Politics: Bending the Rules; Jose Sarney has been a key Lula ally, but his congressional clout may soon weaken, spelling trouble for the president.(Brazil)(Cover Story)(Biography)

Byline: Mac Margolis

He is short and plodding, with a feathery handshake and a voice so timorous you have to lean windward to catch all the words. At 73, Jose Sarney could be your favorite grandfather or the school librarian--anything, that is, but one of the most powerful public figures in Brazil. He currently presides over the Brazilian Senate, but in the past half century Sarney has held every political job imaginable--from city councilor to president--clinging to office even as the country careened from democracy to dictatorship and back. Behind the brush mustache and diffident smile is a shrewd operator quietly making the rules, or bending them, in one of the world's biggest and most unruly legislatures.

Until now he has also been perhaps the most critical ally of President Luiz Inacio Lula da Silva, the onetime leftist firebrand who needs all the establishment backing he can get to push through painful economic reforms. Sarney played a crucial role steering bills to reform the country's profligate pension system and onerous tax code through the legislature, which is divided among 17 different parties. "After the president, Sarney is Brazil's most powerful politician," says Pedro Simon, a senior senator who commands a rival wing of Sarney's own Brazilian Democratic Movement Party, or PMDB. In person Sarney is more modest. "I do nothing more than serve as a balancing point within the national Congress," he told NEWSWEEK. He has made no secret of his own ambitions--to amend the rules that limit a Senate president to one term, clearing the way for his re-election.

The problem is that Lula has not supported his bid, and last week Sarney announced he would not seek another term. The question political observers have is whether that means he will also withdraw his support for the president, who, with just two and a half years left in office, faces tough legislative battles to reform the judiciary, labor laws and party politics. "The government can't afford a clash," says Amaury de Souza, a political analyst for the Sao Paulo consulting firm MCM. "If Lula plays his cards wrong, he could dismantle his entire base of support."

The two men are an odd pair. Lula is the son of peasants, while Sarney was raised in the comfort of the ruling political aristocracy of northeast Brazil. Sarney came of age ...