Western Hemisphere Intelligence Brief

Issue 224: July 28, 2015

Cuba: Embassies Move Relations Forward, but How Far?
Brazil: Political Crisis Deepens 



Normalized diplomatic relations between the United States and Cuba took another step forward last week with the formal re-designation of the Cuban Interests Section in Washington, D.C., as its new embassy. … Secretary of State John Kerry is scheduled to attend a flag-raising ceremony at the re-designated U.S. embassy in Havana on August 14th. … Kerry hosted Cuban Foreign Minister Bruno Rodríguez at the State Department following the Cuban ceremony, saying, “The interests of both countries are better served by engagement than by estrangement.”… Rodríguez once again repeated his government’s demand that the U.S. unconditionally lift all U.S. sanctions against Cuba. … While President Obama does have authority to liberalize specific categories of trade and travel, the full embargo of Cuba can only be lifted by an act of Congress. … Details of the embassy agreement have been scarce, but media reports say, in terms of diplomatic freedom of maneuver, that the top four diplomats in each capital will have unrestricted travel rights.  (Others will be required to give notification – though not obtain permission – before any travel.) … Senator Bob Menendez (D-NJ) voiced his disapproval of the embassy’s opening, “Diplomatic relations with the U.S. are a privilege and must be earned, yet the Cuban government refuses to make any substantial changes to uphold democratic principles and human rights since the December 17th announcement.” … In Congress, both supporters and critics of President Obama’s Cuba outreach policy have sponsored legislation either attempting to expand it or hinder it. … Last Thursday, the Senate Appropriations committee voted to remove restrictions on Americans seeking to travel to Cuba. … Conversely, House Republicans amended a bill to block additional funding for an expanded U.S. embassy in Cuba. … The Miami Herald reports that administration officials are evaluating a possible visit to Cuba by President Obama sometime next year, depending on whether progress is made on “the arrests of dissidents, access to the internet and the development of the island’s private sector”. … A recent analysis by the Cuban Democratic Directorate, a nonprofit dedicated to advocating for human rights in Cuba, found that political repression and arbitrary detentions on the island have increased since Obama’s rapprochement with the Castro regime began. … Observers have also noted an increase in the use of violence by the Cuban government. Roberta Jacobson, Assistant Secretary of State and chief U.S. negotiator in the Cuba talks, condemned a recent violent attack by Cuban state security that hospitalized high-profile Cuban dissident Antonio Rodiles.


  • The official opening of reciprocal embassies continues a policy that to date has been long on images and symbolism, but has yet to bring any practical change to substantive issues that divide the two governments.  Rather than responding to the Obama administration’s unilateral concessions with any good-will gestures of their own, the Castro government continues to issue demands for more concessions, such as the lifting of all economic sanctions and the return of the U.S. naval base at Guantanamo.  The one-sidedness of the outreach to date has only hardened critics’ opposition on Capitol Hill, eliminating the possibility of Congress further lifting sanctions, to say nothing of confirming a new U.S. ambassador to Cuba.  (Career State Department official Jeffrey DeLaurentis, already posted to Havana, will serve as chargé d’affaires for the foreseeable future.) The White House and its supporters on Cuba also face a dilemma in sustaining the political momentum that they deem critical to securing the President’s legacy.  By fast-tracking normalization with unilateral concessions, they have signaled to the Cuban government that the U.S. is willing to de-prioritize human rights for the sake of normalized relations.  But, in turn, the continued repression of Cuban dissidents and human rights activists necessarily restricts the President’s political space to act, as it gives opponents tangible, real examples of the human costs of the President’s balancing act. In the coming months, the President is unlikely to get any cooperation from the Cuban government on the human rights front, as maintaining control far outweighs any benefits to come from Obama’s limited economic opening.



Escalating corruption scandals and controversies are taking their toll on President Dilma Rousseff, driving her approval rating to an all-time low of 7 percent and raising the drastic specter of impeachment. … Her possible involvement in the state oil company’s kickback scandal (where money from inflated contracts was used to finance political campaigns of her ruling Workers’ Party [PT]) and the alleged misappropriation of funds from state financial institutions to make the government’s end-year budget targets are some of the issues challenging her presidency. … Recent polls note that those favoring Rousseff’s impeachment have risen from to 62 percent from 59 percent four months ago, while 84 percent believe her administration is unable to resolve the ongoing economic crisis. … Rousseff’s sagging popularity has also accelerated the fracturing of her government’s coalition. …  Several leading political figures have now broken ranks with her, including Vice President Michel Temer, House Speaker Eduardo Cunha and Senate president Renan Calheiros, all members of the centrist Brazilian Democratic Movement Party (PMBD). … Cunha and Calheiros, also facing charges of corruption, have accused the government of persecution. … In a recent news conference, Cunha said “They [the government] want to drag me through the mud, and that’s something that I won’t allow”. … Calheiros praised Cunha and has described Rousseff’s administration as a “horror film.” … Vice President Temer, who would become president if Rousseff were impeached, said, “What can happen any day now is that the PMDB splits from the government, especially in 2018, when we intend to put our own presidential candidate.” … By breaking ranks with the PT, the PMDB, which holds most seats in Congress, will paralyze the executive’s agenda. … Members of the opposition, including former president Fernando Henrique Cardoso, while not mentioning impeachment directly, recently stated, “We are not owners of what will happen in coming weeks, in coming months…but we are ready to take over…the Brazilian Social Democracy Party (PSDB) knows how to rule.” … The state oil company scandal, dubbed Operation “Car Wash,” which sparked investigations beginning in March 2014, has targeted more than 50 politicians and more than a dozen businessmen for taking more than $2 billion in kickbacks. … As part of the investigation, former presidents Fernando Collor de Mello and Luiz Inácio “Lula” da Silva have also been accused of corruption. … Collor de Mello, who was impeached in 1992, had over $1 million in cash and vehicles seized last week. … Lula da Silva faces an investigation for influence-peddling on behalf of Brazil’s construction company Odebrecht.  … Marcelo Odebrecht, CEO of Brazil’s largest construction company, has been arrested for corruption, money laundering, and criminal conspiracy. … Compounding the political crisis is Brazil’s economy, which is expected to shrink 1.5 percent, and is facing a foreign investment decline from $39 billion in 2014’s to $25 billion in 2015 and a 20 percent devaluation of the country’s currency in 5 months.


  • With more than two years to go in her second term, President Rousseff is entering by far the most difficult period of her presidency.  A possible move from Congress to push for her impeachment is uncertain at this juncture given the political repercussions and the alleged involvement of congressional leadership, including Cunha and Calheiros, in the corruption. However, an indictment of Lula da Silva, Rousseff’s patron and protector, would be the severest blow to date to Rousseff’s fortunes. With investigations ongoing, it remains to be seen how many more politicians and businessmen will be caught in the growing web. What is clear is that ordinary Brazilians are fed up with official corruption and the chronic inattention to public needs.  Their verdicts on those indicted can be expected to be harsh and without quarter.  Rousseff’s political difficulties will also likely hamper any effort to move forward on a more cooperative relationship with the United States, following from her successful trip last June, in which U.S. officials have said even including mention of a possible and long-elusive trade agreement. However, with her political capital fast diminishing at home, it is unlikely she would be able to muster the political strength to shepherd any major new initiatives.


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