PERNAMBUCO PMDB LEADER FORESEES DIFFICULT LULA SECOND

UNCLAS SECTION 01 OF 02 BRASILIA 001961

SIPDIS

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SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL ECON BR
SUBJECT: PERNAMBUCO PMDB LEADER FORESEES DIFFICULT LULA SECOND
TERM



1. (SBU) Summary: The re-election of President Luiz Inacio Lula da
Silva will be a "tragedy" and his government will perform so badly
he may not finish his term of office, according to Pernambuco's
former Governor Jarbas Vasconcelos, (strictly protect),a veteran
PMDB (Party of the Brazilian Democratic Movement) politician from
Pernambuco state and candidate for Senate. Jarbas did not specify
how Lula4s second term might end prematurely, but he described a
discouraging political landscape during a meeting with visiting
Embassy poloff and Recife Principal Officer on September 5. Jarbas
said he had no doubt that Lula knew of all the corruption scandals
that erupted during his first term, but most voters do not care
enough about corruption to reject Lula at the ballot box, in spite
of relentless media attacks on him. He dismissed predictions of a
deep reduction in the PT (Workers Party) seats in Congress, but said
Lula will have a hard time working with the new Congress, which will
be against him. Most of Jarbas's own party, the PMDB, is "rotten,"
he said, but he explained that he did not feel he had a place in
another party. Polling shows Jarbas should easily win the senate
seat being vacated by Jose Jorge, opposition presidential candidate
Geraldo Alckmin's running mate. This report was prepared by
visiting Embassy Poloff in Recife and cleared with AmConsul Recife.
End summary


2. (SBU) The re-election of President Luiz Inacio Lula da Silva
will be a "tragedy" and his government will be so bad that he may
not finish his term of office, according to former two-term
Pernambuco governor Jarbas Vasconcelos, now running for the Senate.
Jarbas did not specify how Lula4s second term might end prematurely,
but he described a discouraging national political landscape during
a meeting with Recife Principal Officer and visiting Embassy Poloff
on September 5. Jarbas retold a bit of the overthrow of Joao
Goulart by the Brazilian military in 1964, noting that Goulart had
sown the seeds of his government's demise by undermining two pillars
that were fundamental to military support: discipline and hierarchy.
But Jarbas said the end was provoked by two editorials in leading
daily "O Estado de Sao Paulo." By comparison, he noted, Lula has
survived a relentless and ongoing media attack and is heading for
re-election. Jarbas did not say how Lula might be forced out before
the end of his second term, but he seemed to be suggesting it would
be a resignation in the face of overwhelming opposition.


3. (SBU) Jarbas said he believed that Lula will win re-election in
the first round, but foresaw a very poor relationship with congress.
He predicted the PMDB, the PFL (Party of the Liberal Front) and
PSDB (Party of Brazilian Social Democracy) would each have 17
senators, or 51 out of 81 senate seats. He said Lula would not be
able to get along with such a congress. Part of the PMDB supports
the Lula government, while another faction remains in opposition;
Jarbas did not say how many of the PMDB senators would be
pro-government and how many opposition. Jarbas also said the PSOL
(Party of Solidarity and Liberty),the far left party of Heloisa
Helena, the presidential candidate polling third at about ten
percent, would decline after the election.


4. (SBU) Many voters do not care enough about the corruption
scandals of Lula4s first term, Jarbas said, and they will vote for
Lula. Many of Lula4s supporters, especially those with little
education, will vote loyally for the PT by choosing candidates on
the ballot whose numbers start with 13, the PT's number, he
explained. Because of this loyalty to the PT among the poor, Jarbas
said the PT block in Congress, currently just over 90 federal
deputies and senators, will not be reduced by more than 10 or 15
seats. Jarbas also said Lula was running a good campaign, while
Alckmin's campaign was weak. The only one affected locally by
corruption charges, in Jarbas' view, is Severino Cavalcanti, a
Pernambuco politician who was forced to resign from the presidency
of the Chamber of Deputies for taking bribes from the congressional
cafeteria concession. Jarbas expected an electoral defeat for him.



5. (SBU) While most of the PMDB remains in Lula's camp, Jarbas does
not moderate his anti-Lula stance. He was not always an
anti-Lulista: he said he recommended the PMDB cooperate with Lula in
2003 when Lula first took office, but the PMDB refused. Jarbas, who
is as critical of his own party as he is of the Lula government,
said that refusal was strong evidence that the PMDB acted out of
self-interest regardless of what was good for Brazil. Jarbas said
the majority of the PMDB was "rotten," and an ideological grab-bag
("a sack of cats"). Still, he said he has not joined another party
because he does not have a PSDB "profile," and he does not feel
close enough to any other party to switch. (Jarbas was elected
governor of Pernambuco in 1998 and re-elected in 2002 in the same

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election that brought Lula to power. He resigned recently to run
for the Senate.)


6. (SBU) Jarbas added that in 2003 he became aware of extensive
corruption at a national level and warned his state government
administrators to be on guard against it in Pernambuco. Lula was
fully aware of all the corruption scandals, Jarbas was certain,
because there was rampant cronyism.


7. (U) Jarbas was confident of his own election to the senate and
said his polling shows he is at 66 percent with Pernambuco voters.


8. (SBU) Comment: Some of Jarbas' observations struck us as
reasonable, except for the stunning and rather mysterious prediction
that Lula might not finish his second term. Coming from such a
level-headed and well-respected politician, Jarbas's forecast of
stormy political weather ahead is a warning that political gridlock
could revisit Brazil in one form or another in a second Lula
presidency.


9. (SBU) Comment continued. Given Jarbas' long-time role in
Northeast politics and his good relations with Lula when he was
governor, his frank and negative comments came as a surprise. He
takes the role of the realist in politics, but he made very clear
that he did not condone corrupt practices in any party. He will
have an interesting role to play in the Senate, and he believes that
his vice governor, Jose Mendonca Filho, will take the election in
Pernambuco and be his surrogate there.

SOBEL