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UNCLAS SECTION 01 OF 05 SAO PAULO 000316 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NSC FOR CRONIN 
STATE PASS USTR FOR SULLIVAN/LEZNY 
DEPT OF TREASURY FOR FPARODI 
USDOC FOR 332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWARD 
USDOC ALSO FOR 3134/USFCS/OIO/EOLSON/DDEVITO/DANDERSON 
STATE PASS EXIMBANK 
STATE PASS OPIC FOR DMORONESE, NRIVERA, CMERVENNE 
DOL FOR ILAB MMITTELHAUSER 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PINR ECON ETRD BR
SUBJECT: GERALDO ALCKMIN: TWO ADVISORS TALK ABOUT HOW HE BEAT SERRA, 
HOW HE WILL CAMPAIGN AGAINST LULA 
 
REF: (A) SAO PAULO 278; (B) SAO PAULO 206; (C) SAO PAULO 73 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY. 
 
------- 
SUMMARY 
------- 
 
¶1. (SBU) The March 14 announcement by the leadership of the 
opposition Brazilian Social Democracy Party (PSDB) of the nomination 
of Sao Paulo Governor Geraldo Alckmin for President (ref A) 
represented the culmination of a two-month blitzkrieg by Alckmin's 
forces that apparently took party chieftains and supporters of Sao 
Paulo Mayor Jose Serra by surprise.  Everyone, it seems, knew 
Alckmin was an able politician and administrator, but few imagined 
he had the tenacity to prevail in the face of tepid poll numbers, a 
better-known opponent, and the perceived opposition of the party 
leadership's, especially former president Fernando Henrique Cardoso 
(FHC).  Post spoke with two of Alckmin's intimates about how Alckmin 
won the battle for the nomination and what his strategy is for 
defeating President Lula da Silva in the October election.  People 
who know him emphasize that Alckmin is a highly disciplined and 
focused individual who values competence, pragmatism, and 
efficiency.  Beneath the bland exterior there is fiery 
determination.  If Serra and his supporters underestimated him, Lula 
and his Workers' Party (PT) are not likely to make the same mistake. 
 End Summary. 
 
-------------------- 
THE CAMPAIGN MANAGER 
-------------------- 
 
¶2. (SBU) CG and Poloffs met March 20 with Joao Carlos de Souza 
Meirelles, Sao Paulo State Secretary for Science, Technology, and 
Economic Development.  Meirelles, who served 1998-2002 as state 
Secretary of Agriculture under both the late Governor Mario Covas 
 
SIPDIS 
and his successor Alckmin, managed Alckmin's 2002 re-election 
campaign for Governor and is now planning to leave his job to devote 
his full attention to the presidential campaign.  He noted that 
until March 31, the day of his resignation, Alckmin will remain 
focused on state government, getting projects and initiatives ready 
to turn over to his successor, Lieutenant Governor Claudio Governor 
of the Liberal Front Party (PFL).  On Sunday, Alckmin inaugurated 
another phase of the sanitation/flood control project for the Tiete 
River, which runs through the city of Sao Paulo and is prone to 
flooding during heavy rains; on Monday, he cut the ribbon at the 
restoration of the historic Luz train station and opening of the 
Museum of the Portuguese Language in downtown Sao Paulo.  On March 
31 he plans to inaugurate work on a new subway line on Avenida 
Paulista in the business district. 
 
--------- 
ALLIANCES 
--------- 
 
¶3.  (SBU) April and May, Meirelles continued, will be devoted to 
developing terms of reference for large national themes.  Each theme 
will have a working group.  Advisors will also identify the specific 
problems of each state as well as regional problems.  Then there is 
much work to be done on alliances.  The priority is to talk to Rio 
de Janeiro Mayor Cesar Maia, who has declared himself a 
pre-candidate for President for the PFL, but who Meirelles thinks is 
not really interested in running.  According to press reports, 
Alckmin hopes to persuade him to run instead for Governor of Rio de 
Janeiro state.  The PFL was allied electorally with the PSDB in 
FHC's successful runs in 1994 and 1998, and the two parties are 
allied in a number of states, including Sao Paulo.  Meirelles said 
 
SAO PAULO 00000316  002 OF 005 
 
 
the PSDB and PFL need to find a common denominator that will enable 
them not only to campaign together successfully, but to govern 
together; in his view, a great weakness of the Lula government has 
been its inability to hold its electoral coalition together to pass 
legislation.  Another possible ally is the Popular Socialist Party 
(PPS); its president, Roberto Freire, is planning to run for 
President, but not with any hope of winning, only to help some of 
the party's candidates for Federal Deputy. 
 
------------- 
THE NORTHEAST 
------------- 
 
¶4.  (SBU) CG asked how Alckmin would do against Lula in the 
all-important northeastern region.  Meirelles rejoined that Lula was 
strong in the northeast - though the PT was not - because he was 
born there and because he gave people money (i.e., government 
handouts), but he didn't create jobs.  There are people in their 
seventh year of receiving payments from the "Bolsa Familia" program, 
which was created by FHC but expanded by Lula.  Bolsa Familia should 
be a "port of entry" for the poor to a better life, not a dead-end 
welfare program.  The region needs massive investment in 
infrastructure and human capital, and financial investment as well, 
which Lula has not provided.  Although Alckmin is not well known in 
the northeast, Meirelles said, the PSDB has a presence there.  Its 
president, Senator Tasso Jereissati, is from Ceara, and the state's 
Governor, Lucio Alcantara, is PSDB.  The party also has a number of 
federal and state deputies in that state.  In Paraiba, there is 
Governor Cassio Cunha Lima, a strong "alckmista."  The PSDB is weak 
in Pernambuco, Meirelles acknowledged, but it has an alliance with 
Governor Jarbas Vasconcelos of the Brazilian Democratic Movement 
Party (PMDB). 
 
¶5.  (SBU) Asked about the PMDB's likely impact on the campaign, 
Meirelles opined that if Rio de Janeiro former Governor Anthony 
Garotinho runs, he will take votes away from Lula because of his 
populist positions.  If not, and if Lula does not choose a running 
mate from the PMDB, the party will ally with the PSDB in some 
states, though probably not in Sao Paulo.  (NOTE: The PMDB allied 
with the PSDB in the 2002 presidential election but eventually 
joined President Lula's governing coalition.  The party remains 
deeply divided between pro- and anti-Lula factions, and will not 
decide until its convention in June whether or not to run a 
candidate for President.  Garotinho just won the party's "informal" 
primary.  In Sao Paulo state, there has been some speculation that 
PMDB former Governor Orestes Quercia may prefer to run for a Senate 
seat rather than for Governor, and that the PSDB may support him in 
return for PMDB support in other races, but this possibility remains 
hypothetical at this stage.  END NOTE.) 
 
------------------------ 
FOREIGN POLICY AND TRADE 
------------------------ 
 
¶6.  (SBU) CG asked about Alckmin's policy with respect to bilateral 
relations with the United States and his approach to FTAA and 
Mercosul.  Meirelles said an Alckmin administration would want to 
sit down and have a very special, specific dialogue with the United 
States to develop, step-by-step, over the long-term, a pragmatic 
bilateral partnership without undermining either FTAA or Mercosul. 
Right now, everyone in the region wants to negotiate a bilateral 
trade agreement with the United States, ignoring their neighbors, 
hurting regional integration, he opined.  Mercosul was 
dysfunctional, as demonstrated by Argentina's problems with beef. 
South America needs economic development and growth.  Relations with 
the EU "have been badly conducted by all of us."  Brazil would also 
like to have a better quality of discussions with the United States 
 
SAO PAULO 00000316  003 OF 005 
 
 
in the WTO.  There are certain gestures the U.S. could make to 
facilitate such discussions, but "the U.S. wants gestures from us 
too."  "The planet called China" is now everyone's central focus; 
Brazil and the U.S. could work together on that as well, and on 
helping Africa.  Meirelles clearly envisioned a closer and more 
collaborative bilateral relationship. 
 
----------- 
THE INSIDER 
----------- 
 
¶7.  (SBU) Poloff and Pol Assistant met March 21 with State Deputy 
Edson Aparecido dos Santos, an Alckmin insider who coordinated the 
campaign for the nomination.  Aparecido, who is the government's 
leader in the state legislature, said he was planning to run for 
Federal Deputy in this year's election.  Obviously in high spirits, 
he characterized Alckmin's nomination as a "great victory."  Asked 
how it came about, he said that he, along with Meirelles, Federal 
Deputy Silvio Torres, and State Housing Secretary Emanuel Fernandes 
had lobbied for Alckmin first among PSDB State and Federal Deputies, 
and then among Governors and state party chairmen, gradually 
building a strong base of support.  They had pitched Alckmin as the 
"natural" candidate, the political heir of party founder Mario 
Covas, with six years as Covas's Lieutenant Governor and six years 
as Governor with an impressive 69 percent job approval rating, low 
negatives, and a solid record as an administrator.  Lula's poor 
showing in the polls in late 2005 had helped, showing he was 
vulnerable.  Ultimately, the party's leadership had no choice.  From 
Aparecido's perspective, their choice of Alckmin reflected the 
electorate's clear call for something new: a Lula-Alckmin race was 
the way of the future, whereas a Lula-Serra race - a repeat of 2002 
- would have been like looking through the rear-view mirror.  A 
Lula-Serra race would have been bloody as well - extremely negative 
all around - but the Lula-Alckmin race would not be, he thought. 
After the nomination was announced, Lula was quick to praise Alckmin 
and state that he should not be underestimated. 
 
¶8.  (SBU) A PSDB alliance with the PFL is already pretty much a done 
deal, Aparecido said.  Alckmin is going to persuade Cesar Maia to 
run for Governor of Rio de Janeiro instead of for President.  As an 
added bonus, Maia's Vice Mayor, who would succeed him, is from the 
PSDB.  This would make a fair trade, if, as widely rumored, Jose 
Serra resigns as Mayor to run for Governor of Sao Paulo, leaving the 
Mayorship to PFL Vice-Mayor Gilberto Kassab.  (NOTE: A "Datafolha" 
poll published March 20 suggested Serra could win the Governor's 
race in the first round, handily defeating possible PMDB candidate 
Orestes Quercia and either PT candidate, Senator Aloisio Mercadante 
or former Sao Paulo Mayor Marta Suplicy.  If he doesn't run, neither 
of the other likely PSDB candidates, City Councilman Jose Anibal and 
former Education Minister Paulo Renato, appears likely to break out 
of single digits.  According to press reports, Alckmin wants to have 
strong gubernatorial allies in the three key states of Sao Paulo, 
Rio de Janeiro, and Minas Gerais, where Aecio Neves looks like a 
shoo-in for re-election.  END NOTE.)  The PSDB, he went on, has also 
had good conversations with the PPS, and an alliance is likely. 
There have been preliminary conversations as well with the Green 
Party (PV) and the Democratic Labor Party (PDT). 
 
------------------- 
HOW TO TAKE ON LULA 
------------------- 
 
¶9.  (SBU) Political scandal, Aparecido said, had destroyed the 
leadership of Lula's party, ousted his "Prime Minister," Jose 
Dirceu, and was now damaging his Finance Minister, Antonio Palocci. 
The only reason Lula himself had not been more badly damaged was 
that, because of the scope of the "mensalao" (bribery scheme), 
 
SAO PAULO 00000316  004 OF 005 
 
 
Congress had lacked the moral authority to pursue impeachment, and 
he had had time to recover.  But Lula was not a political operator 
or leader, but rather a symbol.  Alckmin was not going to attack 
that symbol, though inevitably he would raise the corruption issue. 
Lula had lost the middle-class vote because of the scandal. 
Aparecido was confident that voters would discover for themselves 
how little Lula had done for the country by "playing Robin Hood in 
reverse," funneling taxpayers' money to the already wealthy.  He was 
also scathing about Lula's social programs.  "There was a program, 
begun under Fernando Henrique, called 'Bolsa Escola.'  Poor families 
could receive stipends from the state, so long as the parents sent 
their children to school and met other conditions.  When Lula and 
the PT came to power, they renamed the program 'Bolsa Familia' and 
removed the conditions and requirements so more families could 
qualify and they could get more political credit for it." Alckmin, 
he said, was going to put to the voters a program showing how, in 
his first weeks in office in January 2007, he would propose 
legislation for labor reform, tax and budget reform, social security 
reform, and political reform.  With the right alliances, he could 
pass them. 
 
¶10.  (SBU) Tasso Jereissati will be the campaign's national 
coordinator, Aparecido said, and Joao Carlos Meirelles will prepare 
the government program, as he did in the 2002 gubernatorial 
campaign.  Other leadership positions have not yet been determined. 
Aparecido himself will help out in Sao Paulo to the extent possible 
consistent with running his own campaign for Congress.  The foreign 
policy platform will be developed by FHC's old team, including 
former Ambassador to the U.S. Rubens Barbosa, former Foreign 
Minister Celso Lafer, and former Ambassador to France Sergio Amaral, 
though they won't necessarily get their old jobs back.  On the 
economic side, Alckmin has been listening to proponents of all 
schools of economic thought (e.g., government interventionist, 
monetarist, developmentalist), but it is not yet clear who will 
become the campaign's leading influences on economic issues. 
 
¶11. (SBU) The internal competition for the nomination, Aparecido 
concluded, had been good for the PSDB, and especially good for 
Geraldo Alckmin, who had emerged much stronger.  It had demonstrated 
that a small coterie of party bosses could no longer work their will 
absent solid support from the party's base.  "Even Fernando Henrique 
can't do it.  The only one who could do it was Mario Covas.  If a 
situation like this ever arises again, we'll have a much more 
inclusive, democratic process." 
 
------- 
COMMENT 
------- 
 
¶12. (SBU) The words used most often by both Meirelles and Aparecido 
to describe Alckmin are "disciplined" and "focused."  When the 
Governor himself talks about government, he uses words like 
"efficiency" and "competence."  Much of the mainstream press is 
already characterizing him as "the anti-Lula," and one leading daily 
depicted the campaign as what happens "When the King of Talk Meets 
the Notebook Man."  We can attest to the fact that Alckmin is very 
reserved in person; unlike many politicians, he is much more a 
listener than a talker.  He is also very much a policy wonk, having 
been in government since the age of 19, when he was elected to the 
City Council of his home town of Pindamonhangaba in the interior of 
Sao Paulo state.  To some, this makes him come across as boring: 
some time ago, one clever political commentator gave him the 
humorous, albeit virtually untranslatable, sobriquet of "picole de 
chuchu" (bland green vegetable on a stick), and it has stuck, much 
to cartoonists' delight.  But mere blandness and industriousness 
would not have defeated Serra; it is now evident that Alckmin also 
has fire in his belly.  As one Lula advisor reportedly commented, 
 
SAO PAULO 00000316  005 OF 005 
 
 
"he's a picole de chuchu with a peppery taste."  (NOTE:  A "picole" 
is a popsicle.  A "chuchu" is a chayote, also known as a vegetable 
pear or a mango squash.  END NOTE.)  It looks like Lula will have 
his hands full with him.  End Comment. 
 
¶13. (U) This cable was coordinated/cleared with Embassy Brasilia. 
 
MCMULLEN