VZCZCXRO0812
OO RUEHRG
DE RUEHSO #0355/01 0931651
ZNR UUUUU ZZH
O 031651Z APR 06
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4799
INFO RUEHBR/AMEMBASSY BRASILIA 5947
RUEHBU/AMEMBASSY BUENOS AIRES 2134
RUEHAC/AMEMBASSY ASUNCION 2481
RUEHCV/AMEMBASSY CARACAS 0230
RUEHMN/AMEMBASSY MONTEVIDEO 1895
RUEHLP/AMEMBASSY LA PAZ 2686
RUEHSG/AMEMBASSY SANTIAGO 1642
RUEHRI/AMCONSUL RIO DE JANEIRO 6962
RUEHRG/AMCONSUL RECIFE 2815
RHEHNSC/NSC WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 2348
RUEHC/DEPT OF LABOR WASHDC

UNCLAS SECTION 01 OF 03 SAO PAULO 000355 
 
SIPDIS 
 
SIPDIS 
 
NSC FOR CRONIN 
STATE PASS USTR FOR SULLIVAN/LEZNY 
TREASURY FOR OASIA, DAS LEE AND FPARODI 
USDOC FOR 4332/ITA/MAC/WH/OLAC/SHUPKA 
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 PINR BR
SUBJECT: SERRA ANNOUNCES CANDIDACY FOR GOVERNOR OF SAO PAULO 
 
REF: (A) SAO PAULO 316; (B) SAO PAULO 278; 
 
     (C) SAO PAULO 206; (D) SAO PAULO 102; 
     (E) SAO PAULO 73 
 
------- 
SUMMARY 
------- 
 
¶1.  On March 31, Sao Paulo Mayor Jose Serra announced his 
resignation and his candidacy for Governor of Sao Paulo state. 
After agonizing for months over whether - and how - to break his 
2004 promise to voters to serve a full four-year term as Mayor in 
order to run for President of Brazil, Serra hesitated for only about 
two weeks before resigning to run for the lesser office of Governor. 
 The critical difference, from his perspective, is that in his 
gubernatorial bid he will have what was so sorely lacking in his 
wished-for presidential campaign - the near-unanimous support of his 
party.  Polls show he has a good chance of winning in the first 
round.  End Summary. 
 
------------ 
ANNOUNCEMENT 
------------ 
 
¶2. As expected, late in the afternoon of March 31, Jose Serra, Mayor 
of Sao Paulo for the past fifteen months, announced his resignation 
and his candidacy for Governor under the banner of the Brazilian 
Social Democracy Party (PSDB).  He made the announcement at a press 
conference at the Anhembi Convention Center in northern Sao Paulo, 
and also sent a letter of resignation to the City Council.  In his 
announcement, Serra dealt head-on with the issue of his written 
pledge of September 14, 2004, that "if elected Mayor of the City of 
Sao Paulo in the contest of October 2004, I commit myself to 
complete the entire four years of the mandate, without resigning the 
Mayor's office to become a candidate for any other elective office." 
 In attempting to defuse the expected criticism, Serra could not 
resist taking yet another swipe at his predecessor in City Hall, 
Marta Suplicy (2001-04) of President Lula's Workers' Party (Partido 
dos Trabalhadores - PT).  "The opposing team...has no moral standing 
to open its mouth to talk about public works and everything and 
anything else [i.e., except Serra's broken promise].  They do not 
have and will not have anything else to say.  After the mess they 
left City Hall in...and in the face of their lack of proposals and 
the path Brazil is on now, really there won't be anything else for 
them to talk about except this."  He went on to say that resigning 
was "a difficult decision, the most difficult of my life.  But it 
was a decision, which, though risky, was necessary.  I am convinced 
it was the correct decision.  I believe the people of Sao Paulo will 
understand my reasons." 
 
---------------------------------- 
GOVERNOR ALCKMIN MAKES IT OFFICIAL 
---------------------------------- 
 
¶3. On the evening of March 30, Governor Geraldo Alckmin sent a 
letter to the President of the state Legislative Assembly 
communicating his own resignation, effective March 31, "in light of 
my decision to be a candidate for elective office in the upcoming 
contest of October 1, 2006."  Under Article 14 of the 1988 
Constitution, holders of Executive Branch offices - Governors, 
Mayors, Ministers, State and Municipal Secretaries - must resign six 
months prior to any election in which they plan to run for 
government office.  The only exceptions are Mayors, Governors and 
Presidents seeking re-election; for example, President Lula does not 
have to resign in order to run this year. 
 
--------------------------- 
NOT A BAD CONSOLATION PRIZE 
--------------------------- 
 
SAO PAULO 00000355  002 OF 003 
 
 
 
¶4. Per refs B-C and E, Serra, who as the PSDB presidential candidate 
in 2002 lost to Lula, was long considered the front-runner for the 
party's presidential nomination this year, but was defeated by a 
determined Alckmin.  A large part of Serra's problem was his 
reluctance to announce his candidacy absent strong party consensus 
behind him, a consensus that was denied him by Alckmin and his 
supporters.  His promise to serve out his term required him not to 
appear too eager to leave; only a strong appeal from the whole 
party, it seemed, would offer him a graceful way out of his pledge. 
Alckmin, barred by term limits from seeking re-election, was not so 
handicapped. 
 
¶5.   As momentum swung towards Alckmin in the contest for the 
presidential nomination - the party leadership named him on March 14 
(ref B) -- Serra supporters began to discuss the possibility of his 
running for Governor instead.  The idea was to keep this key 
position of leader of Brazil's largest state (with 40 million 
people, an annual budget of about USD 40 billion, and a 2004 GDP of 
USD 190.9 billion) out of the hands of the PT, whose two candidates, 
Marta Suplicy and Senator Aloisio Mercadante, are to face off in a 
primary on May 7 (though Suplicy would reportedly like to hold it 
earlier).  The notion of a Serra candidacy gained momentum with the 
March 20 publication of a "Datafolha" poll (ref A) showing that 
Serra could win the race in the first round with 58 percent of the 
vote if Mercadante were the PT candidate and with 50 percent if 
Suplicy were the PT candidate.  In either scenario, the nearest 
other challenger, former Governor Orestes Quercia of the Brazilian 
Democratic Movement Party (PMDB), would get at most 15 percent, 
according to the poll.  None of the other prospective PSDB 
candidates appeared to resonate with voters.  Under those 
circumstances, a Serra candidacy became all but inevitable.  Several 
Alckmin supporters told us (ref A) that his candidacy would 
strengthen the ticket and be good for the party.  PSDB State 
Deputies and Mayors visited him at City Hall to ask him to run. 
Representatives of other parties met with him to discuss possible 
alliances. 
 
-------------------------------------- 
KASSAB TAKES OVER, PROMISES CONTINUITY 
-------------------------------------- 
 
¶6. Serra is succeeded by Vice-Mayor Gilberto Kassab (see ref D) of 
the Liberal Front Party (PFL), who will serve the remaining two 
years and nine months of his term.  Kassab has pledged to continue 
Serra's policies.  For the time being, Serra's Secretary of 
Municipal Government, Aloisio Nunes Ferreira, will remain in 
position to help Serra keep his fingers on the pulse of municipal 
affairs even while on the campaign trail.  Also staying on is 
Secretary of Services Andrea Matarazzo, who will become Secretary in 
 
SIPDIS 
charge of coordinating the city's 31  Assistant Mayors' Offices 
("Subprefeituras"), replacing Walter Feldman, who resigned to run 
for Congress.  Matarazzo, a Serra loyalist, former Minister and 
Ambassador under Fernando Henrique Cardoso, and long-time Consulate 
contact, had expected to play a key role in Serra's presidential 
campaign (ref E). 
 
------- 
COMMENT 
------- 
 
¶7. Serra's gubernatorial candidacy has the potential to be a win/win 
for the PSDB.  Political observers note that his strength in Sao 
Paulo will enable Alckmin to leave the campaign here in his hands 
and devote more attention to the critical northeast.  Another clear 
winner is the PFL, which, in addition to the Mayorship, will hold 
the Governorship for the next nine months in the person of Claudio 
Lembo.  Post will report in further detail septel on departure of 
important personnel at the state and local levels and other 
 
SAO PAULO 00000355  003 OF 003 
 
 
election-related developments.  End Comment. 
 
¶8. This cable was coordinated with Embassy Brasilia. 
 
MCMULLEN