VZCZCXRO3288
PP RUEHRG
DE RUEHSO #0048/01 0191829
ZNR UUUUU ZZH
P 191829Z JAN 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC PRIORITY 6295
INFO RUEHBR/AMEMBASSY BRASILIA 7374
RUEHAC/AMEMBASSY ASUNCION 2900
RUEHBU/AMEMBASSY BUENOS AIRES 2596
RUEHMN/AMEMBASSY MONTEVIDEO 2253
RUEHLP/AMEMBASSY LA PAZ 3186
RUEHSG/AMEMBASSY SANTIAGO 1962
RUEHRG/AMCONSUL RECIFE 3317
RUEHRI/AMCONSUL RIO DE JANEIRO 7716
RHEHNSC/NSC WASHDC
RUCPDOC/USDOC WASHDC 2687
RUEATRS/DEPT OF TREASURY WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL

UNCLAS SECTION 01 OF 04 SAO PAULO 000048 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/BSC 
STATE ALSO FOR DS/IP/WHA, DS/DSS/ITA, DS/DSS/OSAC 
STATE PASS USTR FOR SULLIVAN/CRONIN 
STATE PASS EXIMBANK 
STATE PASS OPIC FOR DMORONESE, NRIVERA, CVERVENNE 
STATE ALSO PASS TDA FOR ANGULO AND MCKINNEY 
NSC FOR FEARS 
TREASURY FOR OASIA, DAS LEE AND JHOEK 
USDOC FOR 4332/ITA/MAC/WH/OLAC 
USDOC FOR 3134/ITA/USCS/OIO/WH/RD 
SOUTHCOM ALSO FOR POLAD 
USAID FOR LAC/AA 
 
E.O. 12958:  N/A 
TAGS: PGOV PINR BR
SUBJECT: CONVERSATION WITH OPPOSITION FEDERAL DEPUTY 
 
 
SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY 
 
REF: (A) BRASILIA 107; (B) 06 SAO PAULO 980 
     (C) 06 SAO PAULO 73 
 
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SUMMARY 
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¶1.  (SBU) Summary: Opposition Federal Deputy Arnaldo Madeira 
outlined what he considers Brazil's four major problems, which have 
the cumulative effect of impeding the country's economic growth.  He 
also decried the immaturity of Brazil's political class, one symptom 
of which is the perennial weakness of political parties, including 
his own Brazilian Party of Social Democracy (PSDB), as illustrated 
by its weak, half-hearted defense of privatizations concluded during 
the 1995-2002 presidency of Fernando Henrique Cardoso (FHC) when 
they were attacked by President Lula during the 2006 presidential 
campaign.  Madeira, who served (2001-2006) as Sao Paulo Governor 
Geraldo Alckmin's Chief of Staff until Alckmin left to run 
unsuccessfully for President, deemed it extremely unlikely that 
Alckmin would be a candidate again in 2010, but predicted that 
Alckmin will run for Mayor of Sao Paulo in 2008.  Madeira has his 
own plans for political reform, beginning with changing to a 
single-district electoral system for the Chamber of Deputies.  He 
characterized Lula as politically weak and predicted the PSDB would 
mount a strong and effective opposition during Lula's second term. 
On the state level, he identified a few areas where he thought Sao 
Paulo Governor Jose Serra could make a difference.  End Summary. 
 
--------------------------------------- 
DEPUTY PROPOSES CONGRESSIONAL DISTRICTS 
--------------------------------------- 
 
¶2.  (SBU) Poloff and Political Assistant met January 11 with Arnaldo 
Madeira (ref C), who was recently re-elected to a fourth term as 
Federal Deputy from Sao Paulo.  Madeira, who served as Chief of the 
Civil Household to Sao Paulo Governor Geraldo Alckmin, said that 
during the campaign he visited 68 cities in this state of 40 
million.  He complained about Brazil's electoral system, especially 
the nationwide and statewide proportional allocation of votes in 
legislative races.  In reply to poloff's remark that PT politicians 
have articulated the same complaint, Madeira noted that he, unlike 
the PT, favors a straightforward single-district system such as the 
U.S. has, as does former President Fernando Henrique Cardoso 
(FHC)(see ref B).  Last November, Madeira introduced a proposal for 
a constitutional amendment that, if passed, would implement this 
change.  The statewide, proportional electoral system (in which Sao 
Paulo, Brazil's largest state, elects 70 Deputies at large) results 
in a disconnect between voters and candidates, he said.  Madeira's 
proposal differs from the PT's proposal for political reform in that 
it opposes party lists.  The Lula/PT proposal involves a combination 
of single district and party list voting.  It also calls for public 
financing of political campaigns (which Madeira considers 
"impossible"), and a requirement that politicians remain faithful to 
their party (a prohibition of the widespread practice of 
party-jumping). 
 
--------------------------------------------- ------- 
PROBLEMS: EDUCATION, JUDICIARY, MANAGEMENT, POLITICS 
--------------------------------------------- ------- 
 
¶3.  (SBU) Madeira identified four major problems that he believes 
are holding Brazil back and impeding economic growth: 
 
-- Education.  Primary and secondary schools don't work.  Children 
spend eight years in the public schools and leave functionally 
 
SAO PAULO 00000048  002 OF 004 
 
 
illiterate. 
 
-- Judicial system.  Courts are slow and inconsistent.  The same law 
can be interpreted in a variety of different ways by different 
judges, causing widespread unpredictability as well as concerns 
about a lack of independence on the part of some judges. 
 
-- Public administration.  The bureaucracy is cumbersome and poorly 
structured, leading to gross inefficiencies. 
 
-- Political system.  There's no control over representatives (state 
and federal deputies, senators) once they're in office; they're not 
accountable to voters, who can't even remember who they voted for. 
They switch parties at the drop of a hat.  Personalism leads to 
situations like the notoriously corrupt Paulo Maluf being elected 
Federal Deputy with the highest vote total in the country.  The 
parties lack identity, so a candidate's personal fame and charisma 
become the dominant factors. 
 
¶4.  (SBU) Elaborating on the last point, Madeira commented that the 
PT is the only real political party in Brazil. Unlike the others, 
the PT has a real party apparatus, while the rest, including 
Madeira's own PSDB, are mere "membership cards."  The PSDB is in the 
process of putting together a new program, which should be ready in 
the second half of 2007.  The election for the party's leadership is 
expected to take place late in the year (anytime from September on). 
 FHC won't himself be a candidate, but he wants a big say in who 
replaces Tasso Jereissati as PSDB President. 
 
---------------- 
WHITHER ALCKMIN? 
---------------- 
 
¶5.  (SBU) Madeira dismissed the possibility of former Governor 
Geraldo Alckmin's running again for President in 2010.  He 
predicted, however, that Alckmin will run for Mayor of Sao Paulo in 
2008, and that the most likely PT candidate was former Mayor 
(2001-04) Marta Suplicy.  The next four years will see a rivalry 
between Sao Paulo Governor Jose Serra and Minas Gerais Governor 
Aecio Neves for the PSDB 2010 presidential nomination. 
 
-------------------------- 
POLITICAL WEAKNESS ABOUNDS 
-------------------------- 
 
¶6.  (SBU) Despite his impressive showing in the second round of the 
election, President Lula begins his second term politically weak, in 
Madeira's view.  Nobody knows what he is going to do or what his 
priorities are; he himself likely doesn't know.  Lula went on 
vacation without naming new members of his Cabinet or articulating a 
legislative agenda.  During the campaign, Madeira said, Lula's 
speeches were devoted to attacking FHC's administration, especially 
the privatizations of state-owned companies.  The unwillingness of 
the opposition candidate - or anyone else in the PSDB - to speak up 
and highlight the benefits Brazilians had received from, for 
example, privatization of telecoms, illustrates the weakness of the 
party. 
 
--------------------------------------------- 
CONFUSION OVER CONTEST FOR CHAMBER PRESIDENCY 
--------------------------------------------- 
 
¶7.  (SBU) Regarding the current competition for the Presidency of 
the Chamber of Deputies, Madeira declined to say whom the PSDB would 
support; however, he derided as "exotic" the idea of having a member 
of the Communist Party, which has only 13 of the Chamber's 513 
seats, as President of the Chamber, as is currently the case.  He 
 
SAO PAULO 00000048  003 OF 004 
 
 
said the Brazilian Democratic Movement Party (PMDB), as the largest 
party, would normally get to choose the President, but they made a 
deal to support the PT candidate in return for the job of First 
Secretary, the Chamber's extremely powerful number two leadership 
 
SIPDIS 
position.  Thus, the PT and PMDB support Arlindo Chinaglia (PT-SP), 
who is challenging incumbent Aldo Rebelo of the Communist Party of 
Brazil (PCdoB), whom Lula supports.  The fact that Lula's party is 
opposing his preferred candidate is emblematic of the current 
confused political situation.  Everyone wants to avoid the fiasco of 
early 2005, when a split in PT ranks between two candidates led to 
the election as Chamber President Severino Cavalcanti (PP-PE) of the 
so-called "lower clergy" (backbenchers), who was widely regarded as 
unqualified for the job and as an embarrassment to Brazil.  (Note: 
Cavalcanti was forced to resign in September 2005 after being 
credibly accused of corruption.  End Note.) But they may be headed 
for just that.  Madeira remarked that his own PSDB is 
"meeting-averse;" nobody wants to sit down and have a meeting to 
decide a controversial issue where there is a divergence of views, 
because they dislike airing their differences, even among 
themselves.  It's a serious weakness, he acknowledged.  Thus, all he 
would say for sure was that the PSDB was unlikely to nominate its 
own candidate, but rather would have to take sides between Rebelo 
and Chinaglia. 
 
¶8.  (U) (NOTE: Later the same day, the press announced that the PSDB 
leadership in the Chamber had decided to support Chinaglia, making 
him all but unbeatable.  They apparently did so with only a straw 
poll, of some members, without meeting with anyone. At any rate, 
various party leaders close to Geraldo Alckmin and FHC immediately 
began howling about "betrayal," and PSDB President Tasso Jereissati, 
Senator from Ceara (northeast), called a meeting of the party 
leadership to discuss the issue.  On January 16, the "group of 30" 
-- a newly-formed collection of independent-minded Federal Deputies 
from a variety of parties who favor a "third way" -- nominated 
Gustavo Fruet, a PSDB member from the southern state of Parana.  The 
PSDB subsequently withdrew its support from Chinaglia and decided to 
support Fruet, throwing the outcome into doubt.  The election will 
take place February 1, when the new Chamber is seated, with a second 
round likely.  See ref A and stay tuned.  End Note.) 
 
------------------------------- 
BRAZIL SHOULD OBEY ITS OWN LAWS 
------------------------------- 
 
¶9.  (SBU) Brazil, Madeira said, needs to learn to obey its own laws. 
 There's a famous saying here, "a lei nao pegou," the law didn't 
stick.  Laws - good laws - are passed but not implemented or 
enforced.  The Constitution of 1988 has specific provisions 
governing the leadership of the Senate and the Chamber of Deputies 
-- Madeira had his secretary bring him the thick tome containing the 
Constitution and read passages from it, commenting on the various 
ways they are being flouted.  He decried the lack of maturity of 
Brazil's political institutions and the "cultural backwardness" of 
the legal environment. 
 
¶10.  (U) Madeira served several times as the Government's 
Vice-leader in the Chamber and briefly as leader during FHC's 
administration.  He does not, however, anticipate being one of his 
party's leaders in this Congress.  The PSDB leader, he said, will be 
Antonio Carlos Pannunzio (PSDB-SP). 
 
¶11.  (SBU) Lula and his government are very popular with the people, 
Madeira said, but his failure to take action on important issues 
leaves a vacuum.  The PSDB will do what it can to weaken him, and 
may succeed, he said; after all, Lula's mandate is not eternal. 
Madeira supports social security reform and will continue to call 
for it; however, if the majority does not propose it, he will not 
 
SAO PAULO 00000048  004 OF 004 
 
 
try to push it through Congress from a minority position.  As an 
opposition Deputy, he noted, his job is to oppose. 
 
------------------------------ 
SERRA WILL BE A GREAT GOVERNOR 
------------------------------ 
 
¶12.  (SBU) This will be an interesting four-year period, Madeira 
predicted, because the elections led to considerable turnover among 
Governors and what he called "a renovation of the political elite." 
Jose Serra, he prognosticated, will do an excellent job as Governor 
of Sao Paulo.  He has certain challenges to meet.  There are grave 
problems, for instance, in the state payroll system, from which 
60,000 public-sector employees are paid.  If Serra looks in the 
right places - and Madeira, based on his experience as Governor 
Alckmin's Chief of Staff, has told him where to look - can save 600 
million Reals (about USD 275 million) just by eliminating payroll 
inefficiencies and abuses.  Savings can also be made by improving 
the state government's internal communications. 
 
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COMMENT 
------- 
 
¶13.  (SBU) Despite (or perhaps because of) his five years as Geraldo 
Alckmin's right-hand man, Madeira does not talk like an Alckmin 
insider.  He was critical of Alckmin's performance during the 
campaign, for example, and gave the impression of being much closer 
to FHC, who is still a force in the PSDB.  Whichever camp, if any, 
he belongs to, Madeira is an able, experienced lawmaker with 
strongly-held views on what ails Brazil and some practical ideas on 
how to fix it.  End Comment. 
 
¶14.  (U) This cable was coordinated/cleared with Embassy Brasilia. 
 
MCMULLEN