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UNCLAS SECTION 01 OF 03 SAO PAULO 000935 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE PASS USTR FOR MSULLIVAN 
STATE PASS EXIMBANK 
STATE PASS OPIC FOR MORONESE, RIVERA, MERVENNE 
NSC FOR FEARS 
USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D 
USDOC FOR 3134/USFCS/OIO/WH/SHUPKA 
TREASURY FOR OASIA, DAS LEE AND DDOUGLASS 
DOL FOR ILAB MMITTELHAUSER 
SOUTHCOM ALSO FOR POLAD 
USAID/W FOR LAC/AA 
 
E.O. 12958: N/A 
TAGS: PGOV PINR ECON BR
SUBJECT: Despite Sagging Poll Numbers, Alckmin Adviser Thinks 
Ex-Governor Can Still Beat Lula 
 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY 
 
------- 
SUMMARY 
------- 
 
¶1.  (SBU) Fernando Braga, Sao Paulo State Secretary for Economy and 
Planning, argued that former Governor Geraldo Alckmin will make it 
to the second round of the presidential election, where he will take 
advantage of Lula's high negative numbers in the polls to "win in 
the last five minutes."  He regretted that the country's largest 
media enterprise, Rede Globo, was so partial to the Lula 
administration, which put Alckmin at a serious disadvantage. 
Nevertheless, Braga believed the voters would respond to Alckmin's 
television advertising.  A long-time economic adviser to the former 
Governor, Braga described Alckmin as someone who has no leisure 
activity, hobby, or recreation, and spent all his "down time" 
preparing for the next event.  According to Braga, Alckmin's top 
foreign affairs adviser is former Ambassador Sergio Amaral.  On the 
economic side, Alckmin is still consulting with economists from 
various schools of thought but not allowing any individual to emerge 
as his senior economic guru or identifying himself with any one 
philosophy.  END SUMMARY. 
 
¶2.  (SBU) Consul General (CG) and Poloff met recently with Fernando 
Carvalho Braga, Sao Paulo State Secretary for Economy and Planning. 
Prior to his appointment in April by Governor Claudio Lembo, Braga 
had served Governor Alckmin for many years as an economic advisor 
with expertise in privatization and infrastructure.  He predicted, 
as have other Alckmin advisers, that the former Governor will rise 
in the polls between now and election day as voters begin to respond 
to his government-subsidized radio and television advertising. 
Alckmin, he said, comes across powerfully on TV, and advanced in the 
polls in June thanks to TV coverage, only to fall back again in 
July.  The goal at this stage, he asserted, isn't to come in first 
but simply to ensure a second round in which Alckmin will have a 
good chance due to Lula's high rejection rate. 
 
¶3.  (SBU) Commenting on Alckmin's personal style, Braga remarked 
that the former Governor has no leisure activity or hobby or 
preferred means of recreation, but rather devoted all his time and 
energy to work, whether as Governor or presidential candidate.  He 
dedicated enormous amounts of time preparing for the August 14 
presidential debate, to the point that he "knew everything about 
every subject."  (COMMENT: Given that President Lula opted not to 
participate in the debate, it is unclear how much Alckmin's 
exhaustive preparation advanced his chances. END COMMENT.) 
 
----------------- 
REGIONAL POLITICS 
----------------- 
 
¶4.  (SBU) Braga predicted that though Lula will do well in the 
northeast, he will not win there by the overwhelming margins 
suggested by current polls.  His allies running for state offices in 
the northeast will deliver a lot of votes for him.  Lula's Workers' 
Party (PT), on the other hand, is not strong at the state levels; it 
currently controls only three governorships and may have even less 
after the elections.  To compensate, the PT tends to be more active 
at the municipal level.  But even the advantage Lula enjoys among 
poor voters due to programs like "Bolsa Familia" (the direct public 
assistance program for poor families) is not as clear-cut as many 
people think, Braga said.  When new job-generating infrastructure 
projects require employees to be formally registered, the poor get 
some jobs but then become ineligible to receive "Bolsa Familia" 
benefits. 
 
 
SAO PAULO 00000935  002 OF 003 
 
 
¶5.  (SBU) Alckmin had begun to do a little better in  southern Minas 
Gerais, Braga said, the part of the state that is closest to and 
most influenced by Sao Paulo state.  However, much of Minas Gerais 
is geographically and demographically similar to its neighbor to the 
northeast, Bahia, and is heavily influenced by that state.  Given 
that former President Itamar Franco, a prominent "Mineiro," 
(resident of Minas) had recently come out for Alckmin, Braga thought 
Alckmin's Brazilian Social Democracy Party (PSDB) colleague, 
Governor Aecio Neves, would be compelled to campaign more 
strenuously for Alckmin.  (COMMENT: Neves, who in his bid for 
re-election holds an amazing 62-point lead in the latest polls, is 
widely believed to prefer that Lula defeat Alckmin because it will 
help make Neves the PSDB's obvious presidential candidate in 2010. 
How seriously he would be embarrassed if Lula carried his home state 
is unclear.  Last week, in a high-profile interview with leading 
daily "Folha de Sao Paulo," he criticized the "hegemony of Sao Paulo 
state" in national politics, complaining that Brazil's most populous 
state has for years enjoyed undue influence on the national 
political scene to the detriment of other states and the nation as a 
whole.  Though neither was born in Sao Paulo, both former president 
Fernando Henrique Cardoso (FHC) and President Lula have been 
identified with Sao Paulo for their entire political careers; 
Alckmin, of course, is a native "Paulista" from the state's 
interior.  END COMMENT.) 
 
¶6.  (SBU) The strategy of the opposition coalition, Braga said, was 
to bring the political corruption issue to voters' attention but not 
to harp on it to the exclusion of other issues.  Many voters from 
the lower classes, he opined, are much more interested in their 
economic well-being, and any appeal to cleaner government must be 
accompanied by programs that will generate jobs and lead to salary 
increases. 
 
¶7.  (SBU) Braga lamented the power of "Rede Globo," the nation's 
largest media enterprise, to define the terms of public debate. 
Certain elements of the Globo enterprise enjoyed journalistic 
independence, he said, citing the high-profile "National Journal" 
nightly TV news program and the "Globo" newspapers.  However, on the 
whole, the conglomerate had done very well under Lula, reducing its 
large debts thanks in large part to massive advertising revenues 
from government agencies and state-owned companies.  Whereas founder 
Roberto Marinho had begun as a journalist, his sons, who now control 
the company, are all business entrepreneurs and are much more 
interested in the company's commercial interests.  Unless something 
happens to make Alckmin a more likely winner, "Rede Globo" will 
continue to tilt its coverage in Lula's favor, he asserted. 
 
---------------------------- 
FOREIGN POLICY AND ECONOMICS 
---------------------------- 
 
¶8.  (SBU) Asked about major players in the Alckmin campaign, Braga 
said that former Ambassador Sergio Amaral was far and away the most 
important advisor on foreign policy, though former Ambassador Rubens 
Barbosa also remains influential.  (Many PSDB insiders have told us 
privately that Amaral would be the next Foreign Minister if Alckmin 
were to win the election.)  There is apparently no one person in 
charge of economic policy.  Alckmin is listening to PSDB economists 
from various schools - the Catholic University of Rio de Janeiro, 
which tends to be more orthodox; the University of Campinas, home of 
"developmentalist" economists; and from the University of Sao Paulo 
and the Getulio Vargas Foundation, which Braga characterized as 
"hybrids."  However, Alckmin has been careful not to let any one 
individual emerge as a leading candidate for Finance Minister nor to 
identify his own policy preference too clearly, though Braga 
predicts a President Alckmin would not be "too tied up in 
orthodoxy."  Rather, he has attempted to keep his balance with many 
 
SAO PAULO 00000935  003 OF 003 
 
 
economists of differing views all in the boat, trying to "respect 
the degrees of vanity" of each. 
 
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COMMENT 
------- 
 
¶9.  (SBU) People close to Alckmin and his campaign continue to 
assert that the intense media exposure of the last five weeks of the 
campaign will enable Alckmin to surge while Lula, who they believe 
has already achieved his ceiling, will fade.  Such a scenario 
appears increasingly unlikely, though Alckmin might still be able to 
do well enough to force a second round.  (Ironically, leftist 
candidate Heloisa Helena, formerly of the PT, might be able deny 
Lula a first round victory, if she can get about 15 percent of the 
vote.)  It's not clear at this point whether opposition supporters 
are now engaged in wishful thinking and fantasy or whether they are 
banking on some as yet undefined "October surprise" to tilt the 
balance against Lula in the second round.  END COMMENT. 
 
¶10.  (SBU) This cable was cleared/coordinated with Embassy 
Brasilia. 
 
MCMULLEN