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UNCLAS SECTION 01 OF 04 BRASILIA 000905 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV BR
SUBJECT:  Brazil's 2010 Presidential Election: Early Snapshot 
 
REFS: SAO PAULO 273, SAO PAULO 90, BRASILIA 791, BRASILIA 799 
 
¶1. (SBU) Summary.  The 2010 presidential election in Brazil, fifteen 
months out, currently looks like a two person contest between 
Minister Dilma Rousseff and Sao Paulo Governor Jose Serra.  Although 
Serra maintains his lead in the polls, Rousseff's steady rise in 
public opinion has some analysts already labeling her the favorite. 
Without either having clear frontrunner status established and few 
evident policy differences between these two mainstream leftist 
candidates, they will try to persuade low income voters of their 
firmer commitment to ongoing social programs, and middle and upper 
income voters of their greater managerial competence.  Analysts say 
both major parties--Rousseff's Workers' Party (PT) and Serra's 
Social Democrats (PSDB)--will try to win massively in their regional 
strongholds and reduce their opponent's edge as much as possible 
where they do not expect to win.  The non-ideological Brazilian 
Democratic Movement Party (PMDB) could play a decisive role and both 
leading parties would like to form an alliance with it.  A steady 
stream of political scandals and the accompanying revelations could 
change the landscape suddenly and surprisingly.  Despite the 
unpredictability that is typical of Brazilian politics, 
institutional stability is as great as it has ever been in the 
post-military dictatorship period.  End summary. 
 
Two Person Race 
 
¶2. (SBU) The October 2010 presidential election in Brazil, fifteen 
months out, looks like a two person contest between Dilma Rousseff 
(PT), Minister-chief of the Civilian Household, and Jose Serra 
(PSDB), governor of the state of Sao Paulo.  Rousseff, President 
Lula's handpicked choice to succeed him, is the president's top 
domestic policy adviser, whom he has given a lead role and high 
visibility in the execution of the Accelerated Growth Program (PAC), 
a massive public works program.  Serra, a former minister of health 
and planning under President Fernando Henrique Cardoso, Lula's 
predecessor, is governor of Brazil's most economically important 
state, and its most populous one (refs A and B). 
 
Serra: Slow and Steady... 
 
Serra maintains the overall lead in early polling, with numbers 
remaining in the range of 40 percent.  In keeping with his 
administrative style (Sao Paulo septel) Serra is keeping a low 
profile at the moment as he carefully lines up federal monies for a 
stream of PAC-like projects to announce at the state level when the 
national campaign accelerates. 
 
Dilma on the Rise 
 
¶3. (SBU) The story of recent months is Dilma Rousseff's rise in the 
polls, from single digits late last year to mid-teens earlier this 
year to as high as 24 percent in May (depending on which candidates 
are included in the poll).  Her rise is the result of her heightened 
public visibility in PAC events, Lula's declared support, and her 
apparently rapid recovery from lymphatic cancer.  PATRI's Miranda 
said that the public perception that she has quickly defeated cancer 
plays strongly in her favor.  While Miranda and some PT officials 
such as Luis Marinho believe that, if by March 2010 she is tied with 
Serra in the polls, he could yield his PSDB candidacy to Minas 
Gerais Governor Aecio Neves, other observers such Serra colleague 
and former Central Banker Luiz Fernando Figueiredo downplayed the 
influence of polling on Serra's plans.  As long as Rousseff 
continues to look like a fighter who conquered cancer, her 
presidential chances will improve.  If her cancer recurs and makes 
her candidacy impossible, the PT has no alternative of her stature, 
although former Finance Minister Antonio Palocci and Presidential 
Chief of Staff Gilberto Carvalho are sometimes named as possible 
candidates (ref C). 
 
¶4.  (SBU) The relatively minor effect of the global financial crisis 
in Brazil helps Rousseff as a member of the incumbent party.. 
Developments in the ongoing scandal involving Senate President Jose 
Sarney (septel) could play in Rousseff's favor as well.  Thanks to 
President Lula's intervention with PT senators, Sarney's chances of 
retaining the Senate presidency are improved-- meaning the PT is 
better positioned to demand stronger concrete support for Rousseff's 
candidacy from the PMDB in the general election. 
 
Several "Also-Rans" 
 
 
BRASILIA 00000905  002 OF 004 
 
 
¶5. (SBU) Aside from Rousseff and Serra, other candidates are 
unlikely to gain sufficient support to make it a three- or 
four-person race.  Prospects for a run by the young, charismatic 
governor of Minas Gerais state, Aecio Neves, the strongest of the 
second tier candidates, appear to be waning.  However, if Serra's 
prospects were to nose-dive because of a scandal, health concerns, 
or a serious blunder, Neves would be the obvious choice for the 
PSDB.  Alternatively, Neves could switch parties to run as a PMDB, 
PSB or even Green Party (PV) candidate, but would have to do so by 
October 2009 (see ref C). 
 
¶6. (SBU) Alternative names will continue to surface, and there will 
certainly be a handful of other candidates from other parties 
ranging from nationally important to "dwarf" parties.  "Also-rans" 
currently in the news include Heloisa Helena, leader of the 
Socialism and Freedom Party (PSOL), a small far left party, who came 
in third in 2006 with 6.85 percent, and Ciro Gomes, a federal deputy 
from the Brazilian Socialist Party (PSB).  In 1998, Gomes came in 
third for president with 11 percent of the vote, and in 2002 came in 
fourth with 12 percent.  He is positioning himself to run for 
governor of Sao Paulo or for president as a second pro-Lula 
candidate.  In either case, he would do Rousseff and the PT the 
favor of being the hatchet man against Serra, with the expectation 
of a cabinet position if Rousseff won.  Under current circumstances, 
these second-tier candidates stand little chance of surpassing 
either of the two front-runners.  The last two presidential 
elections were also primarily contests between the PSDB and the PT, 
and the broad political alignment remains the same as it was in 2002 
and 2006. 
 
Third Term for President Lula? 
 
¶7. (SBU) President Lula has repeatedly and convincingly stated he 
does not want to serve a third consecutive term, which would require 
a constitutional amendment (PEC) enacted not less than a year before 
the election.  This month, a Chamber of Deputies committee probably 
put an end to any possible amendment when it overwhelmingly voted 
down such a proposal.  Federal Deputy Jose Genoino, a senior PT 
figure, recommended its rejection, signally the party's opposition 
to a third consecutive term.  Given the lead time necessary to 
approve a PEC and the PT's opposition, the chances of a 2011-2015 
Lula presidency can now be ruled out.  Some analysts, including 
Andre Miranda, and many opposition figures now believe Lula plans to 
run in 2014, in which case he could serve two additional terms. 
 
Strategies Beginning to Take Shape 
 
¶8. (U) Analysts say that Rousseff and Serra are developing similar 
campaign strategies: try to win massively in their bases with a 
single overall message, and diminish the other party's margin of 
victory in its stronghold with a single, different, and resonant 
message.  Thiago de Aragao, of the Arko Advice consulting firm, said 
the PT is probably unbeatable in the north and northeast, home to a 
large percentage of Brazil's poor, and will reinforce its image as 
the guarantor of generous social welfare programs such as the Bolsa 
Familia (Family Stipend).  At the same time, the PT will attack 
Serra in the south and southeast, where the PSDB is strongest, with 
a message of demonstrated executive competence through Rousseff's 
leading role in the PAC.  In the south and southeast, Serra will run 
on his record as governor of Sao Paulo to persuade voters he has the 
administrative competency and leadership to be president.  In the 
north and northeast, Aragao believes, Serra will try to reassure the 
poor that he would maintain social spending.  He will also try to 
associate the PT with ongoing corruption scandals, although it will 
not be the most important message for voters, Aragao said. 
 
Wooing the PMDB 
 
¶9. (U) The Brazilian Democratic Mvement Party (PMDB), Brazil's 
largest political arty, will play a crucial and probably decisive 
ole in the election.  The PMDB, a fractured and no-ideological 
confederation of state organization that often form alliances for 
local reasons, oftn prefers to play a supporting role to a 
presidetial candidate rather than running its own, allowig it to 
enter the government with the winner or,if on the losing side, to 
seek concessions from he winner exchange for joining the government 
coaition.  According to Andre Miranda, of the PATRI cnsulting 
firm, and Thiago de Aragao, both partie are wooing the PMDB 
because, as the holder of te most seats in congress and more 
mayoral slots han any other party, the PMDB can take advantage ofa 
 
BRASILIA 00000905  003 OF 004 
 
 
vast network of influential local politicians who get the vote out. 
The PMDB is in the Lula government coalition, and analysts expect 
the party will back Rousseff, putting it in a position to demand the 
vice presidential slot. 
 
¶10. (U) A less likely possibility is a PSDB-PMDB alliance, which 
cannot be ruled out because, according to Aragao, old rivalries make 
a PT-PMDB alliance impossible in nine states.  Moreover, a powerful 
PMDB figure in Sao Paulo, Orestes Quercia, has already pledged to 
support Jose Serra.  (Note: Quercia's support would be in exchange 
for Serra's support for Quercia's expected run for the Senate in 
¶2010. End note.)  Possible PMDB vice presidential running mates 
include Sergio Cabral, governor of Rio de Janeiro, Michel Temer, 
president of the Chamber of Deputies, and Nelson Jobim, the Defense 
Minister.  Miranda said the PMDB might increase the ticket's appeal 
in the south and southeast by choosing a southerner such as Nelson 
Jobim, of Rio Grande do Sul. 
 
State Alliances a Complicating Factor 
 
¶11. (U) The effort by Rousseff and Serra to build support beyond 
their respective bases is being complicated by the need for parties 
to build coalitions in support of their candidates in the 
simultaneous races for state deputy, federal deputy, senator, and 
governor.  Brazilian parties traditionally form state and federal 
alliances in support of a slate of candidates for these races, but 
alliances in favor of state and federal candidates often differ from 
those at the local level.  Local rivalries often make state-level 
alliances in support of a national candidate difficult, and local 
politics often make for strange bedfellows.  Several state PMDB 
branches are bitter rivals of the PT and will not back a state or 
national PT candidate.  Under Brazilian law, parties are free to 
enter regional coalitions that are different from coalitions in 
support of a presidential candidate.  The result is a complex and 
unpredictable patchwork of alliances that may or may not be 
effective in mustering a party's support for a presidential 
candidate.  For example, in Pernambuco the PMDB traditionally allies 
with the PSDB and DEM at the state level, and can be expected to do 
so even if Dilma Rousseff's running mate is from the PMDB. 
 
The Limits of Early Polling 
 
¶12. (SBU) Early polls are not particularly reliable in Brazil as a 
result of low party membership (less than ten percent of voters) and 
the non-ideological nature of Brazilian politics.  The similarities 
between the platforms of the two most likely candidates and their 
equally matched (i.e., limited) personal charisma are also factors 
that could allow small events or mistakes to carry out-sized weight 
during the campaign.  One additional reason for the low reliability 
of early polls is the extreme influence of television advertising 
among the masses in the run-up to the first round.  Campaign 
advertising in electronic media is strictly regulated by law, 
presidential candidates are allotted the same amount of free 
advertising time, all stations must broadcast the campaign messages 
simultaneously.  The season for presidential campaign messages is 
short and opens only two months before the election.  As a result, 
this advertising may cause sudden changes in the candidates' 
relative popularity. 
 
Electoral Volatility, Institutional Stability 
 
¶13. (SBU) Fifteen months, the time remaining before the October 2010 
presidential election, is a long time in Brazilian politics. 
Although Serra, the favorite to win only six months ago, has lost 
some ground to Rousseff, the inherent volatility of the political 
process will make it difficult to pick the winner up to the end.  A 
steady stream of political scandals and the accompanying revelations 
could change the landscape suddenly and surprisingly.  In 2006, the 
"bloodsuckers" scandal sent the presidential race to a second round, 
although it did not change the result.  The outcome of the Senate 
scandal and its possible effects on the 2010 election are still 
unclear (ref D, septel).  Rousseff's lymphatic cancer introduces an 
uncertainty that could invalidate calculations about the election's 
outcome (ref C).  But in spite of the unpredictability that is 
typical of Brazilian politics, institutional stability is as great 
as it has ever been in the post-military dictatorship period.  The 
system is dealing fairly well with scandals and there are no signs 
of a turn toward populism or the possibility of anything but strict 
constitutional order. 
 
 
BRASILIA 00000905  004 OF 004 
 
 
¶14. (U) Mission Brazil takes the opportunity of his final cable to 
say farewell to Dale Prince, our lead domestic political analyst for 
the last three years, whose in-depth knowledge, insights, and 
contacts we will miss.  This cable was cleared by Consulate General 
Sao Paulo. 
 
KUBISKE