BRAZIL: OPPOSITION PSDB PRESIDENT'S COMMENTS ON

C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 001837

SIPDIS

SIPDIS

E.O. 12958: DECL: 05/25/2016
TAGS: PREL PGOV BR
SUBJECT: BRAZIL: OPPOSITION PSDB PRESIDENT'S COMMENTS ON
STATE OF PLAY OF THE PRESIDENTIAL ELECTION


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Classified By: POLITICAL COUNSELOR DENNIS HEARNE. REASONS: 1.4 (B)(D).


1. Summary. PSDB national president Tasso Jereissati told
PolCouns that his party believes it has a window of another
10 to 15 days to diminish President Lula da Silva's
commanding lead over PSDB contender Geraldo Alckmin, and move
his candidacy to a second round of voting in late October.
The PSDB remains resolute, but Alckmin, currently polling at
27 percent of voter intention versus Lula's steady 50
percent, must grow dramatically. Jereissati said Alckmin
will now begin attacking the Lula government's record on
corruption (but will make no new allegations) in TV and radio
election programs, following a phase in which Alckmin used
high-road rhetoric and focused on his policy achievements as
Sao Paulo governor in order to positively establish his
identity with voters nationwide. Lula's machine is
formidable, Jereissati said, providing the president with a
national stage and doling out subsidies to the poor at record
levels in recent months, in an "audacious" effort to
consolidate Lula's base among Brazil's millions of low-income
voters. This, plus a generally good economic situation in
the country, are boosting Lula, while the PSDB struggles to
fund its national campaigns. End summary.

THE CRITICAL WINDOW -- NOW UNTIL MID-SEPTEMBER
-------------- -


2. (C) PolCounselor met privately on 30 August with Senator
Tasso Jereissati, National President of the opposition PSDB
party, and -- along with former President Fernando Henrique
Cardoso and Minas Gerais Governor Aecio Neves -- one of the
"troika" that sets policy for the party and its current
campaign. Jereissati candidly acknowledged that PSDB
candidate Geraldo Alckmin is facing a steep uphill fight
against incumbent President Lula da Silva, and that current
poll results -- if they solidify into firm trends -- would
point toward a first round victory for Lula in October's
election. However, Jereissati said the PSDB is nowhere near
throwing in the towel, and he believes the party has 10 to 15
days (until mid-Septeber) to turn the election's course in a
more positive direction for Alckmin. If Alckmin can grow
several points in the next week or so, and if PSOL candidate
Heloisa Helena -- currently garnering 10 percent of voter
intention -- does not implode, then a second round remains a
live possibility. (Note: A second round between the two
finalists is required for the presidential election if no
candidate gains 51 percent of the vote. It is widely viewed
in Brazilian politics as "a whole new ball game," since
voters focus more intently on two candidates only, and
supporters from also-rans shift their allegiances to one of
the final contenders. End note.) If Alckmin cannot turn the
tide by mid-September, the PSDB national campaign will become
demoralized and party candidates in states and municipalities
will focus entirely on their own races, Jereissati said.

GOING NEGATIVE
--------------


3. (C) Jereissati said he and other party leaders made a
decision early on to avoid direct attacks on Lula for
corruption issues in the early phase of the television and
radio campaign season, which is widely viewed as decisive in
Brazilian elections and which began on 15 August. Despite
mounting pressure and complaints in the press from leaders in
the PSDB's coalition partner party, the PFL, Alckmin and the
party had stayed firmly with a set strategy, which Jereissati
outlined:

-- Use the first weeks of TV and radio time to establish
Alckmin's identity and bonafides with voters as an effective
and honest governor of the country's most advanced state,
while largely avoiding harsh criticisms of Lula. This was
essential, as Alckmin was little known among voters outside
the country's southern and central states, and an unknown

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opponent would have been ill-advised to enter swinging
against a president who is "bem querida" (well-loved) by so
many Brazilians without first establishing positive
recognition and credibility.

-- Monitor progress in increasing Alckmin's positive
recognition level two weeks into the TV/radio season.
Jereissati said PSDB-sponsored focus groups now clearly
indicate Alckmin's positive rating is the highest among the
candidates, though this has not translated thus far into
voter intentions in the polls;

-- With Alckmin established positively on a national level
with voters, gradually shift to tough attacks against Lula on
the corruption issue, which is "Lula's critical
vulnerability." This phase is starting now. Asked by
PolCounselor whether the attacks on Lula's ethics would
include any "September surprise" revelations, Jereissati
paused but then replied no, saying "Lula's public record in
corruption over the last year is more than enough to work
with." (Comment: In PolCouns' view, Jereissati seemed to
imply that the PSDB has some additional prejudicial material
against Lula, but would refrain from using it. See para 7
below. End comment.)


RAGE AGAINST THE MACHINE
--------------


4. (C) Jereissati said the PSDB is "fighting hard against a
formidable machine." Lula had used all of the resources of
his office and position to campaign inappropriately before he
declared his legal candidacy and the outset of the official
election campaign season. Moreover, he had opened the
sluices of federal money to secure and widen his base among
low-income voters. Jereissati claimed that, since the start
of June, the number of beneficiaries of the "Bolsa Familia"
poverty subsidy program had expanded massively. Lula had
also increased subsidies to small farms in the last few
months. These represent an "audacious use of federal programs
for political gain," Jereissati added. The recent
distribution of these goodies to poor voters, together with a
generally improving economic situation have created a "feel
good factor" that is boosting Lula, he said. Other voters are
simply afraid of any change.


5. (C) Arrayed against Lula's juggernaut, the PSDB has
struggled financially in the campaign, he said. Business
interests that were expected to support Alckmin have proved
hesitant to publicly commit funds to his campaign as his poll
numbers have flat-lined, fearing reprisals should Lula win
re-election -- "and they have every reason to be afraid,"
Jereissati opined. Since the PSDB will not resort to use of
a "Caixa 2" (off-the-books illegal contributions) -- the kind
of illicit financing linked to the past year's scandals --
the party's national campaign has been underfunded, he said.


6. (C) PolCouns asked Jereissati whether he thought Jose
Serra -- Alckmin's early rival for the PSDB candidacy for the
presidency and now front-runner in Sao Paulo's gubernatorial
race -- would perhaps have had a better showing against Lula.
Jeressati immediately replied in the negative. He said Serra
would have faced the same powerful Lula machine and the same
economic facts as those confronting Alckmin, and would also
have been vulnerable to attacks on Serra's role as a minister
in the Cardoso government, which Lula tirelessly denigrates
in campaign speeches.

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


7. (C) Wealthy, urbane, autocratic in his management style,
but centrist in his politics and pro-American, Jereissati is
always candid in his conversations with PolCouns. He is an

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authoritative source for information regarding the PSDB party
that he helped to found and currently leads nationally. In
our view, the primary points of interest in this frank and
confidential meeting were (1) Jereissati's assertion that,

SIPDIS
though beleaguered, the PSDB has not given up on the hope of
getting Alckmin to a second round; If Jereissati thought the
game was already lost, he would have found a way to say so;
and (2) Confirmation that Alckmin will now attack Lula
vigorously on corruption, but will not deploy any sensational
new allegation against him. We have reason to believe such
information exists (per septel reports) and may be known to
the opposition, but it would appear such allegations will not
play a role in the campaign, unless suddenly surfaced by the
media. We have long thought that only a stunning "new fact"
that can re-ignite public indignation about the past year's
sorry history of PT-led corruption and focus that anger on
Lula personally could change the course of this election in a
dramatic way. In the absence of such a development, time may
be running out for Alckmin.



Chicola