By Brian Winter
SAO PAULO, Sept 4 (Reuters) - Furious about a report that the U.S. government spied on her private communications, Brazilian President Dilma Rousseff may cancel a planned White House visit and downgrade commercial ties unless she receives a public apology, a senior Brazilian official told Reuters on Wednesday.
A Brazilian news program reported on Sunday that the U.S. National Security Agency spied on emails, phone calls and text messages of Rousseff and Mexican President Enrique Pena Nieto. The report by Globo TV was based on documents leaked by fugitive former NSA contractor Edward Snowden.
Rousseff is due to make a formal state visit to Washington next month to meet U.S. President Barack Obama and discuss a possible $4 billion jet-fighter deal, cooperation on oil and biofuels technology, as well as other commercial agreements.
The visit, which is the only such invitation extended by Obama this year, was meant to highlight a recent improvement in relations between the two biggest economies in the Americas, as well as Brazil's emergence over the past decade as a vibrant economy and regional power.
But the official, who declined to be identified due to the sensitivity of the episode, said Rousseff feels "patronized" by the U.S. response so far to the Globo report. She is prepared to cancel the visit as well as take punitive action, including ruling out the purchase of F-18 Super Hornet fighters from Chicago-based Boeing Co, the official said.
"She is completely furious," the official said.
"This is a major, major crisis .... There needs to be an apology. It needs to be public. Without that, it's basically impossible for her to go to Washington in October," the official said.
Obama and Rousseff are scheduled to attend a Group of 20 meeting in St. Petersburg, Russia this week. However, as of Wednesday afternoon, the two leaders had no bilateral meeting scheduled, the official said.
Rousseff is a moderate leftist but comes from a party with roots in trade unions and a historic mistrust of the United States. Local analysts have said it would be politically difficult for her to participate in the pomp of a state visit, which includes a black-tie dinner at the White House, so soon after allegations that Washington was spying on her.
On Monday, Rousseff's foreign minister demanded a written response to the Globo report from the U.S. government by the end of this week. A foreign ministry official told Reuters there had been no response by Wednesday afternoon.
Communications Minister Paulo Bernardo, one of Rousseff's most trusted aides, told reporters late on Tuesday that the spying was "more serious than it seemed upon first impressions," which may help explain why Brazil is now seeking an apology in addition to the written explanation.
OBAMA SAYS U.S. TARGETS 'AREAS OF CONCERN'
Obama, speaking in Sweden on Wednesday on his way to the G-20 summit, said that U.S. intelligence agencies are not "snooping at people's emails or listening to their phone calls."
"What we try to do is to target, very specifically, areas of concern," he said, adding that such areas included counter-terrorism, weapons of mass destruction and cyber-security.
Brazilian officials are skeptical as to how Rousseff's private communications would have fallen into those categories. Brazil is not a known base of operations for terrorists, it does not produce nuclear weapons and it has been a stable democracy and U.S. ally in South America for the last three decades.
Obama also said on Wednesday that safeguards should be strengthened to make sure surveillance programs stay within certain parameters. "Just because we can do something doesn't mean we should do it," he said.
The Globo report showed what it said was an NSA slide dated June 2012 displaying communication patterns between Rousseff and her top advisers.
That slide, and a separate one showing written messages sent by Mexico's Pena Nieto when he was still a candidate, were part of an NSA case study showing how data could be "intelligently" filtered by the agency, Globo said.
The report was based on documents obtained from Snowden by journalist Glenn Greenwald, who lives in Rio de Janeiro.
Bernardo, the communications minister, said Brazil had yet to receive any "reasonable" explanation from the United States.
Globo newspaper published a separate set of documents in July that it said showed the NSA targeted several Latin American countries in its spying program, including Brazil, Mexico, Colombia and Venezuela.
"All of the explanations that have been given to us from the beginning of these episodes have proven to be false," Bernardo said. "I think it's indiscriminate spying that has nothing to do with national security ... It's espionage with a commercial, industrial aim."
The Brazilian official speaking to Reuters compared the current crisis to the last time the two countries publicly clashed - in 2010, when Rousseff's predecessor tried to broker a deal over Iran's nuclear program. The mediation did not succeed, and sparked a wave of recriminations between Washington and Brasilia that Rousseff has since tried to move past.
"This is far worse than Iran," the official said. (Reporting by Brian Winter; Editing by Kieran Murray and Cynthia Osterman)