Identifier
Created
Classification
Origin
06SAOPAULO676
2006-06-16 18:35:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Sao Paulo
Cable title:  

PSDB INSIDER OFFERS "REALISTIC" ASSESSMENT OF ALCKMIN'S

Tags:  PGOV PINR ECON BR 
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VZCZCXRO2025
PP RUEHRG
DE RUEHSO #0676/01 1671835
ZNR UUUUU ZZH
P 161835Z JUN 06
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC PRIORITY 5272
INFO RUEHBR/AMEMBASSY BRASILIA 6368
RUEHAC/AMEMBASSY ASUNCION 2629
RUEHBU/AMEMBASSY BUENOS AIRES 2305
RUEHMN/AMEMBASSY MONTEVIDEO 2032
RUEHSG/AMEMBASSY SANTIAGO 1761
RUEHLP/AMEMBASSY LA PAZ 2856
RUEHRI/AMCONSUL RIO DE JANEIRO 7188
RUEHRG/AMCONSUL RECIFE 2987
RHEHNSC/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 2485
RUEHC/DEPT OF LABOR WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL
UNCLAS SECTION 01 OF 04 SAO PAULO 000676 

SIPDIS

SENSITIVE
SIPDIS

STATE PASS USTR FOR MSULLIVAN
STATE PASS EXIMBANK
STATE PASS OPIC FOR MORONESE, RIVERA, MERVENNE
NSC FOR FEARS
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
USDOC FOR 3134/USFCS/OIO/WH/SHUPKA
TREASURY FOR OASIA, DAS LEE AND DDOUGLASS
DOL FOR ILAB MMITTELHAUSER
SOUTHCOM ALSO FOR POLAD
USAID/W FOR LAC/AA

E.O. 12958: N/A
TAGS: PGOV PINR ECON BR
SUBJECT: PSDB INSIDER OFFERS "REALISTIC" ASSESSMENT OF ALCKMIN'S
CHANCES AGAINST LULA

REF: (A) SAO PAULO 647; (B) SAO PAULO 643;

(C) SAO PAULO 623; (D) SAO PAULO 355;
(E) SAO PAULO 316; (F) SAO PAULO 278;
(G) SAO PAULO 206; (H)SAO PAULO 73;
(I) 05 SAO PAULO 1256

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

UNCLAS SECTION 01 OF 04 SAO PAULO 000676

SIPDIS

SENSITIVE
SIPDIS

STATE PASS USTR FOR MSULLIVAN
STATE PASS EXIMBANK
STATE PASS OPIC FOR MORONESE, RIVERA, MERVENNE
NSC FOR FEARS
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
USDOC FOR 3134/USFCS/OIO/WH/SHUPKA
TREASURY FOR OASIA, DAS LEE AND DDOUGLASS
DOL FOR ILAB MMITTELHAUSER
SOUTHCOM ALSO FOR POLAD
USAID/W FOR LAC/AA

E.O. 12958: N/A
TAGS: PGOV PINR ECON BR
SUBJECT: PSDB INSIDER OFFERS "REALISTIC" ASSESSMENT OF ALCKMIN'S
CHANCES AGAINST LULA

REF: (A) SAO PAULO 647; (B) SAO PAULO 643;

(C) SAO PAULO 623; (D) SAO PAULO 355;
(E) SAO PAULO 316; (F) SAO PAULO 278;
(G) SAO PAULO 206; (H)SAO PAULO 73;
(I) 05 SAO PAULO 1256

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


1. (SBU) Though not sanguine about the odds, PSDB heavyweight
Andrea Matarazzo thinks Geraldo Alckmin still has a chance to defeat
President Lula in the election this October, provided that all the
pieces fall into place. But the Assistant Mayor of Sao Paulo's
downtown district thinks his party blundered badly by choosing
Alckmin as its candidate over former Mayor Jose Serra. Alckmin and
the people around him, in Matarazzo's admittedly biased view (as a
"serrista"),simply have no conception of how to run a national
campaign. Though Alckmin's call for a "management shock" may appeal
to the business community, the voters in the northeast whom he must
win over in order to defeat Lula have no idea what he's talking
about. More than likely, according to Matarazzo, Lula will win a
second term but will have very little support in Congress. As a
result, Brazil will remain "fragile." The opposition PSDB will not
support Lula but will try to provide some sort of "balance" to keep
the country from foundering completely. Why Alckmin, who fought
with such intelligence, tenacity, and determination for the
nomination, has so far run such a lackluster campaign remains a
mystery. END SUMMARY.


2. (SBU) Consul General (CG) and Poloff paid a call June 14 on
Andrea Matarazzo, a leader of the opposition Brazilian Social
Democracy Party (PSDB),to discuss the current political situation
and the upcoming elections. Scion of one of Brazil's wealthiest
families, Matarazzo served in Fernando Henrique Cardoso's (FHC)
administration as Minister of Social Communications and later as
Ambassador to Italy. Now he wears two hats in the city government,

as Assistant Mayor of Sao Paulo's downtown district and Municipal
Secretary in charge of coordination among the 31 assistant

SIPDIS
mayoralties ("subprefeituras"). In his suite on the 35th floor of a
downtown office building with commanding views on all sides of Sao
Paulo's endless concrete jungle, Matarazzo was very much in his
element; our meeting was interrupted while he held a lengthy
telephone conversation with a leader of the gay community
negotiating issues pertaining to the
Gay-Lesbian-Bisexual-Transgender Pride parade to take place June 17
on Paulista Avenue in the heart of the business district.

--------------
A "REALISTIC" ASSESSMENT
--------------


3. (SBU) CG led off by indicating we had recently met with Joao
Carlos de Souza Meirelles (ref A),coordinator of former Governor
Geraldo Alckmin's presidential campaign. Matarazzo laughed and said
that instead of the party line purveyed by Meirelles, he would
provide a "realistic" view of the campaign. The PSDB, he explained,
had simply decided wrongly back in March (ref F) when it chose
Alckmin. Jose Serra was a national politician who had served as a
Senator, as a Federal Deputy, and twice as a Minister. He knew how
the Congress worked, had his own base of support there, and had even
introduced two Constitutional amendments. Serra had a well-defined
government program and knew how to negotiate alliances and
coalitions at the state level.


4. (SBU) Alckmin, on the other hand, had been City Councilman and
later Mayor of the small rural town of Pindamonhangaba, had served a

SAO PAULO 00000676 002 OF 004


term as Federal Deputy, and in 1994 was chosen to run for Sao Paulo
Lieutenant Governor on the ticket with Mario Covas, "against Covas's
wishes," Matarazzo asserted. (NOTE: Inadvertently or otherwise,
Matarazzo slights Alckmin's resume; he in fact served one four-year
term in the Sao Paulo state Legislative Assembly and two terms in
the Chamber of Deputies; in both raceas for Federal Deputy he was
among his party's leading vote-getters. END NOTE.) Furthermore,
all the major accomplishments of the twelve years of PSDB rule in
the state - Covas died in 2001 and was succeeded by Alckmin, who was
re-elected in his own right in 2002 - were to the credit of Covas
and not to Alckmin, according to Matarazzo. By the time Alckmin
became Governor, Covas had already put the state's finances on a
sound footing. Alckmin had pushed the "Rodoanel," the ring of
highways around the metropolitan area, but had not completed it.
His performance in the areas of health and education had not been
overly impressive. As a Catholic conservative ("of course" Alckmin
is a member of Opus Dei, despite his denials, Matarazzo opined,
though he is not a leader of the group),Alckmin had charted a
rightist direction in his governance, which helps explain why he
enjoys the support of so large a segment of the business community.
Many of the people around him, whom Matarazzo characterizes as the
"baixo clero" or lower caste of the PSDB, may have some political
ability - some, like Edson Aparecido (see ref E),are powers in the
state Legislative Assembly - but have no idea what it takes to
operate a campaign on the national level.


5. (SBU) Alckmin and his advisers, Matarazzo continued, see the
world from a Sao Paulo perspective, but the candidate needs to
compete for votes in the impoverished, rural northeast, where people
don't understand concepts like "management shock." Though Brazil's
economy may be stagnating, the lower classes of the northeast have
done fairly well in recent years due to the growth in social
spending, the large increase in the minimum wage, and the increased
access to consumer credit (ref B). He cited figures showing
dramatic growth in the purchase of household appliances in the
northeast as one example of what Alckmin was up against. More to
the point, Alckmin's communications strategy has simply not worked
so far.

--------------
PARTY DISUNITY
--------------


6. (SBU) Alckmin still might beat Lula, Matarazzo said; anything
can happen. There might be an economic downturn or some other event
in August or September to alter the dynamic. He discounted
speculation that the PSDB might be holding back some scandalous
secret about Lula to spring late in the campaign. The Brazilian

SIPDIS
people, he opined, know Lula well by now, and a solid segment of
them would vote for him no matter what might be revealed. Major
media groups like "Globo" support Lula. Moreover, Matarazzo
explained candidly, the PSDB is not strongly united behind Alckmin,
despite public protestations to the contrary. Serra knows that if
Alckmin wins, his own chances at age 64 of ever again aspiring to
the Presidency are finished; Minas Gerais Governor Aecio Neves, who
doesn't want to wait too long, may have to search for another party
as a vehicle for his aspirations if Alckmin wins; and, though
certainly FHC supports Alckmin, he does so "without any enthusiasm."
Backed up by polls coming out every week showing Lula's lead at
20-25 percentage points and growing, predictions by major figures in
his own party that Alckmin is going to lose are in danger of fast
becoming self-fulfilling prophecies.


7. (SBU) Even if Lula wins, Matarazzo said, his Workers' Party (PT)
is going to take a hit because of the political corruption scandals.
As a result, Lula will lack a strong base in Congress and have a
difficult time governing. In this situation, the PSDB will not

SAO PAULO 00000676 003 OF 004


support Lula - that would be too much to expect - but they may try
to provide some sort of "balance" to help keep his government afloat
for the good of the country.


8. (SBU) Matarazzo, who had planned to leave the city government to
play a key role in Jose Serra's presidential campaign, has no plans
to join his gubernatorial campaign. In fact, he stayed on to ensure
continuity in the municipal government under Serra's successor,
Gilberto Kassab. He told us he spends half of every day in the "no
man's land" he occupies as Assistant Mayor of the blighted,
dangerous downtown district and the other half in the skyscraper
where he received us. He still dreams of what might have been,
reminding us that Serra has a national vision and, unlike Alckmin,
is not a prisoner of macroeconomic orthodoxy.


9. (SBU) Ever since his March 31 resignation and announcement of
his candidacy for Governor (ref D),Serra has been an invisible man.
First he took some time off to have a hernia operation. Since
then, with polls showing him likely to win in the first round no
matter who his opponents are, he has kept a low profile to avoid
rocking the boat. Matarazzo expects Serra, who is already popular
in the city, to start running radio ads in the interior of the state
in July. He doesn't expect much trouble from the PT candidate,
Senator Aloisio Mercadante, or from possible PMDB candidate Orestes
Quercia (ref C); with the help of Serra's strong coattails, the PSDB
should elect a strong slate of Federal Deputies from Sao Paulo, he
believes. This will give Serra, as Governor of Brazil's largest
state, considerable freedom of movement no matter who is elected
President.

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


10. (SBU) Matarazzo essentially told us what has been widely
rumored and whispered but what few wanted to say out loud: that a
sizable portion of the PSDB has no enthusiasm for Alckmin's
candidacy, expects him to lose, and is disinclined to lift a finger
to help him (PSDB Senate leader Arthur Virgilio Neto gave a
prominent interview to national newsweekly Istoe headlined, "The
Candidate Should Have Been Jose Serra"). There is a cultural divide
within the party between the intellectual, internationalist types
represented by FHC and Matarazzo, and the more provincial elements
exemplified by Alckmin and the "baixo clero" around him. Matarazzo
makes a decent argument as to why Serra might have been a better
choice as the PSDB's presidential candidate; what he fails to
mention is that Serra was the front-runner for the nomination, but,
when challenged by Alckmin (refs G-H),declined to fight for the
nomination and opted instead, for reasons of his own, to run for the
governorship that Alckmin vacated. Had the party had in place a
democratic mechanism for addressing such disputes -- Alckmin called
for a primary, but Serra and his supporters said no -- he might have
taken Alckmin on and prevailed, and he might now be head-to-head
with Lula.


11. (SBU) But Matarazzo's analysis of the campaign leaves another
key question unanswered. During the blitz he unleashed this past
January in seeking the nomination, Alckmin showed himself to be not
only highly intelligent and focused but also fiercely determined and
tenacious. Why his performance in the campaign has been so
uniformly, almost obsessively, lackluster is an abiding mystery. On
June 11, he formally accepted the PSDB nomination at the party's
national convention in Belo Horizonte. He did so with a sixty-five
minute speech characterized by one media report as "long and
tiring," and in the process reportedly managed to drive half his
audience away. "It had to be a dense speech, that's all there is to
it," said national campaign manager Sergio Guerra. "Otherwise

SAO PAULO 00000676 004 OF 004


they'd say he had no content." Maybe so, but "no content" might
have been an improvement; just ask Lula. END COMMENT.


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

MCMULLEN