Cablegate: Pt Internal Elections Head to Second Round

VZCZCXRO5345
PP RUEHRG
DE RUEHSO #0961/01 3401334
ZNR UUUUU ZZH
P 061334Z DEC 07
FM AMCONSUL SAO PAULO
TO RUEHC/SECSTATE WASHDC PRIORITY 7732
INFO RUEHBR/AMEMBASSY BRASILIA 8865
RUEHBU/AMEMBASSY BUENOS AIRES 2976
RUEHAC/AMEMBASSY ASUNCION 3216
RUEHCV/AMEMBASSY CARACAS 0626
RUEHMN/AMEMBASSY MONTEVIDEO 2532
RUEHLP/AMEMBASSY LA PAZ 3612
RUEHSG/AMEMBASSY SANTIAGO 2235
RUEHRI/AMCONSUL RIO DE JANEIRO 8480
RUEHRG/AMCONSUL RECIFE 3913
RHEHNSC/NSC WASHDC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC 2981
RUEHC/DEPT OF LABOR WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 SAO PAULO 000961

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/BSC, DRL/ILCSR, 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: PINR PGOV KDEM ELAB BR
SUBJECT: PT INTERNAL ELECTIONS HEAD TO SECOND ROUND

REF: (A) SAO PAULO 949; (B) SAO PAULO 749;
(C) SAO PAULO 742; (D) SAO PAULO 734;
(E) SAO PULO 129; (F)05 SAO PAULO 1110;
(G) 05 SAO PAULO 1076

SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY

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SUMMARY
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1. (U) Results in the Workers' Party (Partido dos Trabalhadores -
PT) internal elections on December 2 confirm that the old centrist
Majority Camp, associated with President Lula and the inner circle
of his first term, no longer commands a majority of the party
faithful or the leadership, but nonetheless retains considerable
influence within the PT. The PT announced the evening of December 4
that incumbent national president Ricardo Berzoini of the majority
CNB faction, finished first in the party's December 2 internal
elections with 43.75 percent of the valid vote, followed by his
fellow Sao Paulo federal deputy, Jilmar Tatto, with 20.51 percent.
However, Berzoini fell short of the 50 percent required for a
first-round victory and faces a December 16 runoff against Tatto.
It is possible that all six also-rans will join forces to try to
defeat Berzoini in the second round; however, he may be able to make
a deal with either the second- or third-place finisher to secure his
victory. The PT continues to command the loyalties of about 16-18
percent of the electorate, and is strong among the working class and
the poor, but faces significant challenges as it looks towards the
2010 elections without President Lula as a candidate. End Summary.

2. (U) Workers' Party (PT) members went to the polls nationwide
December 2 to elect national, state, and local presidents and
tickets which will form the basis for PT Directorates and
Commissions. Preliminary estimates are that about 325,000 of the
917,000 registered party members, or 35 percent, turned out to vote,
slightly more than in the 2005 elections. The presidents and their
tickets are elected for three-year terms. These elections were
originally scheduled for late 2008, but the party decided at its
National Congress (ref B) to move them up a year to de-conflict them
from the 2008 municipal elections. Unlike the 2005 elections (refs
F and G), this year's balloting was not held in a crisis atmosphere,
as the Lula/PT political corruption scandals are now old news.
Nevertheless, the PT is in a difficult situation as it prepares for
the 2010 elections for President, Governors, and federal and state
legislators all but certain that President Lula will not be a
candidate for office for the first time in PT history. It is
uncertain whether the party will be able to field a viable
presidential candidate of its own.

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SHORT OF A MAJORITY
-------------------

3. (U) With the vote count all but final, former Labor Minister
Ricardo Berzoini is leading the race to win another term as PT
national president, but has fallen short of the 50 percent needed to
win in the first round. He will contest a December 16 runoff
against Sao Paulo federal deputy Jilmar Tatto, who garnered 20.5
percent. Berzoini represents the PT's largest faction, the centrist
Constructing a New Brazil (CNB), formerly known as the Majority
Camp, whereas Tatto is running under an umbrella coalition - "Party
is for Fighting" - composed of his own faction, "PT for Struggles
and Masses," allied with the moderate "PT Movement" and the more
leftist "New Course" tendencies. Struggles and Masses and New
Course are both Sao Paulo-centered organizations loyal to Tourism

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Minister (and former Sao Paulo Mayor, 2001-04) Marta Suplicy. PT
Movement is led by Maria do Rosario Nunes, a Federal Deputy from Rio
Grande do Sul (RS), where the PT is very strong, and Arlindo
Chinaglia of Sao Paulo, President of the Chamber of Deputies. Tatto
made an extremely strong showing in Sao Paulo state, home to about a
third of PT members, outpolling Berzoini here by about 48 to 32
percent.

4. (U) Jose Eduardo Martins Cardozo (see ref A), another Federal
Deputy from Sao Paulo, finished third with just under 19 percent,
and has thus been eliminated from the runoff. The PT's Secretary
for International Relations, Valter Pomar of "Hope is Red," got
11.43 percent, with three militant socialist and Trotskyite
candidates splitting the remaining five percent.

5. (U) The balloting for "chapas" or tickets whose members will
serve on the National Directorate (DN) and various party committees
followed loosely the presidential vote. Berzoini's ticket, CNB, got
42.91 percent of the vote, with Tatto's "Party is for Fighting"
scoring 19.69 percent and Cardozo's "Message to the Party" at 16.84.
Accordingly, CNB, formerly known as the Majority Camp, has won 34
of the 81 elected seats on the DN and will have to negotiate deals
with other factions to secure a majority when voting on party
business.

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A BITTER RIVALRY
----------------

6. (U) Going into the race, all the opposition candidates except
third-place finisher Cardozo pledged that, in the event of a second
round, they would unite against Berzoini and CNB. Cardozo has not
yet made his position known. His "Message to the Party" faction,
led by Justice Minister Tarso Genro and supported by such party
luminaries as Bahia Governor Jaques Wagner and former RS Governor
Olivio Dutra, is a bitter opponent of the CNB and of its de facto
leader, former Lula Chief of Staff Jose Dirceu. (Note: Dirceu
resigned under a cloud in June 2005 and was subsequently expelled
from Congress and deprived for eight years of his political rights.
The Supreme Federal Tribunal recently indicted him on corruption
charges related to his alleged leadership role in the "mensalao"
(Big Monthly Payoff) vote-buying scandal. End Note.) The "Message"
faction is named after a manifesto published by Genro in February
(ref E) calling for the "re-founding" of the PT with a more robust
ethical posture, and blaming the Majority Camp (now CNB) for the
corruption scandals that so badly damaged the PT's reputation.

7. (U) Apparently not eager to make a deal with Cardozo and
"Message," Berzoini and his allies are reportedly reaching out to
Jilmar Tatto and his faction to explore the possibility of a modus
vivendi that would avoid a contentious, possibly fratricidal second
round. Any agreement would involve sharing power and leadership
positions. Tatto and his coalition are champions of strengthening
the party's base and running a PT candidate for president in 2010.
The CNB, as the faction closest to President Lula, favors his
approach of identifying the most viable candidate from any of the
parties in his governing coalition, not necessarily the PT.
Berzoini and the CNB might emerge stronger with Tatto and his
friends as partners rather than as defeated rivals, but whether they
can come to an agreement remains to be seen.

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COMMENT
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8. (SBU) Ironically, Berzoini was not even President Lula's first

SAO PAULO 00000961 003 OF 003

choice for PT President. He has been derided by many PT militants
as a weak leader who was further weakened by allegations of his
participation in the 2006 "dossier" scandal, in which PT members and
Lula campaign workers allegedly purchased a false dossier ginned up
to embarrass Sao Paulo gubernatorial candidate Jose Serra. By all
accounts, Lula preferred his foreign affairs advisor, PT First
Vice-President Marco Aurelio Garcia, who ran the party during
Berzoini's enforced leave of absence. However, Garcia faced
opposition from within CNB and never launched a candidacy, and Lula
grudgingly accepted Berzoini, who now faces the difficult task of
leading the PT through the 2008 municipal elections and into the
2010 campaign.

9. (SBU) When Berzoini and the Majority Camp won the 2005 internal
elections, a number of leftists, some of them quite prominent PT
founders and long-time leaders, defected to Heloisa Helena's
Socialism and Liberty Party (PSOL). Nothing so drastic is expected
to happen this time. If Berzoini prevails, the PT will continue to
chart a pragmatic, centrist course, supporting the Lula
administration's moderate governance, with the left wing and the
social movements continuing to articulate vocal criticism of the
government's economic policies even while remaining essentially
loyal. The "Message" faction will agitate for internal party reform
from a minority position, making scant progress. Jilmar Tatto, for
his part, is known as an urban machine politician without strongly
held ideological views, but some of his supporters are to the left
of center. Were they to hold the reins of power in the PT, they
would likely push for more progressive economic policies. More to
the point, a Tatto presidency would significantly increase Marta
Suplicy's clout within the party leadership and her chances of being
the PT's 2010 presidential candidate. At the moment, she is still
deliberating over whether to make another run for Mayor of Sao Paulo
next year.

10. (SBU) Regardless of which candidate wins, the PT will likely
continue to command the loyalties of about 16-18 percent of voters
nationwide, as evidenced by its 2006 Congressional vote, and to
remain strong among the poor and the working class and in certain
states and regions. If the economy remains strong and Lula's second
term is viewed as successful, the PT may fare well in 2010. For
now, however, it is struggling to find a leader or a theme to rally
around. End Comment.

11. (U) This cable was cleared by Embassy Brasilia.

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