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INT LAB TAR S SUBJECT : Monthly Summary - February 1967 ^ARj q Jg^^

T R XMB AIR^ REF • Belo Horizonte«s A-27, February 8, 1967 *• s ARMY CIA NAVY 3 r r Table of Contents OSD USI A NSA 3 :

4 1. MagalhSes Pinto Designated as Minister of Foreign Relations 2. Third-Party Fever 3. Another Cassation k. Separatist Talk 5. Military Maneuvers in Southern Minas Gerais 6. Student Demonstrations Anticipated 7. Transfers and Appointments

ESPlRITO SANTO: o 8. Governor Inaugurated PYCHOLOGICAL: or CD Q_I o 9. The Costa e Silva Cabinet *****

1. Magalhaes Pinto Designated as Minister of Foreign Relations The news that former Governor Magalhaes Pinto had been designated as the new Minister of Foreign Relations in Costa e Silva1s Cabinet came as a surprise and was received with enthusiasm in Minas Gerais by all except GROUP IV l_ Downgraded at 3-year intervals/Declassified\l2 J years after date or origin. V CONFIDENTIAL T PEPT- USE °NLY I In DS-323 • Out Drafted by: Contents and Classification Approved by: WEPrice/jChallinorrt 3/6-8/67 Clearances:

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Governor Pinheiro and the old-line ex-PSD*s. Ex-UDN*s are especially elated while a group of young ex-PSD*s led by Federal Deputy Murilo Badard are now moving away from Governor Pinheiro and Vice Governor Pio Canedo, who they feel have marginal influence with Costa e Silva, towards Magalhaes Pinto through whom they consider they will have easier access to the central power.

Magalhaes Pinto has announced that as the Minister of Foreign Relations it will be his policy "to give special emphasis to economic and social problems in his relations with foreign countries."

Comment; All secretly wonder what kind of a Minister of Foreign Relations Magalhaes Pinto will be. Magalhaes Pinto is provincial and nationalistic in outlook, he has no training or experience in foreign affairs, and he is ex• ceedingly conservative and circumspect - characteristics derived from his own nature and his Minas Gerais and banking background. People here have dif• ficulty in adjusting to thinking of Magalhaes Pinto as the Minister of Foreign Relations and some feel he may be miscast in his new role because they only think of him as typifying the scheming politician. Those who have some mis• givings believe the demands of his new position, since it is so different from his experience, may cause him some difficulties. Also, they consider that his new position places him somewhat out of the mainstream of internal politics. Actually, a person with Magalh8es Pinto's political abilities and potential cannot be placed off to one side and he will probably maneuver himself into being the leader of the Cabinet. He can be expected to use his talents to the full both as Minister of Foreign Relations and as a politician interested in internal affairs and to take advantage of every opportunity because he has every intention of being a candidate for the presidency in 1970. (CONFIDENTIAL)

2. Third-Party Fever a) Frente Ampla

State Deputy Raul Brunini, MDB/Guanabara, stopped off in Belo Horizonte on February 20 en route to Brasilia to discuss the formation of the "Frente Ampla" in Minas Gerais. His two principal contacts here were Federal Deputy Jose" Maria Magalhaes, MDB/Minas Gerais and former leader of Lacerdismo in Minas Gerais, and State Deputy Anibal Teixeira de Sousa, MDB/MG and an ardent Jus- celinista.

During the same week Rodrigo Lopes and Baldomero Barbari, sons-in-law of ex- President Juscelino Kubitschek, arrived in Belo Horizonte for the purpose of sounding out former Lacerdistas and Juscelinistas regarding the possibility of organizing the "Frente Ampla" within the framework of the "Lisbon Manifesto."

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They also conferred with Magalhaes and Teixeira de Sousa and, in addition, ' with Federal Deputy Renato Mario de Avelar Azeredo, MDB/WJ, and Carlos Murilo, ex-State Deputy of Minas Gerais (ex-PSD/MDB) and nephew of ex-President Kubitschek.

All three of the visitors passed along Lacerda's suggestions that before form• ing the party itself in Minas Gerais students and workers could be organized into political action groups and clubs to work for the restoration of democracy. They stated they hope to consolidate the preparations for the movement in Minas Gerais before Lacerda and other "Frente Ampla" supporters come here to establish the party structure sometime after March 15.

Federal Deputy Magalhaes, who terminated his political association with Lacerda shortly after the March Revolution, brusquely rejected the visitors* overtures and made a public statement that "the formation of the 'Frente Ampla1 is un• necessary as the MDB, with some purging, can very well accomplish its role as the political party concerned with the redemocratization of the country."

Comment: Magalh&es by his statement and his unwillingness to cooperate and because of his former close association with Lacerda dealt "Frente Ampla" efforts in Minas Gerais a serious blow. Texeira de Sousa, true to his long• standing personal friendship with Kubitschek, and Carlos Murilo, because of family relationship, can be expected to support and actively work for the "Frente Ampla."

Of the 82 State Deputies in the Legislative Assembly, it is estimated that possibly five MDB's, including Texeira de Sousa, will be persuaded to move toward the "Frente Ampla" and perhaps join the party if and when it materializes.

There is presently exceedingly little enthusiasm in Minas Gerais for the "Frente Ampla," but the situation could change if Lacerda appears here in per• son and makes an appeal to politicians and to the people in general.

At the moment Mineiro politicians are waiting to find out how Costa e Silva will organize his government, what the party line-up will be thereafter, his attitude toward ARENA and MDB and any third-party pretentions, and the answers to many other bothersome questions before they determine their own course of action. And the "Frente Ampla" is the least of their worries.

b) Frente Mineira

Governor Pinheiro is attempting to establish the "Frente Mineira" as a device to pull ex-PSD's and ex-UDN's together in a loosely organized political/economic party. The move is primarily for the purpose of ensuring that Minas Gerais

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CONFIDENTIAL k will receive its full share of Federal funds which are made available to the states for developmental purposes. It is estimated that in 1966 Minas Gerais lost by default CR$ 8 billion which otherwise could have been made available to it for various projects. The basic idea is for members of all parties to be loyal to their state, forget their political animosities and vote for the receipt of such funds. Also, the theory is that the "Frente Mineira" will act as a support arm for ARENA and tend to reduce ex-party bickering within the state.

The order has come down from MDB/Minas Gerais headquarters for its members not to support the "Frente Mineira."

To give impetus to the move, following a recommendation said to have been made by Costa e Silva, Governor Pinheiro and former Governor Magalhaes Pinto have tentatively agreed to meet and discuss a peaceful merger of ex-PSD and ex-UDN forces for the benefit of the state and of ARENA.

Comment; From the viewpoint of Governor Pinheiro this move affords him with the means of regaining some of his popularity if not influence with Costa e Silva by showing him his willingness to cooperate with him and at the same time he will be in a position to help Minas Gerais more effectively. This is believed to be the short term view because in the long run it is foreseen that Magalhaes Pinto will be the one to enhance his position. Besides his ex-UDN's, Magalhaes Pinto will then have the support of the ex-PSD contingent in the state, a windfall of no small value gained by a fortunate turn of events, at no cost to himself. With his eye on the presidency in 1970, this move could prove to be very important for him indeed. (CONFIDENTIAL)

3. Another Cassation

Former Municipal Council member Henrique Novais, most recently a defeated candidate for the Minas Gerais Legislative Assembly, had his political rights cancelled for ten years by President Castello Branco on February 27, 19°7.

During the administration of former Mayor Jorge Carone, who was cassated in October 1966, Novais' continuous opposition to Carone attracted considerable notoriety. Nevertheless during the January 1965 council meeting, at which time Carone was deposed, Novais protested the arbitrary action taken against Carone.

During the administration of Pieruccetti, who succeeded Carone, Novais had little to say and cooperated with Pieruccetti.

Information here reveals that Novais has been the subject of an IPM and in June I96I+ was charged with being a member of Aqab Popular in 1963. Addition• ally he was charged with subversive activities among students.

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Comment: While Novais* cassation came as a surprise it prompted no adverse comment or reaction among local politicians.

One newspaper story includes the statement that Novais is going to the United States in June (1967) on a schorlarship granted him by the United States Government. The USIS officer here states no scholarship has been awarded Novais by the United States Government. To date Novais has not made application for a visa at the Consulate. (CONFIDENTIAL) h. Separatist Talk

Five Councilmen, representing the Town Council of , called upon Governor Pinheiro on February 27 and presented him with a "Petition", which they claimed had been unamiously approved by the Town Council of Uberaba, that advocates the creation of the "Estado do Triangulo" with Uberaba as its capital. The State as proposed would comprise hi municipalities in the western triangular region of Minas Gerais with an area in excess of 100 thousand square kilometers.

The "Petition" sets forth conditions to be changed which include decentralization of administration, creation of conditions for the investment of funds, return of revenue contributed by the region, and elimination of electoral vassalage and "great state" political power over the region.

Federal and State Deputies from that region met with the Councilmen and were unanimous in denouncing the "movement." State Deputy Joaquim Roberto Leab Borges, from Uberaba, says the manifestations are isolated, and the "movement" has no depth as it derives no support from the general public.

Comment; While it cannot be claimed that certain separatist feeling does not exist in the western triangle, it has never advanced to the point of being a popular movement. "Petitions" have been presented to Governors of Minas Gerais more or less regularly for 20 years or more always with the intention of receiv• ing some political, economic or other benefits from the threats. This time the real issue is the delay being experienced in completing the Uberaba^Belo Horiz- onte-Vitdria highway. Uberaba want* this highway completed as quickly as possible as it will open the markets of Belo Horizonte and Vitdria to western triangle agricultural products. Governor Pinheiro has agreed to accord priority to the Minas Gerais section of this project. (LIMITED OFFICIAL USE)

5. Military Maneuvers in Southern Minas Gerais

Combined Army and Military Police practice maneuvers were held in an area near Caxambu and Cruzilia in southern Minas Gerais during February 18 to 2b in• clusive. The Brazilian Air Force participated to the extent of supplying ob• servation planes. The maneuvers were under the overall command of General

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Alfredo Souto Malan, Commander of the Fourth Military Region at . General Didscoro Valle, Commander of the Fourth Infantry Division (iD/h) at Belo Horizonte, and Colonel Milton Campos, Commander of the Military Police of Minas Gerais, assisted General Malan.

Following the usual plan of events, the approximately 1,800 participating troops were designated as "guerrilheiros" and "legalistas" in about equal pro• portions and assigned field positions. In the melee that ensued the attacking "guerrilheiros" were effectively outflanked and driven from the field of battle by the "legalistas" one full day before the time scheduled for such occurance. Some say there was collusion among the troops to cut the maneuvers short by one day because of the prevailing hot and humid weather. In any event, with the conclusion of the exercises and after some artillery and rifle practice using live ammunition, without loss of life, the maneuvers were de• clared a success and all troops returned to their respective command headquarters one day earlier.

Comment: In accordance with past practice, the Army availed itself of the opportunity of its presence in the area, as a gesture of good-will, to provide free medical and dental care to the populace in need of such services and to distribute food and clothing.

General Valle states similar maneuvers are planned for next September or October. (LIMITED OFFICIAL USE)

6. Student Demonstrations Anticipated

Information available to the Consulate indicates university students will probably demonstrate here on March 15 to express their opposition to Costa e Silva assuming the presidency. Their theme or slogan seems to be "exchange of one dictator for another."

The Military Police supported by DVS agents, the Civil Guard and Army units will be placed on an alert basis March 13 through 18.

Comment: It is unfortunate that the week starting March 13 coincides with the last week of freshman hazing. Demonstrations could spontaneously occur at any time from these exercises or they could be used initially as a cover for planned demonstrations. (LIMITED OFFICIAL USE)

7. Transfers and Appointments

General Alfredo Souto Malan, Commander of the Fourth Military Region at Juiz de Fora, is to be transferred in March to Rio de Janeiro where it is now be• lieved he will be on the staff of the Superior School of the Army. General Malan is to be replaced by General Itibere- Goveia Maranhab who is presently

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stationed in Fortaleza.

Colonel AfrSnio da Silva Aguiar, Commander of the Air Base at Belo Horizonte, has been transferred to Rio de Janeiro where he is to serve on the Air Force General Staff. Lieutenant Colonel Haroldo RLbeiro Fraga who comes here from Rio de Janeiro where he served in the Third Section of the Air Force General Staff has already replaced Colonel Aguiar in his command.

Eliseu Resende, recently appointed Vice President of the State Council for Development, has been designated as the Director of DNER (Departamento Naeional de Estradas de Rodagem), a federal entity responsible for the plan• ning, construction and maintenance of the national highway system.

Governor Pinheiro has appointed Eduardo da Silva Bambirra as Director of DER (Departamento de Estradas de Rodagem) to replace Eliseu Resende who served in this capacity until appointed as the Vice President of the State Council for Development. Bambirra is a competent engineer with an extensive background of experience. (LIMITED OFFICIAL USE)

ESPlRITO SANTO:

8. Governor Inaugurated

Christiano Dias Lopes Filho (ex-PSD/ARENA) received the oath of office as the Governor of Espfrito Santo on January 31, 1967* During the same ceremonial proceedings Isaac Lopes Rubim (ex-PSD/ARENA) was sworn in as the Vice Governor. Governor Dias Lopes succeeds Governor Rubens Rangel.

Governor Dias Lopes has been slow to name the members of his Secretariat. Those who he has appointed and have assumed office as of March 8, 1967, filling seven portfolios, are listed as follows: Secretary of Government, Paulo Augusto Costa Alves; Secretary of Interior and Justice, Antonio Dias de Souza; Secretary of the Treasury, Rubens Vieira de Oliveira; Secretary of Education and Culture, Darcy Werther Vervloet; Secretary of Health and Assistance, Hamil• ton Machado de Carvalho; Secretary of Highways and Public Works, Bertino Alves de Souza; and Secretary of Agriculture, Ivan Neves Andrade. Additionally, Alvino Gatti has been named Secretary without portfolio. Two portfolios, those of Industry and Commerce and of Planning, which remained vacant during ex-Governor Rangel's administration, have not been filled and perhaps will re• main unfilled, at least for the present.

Deputy Jose Moraes has been re-elected as the President of the State Chamber of Deputies.

Comment: Governor Dias Lopes, a former State Deputy, is 39 years of age, possessed with a dynamic personality and an urge to get things done. He has ambitious plans for his state and under his administration Espfrito Santo can be expected to improve immeasurably in the commercial, educational and social spheres. (LIMITED OFFICIAL USE) CONFIDENTIAL Belo Horizonte A-30

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8. The Costa e Silva Cabinet

Since Carnival the daily newspapers have mostly been occupied with the formation of Costa e Silva*s cabinet. Several editorials commented that the new appointments signify a softening of present GOB economic policies and a return to development. 0 ESTADO DE MINAS said that Magalhaes Pinto would mold a more aggressive trade policy with Europe, principally Eastern Europe. DIARIO DE MINAS commented that the "appointment of Magalhaes Pinto to Itamarati will mean a return to an independent foreign policy." 0 DIARIO, the Catholic daily, expressed hope that the new cabinet would pay more attention to the neglected aspirations of the people and better treatment for labor leaders and students. (UNCLASSIFIED)

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