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UNCLAS SECTION 01 OF 03 SAO PAULO 000968 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS USTR FOR MSULLIVAN 
STATE PASS EXIMBANK 
STATE PASS OPIC FOR MORONESE, RIVERA, MERVENNE 
NSC FOR FEARS 
SOUTHCOM ALSO FOR POLAD 
USAID/W FOR LAC/AA 
 
E.O. 12958: N/A 
TAGS: PGOV PINR ECON BR
SUBJECT: POLLSTER GIVES AlCKMIN A FIGHTING CHANCE IN ELECTIONS, SEES 
LIMITED REFORMS IN A SECOND LULA GOVERNMENT 
 
 
¶1.  SUMMARY: Marcia Cavallari Nunes, Executive Director of the 
prestigious "IBOPE" polling firm, believes opposition candidate 
Geraldo Alckmin still has a chance to deny President Lula a 
first-round electoral victory, but that it would require an 
unpredictable combination of events between now and October 1.  She 
attributed Alckmin's failure to connect with the electorate to his 
ponderous, deliberate speaking style and complex parsing of issues, 
which voters have no patience for.  If he decides to go on the 
attack against Lula, as many of his supporters have been urging him 
to do, he needs to do so carefully, as polls show voters often 
resent and react against negative campaigning.  Cavallari noted the 
manner in which Lula has distanced his campaign from that of his 
Workers' Party (PT) and predicted that the PT will suffer losses in 
Congressional elections, while the centrist Brazilian Democratic 
Movement Party (PMDB) will gain seats and exercise considerable 
influence both in Congress and in a second Lula administration. 
Assuming he is re-elected, she said Lula may be able to enact some 
form of tax reform and industrial relations reform, both of which 
would bring tangible benefits to voters, but, despite his campaign 
promises, doubted he would be able to bring about political reform 
due to entrenched interests and a lack of consensus among the 
political class.  END SUMMARY. 
 
¶2.  A series of recent polls show President Lula holding steady and 
even slightly increasing his numbers and suggest that if the 
election were held today, he would win in a first round with a 
little more than 50 percent of the valid votes cast.  The recent 
IBOPE (Brazilian Institute for Public Opinion and Education) poll 
also reported increasing levels of voter alienation; 57 percent 
indicated they would probably not vote were it not required by law. 
(NOTE: While voting is mandatory, some voters stay away from the 
polls regardless, and others simply submit blank or "spoiled" 
ballots.)  Cavallari cited a number of reasons: Elections in the 
past were often enlivened by the PT's strong militancy; now, 
however, after four years at the helm of the federal government, and 
still reeling from the political corruption scandal that costs it 
much of its leadership, the PT is increasingly viewed by voters as 
just another party like all the others, no longer inspiring either 
enthusiastic support or passionate opposition.  The fact that 20 of 
27 gubernatorial races involve incumbents running for re-election, 
many of them poised to win in the first round, is another cause of 
voter apathy. 
 
-------------------------------- 
ALCKMIN CAN STILL TURN IT AROUND 
-------------------------------- 
 
¶3.  Nevertheless, Cavallari believes many voters remain engaged and 
interested, and that Alckmin still has time to improve his 
performance enough to deny Lula a first-round victory and force a 
runoff.  Enough undecided voters, and voters whose current support 
for Lula is tepid and subject to change, are still out there to be 
tapped by Alckmin under the right circumstances.  Given that 
economic issues are such a strong determinant of voter preferences 
and that Lula's strong position in the polls is based substantially 
on a general satisfaction with the economy, any economic bad news 
that affects a large number of people or undermines confidence could 
still hurt Lula.  The recently announced layoffs at Volkswagen in 
Sao Bernardo do Campo(which the company subsequently rescinded) and 
newly released economic figures showing lower GDP growth than 
anticipated, while in themselves not sufficient, are examples of 
events that might provoke some voters to change their minds.  New 
evidence of corruption on Lula's part, should it emerge, could also 
diminish his lead, but Cavallari cautioned that most voters are 
tired of the scandals, and the only thing likely to rouse their 
indignation would be evidence of theft of public funds for personal 
gain. 
 
¶4.  Cavallari attributed Alckmin's failure thus far to connect with 
voters to his bland personal style and manner of communication. 
Because he addresses issues in such a measured, deliberate manner, 
full of pauses, many observers perceive his message as programmed or 
canned (though, ironically, it isn't; this is simply the way he 
talks).  In contrast, Lula's spontaneous, relaxed style goes down 
well even with voters who disagree with the substance of his 
 
SAO PAULO 00000968  002 OF 003 
 
 
message.  For this reason, Cavallari continued, when the scandal 
broke in mid-2005 and was laid at his doorstep, important elements 
of the public were inclined to protect him and even make excuses for 
him.  This, combined with the opposition's possibly fatal error of 
not knocking him out while they had him on the ropes, enabled him to 
survive, and after a difficult period he was able in January to 
begin a recovery that surprised many.  This apparent spontaneity, 
however, carries risks of his own; on several occasions, Lula has 
committed gaffes or made inaccurate, possibly even dishonest, 
assertions which have made him look bad; too many more of those in 
the last month of the campaign could also damage him in the polls 
and make him look less unbeatable.  Observers have commented on 
Lula's lack of a "self-censorship" mechanism. 
 
--------------------------- 
TO ATTACK OR NOT TO ATTACK? 
--------------------------- 
 
¶5.  Up to now, Cavallari noted, Alckmin has avoided attacking Lula 
directly, both because it is incompatible with his personal style 
and because he fears it might backfire on him.  However, as he 
continues to trail and as time runs short, more and more of his 
supporters are urging him to take the gloves off.  Any attempt to 
attack Lula on ethical grounds, however, needs to be carefully 
planned and mixed with more positive messages, because many 
lower-class people identify with Lula and many voters are alienated 
by negative campaigning.  (NOTE: During the week of August 28, 
Alckmin's speeches and those of his supporters were more combative 
in tone, and his television advertising, which up to now had focused 
on his biography and accomplishments, made explicit references to 
the scandals that have plagued the Lula administration.  One PSDB 
insider told us privately that he expected this more aggressive 
approach to increase in intensity over the next few weeks, while at 
the same time the PSDB would release, piece by piece, its detailed 
government program and contrast it with the PT's government program, 
which was published August 29.  END NOTE.) 
 
------------------------------------------ 
CHALLENGES IN A SECOND LULA ADMINISTRATION 
------------------------------------------ 
 
¶6.  Cavallari commented on the way Lula has campaigned almost 
without reference to the PT, which was such a visible part of all 
his previous campaigns.  He evidently believes -- rightly -- that 
the party is damaged goods, more a hindrance than a help in 
attracting votes, and he has done little or nothing to help PT 
gubernatorial or congressional candidates.  The resulting lack of 
coattails, combined with the party's already damaged reputation, 
will hurt the party in the Congressional races, she said.  The PT 
will almost inevitably elect fewer than its current 81 Federal 
Deputies; the only question is how bad a loss it will suffer.  The 
PMDB, on the other hand, is on track to elect as many as 15 
Governors, and its strength in so many states will propel it to an 
increase over its current total of 79 Deputies.  (Some observers 
believe it will win up to 100 seats.)  Alckmin's PSDB will also 
likely lose some seats, further strengthening the PMDB's position. 
This will complicate Lula's task of governing.  He can appoint PMDB 
members to Cabinet and other important positions (as he has 
indicated a willingness to do), but even so, he will have a 
difficult time garnering the fragmented party's united support for 
his initiatives.  As many smaller parties lose their viability as a 
result of failing to meet the five percent threshold mandated by the 
"Barrier Clause" in effect for the first time this year, a key 
question will be where their elected members migrate to and what 
dynamic emerges in a new Chamber and Senate composed of only about 
seven political parties as opposed to the current 15-17. 
 
¶7.  In this new setting, Cavallari predicted that Lula may be able 
to push through some limited tax reform or industrial relations 
reform, but that the political reform he has promised will be very 
difficult to achieve, because there exists little consensus as to 
what it should encompass.  (NOTE: Curiously, Lula's government 
program does not even mention tax reform or social security reform. 
END NOTE.) 
 
 
SAO PAULO 00000968  003 OF 003 
 
 
------- 
COMMENT 
------- 
 
¶8.  While Alckmin's supporters have pinned their hopes on the 
subsidized television advertising (which began August 15), polls 
indicate that a large portion of the electorate is not even 
watching, and that so far it is not changing voters' preferences. 
It will be interesting to see if this remains the case as Alckmin's 
ads attempt to target Lula more directly.  END COMMENT. 
 
¶9.  This cable was coordinated/cleared with Embassy Brasilia. 
 
MCMULLEN