This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 BRASILIA 000564 
 
SIPDIS 
 
DEPT FOR WHA/BSC 
 
TAGS: PGOV SOCI ECON BR
SUBJECT: LULA'S PERSONAL APPROVAL UNSCATHED BY RECENT 
SCANDAL 
 
REFS: A) BRASILIA 0458 
 
      B) BRASILIA 0402 
 
¶1.  SUMMARY:  The administration of Brazilian President Lula 
da Silva is facing the worst crisis of its fifteen months in 
power, yet Lula's personal approval rating remains at 60%, 
according to a recent poll.  However, his government's 
approval number stands at 38%, suggesting that Lula will 
have to expend greater personal and political effort to move 
legislation and to maintain popular support for his agenda. 
The difference in the numbers also demonstrates Lula's 
personal charisma, though this alone is unlikely to be 
enough to ensure his administration's success.  As it now 
appears the worst of the scandal is abating, Lula and his 
government emerge with a tarnished reputation and reduced 
political capital, both in Congress and with the public. 
END SUMMARY. 
 
LULA AT 60%, BUT HIS GOVERNMENT AT 38% 
-------------------------------------- 
¶2.  The personal popularity of President Lula da Silva 
remains high (60%) despite the rash of bad press from the 
recent "Waldomiro Diniz scandal" involving a senior aide 
caught soliciting bribes from a numbers racketeer (refs A 
and B).  A nationwide poll released March 2 by Datafolha 
showed that Lula's personal approval remains at the same 
level as it was in October 2003 (and nearly the same as the 
61% of the popular vote he received in the October 2002 
elections).  Most Brazilians do not believe that Lula is 
linked to or knew about Diniz's corruption. 
 
¶3.  As always, Lula personally is much more popular than his 
administration.  The approval numbers for Lula's government 
have slipped steadily since taking office, dropping again 
from 42% in December 2003 to 38% on March 2 (though this 
change is within the margin of error).  In response to 
specific questions about the Diniz scandal, 81% of 
respondents believe there should be a congressional inquiry 
(which Lula's PT party vigorously opposed and managed to 
kill on March 4); 43% think Lula's powerful Chief of Staff, 
Jose Dirceu (for whom Diniz worked) should step aside during 
the investigation; and 24% believe Dirceu should step down 
permanently.  Lula has reportedly refused Dirceu's offered 
resignation. 
 
¶4.  The scandal is not the only thing weighing down the 
government's approval numbers.  An economy that remains 
sluggish despite fiscal belt-tightening (and controversial 
pension reforms passed in December) has not helped the 
administration's popularity.  The Datafolha poll also notes 
that many Brazilians (36%) do not see President Lula as a 
hard worker, an increase over the 21% who held this opinion 
last year.  This may be a function of his frequent 
international travels.  Yet Ricardo Antunes, a Professor of 
Sociology at the University of Campinas in Sao Paulo, 
commented to the press that Lula's populist style enables 
him to communicate effectively with the working class, and 
therefore this segment of the population will give him more 
time to show results, in a sense give him a longer 
honeymoon. 
 
¶5.  The March 2 polling numbers also show that the 
popularity of the government has fallen regardless of 
region.  In the prosperous southeast (which includes the 
economic centers of Sao Paulo and Rio) the government's 
approval fell from 37% in December to 31% on March 2.  In 
the poorer northeast, the numbers slipped from 47% to 42% in 
the same period. 
 
COMMENT 
------- 
¶6.  Waldomiro Diniz was a senior advisor to Jose Dirceu, 
Lula's closest and most powerful advisor.  Dirceu has been 
diminished by the scandal, though he is not personally 
implicated.  Yet Lula continues to rise above the image of 
his party and his administration.  The Datafolha numbers 
show that his personal popularity is a remarkable 22 points 
higher than that of his government.  This dynamic has caused 
press and pundits to speculate on how long Lula's popularity 
balloon can sustain the deadweight of a sluggish economy and 
controversial political reforms.  With the Diniz scandal 
making matters even worse for the government, some believe 
that the GoB may be forced to make concessions, either on 
fiscal austerity or on controversial pieces of legislation, 
in order to maintain popular and congressional support.  To 
date, this is just speculation, and Lula has given no sign 
that he will cave in to political pressures.  In fact, even 
in the wake of the latest dismal GDP figures, Lula again 
reasserted his long-term commitment to Finance Minister 
Palocci's austerity program. 
RVIRDEN