U.S. Loses Multibillion-Dollar Contract Because of Administration Spying

The U.S. lost a fighter jet contract with Brazil worth $4.5 billion in the wake of the South American country's anger over revelations that President Obama's intelligence agencies spied on the personal communications of President Dilma Rousseff.

Boeing was considered to be the front-runner for the contract with its F/A-18 Super Hornet until the leak from former National Security Agency contractor Edward Snowden.

Instead, the Brazilian air force will be supplied by Saab, with an initial order of 36 new Gripen NG fighters by 2020. Negotiations over the contract bids had been going on for years and Rousseff's decision, which apparently caught all of the parties involved by surprise, came this morning, the Brazilian government said in a statement.

"We are indeed a peaceful country, but we will not be helpless," Rousseff said. "...We have much to learn; it is important to be aware that a country the size of Brazil must always be ready to protect citizens, property and sovereignty."

"We must be prepared to face any threat, defend our heritage in regions that already receive our attention, such as the Amazon," she added.

Saab said the deal also includes long-term bilateral cooperation between the Brazilian and Swedish governments.

”I am extremely proud of the confidence that the Brazilian government has placed in Gripen NG. Saab regards the announcement today as a strong commitment of the Brazilian Government and we are looking forward to provide the Brazilian Air Force with the world-leading and most affordable fighter," Saab CEO Håkan Buskhe said. "Furthermore, this announcement is very significant for the collaboration between Brazil and Sweden. We stand prepared to start the industrial collaboration as planned, with its positive effects for Brazilian industry."

Sweden, South Africa, Hungary, Czech Republic, Thailand and the UK Empire Test Pilot School (ETPS) are already using the new Gripen system, which Saab calls "the world’s most agile fighter for close combat."

A Brazilian official told Reuters on condition of anonymity that "the NSA problem ruined it for the Americans."

Boeing, which opened a large office in Brazil just to show its commitment to the deal, said it was "disappointed" by the decision. France's Dassault Aviation also competed for the contract, and President Francois Hollande lobbied for the deal on a visit to Brazil last week.

Privately, Americans close to the talks told reporters that what the administration gleaned through its spying can hardly outweigh the financial toll it took on U.S. industry today.

Rousseff's decision comes just after Snowden wrote an open letter to the Brazilian people published in a newspaper there, offering to help the government investigate how the U.S. has spied on its leaders in exchange for asylum.

“I’ve expressed my willingness to assist where it’s appropriate and legal, but, unfortunately, the US government has been working hard to limit my ability to do so,” Snowden wrote.

“Until a country grants me permanent political asylum, the U.S. government will continue to interfere with my ability to speak out.”

Brazilian senators have reached out to him for assistance in their hearings about how to re-route fiber-optic cables to lessen the chance of American agencies getting a peek into the country’s affairs. Glenn Greenwald, the reporter who broke the Snowden leaks, lives in Brazil.

White House press secretary Jay Carney, when asked whether the administration had been in touch with Brazil over the asylum request, told reporters today that "the broader issues with regards to Brazil and other nations and the disclosures are ones that we discuss directly with those nations through diplomatic channels and with our Brazilian counterparts, and that will continue."

"We believe that Mr. Snowden ought to be returned to -- ought to return to the United States, where he faces charges for leaking classified information and where he will receive full due process and protections," Carney said.

At the UN General Assembly in September, Rousseff railed against the U.S. government from the podium just after canceling a visit to meet with Obama in Washington.

At the time, Carney said the new date for talks was Oct. 23, but that meeting still hasn't happened.

“Meddling in such a manner in the lives and affairs of other countries is a breach of international law,” Rousseff told the UN. “And as such, it is an affrontment to the principles that should otherwise govern relations among countries, especially among friendly nations. A country’s sovereignty can never affirm itself to the detriment of another country’s sovereignty.”

“The right to security of a country’s citizens can never be ensured by violating the fundamental human and civil rights of another country’s citizens. Even worse, when private sector companies uphold this type of spying activity,” she continued. “The argument that illegal interception of information and data is allegedly intended to protect nations against terrorism is untenable.”

“Without the right to privacy, there is no real freedom of speech or freedom of opinion. And, therefore, there is no actual democracy. Without respect of sovereignty, there is no base for proper relations among nations.”

Rousseff said the international community is now faced with “a serious case of violation of human rights and civil liberties, a case of invasion and capture of confidential secret information pertaining to business activities. And, above all, a case of disrespect to national sovereignty, the national sovereignty of my country.”

“We have let the U.S. government know about our protests, by demanding explanations, apologies and guarantees that such acts or procedures will never be repeated again,” she said. “Friendly governments and societies that seek to consolidate a truly strategic partnership, such as is our case, cannot possibly allow recurring and illegal actions to go on as if they were normal, ordinary practice. Such actions are totally unacceptable.”

“…The problem, however, goes beyond the bilateral relations of two countries. It affects the international community itself and, as such, requires an answer from it.”