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Cablegate: Brazil: Lula and Alckmin Tie in Debate but Alckmin

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1. (SBU) Summary. President Luiz Inacio Lula da Silva and
PSDB challenger Geraldo Alckmin faced off against each other
for the first time in a live national television debate on
Sunday, October 9. Lula and Alckmin traded accusations for
nearly two and a half hours in a debate that many saw as a
draw in terms of changing votes, but a big win for Alckmin in
changing his previously bland image with voters. Lula was
visibly flustered by Alckmin's hard-hitting questioning on
corruption scandals that have plagued Lula's government for
the last year and a half. Sparks flew as Alckmin accused
Lula of lying, while Lula warned Alckmin to be cautious with
his accusations. Alckmin, a former governor of Sao Paulo
state, and Lula each rattled off a litany of statistics about
their own and their opponent's track records, some of which
were disproved in journalistic truth-squadding by major
dailies. Decorum was barely maintained: as the debate
progressed, Lula dismissively and sarcastically addressed
Alckmin as "Governor," "your excellency," then "my dear
Alckmin," then "Alckmin," and finally just "voce," the
informal form of "you," clearly inappropriate for the
occasion. Alckmin addressed Lula as "candidate Lula" or just
"candidate," avoiding the fact that Lula is the sitting
president, and returned the informal "voce" in the latter
part of the debate. The candidates will debate at least two
more times, on October 17 and 27. The latest opinion poll,
released by Datafolha on October 10, shows voters nearly
evenly divided over who won the debate, but Alckmin lost
three percentage points of support among voters while Lula
advanced one point. Lula's advantage is now 11 points (51 v.
40), and 12 points after adjusting for nulls and blanks (56
v. 44). Embassy Poloff and two Sao Paulo Pol-Econ officers
attended the debate in the VIP seating area inside the TV
studio. In the debate aftermath, the PSDB is reinvigorated
with Alckmin's performance, and Lula's campaign is resorting
to scare tactics, claiming an Alckmin government would cut
social programs and privatize on a mass scale, claims that
Alckmin calls "lies." Both campaigns have been hard at work
to win endorsements and support from leaders from uncommitted
parties, the most important being the PMDB (Brazilian
Democratic Movement Party). Each has won over some major
allies, and the states of Rio and Minas Gerais are looming as
key. Small political parties have been negotiating
consolidations ("fusions") in order to form new entities with
full political rights in the Congress, where several parties
did not receive the minimum number of nationwide votes last
October 1 to retain full rights in the congress under new
Brazilian electoral legislation. This cable was coordinated
with ConGen Sao Paulo. End summary.

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Alckmin Sheds Milquetoast Image

2. (SBU) Lula and Alckmin met at the Band TV studio in Sao
Paulo on October 8 for a live television debate that lasted
nearly two and a half hours. Alckmin, who had won the right
to the first question, opened with an accusation that Lula
had "fled" from the several previous TV debates, thereby
disrespecting voters, and then in an uncharacteristically
tough manner he demanded to know the origin of the 1.75
million reais (about USD 800,000) that police seized in the
latest scandal, involving the attempted purchase by
operatives from Lula's campaign of a "dossier" of ostensibly
damaging information about Jose Serra (PSDB - Brazilian
Social Democracy Party) while he was running against Aloisio
Mercadante (PT - Workers Party) for the Sao Paulo
governorship. Alckmin returned to this and other corruption
scandals repeatedly during the debate. Lula was visibly
nervous, and repeatedly dodged the question or gave
unsatisfactory answers, which Alckmin rebutted by pointing
out to viewers that Lula had not answered the question.

3. (SBU) Alckmin was obviously the better prepared of the
two. Alckmin referred to his notes before posing questions,
but largely spoke extemporaneously. He had a number of
effective rebuttals, and seemed more comfortable with the
figures on public finance, which he rattled off easily.
Lula, in contrast, read most of his questions. Lula
repeatedly referred to the Fernando Henrique Cardoso
administration, trying to link Alckmin to unpopular policies
such as privatization of public entities, but Alckmin would
not let him get away with it, saying Lula's claims were signs

BRASILIA 00002157 002 OF 004

of "desperation." Lula warned Alckmin not to make frivolous
or light charges, which brought an immediate retort of "show
respect" from Alckmin. Each accused the other of being
misinformed, playing with the truth, and later in the debate,
simply lying. Alckmin repeatedly accused Lula of being

4. (SBU) Amidst all the smoke and heat there was relatively
little light shed on what each candidate actually proposed to
do if elected, though Alckmin appeared better prepared on
substantive issues on those occasions when he outlined his
policy plans. Lula did assert his top priority would
continue to be social spending. The rest, when it wasn't
Alckmin banging away on corruption, was a blur of numbers on
public works projects, health care, the cost of the new
presidential jet, military spending, youth programs, digital
education, official travel expenditures, and the like.

5. (SBU) Alckmin's image has undergone an overnight
transformation. The candidate who had been nicknamed "the
chayote popsicle" for his blandness by his political enemies
is now being called pejoratively "Rambo" and "Terminator."
The dramatic change is reinvigorating the PSDB and causing
media buzz nationwide. Lula expressed his surprise at
Alckmin's behavior when he told the media that Alckmin's
aggressive approach was like "a prison gate lawyer," that is,
the Brazilian equivalent to an ambulance chaser. (Comment:
It is possible that Alckmin's aggressiveness and name-calling
may have hurt him among some sophisticated voters. The
Datafolha results signal a slight loss of support for Alckmin
among more educated voters, and this could reflect a negative
reaction to his demeanor, not his arguments. Undoubtedly for
some voters, Alckmin was disrespectful toward the president,
while Lula may have impressed some voters merely by showing
up and not committing any of the major gaffes that are
sometimes features of his unscripted public appearances. End

Leave the Family Out of It

6. (SBU) Press reports said that each side had agreed in
advance not to make accusations about family members. Lula's
son has been accused of getting some multi-million dollar
sweetheart business deals, while Alckmin's wife is accused of
receiving hundreds of free designer dresses while Alckmin was
governor, although she reportedly donated them all to charity
after wearing them.

Lula's Damage Control; Alckmin's Confidence

7. (SBU) Damage control after Lula's rather poor
performance started Monday morning. Lula told media on
Monday that Alckmin disappointed him by focusing aggressively
on corruption, instead of engaging in a real debate about the
issues. Jaques Wagner, brought into the top level of the
Lula campaign after winning the governorship of Bahia on
October 1, expressed a similar sentiment to media. Tarso
Genro, Minister for Institutional Relations, said Alckmin
looked like a "trained pitbull," and showed a "fascistic
attitude," according to press reports. Lula vowed he would
be better prepared next time. Alckmin's side crowed victory
and continued the offensive, accusing Lula of lying about
corruption in his administration and covering up the origin
of the "dossier" money. Alckmin said his aggressive
questioning had meely "externalized the people's feeling of
indigntion," after more than a year of corruption scandas.
Media commentators have given Alckmin thumbs p for his
uncharacteristically strong performance and although no one
is ready to predict a gain n votes for Alckmin, commentators
suggest that Ackmin's newer, stronger image is a major plus
fo his campaign. The first post-debate opinion poll by
Datafolha, shows voters nearly evenly dividedover who won
the debate, but Alckmin lost three ercentage points of
support among voters while Lla advanced one point. Lula's
advantage is now 1 points (51 v. 40), and 12 points after
adjustig for nulls and blanks (56 v. 44). Rogerio Schmitt
a Sao Paulo political analyst for the Tendencia firm, told
us on Monday he thought many of Lulas voters would not
understand the content of thedebate, and agreed with us that
the body languag and comportment would be more influential
in ther understanding of the debate, if they watched at ll.

BRASILIA 00002157 003 OF 004

Scare Tactics

8. (SBU) More on the defensive than would have seemed
possible just a few weeks ago, Lula's campaign has introduced
a new electoral tactic: fear-mongering. Top PT figures,
including government ministers, are now warning of dire
consequences should Alckmin be elected, with social programs
slashed and mass privatization across the country. Chief
among these new claims is the ominous assurance that Alckmin
will cut or abolish the Bolsa Familia (Family Subsidy)
program that gives a cash bonus to millions of poor families.
On the privatization ploy, Alckmin is accused of intending
to privatize sacred cow state enterprises such as Petrobras
(although it is, in fact, already partially privatized, and
the government retains a controlling stake.) Alckmin's
campaign is counter-attacking bitterly, stressing that no
such policies appear anywhere in Alckmin's written platform
or speeches, and accusing Lula and the PT of the "Goebbels"
tactics in deploying the "big lie" to frighten voters.


9. (SBU) The Lula and Alckmin campaigns have been hustling
since October 1 to line up as much support as possible from
uncommitted politicians and parties. The big prize remains
support from the PMDB, more a national federation of
alliances than a truly cohesive national party. As a result,
in some states the PMDB supports Lula, in others it backs
Alckmin. Alckmin's campaign was rocked last week after he
accepted support from PMDB politicians Anthony and Rosinha
Garotinho, a prominent Rio power couple widely believed to be
corrupt (she is governor, he is former governor), and then
ally Denise Frossard (PPS - Socialist People's party),
running for Rio governor, ditched the Alckmin campaign over
the ethical issue (Ref B). Rio mayor Cesar Maia (PFL -
Liberal Front Party) also criticized Alckmin, but did not
jump ship. Frossard later reversed herself and re-pledged
her support for Alckmin. The PMDB is split all across the
country. For example, the Rio Grande do Sul PMDB has
announced in favor of Alckmin, while the Goias PMDB
leadership supports Lula. Most parties in the governing
coalition are expected to stay with the governing coalition,
and most opposition parties and politicians with the PSDB-PFL
alliance. But in Maranhao, Roseana Sarney (PFL) has broken
ranks and supports Lula, and she may be sanctioned by her
party. But she is only following her father's lead: he is
former president and current Senator Jose Sarney (PMDB), a
member of his party's pro-Lula faction. Rio and Minas
Gerais, with their large electorates, remain the key swing
states for the second round and are the focus of frenetic
activity now by both campaigns.

Party Fusions

10. (SBU) Several parties that did not receive a minimum
percentage of votes to retain full political rights are
negotiating "fusions" to regain full rights in congress. New
legislation (the "barrier law") governing parties will
deprive members of congress elected from a number of parties
of full rights because they did not get five percent of votes
nationally and at least two percent in at least nine states.
According to press reports based on unofficial Chamber of
Deputies figures, only seven parties passed the threshold: PT
(15 percent of national vote), PMDB (14.6), PSDB (13.6), PFL
(10.9), PP (7.1), PSB (Brazilian Socialist Party) (6.2), and
PDT (Democratic Labor Party) (5.2). Media have reported
likely fusions involving the PPS, PV (Green Party), and the
PHS (Humanist Party of Solidarity), the first two being
parties now in opposition, and the PTB (Brazilian Labor
Party, pro-government) PSC (Christian Social Party,
opposition), and PAN (Party of the Nation's Retirees). It is
still too early to measure the full impact of the barrier law
on the formation of a governing coalition.

11. (SBU) Comment. With two more debates to go, Alckmin
could again surprise Lula and put him on the defensive,
although -- as polls suggest this week -- a strong Alckmin
debate performance does not necessarily translate into a
surge in support. But polls before the first election round
on October 1 underestimated Alckmin's votes; Alckmin himself

BRASILIA 00002157 004 OF 004

has questioned particularly the veracity of Datafolha polls
and did so again in statements on 11 October. Indeed, there
may be declining value in relying too heavily on polls at
this stage in this election. Meanwhile, the rowdy debate and
Lula's scare tactics have created a polarized and acrimonious
political environment -- "fertile ground for new facts and
scandal revelations," as one political analyst said this week
-- that could further affect what is suddenly a volatile
contest. Indeed, the background sound track to this last
phase of the campaign is the ongoing investigation into the
dossier scandal. Lula retains his advantages of incumbency,
a wide and solid base in the lower classes and throughout the
northeast, and most observers cite historical precedents in
similar circumstances in past Brazilian elections and
continue to give him the odds-on advantage for victory. But
Alckmin has momentum now, and between the ongoing formation
of alliances, the scandal investigation, and the potential
for gaffes or major blows in a future debate, we will
continue, at this point, to call this election's outcome


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