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RR RUEHRG
DE RUEHSO #0094/01 0571311
ZNR UUUUU ZZH
R 261311Z FEB 08 ZDK
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC 7944
INFO RUEHBR/AMEMBASSY BRASILIA 9095
RUEHBU/AMEMBASSY BUENOS AIRES 3077
RUEHAC/AMEMBASSY ASUNCION 3325
RUEHCV/AMEMBASSY CARACAS 0687
RUEHMN/AMEMBASSY MONTEVIDEO 2630
RUEHLP/AMEMBASSY LA PAZ 3735
RUEHSG/AMEMBASSY SANTIAGO 2326
RUEHRI/AMCONSUL RIO DE JANEIRO 8608
RUEHRG/AMCONSUL RECIFE 4021
RHEHNSC/NSC WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 3039
RUEHC/DEPT OF LABOR WASHDC

UNCLAS SECTION 01 OF 03 SAO PAULO 000094 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/BSC, INR/IAA, INR/R/AA 
STATE PASS USTR FOR KATE DUCKWORTH 
NSC FOR TOMASULO 
TREASURY FOR 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 BR
SUBJECT: SAO PAULO'S MAYORAL ELECTION AND ITS IMPLICATIONS FOR 2010 
 
REF: (A) 07 SAO PAULO 878; (B) 07 SAO PAULO 767; 
     (C) 07 SAO PAULO 882 
 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY 
 
------- 
SUMMARY 
------- 
 
¶1. (SBU) In October, Brazilians will go to the polls to elect the 
Mayors and City Council members ("Vereadores") of the country's 
5,064 municipalities.  Political analysts and consultants, as well 
as politicians from across the spectrum, agree on one thing:  these 
elections will set the stage for the 2010 national and state 
elections.  In Sao Paulo, incumbent Mayor Gilberto Kassab 
(Democratic Party - DEM) will likely face off against two national 
powerhouses - Minister of Tourism and former Mayor Marta Suplicy of 
President Lula's Workers' Party (PT), and former state Governor and 
2006 presidential candidate Geraldo Alckmin of the Social Democracy 
Party of Brazil (PSDB).  The conduct and results of this campaign 
will have major implications for three of Brazil's four major 
parties, for the political panorama in Brazil's largest state, and 
for the 2010 presidential contest.  End Summary. 
 
-------------------------------------------- 
THE MAYOR, THE MINISTER, AND THE EX-GOVERNOR 
-------------------------------------------- 
 
¶2.  (U) Sao Paulo, with just over 11 million people, is South 
America's largest city and among the five largest in the world.  Due 
to its size and prominence, the city offers unique opportunities and 
challenges to ambitious politicians.  Gilberto Kassab (DEM - 
formerly Liberal Front Party or PFL) was elected Vice-Mayor of Sao 
Paulo in 2004, and became Mayor in April 2006 when Jose Serra (PSDB) 
resigned to run for Governor.  The previously unknown Kassab has 
surprised everyone with his performance in office.  Hallmarks of his 
administration include the "Cidade Limpa" (Clean City) program, 
aimed at reducing visual pollution, and aggressive law enforcement 
actions against illegal gaming establishments and street vendors, as 
well as stores that sell contraband and pirated goods (ref A). 
Though many problems remain, even the Mayor's opponents acknowledge 
he has a good record on which to run.  If he wins, the 47-year old 
Kassab could have a bright national future, running for Governor or 
Senator in 2010 or 2014.  Prominent supporters of his re-election 
include Governor Serra - himself a likely 2010 Presidential 
candidate - and former President Fernando Henrique Cardoso (FHC). 
 
¶3.  (SBU) Marta Suplicy (Workers' Party - PT) served as Mayor of Sao 
Paulo from 2001 through 2004.  She ran for re-election but was 
defeated by Jose Serra.  In 2006, after losing the PT gubernatorial 
primary to Senator Aloizio Mercadante, she coordinated President 
Lula's re-election campaign in Sao Paulo.  In March 2007, Lula named 
her Minister of Tourism.  Suplicy is popular among the poor, who 
remember her introduction of Unified Educational Centers (CEUs) into 
low-income neighborhoods.  Her tenure, however, was also 
controversial, especially in the area of financial management. 
Suplicy, 62, is motivated by a desire to remove the bad taste left 
by her 2004 defeat and to position herself to seek the Governorship 
or the PT presidential nomination in 2010. 
 
¶4.  (SBU) The third and perhaps most important likely candidate is 
Geraldo Alckmin, the former Sao Paulo state Governor (2001-06) who 
was the PSDB's presidential candidate in 2006.  Alckmin left the 
Governor's office in April 2006 with a remarkable 69 percent 
approval rating.  Despite his mediocre performance as a presidential 
candidate, he remains well-respected in the city and state and is 
considered an excellent administrator. 
 
SAO PAULO 00000094  002 OF 003 
 
 
 
-------------------- 
THE ALLIANCE AT RISK 
-------------------- 
 
¶5.  (SBU) Mayor Kassab's DEM party is a junior partner in coalition 
with the PSDB both nationally and in Sao Paulo state.  Together they 
form the main opposition to President Lula and the PT.  Kassab was 
elected on a PSDB ticket and presides over a PSDB administration 
(see ref B), with 15 of 23 Municipal Secretaries and 22 of the 31 
Assistant Mayors, as well as lower-level city officials, coming from 
that party.  Many in both the DEM and PSDB parties argue that an 
Alckmin candidacy will destroy the long-standing but fragile 
PSDB-DEM alliance and split the vote, leaving the door open to Marta 
Suplicy in Sao Paulo and potentially hurting the PSDB's chances of 
capturing the Presidency in 2010.  However, Alckmin and his advisors 
argue that Sao Paulo's City Hall is too important to leave to 
another party, even an ally.  More urgently, they stress the 
importance of not letting the city fall into the hands of Suplicy 
and the PT, and point to Alckmin's evident strength in the polls. 
 
------------- 
STATE OF PLAY 
------------- 
 
¶6.  (SBU) The campaign does not formally begin until July, but is in 
many respects already under way.  Kassab's candidacy, at one time in 
doubt (ref B), is now all but certain.  Publicly, Marta Suplicy has 
deferred questions about her intentions, perhaps waiting to see how 
the Alckmin-Kassab situation sorts itself out.  Others believe she 
may be waiting for Lula's blessing to resign her Ministry (she has 
until June 5), but few doubt she will be a candidate.  Edinho Silva, 
PT state chairman, told Poloff flatly that Suplicy will run with 
Lula's support.  State Deputy Rui Falcao, who served as Secretary of 
Government under Mayor Suplicy, was less categorical but averred 
that he had never known her to duck a challenge. 
 
¶7.  (SBU) Commentators agree that there is still time for the DEM 
and PSDB to persuade Alckmin not to run, but that it is increasingly 
unlikely.  Already, both FHC - the PSDB's honorary president - and 
DEM leader Jorge Bornhausen have offered Alckmin their support in a 
gubernatorial campaign in 2010 - assuming Serra resigns to run for 
President - if he agrees to sit this year out.  However, Fernando 
Braga, a long-time Alckmin economic advisor, told the CG that 
Alckmin deems such an offer too uncertain, and Serra may end up 
seeking re-election as Governor instead of running for President. 
Braga said Alckmin faces a dilemma over whether or not to run for 
Mayor, but people close to the ex-Governor seem fairly certain that 
Alckmin will ultimately run.  By all accounts, he wants both to be 
Mayor and to position himself to compete for higher office - 
Senator, Governor again, even President - in 2010 or 2014. 
 
----------------------------- 
POLLS SHOW ALCKMIN'S STRENGTH 
----------------------------- 
 
¶8.  (U) A Datafolha poll published February 17 shows that in a 
three-way race, Alckmin would get 29 percent to Suplicy's 25 and 
Kassab's 12.  If Alckmin doesn't run, Suplicy leads Kassab 32-19 
percent.  (Note: The polls presuppose the participation of two or 
possibly three minor candidates who together may account for about 
20 percent, so a second round is inevitable under any scenario, 
since no candidate will get 50 percent of the first-round vote.  End 
Note.)  If Kassab desists, Alckmin leads Suplicy, 34-28 percent.  If 
Suplicy decides not to run, Alckmin leads Kassab, 34-16 percent, 
with the projected PT candidate, Chamber of Deputies President 
Arlindo Chinaglia, garnering only 1 percent.  In a second round, 
 
SAO PAULO 00000094  003 OF 003 
 
 
Alckmin would defeat either Suplicy or Kassab handily, whereas 
Suplicy would defeat Kassab, 50-39 percent.  Kassab remains the 
least well-known of the three candidates and thus must be considered 
the underdog in a race against two major national figures.  However, 
at this early date, the polls represent only a snapshot and are 
subject to change as candidates enter the race and parties make and 
break alliances.  Given the advantages of incumbency, Kassab has a 
good chance of rising in the polls as the race progresses. 
 
¶9.  (SBU) Even while recognizing Geraldo Alckmin's ability and 
popularity with voters, many PSDB leaders view his candidacy as a 
train wreck that they are powerless to prevent.  The problem, from 
their perspective, is that Alckmin is not a team player.  His 
putative candidacy exposes a recurring weakness that continues to 
undermine the PSDB, where, as Braga put it, "everyone is a Chief and 
nobody is willing to be an Indian."  PSDB stars like Alckmin deem 
themselves essential and refuse to yield.  With so much talent and 
ambition, there are inevitable fallings-out.  The PSDB spends more 
time and energy on infighting than on developing and implementing 
strategies to challenge its opponents.  This year would appear to be 
no exception.  Unless it can resolve this question, the party faces 
a real problem in 2010.  Post will report septel on the impact of an 
Alckmin candidacy on the PSDB. 
 
------- 
COMMENT 
------- 
 
¶10.  (SBU) The PT and the PSDB were both founded in Sao Paulo, and 
many of the household names from both parties hail from the state. 
Their rivalry here tends to have national repercussions.  The 
PSDB-DEM alliance is a key part of the equation.  This year's race 
for Mayor of Sao Paulo exposes all these elements.  Whatever its 
outcome, this election will have huge visibility as well as a major 
impact on all three parties as they look to 2010 and the beginning 
of Brazil's post-Lula future.  End Comment. 
 
¶11.  (U) This cable was coordinated with and cleared by Embassy 
Brasilia. 
 
WHITE