Cablegate: A Once Mighty Pri Struggles for Relevancy

DE RUEHME #3465/01 1741321
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2006-06-23 13:21:00
Embassy Mexico
DE RUEHME #3465/01 1741321
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C O N F I D E N T I A L SECTION 01 OF 03 MEXICO 003465



E.O. 12958: DECL: 06/21/2016
REF: A) MEXICO 3325 B) MEXICO 1370 C) MEXICO 3196

S: 1.4(B/D).

1. (C) Summary: With Election Day ten days off, the
Institutional Revolutionary Party (PRI) remains divided and
debilitated, struggling to maintain its relevance in a
political scene it once dominated. On the one hand, party
insiders tell us that presidential candidate Roberto Madrazo
appears genuinely to believe that he remains in contention,
and contacts involved in his campaign are doing their best to
put on a brave face. Many others in the party, particularly
members of Congress, are more realistic and candid,
acknowledging that Madrazo has fallen out of contention, and
pinning their hopes on a strong result in congressional
races. Most contacts admit that a serious lack of funds
severely handicapped their campaign this year; while some
attribute this problem to the fine the party paid for
campaign finance violations in 2000, others speculate that
party funds may have been misappropriated. Virtually all of
our contacts predict that the party will witness a
post-electoral blood-letting which may well determine its
future direction and even viability. End summary.

2. (C) As the 2006 electoral campaign draws to a close, a
reduced PRI is sending mixed messages about its electoral
expectations. On the one hand, several party insiders insist
that Roberto Madrazo appears genuinely to believe he is still
a contender, perhaps buoyed by the fact that the last two
polls published in Milennio -- including one published June
22 -- show that the gap between him and first place candidate
Andres Manuel Lopez Obrador (AMLO) is within the polls'
margin of error. Chamber of Deputies Vice President
Francisco Arroyo (PRI) told poloff that in recent
conversations, Madrazo has seemed surprisingly "calm and
serene," not betraying any hint of resignation. Those
involved directly in Madrazo's campaign -- citing the
Milennio polls -- also project a degree of optimism, albeit
less convincingly. PRIistas further removed from the
campaign's inner circle are more realistic about the
prospects of their presidential candidate. A British
diplomat told us yesterday that in a meeting with European
Union election observers, PRI Secretary-General Rosario Green
confessed she did not believe Madrazo could win. Many in the
party appear to be pinning their hopes on a strong showing in
congressional races: according to the poll published in
Milennio on June 22, the PRI enjoys a solid first place
showing nationwide for both the Senate and the Chamber of
Deputies. (Comment: While we are generally skeptical of
Mexican polls, we are especially skeptical of Milennio's
poll. Although well-respected, Maria de las Heras, the
pollster responsible for the Milennio poll, has very close
personal links with the PRI, and her polls consistently have
been more favorable to the PRI than have other polls (ref A)
. End comment.)

Where Has All the Money Gone?

3. (C) Among the many handicaps facing the PRI in this
election season has been a lack of funds, a problem affecting
the party's efforts at every level. For example, a PRI
insider told poloff that the party,s coordinator in Mexico
City, Jesus Salazar, has complained that he literally has
received no party funds to run the campaign in what is
Mexico's second largest constituency; he has been paying
office staff from his personal funds and has loaned his own
computers to the campaign office. Given this utter lack of
resources, Salazar threatened to quit his position, in the
heat of the campaign's final stretch. Similarly, the press
recently reported that the party's national organization had
not made good on its promise to provide approximately USD
36,000 to each Chamber of Deputies candidate; the PRI state
president in Guanajuato claims candidates have received less
than 25% of that amount. For its part, the Guanajuato state
organization has been able to provide a mere USD 200 to each
PRI candidate for the state legislature.
4. (C) When asked about funding, Deputy Arroyo told poloff
that the party was saving its limited resources to finance
its expensive, nationwide, get-out-the-vote machine, which is
perhaps the only advantage it has over its rivals. Yet
Heladio Ramirez, President of the National Confederation of
Farmers, the PRI's largest corporatist sector and a key
player in the party's get-out-the-vote operation, told
poloffs that in his memory, the party has never been as hard
pressed as this year to finance this crucial operation.

5. (C) The party's financial crunch is undoubtedly
attributable in part to the approximately USD 100 million
fine the party was ordered to pay as a result of the Pemex

MEXICO 00003465 002 OF 003

campaign finance scandal during the 2000 election. A senior
party contact told poloff, however, that he believed the lack
of campaign funds could not be entirely attributable to the
fine, since the party finished paying the fine months ago.
He suspects that high-ranking party insiders -- realizing
that they are doomed to lose the election and possibly their
influence in the party -- may be siphoning off party funds
while they still can.

A Shrinking Party Base

6. (C) While few doubt that the PRI's get-out-the-vote
machine remains by far the most effective of the three major
parties, even the most effective of party machines can only
produce results when there are willing voters to bring to the
polls. A pessimistic Dulce Maria Sauri, a prominent PRI
Senator from the Yucatan, opined that the Madrazo campaign
seriously overestimates the size of the party's base of loyal
voters that it hopes to mobilize on Election Day. Analyzing
the likely voting trends state-by-state, Sauri pointed out
that Madrazo recently has polled under 10 percent in Mexico
City, a PRD stronghold and Mexico's second most populous
entity after the State of Mexico (Edomex). She said that
such a meager showing in such a large constituency would
create a vote deficit that would be almost impossible to make
up in other states. Moreover, she added that recent state
elections in the long-time PRI stronghold of Edomex (ref B)
reveal that the vote there is likely to divide in roughly
equal thirds, with the PRI hardly guaranteed to take first
place. She opined that the PRI could even fail to place
first in its traditional bastion of Puebla, as a result of
the scandal involving PRI Governor Mario Marin.

Losing with a Winning Hand

7. (C) Sauri added that the PRI managed to squander a huge
advantage that it brought into this campaign, i.e. its
control of 17 of Mexico's 32 statehouses: governors have
access to considerable resources to mobilize voters.
Nevertheless, as a result of his unpopularity within the PRI
and the party's divisions, many PRI governors are supporting
Madrazo in name only. Sauri estimated that perhaps only half
of the PRI governors were actually offering the campaign any
substantive assistance. Deputy Arroyo countered, however,
that these dissident governors, such as Eduardo Bours of
Sonora, had to maintain a delicate balance. They all had
state and local candidates on the PRI ticket that they hoped
to see win, so even if such governors were not working to
support Madrazo directly, they were working to support the
PRI ticket. Arroyo opined that their recent efforts might
account for the slight rise in several polls that Madrazo has
registered recently.

Pinning Their Hopes on Congress

8. (C) With much of the party hierarchy -- if not Roberto
Madrazo himself -- having already written off the
presidential race, attention is now focusing on the party's
congressional races. Arroyo said that in the recent past, as
many as 30% of Mexicans split their vote between two or more
parties and he expected that proportion to increase this
year, to the benefit of the PRI's legislative candidates. He
added that the PRI's internal polls show the party's Senate
candidates running 6-7% ahead of Madrazo, with its slate for
the Chamber of Deputies running 3-4% ahead of Madrazo.
Published polls also have consistently shown the PRI's
legislative slates running ahead of Madrazo, albeit their
results are not uniform; some project that the PRI will
maintain its congressional plurality while others have
suggested it may fall to second or even third place in the

Looking Forward to A "Night of Long Knives"

9. (C) Party insiders almost universally agree that a
Madrazo defeat will lead to a fierce internecine struggle for
control of the party, or as Senator Sauri put it, a "night of
long knives." Some, like Sauri, expect the conflict to erupt
soon after the election. Others, like former presidential
candidate Everardo Moreno and former Oaxaca Governor and
Secretary of Government Diodoro Carrasco, expect it will

occur months later, as Madrazo maintains a fairly tight grip
over the party's machinery and as there will be little to
fight over before the new Congress is seated on September 1.

10. (C) Literally everyone we have spoken with in the party

MEXICO 00003465 003 OF 003

agrees that the party will have to transform itself in order
to remain competitive. Some contacts, like former President
Echeverria, envision the party rebranding itself with a new
name (reftel C), whereas others, like Senator Sauri, argue
that the PRI "brand" remains valuable and that the struggle
will be to see which faction assumes control. PRI Governors
are expected to be among the most influential forces in this
power struggle. Numerous contacts concur that former
Tlaxcala Governor (and current candidate for Mexico City
Mayor) Beatriz Paredes, and Senate President Enrique Jackson,
are the two strongest reformist candidates for the party's
leadership. Sauri suspects that if AMLO wins the presidency,
the party will turn to Paredes, who leans to the left and
would be a natural interlocutor with the PRD, although her
support in the party could be undermined by her lackluster
campaign in the Mexico City mayoral race. If Calderon wins,
the party is likely to turn to the more conservative Jackson.
Another possible leader is Deputy (and senatorial
candidate) Manlio Fabio Beltrones, a PRI caudillo from the
state of Sonora and one of Madrazo's closest political
operatives. Although politically adept and influential,
Beltrones represents the unreformed wing of the PRI and his
selection would alienate the party's reformers.

Winning With a Losing Hand

11. (C) Despite this bleak scenario, none of our contacts
predicted the PRI's imminent, post-election demise, even if
they expected a third place finish in the presidential race
to lead to further defections. A few even expect the party
to emerge stronger in the long term from an Election Day
rout. Former presidential candidate Everardo Moreno said the
PRI could "win by losing," as a loss would provide the
impetus needed to transform the party into a modern, social
democratic institution, worthy of the public's trust.
Moreno's optimistic view assumes that party leaders, who
generally come from its dominant, unreformed wing, will learn
the lesson they failed to learn after their 2000 electoral
defeat, that the party will not remain competitive unless it
adapts to Mexico's modern, multiparty democracy.

Comment: When the Voting Ends, the Jockeying Begins
--------------------------------------------- -------

12. (C) While July 2 will bring about the end of Mexico's
electoral season, it will not bring about the end of its
political season. Once the election is over -- and
especially once the new Congress is seated on September 1 --
we expect to see a considerable amount of political
jockeying as the governing party seeks to attain a
legislative majority by luring wavering PRI legislators to
their ranks. Those efforts are likely to reap even greater
dividends if the same party wins both the presidency and a
legislative plurality. Accordingly, once the new government
takes shape, the PRI will be under considerable pressure to
offer its legislators a compelling reason to stay with the
party. We are not yet convinced it is up to the challenge.

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