Despite Sagging Poll Numbers, Alckmin Adviser Thinks

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E.O. 12958: N/A
TAGS: PGOV PINR ECON BR
SUBJECT: Despite Sagging Poll Numbers, Alckmin Adviser Thinks
Ex-Governor Can Still Beat Lula


SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY

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SUMMARY
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1. (SBU) Fernando Braga, Sao Paulo State Secretary for Economy and
Planning, argued that former Governor Geraldo Alckmin will make it
to the second round of the presidential election, where he will take
advantage of Lula's high negative numbers in the polls to "win in
the last five minutes." He regretted that the country's largest
media enterprise, Rede Globo, was so partial to the Lula
administration, which put Alckmin at a serious disadvantage.
Nevertheless, Braga believed the voters would respond to Alckmin's
television advertising. A long-time economic adviser to the former
Governor, Braga described Alckmin as someone who has no leisure
activity, hobby, or recreation, and spent all his "down time"
preparing for the next event. According to Braga, Alckmin's top
foreign affairs adviser is former Ambassador Sergio Amaral. On the
economic side, Alckmin is still consulting with economists from
various schools of thought but not allowing any individual to emerge
as his senior economic guru or identifying himself with any one
philosophy. END SUMMARY.


2. (SBU) Consul General (CG) and Poloff met recently with Fernando
Carvalho Braga, Sao Paulo State Secretary for Economy and Planning.
Prior to his appointment in April by Governor Claudio Lembo, Braga
had served Governor Alckmin for many years as an economic advisor
with expertise in privatization and infrastructure. He predicted,
as have other Alckmin advisers, that the former Governor will rise
in the polls between now and election day as voters begin to respond
to his government-subsidized radio and television advertising.
Alckmin, he said, comes across powerfully on TV, and advanced in the
polls in June thanks to TV coverage, only to fall back again in
July. The goal at this stage, he asserted, isn't to come in first
but simply to ensure a second round in which Alckmin will have a
good chance due to Lula's high rejection rate.


3. (SBU) Commenting on Alckmin's personal style, Braga remarked
that the former Governor has no leisure activity or hobby or
preferred means of recreation, but rather devoted all his time and
energy to work, whether as Governor or presidential candidate. He
dedicated enormous amounts of time preparing for the August 14
presidential debate, to the point that he "knew everything about
every subject." (COMMENT: Given that President Lula opted not to
participate in the debate, it is unclear how much Alckmin's
exhaustive preparation advanced his chances. END COMMENT.)

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REGIONAL POLITICS
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4. (SBU) Braga predicted that though Lula will do well in the
northeast, he will not win there by the overwhelming margins
suggested by current polls. His allies running for state offices in
the northeast will deliver a lot of votes for him. Lula's Workers'
Party (PT),on the other hand, is not strong at the state levels; it
currently controls only three governorships and may have even less
after the elections. To compensate, the PT tends to be more active
at the municipal level. But even the advantage Lula enjoys among
poor voters due to programs like "Bolsa Familia" (the direct public
assistance program for poor families) is not as clear-cut as many
people think, Braga said. When new job-generating infrastructure
projects require employees to be formally registered, the poor get
some jobs but then become ineligible to receive "Bolsa Familia"
benefits.


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5. (SBU) Alckmin had begun to do a little better in southern Minas
Gerais, Braga said, the part of the state that is closest to and
most influenced by Sao Paulo state. However, much of Minas Gerais
is geographically and demographically similar to its neighbor to the
northeast, Bahia, and is heavily influenced by that state. Given
that former President Itamar Franco, a prominent "Mineiro,"
(resident of Minas) had recently come out for Alckmin, Braga thought
Alckmin's Brazilian Social Democracy Party (PSDB) colleague,
Governor Aecio Neves, would be compelled to campaign more
strenuously for Alckmin. (COMMENT: Neves, who in his bid for
re-election holds an amazing 62-point lead in the latest polls, is
widely believed to prefer that Lula defeat Alckmin because it will
help make Neves the PSDB's obvious presidential candidate in 2010.
How seriously he would be embarrassed if Lula carried his home state
is unclear. Last week, in a high-profile interview with leading
daily "Folha de Sao Paulo," he criticized the "hegemony of Sao Paulo
state" in national politics, complaining that Brazil's most populous
state has for years enjoyed undue influence on the national
political scene to the detriment of other states and the nation as a
whole. Though neither was born in Sao Paulo, both former president
Fernando Henrique Cardoso (FHC) and President Lula have been
identified with Sao Paulo for their entire political careers;
Alckmin, of course, is a native "Paulista" from the state's
interior. END COMMENT.)


6. (SBU) The strategy of the opposition coalition, Braga said, was
to bring the political corruption issue to voters' attention but not
to harp on it to the exclusion of other issues. Many voters from
the lower classes, he opined, are much more interested in their
economic well-being, and any appeal to cleaner government must be
accompanied by programs that will generate jobs and lead to salary
increases.


7. (SBU) Braga lamented the power of "Rede Globo," the nation's
largest media enterprise, to define the terms of public debate.
Certain elements of the Globo enterprise enjoyed journalistic
independence, he said, citing the high-profile "National Journal"
nightly TV news program and the "Globo" newspapers. However, on the
whole, the conglomerate had done very well under Lula, reducing its
large debts thanks in large part to massive advertising revenues
from government agencies and state-owned companies. Whereas founder
Roberto Marinho had begun as a journalist, his sons, who now control
the company, are all business entrepreneurs and are much more
interested in the company's commercial interests. Unless something
happens to make Alckmin a more likely winner, "Rede Globo" will
continue to tilt its coverage in Lula's favor, he asserted.

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FOREIGN POLICY AND ECONOMICS
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8. (SBU) Asked about major players in the Alckmin campaign, Braga
said that former Ambassador Sergio Amaral was far and away the most
important advisor on foreign policy, though former Ambassador Rubens
Barbosa also remains influential. (Many PSDB insiders have told us
privately that Amaral would be the next Foreign Minister if Alckmin
were to win the election.) There is apparently no one person in
charge of economic policy. Alckmin is listening to PSDB economists
from various schools - the Catholic University of Rio de Janeiro,
which tends to be more orthodox; the University of Campinas, home of
"developmentalist" economists; and from the University of Sao Paulo
and the Getulio Vargas Foundation, which Braga characterized as
"hybrids." However, Alckmin has been careful not to let any one
individual emerge as a leading candidate for Finance Minister nor to
identify his own policy preference too clearly, though Braga
predicts a President Alckmin would not be "too tied up in
orthodoxy." Rather, he has attempted to keep his balance with many

SAO PAULO 00000935 003 OF 003


economists of differing views all in the boat, trying to "respect
the degrees of vanity" of each.

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COMMENT
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9. (SBU) People close to Alckmin and his campaign continue to
assert that the intense media exposure of the last five weeks of the
campaign will enable Alckmin to surge while Lula, who they believe
has already achieved his ceiling, will fade. Such a scenario
appears increasingly unlikely, though Alckmin might still be able to
do well enough to force a second round. (Ironically, leftist
candidate Heloisa Helena, formerly of the PT, might be able deny
Lula a first round victory, if she can get about 15 percent of the
vote.) It's not clear at this point whether opposition supporters
are now engaged in wishful thinking and fantasy or whether they are
banking on some as yet undefined "October surprise" to tilt the
balance against Lula in the second round. END COMMENT.


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

MCMULLEN