DESPITE CORRUPTION SCANDALS, MAJORITY CAMP WINS IN WORKERS'

UNCLAS SECTION 01 OF 02 SAO PAULO 001004 SIPDIS SENSITIVE SIPDIS STATE FOR WHA/BSC, DRL/ILCSR, INR/IAA, INR/R/AA STATE PASS USTR FOR KATE DUCKWORTH NSC FOR TOMASULO TREASURY FOR JHOEK USDOC FOR 4332/ITA/MAC/WH/OLAC USDOC ALSO FOR 3134/USFCS/OIO DOL FOR ILAB SOUTHCOM ALSO FOR POLAD USAID FOR LAC/AA E.O. 12958: N/A TAGS: PINR PGOV KDEM BR SUBJECT: DESPITE CORRUPTION SCANDALS, MAJORITY CAMP WINS IN WORKERS' PARTY ELECTIONS REF: SAO PAULO 961 Summary -------------- ¶1. (SBU) Federal Deputy Ricardo Berzoini won the second round of internal voting in President Lula's Workers' Party (PT) presidential elections on December 16. The results maintain the distribution of political power within the PT's national directorate and consolidates President Lula's faction, the "Majority Camp," as the decisive force going into the 2008 municipal and 2010 national Brazilian elections. Sao Paulo results also forecast the likely return of former Sao Paulo Mayor and current Tourism Minister Marta Suplicy as the PT candidate for mayor in Sao Paulo's 2008 city-wide elections. Berzoini's election indicates that Lula's faction has survived all recent corruption scandals and that the PT is unlikely to change its public policy goals in the short term. End Summary. PT Internal Elections: The Winners -------------- ¶2. (SBU) Approximately 200,000 PT members cast their ballots throughout Brazil in internal party elections on December 16. Federal Deputy Berzoini's win with 61 percent of the vote was widely expected based on his first round victory in November with 43.8 percent. Federal Deputy Tatto, Berzoini's main opponent, garnered 38.6 percent. A candidate of a local PT faction, Tatto finished in second place during the November voting with 23 percent. (Note: Although in the lead-up to PT elections Berzoini suggested an alliance with Tatto that could avoid a second round election, Tatto rejected the offer. End Note.) During the first round of PT voting in November, Federal Deputy Jose Eduardo Cardozo, who was the candidate of Justice Minister Tarso Genro's "Message to the Party" faction, ended up in the third position with 17 percent. Cardozo's performance not only frustrated Genro's group's hope of changing the party internal structure but also facilitated Berzoini's second round victory: after Cardozo's loss, the majority of his supporters shifted their backing to Berzoini's candidacy. The December 16 voting also led to Sao Paulo City Councilman Jose Americo's election �A;as president of the City of Sao Paulo branch of the PT and Araraquara Mayor Edinho Silva's election as president of the State of Sao Paulo PT. ¶3. (SBU) Incumbent PT President Berzoini represents the so-called "Majority Camp," a faction that has controlled the PT since 1995, and includes former Ministers Jose Dirceu, Antonio Palocci and other PT leaders accused of being involvedt in the "mensalao" vote-buying scandal such as Federal Deputies Jose Genoino and Joao Paulo Cunha. During the campaign leading up to the PT's second round of voting, President Lula himself defended Berzoini's candidacy. The "Majority Camp," which recently relabeled itself the "Building a New Brazil" faction, will control the process for municipal elections in 2008 and, more importantly, will determine the party's candidate for Brazil's presidency in 2010. (Note: President Lula has stated that he will not run for re-election in 2010 although opponents and supporters alike have not yet discounted a Lula change of heart and ultimate candidacy for re-election. Should Lula decide to run for president again, Congress would first have to amend the Constitution. End Note.) The Losers -------------- ¶4. (SBU) Heading into the first round of party elections, Genro's faction called for internal PT changes and ethical reform. Owing to SAO PAULO 00001004 002 OF 002 support from intellectuals and artists unsatisfied with the PT's involvement in several corruption scandals, the "Message to the Party" faction expected at least to make it to the second round of party voting. Had it managed to do so, faction members believed they could count on additional leftist group votes to beat back Berzoini's "Majority Camp." ¶5. (SBU) Federal Deputy Tatto represented a group whose most visible figure is former Sao Paulo Mayor and current Tourism Minister Suplicy (Note: Tatto, Suplicy, and their followers used o belong to the "Majority Camp." End Note.) Sulicy's own faction, nicknamed the "New Course" goup, has strong influence over the local party mchinery in the city of Sao Paulo. Despite the "New Course's" loss in the PT elections, it was able o solidify its position and has now increased it influence within the PT as well as strengthenedSuplicy's candidacy for Sao Paulo mayor in 2008. Comment -------------- ¶6. (SBU) With Berzoini's vicory, the PT elections have solidified President Lula's dominance over the party and support for a continuation of his national policies. President Lula and the "Majority Camp" or "Building a New Brazil" faction will continue to dictate the PT's path for the next few years despite the fact that only a year ago a series of corruption scandals seemed to spell serious trouble for the party. While the scandals soiled the reputations of many "Majority Camp" leaders - including Berzoini himself, who was accused of involvement in a 2006 conspiracy that used a fake dossier to smear Jose Serra, then running his eventually successful campaign for Sao Paulo governor, - Berzoini's victory demonstrated that the "Majority Camp" still controls the party and Brazil's future. End Comment. ¶7. (U) This cable was cleared by Embassy Brasilia. WHITE