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UNCLAS SECTION 01 OF 04 SAO PAULO 000734 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/BSC, INR/IAA, INR/R/AA 
STATE PASS USTR FOR KATE DUCKWORTH 
NSC FOR TOMASULO 
TREASURY FOR OASIA, DAS LEE AND JHOEK 
USDOC FOR 4332/ITA/MAC/WH/OLAC 
USDOC ALSO FOR 3134/USFCS/OIO 
DOL FOR ILAB 
SOUTHCOM ALSO FOR POLAD 
USAID FOR LAC/AA 
 
E.O. 12958: N/A 
TAGS: PGOV PINR PHUM ELAB ECON BR
SUBJECT: PT PREPARES FOR NATIONAL CONGRESS 
 
REF: (A) SAO PAULO 496; (B) SAO PAULO 129; 
 
     (C) 06 SAO PAULO 1264; (D) 06 SAO PAULO 1105 
     (E) 05 BRASILIA 2951 AND PREVIOUS 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY. 
 
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SUMMARY 
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¶1.  (SBU) In recent meetings with Poloff, leaders within the Workers 
Party (PT) outlined the focus of the upcoming PT National Congress. 
According to Renato Simoes and others, the Third National Congress 
of the Workers' Party (PT) will not be a forum for great ideological 
debates, but rather an opportunity for leaders and factions to 
position themselves for upcoming electoral struggles such as the 
municipal elections in 2008 and national elections in 2010.  The 
National Congress will also address the future leadership of the 
party, seek to enhance the party's profile, and build a lasting 
constituency in a post-Lula PT party.  End Summary. 
 
¶2.  (U) The PT will hol its National Congress, only the third in 
its 27year history, from August 31 through September 2 i Sao 
Paulo.  Some 1,500 delegates from Brazil's 6 states and the Federal 
District will participae.  The Congress comes at a difficult moment 
in the party's history as the Lula administration has been rocked by 
a number of scandals as well as internal dissension.  After 
weathering the trauma of a major corruption scandal in 2005 to elect 
83 Federal Deputies, five Governors, and to re-elect President Lula, 
the PT is plagued by disgruntlement and disillusion in its leftist 
base.  Serious internal divisions and rivalries, growing public 
weariness over federal government policies, and the lack of a strong 
national candidate to succeed Lula have all contributed to a lack of 
focus within the PT. 
 
¶3.  (U) Over the past few weeks, Poloff and Political Assistant have 
met with various party leaders, thinkers, and office-holders to 
discuss the issues that are most likely to emerge during the PT 
National Congress.  These meetings included: Renato Simoes, acting 
Secretary for Social Movements and a member of the PT's National 
 
SIPDIS 
Executive Committee; Rui Falcao, a Sao Paulo state legislator and 
former party President who managed Lula's unsuccessful 1994 
presidential campaign; and Ricardo Azevedo, president of the Perseu 
Abramo Foundation (FPA), the PT's think tank.  From varied 
perspectives and with differing points of emphasis, each described 
the state of play and the issues to watch for in the Third Congress 
as well as the 2008 municipal elections, and the 2010 national and 
state executive and legislative elections. 
 
----------------- 
THEMES AND THESES 
----------------- 
 
¶4.  (U) Three broad themes have been identified for discussion at 
the Congress: "The Brazil We Want," "PT Socialism," and "PT: 
Conception and Functioning."  Representatives of different schools 
of thought within the party have published 12 "theses," which have 
been debated and refined in local and state party congresses.  The 
first two are relatively uncontroversial - the PT wants a growing, 
developing free Brazil with a strong dose of egalitarianism and 
emphasis on social progress, including more rights and better access 
for Afro-Brazilians, indigenous peoples, workers, and the poor, and 
favors a vigorous democratic socialism - with only some priorities 
and details to be worked out.  However, the question of the party's 
conception and functioning - how it operates in a multi-party system 
- has stimulated a variety of responses and has the potential to be 
an area of contention.  NOTE:  An in-depth look at the various power 
 
SAO PAULO 00000734  002 OF 004 
 
 
centers is forthcoming septel. END NOTE. 
 
--------------- 
WHO SHALL LEAD? 
--------------- 
 
¶5.  (SBU) Due to the multi-faction nature of the PT, the question of 
internal party elections figures to loom large at the National 
Congress.  In September 2005, the party elected its national 
president, executive committee, and national, state, and local 
directorates to three-year terms.  The timeline calls for new 
internal elections in September 2008, but most in the PT resist the 
idea of holding internal elections so close to the October municipal 
elections.  A small portion of the PT's largest faction, the Campo 
Majoritario (CM), favors postponing internal elections until early 
2009, but most other parties prefer to move them forward to either 
late 2007 or early 2008 (before the municipal races are in full 
stride) to get new leadership in place sooner rather than later. 
 
¶6.  According to both Simoes and Falcao, the incumbent PT president, 
Ricardo Berzoini (a Social Security Minister and later Labor 
Minister in Lula's first term) of the CM is a strong candidate for 
re-election, though not without opposition.  However, Berzoini has 
said both publicly and privately in the past week that he will not 
run, and Azevedo thinks he should be believed.  Comment:  Elected in 
the aftermath of the "Mensalao" vote-buying scandal (see ref E), 
Berzoini has never been seen as a strong leader.  He was forced to 
step aside in October 2006 after being implicated in another scandal 
involving a fake political "dossier" designed to undermine Sao Paulo 
gubernatorial candidate Jose Serra.  Though he later returned to the 
job, he has never recovered his strength.  End Comment. 
 
¶7.  (SBU) If Berzoini does not run, logical choices would include 
two old-timers, Marco Aurelio Garcia (PT first vice president who 
served as acting President in Berzoini's absence and is currently 
President Lula's Foreign Affairs Advisor) and Luiz Dulci, the 
Secretary General of the Presidency.  Garcia, however, has said he 
 
SIPDIS 
doesn't want the job and is also suffering from an image problem 
ever since he was captured on national television making obscene 
gestures to "celebrate" the news that the July 17 crash of TAM 3054 
at Congonhas airport in Sao Paulo, which killed 199 people, may have 
been caused by mechanical problems and not by factors under the 
government's purview such as the short, slippery runway.  Luiz 
Dulci, a founder of both the PT and the Unified Workers Center (CUT) 
and a past President of the Perseu Abramo Foundation who remains one 
of President Lula's oldest and closest friends, has also said he is 
not interested, but may change his mind.  As one of the few members 
of the old guard to emerge untainted from the scandals and to remain 
in the government, and reportedly one of the only people left in the 
Presidential palace in whom Lula still confides, if forced to choose 
between party and government, Dulci would probably want to stay in 
the government. 
 
¶8.  (SBU) Other potential candidates have emerged, such as Olivio 
Dutra, former Governor of Rio Grande do Sul and former Minister of 
Cities and, most recently, Antonio Palocci, a Federal Deputy who 
served as Finance Minister 2003-6 before resigning over a blatant 
abuse of his office to escape incrimination in a sex scandal.  Both 
would likely generate opposition from either the CM, in the case of 
Dutra, or the PT's left wing, in the case of Palocci.  While 
long-shots, both potential candidates are waiting in the wings in 
the event that Berzoini, Garcia, or Dulci decide not to run. 
 
--------------------------------------- 
WHAT TO DO ABOUT 2010 AND WHEN TO DO IT 
--------------------------------------- 
 
 
SAO PAULO 00000734  003 OF 004 
 
 
¶9.  (SBU) The question about when to elect new party leadership, and 
whom to elect, is extremely important because the new PT president 
must lead the party into national elections three years from now. 
Political observers agree that all parties are already focused on 
2010, but none so much as the PT, which for the first time will 
offer a candidate not named Lula.  NOTE: Some observers believe that 
Lula hopes to see a weak President elected so he can mount another 
challenge in 2014 (the Constitution prohibits three consecutive 
terms, but nothing precludes Lula from running in 2014, when he will 
be 68)  End note. 
 
¶10.  (SBU) The decision on when or if to field a leading candidate 
either from the PT or any of the other coalition parties is also at 
center stage for this National Congress.  Azevedo predicted that if 
left up to him, Lula would not decide whom to support until sometime 
in 2009, after the municipal elections have clarified the picture. 
Lula aspires to be the Great Elector and kingmaker, to perpetuate 
his legacy, but many in the PT will insist on beginning now to work 
on identifying a PT candidate.  Comment:  Many analysts agree that 
fielding a candidate too soon would result in increasing dissension 
within the PT ranks and would offer a target for the opposition to 
attack.  End Comment. 
 
¶11.  (SBU) Regarding the political/economic platform of the PT, 
there is near unanimity that the political system needs to be 
overhauled before any meaningful economic reforms or improvements in 
governance can take place.  The Lula administration put forward a 
bill with four elements: 1) Voting for a closed party list; 2) 
Public financing of election campaigns; 3) Party fidelity; and 4) An 
end to coalitions in campaigns governed by proportional voting, 
e.g., legislative campaigns.  The PT generally supports the bill, 
but numerous PT Federal Deputies oppose the closed party list (in 
which voters are asked to choose a political party, whose slate of 
candidates is selected by party leaders but not disclosed to 
voters).  Even though strong opposition to this reform agenda by the 
opposition appears to have killed three of the four initiatives for 
now, the PT is likely to maintain many of these areas as central 
themes going into 2010.  A party fidelity measure was approved in 
committee in the Chamber of Deputies and is now awaiting a plenary 
vote. 
 
------- 
COMMENT 
------- 
 
¶12.  (SBU) Despite the challenges it faces, the PT remains strong in 
many ways.  Labor leaders such as the Unified Workers' Center 
(CUT's) Joao Felicio, while taking issue with some of Lula's 
policies, freely acknowledge that Brazil may never again see a 
candidate so friendly to labor.  In addition, the PT is closely 
associated with public welfare campaigns such as the "Bolsa Familia" 
from which roughly 25% of Brazilians receive financial support, and 
thus remains strong with the economically disadvantaged of the 
country.  But there is no question that the burdens associated with 
running the federal government, with its accompanying 
coalition-building and compromising, has severely taxed the party's 
political talent and tarnished its image.  It is losing old friends; 
a number of radicals left in 2005 to join Heloisa Helena's Socialism 
and Liberty Party (PSOL); the MST (Landless Movement) is 
increasingly alienated by what they perceive as a lack of commitment 
to agrarian reform; and we hear increasingly that the Communist 
Party of Brazil (PC do B) wants to leave the coalition and may even 
launch a new labor central in competition with the CUT, a PT sister 
organization.  The question remains whether the support enjoyed by 
the PT is support of Lula or of the party itself.  How the PT will 
meet this challenge and burnish its image is perhaps the most 
important issue its Third Congress will have to address.  End 
 
SAO PAULO 00000734  004 OF 004 
 
 
Comment. 
 
¶13.  (U) This cable was coordinated with Embassy Brasilia. 
 
WHITE