VZCZCXRO8189
PP RUEHRG
DE RUEHSO #0767/01 2571912
ZNR UUUUU ZZH
P 141912Z SEP 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC PRIORITY 7468
INFO RUEHBR/AMEMBASSY BRASILIA 8581
RUEHRG/AMCONSUL RECIFE 3782
RUEHRI/AMCONSUL RIO DE JANEIRO 8325
RUEHBU/AMEMBASSY BUENOS AIRES 2866
RUEHAC/AMEMBASSY ASUNCION 3106
RUEHMN/AMEMBASSY MONTEVIDEO 2438
RUEHSG/AMEMBASSY SANTIAGO 2140
RUEHLP/AMEMBASSY LA PAZ 3483
RUCPDOC/USDOC WASHDC 2899
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 02 SAO PAULO 000767 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/FO, WHA/BSC 
STATE PASS USTR FOR KATE DUCKWORTH 
STATE PASS FED BOARD OF GOVERNORS FOR ROBITAILLE 
NSC FOR TOMASULO 
TREASURY FOR JHOEK 
USDOC FOR 4332/ITA/MAC/WH/OLAC 
USDOC ALSO FOR 3134/USFCS 
STATE PASS EXIMBANK 
STATE PASS OPIC FOR DEMROSE, NRIVERA, CMERVENNE 
USAID FOR LAC/AA 
 
E.O. 12958: N/A 
TAGS: ECON PINR PGOV BR
SUBJECT: SAO PAULO MAYOR WANTS U.S. INVESTMENT, MAY RUN FOR 
RE-ELECTION 
 
REF: SAO PAULO 731 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY 
 
SUMMARY 
------- 
 
¶1.  (SBU) In an introductory lunch with recently arrived Consul 
General (CG) and DPO, Sao Paulo Mayor Gilberto Kassab expressed an 
interest in strengthening the city's cooperative relationship with 
the USG and said Sao Paulo was interested in attracting U.S. 
investors for infrastructure projects.  He indicated he would also 
like to invite New York City Mayor Michael Bloomberg to visit Sao 
Paulo and perhaps develop a formal city-to-city relationship.  On 
the political front, Kassab fixed January 2008 as a deadline for 
deciding whether he would run for re-election or instead support 
former Governor and 2006 presidential candidate Geraldo Alckmin. 
End Summary. 
 
¶2.  (U) The Mayor was relaxed throughout, and reflected on the 
governance challenges posed by a city of over 11 million people and 
5.5 million cars, and an annual budget of 21 billion Reals (slightly 
more than USD 10 billion).  He expressed satisfaction with 
beautification projects, commenting that under his "Clean City" 
program aimed at reducing visual pollution, some 6,300 billboards 
have been removed.  The Mayor has also devoted considerable effort 
to cleaning up Sao Paulo's downtown area and such crime-ridden 
nearby neighborhoods as "Cracolandia" by relocating residents, 
tearing down abandoned buildings, and cracking down on itinerant 
street vendors selling legal and other merchandise. 
 
WANTED: FUNDS FOR INFRASTRUCTURE 
-------------------------------- 
 
¶3.  (U) CG and Mayor Kassab exchanged views on areas where USG and 
the municipal government have common interests and may be able to 
work together, including security and environment.  The city 
government is looking for interested private investors for 
infrastructure development, and the Mayor mentioned several state 
and municipal projects.  Some improvement projects are designed as 
public-private partnerships (PPPs), and would be ideal for U.S. 
investment.  For example, a planned rapid light rail system 
connecting Sao Paulo to Guarulhos International Airport some 30 km 
away will facilitate the rerouting of flights away from the 
overcrowded Congonhas airport.  The city's mass transit system is 
being expanded, while the state and city are planning an outer ring 
road to alleviate congestion.  CG commented that he had recently had 
a similar conversation with Central Bank President Henrique 
Meirelles (reftel), and that a group of institutional investors from 
the U.S., including major pension funds like CalPERS, is visiting 
Rio and Sao Paulo to learn about opportunities in Brazil. 
 
¶4.  (U) Kassab asked the Consulate to help him invite New York City 
Mayor Michael Bloomberg to Sao Paulo, possibly to develop a formal 
city to city relationship.  (Note: Sao Paulo is partnered with Miami 
Dade County in the Sister Cities International organization, but 
Kassab did not mention it.  End note.)  CG replied that the city 
should put forward a specific program of activities that would 
interest the Mayor and should think carefully about the timing of 
any invitation, given next year's electoral calendar. 
 
ELECTORAL PROSPECTS 
------------------- 
 
¶5.  (SBU) Kassab, whose approval ratings have improved in recent 
months, told CG he might run for re-election in October 2008. 
Recalling that he was elected Vice-Mayor in 2004 on a PSDB-DEM 
ticket with Jose Serra of the Social Democracy Party of Brazil 
(PSDB), becoming Mayor in March 2006 when Serra resigned to run 
 
SAO PAULO 00000767  002 OF 002 
 
 
(successfully) for Governor, Kassab said the PSDB and DEM should 
agree on a single candidate.  PSDB former Governor and presidential 
candidate Geraldo Alckmin appears to be interested and would 
certainly be a strong, accomplished candidate who could attract a 
lot of votes.  Kassab expected the question to be resolved by 
January of next year so the candidate can begin campaigning.  The 
most important thing, he said, was to maintain the PSDB-DEM 
alliance. 
 
¶6. Participants: 
 
U.S. 
 
Consul General Thomas White 
Deputy Principal Officer James Story 
Political officer Peter Higgins 
 
Brazil 
 
Sao Paulo Mayor Gilberto Kassab 
Chief of Protocol Brasilia Arruda 
Municipal Secretary for International Relations Alfredo Cotait Neto 
Staff Assistant Guilherme Mattos. 
 
COMMENT 
------- 
 
¶7.  (SBU) This lunch represented an opportunity for the Mayor and 
the CG to get to know one another, and to build on the existing 
city-Consulate relationship.  They identified a number of common 
interests and areas of possible cooperation between the municipal 
government and ConGen Sao Paulo.  The Mayor's interest in attracting 
private investment for infrastructure projects is reflected at all 
levels of government as awareness grows that high costs and 
logistical impediments are hurting Brazilian industries and the 
economy.  Much work remains to be done, however, to create the 
necessary regulatory environment to attract foreign participation. 
End Comment. 
 
WHITE