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### Viewing cable 06SAOPAULO862, LULA'S BALANCING ACT: PT LEADER OUTLINES PARTY'S ELECTORAL

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06SAOPAULO862 | 2006-08-07 18:39 | 2011-07-11 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Sao Paulo

`

    VZCZCXRO3077
    PP RUEHRG
    DE RUEHSO #0862/01 2191839
    ZNR UUUUU ZZH
    P 071839Z AUG 06
    FM AMCONSUL SAO PAULO
    TO RUEHC/SECSTATE WASHDC PRIORITY 5556
    INFO RUEHBR/AMEMBASSY BRASILIA 6631
    RUEHAC/AMEMBASSY ASUNCION 2698
    RUEHBU/AMEMBASSY BUENOS AIRES 2376
    RUEHMN/AMEMBASSY MONTEVIDEO 2089
    RUEHSG/AMEMBASSY SANTIAGO 1814
    RUEHLP/AMEMBASSY LA PAZ 2942
    RUEHRI/AMCONSUL RIO DE JANEIRO 7334
    RUEHRG/AMCONSUL RECIFE 3058
    RHEHNSC/NSC WASHDC
    RUEATRS/DEPT OF TREASURY WASHDC
    RUCPDOC/USDOC WASHDC 2528
    RUEHC/DEPT OF LABOR WASHDC
    RHMFISS/CDR USSOUTHCOM MIAMI FL

` `

    UNCLAS SECTION 01 OF 03 SAO PAULO 000862

    SIPDIS

    SENSITIVE
    SIPDIS

    STATE PASS USTR FOR MSULLIVAN
    STATE PASS EXIMBANK
    STATE PASS OPIC FOR MORONESE, RIVERA, MERVENNE
    NSC FOR FEARS
    USDOC FOR 4332/ITA/MAC/WH/OLAC/JANDERSEN/ADRISCOLL/MWAR D
    USDOC FOR 3134/USFCS/OIO/WH/SHUPKA
    TREASURY FOR OASIA, DAS LEE AND DDOUGLASS
    DOL FOR ILAB MMITTELHAUSER
    SOUTHCOM ALSO FOR POLAD
    USAID/W FOR LAC/AA

    E.O. 12958: N/A
    TAGS: PGOV PREL PINR ECON BR
    SUBJECT: LULA'S BALANCING ACT: PT LEADER OUTLINES PARTY'S ELECTORAL
    STRATEGY

    REF: BRASILIA 1136

    SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY

    -------
    SUMMARY
    -------

    ¶1.  (SBU) Summary: Sao Paulo State Legislator Renato Simoes outlined
    the strategy of Lula's Workers Party (Partido dos Trabalhadores -
    PT) for the October elections.  Simoes indicated that the party
    believes the Sao Paulo state and national campaigns have to be
    integrated.  PT gubernatorial candidate (and Senator) Aloysio
    Mercadante needs President Lula's coattails to have a chance to
    defeat former Sao Paulo Mayor Jose Serra, just as Lula needs a
    strong showing by Mercadante to improve his own electoral
    performance in Brazil's most populous state.  The PT's ideal
    scenario would have Lula winning in the first round while Mercadante
    forces the gubernatorial race into a second round.  On the national
    level, the PT will focus on the Lula administration's achievements
    while remaining vague and general about future programs and plans;
    in the state campaign, the PT believes that Serra has weaknesses
    that can be exploited despite his strong position in the polls.  The
    message in both campaigns will be that Lula needs a strong ally in
    Sao Paulo's state government to ensure a successful second term.
    Simoes also indicated that the PT's campaign for the federal Chamber
    of Deputies will focus on the party list rather than individual
    candidates; he is optimistic that the "disaster" of lost seats
    predicted by many observers will not occur.  He also expressed the
    view that although the popular and social movements that comprise
    the left wing of the PT will support Lula's re-election, they remain
    disappointed with Lula and will be more aggressive and demanding in
    a second term.  END SUMMARY.

    ¶2.  (SBU) Poloff and Political Assistant met July 31 with Renato
    Simoes, a leader of the PT in the Sao Paulo State Legislative
    Assembly.  Simoes is also a member of the PT's National Directorate
    and is serving on its Executive Committee as acting National
    Secretary for Popular Movements, replacing Bruno Maranhao, who was

    SIPDIS
    suspended after leading the Landless Workers Liberation Movement
    (MLST) invasion of Congress in June (reftel).

    ---------------------------------
    LOOKING FOR A FIRST ROUND VICTORY
    ---------------------------------

    ¶3.  (SBU) Simoes expressed confidence that Lula will win the
    election in the first round. The votes for Lula from the northeast -
    especially from the poor - are already solid, he said, so the
    President can afford to focus his campaign in the south and
    southeast, where his performance in recent polls is worrisome. In
    these areas, Simoes acknowledged, Lula is trailing his opponent,
    Geraldo Alckmin of the Social Democracy Party of Brazil (PSDB). This
    part of the country comprises more than 35 percent of all voters, as
    well as the largest proportion of middle class families.  Lula needs
    to retain the votes of the poor while regaining the trust of the
    middle class.  Thus, in both his government programs and his
    campaign speeches, he is trying to appeal to both groups while
    alienating neither, a delicate balancing act.  His government is
    distributing benefits both to the poor (e.g., the "Bolsa Familia
    program and the increase in the minimum wage) and to the medium
    class (e.g., a tax break for families that hire a maid formally).
    Likewise, his government program is intentionally vague.  Lula is
    being careful to steer clear of controversy and specific
    commitments.  The PT strategists believe he will be reelected if he
    can run on his image and his bond with poor voters and avoid making
    any mistakes during the campaign.

    SAO PAULO 00000862  002 OF 003

    ¶4.  (SBU) Simoes thinks Heloisa Helena, presidential candidate of
    the Socialism and Liberty Party (PSOL) and a former PT member,
    probably has a ceiling of about 8 percent despite recent polls
    showing her higher.  The PSOL, a new party created largely from PT
    defectors, has no organization at the national or state level to
    work for its candidates.  Heloisa takes some votes from Lula, but
    really takes votes from everybody because some voters express
    support for her as a protest against the system.  Simoes thinks she
    may fall to her natural level of about 5-6 percent; with Democratic
    Labor Party (PDT) candidate Cristovam Buarque at around 2 percent,
    Lula should thus be able, with his still sizeable lead over Alckmin,
    to win in a first round.

    ¶5.  (SBU) Simoes recognizes that a second round would be hard on
    Lula.  The President would have to campaign in a much more hostile
    political environment.  The PT won't have gubernatorial candidates
    running in the second round in many important battleground states.
    (This is one reason the PT considers it critical for Mercadante to
    force Serra into a second round in Sao Paulo.)  In addition, merely
    by making it to the second round, Alckmin will have shifted the
    momentum and will begin to look more like a winner.  Many Brazilian
    political analysts argue that voters like to vote for winners.

    ---------------------------------
    THE IMPORTANCE OF BEING SAO PAULO
    ---------------------------------

    ¶6.  (SBU) In discussing electoral strategy, Simoes stressed the
    importance of integrating the national campaign with the campaign in
    Sao Paulo state.  The idea of winning the Sao Paulo government is
    more than just an electoral target. The PT believes the state, with
    a friendly government, could give support to the Lula administration
    as it did for President Fernando Henrique Cardoso's (FHC)
    administration.  Simoes remembered that some of FHC's programs were
    first implemented in Sao Paulo as a test or pilot and then enlarged
    to encompass the whole country. In addition, many things that happen
    in Sao Paulo tend to resonate quickly throughout the rest of the
    country.

    ¶7.  (SBU) Simoes is convinced that Mercadante can force a second
    round with Serra in the gubernatorial race, despite poll numbers
    showing Serra with a commanding lead.  Former Governor Orestes
    Quercia, candidate of the centrist Brazilian Democratic Movement
    Party (PMDB) and third on the polls, who has strong support in the
    state's interior, has a ceiling of about 12 percent.  According to
    Simoes' electoral arithmetic, Mercadante should get around 25
    percent of the votes and has a chance of reaching 30 as the PT's
    Jose Genoino did in 2002.  At the same time, if PDT candidate Carlos
    Apolinario and PSOL candidate Plinio de Arruda Sampaio, of PSOL each
    get 2-3 percent, a second round is guaranteed.

    ¶8.  (SBU) In the state campaign, the PT needs to focus on social
    issues and the disenchantment of some voters after twelve years of
    PSDB rule.  Public security, health, and education are areas where
    the PSDB Covas-Alckmin governments made insufficient investment,
    Simoes said. Public security and the issue of the organized criminal
    gang First Capital Command (PCC) won't necessarily be a winning
    issue for the PT, however, because the public holds everyone
    responsible. The PCC attacks in May damaged Alckmin at the time and
    may continue to hurt him in some quarters, but many also held the
    federal government accountable.  Under Brazil's federal system,
    municipalities also have a role to play.  The Lula administration
    didn't provide enough federal security assistance to Sao Paulo state
    over its first three years, in part because state government was in
    the hands of the opposition.  Thus, while the issue is important to
    the campaign, it's not a winner for any candidate or party.

    SAO PAULO 00000862  003 OF 003

    ¶9.  (SBU) Simoes also outlined the PT strategy to fight for more
    seats in the Congress.  Most observers expect that due to the
    "mensalao" corruption scandal, the PT will elect at most 60 (some
    say 50) members to the Chamber of Deputies after electing 90 in
    ¶2002.  However, Simoes thinks the PT can repeat its 2002
    performance.  Its television campaign will focus on the party list
    as a whole instead of promoting individual candidates, and will
    attempt to remind voters of the party's historic role in Brazilian
    politics.  Via this "voto de legenda," the party hopes to take
    advantage of the positive image it continues to enjoy with some
    segments of the electorate, and to avoid the public identification
    of certain candidates who became notorious during the scandals.  In
    short, Simoes believes that "the anticipated disaster will not
    happen."

    ------------------
    LULA'S SECOND TERM
    ------------------

    ¶10.  (SBU) The leftist popular and social movements will campaign
    for Lula, because they are afraid of losing ground under an Alckmin
    administration.  However, Simoes said, these leftist movements have
    been disappointed with Lula's government and will continue to make
    their disappointment felt.  They are frustrated with Lula's handling
    of social security reform, labor reform, and his failure to do more
    on land reform.  Assuming a second Lula term, the social movements
    will be more active, more aggressive, and more confrontational.
    They will expect Lula, with more political maneuvering room, to do
    more for his leftist political base.

    ¶11.  (SBU) Nevertheless, Simoes warned against expecting fundamental
    changes from a second Lula administration.  Macroeconomic policy
    will continue on the same course.  But there may be ways that Lula
    can open up some political space, work more closely with the leftist
    and the social/popular movements, and increase social participation.
     Simoes conceded that the MLST invasion of Congress (reftel) had
    gotten the PT and the movements some bad publicity, but didn't think
    it had done long-term damage to the party's electoral prospects.
    Everyone knows, he said with a shrug, that such demonstrations
    sometimes turn out well and sometimes end badly.

    -------
    COMMENT
    -------

    ¶12.  (SBU) Simoes' predictions combine optimism with apprehension.
    He thinks Lula can win in the first round but fears the consequences
    if he doesn't.  He expects the PT at the national level to avoid the
    worst consequences of the corruption scandals but recognizes the
    need to improve the party's performance in key states like Sao
    Paulo.  He seems aware that one or two prominent blunders could cost
    Lula dearly and stressed that the campaign is going to play it safe.
     He is aware that Lula has ignored the popular and social movements
    and probably cannot do so indefinitely.  Despite Lula's comfortable
    lead in the polls, all is not well in the land of the PT.  END
    COMMENT.

    ¶13. (U) This cable was coordinated with Embassy Brasilia.

    MCMULLEN

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