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### Viewing cable 06BRASILIA2246, BRAZIL PRESIDENTIAL ELECTION: VOTERS WILL RE-ELECT

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06BRASILIA2246 | 2006-10-27 11:47 | 2011-07-11 00:00 | CONFIDENTIAL//NOFORN | Embassy Brasilia

`

    VZCZCXRO2291
    OO RUEHRG
    DE RUEHBR #2246/01 3001147
    ZNY CCCCC ZZH
    O 271147Z OCT 06
    FM AMEMBASSY BRASILIA
    TO RUEHC/SECSTATE WASHDC IMMEDIATE 7106
    INFO RUEHAC/AMEMBASSY ASUNCION 5751
    RUEHBO/AMEMBASSY BOGOTA 3980
    RUEHBU/AMEMBASSY BUENOS AIRES 4370
    RUEHCV/AMEMBASSY CARACAS 3481
    RUEHPE/AMEMBASSY LIMA 3221
    RUEHMN/AMEMBASSY MONTEVIDEO 6560
    RUEHPU/AMEMBASSY PORT AU PRINCE 0152
    RUEHQT/AMEMBASSY QUITO 2013
    RUEHSG/AMEMBASSY SANTIAGO 5890
    RUEHRG/AMCONSUL RECIFE 5731
    RUEHRI/AMCONSUL RIO DE JANEIRO 3179
    RUEHSO/AMCONSUL SAO PAULO 8442

` `

    C O N F I D E N T I A L SECTION 01 OF 03 BRASILIA 002246

    SIPDIS

    SENSITIVE
    SIPDIS

    E.O. 12958: DECL: 10/26/2016
    TAGS: PGOV BR
    SUBJECT: BRAZIL PRESIDENTIAL ELECTION: VOTERS WILL RE-ELECT
    LULA, DESPITE SCANDAL ACCUSATIONS

    REF: A. BRASILIA 2193

         ¶B. BRASILIA 2157
         ¶C. BRASILIA 2100

    Classified By: POLITICAL COUNSELOR DENNIS HEARNE. REASONS: 1.4(B)(D).

    ¶1.  (SBU)  Summary.  President Luiz Inacio Lula da Silva (PT
    - Workers Party) appears to be headed for re-election on
    October 29.  Challenger Geraldo Alckmin (PSDB - Brazilian
    Social Democracy Party) has failed to convince a majority of
    voters that they would be better off if he were elected, and
    polls this week give Lula a twenty point advantage over his
    opponent.  The campaign has been conducted amidst accusations
    of corruption and illicit acts by operatives in Lula's PT
    party -- which have apparently not resonated with Lula's
    large base of low income voters -- and specious charges by
    Lula that Alckmin would privatize state entities -- which
    appear to have had some effect, despite Alckmin's vociferous
    denials and lack of any evidence that he ever intended to go
    that route.  Alckmin's sound debating skills have been on
    display through three rounds of televised debates, but they
    have not helped him turn the tide in the electorate.  This
    has been particularly true of the millions of Brazilians with
    low incomes who benefit from government programs aimed at the
    poor, and who are the bedrock of Lula's support base.  In the
    weeks since the first round of voting (refs), Lula has played
    on class and regional tensions, portraying Alckmin as an
    enemy of "social spending," as Alckmin has slipped in polls
    since the first debate on October 8 (refs).  A top pollster
    said only a "spectacular revelation" about Lula could turn
    the tide for Alckmin on October 29.   End summary.

    Lula Almost Certain to be Re-elected

    ¶2.  (SBU)   President Lula will almost assuredly be
    re-elected to a second four year term on October 29,
    defeating Geraldo Alckmin, a former governor of Sao Paulo.
    Latest polling shows Lula could win over 60 percent of the
    vote.  Senior PSDB party leaders have told us in private that
    their party-commissioned internal polling show a much
    narrower gap with Lula, as was the case just before Alckmin's
    surprisingly strong outcome in the first round of voting on
    October 1. Hence Alckmin may yet tighten the result, but it
    is unlikely to be enough to win.  Carlos Augusto Montenegro,
    president of the polling firm Ibope, told media the
    difference is insurmountable, barring a "spectacular
    revelation," such as one directly linking the president to
    criminal acts.

    ¶3.  (SBU)  Alckmin has been unable to construct a winning
    majority of voters with his arguments that Brazil's economic
    growth has stagnated under the current administration, and
    that Lula should be turned out of the Planalto Palace because
    his administration has been convulsed by a series of scandals
    involving cabinet ministers, party officials, congressmen,
    and members of Lula's innermost circle of trusted advisers
    and longtime associates.  But sluggish growth in the economy
    has not proven a selling point to low income voters, and
    Alckmin's attacks on corruption -- including the most recent
    attempts by PT operatives to use illicit funds to buy a
    dossier damaging PSDB candidates (ref c) -- may resonate with
    the middle class, but are not swaying poorer voters away from
    a vote they believe will ensure the continuation of Lula's
    spending on social programs.

    Lula Plays on Class Tensions...

    ¶4.  (SBU)  Lula's campaign has deliberately played on these
    social class differences.  The map of voting patterns after
    October 1 showed a country starkly divided into red and blue
    states along a line separating the country's prosperous
    southern half, with industry and agribusiness, from the
    underdeveloped and poor northeast and north.  In the
    prosperous, comparatively more developed south, center west,
    and much of the south, Alckmin's message of economic growth,
    low taxes, low interest rates and honest government carried
    the day on October 1, while the northeast and much of the
    north voted overwhelmingly then for Lula's promises of
    continued social spending.  Lula's campaign is betting on

    BRASILIA 00002246  002 OF 003

    this continued divide, and his rhetoric draws a line between
    "us" and "them," with Lula portraying himself as a modern-day
    "father of the poor," a title historically associated with
    Getulio Vargas, the populist president of Brazil in the last
    century.  Lula claims that "never before" has anyone done as
    so much for the poor, and warns that if he is not re-elected,
    powerful "elites" will conspire to undo his social programs.
    Alckmin was handicapped by his Sao Paulo origins, while Lula
    comes from a poor Pernambuco family and has a legitimate
    claim to identification with poor northeasterners.  Alckmin
    made only a belated attempt to even address that issue, and
    his messages of honest government and anti-corruption did not
    translate for the poor into a guarantee of a continued
    commitment to social spending.

    ... and Continues With the Misinformation Tactic

    ¶5.  (C)  In the October 23 debate, Alckmin confronted Lula
    over his misleading campaign tactics (refs), and directly
    accused him of lying when he said that Alckmin would
    privatize state-owned enterprises.   Lula in turn claimed
    that he was just "deducing" from Alckmin's and former
    President Fernando Henrique Cardoso's past records that
    Alckmin would privatize.  Lula's campaign has stuck by this
    blatantly deceptive tactic since the October 8 debate, in
    spite of repeated protest from Alckmin that there is
    absolutely no evidence in his platform or statements to
    indicate he intended to privatize any companies.  Fernando
    Henrique Cardoso himself stepped in to defend Alckmin in a
    speech earlier this week in which he said the PT is
    perpetrating a Hitlerian "big lie" campaign with its
    accusations that Alckmin would introduce a new round of
    privatization affecting Petrobras, the Post Office, the Bank
    of Brazil, and the Caixa Economica Federal.  But despite the
    PSDB protests, it appears from polls that this brazen PT
    tactic has had an impact. In a private meeting with the
    Ambassador and PolCouns on 19 October, PSDB party president
    Tasso Jereissati lamented that Alckmin had been placed on the
    defensive on the privatization issue.  He opined that, while
    Alckmin should have challenged Lula on the duplicity of the
    current PT rhetoric, there is no reason to be apologetic or
    defensive about the earlier PSDB government's successful
    privatization programs.  Jereissati said that Alckmin would
    have scored points with many lower income voters if he had
    pointed out that the wide-spread use of cellular phones today
    in Brazil, including among the poor, is a direct result of
    the privatization of the telecommunication sector.

    President's Chief of Staff Named in Investigation

    ¶6.  (SBU)  Two more names of prominent PT figures emerged
    over the weekend as Federal Police continue their
    investigation into a scheme to purchase a dossier of
    ostensibly damaging information about Jose Serra (PSDB
    governor-elect of Sao Paulo) and Geraldo Alckmin.  Eight PT
    figures have already been implicated and will be called to
    testify before a congressional inquiry.  Giberto Carvalho,
    Lula's chief of staff,and Jose Dirceu, a former minister in
    Lula's administration, were discovered to have spoken by
    phone with Jorge Lorenzetti, former chief of a Lula campaign
    intelligence unit, just after the dossier scheme was
    discovered, and well before Lorenzetti's name was in the
    press.  The Parliamentary Inquiry Committee (CPI) that is
    looking into the dossier scandal will hear testimony from
    eight of the implicated figures, but only after the election.
     Indeed, the PSDB continues to criticize the slow pace of the
    investigation, alleging top-down pressure on the police to
    move slowly until after the vote on 29 October.

    Comment:  The Day After -- A Continuing Confrontation

    ¶7. (C)  Lula's campaign has been telegraphing through the
    media that, after the elections are over, their side would
    seek a modus vivendi with the opposition in the interests of
    governability. But we are skeptical that peace will break
    out. The PSDB declared outright on October 24 there will be
    no "governability agreement."  Alckmin stated forcefully this
    week that the PSDB will not stand for "impunity" for
    officials implicated in the dossier case and other scandals.

    BRASILIA 00002246  003 OF 003

    Moreover, in their private conversation with Ambassador and
    PolCouns, PSDB leaders Jereissati and Virgilio laid out two
    possible scenarios, neither indicative of a truce: the
    PSDB-PFL opposition will not force a crisis, and will
    cooperate with Lula in a minimum number of issues of national
    interest, while pointing out the "exhaustion" of his
    government and preparing for the 2010 election; a second
    scenario would see a much more aggressive opposition that
    relentlessly criticizes Lula across the board, presses hard
    for investigations, and does not back away if talk of
    institutional crises roils up again, as it did a year ago at
    the outset of the corruption scandals.  The path will depend
    largely on the scale of the additional scandal revelations
    everyone expects soon after the elections, the choice of
    opposition leadership in the Senate (the harder-line PFL may
    emerge as the largest party in the Senate, depending on
    second round election results) and the overall mood of the
    country, Jereissati opined.

    ¶8. (C) Comment continued.  We would bet on scenario two.
    Indeed, many pundits here are already dubbing the continuing
    conflict scenario the "third round" of the election, in which
    the opposition will attack Lula on the corruption issues,
    while the government and PT counter-charge that the PSDB and
    PFL are trying "a white collar coup," attempting to decimate
    Lula's victory through congressional and police
    investigations, pressure on the judicial system to disqualify
    his candidacy after the fact, and possibly even impeachment.
    All of this suggests to us that October 29 will bring a
    certain but hollow victory and a troubled second term for
    Lula, starting the day after the votes are in.

    SOBEL

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