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### Viewing cable 06SAOPAULO722, SAO PAULO MAYOR DISCUSSES PCC VIOLENCE, ELECTIONS, BOLIVIA

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06SAOPAULO722 | 2006-06-30 12:18 | 2011-07-11 00:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Consulate Sao Paulo

`

    VZCZCXRO6131
    PP RUEHRG
    DE RUEHSO #0722/01 1811218
    ZNR UUUUU ZZH
    P 301218Z JUN 06
    FM AMCONSUL SAO PAULO
    TO RUEHC/SECSTATE WASHDC PRIORITY 5340
    INFO RUEHBR/AMEMBASSY BRASILIA 6430
    RUEHAC/AMEMBASSY ASUNCION 2650
    RUEHBU/AMEMBASSY BUENOS AIRES 2326
    RUEHMN/AMEMBASSY MONTEVIDEO 2053
    RUEHSG/AMEMBASSY SANTIAGO 1782
    RUEHLP/AMEMBASSY LA PAZ 2884
    RUEHRI/AMCONSUL RIO DE JANEIRO 7229
    RUEHRG/AMCONSUL RECIFE 3011
    RHEHNSC/NSC WASHDC
    RUEATRS/DEPT OF TREASURY WASHDC
    RUCPDOC/USDOC WASHDC 2505
    RUEHC/DEPT OF LABOR WASHDC
    RHMFISS/CDR USSOUTHCOM MIAMI FL

` `

    UNCLAS SECTION 01 OF 03 SAO PAULO 000722

    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 PINR ECON ETRD EPET BR
    SUBJECT: SAO PAULO MAYOR DISCUSSES PCC VIOLENCE, ELECTIONS, BOLIVIA

    REF: (A) SAO PAULO 708; (B) BRASILIA 1266;
         (C) SAO PAULO 689; (D) SAO PAULO 573 AND PREVIOUS;
         (E) SAO PAULO 106

    SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY

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

    ¶1.  (SBU) Sao Paulo Mayor Gilberto Kassab told the Consul General
    (CG) June 29 that the recent gang violence in the city was a wake-up
    call to the public, which has responded in solidarity with the
    police.  Kassab believes opposition candidate Geraldo Alckmin will
    have a hard time catching up with President Lula; therefore, the
    Liberal Front Party (PFL) is focusing its attention on helping
    former Mayor Jose Serra win the election for Governor of Sao Paulo.
    He predicted that, if re-elected, Lula will continue his orthodox
    economic policies and resist pressures for a turn to the left, and
    may even become more accommodating towards the U.S. in his approach
    to foreign policy.  Kassab expected the political scene to change
    for the better as small parties disappear and large center-left and
    center-right coalitions are formed.  Asked about Bolivia, he
    acknowledged concerns about Sao Paulo's heavy dependence on Bolivian
    gas, but ruled out any serious disruption.  END SUMMARY.

    --------------------------------
    SOLIDARITY WITH EMBATTLED POLICE
    --------------------------------

    ¶2.  (SBU) CG noted the morning's news of the killing of a prison
    guard, allegedly by the criminal gang First Capital Command (PCC) in
    the aftermath of the recent killing of 13 PCC members by state
    police (ref A).  Kassab commented that the criminal gang problem had
    been brewing in Sao Paulo for years before erupting in the May wave
    of violence (ref D).  It was a difficult time, both he and Municipal
    Secretary for International Relations Helena Gasparian noted,

    SIPDIS
    because the PCC was able to identify and kill individual police
    officers in their homes, putting enormous pressure on the police.
    Yet he also noted that the violence, while terrible in its own right
    and damaging to the city's image, had one positive outcome.  The
    show of force by the PCC had frightened the citizenry, which, when
    forced to choose sides, had shown solidarity with the police.  Now
    everyone is more aware of the need to fight organized crime, though
    this remains a challenge due in large part to the weakness of
    federal law enforcement.

    ¶3.  (SBU) CG described his recent meeting with state public security
    officials (septel) and the USG interest in exploring ways we might
    be able to help the state improve its ability to combat organized
    crime and mitigate the PCC's ability to control the state prison
    system.  Over the longer term, Kassab expressed confidence that
    improved technology would assist authorities in combating crime more
    effectively.  At the same time, he agreed with his PFL colleague,
    Sao Paulo Governor Claudio Lembo, that Brazil's elites need to
    provide more education and do more to combat economic inequality as
    part of the war on crime.

    ------------------------------
    GRIM VIEW OF ALCKMIN'S CHANCES
    ------------------------------

    ¶4.  (SBU) CG asked Kassab, a PFL insider, how he viewed the
    presidential election.  Kassab acknowledged that from an opposition
    perspective, it wasn't going well.  He frankly did not see at this
    point how Geraldo Alckmin was going to overcome President Lula's
    large lead, estimated at nearly 30 points in some recent polls (ref

    SAO PAULO 00000722  002 OF 003

    B).  Though they continued to work for Alckmin, Kassab said he and
    his PFL colleagues are focusing more on ensuring Jose Serra's
    election as Governor.  After failing to negotiate an alliance with
    the centrist Brazilian Democratic Movement Party (PMDB), Serra had
    chosen as his running mate PSDB Federal Deputy Alberto Goldman.  But
    the PSDB-PFL alliance remained strong.  Later that day, Kassab
    planned to attend the official launching of the Senate campaign of
    his friend and PFL colleague, Guilherme Afif Domingos, President of
    the Sao Paulo Chamber of Commerce, who is running with PSDB support
    against incumbent Eduardo Suplicy of Lula's Workers' Party (PT).

    --------------------------
    LULA AS PRAGMATIC MODERATE
    --------------------------

    ¶5.  (SBU) CG asked Kassab for his views on what we could expect from
    a second Lula term if he is re-elected.  Kassab noted that many
    political analysts expect that Lula, unencumbered by conservative
    allies and ineligible to run for re-election, would begin to pay
    more attention to the leftist elements of the PT and govern in more
    populist fashion.  He, Kassab, did not agree.  People don't change,
    he said, and Lula is ultimately conservative at heart, a trade
    unionist who worked pragmatically within the system for modest,
    incremental advances.  He has won plaudits from around the world for
    his responsible management of Brazil's economy.  He has never really
    paid much attention to the PT's leftist economists and is not likely
    to begin now.  Kassab did not say what will become of the labor
    unions, landless movement (MST), and other leftist social movements
    that comprise the PT's core constituency; presumably they will
    continue to agitate from the left, but without much effect.

    ¶6.  (SBU) On the trade front, Kassab opined, Lula may never support
    the FTAA, but he may eventually become more accommodating on trade
    issues.  Many of the problematic foreign policy positions
    articulated by Lula and the MFA, especially those at odds with U.S.
    policy objectives, have been taken for electoral reasons; when these
    political imperatives disappear, he may become more moderate,
    including in his approach to bilateral relations with the United
    States.  He may even move closer in some of his policies to the
    PSDB.  Though Kassab did not say so explicitly, he hinted that the
    PSDB and PFL may be prepared to offer some support in Congress to
    such a "moderate" Lula to avoid political gridlock and keep the
    country on track.

    -----------------
    BIPARTISAN BRAZIL
    -----------------

    ¶7.  (SBU) Kassab reiterated his view (see ref E) that the entry into
    force this year of the "Barrier Clause" will change Brazil's
    political panorama.  After the smaller parties lose their viability
    when they fail to garner the required five percent of the national
    vote for the Chamber of Deputies, only five or six parties will
    remain.  Lula's PT will be forced into a center-left alliance with
    the PMDB, which in return for its support will demand control of
    several Ministries to be used to advance the ambitions of their
    supporters.  Meanwhile, the PSDB and PFL will form their own
    center-right coalition as a counter-weight.  Any other surviving
    parties will eventually gravitate to one bloc or another, and Brazil
    will again have something resembling a two-party system.  Kassab
    suggested this would have a salutary and stabilizing effect on
    Brazilian politics.

    ------------
    BOLIVIAN GAS
    ------------

    ¶8.  (SBU) CG expressed interest in Kassab's perspective on Bolivia's

    SAO PAULO 00000722  003 OF 003

    nationalization of its hydrocarbons sector.  Kassab acknowledged
    that although a national issue, this was extremely worrisome for Sao
    Paulo, which remains heavily dependent on Bolivian gas to meet its
    energy needs.  The city and the private sector were already
    exploring alternatives with a view to reducing that dependency,
    though it may have to pay higher prices in the short term.
    Ultimately, Brazil and Petrobras had the stronger negotiating
    position and would find an acceptable solution.  Gasparian
    interjected that the 200,000 Bolivians residing illegally in Sao
    Paulo constituted a serious headache for the city.

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

    ¶9. (SBU) For the leader of a mega-city that recently suffered a
    major trauma and continues to confront challenges in the areas of
    crime, pollution, health care, the informal economy, and a large
    marginalized population, Kassab seemed remarkably relaxed, cheerful,
    and optimistic.  Even the prospect of four more years of Lula, which
    dismays some leaders of the business community, did not appear to
    give him pause.  Indeed, he volunteered that he sees no crises,
    political or economic, on the horizon.  He expressed interest in
    maintaining close contact with the Consulate and having city
    officials participate in several upcoming USG-sponsored events.  END
    COMMENT.

    ¶10.  (U) This cable was coordinated/cleared with Embassy Brasilia.

    MCMULLEN

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