of the United States. It’s always been like that in South America.”

A month after Obama’s visit the 2011 Brazil Summit was held at the Harvard Club New York City was held. Present was COA’s ubiquitous William R. Rhodes, and former Ambassador to Brazil, and CEO of Council of the Americas member Albright Stonebridge Group, Anthony S. Harrington, who spoke at the event about Obama’s recent visit. At this point, publicly at least, hopes were high for U.S.-Brazil relations under Rousseff.

Harrington was effusive: “President Rousseff has demonstrated strong leadership and vision as she begins her new administration, and she appears to embrace and welcome this increased level of dialog between the US and Brazil. I’ve noticed [during her time as] Chief of Staff and as Minister of Mines and Energy that she is a doer. She likes action and results…”

However, the man she had defeated at the 2010 election, José Serra, had a very different view, having previously warned the State Department to be wary of Rousseff’s “populism”. When she became Lula’s Chief of Staff, U.S. Diplomats had referred to her as the “Joan of Arc of Subversion” and alleged that she had planned three armed bank robberies during the Dictatorship for the group to which she belonged VAR Palmares. In June 2009, the U.S. Embassy sent an extensive report titled “How Sick Is Dilma Rousseff?” when she was recovering from lymphatic cancer, and discussed various scenarios in which she could not run for President. In another cable, dated July 24, Clinton explains that information about Dilma was used in briefing meetings with top US government officials, including Treasury Secretary Timothy Geithner.

“No one can say for certain how this change will end. But I do know that change is not something we should fear.” Obama told Teatro Municipal in March 2011.

“Wherever the light of freedom is lit, the world becomes a brighter place. That is the example of Brazil. That is the example of Brazil. Brazil – a country that shows that a dictatorship can become a thriving democracy. Brazil – a country that shows democracy delivers both freedom and opportunity to its people.”

“Brazil – a country that shows how a call for change that starts in the streets, can transform a city,  transform a country, transform a world.”

Around this time, an Anonymous U.S. hacker named Hector Xavier Monsegur, aka Sabu, was already working “around the clock… at the direction of law enforcement” to provide information on “targets of national and international interest”. Having early been arrested, he had turned FBI informant, eventually leading to the capture of hacker Jeremy Hammond a year later.

At his court hearing, Hammond specifically mentioned Brazil, Iran and Turkey as countries he had been instructed to pursue by Monsegur, before being forced to stop by Judge Loretta Preska, who had ruled that names of countries targeted should be redacted for the purposes of secrecy.

In January and February 2012, Monsegur, collaborators such as Hammond, and local hackers, began targeting Brazilian sites in earnest. Although the Brazilian groups were from across the political spectrum, Monsegur’s AntiSec were facilitating an anti-corruption campaign principally directed against the Federal Government. Operation Brasília, as they called it, defaced more than 100 commercial and government sites to leave protest messages about corruption, and steal confidential information from servers.

Such nebulous, generic “corruption” would be the principal propaganda weapon of Brazil’s coup to come.

It was a massive campaign of hacks against Brazilian Government’s online infrastructure, all under the control of the FBI and a U.S. Agent in the form of Monsegur, yet the story would go on to be overshadowed by later espionage revelations, and ultimately forgotten.

Given that the FBI and Department of Justice were already collaborating on what would evolve into Operation Lava Jato, this is more historically significant now than it seemed.

In his own statement, Hammond wrote: “In one instance, Sabu and I provided access information to hackers who went on to deface and destroy many government websites in XXXXXX (redacted). I don’t know how other information I provided to him may have been used, but I think the government’s collection and use of this data needs to be investigated.” He explained that, for example “The FBI took advantage of hackers who wanted to help support the Syrian people against the Assad regime, who instead unwittingly provided the U.S. government access to Syrian systems, undoubtedly supplying useful intelligence to the military and their buildup for war.”

Amongst targets Hammond recalls being given were the Internal Affairs Division of the Military Police of Brazil and the Globo Television Network. In his statement following his trial, Hammond, now serving a ten year prison sentence, explained that he was drawn to Anonymous because it “was involved in operations in support of the Arab Spring uprisings…” and that it “was also involved in the early stages of Occupy Wall Street…”

Both of which the protests that would soon hit Brazil would be compared to.

On Social Media, attacks on Brazil’s international and self-image had already begun to appear.

In her May 1, 2013 televised address, Dilma Rousseff called for public support to push through a constitutional amendment which would guarantee that all royalties from Brazil’s Pré-Sal Oil finds would be diverted into public education. She called the Pré-Sal Oil Brazil’s passport to the future, and Rousseff sought to revolutionise its education system in a programme envisaged to push the country towards a notional fully developed status. Quality of education was then a principal political complaint.

Following the auction of the Libra oilfield later that year, Rousseff again addressed the country to explain the implications in detail: “Over the next 35 years, Libra will pay the following amounts to the Brazilian State: first, R$ 270 billion in royalties; second, R$ 736 billion of “minimum profit-oil” given for the government to sell under the production sharing model; third, R$ 15 billion paid as a signing bonus for the contract. This adds up to the tremendous amount of more than R$ 1 trillion. I repeat: over R$ 1 trillion.

Under the law we have approved in Congress, most of these proceeds will be invested in education and healthcare. That’s because the entire proceeds from royalties and half the minimum profit-oil proceeds will become part of the Social Fund (to the amount of R$ 736 billion), 75 percent of which will be invested in education and 25 percent in healthcare.

But the direct social benefits of exploring Libra do not stop there. The remaining income from the Social Fund, in the amount of R$ 368 billion, will be mandatorily invested in the fight against poverty and in development projects in the areas of culture, sports, science and technology, the environment and mitigation of and adaptation to climate change.”

Rousseff’s plan to socialise the Pré-Sal, to lock it together with public spending, was not what the U.S. Government, nor its Oil Producers, wanted to hear.

One week later at the 43rd Council of the America’s annual Conference at the State Department in Washington D.C., Vice President Joe Biden would announce a visit to Brazil and South America, focussed on energy and security. At the event, sponsored by COA members Chevron, Shell, Ford, Freeport-McMorRan Copper & Gold, and the Bureau of Western Hemisphere Affairs, Biden underscored the strategic role that the continent plays for the future of the US and the world, particularly as Western Hemisphere countries would account for two-thirds of world oil supply growth in the coming decades.

The U.S. wanted to reduced its Oil dependence on Venezuela and other OPEC producers, Brazil and its massive new Pré-Sal discoveries were the solution.

Thus an urgency to break the Pré-Sal law, and if need be to remove the then electorally unassailable Rousseff, and the Workers Party altogether, intensified in foreign policy circles.

With an election coming next year, change of Government in Brazil would also provide the US with “A like-minded democratic ally in Latin America to counter the influence of countries such as Venezuela”, as COA corporate member the FT put it. Hugo Chavez had died two months previously, and the Workers Party’s pragmatic social democracy was no longer a necessary prop, a “good left” example to the region, as it had been under Lula.

Less than three weeks after Rousseff’s Workers Day address, attempted sabotage of the Caixa Economica state-controlled lending bank caused panic in the country.

Fake SMS messages were circulated by a Telemarketing agency in Rio de Janeiro which announced the Bolsa Famila programme was about to end. 30 minutes after the first messages were received, withdrawals from bank began. By the next day R$152 million reais had been withdrawn by distraught recipients of the cash transfer programme on which they depend, throughout the Workers Party heartlands of the North East. Dilma called it a criminal act, and orchestrated economic terrorism.

Minister of Foreign Relations, Antonio Patriota was then already en-route to Washington D.C. for meetings with new Secretary of State John Kerry, Tom Donilon and Michael Froman, Deputy National Security Advisor for International Economic Affairs, formerly of Council of the Americas Elite member, Citigroup.

As an integral member of the Obama administration, Froman was responsible for negotiating the controversial TPP (Trans Pacific Partnership) free trade deal. Prior he had served as Chief of Staff under Robert Rubin at the U.S. Treasury from 1997-99. and thus Froman was no stranger to Brazil. Their role in the 1998 Brazil election and the victory of PSDB’s Fernando Henrique Cardoso was revealed to the outside world by investigative journalist Gregory Palast at the time:

“Last October 9, the nominal President of Brazil, Fernando Henrique Cardoso, was voted back into office for one thing and one thing only: he had stabilized the value of Brazil’s currency and thereby stopped inflation. In truth, he hadn’t. Brazil’s REAL was ludicrously overvalued. Yet, as the election approached, its rate of exchange against the dollar simply defied gravity. This miracle carried Cardoso over the finish line with 54% of the vote. But there are no miracles. Fifteen days after Cardoso’s inauguration, the REAL folded over and died. Today, it trades at roughly half its election day value. Inflation is zooming and the economy imploding. Support for Cardoso, now reviled as an incompetent and a cheat, has dropped to 23% of the electorate….There is nothing much left to Cardoso’s presidency but the title. All meaningful policies, from spending to employment, are dictated by the International Monetary Fund and its brethren agencies. And behind them, calling the shots, is Treasury Secretary Rubin who rules as de facto President of Brazil without having to miss a single Manhattan cocktail party. But this is the price Cardoso pays for Rubin’s election campaign services. For it was the US Treasury which, with the IMF, kept Brazil’s currency aloft.”

“Crisis has its uses.” wrote Palast, “Only in an economic panic can Rubin and the IMF unleash the Four Horsemen of Reform: kill social spending, cut government payrolls, break the unions and, the real prize: privatize lucrative public assets.

On May 26 2013 Dilma Rousseff would announce the auctioning of the massive Libra Oil Field according to the local content conditions of the Pré-Sal law.

She emphasised that this public-private production partnership, which would retain government control over the resources, was distinct from the privatisation of Petrobras, and sell off of Brazilian Oil and Gas assets to which her Workers Party were historically opposed, and that the main Brazilian opposition, PSDB, actively favoured.

Speaking from the African Union conference where she was present to promote South-South cooperation, she would end her speech with a metaphor: “The time has come for the African Lion to write its own story, as well as the Brazilian Jaguar to write its own.”

With an eye on the Pré-Sal, Vice President Biden would visit Brazil two days later on May 28, meeting with Rousseff’s Vice President Michel Temer, Petrobras President Graça Foster, and finally Dilma Rousseff herself.

During his visit, Biden talked up the Trans Pacific Partnership, warned against protectionism and urged Brazil to open up its economy, i.e. privatize lucrative public assets.

Biden addressed the media in Rio de Janeiro and spoke of marking ‘in 2013, the start of a new era of U.S.-Brazilian relations’ and envisoned an Americas which are “…middle class, secure, democratic, from the Arctic Circle to the Straits of Magellan.”

A seasoned foreign policy operator, there was little remarkable about Biden’s speech, with its vanilla emphasis on partnership and free trade. Its timing was however significant. Biden would of course single out anti-corruption, as had John Kerry, he also made an extended emphasis on U.S. energy independence through shale gas, repeated references to Brazil’s enormous resources, and insisted that it already was a developed country. Rousseff called Biden “a seductive Vice President”, and at this point there was a sense that she could be transformed into a staunch U.S. ally, as had been hoped earlier in her first term.

“Brazil has long taken its place as one of the World’s great democratic economic powers. You’re the seventh largest economy in the World – larger than India, larger than Russia….Your democratic and social innovations, your Zero Hunger program, your Bolsa Familia, your home ownership programs, they’re studied and copied around the World.”

“The rest of the World looks at you with envy, at the progress you’ve made.”

“It’s true that we can both prosper whether or not we deepen our economic relations, but imagine, just imagine if these two dynamic economies could do with greater trade and investment for our people, for the hemisphere, for the World.”

“Look, I know that for many in Brazil the United States does not start with a clean slate. Theres’s some good reason for that skepticism. That skepticism still exists and it’s understandable.”

“Our Presidents, our Secretaries of Defence, as the Military can tell you, our  Secretaries of State, our Special Trade representatives, and all 10 of our cabinet members have visited this country since we took office. That is not by accident, that is by design. And it is unprecedented. And it’s a reflection of the value we place on Brazil and the effort to deepen relations.”

“American companies are competing for opportunities to do business in Brazil. We both know there’s a future in Biofuels and Aviation. Embraer and Boeing are jointly researching and testing the development of Biofuels and the capability to use it as jet fuel. If they’re successful, the market is limitless.”. (COA Elite member Boeing later attempted to purchase Embraer).

“And those of you who may have read accounts of the demise of America, the United States…I would point out ‘It’s never been a good bet, to bet against the United States of America. Never.’”

Biden would end his speech with an incongruous “…and may God protect our Troops.” in a country with no U.S. Military presence since the Second World War.

To the surprise of Brazil, response from the big foreign oil producers to the 2013 Libra Oilfield auction was underwhelming. With an estimated 8bn-12bn barrels or equivalent, or four years U.S. crude production, Libra was expected to generate enormous revenue for all, yet only 11 of the 40 anticipated participants wanted in.

“While national oil companies from around the world jumped at the opportunity, some of the biggest private sector names, including Chevron, ExxonMobil and BP, were conspicuously absent. The result suggests Brazil’s pre-salt project could increasingly become a joint undertaking with foreign states, particularly China.” wrote the FT.

It was as if the big US and UK producers were waiting for something, as if they knew that, by hook or by crook, the hated Pré-Sal law would be gone soon enough, and they would enjoy the kind of free, cut-price access to Brazil’s oil for which they had lobbied for years.

They were absolutely right. Temer’s post-coup administration immediately saw to that and foreign Companies who had largely ignored previous auctions moved fast. Within weeks, Norway’s Statoil had captured one of Petrobras’s crown jewels, the Carcará field in the Santos Basin, for just US$2.5 billion. This was excitedly called a “Viking Conquest” by the UK Chamber of Commerce.

During his speech years prior at the Teatro Municipal, Obama paid tribute to Dilma Rousseff, and her legacy of struggle: “Decades ago it was directly outside of this theatre, in Cinelandia square, where the call for change was heard in Brazil. Students and artists and political leaders of all stripes, would gather with banners that said “Down with the dictatorship. The people in power.” Their democratic aspirations would not be fulfilled until years later, but one of the young Brazilians in that generation’s movement would go on to forever change the history of this country. A child of an immigrant, her participation in the movement led to her arrest and her imprisonment, her torture at the hands of her own government. And so she knows what it’s like to live without the most basic human rights that so many are fighting for today. But she also knows what it is to persevere. She knows what it is to overcome. Because today that woman is your nation’s President. Dilma Rousseff.”

A mixture of murmur and applause.

“Our two nations face many challenges, on the road ahead we will certainly encounter many obstacles. But in the end, it is our history that gives us hope for a better tomorrow, it is the knowledge that the men and women who came before us have triumphed over greater trials than these. That we live in places where ordinary people have done extraordinary things. It’s that sense of possibility, that sense of optimism that first drew pioneers to this New World. It’s what binds our nations together as partners in this new century.”

These words have a very different significance today.

Dilma Rousseff had a official state visit to the Washington D.C. scheduled for October 2013.

It would not take place.

Nobody knew then that these would be final fleeting moments of normality for Brazil on the world stage…

Part one in this series: Park Avenue’s dirty, deadly Amazonian secrets.

Part Two of this series: Smiling Assassins.

Part Three of this series: Gold against the Soul

Part Five to follow.