Identifier
Created
Classification
Origin
06SAOPAULO722
2006-06-30 12:18:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Sao Paulo
Cable title:  

SAO PAULO MAYOR DISCUSSES PCC VIOLENCE, ELECTIONS, BOLIVIA

Tags:  PGOV PINR ECON ETRD EPET BR 
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VZCZCXRO6131
PP RUEHRG
DE RUEHSO #0722/01 1811218
ZNR UUUUU ZZH
P 301218Z JUN 06
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC PRIORITY 5340
INFO RUEHBR/AMEMBASSY BRASILIA 6430
RUEHAC/AMEMBASSY ASUNCION 2650
RUEHBU/AMEMBASSY BUENOS AIRES 2326
RUEHMN/AMEMBASSY MONTEVIDEO 2053
RUEHSG/AMEMBASSY SANTIAGO 1782
RUEHLP/AMEMBASSY LA PAZ 2884
RUEHRI/AMCONSUL RIO DE JANEIRO 7229
RUEHRG/AMCONSUL RECIFE 3011
RHEHNSC/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 2505
RUEHC/DEPT OF LABOR WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL
UNCLAS SECTION 01 OF 03 SAO PAULO 000722 

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 ETRD EPET BR
SUBJECT: SAO PAULO MAYOR DISCUSSES PCC VIOLENCE, ELECTIONS, BOLIVIA


REF: (A) SAO PAULO 708; (B) BRASILIA 1266;
(C) SAO PAULO 689; (D) SAO PAULO 573 AND PREVIOUS;
(E) SAO PAULO 106

SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY

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

UNCLAS SECTION 01 OF 03 SAO PAULO 000722

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 ETRD EPET BR
SUBJECT: SAO PAULO MAYOR DISCUSSES PCC VIOLENCE, ELECTIONS, BOLIVIA


REF: (A) SAO PAULO 708; (B) BRASILIA 1266;
(C) SAO PAULO 689; (D) SAO PAULO 573 AND PREVIOUS;
(E) SAO PAULO 106

SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY

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


1. (SBU) Sao Paulo Mayor Gilberto Kassab told the Consul General
(CG) June 29 that the recent gang violence in the city was a wake-up
call to the public, which has responded in solidarity with the
police. Kassab believes opposition candidate Geraldo Alckmin will
have a hard time catching up with President Lula; therefore, the
Liberal Front Party (PFL) is focusing its attention on helping
former Mayor Jose Serra win the election for Governor of Sao Paulo.
He predicted that, if re-elected, Lula will continue his orthodox
economic policies and resist pressures for a turn to the left, and
may even become more accommodating towards the U.S. in his approach
to foreign policy. Kassab expected the political scene to change
for the better as small parties disappear and large center-left and
center-right coalitions are formed. Asked about Bolivia, he
acknowledged concerns about Sao Paulo's heavy dependence on Bolivian
gas, but ruled out any serious disruption. END SUMMARY.

--------------
SOLIDARITY WITH EMBATTLED POLICE
--------------


2. (SBU) CG noted the morning's news of the killing of a prison
guard, allegedly by the criminal gang First Capital Command (PCC) in
the aftermath of the recent killing of 13 PCC members by state
police (ref A). Kassab commented that the criminal gang problem had
been brewing in Sao Paulo for years before erupting in the May wave
of violence (ref D). It was a difficult time, both he and Municipal
Secretary for International Relations Helena Gasparian noted,


SIPDIS
because the PCC was able to identify and kill individual police
officers in their homes, putting enormous pressure on the police.
Yet he also noted that the violence, while terrible in its own right
and damaging to the city's image, had one positive outcome. The
show of force by the PCC had frightened the citizenry, which, when
forced to choose sides, had shown solidarity with the police. Now
everyone is more aware of the need to fight organized crime, though
this remains a challenge due in large part to the weakness of
federal law enforcement.


3. (SBU) CG described his recent meeting with state public security
officials (septel) and the USG interest in exploring ways we might
be able to help the state improve its ability to combat organized
crime and mitigate the PCC's ability to control the state prison
system. Over the longer term, Kassab expressed confidence that
improved technology would assist authorities in combating crime more
effectively. At the same time, he agreed with his PFL colleague,
Sao Paulo Governor Claudio Lembo, that Brazil's elites need to
provide more education and do more to combat economic inequality as
part of the war on crime.

--------------
GRIM VIEW OF ALCKMIN'S CHANCES
--------------


4. (SBU) CG asked Kassab, a PFL insider, how he viewed the
presidential election. Kassab acknowledged that from an opposition
perspective, it wasn't going well. He frankly did not see at this
point how Geraldo Alckmin was going to overcome President Lula's
large lead, estimated at nearly 30 points in some recent polls (ref

SAO PAULO 00000722 002 OF 003


B). Though they continued to work for Alckmin, Kassab said he and
his PFL colleagues are focusing more on ensuring Jose Serra's
election as Governor. After failing to negotiate an alliance with
the centrist Brazilian Democratic Movement Party (PMDB),Serra had
chosen as his running mate PSDB Federal Deputy Alberto Goldman. But
the PSDB-PFL alliance remained strong. Later that day, Kassab
planned to attend the official launching of the Senate campaign of
his friend and PFL colleague, Guilherme Afif Domingos, President of
the Sao Paulo Chamber of Commerce, who is running with PSDB support
against incumbent Eduardo Suplicy of Lula's Workers' Party (PT).

--------------
LULA AS PRAGMATIC MODERATE
--------------


5. (SBU) CG asked Kassab for his views on what we could expect from
a second Lula term if he is re-elected. Kassab noted that many
political analysts expect that Lula, unencumbered by conservative
allies and ineligible to run for re-election, would begin to pay
more attention to the leftist elements of the PT and govern in more
populist fashion. He, Kassab, did not agree. People don't change,
he said, and Lula is ultimately conservative at heart, a trade
unionist who worked pragmatically within the system for modest,
incremental advances. He has won plaudits from around the world for
his responsible management of Brazil's economy. He has never really
paid much attention to the PT's leftist economists and is not likely
to begin now. Kassab did not say what will become of the labor
unions, landless movement (MST),and other leftist social movements
that comprise the PT's core constituency; presumably they will
continue to agitate from the left, but without much effect.


6. (SBU) On the trade front, Kassab opined, Lula may never support
the FTAA, but he may eventually become more accommodating on trade
issues. Many of the problematic foreign policy positions
articulated by Lula and the MFA, especially those at odds with U.S.
policy objectives, have been taken for electoral reasons; when these
political imperatives disappear, he may become more moderate,
including in his approach to bilateral relations with the United
States. He may even move closer in some of his policies to the
PSDB. Though Kassab did not say so explicitly, he hinted that the
PSDB and PFL may be prepared to offer some support in Congress to
such a "moderate" Lula to avoid political gridlock and keep the
country on track.

--------------
BIPARTISAN BRAZIL
--------------


7. (SBU) Kassab reiterated his view (see ref E) that the entry into
force this year of the "Barrier Clause" will change Brazil's
political panorama. After the smaller parties lose their viability
when they fail to garner the required five percent of the national
vote for the Chamber of Deputies, only five or six parties will
remain. Lula's PT will be forced into a center-left alliance with
the PMDB, which in return for its support will demand control of
several Ministries to be used to advance the ambitions of their
supporters. Meanwhile, the PSDB and PFL will form their own
center-right coalition as a counter-weight. Any other surviving
parties will eventually gravitate to one bloc or another, and Brazil
will again have something resembling a two-party system. Kassab
suggested this would have a salutary and stabilizing effect on
Brazilian politics.

--------------
BOLIVIAN GAS
--------------


8. (SBU) CG expressed interest in Kassab's perspective on Bolivia's

SAO PAULO 00000722 003 OF 003


nationalization of its hydrocarbons sector. Kassab acknowledged
that although a national issue, this was extremely worrisome for Sao
Paulo, which remains heavily dependent on Bolivian gas to meet its
energy needs. The city and the private sector were already
exploring alternatives with a view to reducing that dependency,
though it may have to pay higher prices in the short term.
Ultimately, Brazil and Petrobras had the stronger negotiating
position and would find an acceptable solution. Gasparian
interjected that the 200,000 Bolivians residing illegally in Sao
Paulo constituted a serious headache for the city.

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


9. (SBU) For the leader of a mega-city that recently suffered a
major trauma and continues to confront challenges in the areas of
crime, pollution, health care, the informal economy, and a large
marginalized population, Kassab seemed remarkably relaxed, cheerful,
and optimistic. Even the prospect of four more years of Lula, which
dismays some leaders of the business community, did not appear to
give him pause. Indeed, he volunteered that he sees no crises,
political or economic, on the horizon. He expressed interest in
maintaining close contact with the Consulate and having city
officials participate in several upcoming USG-sponsored events. END
COMMENT.


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

MCMULLEN