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For U.S., Lula's the likable Latin leftist

By DAVID ADAMS
Published October 6, 2005

SAO PAULO, Brazil - Despite its preoccupation with the war on terror, the United States still has two countries in Latin America - in reality, two men - it likes to keep its eye on.

Brazilian President Luiz Inacio Lula da Silva and his Venezuelan neighbor, Hugo Chavez, are the charismatic faces of what some observers have described as the leftist resurgence in Latin America.

Venezuela is the fourth-largest supplier of oil to the United States. Brazil is the region's largest economy, with major U.S. private-sector investment and a growing bilateral trade.

Last week, Lula and Chavez met in the Brazilian capital, Brasilia, in a spectacle that is becoming all too familiar. They practically fell over each other in declarations of mutual appreciation - with the occasional dig at U.S. meddling in the region. But such shows of political solidarity aren't what most grabs Washington's attention.

Rather, it's the differences between the two men that are spellbinding.

While they appear cut from similar ideological cloth, their actions speak louder than words. Since his election in 1998, Chavez has launched an aggressive revolution to restructure the country, attacking wealthy business elites, large landowners, and the Roman Catholic Church and alleged U.S.-backed plots to unseat him. The United States has responded lately by accusing Chavez of undermining regional democracy and failing to combat drug trafficking.

For years, Brazilians worried that Lula's Partido dos Trabalhadores, or Workers Party, had the same plan in mind. A former metalworker and veteran trade union leader, every time Lula ran for office, Wall Street grew nervous about U.S. investments. But one electoral defeat after another softened the party's radical leadership. Like Bill Clinton and Tony Blair, Lula led his party to the center, away from its revolutionary roots and toward electability. It was a formula that finally won Lula election in late 2002.

Now he is excoriated by old-fashioned leftists and landless peasant groups. And he is hailed by the Bush administration as a pragmatic free market reformer.

U.S. Treasury Secretary John Snow last week heaped praise on the Brazilian government's sound economic policies. "The leaders of Brazil have had courage to embrace and then stick by good policies," Snow said in a speech at a Washington conference on Brazil's economy. The results have been declining inflation, increasing job creation, a reduction in debt levels and increasing exports, Snow said.

Less enthusiastic Brazil observers emphasize other factors. They point to economic growth in the Far East driving huge demand for Brazil's exports, such as soy and steel. That has helped soften the sometimes acrimonious trade disputes between Brazil and the U.S. over citrus and sugar exports.

But, storm clouds perpetually hang over the future of Brazil and the prolonged honeymoon between Lula and the United States. Many Brazilians are deeply disillusioned by a huge scandal sweeping Lula's party.

Senior PT officials are accused of using a slush fund to pay legislators of other parties $12,500 a month for their votes. A PT official was caught trying to board a plane with $100,000 in his underpants. As a result, four top PT officials - including the party's president, treasurer and secretary-general - have resigned.

After years of railing from the margins against the corrupt practices of the country's political elite, Lula took power with promises to clean up public office. Now the scandal has derailed an important legislative reform package.

Despite his victory in the 2002 elections, Lula's party won only 89 out of 513 congressional seats, requiring him to win over other parties. Ironically, that's what the bought votes were designed to accomplish.

"It's been a huge disappointment," said Fabio Santos, editor of Primeira Leitura, a monthly political journal. "They did all the things they used to denounce."

"We thought the (PT) party would be different. But no, money has won," added Mario Conti, a Brazilian journalist and expert on corruption. "Lula has changed. He was seduced by power."

Lula has denied any knowledge of wrongdoing. But his popularity has suffered. In one recent poll, only 45 percent said they approved of the way he is running the country. He is still the most popular candidate among voters for the 2006 elections.

As long as he maintains economic stability, analysts say Lula has a good chance of clinging to power. But the leftist menace once represented by the PT lies in ruins.

And that may suit Washington and Wall Street just fine.

David Adams can be reached at dadams@sptimes.com

[Last modified October 6, 2005, 01:15:08]