VZCZCXRO3384
PP RUEHRG
DE RUEHBR #1837/01 2441259
ZNY CCCCC ZZH
P 011259Z SEP 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC PRIORITY 6536
INFO RUEHAC/AMEMBASSY ASUNCION PRIORITY 5634
RUEHBO/AMEMBASSY BOGOTA PRIORITY 3906
RUEHBU/AMEMBASSY BUENOS AIRES PRIORITY 4237
RUEHCV/AMEMBASSY CARACAS PRIORITY 3411
RUEHGT/AMEMBASSY GUATEMALA PRIORITY 0287
RUEHLP/AMEMBASSY LA PAZ PRIORITY 4833
RUEHPE/AMEMBASSY LIMA PRIORITY 3150
RUEHMN/AMEMBASSY MONTEVIDEO PRIORITY 6438
RUEHSG/AMEMBASSY SANTIAGO PRIORITY 5727
RUEHRG/AMCONSUL RECIFE PRIORITY 5375
RUEHRI/AMCONSUL RIO DE JANEIRO PRIORITY 2778
RUEHSO/AMCONSUL SAO PAULO PRIORITY 7897
RUEKJCS/SECDEF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUMIAAA/USCINCSO MIAMI FL PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 001837 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 05/25/2016 
TAGS: PREL PGOV BR
SUBJECT: BRAZIL: OPPOSITION PSDB PRESIDENT'S COMMENTS ON 
STATE OF PLAY OF THE PRESIDENTIAL ELECTION 
 
 
BRASILIA 00001837  001.2 OF 003 
 
 
Classified By: POLITICAL COUNSELOR DENNIS HEARNE. REASONS: 1.4 (B)(D). 
 
 ¶1.  Summary.  PSDB national president Tasso Jereissati told 
PolCouns that his party believes it has a window of another 
10 to 15 days to diminish President Lula da Silva's 
commanding lead over PSDB contender Geraldo Alckmin, and move 
his candidacy to a second round of voting in late October. 
The PSDB remains resolute, but Alckmin, currently polling at 
27 percent of voter intention versus Lula's steady 50 
percent, must grow dramatically.  Jereissati said Alckmin 
will now begin attacking the Lula government's record on 
corruption (but will make no new allegations) in TV and radio 
election programs, following a phase in which Alckmin used 
high-road rhetoric and focused on his policy achievements as 
Sao Paulo governor in order to positively establish his 
identity with voters nationwide.  Lula's machine is 
formidable, Jereissati said, providing the president with a 
national stage and doling out subsidies to the poor at record 
levels in recent months, in an "audacious" effort to 
consolidate Lula's base among Brazil's millions of low-income 
voters.  This, plus a generally good economic situation in 
the country, are boosting Lula, while the PSDB struggles to 
fund its national campaigns.  End summary. 
 
THE CRITICAL WINDOW -- NOW UNTIL MID-SEPTEMBER 
--------------------------------------------- - 
 
¶2. (C) PolCounselor met privately on 30 August with Senator 
Tasso Jereissati, National President of the opposition PSDB 
party, and -- along with former President Fernando Henrique 
Cardoso and Minas Gerais Governor Aecio Neves -- one of the 
"troika" that sets policy for the party and its current 
campaign.  Jereissati candidly acknowledged that PSDB 
candidate Geraldo Alckmin is facing a steep uphill fight 
against incumbent President Lula da Silva, and that current 
poll results -- if they solidify into firm trends -- would 
point toward a first round victory for Lula in October's 
election.  However, Jereissati said the PSDB is nowhere near 
throwing in the towel, and he believes the party has 10 to 15 
days (until mid-Septeber) to turn the election's course in a 
more positive direction for Alckmin.  If Alckmin can grow 
several points in the next week or so, and if PSOL candidate 
Heloisa Helena -- currently garnering 10 percent of voter 
intention -- does not implode, then a second round remains a 
live possibility.  (Note: A second round between the two 
finalists is required for the presidential election if no 
candidate gains 51 percent of the vote.  It is widely viewed 
in Brazilian politics as "a whole new ball game," since 
voters focus more intently on two candidates only, and 
supporters from also-rans shift their allegiances to one of 
the final contenders.  End note.) If Alckmin cannot turn the 
tide by mid-September, the PSDB national campaign will become 
demoralized and party candidates in states and municipalities 
will focus entirely on their own races, Jereissati said. 
 
GOING NEGATIVE 
-------------- 
 
¶3. (C) Jereissati said he and other party leaders made a 
decision early on to avoid direct attacks on Lula for 
corruption issues in the early phase of the television and 
radio campaign season, which is widely viewed as decisive in 
Brazilian elections and which began on 15 August. Despite 
mounting pressure and complaints in the press from leaders in 
the PSDB's coalition partner party, the PFL, Alckmin and the 
party had stayed firmly with a set strategy, which Jereissati 
outlined: 
 
-- Use the first weeks of TV and radio time to establish 
Alckmin's identity and bonafides with voters as an effective 
and honest governor of the country's most advanced state, 
while largely avoiding harsh criticisms of Lula.  This was 
essential, as Alckmin was little known among voters outside 
the country's southern and central states, and an unknown 
 
BRASILIA 00001837  002.2 OF 003 
 
 
opponent would have been ill-advised to enter swinging 
against a president who is "bem querida" (well-loved) by so 
many Brazilians without first establishing positive 
recognition and credibility. 
 
-- Monitor progress in increasing Alckmin's positive 
recognition level two weeks into the TV/radio season. 
Jereissati said PSDB-sponsored focus groups now clearly 
indicate Alckmin's positive rating is the highest among the 
candidates, though this has not translated thus far into 
voter intentions in the polls; 
 
-- With Alckmin established positively on a national level 
with voters, gradually shift to tough attacks against Lula on 
the corruption issue, which is "Lula's critical 
vulnerability."  This phase is starting now.  Asked by 
PolCounselor whether the attacks on Lula's ethics would 
include any "September surprise" revelations, Jereissati 
paused but then replied no, saying "Lula's public record in 
corruption over the last year is more than enough to work 
with." (Comment:  In PolCouns' view, Jereissati seemed to 
imply that the PSDB has some additional prejudicial material 
against Lula, but would refrain from using it.  See para 7 
below.  End comment.) 
 
 
RAGE AGAINST THE MACHINE 
------------------------ 
 
¶4.  (C) Jereissati said the PSDB is "fighting hard against a 
formidable machine."  Lula had used all of the resources of 
his office and position to campaign inappropriately before he 
declared his legal candidacy and the outset of the official 
election campaign season.  Moreover, he had opened the 
sluices of federal money to secure and widen his base among 
low-income voters.  Jereissati claimed that, since the start 
of June, the number of beneficiaries of the "Bolsa Familia" 
poverty subsidy program had expanded massively.  Lula had 
also increased subsidies to small farms in the last few 
months. These represent an "audacious use of federal programs 
for political gain," Jereissati added. The recent 
distribution of these goodies to poor voters, together with a 
generally improving economic situation have created a "feel 
good factor" that is boosting Lula, he said. Other voters are 
simply afraid of any change. 
 
¶5. (C) Arrayed against Lula's juggernaut, the PSDB has 
struggled financially in the campaign, he said.  Business 
interests that were expected to support Alckmin have proved 
hesitant to publicly commit funds to his campaign as his poll 
numbers have flat-lined, fearing reprisals should Lula win 
re-election -- "and they have every reason to be afraid," 
Jereissati opined.  Since the PSDB will not resort to use of 
a "Caixa 2" (off-the-books illegal contributions) -- the kind 
of illicit financing linked to the past year's scandals -- 
the party's national campaign has been underfunded, he said. 
 
¶6. (C) PolCouns asked Jereissati whether he thought Jose 
Serra -- Alckmin's early rival for the PSDB candidacy for the 
presidency and now front-runner in Sao Paulo's gubernatorial 
race -- would perhaps have had a better showing against Lula. 
Jeressati immediately replied in the negative.  He said Serra 
would have faced the same powerful Lula machine and the same 
economic facts as those confronting Alckmin, and would also 
have been vulnerable to attacks on Serra's role as a minister 
in the Cardoso government, which Lula tirelessly denigrates 
in campaign speeches. 
 
COMMENT 
------- 
 
¶7. (C) Wealthy, urbane, autocratic in his management style, 
but centrist in his politics and pro-American, Jereissati is 
always candid in his conversations with PolCouns.  He is an 
 
BRASILIA 00001837  003.2 OF 003 
 
 
authoritative source for information regarding the PSDB party 
that he helped to found and currently leads nationally.  In 
our view, the primary points of interest in this frank and 
confidential meeting were (1) Jereissati's assertion that, 
 
SIPDIS 
though beleaguered, the PSDB has not given up on the hope of 
getting Alckmin to a second round; If Jereissati thought the 
game was already lost, he would have found a way to say so; 
and (2) Confirmation that Alckmin will now attack Lula 
vigorously on corruption, but will not deploy any sensational 
new allegation against him.  We have reason to believe such 
information exists (per septel reports) and may be known to 
the opposition, but it would appear such allegations will not 
play a role in the campaign, unless suddenly surfaced by the 
media.  We have long thought that only a stunning "new fact" 
that can re-ignite public indignation about the past year's 
sorry history of PT-led corruption and focus that anger on 
Lula personally could change the course of this election in a 
dramatic way.  In the absence of such a development, time may 
be running out for Alckmin. 
 
 
 
Chicola