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UNCLAS SECTION 01 OF 04 SAO PAULO 000142 
 
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 ELECTIONS: ALCKMIN MAYORAL CANDIDAC VIEWED AS 
ENDANGERING PSDB'S CHANCES IN 2010 
 
REF: (A) Sao Paulo 94;     (B) 07 SAO PAULO 882;     (C) 07 Sao Paulo 560; (D) 
07 Sao Paulo 943 
SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDNGLY 
 
------- 
SUMMARY 
------- 
 
¶1.  (SBU) The Social Democracy Party of Brazil (PSDB), the counry's 
largest and most important opposition party is facing internal 
division as well as a possibe breach with its principal ally, the 
Democrats arty (DEM), over this year's municipal elections. 
Despite their partnership on the national level and in a number of 
states, the two parties will likely run separate, competing 
candidates for mayor in a number of major cities.  The situation is 
especially acute in Sao Paulo (ref A), where incumbent Gilberto 
Kassab (DEM), who is supported by Governor Jose Serra (PSDB), is 
being challenged by former Governor and 2006 PSDB presidential 
candidate Geraldo Alckmin.  Whatever the outcome, many in the PSDB 
fear that Alckmin's candidacy may split the party and irreparably 
break the PSDB-DEM coalition, thus hurting Serra's chances to win 
the Presidency in 2010.  End Summary. 
 
--------------------- 
THE PSDB-DEM ALLIANCE 
--------------------- 
 
¶2.  (SBU) Alckmin, who was Sao Paulo state's Lieutenant Governor 
from 1995 until 2001 and Governor from 2001 until he resigned in 
April 2006 to run for President, is the successor and political heir 
of the late Mario Covas, a PSDB founder and political legend.  He 
enjoys the support of many influential PSDB members who served in 
the Covas-Alckmin administrations as well as a number of PSDB 
federal and state Deputies.  In 2006, ineligible to run for 
re-election, he outmaneuvered then-Mayor Jose Serra for the party's 
presidential nomination but lost the general election to Lula. 
Meanwhile, Serra ran for Governor and won, leaving DEM Vice-Mayor 
Kassab to replace him as Mayor.  For Serra and his supporters, the 
logical stance is to support Kassab's re-election, especially since 
many senior members of his administration are PSDB holdovers from 
Serra's time as Mayor.  Throwing the PSDB's weight behind the 
election of a DEM in Brazil's largest city would help solidify the 
alliance and ensure DEM support for Serra's 2010 presidential bid. 
This support is crucial for the PSDB in the 2010 general elections 
as the DEMs are particularly strong in the populous Northeast of 
Brazil where Lula's PT gets many votes and where the PSDB has a very 
small presence.  It would appear that Governor Serra wants the PSDB 
to maintain this alliance in order to avoid a repetition of 2002, 
when a series of contretemps led the Liberal Front Party (PFL), as 
the Democratic Party was known in those days, to break with the 
Fernando Henrique Cardoso (FHC) administration, the PSDB, and 
Serra's presidential campaign, thus contributing to a PT victory. 
 
¶3. (SBU) For these reasons, Governor Serra and many PSDB leaders, 
including former president FHC, consider an Alckmin campaign against 
Kassab a complication to be avoided if possible.  Per ref A, leaders 
of both the PSDB and DEM have tried to dissuade Alckmin, even 
offering to support him for Governor in 2010 if he'll sit this year 
out.  However, Alckmin, undaunted, has begun to form his municipal 
campaign organization, and party leaders are beginning to accept, if 
not applaud, the inevitability of his candidacy.  Aloysio Nunes 
Ferreira, Secretary of the Governor's Civil Household (Chief of 
Staff equivalent), told emboffs recently that the decision is 
Alckmin's: "If he decides to run, nobody can stop him, and the PSDB 
cadres will support him, like it or not."  Similarly, during a 
 
SAO PAULO 00000142  002 OF 004 
 
 
February 15 public appearance, Governor Serra himself acknowledged 
that "If Alckmin decides to be a candidate, he will be." 
 
----------------------- 
WHAT MAKES GERALDO RUN? 
----------------------- 
 
¶4.  (SBU) Asked why Alckmin is so determined to run given that a 
significant portion of his party prefers Kassab, Nunes Ferreira 
explained that a politician who is neither in office or running for 
office has no visibility and no influence.  Alckmin is surrounded by 
loyal supporters who depend on his success and his power of 
appointment to advance their own careers.  At 55, he has been either 
in public office or campaigning since 1972.  Quite likely, one 
reason he wants to run this year is that he is going stir-crazy, as 
he has been out of elected office for two years.  And even while FHC 
and other PSDB leaders are trying to persuade Alckmin to desist, 
Minas Gerais Governor Aecio Neves (PSDB) is encouraging him to run. 
Neves is Serra's main rival for the PSDB's 2010 presidential 
nomination and is happy to ally with anyone who might be able to 
weaken front-runner Serra. 
 
----------------------- 
THE VIEW FROM CITY HALL 
----------------------- 
 
¶5.  (SBU) An Alckmin candidacy poses special problems for the many 
PSDB members currently serving in the Kassab administration. 
Assistant Mayor Andrea Matarazzo, a close friend and advisor of 
Governor Serra, commented (ref B) that the "tucanos" (as PSDB 
supporters are called) in the city government - 15 Municipal 
Secretaries, 22 Assistant Mayors, and a host of others - "can't 
 
SIPDIS 
campaign against Alckmin" even though they may prefer to see Kassab 
re-elected.  There has even been talk that they may all have to 
resign.  Walter Feldman, a PSDB Federal Deputy (also a Serra 
loyalist) currently serving as Municipal Secretary of Sports (see 
ref C), told the CG on February 19 that the danger to the PSDB-DEM 
coalition posed by an Alckmin candidacy is "very grave, more serious 
than people realize."  If Alckmin runs, Feldman and all the PSDB 
appointees in the city government will be "paralyzed," caught 
between loyalty to the administration they serve and their party. 
"It will be a disaster," he said, and called Alckmin's candidacy "a 
conspiracy" and "a unilateral act."  The alliance with DEM is very 
important to the PSDB, he continued, the key to its fortunes as a 
national party and especially to Serra's 2010 presidential 
prospects.  Breaking the alliance would throw everything into 
question. 
 
¶6.  (SBU) While representatives of the embryonic Alckmin and Kassab 
campaigns would like to negotiate a non-aggression pact in which the 
two candidates and parties agree to compete but try not to attack or 
damage each other, Feldman deems such a concept unworkable in 
practice.  In his view, it will be impossible to prevent a rupture 
if Alckmin runs. 
 
-------------------------------- 
INTO THE WEEDS - THE PROXY FIGHT 
-------------------------------- 
 
¶7.  (U) The party's internal divide spilled over into the Chamber of 
Deputies in Brasilia when on February 13, the 58 PSDB Federal 
Deputies elected Jose Anibal Peres de Pontes, an Alckmin supporter, 
as the party's leader in the Chamber, over Arnaldo Madeira, a 
supporter of Kassab's re-election bid.  Back in Sao Paulo, on 
February 22, the 12 PSDB members of the City Council asked the local 
PSDB President, Jose Henrique Reis Lobo, to work with other party 
 
SAO PAULO 00000142  003 OF 004 
 
 
leaders to maintain the PSDB-DEM alliance, a not terribly subtle way 
of saying they believe the party should support Kassab's 
re-election.  Reis Lobo has been seeking an accommodation between 
the two sides but is not optimistic.  Comparing the conflict between 
Alckmin and Kassab supporters to West Side Story, he remarked 
ominously that "the story ends with the death of the leaders of both 
groups." 
 
---------------------------- 
THE VIEW FROM ALCKMIN'S CAMP 
---------------------------- 
 
¶8.  (SBU) In a February 29 meeting with Poloff, Deputy Jose Anibal 
laid out the arguments for a PSDB/Alckmin candidacy this year. 
Winning control of municipal governments is a key element in the 
PSDB's strategy to regain the presidency in 2010 (see ref D).  Out 
of power in Sao Paulo for nearly 20 years, the PSDB put together a 
strong, comprehensive platform for the city and Jose Serra won in 
¶2004.  He cleaned up the mess in City Hall, and restored the party 
to its prominence in the municipality before departing to run for 
Governor.  Having worked so hard to get local power, the PSDB wants 
to keep it.  Mayor Kassab, in Jose Anibal's view, has been an 
adequate caretaker, but no more.  With the help of many Serra 
holdovers, and boosted by a budget surplus generated by Serra's 
fiscal policies, Kassab has done a creditable job of implementing 
the PSDB/Serra program, but really has no agenda or team of his own, 
Anibal said.  According to Anibal, Kassab simply lacks the breadth 
of vision and the unified strategy the city needs, and with him in 
power, the PSDB misses a great opportunity to use the city as a 
platform to promote itself in the 2010 Presidential elections. 
Anibal added that Alckmin is the party's all-time champion 
vote-getter and frankly, not allowing him to run would be a waste of 
the party's talent. 
 
¶9.  (SBU) As for the alliance with the DEMs, Jose Anibal expects 
that any damage done during campaign season can be repaired in 
preparation for a second round and Alckmin or Kassab would support 
the other to defeat current Minister of Tourism and probably PT 
mayoral candidate Marta Suplicy.  After all, the DEMs have nowhere 
else to go but the PSDB.  "What are they going to do, support Marta 
[Suplicy]?  Support Lula's choice for President [in 2010]?" Jose 
Anibal asked rhetorically.  (Note:  A March 16 poll by Toledo and 
Associates shows Alckmin with 27.6%, Suplicy with 22.3%, and Kassab 
with 20.4% of the vote (margin of error of 3%) if the vote were held 
today.  End Note.) 
 
¶10.  (SBU) As Jose Anibal sees it, Governor Serra's support for 
Kassab is a political error based on his unfounded fear that 
Alckmin, as Mayor, will use the city as a political base to support 
Aecio Neves for president.  The PSDB must absolutely be united in 
2010, Anibal said, and Serra is the "natural" candidate for 
President.  Serra and Alckmin, as Governor and Mayor, will work well 
together "unless they're both idiots," because they have nothing to 
gain and everything to lose from fighting with each other.  Aecio 
Neves must wait his turn.  In both 2002 and 2006, when first Serra 
and then Alckmin lost to Lula, the PSDB suffered from disunity, Jose 
Anibal said.  The party's leaders supported the candidate in name 
only, not with enthusiasm and vigor.  This is the mistake the party 
must avoid repeating in 2010. 
 
------- 
COMMENT 
------- 
 
¶11.  (SBU) The Kassab and Alckmin supporters within the PSDB profess 
to have the same goal in this year's municipal elections - 
 
SAO PAULO 00000142  004 OF 004 
 
 
strengthening the party to put it in the best possible position to 
win back the Presidency in 2010.  Their visions of how to accomplish 
that objective, however, diverge completely, and neither faction 
shows any sign of yielding.  While Jose Anibal makes a cogent case 
for an Alckmin candidacy, demonstrating that it involves more than 
personal ambition, Alckmin and his followers run a big risk by 
appearing to underestimate the DEMs' likely alienation if the PSDB 
abandons Kassab.  Reacting to disagreements between the two parties 
over the Sao Paulo and Rio de Janeiro races for Mayor, DEM President 
Rodrigo Maia told an interviewer on Saturday that his party may have 
to go its own way.  This, he elaborated, could mean running a DEM 
candidate for President in 2010 or, alternatively, supporting Ciro 
Gomes as the candidate of the "Left Bloc" (Socialists, Communists, 
Democratic Labor Party).  This notion seems on its face politically 
unrealistic, even surreal, but Brazilian politics make for strange 
bedfellows.  However this year's race in Sao Paulo turns out, the 
PSDB is going to have to do some serious fence-mending before the 
next presidential election.  End Comment. 
 
¶12.  (U) This cable was coordinated with and cleared by Embassy 
Brasilia. 
 
WHITE