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Cablegate: Sao Paulo Elections: Alckmin Mayoral Candidac Viewed As

VZCZCXRO8362
RR RUEHRG
DE RUEHSO #0142/01 0781615
ZNR UUUUU ZZH
R 181615Z MAR 08
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC 8041
INFO RUEHBR/AMEMBASSY BRASILIA 9183
RUEHBU/AMEMBASSY BUENOS AIRES 3102
RUEHAC/AMEMBASSY ASUNCION 3349
RUEHCV/AMEMBASSY CARACAS 0706
RUEHMN/AMEMBASSY MONTEVIDEO 2654
RUEHLP/AMEMBASSY LA PAZ 3759
RUEHSG/AMEMBASSY SANTIAGO 2350
RUEHRI/AMCONSUL RIO DE JANEIRO 8653
RUEHRG/AMCONSUL RECIFE 4056
RHEHNSC/NSC WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 3051
RUEHC/DEPT OF LABOR WASHDC

UNCLAS SECTION 01 OF 04 SAO PAULO 000142

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/BSC, INR/IAA, INR/R/AA
STATE PASS USTR FOR KATE DUCKWORTH
NSC FOR TOMASULO
TREASURY FOR JHOEK
USDOC FOR 4332/ITA/MAC/WH/OLAC
USDOC ALSO FOR 3134/USFCS/OIO
DOL FOR ILAB
SOUTHCOM ALSO FOR POLAD
USAID FOR LAC/AA

E.O. 12958: N/A
TAGS: PGOV PINR BR
SUBJECT: SAO PAULO ELECTIONS: ALCKMIN MAYORAL CANDIDAC VIEWED AS
ENDANGERING PSDB'S CHANCES IN 2010

REF: (A) Sao Paulo 94; (B) 07 SAO PAULO 882; (C) 07 Sao Paulo 560; (D)
07 Sao Paulo 943
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDNGLY

-------
SUMMARY
-------

1. (SBU) The Social Democracy Party of Brazil (PSDB), the counry's
largest and most important opposition party is facing internal
division as well as a possibe breach with its principal ally, the
Democrats arty (DEM), over this year's municipal elections.
Despite their partnership on the national level and in a number of
states, the two parties will likely run separate, competing
candidates for mayor in a number of major cities. The situation is
especially acute in Sao Paulo (ref A), where incumbent Gilberto
Kassab (DEM), who is supported by Governor Jose Serra (PSDB), is
being challenged by former Governor and 2006 PSDB presidential
candidate Geraldo Alckmin. Whatever the outcome, many in the PSDB
fear that Alckmin's candidacy may split the party and irreparably
break the PSDB-DEM coalition, thus hurting Serra's chances to win
the Presidency in 2010. End Summary.

---------------------
THE PSDB-DEM ALLIANCE
---------------------

2. (SBU) Alckmin, who was Sao Paulo state's Lieutenant Governor
from 1995 until 2001 and Governor from 2001 until he resigned in
April 2006 to run for President, is the successor and political heir
of the late Mario Covas, a PSDB founder and political legend. He
enjoys the support of many influential PSDB members who served in
the Covas-Alckmin administrations as well as a number of PSDB
federal and state Deputies. In 2006, ineligible to run for
re-election, he outmaneuvered then-Mayor Jose Serra for the party's
presidential nomination but lost the general election to Lula.
Meanwhile, Serra ran for Governor and won, leaving DEM Vice-Mayor
Kassab to replace him as Mayor. For Serra and his supporters, the
logical stance is to support Kassab's re-election, especially since
many senior members of his administration are PSDB holdovers from
Serra's time as Mayor. Throwing the PSDB's weight behind the
election of a DEM in Brazil's largest city would help solidify the
alliance and ensure DEM support for Serra's 2010 presidential bid.
This support is crucial for the PSDB in the 2010 general elections
as the DEMs are particularly strong in the populous Northeast of
Brazil where Lula's PT gets many votes and where the PSDB has a very
small presence. It would appear that Governor Serra wants the PSDB
to maintain this alliance in order to avoid a repetition of 2002,
when a series of contretemps led the Liberal Front Party (PFL), as
the Democratic Party was known in those days, to break with the
Fernando Henrique Cardoso (FHC) administration, the PSDB, and
Serra's presidential campaign, thus contributing to a PT victory.

3. (SBU) For these reasons, Governor Serra and many PSDB leaders,
including former president FHC, consider an Alckmin campaign against
Kassab a complication to be avoided if possible. Per ref A, leaders
of both the PSDB and DEM have tried to dissuade Alckmin, even
offering to support him for Governor in 2010 if he'll sit this year
out. However, Alckmin, undaunted, has begun to form his municipal
campaign organization, and party leaders are beginning to accept, if
not applaud, the inevitability of his candidacy. Aloysio Nunes
Ferreira, Secretary of the Governor's Civil Household (Chief of
Staff equivalent), told emboffs recently that the decision is
Alckmin's: "If he decides to run, nobody can stop him, and the PSDB
cadres will support him, like it or not." Similarly, during a

SAO PAULO 00000142 002 OF 004


February 15 public appearance, Governor Serra himself acknowledged
that "If Alckmin decides to be a candidate, he will be."

-----------------------
WHAT MAKES GERALDO RUN?
-----------------------

4. (SBU) Asked why Alckmin is so determined to run given that a
significant portion of his party prefers Kassab, Nunes Ferreira
explained that a politician who is neither in office or running for
office has no visibility and no influence. Alckmin is surrounded by
loyal supporters who depend on his success and his power of
appointment to advance their own careers. At 55, he has been either
in public office or campaigning since 1972. Quite likely, one
reason he wants to run this year is that he is going stir-crazy, as
he has been out of elected office for two years. And even while FHC
and other PSDB leaders are trying to persuade Alckmin to desist,
Minas Gerais Governor Aecio Neves (PSDB) is encouraging him to run.
Neves is Serra's main rival for the PSDB's 2010 presidential
nomination and is happy to ally with anyone who might be able to
weaken front-runner Serra.

-----------------------
THE VIEW FROM CITY HALL
-----------------------

5. (SBU) An Alckmin candidacy poses special problems for the many
PSDB members currently serving in the Kassab administration.
Assistant Mayor Andrea Matarazzo, a close friend and advisor of
Governor Serra, commented (ref B) that the "tucanos" (as PSDB
supporters are called) in the city government - 15 Municipal
Secretaries, 22 Assistant Mayors, and a host of others - "can't

SIPDIS
campaign against Alckmin" even though they may prefer to see Kassab
re-elected. There has even been talk that they may all have to
resign. Walter Feldman, a PSDB Federal Deputy (also a Serra
loyalist) currently serving as Municipal Secretary of Sports (see
ref C), told the CG on February 19 that the danger to the PSDB-DEM
coalition posed by an Alckmin candidacy is "very grave, more serious
than people realize." If Alckmin runs, Feldman and all the PSDB
appointees in the city government will be "paralyzed," caught
between loyalty to the administration they serve and their party.
"It will be a disaster," he said, and called Alckmin's candidacy "a
conspiracy" and "a unilateral act." The alliance with DEM is very
important to the PSDB, he continued, the key to its fortunes as a
national party and especially to Serra's 2010 presidential
prospects. Breaking the alliance would throw everything into
question.

6. (SBU) While representatives of the embryonic Alckmin and Kassab
campaigns would like to negotiate a non-aggression pact in which the
two candidates and parties agree to compete but try not to attack or
damage each other, Feldman deems such a concept unworkable in
practice. In his view, it will be impossible to prevent a rupture
if Alckmin runs.

--------------------------------
INTO THE WEEDS - THE PROXY FIGHT
--------------------------------

7. (U) The party's internal divide spilled over into the Chamber of
Deputies in Brasilia when on February 13, the 58 PSDB Federal
Deputies elected Jose Anibal Peres de Pontes, an Alckmin supporter,
as the party's leader in the Chamber, over Arnaldo Madeira, a
supporter of Kassab's re-election bid. Back in Sao Paulo, on
February 22, the 12 PSDB members of the City Council asked the local
PSDB President, Jose Henrique Reis Lobo, to work with other party

SAO PAULO 00000142 003 OF 004


leaders to maintain the PSDB-DEM alliance, a not terribly subtle way
of saying they believe the party should support Kassab's
re-election. Reis Lobo has been seeking an accommodation between
the two sides but is not optimistic. Comparing the conflict between
Alckmin and Kassab supporters to West Side Story, he remarked
ominously that "the story ends with the death of the leaders of both
groups."

----------------------------
THE VIEW FROM ALCKMIN'S CAMP
----------------------------

8. (SBU) In a February 29 meeting with Poloff, Deputy Jose Anibal
laid out the arguments for a PSDB/Alckmin candidacy this year.
Winning control of municipal governments is a key element in the
PSDB's strategy to regain the presidency in 2010 (see ref D). Out
of power in Sao Paulo for nearly 20 years, the PSDB put together a
strong, comprehensive platform for the city and Jose Serra won in
2004. He cleaned up the mess in City Hall, and restored the party
to its prominence in the municipality before departing to run for
Governor. Having worked so hard to get local power, the PSDB wants
to keep it. Mayor Kassab, in Jose Anibal's view, has been an
adequate caretaker, but no more. With the help of many Serra
holdovers, and boosted by a budget surplus generated by Serra's
fiscal policies, Kassab has done a creditable job of implementing
the PSDB/Serra program, but really has no agenda or team of his own,
Anibal said. According to Anibal, Kassab simply lacks the breadth
of vision and the unified strategy the city needs, and with him in
power, the PSDB misses a great opportunity to use the city as a
platform to promote itself in the 2010 Presidential elections.
Anibal added that Alckmin is the party's all-time champion
vote-getter and frankly, not allowing him to run would be a waste of
the party's talent.

9. (SBU) As for the alliance with the DEMs, Jose Anibal expects
that any damage done during campaign season can be repaired in
preparation for a second round and Alckmin or Kassab would support
the other to defeat current Minister of Tourism and probably PT
mayoral candidate Marta Suplicy. After all, the DEMs have nowhere
else to go but the PSDB. "What are they going to do, support Marta
[Suplicy]? Support Lula's choice for President [in 2010]?" Jose
Anibal asked rhetorically. (Note: A March 16 poll by Toledo and
Associates shows Alckmin with 27.6%, Suplicy with 22.3%, and Kassab
with 20.4% of the vote (margin of error of 3%) if the vote were held
today. End Note.)

10. (SBU) As Jose Anibal sees it, Governor Serra's support for
Kassab is a political error based on his unfounded fear that
Alckmin, as Mayor, will use the city as a political base to support
Aecio Neves for president. The PSDB must absolutely be united in
2010, Anibal said, and Serra is the "natural" candidate for
President. Serra and Alckmin, as Governor and Mayor, will work well
together "unless they're both idiots," because they have nothing to
gain and everything to lose from fighting with each other. Aecio
Neves must wait his turn. In both 2002 and 2006, when first Serra
and then Alckmin lost to Lula, the PSDB suffered from disunity, Jose
Anibal said. The party's leaders supported the candidate in name
only, not with enthusiasm and vigor. This is the mistake the party
must avoid repeating in 2010.

-------
COMMENT
-------

11. (SBU) The Kassab and Alckmin supporters within the PSDB profess
to have the same goal in this year's municipal elections -

SAO PAULO 00000142 004 OF 004


strengthening the party to put it in the best possible position to
win back the Presidency in 2010. Their visions of how to accomplish
that objective, however, diverge completely, and neither faction
shows any sign of yielding. While Jose Anibal makes a cogent case
for an Alckmin candidacy, demonstrating that it involves more than
personal ambition, Alckmin and his followers run a big risk by
appearing to underestimate the DEMs' likely alienation if the PSDB
abandons Kassab. Reacting to disagreements between the two parties
over the Sao Paulo and Rio de Janeiro races for Mayor, DEM President
Rodrigo Maia told an interviewer on Saturday that his party may have
to go its own way. This, he elaborated, could mean running a DEM
candidate for President in 2010 or, alternatively, supporting Ciro
Gomes as the candidate of the "Left Bloc" (Socialists, Communists,
Democratic Labor Party). This notion seems on its face politically
unrealistic, even surreal, but Brazilian politics make for strange
bedfellows. However this year's race in Sao Paulo turns out, the
PSDB is going to have to do some serious fence-mending before the
next presidential election. End Comment.

12. (U) This cable was coordinated with and cleared by Embassy
Brasilia.

WHITE

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