Big Surveillance Project For the Amazon Jungle Teeters Over Scandals

AFTER months of delays, debate, and escalating scandals, the future of what would be the largest nonmilitary surveillance contract ever awarded in Latin America will be decided any day now by the Brazilian Senate.

The $1.3 billion contract between Brazil's government and the Massachusetts-based Raytheon Corp. to build a pioneering surveillance project in the Amazon jungle is supposed to usher in a new era of commercial relations with the United States. The support of President Fernando Henrique Cardoso was won after intensive personal lobbying from President Clinton and Commerce Secretary Ron Brown.

Instead, the state-of-the-art System for Vigilance Over the Amazon, known as Sivam, may have an ''impact on bilateral relations if the contract is suspended without a solid reason,'' US Ambassador to Brazil Melvyn Levitsky told a Rio de Janeiro newspaper last month.

Sivam's stated purpose is to monitor weather and airplane traffic through the Amazon, stop drug traffic, and track environmental abuses from illegal miners and loggers. The project, which would cover an area larger than Western Europe and would begin operating by 2000, includes radar, satellites, and infrared sensors on planes and helicopters.

Even though Brazil signed a contract with Raytheon last May, the Brazilian Senate has yet to authorize the program while a special investigating committee reviews its financing.

Senators object to cost

Raytheon is America's largest missile maker. Several Brazilian senators have charged that Sivam would give too much surveillance power to a foreign company with close ties to the Pentagon, and that the government would be better served by cheaper, conventional measures to combat smugglers and environmental abusers, such as a beefed-up police force.

In 1994, Raytheon beat out 11 international companies bidding on the project, after the CIA reported that the other finalist, France's Thomson/Alcatel, was paying bribes to get the contract.

But then anonymous allegations were made to the press that Raytheon also had paid bribes for the contract. In November, a federal police wiretap revealed a top aide of President Cardoso suggesting that a Brazilian representative of Raytheon pay off a senator heading a committee that was reviewing the project. In the scandal's aftermath, Aeronautics Minister Mauro Jose Gandra resigned over accusations of influence-trafficking in favor of Raytheon.

Raytheon officials say there is no proof of any wrongdoing and that they won the contract because they offered the best technology at the lowest price. Under terms of the contract, most of Sivam's funding will come from the US Export-Import Bank.

''We've done nothing wrong. The allegations of bribery are absolutely, positively not true,'' says Raytheon Vice President James Carter, the company officer in charge of Sivam.

Sivam as smokescreen?

A local political scandal indirectly added to Raytheon's woes. When two powerful senators, former President Jose Sarney and Antonio Carlos Magalhaes, were accused last month of accepting illegal campaign funds, they surged to the forefront of the anti-Sivam forces. Mr. Magalhaes heads the Senate committee investigating the Sivam contract.

''They are using Sivam as a giant smoke screen to divert public attention from their own troubles,'' says Richard Foster, editor of the Brasilia-based business newsletter Brazil Watch.

The anti-Raytheon forces have also been joined by a top organization of Brazilian scientists and a retired air force general, known for his nationalist views.

The Brazilian Society for Scientific Progress has asked Cardoso to consider contracting Brazilian firms to build the Amazon program, which it estimates can be done for $900 million. And former Brig. Gen. Ivan Moacyr da Frota, who has branded the United States as an ''alien vulture'' intent on keeping the third world under its control, is leading a campaign to squelch the contract since it ''implies strategic vulnerabilities that would compromise national security.''

Most experts agree that the key to Raytheon's success is Cardoso, who must cajole the Senate committee to join him in supporting the contract. In the past few weeks, Cardoso has been busy wooing key senators, including Sarney and Magalhaes.