DEPARTMENT OF STATE

REP

FOR RM USE ONLY

AR A EUR FE

A-1235 ^DLING INDICATOR N EA CJU INR 3 / IV" TO : Department of Syta-tjje/' ^ E P IO

£^

L F BO AID 3 if i 13 "/Ifft < m 181964 A G R COM FRB w ft / wukyr / 1> 2. FROM AmE^'assy RIODE JANEIRO / DATJ^T April 16, 1< INT LAB TAR WEEKA'*'16 V SUBJECT: TR XMB AIR REF

ARMY CI A NAVY

v ~l to M? (0 r o CoqTents OSD USI A NSA POLITICAL 3 // 1. Supreme Command of tai^ Revolution Issues "Institutional Act" a) Act Providesv Broad Powers to President b) Congressional Mandates Cancelled c) Political Rights Suspended for Some d) Congress Prepares to Adjust to New Situation 2. Congress Elects Castello Branco President a) Jose Maria Alkmim New Vice President 3. Castello Branco Government Inaugurated a) Castello Branco Appoints Cabinet b) Other Key Appointments 4. New Government Program Awaited a) Mazzilli-Castello Branco Speeches Pre-View New Economic Policy b) Foreign Policy Shift Expected ma 5. Several Goulart-Signed Decrees Cancelled -o CO 6. "Operation Clean-Up" Simmers Down 7. Labor Developments m MILITARY ARMY 1. New Chief of Staff Replaces Castello Branco 2. Eighty-Five Officers Transferred to Reserve

IGROUP 3 - Downgraded at 12-year intervals, J Not automatically declassified. FOR J?EPT. USE ONLY CONFIDENT!AI DS-323

Drafted by: Contents and Classification Approved by: POL:See last pager rb PCM - Mi n-i Rtpr M»-iJi— — 2-

CONFIDENTIAL A-1235 4/16/64 Page 2-a NAVY 1. Navy Holds Soviet Tanker for Search 2. Officers Transferred to Reserve 3. Command Changes AIR FORCE 1. Forty-Nine Officers Transferred to Reserve 2. Command Changes PSYCHOLOGICAL 1. Press, Radio, Motion Pictures Adjust and React 2. International News Controls Minimal

»

CONFIDENTIAL

• DECLASSIFIED

Authority tyMMTi^^ CONFIDENTIAL A-1235 4/16/64 Page 2 Rio de Janeiro

POLITICAL

1. Supreme Command of the Revolution Issues "Institutional Act"

Defined as the "three military ministers acting on behalf of the Revolution", a Comando Supremo da Revolucao emerged this week, announced that it was the maximum authority in the country, and pro• ceeded to back up its announcement by first decreeing an Ato Institucional, and then cancelling the mandates of over forty federal deputies and senators, suspending the political rights of over a hundred other Brazilian citizens, retiring almost one hundred and fifty Brazilian military officers, and appointing interventors to several federal entities. The first of these actions, the issuance of the Act, was taken on the authority that the Command claimed was inherent to a victorious revolution; the other actions were justified by the terms of the Act.

The issuance of some sort of a basic revolutionary law had been regarded as inevitable, but the abrupt manner in which it was decreed on April 9 momentarilly stunned the country and the Congress, particularly since the military leaders had, to all appearances, agreed only a day earlier to allow Congress to legislate along the lines previewed for the Act. A strongly-worded proclamation delivered along with the Act's decree, however, indicated that the leaders of the Revolution had assumed the exclusive power and authority to "institutionalize" the Revolution. Pointing out that "Constitutional processes did not serve to depose the (Goulart) government", the Command claimed, on behalf of the Revolution, "the authority to dictate the norms and the processes for the constitution of the new government". With regard to the need for Congress to legalize its actions, the Command stated: "It is...clear that the Revolution does not attempt to legitimatize itself through Congress. It is Congress which receives its own legitimacy from the Ato Institucional..." (LIMITED OFFICIAL USE)

a) Act Provides Broad Powers to President

The Act is to remain in force until January 31, 1966, the date on which the interim President of the Republic is to transfer office

CONFIDENTIAL

DECLASSIFIED

Authority N/MOtS" ^O*90 Y

CONFIDENTIAL A-1235 4/16/64 Page 3 Rio de Janeiro to his legally-elected successor. In effect, the Constitution is temporarily amended during the life of the Act, particularly with respect to the powers of the President vis-a-vis Congress, Draft constitutional amendments and other draft bills presented to the Congress by the President are to be considered within thirty days; in the case of simple legislation, failure of the Congress to con• sider within that period of time is tantamount to approval. Only the President has the power to initiate legislation governing public expenditures, and no member of Congress may offer amendments which would increase expenditures proposed by the President, The Presi• dent is authorized to declare a state of siege, sending subsequent justification to the Congress, During the initial sixty days and with the permission of the National Security Council, the President may suspend political rights for a period of ten years and cancel federal, state and municipal legislative mandates. Although these latter powers are extended to the President for a limited period and only with the permission of the National Security Council, the terms of the Act give unrestricted authorization to the "Commanders in Chief who publish the present act" to exercise the same powers, a fact not unnoticed by the critics of the Revolution. (LIMITED OFFICIAL Comment: USE) Clearly, the Act provides the President with sufficient power to mount an autocratic government in Brazil if he so desires. It is, then, the source of much satisfaction that Brazil has chosen a man who apparently has no intention of presiding over the destruction of democratic institutions. (See Item 2)

The dominating role played by the Supreme Command during the events of the past week, and the powers granted to the Command in the Ato Institucional, have given rise to speculation that the Command will, in effect, serve as a ruling military junta behind the figure of the President, However, those who know Castello Branco best discount this possibility, and War Minister Costa e Silva told fellow officers on April 14: "The hour has come for troops to return to the barracks and preserve discipline" and respect for authority. (LIMITED OFFICIAL USE)

b) Congressional Mandates Cancelled

Prior to issuance of the Act, press speculation on the number of federal deputies and senators likely to lose their mandates varied

CONFIDENTIAL

DECLASSIFIED 5

CONFIDENTIAL A-1235 4/16/64 Page 4 Rio de Janeiro from six to forty, the lower figure presumably representing the maxi• mum concession congressional leaders were willing to make and the higher figure indicating the minimum demands of the military. When the Supreme Command took away the opportunity for Congressional '•legalization" of the Act, it also freed itself from any limitations it might have agreed to in the course of negotiations with Congress. At any rate, the first list, issued on April IO, contained the names of one senator, thirty-six deputies, and three substitute deputies. Subsequent listings on April 11 and 14 pushed the number of federal deputies up to/SQJ& aYidalso included the names of several state deputies.

The cancellations affected most parties represented in the Con• gress, although the PTB was the heavy loser with twenty-four deputies and one senator. Included on the lists were such obvious figures as Leonel Brizola, Roland Corbisier, Sergio Magalhaes, Francisco Juliao, Max da Costa Santos, and other members of the now defunct Frente Parlamentar Nacionalista, as well as a few lesser-known deputies. While most suffered the loss of their mandates for xeasons of Communist affiliation or collaboration with the deposed Goulart government, at least three were apparently selected on the basis of corruption. (For full list, see EmbTels 2232 and 2293.) (LIMITED OFFICIAL USE)

Comment: The issuance of additions to the list is rumored. In this connection, rightist deputy Abel Rafael, in a chamber speech on April 14, demanded the expulsion of Deputy San Tiago Dantas and Senator Afonso Arinos, charging that they had been the architects of Brazil's pro-Cuba policy during their respective occupations of the Foreign Ministry.

Substitutes (suplentes) called to replace the ousted deputies will not necessarily be of the same party. In some cases a deputy elected by a multi-party coalition will have a substitute from one of the other coalition parties: in others the ousted deputy had changed parties after his election but the party that actually elected him will supply the substitute. (UNCLASSIFIED)

c) Political Rights Suspended for Some

In addition to nullifying legislative mandates, the Supreme Command of the Revolution, to date, has cancelled the political rights

CONFIDENTIAL

< DECLASSIFIED

Authority tSlMMll^^ A-1235 4/16/64 Page 5 Rio de Janeiro of some 125 Brazilian citizens for a period of ten years. Named on the first lists issued under Article IO of the Ato Institucional were ex-Presidents Joao Goulart and Janio Quadros, impeached governors Miguel Arraes and Seixas Doria, certain members of the Communist Party, other extreme leftists from the federal and state legislatures, the Armed Forces, and the labor movement, and other close collabora• tors of Goulart. In addition, there were included on the lists a few persons whose misdeeds were not immediately clear. It is expected that new lists will appear in coming weeks as the drive to purge the country of subversive and corrupt influences continues. (LIMITED OFFICIAL USE)

Comment; "Political rights" presumably means the right to vote and to hold elective office, but revolutionary authorities have yet issued no clear definition of the term. Also unclear at this point is whether formal charges will be placed against the disenfranchised individuals, whether their crimes will be documented in some other way, or whether their inclusion on the lists issued by the Command will be considered proof of subversive or corrupt activities. While it is too early to issue a confident prediction, the Brazilian tradi• tion of compassion and clemency would seem to indicate that some sort of review procedures might be instituted, and that innocent persons would regain their rights in time. (LIMITED OFFICIAL USE)

d) Congress Prepares to Adjust to New Situation

Within the unusual prevailing atmosphere of "politics not as usual", the Brazilian Federal Congress is attempting to adjust itself to the uncertainty of the new situation and to the conditions imposed by the Institutional Act. That Act, by stating that all proposed bills submitted by the President of the Republic shall become law automatically if not acted upon within thirty days after submission to the Congress, threatens to limit severely the Congress' power. Congress is preparing to meet this challenge by clearing its calendar of bills made "unnecessary" by the change in government and pushing a resolution which will simplify congressional procedures and help move bills to more rapid consideration. (UNCLASSIFIED)

Comment: The Congressional leadership sponsoring these measures clearly hopes that they will help Congress to retain some of its

CONFIDENTIAL

DECLASSIFIED Authority hil^LGirl^- CONFIDENTIAL A-1235 4/16/64 Page 6 Rio de Janeiro power and prestige, even in the face of the Institutional Act and the presence of the military. But there are indications that Con• gressional prestige may suffer from an old problem, the non-attendance of its members and consequently the continual lack of "quorums". Many Congressional observers argue that this will not be a problem as long as the new President actually governs the country from Brasilia and thereby gives importance to the seat of the National Congress.

Despite these efforts to adjust, Congress clearly was not happy about its new relationship to the Executive. de President of the Senate, Auro/Moura Andrade, in a strong state• ment on April 11, accurately represented the sentiment of the Con• gress in the new situation. Referring to the Ato Institucional, he argued that the revolution must not lose sight of its democratic objectives, stripping the Congress of its rights, since Congress pro• vided the necessary political support and collaboration for the military victory. He explained that when he declared the Presidency vacant, he realized that the rule of law was rapidly giving way to the rule of fact, and it was his duty to structure what was happening to insure democratic continuity. Moura Andrade concluded with an appeal for moderation to the newly-elected President and Vice-Presi• dent: "Congress is at your disposition, ready to serve the revolu• tion, to institutionalize the revolution, to realize the aims of the revolution and to exert itself so that this revolution is not lost... but for this the Congress is disposed to maintain its authority; otherwise it should not remain open. " On the other hand, it must have been doubts that within the framework of the Constitution Con• gress would adequately serve the purposes of the Revolution that led the leaders of the Revolution to issue the Ato Institucional. (LIMITED OFFICIAL USE)

2. Congress Elects Castello Branco President

On April 11, the Federal Congress elected General Humberto de Alencar Castello Branco to serve as President of the Republic until January 31, 1966. Of the 438 members present for the voting, 361 cast their votes for Castello Branco, 72 (mostly of the PTB) abstained, and 5 wasted their votes on other persons. Abstentions and vote wasting apparently occurred because of resentment caused by the Ato

CONFIDENTIAL

DECLASSIFIED

Authority t^iOill^^ 4

CONFIDENTIAL A-1235 4/16/64 Page 7 Rio de Janeiro

Institucional provision requiring nominal voting. This, and several other provisions of the Act, ran counter to an indirect election bill passed by Congress on April 7. Both General Amaury Kruel and Marshal Eurico Dutra had withdrawn their candidacies the day before, however, so the outcome of the election was really a foregone conclu• sion.

In a statement made shortly after the election, Castello Branco promised to "carry out fully the high objectives of the victorious April movement" in order to "restore legality, reinvigorate democracy, re-establish peace, and promote progress and social justice". He also said that he hoped to hand over a "nation more confident in its future" to his freely-elected successor in 1966.

The new President is considered to be xe^axdsstxas something of an intellectual. Both within and without the Armed Forces he is regarded as a true democrat, and a man of high ideals and unquestionable ethics. Basically apolitical, Castello Branco considers the Brazilian Armed Forces to be the guardians of democracy in Brazil and has twice participated in efforts to save the country from the threat of dictatorship. Castello Branco is said to view himself as a liberal progressive. He believes in a certain amount of state direction for economic planning but feels that private initiative is essential to the development of Brazil.

Castello Branco is a graduate of the U. S. Command and General Staff at Fort Leavenworth. He served with the Brazilian Expeditionary Force in Italy during World War II, and holds the U. S. Legion of Merit and the Bronze Star. A son presently attends the U. S. Navy line officers school at Monterrey, California. (LIMITED OFFICIAL USE)

Comment: Both defeated and victorious forces are now pinning their hopes on Castello Branco, the former for a fair shake, the latter for seeing that the revolution is carried out. (LIMITED OFFICIAL USE)

a) Jose Maria Alkmim New Vice President

The vice presidential election, disputed by Senate President Auro de Moura Andrade and Federal Deputy Jose Maria Alkmim (PSD—Minas

CONFIDENTIAL

DECLASSIFIED

Authority t^i£l^ CONFIDENTIAL A-1235 4/16/64 Page 8 Rio de Janeiro

Gerais) was won by the latter on the second ballot after Moura/con- ceded. The decisive factor in Alkmim1s election was his massive support within the PSD. Moura Andrade was supported by the bulk of the UDN and by small parties. The PTB in general abstained.

Alkmim has been a politician for most of his adult life. He has served as a state deputy, state secretary of finance, federal deputy, bureau director of the Bank of Brazil, Minister of Finance, and, most recently, as secretary without portfolio in the cabinet of Minas Gerais Governor Magalhaes Pinto. (UNCLASSIFIED)

Comment: His principal attraction to Revolutionary leaders as a vice presidential candidate seems to have been his prominence in the PSD. Congress, on the other hand, felt that a vice president selected from its own ranks would provide an extra guarantee that Congress would be respected in the new government. (LIMITED OFFICIAL USE)

3. Castello Branco Government Inaugurated

The crowded Chamber of Deputies in Brasilia was the scene on April 15 of the inauguration of the Castello Branco Government. Oaths of office were administered to President Castello Branco (who was elevated to the rank of Marshal upon leaving the Army) and to Vice President Jose Maria Alkmim by Senator Dinarte Mariz. Later the new President addressed the assemblage, pledging himself to "carry out...the Constitution and the Institutional Act which is a part of it...with determination, since I will be a slave to the laws of the country..."

President Castello Branco was warmly applauded during the speech, especially when he: (1) promised to turn over his office on January 31 1966; (2) outlined a pro-western foreign policy (see Item 4); and (3) assured the nation that "...the solution of the evils of the left will not give birth to a reactionary right, but to necessary reforms.. (Brasilia Telegram 163).

The inauguration ceremonies included a military review, a turning over of office from interim President Raneiri Mazzilli and, of course, voluminous speechmaking from all quarters.

CONFIDENTIAL

DECLASSIFIED CONFIDENTIAL A-1235 4/16/64 Page 9 Rio de Janeiro

The President's speech was generally heralded by Rio editors as being a statesmanlike declaration of intent to work for pacific and just solutions to Brazil's problems. Even leftist Ultima Hora termed it "...a serene speech...a modest speech in the sense that its author adopted a position of humility before the great national pro• blems and even proclaimed himself to be a 'slave of the Laws'. It was a speech of one who feels the heavy responsibilities of power..." On the other hand, Correio da Manha (which so far has been the severest critic of the revolutionary denouement) complained: "We expected a platform, and all we got was a speech...a general discourse which at best can be considered only as a letter of intent. It was something small—much too small". (UNCLASSIFIED)

Comment: The inauguration with its side-trappings—the indica• tion of stabilizing foreign and economic policies, appointment of an eminently respectable cabinet, expectation that the Supreme Revolu• tionary Command would now slip into the background, etc.—appears to have been quite auspicious. A careful reading of Castello Branco's speech, however, should erase any illusions of those who expected things to return to previous norms. The new President's pointed inclusion of the "Institutional Act" as part of the governing con• stitution, plus his remarks about the "birth of necessary reforms" seem to point to possible far-reaching changes directed by the execu• tive and implemented with perhaps somewhat forced collaboration of the legislative branch. (CONFIDENTIAL)

a) Castello Branco Appoints Cabinet

Upon talcing office on April 15, President Castello Branco moved to appoint the members of his Cabinet. Some of the members of the interim Mazzilli Cabinet were retained, with the addition of some new faces. As of April 16, the Cabinet members who have already taken office are:

War Minister: General Artur COSTA E SILVA Justice Minister: Milton Soares CAMPOS Minister of Transportation and Juarez TAVORA Public Works: Minister of Industry and Commerce: Daniel FARACO Minister of Labor and Social Welfare: Arnaldo SUSSEKIND

CONFIDENTIAL

DECLASSIFIED

Authority t^LOiTi^ 11

CONFIDENTIAL A-1235 4/16/64 Page 10 Rio de Janeiro

Education Minister: Flavio Suplicy de LACERDA Agriculture Minister: Oscar THOMPSON Flores Filho Minister of Health: Raimundo de BRITO Chief of Military Household: General Chief of Civil Household: Luis VIANA Filho

Those expected to be confirmed shortly are:

Navy Minister: Admiral Grunwald Air Force Minister: Brigadier Francisco CORREA DE MELO Minister for Foreign Affairs: Vasco LEITAO da CUNHA Finance Minister: Otavio Goveia BULHOES

The post of Minister of Mines and Energy remains unfilled as of this writing. The post reportedly was turned down by Juracy Magalhaes, and front-running candidate now seems to be Marcondes Ferraz. (UNCLASSIFIED)

Comment: The most striking single characteristic about the Cabi• net is the high level of competence and experience which the ministers bring to their posts. Seemingly without exception, the ministers are primarily technicians in their respective area, although most of them were holders of elective or appointive office before being named to the Cabinet. The average age of the group is around sixty, but given their level of experience, this may be an asset rather than a liability. All members of the Cabinet are judged as being strongly democratic in philosophy and pro-Western in orientation (which does not preclude a degree of healthy nationalism). (EmbTel 2292)

Only four of the ministers are known to be firmly identified with specific political parties—one each with the UDN, PDC, PSD and PL. There is some discussion about who indicated whom for positions, but it is entirely plausible that Castello Branco chose his ministers (admittedly after consultations with revolutionary politicians) more on the basis of performance than of trying to win support of any particular political leader or party. (CONFIDENTIAL)

b) Other Key Appointments

During the short interim Mazzilli period, several key appointments as either heads of agency or as interventors took place. These

CONFIDENTIAL CONFIDENTIAL A-1235 4/16/64 Page 11 Rio de Janeiro included new heads of Petrobras and the Bank of Brazil (Weeka 15), interventors in SUDENE and SUPRA as well as in a large number of labor and social welfare organizations. We have no indication concerning how many of these individuals will continue on under the Castello Branco regime, although presumably many of the interventors (especially in the labor organizations) will be replaced in due course by duly- elected or appointed substitutes. (UNCLASSIFIED)

4. New Government Program Awaited

There has been no authoritative indication yet of the program to be effected by the Castello Branco government. Nevertheless, Castello Branco1s reputation, his statements since his election as President, and the high professional calibre of his ministerial appointments (See Item 3) have resulted in widespread expectations that the govern• ment will make a determined effort to attack the basic, almost institutionalized, ills which have prevented Brazil's social and economic development and have driven the country close to the point of financial ruin. The government is expected to institute a number of administrative and structural reforms, to give a new direction to Brazil's foreign policy, to work for the development of an authentic labor movement, but, most of all, to concentrate on solving the serious financial and economic problems now facing the country. (LIMITED OFFICIAL USE)

a) Mazzilli-Castello Branco Speeches Pre-View New Economic Policy

In major addresses to the nation both provisional President Mazzilli and new President Castello Branco took sharp issue with the doctrine often voiced by Kubitschek that there is any conflict between growth and financial stability. Castello Branco in his rather short inaugural address stated that private initiative would not be cast aside in the development process and that he did not believe in development based on "an inflationary orgy".

Mazzilli's speech delivered over a nation-wide radio-TV hookup on the eve of his last day as interim President, covered the inflation question in greater detail but also stated that the "false argument of conflict between stabilization and growth can be destroyed by a fiscal policy which will increase real incomes while reducing specula• tive incomes". As to inflation and its cures, Mazzilli concentrated

CONFIDENTIAL

. DECLASSIFIED

Authority fc&LDill^ CONFIDENTIAL A-1235 4/16/64 Page 12 Rio de Janeiro mainly on the personnel question—wage distortions, expanded payrolls and the pending federal wage increase. He said inflation in Brazil was a result of the budget deficit which in turn was largely the result of excessive payroll costs. While attacking wheat and petroleum sub• sidies as additional sources of inflation and citing the need for complementary measures in the tax and interest rate areas, he empha• sized that all efforts toward stabilization would fail if federal personnel costs were not returned to a level compatible with the nation's economic activity. (UNCLASSIFIED)

Comment: There is no doubt that Mazzilli's statement was sanctioned by the revolutionary command and reflects the thinking of the Castello Branco government.

His statement, as well as the statements by President Castello Branco and remarks of Finance Minister Bulhoes, suggest that at long last the Brazilian government may make a serious effort at stabiliza• tion.

Particularly encouraging is the apparent determination to do some• thing about the federal payroll, which is now equal to about 50 percent of all budgetary expenditures, and the wide wage disparities in the public sector characterized by exorbitantly high wage schedules of Petrobras, merchant marine and railroad workers, among others. Mazzilli strongly hinted that the pending federal wage bill would not be an across-the-board adjustment which would "simply solidify or even exacerbate" existing distortions.

While as yet too little of the government financial policies have been revealed to enable a firm judgment, the frankness with which the financial situation has been presented to the Brazilian people and the recognition that the personnel question will have to be attacked— an issue which earlier governments shied away from—at least give more grounds for optimism than has been indicated for some time. (LIMITED OFFICIAL USE)

b) Foreign Policy Shift Expected

In the field of foreign affairs, initial indications are that Brazil's cornerstone henceforth will be a true independence (rather

CONFIDENTIAL

DECLASSIFIED

Authority (SlmMrlO^O If

CONFIDENTIAL A-1235 4/16/64 Page 13 Rio de Janeiro than an unobjective "neutralism"), based on strong natural political, cultural, and geographic ties to the Americas and the Western World. For example, President Castello Branco, in his inauguration speech, stated: "The independence of Brazil will constitute the basic postulate of our international policy...All democratic and free nations will be our allies, and all peoples that want to be free through representa• tive democracy can count on the support of Brazil...The historic alliances that link us to the free nations of the Americas will be preserved and strengthened". Earlier, Foreign Minister Leitao da Cunha told a press conference: "As a conscientious integrant of the Western World, it is natural that (Brazil's) relations be more intimate and more profound with those countries to which we are linked by heritage of common ideals and with which we share the same aspirations of freedom and progress".

The question of Brazil's continued relations with Cuba seems likely to be a subject of early consideration by the Castello Branco government. Some top revolutionary leaders—most notably War Minister Costa e Silva and Guanabara Governor Carlos Lacerda--have already made known their view that an immediate break of relations with Cuba is an absolute "must" and it is expected that other persons identified with the revolution will similarly express themselves to the new government in short order. (LIMITED OFFICIAL USE)

Comment: While we fully expect the Castello Branco government to adopt a position not sympathetic to Fidel Castro, we are inclined to believe that it will study thoroughly the entire question of Cuba relations before deciding to continue or break such relations. (LIMITED OFFICIAL USE)

5. Several Goulart-Signed Decrees Cancelled

On April 11, President Mazzilli's Justice Minister, Gama e Silva, announced that the President had revoked the controversial SUPRA decree signed by President Goulart on March 13. Gama e Silva noted that while there is a "necessity for fundamental reforms of our economic, political, juridical and social structure", these reforms "must be carried out in a climate of absolute tranquility and not by force of demagogic argument..." Since the "constitution does not

CONFIDENTIAL

DECLASSIFIED W

CONFIDENTIAL A-1235 4/16/64 Page 14 Rio de Janeiro permit indiscriminate, generalized expropriations" of landholdings, the "present act does not signify in the least that the present government is opposed to agrarian reform, but only revokes an act offensive to the legitimate rights of the Brazilian people..."

In the same address, Gama e Silva announced that the Brazilian Institute for Advanced Studies (ISEB) had been abolished, reportedly on the grounds that it was a "manipulating organ and orientator of the entire machinery for Bolshevization of the country..." (EmbTel 2269).

Meanwhile, O Estado de Sao Paulo reported that the April 16 Diario Oficial published presidential decrees revoking Goulart acts setting up the National Literacy Program and providing for "popular- priced" books published by the Ministry of Education. While the decrees recognize the vaildity of both goals, the ideological bent of the Goulart-sponsored programs led to their cancellation. (UNCLASSIFIED)

Comment: It is probable that these Mazzilli actions were cleared with Castello Branco and the Supreme Revolutionary Command before being put into effect. We do not know what action will be taken in regard to other "popular economy" decrees, but it is possible that some of them may remain in effect. (CONFIDENTIAL)

6. "Operation Clean-Up" Simmers Down

After several days of somewhat indiscriminate and apparently rather poorly-coordinated action in which numerous searches were carried out, "operation clean-up" has now simmered down to a more systematic and meaningful operation. Searches continue to be made, but on a more organized basis with the primary objective apparently being to unearth documentary evidence of subversive activity. Reports of "finds" continue to be made—a clandestine radio station in Rio, 120 sticks of dynamite in Caxias, a "large quantity" of arms in Macae, Rio state, etc. Tons of subversive printed material of various types reportedly have been confiscated throughout the country.

Meanwhile, although some arrests are still being made, the net trend seems now to be towards releasing persons who are proved to be

CONFIDENTIAL

. DECLASSIFIED

Authority fci^Mil^O / CONFIDENTIAL A-1235 4/16/64 Page 15 Rio de Janeiro innocent. The press has indicated that some 500 (out of over 3000) persons arrested in Rio have been released. In Minas Gerais, General Carlos Guedes, one of the revolutionary commanders, has ordered the release of 50 prisoners and will reportedly release another 200 during the course of the week.

Plans are now being made to put subversive material and arms on display in various parts of the country. (LIMITED OFFICIAL USE)

Comment: One of the obvious reasons for the slowdown in "opera• tion clean-up" is the fact that by now most of the obvious targets have already been searched. (LIMITED OFFICIAL USE)

7* Labor Developments

The Supreme Command of the Revolution issued a note on April 13 stressing that "legitimate social conquests of present labor legisla• tion are irreversible". The note referred to a rumor campaign being conducted which had as its intention the destruction of labor's faith in the revolutionary movement, and expressed confidence that workers would ignore these rumors and would know how to carry out their "duties and obligations, inseparable as they are from the rights granted in labor legislation".

This was the second time within a week that the new GOB felt con• strained to appeal to the workers to ignore such rumors—Minister of Labor Arnaldo Sussekind made much the same point in his first press conference on April 7—and indicates GOB concern over the possibility of acquiring an anti-labor image.

Organized labor, or that part of it which has not lost its leader• ship in the aftermath of the Goulart overthrow, for its part published a manifesto on April 13 pledging support of the Castello Branco govern• ment. The manifesto, signed by the leaders of two confederations (CNTC and CNTTT), sixteen federations, and thirty-six unions, stated further that "during many years the undersigned entities could not entrust the highest authority in the country or its advisors with the task of fulfilling the ideals we share". (UNCLASSIFIED)

CONFIDENTIAL CONFIDENTIAL A-1235 4/16/64 Page 16 Rio de Janeiro

MILITARY

ARMY

1. New Chief of Staff Replaces Castello Branco

Lt. General Emilio Maurell Filho assumed the position of Chief of Staff of the Brazilian Army on April 13, replacing General Humberto Castello Branco, whose participation in the ceremony marked his last official act of a forty-three year military career. (UNCLASSIFIED)

Comment: General Maurell Filho is a staunch democrat and a loyal, dedicated officer. During World War II he commanded an artillery battalion with the Brazilian Expeditionary Force, and he has twice attended courses of instruction in the United States (1943 and 1945). General Maurell Filho is expected to provide the Army with firm and decisive leadership. (LIMITED OFFICIAL USE)

2. Eighty-Five Officers Transferred to Reserve

The Supreme Command of the Revolution has transferred to the reserve one hundred and forty-eight officers of the armed forces. Of this number, eighty-five are army officers ranging in rank from three- star general to first lieutenant, and including such notorious figures as General Argemiro de ASSIS BRASIL, Col. Humberto Freire de Andrade, and Lt. Col. Kardeck Leme. These and a number of other army officers have also had their political rights suspended by order of the Supreme Command. (UNCLASSIFIED)

Comment: It is anticipated that 2fckR additionalUsts will be issued to place other officers in the reserve. (LIMITED OFFICIAL USE)

NAVY

1. Navy Holds Soviet Tanker for Search

On April 10, the Brazilian Navy took the Soviet tanker LYUBOTIN into custody and escorted it into the port of Santos where it attempted to conduct a complete search of the ship's holds and safe for any evidence of arms smuggling or other subversive activities. The ship's

CONFIDENTIAL CONFIDENTIAL A-1235 4/16/64 Page 17 Rio de Janeiro captain refused initially to allow the search, but after three days of discussion with representatives of the Brazilian Foreign Office, he permitted the Maritime Police to examine thoroughly the ship's holds« The safe, however, remained unopened. (UNCLASSIFIED)

Comment: The Navy believes that a precedent for the stopping and searching of ships has now been established, and expects to apply that precedent to other Bloc vessels suspected of carrying subversive material. (CONFIDENTIAL)

2. Officers Transferred to Reserve

Fourteen naval officers were among those members of the armed forces transferred to the reserve this week by order of the Supreme Command of the Revolution. The five officers of flag rank included among the fourteen also had their political rights cancelled for a period of ten years. These were: Admiral Araujo Suzano, former Minister of the Navy, Admiral Washington Frazao Braga, Admiral Candido da Costa Aragao, Admiral Jose Luis de Araujo Goiano, and Admiral Alexandre Fausto Alves de Souza.

The Navy has also discharged twenty-six enlisted marines for political activities. (UNCLASSIFIED)

Comment: Investigations within the Navy continue, and it is probabl that additional officers will be transferred to the reserve in the near future. (LIMITED OFFICIAL USE)

3. Command Changes

Vice Admiral Levy Penna Aarao Reis has been appointed Chief of Naval Operations.

Vice Admiral Zilmar Campos de Araripe Macedo has been appointed CINCFLT. (UNCLASSIFIED)

Comment: All of the new appointees are regarded as excellent naval officers. (LIMITED OFFICIAL USE)

CONFIDENTIAL

DECLASSIFIED

Authority N/aiOTTl 0&° CONFIDENTIAL A-1235 4/16/64 Page 18 Rio de Janeiro

AIR FORCE

1. Forty-Nine Officers Transferred to Reserve

Forty-nine Air Force officers were removed from active duty and transferred to reserve status this week. Included in this group were former Air Minister Anisio Botelho, former Air Chief of Staff Francisco Teixeira, Brigadeiro Dirceu de Paiva Guimaraes, and Brigadeiro Ricardo Nicoll. Teixeira, Nicoll, and Brigadeiro Epaminondas Gomes dos Santos also lost their political rights for a period of ten years. (UNCLASSIFIED)

2. Command Changes

Major Brigadeiro Jussaro Fausto da Souza has been appointed Director of Civil Air Routes.

Brigadeiro Alberto Huet de Oliveira Sampaio has been appointed Commander of the 6th Air Zone (Brasilia). (UNCLASSIFIED)

PSYCHOLOGICAL

1. Press, Radio, Motion Pictures Adjust and React

With the demise of the Communist and far-leftist press (Weeka 15) most newspapers have been encouraging and praising the new government, and there is no quarrel with the basic goals of the "revolution". However, there has been some very sharp disapproval of methods. News• paper directors have been told to be careful and writers are aware that some of their colleagues are in jail. Nevertheless, the conservative Correio da Manna has launched some singularly stinging and sarcastic criticism of the new state of affairs and the leftist Ultima Hora seems to be getting bolder every day. Usually, the criticisms are made through the device of printing selected parts of unfavorable foreign press commentary and statements by Brazilian public figures. For example, Jornal do Comercio , Ultima Hora, and Diario Carioca reprinted parts of an interview with law professor Sobral Pinto in which the Ato Institucional is called "an act of force committed by the victors against the helpless vanquished." The lawyer went on to

CONFIDENTIAL

DECLASSIFIED

Authority MmOtS"! OOO CONFIDENTIAL A-1235 4/16/64 Page 19 Rio de Janeiro

say that it has resulted in an atmosphere of "terror" so that "no one feel safe and fear invades every home". Radio and television stations have been more cautious than the press, perhaps because they are more sensi• tive to government pressure short of complete shutdown. Army officers are still stationed at the government-run stations, such as Radio Nacional, and news directors of other stations are reported to be in constant contact with security personnel of the new government.

Newsreels were drastically affected this week. Many theaters are not showing any newsreels (usually required by law), and a newsreel producer reports that the censor has ordered newsreels of Goulart, Arrais, etc. (of which there are scores) eliminated throughout all the theaters of Brazil, a job which will take some time.

2. International News Controls Minimal

Although the government continues to maintain a close watch on copy filed by foreign correspondents, there have been no reported cases of actual censorship in the past week. Army personnel stationed at offices of some of the wire services and at the press cable office did some slight editing early in the week (e.g., changed the word "enemy" to "adversary"), but for the past four or five days, correspondents have suffered only a slight delay as a result of government controls. (UNCLASSIFIED)

For the Ambassador:

tOohn Keppel Counselor for Political Affairs

Contributor s: POL:CCCarson:HWeiner,LCKilday, DEZweifel, RBBentley,PMcLean ECON:JKrizay LABOR:HShapiro USIS: JPLane MIL:FPConnelly, PDillon

CONFIDENTIAL

DECLASSIFIED

Authority N/AlO^riQ^0