VZCZCXRO6236
RR RUEHRG
DE RUEHBR #2157/01 2841927
ZNR UUUUU ZZH
R 111927Z OCT 06
FM AMEMBASSY BRASILIA
TO RUEHC/SECSTATE WASHDC 6988
INFO RUEHAC/AMEMBASSY ASUNCION 5732
RUEHBU/AMEMBASSY BUENOS AIRES 4348
RUEHMN/AMEMBASSY MONTEVIDEO 6541
RUEHSG/AMEMBASSY SANTIAGO 5871
RUEHRG/AMCONSUL RECIFE 5668
RUEHRI/AMCONSUL RIO DE JANEIRO 3116
RUEHSO/AMCONSUL SAO PAULO 8349

UNCLAS SECTION 01 OF 04 BRASILIA 002157 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV BR
SUBJECT: BRAZIL: LULA AND ALCKMIN TIE IN DEBATE BUT ALCKMIN 
SLIPS IN POLLS 
 
REF: A. BRASILIA 2100 
     ¶B. RIO DE JANEIRO 529 
 
¶1.  (SBU)  Summary.  President Luiz Inacio Lula da Silva and 
PSDB challenger Geraldo Alckmin faced off against each other 
for the first time in a live national television debate on 
Sunday, October 9.  Lula and Alckmin traded accusations for 
nearly two and a half hours in a debate that many saw as a 
draw in terms of changing votes, but a big win for Alckmin in 
changing his previously bland image with voters.  Lula was 
visibly flustered by Alckmin's hard-hitting questioning on 
corruption scandals that have plagued Lula's government for 
the last year and a half.  Sparks flew as Alckmin accused 
Lula of lying, while Lula warned Alckmin to be cautious with 
his accusations.  Alckmin, a former governor of Sao Paulo 
state, and Lula each rattled off a litany of statistics about 
their own and their opponent's track records, some of which 
were disproved in journalistic truth-squadding by major 
dailies.  Decorum was barely maintained: as the debate 
progressed, Lula dismissively and sarcastically addressed 
Alckmin as "Governor," "your excellency," then "my dear 
Alckmin," then "Alckmin," and finally just "voce," the 
informal form of "you," clearly inappropriate for the 
occasion.  Alckmin addressed Lula as "candidate Lula" or just 
"candidate," avoiding the fact that Lula is the sitting 
president, and returned the informal "voce" in the latter 
part of the debate.  The candidates will debate at least two 
more times, on October 17 and 27.  The latest opinion poll, 
released by Datafolha on October 10, shows voters nearly 
evenly divided over who won the debate, but Alckmin lost 
three percentage points of support among voters while Lula 
advanced one point.  Lula's advantage is now 11 points (51 v. 
40), and 12 points after adjusting for nulls and blanks (56 
v. 44).  Embassy Poloff and two Sao Paulo Pol-Econ officers 
attended the debate in the VIP seating area inside the TV 
studio.  In the debate aftermath, the PSDB is reinvigorated 
with Alckmin's performance, and Lula's campaign is resorting 
to scare tactics, claiming an Alckmin government would cut 
social programs and privatize on a mass scale, claims that 
Alckmin calls "lies." Both campaigns have been hard at work 
to win endorsements and support from leaders from uncommitted 
parties, the most important being the PMDB (Brazilian 
Democratic Movement Party).  Each has won over some major 
allies, and the states of Rio and Minas Gerais are looming as 
key.  Small political parties have been negotiating 
consolidations ("fusions") in order to form new entities with 
full political rights in the Congress, where several parties 
did not receive the minimum number of nationwide votes last 
October 1 to retain full rights in the congress under new 
Brazilian electoral legislation.  This cable was coordinated 
with ConGen Sao Paulo.  End summary. 
 
Alckmin Sheds Milquetoast Image 
------------------------------- 
 
¶2.  (SBU)  Lula and Alckmin met at the Band TV studio in Sao 
Paulo on October 8 for a live television debate that lasted 
nearly two and a half hours.  Alckmin, who had won the right 
to the first question, opened with an accusation that Lula 
had "fled" from the several previous TV debates, thereby 
disrespecting voters, and then in an uncharacteristically 
tough manner he demanded to know the origin of the 1.75 
million reais (about USD 800,000) that police seized in the 
latest scandal, involving the attempted purchase by 
operatives from Lula's campaign of a "dossier" of ostensibly 
damaging information about Jose Serra (PSDB - Brazilian 
Social Democracy Party) while he was running against Aloisio 
Mercadante (PT - Workers Party) for the Sao Paulo 
governorship.  Alckmin returned to this and other corruption 
scandals repeatedly during the debate.  Lula was visibly 
nervous, and repeatedly dodged the question or gave 
unsatisfactory answers, which Alckmin rebutted by pointing 
out to viewers that Lula had not answered the question. 
 
¶3.  (SBU)  Alckmin was obviously the better prepared of the 
two.  Alckmin referred to his notes before posing questions, 
but largely spoke extemporaneously.  He had a number of 
effective rebuttals, and seemed more comfortable with the 
figures on public finance, which he rattled off easily. 
Lula, in contrast, read most of his questions.  Lula 
repeatedly referred to the Fernando Henrique Cardoso 
administration, trying to link Alckmin to unpopular policies 
such as privatization of public entities, but Alckmin would 
not let him get away with it, saying Lula's claims were signs 
 
BRASILIA 00002157  002 OF 004 
 
 
of "desperation."  Lula warned Alckmin not to make frivolous 
or light charges, which brought an immediate retort of "show 
respect" from Alckmin.  Each accused the other of being 
misinformed, playing with the truth, and later in the debate, 
simply lying.  Alckmin repeatedly accused Lula of being 
arrogant. 
 
¶4.  (SBU)  Amidst all the smoke and heat there was relatively 
little light shed on what each candidate actually proposed to 
do if elected, though Alckmin appeared better prepared on 
substantive issues on those occasions when he outlined his 
policy plans.  Lula did assert his top priority would 
continue to be social spending. The rest, when it wasn't 
Alckmin banging away on corruption, was a blur of numbers on 
public works projects, health care, the cost of the new 
presidential jet, military spending, youth programs, digital 
education, official travel expenditures, and the like. 
 
¶5.  (SBU)  Alckmin's image has undergone an overnight 
transformation.  The candidate who had been nicknamed "the 
chayote popsicle" for his blandness by his political enemies 
is now being called pejoratively "Rambo" and "Terminator." 
The dramatic change is reinvigorating the PSDB and causing 
media buzz nationwide.  Lula expressed his surprise at 
Alckmin's behavior when he told the media that Alckmin's 
aggressive approach was like "a prison gate lawyer," that is, 
the Brazilian equivalent to an ambulance chaser.  (Comment: 
It is possible that Alckmin's aggressiveness and name-calling 
may have hurt him among some sophisticated voters.  The 
Datafolha results signal a slight loss of support for Alckmin 
among more educated voters, and this could reflect a negative 
reaction to his demeanor, not his arguments.  Undoubtedly for 
some voters, Alckmin was disrespectful toward the president, 
while Lula may have impressed some voters merely by showing 
up and not committing any of the major gaffes that are 
sometimes features of his unscripted public appearances.  End 
comment). 
 
Leave the Family Out of It 
-------------------------- 
 
¶6.  (SBU) Press reports said that each side had agreed in 
advance not to make accusations about family members.  Lula's 
son has been accused of getting some multi-million dollar 
sweetheart business deals, while Alckmin's wife is accused of 
receiving hundreds of free designer dresses while Alckmin was 
governor, although she reportedly donated them all to charity 
after wearing them. 
 
Lula's Damage Control; Alckmin's Confidence 
------------------------------------------- 
 
¶7.  (SBU)  Damage control after Lula's rather poor 
performance started Monday morning.  Lula told media on 
Monday that Alckmin disappointed him by focusing aggressively 
on corruption, instead of engaging in a real debate about the 
issues.  Jaques Wagner, brought into the top level of the 
Lula campaign after winning the governorship of Bahia on 
October 1, expressed a similar sentiment to media.  Tarso 
Genro, Minister for Institutional Relations, said Alckmin 
looked like a "trained pitbull," and showed a "fascistic 
attitude," according to press reports.  Lula vowed he would 
be better prepared next time.  Alckmin's side crowed victory 
and continued the offensive, accusing Lula of lying about 
corruption in his administration and covering up the origin 
of the "dossier" money.  Alckmin said his aggressive 
questioning had meely "externalized the people's feeling of 
indigntion," after more than a year of corruption scandas. 
Media commentators have given Alckmin thumbs p for his 
uncharacteristically strong performance and although no one 
is ready to predict a gain n votes for Alckmin, commentators 
suggest that Ackmin's newer, stronger image is a major plus 
fo his campaign.  The first post-debate opinion poll by 
Datafolha, shows voters nearly evenly dividedover who won 
the debate, but Alckmin lost three ercentage points of 
support among voters while Lla advanced one point.  Lula's 
advantage is now 1 points (51 v. 40), and 12 points after 
adjustig for nulls and blanks (56 v. 44).  Rogerio Schmitt 
a Sao Paulo political analyst for the Tendencia firm, told 
us on Monday he thought many of Lulas voters would not 
understand the content of thedebate, and agreed with us that 
the body languag and comportment would be more influential 
in ther understanding of the debate, if they watched at ll. 
 
 
BRASILIA 00002157  003 OF 004 
 
 
 
Scare Tactics 
------------- 
 
¶8.  (SBU)  More on the defensive than would have seemed 
possible just a few weeks ago, Lula's campaign has introduced 
a new electoral tactic: fear-mongering.  Top PT figures, 
including government ministers, are now warning of dire 
consequences should Alckmin be elected, with social programs 
slashed and mass privatization across the country.  Chief 
among these new claims is the ominous assurance that Alckmin 
will cut or abolish the Bolsa Familia (Family Subsidy) 
program that gives a cash bonus to millions of poor families. 
 On the privatization ploy, Alckmin is accused of intending 
to privatize sacred cow state enterprises such as Petrobras 
(although it is, in fact, already partially privatized, and 
the government retains a controlling stake.)  Alckmin's 
campaign is counter-attacking bitterly, stressing that no 
such policies appear anywhere in Alckmin's written platform 
or speeches, and accusing Lula and the PT of the "Goebbels" 
tactics in deploying the "big lie" to frighten voters. 
 
Alliances 
--------- 
 
¶9.  (SBU)  The Lula and Alckmin campaigns have been hustling 
since October 1 to line up as much support as possible from 
uncommitted politicians and parties.  The big prize remains 
support from the PMDB, more a national federation of 
alliances than a truly cohesive national party.  As a result, 
in some states the PMDB supports Lula, in others it backs 
Alckmin.  Alckmin's campaign was rocked last week after he 
accepted support from PMDB politicians Anthony and Rosinha 
Garotinho, a prominent Rio power couple widely believed to be 
corrupt (she is governor, he is former governor), and then 
ally Denise Frossard (PPS - Socialist People's party), 
running for Rio governor, ditched the Alckmin campaign over 
the ethical issue (Ref B).  Rio mayor Cesar Maia (PFL - 
Liberal Front Party) also criticized Alckmin, but did not 
jump ship.  Frossard later reversed herself and re-pledged 
her support for Alckmin.  The PMDB is split all across the 
country.  For example, the Rio Grande do Sul PMDB has 
announced in favor of Alckmin, while the Goias PMDB 
leadership supports Lula.  Most parties in the governing 
coalition are expected to stay with the governing coalition, 
and most opposition parties and politicians with the PSDB-PFL 
alliance.  But in Maranhao, Roseana Sarney (PFL) has broken 
ranks and supports Lula, and she may be sanctioned by her 
party.  But she is only following her father's lead: he is 
former president and current Senator Jose Sarney (PMDB), a 
member of his party's pro-Lula faction.   Rio and Minas 
Gerais, with their large electorates, remain the key swing 
states for the second round and are the focus of frenetic 
activity now by both campaigns. 
 
Party Fusions 
------------- 
 
¶10.  (SBU)  Several parties that did not receive a minimum 
percentage of votes to retain full political rights are 
negotiating "fusions" to regain full rights in congress.  New 
legislation (the "barrier law") governing parties will 
deprive members of congress elected from a number of parties 
of full rights because they did not get five percent of votes 
nationally and at least two percent in at least nine states. 
According to press reports based on unofficial Chamber of 
Deputies figures, only seven parties passed the threshold: PT 
(15 percent of national vote), PMDB (14.6), PSDB (13.6), PFL 
(10.9), PP (7.1), PSB (Brazilian Socialist Party) (6.2), and 
PDT (Democratic Labor Party) (5.2).  Media have reported 
likely fusions involving the PPS, PV (Green Party), and the 
PHS (Humanist Party of Solidarity), the first two being 
parties now in opposition, and the PTB (Brazilian Labor 
Party, pro-government) PSC (Christian Social Party, 
opposition), and PAN (Party of the Nation's Retirees).  It is 
still too early to measure the full impact of the barrier law 
on the formation of a governing coalition. 
 
¶11.  (SBU)  Comment.  With two more debates to go, Alckmin 
could again surprise Lula and put him on the defensive, 
although -- as polls suggest this week -- a strong Alckmin 
debate performance does not necessarily translate into a 
surge in support.  But polls before the first election round 
on October 1 underestimated Alckmin's votes; Alckmin himself 
 
BRASILIA 00002157  004 OF 004 
 
 
has questioned particularly the veracity of Datafolha polls 
and did so again in statements on 11 October.  Indeed, there 
may be declining value in relying too heavily on polls at 
this stage in this election.  Meanwhile, the rowdy debate and 
Lula's scare tactics have created a polarized and acrimonious 
political environment -- "fertile ground for new facts and 
scandal revelations," as one political analyst said this week 
-- that could further affect what is suddenly a volatile 
contest.  Indeed, the background sound track to this last 
phase of the campaign is the ongoing investigation into the 
dossier scandal.  Lula retains his advantages of incumbency, 
a wide and solid base in the lower classes and throughout the 
northeast, and most observers cite historical precedents in 
similar circumstances in past Brazilian elections and 
continue to give him the odds-on advantage for victory.  But 
Alckmin has momentum now, and between the ongoing formation 
of alliances, the scandal investigation, and the potential 
for gaffes or major blows in a future debate, we will 
continue, at this point, to call this election's outcome 
unpredictable. 
 
Sobel