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UNCLAS SECTION 01 OF 02 SAO PAULO 000202 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
NSC FOR CRONIN 
STATE PASS USTR FOR SULLIVAN/LEZNY 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D 
USDOC FOR 3134/USFCS/OIO/EOLSON/DDEVITO/DANDERSON 
 
E.O. 12958: N/A 
TAGS: PGOV PINR BR
SUBJECT: LULA'S RECOVERY IN POLLS EXPOSES PSDB QUANDARY 
 
Ref: (A) BRASILIA 353 and PREVIOUS; (B) SAO PAULO 73 
 
¶1.  (U) SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY. 
 
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SUMMARY 
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¶2. (U) Recent polls showing President Lula recovering lost 
popularity have sounded alarms within the opposition Brazilian 
Social Democracy Party (PSDB), which is struggling to nominate a 
candidate to oppose him in the October presidential election.  Party 
chieftains have been resistant to calls for a primary or some other 
formal decision-making mechanism, fueling a perception of an 
elitist, undemocratic leadership.  Sniping between the two 
pre-candidates, Sao Paulo Mayor Jose Serra and Sao Paulo State 
Governor Geraldo Alckmin, has grown more heated over the past week. 
At this point, even the question of when a decision will be made 
remains uncertain.  The PSDB's mishandling of what normally would be 
considered a major strength - two distinguished, highly qualified 
contenders - calls into question its organizational ability and 
political acumen for mounting a strong challenge to Lula.  While 
there is time for the party to recover from their recent missteps, 
it is not yet clear they've figured out how to do it.  End Summary. 
 
--------------------------- 
POLLS OVERSHADOW PSDB EVENT 
--------------------------- 
 
¶3.  (U) On February 16, the PSDB hosted a seminar in Sao Paulo, 
calling together party economists and office-holders to discuss 
economic initiatives and programs to be used in this year's election 
campaign.  The two pre-candidates, Jose Serra and Geraldo Alckmin, 
were present, as were the party's three "cardinals" or king-makers, 
former President Fernando Henrique Cardoso (FHC), Senator from Ceara 
(and party president) Tasso Jereissati, and Minas Gerais Governor 
Aecio Neves, along with a host of other PSDB luminaries.  The event 
was to some extent overshadowed, however, by the February 14 release 
of a CNT-Sensus poll showing that President Lula could defeat either 
PSDB candidate comfortably (ref A).  Following on a Datafolha poll 
released in early February, the latest numbers appeared to confirm a 
Lula comeback from a deep hole caused by the political scandal. 
(Note: Yet another Datafolha poll released February 22 reconfirmed 
Lula's lead.  End note.) 
 
------------------------------- 
DESPERATELY SEEKING PARTY UNITY 
------------------------------- 
 
¶4. (U) While some PSDB members questioned the Sensus poll's 
validity, others quickly recognized the challenge posed by a 
resurgent Lula and the need for party unity to confront it.  Many 
wanted to rally around Serra, but he has still not declared his 
candidacy and has indicated he will not decide until March (ref B). 
Observers agree he wants to run, even though it means resigning with 
almost three years remaining in his term as Mayor, but that he wants 
to be acclaimed the party's choice and guaranteed its full support. 
The leadership has been generally supportive of Serra on the 
strength of earlier polls showing him defeating Lula, but it cannot 
create consensus where it does not exist.  The impression that the 
nomination is Serra's for the asking was strengthened by the 
king-makers' February 16 dinner in an upscale Sao Paulo restaurant, 
at which Serra but not Alckmin was present.  Alckmin, however, who 
in January declared his intention to resign the office of Governor 
by March 31 as required by electoral law, has refused to disavow his 
candidacy, arguing that the party should hold a primary or some 
other formal process to make its choice. 
 
¶5. (SBU) Up to now, party insiders have intimated that the three 
king-makers (or, in some versions, FHC by himself) will choose the 
candidate following private internal consultations.  Now the party 
is belatedly recognizing that such a process may make it look 
anachronistic, and non-transparent in Brazil's maturing democracy, 
in which other major parties, such as the Brazilian Democratic 
 
SAO PAULO 00000202  002 OF 002 
 
 
Movement Party (PMDB) and Lula's Workers' Party (Partido dos 
Trabalhadores - PT), are planning to hold primaries.  Some prominent 
"tucanos" (as PSDB members are called, after the party symbol) - for 
example, Goias State Governor Marconi Perillo and Curitiba Mayor 
Jose Alberto Richa - have begun to complain about being excluded 
from the process.  Struggling to control the damage, the triumvirate 
reportedly met February 21 with Alckmin and indicated that, though 
they still don't see the need for a primary, they will not make a 
decision until March 10-15, after listening to the views of the 
party's governors, federal deputies, and senators. 
 
------------------------ 
AS THE CANDIDATES BICKER 
------------------------ 
 
¶6. (SBU) Judging by the intensified rhetoric, the contenders 
themselves may also be feeling the pressure.  Serra has reportedly 
characterized Alckmin as "intransigent" for his refusal to step 
aside, suggesting he should follow the statesmanlike example of the 
late Sao Paulo Governor (1983-87) Andre Franco Montoro, who in 1985, 
despite being considered the "natural" candidate, stepped aside to 
allow Tancredo Neves to run in the indirect presidential election 
that led to restoration of Brazilian democracy.  In invoking Franco 
Montoro, Serra is implicitly mocking those who have called Alckmin 
the "natural" PSDB candidate, as well as the Alckmin himself for 
wrapping himself in the mantle of the late Governor (1995-2001) and 
PSDB co-founder Mario Covas, whom he served for six years as 
Lieutenant Governor.  (Some Alckmin supporters told us they are 
planning to take advantage of upcoming observation of the fifth 
anniversary of Covas's death to demonstrate the strength of 
Alckmin's support.)  For his part, the normally even-tempered, 
taciturn Alckmin has shown increasing irritation at insinuations 
that he is an "adventurer" and a Lone Ranger when in fact he is, as 
he points out, his party's only declared candidate.  Nonetheless, 
Serra and the PSDB leadership evidently wish he would just go away. 
 
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COMMENT 
------- 
 
¶7. (SBU) Since the political scandal broke in May 2005, the PSDB has 
been looking forward to these elections as a chance to score major 
gains over a weakened PT.  The embarrassment of riches constituted 
by having too many qualified candidates is the sort of problem most 
parties would give an arm and a leg for, and it places the PSDB in 
sharp contrast with the PT, which has no one but Lula.  Yet the PSDB 
is clearly at a loss as to how to decide the issue, and the more 
competitive the race with Lula looks, the dithering is starting to 
inflict damage on the party's campaign before it even gets under way 
 Some party faithful are grumbling that either Serra or Alckmin 
would be fine with them, but they wish the party would decide and 
move on, because the indecision is hurting them. 
 
¶8. (SBU) At this point, a primary is not a practical notion, if only 
because of the difficulty of organizing one from scratch before the 
March 31 deadline by which Serra and Alckmin have to resign if they 
are going to run.  Even Alckmin may not really want a primary; more 
likely, his calling for one is a tactic to demonstrate he is a 
serious candidate with real support among the party's base.  But the 
party does need to open up its decision-making process, and Alckmin 
hopes that consultations among professional party politicians will 
show that his support is broader than previously suspected.  There 
is still time for the PSDB to resolve this problem, close ranks, and 
repair the damage, but it's not yet clear they've figured out how to 
do it.  End comment. 
 
¶9. (U) This cable was cleared/coordinated with Embassy Brasilia. 
 
McMullen