Brazil Senate president threatens government unity

BRASILIA, Brazil (Reuters) -- Brazil's powerful Senate chief Antonio Carlos Magalhaes, whose term ends in February, has launched a series of scathing attacks on his anticipated successor that analysts say could break apart the center-right government coalition.

Magalhaes has leveled corruption allegations against Sen. Jader Barbalho, whose appointment as Senate president had been seen as a formality. The allegation has thrown Barbalho's appointment into question and opened the fight for the powerful job among the four coalition parties.

Magalhaes has cited a report by the leading newsmagazine Veja, which has accused Barbalho of amassing a personal fortune of $16 million dollars, something it said would be virtually impossible on the salary of a public servant.

Analysts said the conflict erupted at a sensitive time for the coalition and could lead to its break-up since President Fernando Henrique Cardoso has been doing poorly in the polls all year and the coalition is preparing to find a candidate for 2002 presidential elections. Cardoso is barred by the constitution from seeking a third term.

"To encourage divisions within the coalition, even before a candidate for 2002 is found, may eventually lead to the collapse of the government alliance," said Constantin Jancso, an analyst at the MCM consultancy.

Since coming to power in 1994, Cardoso's coalition has introduced sweeping free-market reforms to Latin America's largest country, largely because of Congress' dependable support for government policies -- often with Magalhaes' help.

Barbalho heads the centrist Brazilian Democratic Party (PMDB), which along with Cardoso's Brazilian Social Democratic Party (PSDB), Magalhaes' right-wing Liberal Front Party (PFL) and the smaller conservative Popular Party (PPB), make up the government's coalition.

While Magalhaes has always been outspoken, coalition parties have been irked by other positions he has taken, including a growing populist streak displayed in demands for a huge rise in the minimum wage.

Analysts say the attacks on Barbalho may be intended to make sure Magalhaes remains at the center of power after he steps down.

Jancso said the power struggle created by the scramble for the Senate job will "probably not have a happy ending."

Others say there would be no split, especially since the left-wing Workers Party's sweeping gains in October elections.

"The coalition parties aren't strong enough to go it alone," said political analyst Haroldo de Britto.

The Senate president is chosen by a simple majority through a vote in the upper house, to be held February 15. The less powerful post of head of the lower house of Congress will be decided the same way on the same day.

In a sign of splits to come, the PMDB and PSDB decided Wednesday to unite behind PSDB lawmaker Aecio Neves for the lower house top post, while the PFL nominated one of its own.

And the fighting over the Senate president's job will be dwarfed when the parties start looking for a presidential candidate for 2002.

Amalia Estenssoro, an analyst at BBVA Securities, said in a research note that the government's strategy is to guarantee Cardoso has control over the nomination of his successor and thus ensure continuity for the next administration.

That will work if the booming economy holds up and delivers more jobs, increasing the government's popularity, she said.

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