SAO PAULO ELECTIONS: ALCKMIN MAYORAL CANDIDAC VIEWED AS

UNCLAS SECTION 01 OF 04 SAO PAULO 000142 SIPDIS SENSITIVE SIPDIS STATE FOR WHA/BSC, 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: PGOV PINR BR SUBJECT: SAO PAULO ELECTIONS: ALCKMIN MAYORAL CANDIDAC VIEWED AS ENDANGERING PSDB'S CHANCES IN 2010 REF: (A) Sao Paulo 94; (B) 07 SAO PAULO 882; (C) 07 Sao Paulo 560; (D) 07 Sao Paulo 943 SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDNGLY -------------- SUMMARY -------------- ¶1. (SBU) The Social Democracy Party of Brazil (PSDB),the counry's largest and most important opposition party is facing internal division as well as a possibe breach with its principal ally, the Democrats arty (DEM),over this year's municipal elections. Despite their partnership on the national level and in a number of states, the two parties will likely run separate, competing candidates for mayor in a number of major cities. The situation is especially acute in Sao Paulo (ref A),where incumbent Gilberto Kassab (DEM),who is supported by Governor Jose Serra (PSDB),is being challenged by former Governor and 2006 PSDB presidential candidate Geraldo Alckmin. Whatever the outcome, many in the PSDB fear that Alckmin's candidacy may split the party and irreparably break the PSDB-DEM coalition, thus hurting Serra's chances to win the Presidency in 2010. End Summary. -------------- THE PSDB-DEM ALLIANCE -------------- ¶2. (SBU) Alckmin, who was Sao Paulo state's Lieutenant Governor from 1995 until 2001 and Governor from 2001 until he resigned in April 2006 to run for President, is the successor and political heir of the late Mario Covas, a PSDB founder and political legend. He enjoys the support of many influential PSDB members who served in the Covas-Alckmin administrations as well as a number of PSDB federal and state Deputies. In 2006, ineligible to run for re-election, he outmaneuvered then-Mayor Jose Serra for the party's presidential nomination but lost the general election to Lula. Meanwhile, Serra ran for Governor and won, leaving DEM Vice-Mayor Kassab to replace him as Mayor. For Serra and his supporters, the logical stance is to support Kassab's re-election, especially since many senior members of his administration are PSDB holdovers from Serra's time as Mayor. Throwing the PSDB's weight behind the election of a DEM in Brazil's largest city would help solidify the alliance and ensure DEM support for Serra's 2010 presidential bid. This support is crucial for the PSDB in the 2010 general elections as the DEMs are particularly strong in the populous Northeast of Brazil where Lula's PT gets many votes and where the PSDB has a very small presence. It would appear that Governor Serra wants the PSDB to maintain this alliance in order to avoid a repetition of 2002, when a series of contretemps led the Liberal Front Party (PFL),as the Democratic Party was known in those days, to break with the Fernando Henrique Cardoso (FHC) administration, the PSDB, and Serra's presidential campaign, thus contributing to a PT victory. ¶3. (SBU) For these reasons, Governor Serra and many PSDB leaders, including former president FHC, consider an Alckmin campaign against Kassab a complication to be avoided if possible. Per ref A, leaders of both the PSDB and DEM have tried to dissuade Alckmin, even offering to support him for Governor in 2010 if he'll sit this year out. However, Alckmin, undaunted, has begun to form his municipal campaign organization, and party leaders are beginning to accept, if not applaud, the inevitability of his candidacy. Aloysio Nunes Ferreira, Secretary of the Governor's Civil Household (Chief of Staff equivalent),told emboffs recently that the decision is Alckmin's: "If he decides to run, nobody can stop him, and the PSDB cadres will support him, like it or not." Similarly, during a SAO PAULO 00000142 002 OF 004 February 15 public appearance, Governor Serra himself acknowledged that "If Alckmin decides to be a candidate, he will be." -------------- WHAT MAKES GERALDO RUN? -------------- ¶4. (SBU) Asked why Alckmin is so determined to run given that a significant portion of his party prefers Kassab, Nunes Ferreira explained that a politician who is neither in office or running for office has no visibility and no influence. Alckmin is surrounded by loyal supporters who depend on his success and his power of appointment to advance their own careers. At 55, he has been either in public office or campaigning since 1972. Quite likely, one reason he wants to run this year is that he is going stir-crazy, as he has been out of elected office for two years. And even while FHC and other PSDB leaders are trying to persuade Alckmin to desist, Minas Gerais Governor Aecio Neves (PSDB) is encouraging him to run. Neves is Serra's main rival for the PSDB's 2010 presidential nomination and is happy to ally with anyone who might be able to weaken front-runner Serra. -------------- THE VIEW FROM CITY HALL -------------- ¶5. (SBU) An Alckmin candidacy poses special problems for the many PSDB members currently serving in the Kassab administration. Assistant Mayor Andrea Matarazzo, a close friend and advisor of Governor Serra, commented (ref B) that the "tucanos" (as PSDB supporters are called) in the city government - 15 Municipal Secretaries, 22 Assistant Mayors, and a host of others - "can't SIPDIS campaign against Alckmin" even though they may prefer to see Kassab re-elected. There has even been talk that they may all have to resign. Walter Feldman, a PSDB Federal Deputy (also a Serra loyalist) currently serving as Municipal Secretary of Sports (see ref C),told the CG on February 19 that the danger to the PSDB-DEM coalition posed by an Alckmin candidacy is "very grave, more serious than people realize." If Alckmin runs, Feldman and all the PSDB appointees in the city government will be "paralyzed," caught between loyalty to the administration they serve and their party. "It will be a disaster," he said, and called Alckmin's candidacy "a conspiracy" and "a unilateral act." The alliance with DEM is very important to the PSDB, he continued, the key to its fortunes as a national party and especially to Serra's 2010 presidential prospects. Breaking the alliance would throw everything into question. ¶6. (SBU) While representatives of the embryonic Alckmin and Kassab campaigns would like to negotiate a non-aggression pact in which the two candidates and parties agree to compete but try not to attack or damage each other, Feldman deems such a concept unworkable in practice. In his view, it will be impossible to prevent a rupture if Alckmin runs. -------------- INTO THE WEEDS - THE PROXY FIGHT -------------- ¶7. (U) The party's internal divide spilled over into the Chamber of Deputies in Brasilia when on February 13, the 58 PSDB Federal Deputies elected Jose Anibal Peres de Pontes, an Alckmin supporter, as the party's leader in the Chamber, over Arnaldo Madeira, a supporter of Kassab's re-election bid. Back in Sao Paulo, on February 22, the 12 PSDB members of the City Council asked the local PSDB President, Jose Henrique Reis Lobo, to work with other party SAO PAULO 00000142 003 OF 004 leaders to maintain the PSDB-DEM alliance, a not terribly subtle way of saying they believe the party should support Kassab's re-election. Reis Lobo has been seeking an accommodation between the two sides but is not optimistic. Comparing the conflict between Alckmin and Kassab supporters to West Side Story, he remarked ominously that "the story ends with the death of the leaders of both groups." -------------- THE VIEW FROM ALCKMIN'S CAMP -------------- ¶8. (SBU) In a February 29 meeting with Poloff, Deputy Jose Anibal laid out the arguments for a PSDB/Alckmin candidacy this year. Winning control of municipal governments is a key element in the PSDB's strategy to regain the presidency in 2010 (see ref D). Out of power in Sao Paulo for nearly 20 years, the PSDB put together a strong, comprehensive platform for the city and Jose Serra won in ¶2004. He cleaned up the mess in City Hall, and restored the party to its prominence in the municipality before departing to run for Governor. Having worked so hard to get local power, the PSDB wants to keep it. Mayor Kassab, in Jose Anibal's view, has been an adequate caretaker, but no more. With the help of many Serra holdovers, and boosted by a budget surplus generated by Serra's fiscal policies, Kassab has done a creditable job of implementing the PSDB/Serra program, but really has no agenda or team of his own, Anibal said. According to Anibal, Kassab simply lacks the breadth of vision and the unified strategy the city needs, and with him in power, the PSDB misses a great opportunity to use the city as a platform to promote itself in the 2010 Presidential elections. Anibal added that Alckmin is the party's all-time champion vote-getter and frankly, not allowing him to run would be a waste of the party's talent. ¶9. (SBU) As for the alliance with the DEMs, Jose Anibal expects that any damage done during campaign season can be repaired in preparation for a second round and Alckmin or Kassab would support the other to defeat current Minister of Tourism and probably PT mayoral candidate Marta Suplicy. After all, the DEMs have nowhere else to go but the PSDB. "What are they going to do, support Marta [Suplicy]? Support Lula's choice for President [in 2010]?" Jose Anibal asked rhetorically. (Note: A March 16 poll by Toledo and Associates shows Alckmin with 27.6%, Suplicy with 22.3%, and Kassab with 20.4% of the vote (margin of error of 3%) if the vote were held today. End Note.) ¶10. (SBU) As Jose Anibal sees it, Governor Serra's support for Kassab is a political error based on his unfounded fear that Alckmin, as Mayor, will use the city as a political base to support Aecio Neves for president. The PSDB must absolutely be united in 2010, Anibal said, and Serra is the "natural" candidate for President. Serra and Alckmin, as Governor and Mayor, will work well together "unless they're both idiots," because they have nothing to gain and everything to lose from fighting with each other. Aecio Neves must wait his turn. In both 2002 and 2006, when first Serra and then Alckmin lost to Lula, the PSDB suffered from disunity, Jose Anibal said. The party's leaders supported the candidate in name only, not with enthusiasm and vigor. This is the mistake the party must avoid repeating in 2010. -------------- COMMENT -------------- ¶11. (SBU) The Kassab and Alckmin supporters within the PSDB profess to have the same goal in this year's municipal elections - SAO PAULO 00000142 004 OF 004 strengthening the party to put it in the best possible position to win back the Presidency in 2010. Their visions of how to accomplish that objective, however, diverge completely, and neither faction shows any sign of yielding. While Jose Anibal makes a cogent case for an Alckmin candidacy, demonstrating that it involves more than personal ambition, Alckmin and his followers run a big risk by appearing to underestimate the DEMs' likely alienation if the PSDB abandons Kassab. Reacting to disagreements between the two parties over the Sao Paulo and Rio de Janeiro races for Mayor, DEM President Rodrigo Maia told an interviewer on Saturday that his party may have to go its own way. This, he elaborated, could mean running a DEM candidate for President in 2010 or, alternatively, supporting Ciro Gomes as the candidate of the "Left Bloc" (Socialists, Communists, Democratic Labor Party). This notion seems on its face politically unrealistic, even surreal, but Brazilian politics make for strange bedfellows. However this year's race in Sao Paulo turns out, the PSDB is going to have to do some serious fence-mending before the next presidential election. End Comment. ¶12. (U) This cable was coordinated with and cleared by Embassy Brasilia. WHITE