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UNCLAS SECTION 01 OF 04 SAO PAULO 000647 
 
SIPDIS 
 
STATE PASS USTR FOR SULLIVAN/LEZNY 
STATE PASS EXIMBANK 
STATE PASS OPIC FOR DMORONESE, NRIVERA, CMERVENNE 
DEPT OF TREASURY FOR OASIA, DAS LEE AND FPARODI 
USDOC FOR 4332/ITA/MAC/OLAC/JANDERSEN/ADRISCOLL/MWARD 
USDOC ALSO FOR 3134/USFCS/OIO/SHUPKA 
DOL FOR ILAB MMITTELHAUSER 
NSC FOR CRONIN 
SOUTHCOM ALSO FOR POLAD 
AID/W FOR LAC/AA 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PINR PREL ETRD ECPS BR
SUBJECT: ALCKMIN'S CAMPAIGN COORDINATOR CLAIMS LULA'S POLL NUMBERS 
MASK STRENGTH OF PSDB/PFL POLITICAL MACHINE 
 
REF: (A) SAO PAULO 623; (B) BRASILIA 1015 AND PREVIOUS; 
 
     (C) RECIFE 65;     (D) SAO PAULO 316 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY 
 
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SUMMARY 
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¶1.  (SBU) Despite a series of recent opinion polls that show 
President Lula maintaining a lead of more than twenty points, with a 
chance to be re-elected in the first round, Geraldo Alckmin's 
campaign coordinator told Charg that the PSDB is methodically 
building grassroots political networks throughout the country that 
will help Alckmin overtake Lula once the campaign begins in earnest 
in August.  Joao Carlos Meirelles dismissed reports of divisions in 
the Brazilian Social Democracy Party (PSDB), claiming the party is 
fully united behind Alckmin.  He also said the PSDB has negotiated 
strong alliances with the Liberal Front Party (PFL) and the smaller 
center-left Popular Socialist Party (PPS), which should help the Sao 
Paulo-based PSDB in other parts of the country where Alckmin is not 
well known.  He claimed that Lula's impressive poll numbers do not 
reflect the ability of local political bosses to get out the vote 
for Alckmin on election day.  Meirelles, who is responsible for 
developing Alckmin's government program, indicated that if elected, 
Alckmin would be open to discussing "a new kind of relationship" 
with the United States to include cooperation on regional and global 
issues. When queried by Charge, he said an Alckmin government would 
be willing to revisit the digital TV standard issue, assuming there 
were legal grounds to do so.  END SUMMARY. 
 
¶2.  (SBU) Charg d'Affaires (CDA), accompanied by Consul General 
(CG) and Poloff, met June 2 with Joao Carlos de Souza Meirelles (ref 
D), unofficial coordinator of opposition PSDB presidential candidate 
Geraldo Alckmin's campaign.  Meirelles managed Alckmin's successful 
2002 campaign for re-election as Governor of Sao Paulo state and 
served both Alckmin and his predecessor, the late Mario Covas, as 
State Secretary for Science, Technology, and Economic Development. 
Although PSDB Senator Sergio Guerra from the northeastern state of 
Pernambuco is Alckmin's national campaign manager, Meirelles is in 
charge of coordinating day-to-day operations and is also responsible 
for developing the government program. 
 
¶3.  (U) Several polls published in late May (see ref B) and early 
June show Lula's lead growing.  An "Ibope" poll released June 1 
shows Lula with 48 percent and Alckmin with 19 percent in a 
first-round vote, a spread of 29 points.  If only valid votes are 
counted, Lula would exceed the 50 percent required to win in the 
first round.  If the polls are any indication, he appears to have 
emerged relatively unscathed from the corruption scandals that have 
dominated the political agenda for the past year, though his 
Workers' Party (Partido dos Trabalhadores - PT) has been badly 
damaged.  Alckmin, in the meantime, has run a low-key, lackluster 
campaign that has gone almost unnoticed by the voters.  Yet, when 
asked about the electoral situation, Meirelles disavowed any deep 
concern. 
 
----------------------------------- 
"WE HAVE NOT YET BEGUN TO CAMPAIGN" 
----------------------------------- 
 
¶4.  (SBU) At the moment, he explained, Alckmin is not really 
 
SAO PAULO 00000647  002 OF 004 
 
 
campaigning and in fact cannot by law offcially campaign before July 
¶5.  The PSDB will hold its national convention June 11.  (NOTE:  Per 
the electoral calendar, all political parties must hold their 
national and state conventions between June 10 and June 30.  END 
NOTE.)  That convention will formally approve Alckmin as the 
presidential candidate.  The PFL convention June 14 will confirm 
Jose Jorge of Pernambuco (see ref C) as the Vice-Presidential 
candidate on Alckmin's ticket, sealing the alliance concluded and 
announced May 31.  The small, center-left Popular Socialist Party 
(PPS), at its June 16 convention, will also announce its formal 
alliance with the PSDB and PFL. 
 
¶5.  (SBU) The PT, meanwhile, has sealed its alliance with the 
Communist Party of Brazil (PCdoB), but has been unable to reach 
agreement with the Brazilian Socialist Party (PSB) due to a dispute 
over who would be the coalition's candidate for Governor of 
Pernambuco, the PSB national president Eduardo Campos or PT former 
Health Minister Humberto Costa.  According to Meirelles, the PSB is 
negotiating an alliance with Vice President Alencar's party the 
Brazilian Republic Party (PRB), which is closely affiliated with the 
evangelical Universal Church of the Kingdom of God.  If the PSB 
declines to enter into an alliance with the PT, Lula will be unable 
to choose PSB Minister of National Integration (and two-time 
presidential candidate) Ciro Gomes as his running mate.  Gomes will 
instead run for Federal Deputy in the hopes that his popularity will 
boost the PSB's vote total. 
 
¶6.  (SBU) Meanwhile, the Brazilian Democratic Movement Party (PMDB) 
- "a big federation of parties" - will decide June 11 whether or not 
to run its own candidate for President.  Meirelles was confident the 
PMDB will decide not to run a candidate, and will also decide not to 
enter into an alliance with the PT at the national level or provide 
Lula's running mate.  Such an alliance would tie the party's hands 
in its many state races because of the "verticalization" rule (see 
ref A for an insider's view of the PSDB's deliberations). 
 
¶7.  (SBU) The PSDB-PFL-PPS coalition, Meirelles continued, is 
developing strategies in each of the states.  There are seventeen 
parties represented in Congress.  All but the largest four will 
struggle to achieve the five percent threshold in balloting for 
Federal Deputy that they need under the "Barrier Clause," 
implemented for the first time in this year's elections, to retain 
their privileges and thus their viability.  This situation gives the 
PSDB negotiating space with some of the smaller parties.  In 
Pernambuco and the Federal District, Meirelles said, they will 
support the PMDB candidates for Governor in return for PMDB support. 
 The coalition-building activities will continue through the end of 
June.  The campaign formally begins July 5, but it won't really heat 
up until August 15, when the free television and radio advertising 
begins.  The real campaign takes place in those last six weeks 
between August 15 and October 1. 
 
---------------------------------- 
"WE'RE USED TO COMING FROM BEHIND" 
---------------------------------- 
 
¶8.  (SBU) According to Meirelles, around September 7, Brazilian 
Independence Day, voters begin to search for their voter 
registration cards and to think about who they're going to vote for. 
 Until then, the polls are essentially name-recognition exercises. 
Lula has run for President four times before, and twice the campaign 
went to the second round.  Thus, this is Lula's seventh national 
 
SAO PAULO 00000647  003 OF 004 
 
 
campaign, and his name is universally known, especially since "he's 
been campaigning for the past three and a half years."  Alckmin is 
well known in Sao Paulo and other parts of the populous southeast 
and south, but not elsewhere.  Accordingly, it's not surprising he's 
so far behind in the polls.  Nor, Meirelles pointed out, is it all 
that unusual.  PSDB candidates are used to coming from behind.  In 
1994, Fernando Henrique Cardoso started out with around 8-10 percent 
support in the polls and ended up winning in the first round of the 
presidential election.  In the 2002 Sao Paulo gubernatorial 
election, Paulo Maluf was leading the pack with 43 percent of the 
vote, and the next three other candidates had 40 percent combined; 
however, in the end, Alckmin and PT President Jose Genoino went to 
the second round, and Alckmin prevailed. 
 
¶9.  (SBU) Once the real campaign begins, Meirelles predicted, Lula 
will be revealed as the candidate of the "new populism," which lacks 
answers for problems of education, health care, energy, and 
infrastructure.  His poll numbers of 40-45 percent represent his 
ceiling; he can only fall.  Even the most optimistic of PT members 
admit the party will be lucky to elect 60 candidates to the Chamber 
of Deputies; Meirelles noted it has good gubernatorial candidates in 
only a few states.  The party lacks the network needed to conduct a 
strong national campaign.  The PSDB, on the other hand, won three 
consecutive statewide elections in Sao Paulo, the most populous 
state.  Alckmin, after six years as Lieutenant Governor and five as 
Governor, left office with a 69 percent approval rating.  His 18-20 
percent showing in the polls can only grow. 
 
¶10.  (SBU) CG inquired into the PSDB's unity.  There are persistent 
rumors that supporters of former Sao Paulo Mayor Jose Serra, who had 
sought the nomination, don't have their hearts in Alckmin's 
campaign.  Many observers have also posited that Minas Gerais 
Governor (and party leader) Aecio Neves would actually prefer to see 
Lula win this year, since Alckmin's defeat would pave the way for 
Neves, whose presidential ambitions are well known, to run in 2010. 
Meirelles insisted that the PSDB is totally united behind Alckmin. 
The party's politicians, including Neves and Serra, know that if he 
loses, they lose, and that the most important thing is to return the 
PSDB to power. 
 
------------------------------ 
BILATERAL RELATIONS AND ISSUES 
------------------------------ 
 
¶11.  (SBU) CDA recalled that when the Deputy Secretary visited 
Brazil last October, he noted that the U.S. and Brazil have good, 
cooperative relations, but have lost opportunities to develop a 
stronger, deeper strategic relationship.  We would like to pursue 
such a relationship with the next government, CDA said, including by 
reviving FTAA negotiations.  By not negotiating free trade with the 
U.S., Brazil was missing out on an opportunity to export ethanol 
duty-free into the United States, and other countries were beginning 
to fill the vacuum.  We would like to work more closely with Brazil 
on sugar cane and ethanol.  The USG is forming an inter-agency group 
on ethanol.  Meirelles said if Alckmin were elected, his 
administration would be absolutely open to discussing a new kind of 
relationship, not only in bilateral terms but also with respect to 
cooperation in South America and elsewhere in the world. 
 
¶12.  (SBU) Charg expressed disappointment with the deeply flawed 
process the GoB had used to choose its digital TV standard. 
Meirelles indicated that this was a sensitive issue because major 
 
SAO PAULO 00000647  004 OF 004 
 
 
media groups favored adoption of the Japanese standard, and no 
politician wanted to oppose them.  An Alckmin administration would 
be open to discussing the issue with the USG, but it was not clear 
what flexibility the GoB would have, and would not be known until 
President Lula's decision were formalized and announced. 
 
¶13.  (U) Meirelles indicated he spends several days a week in 
Brasilia and would be pleased to meet with Charg and emboffs later 
in the campaign to touch base. 
 
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COMMENT 
------- 
 
¶14.  (SBU)  To date, Alckmin's campaign has been almost invisible, 
while Lula has taken full advantage of the benefits of incumbency, 
appearing constantly on television and taking full credit when good 
economic news emerges.  In that sense, Meirelles is correct that 
Lula's lead in the polls is only to be expected at this stage.  His 
analysis of the alliances and coalitions shaping up also makes 
sense.  But the PSDB announced Alckmin as its candidate in mid-March 
amidst great expectations that he would give Lula a serious run for 
the money, and his failure thus far to resonate with the voters has 
many people scratching their heads.  Perhaps Meirelles is right, and 
things will change in August with the saturation radio and TV 
advertising.  But much will depend on whether, between now and then, 
Geraldo Alckmin, trained and licensed as an anesthesiologist, can 
learn how not to put people to sleep.  END COMMENT. 
 
¶15. (U) This cable was coordinated with Embassy Brasilia. 
 
MCMULLEN