Brazil Donation Ban May Aid Mafia, Priests in City Elections

  • Municipal election is first since ban on corporate donations
  • Organized crime stands to benefit, says transparency minister

Brazil’s attempt to stop corporations from dominating politics in the wake of a massive corruption scandal may be backfiring and inadvertently benefiting organized crime, priests and celebrities in next month’s nationwide municipal elections.

The Supreme Court in September last year banned corporate donations to the election campaigns of political parties and candidates, allowing contributions only from individuals for up to 10 percent of their taxed income. Many at the time heralded the decision as a groundbreaking attempt to clean up Brazil’s notoriously corrupt politics following revelations of corporate kickbacks to politicians.

The ruling’s first test is the campaign ahead of municipal elections on Oct. 2, when Brazilians across the country select mayors and city counselors. The decision may be doing more harm than good by benefiting candidates who already have access to large amounts of cash, in some cases through illicit means, said Thiago de Aragao, an analyst for the political consulting firm Arko Advice.

"Organized crime has a lot of money, but not a lot of ways to launder that money," he said. "A drug trafficker can give cash to a candidate in return for contracts when he is elected."

Despite misgivings over the law’s impact, Aragao said he agreed with the ruling. He anticipates it will take candidates at least one more election cycle to adapt their campaigns to the new reality in which licit funds are in short supply.

Corruption Probe

Defenders of the ruling argue it’s important to take corporations out of the political process, especially after a sweeping corruption probe uncovered evidence that some of the country’s biggest companies were illegally funneling millions of reais to political campaigns.

The decision is having a major impact this year, as total declared funding is already down 61 percent from the last municipal contests in 2012, according to data from Brazil’s highest electoral court.

"From now on, political mandates will effectively belong to the voters and companies can fully dedicate themselves to what they know best: generating jobs for the population," Marcus Vinicius Furtado Coelho, then-president of Brazil’s bar association, said when the ruling was made.

But in a sign of how some candidates are finding ways around the law, on Thursday Brazil’s top electoral court announced an investigation into donations of around 16 million reais ($5 million) from individual recipients of Bolsa Familia, the social welfare program that targets the country’s poorest. One single welfare beneficiary gave 67,000 reais.

For an in-depth look at corruption in Brazil, click here.

Torquato Jardim

Photographer: Evaristo Sa/AFP via Getty Images

Brazil’s Transparency Minister Torquato Jardim has also cited concerns over the influence of organized crime in this year’s elections. And Supreme Court Justice Gilmar Mendes, who voted against the decision in 2015 and heads Brazil’s top electoral court, said there’s evidence that criminals are helping to finance campaigns and intimidate rival politicians.

"Is banning companies the right solution?" Minister Jardim said in an interview with the newspaper Correio Braziliense on Sunday. "Organized crime is not going to stay out of the electoral process. Now it has even more of an incentive to finance mandates."

Wonder Woman

Some of the candidates who lack financing are using cheap and colorful stunts in the hope of free media attention. They are dressing up like superheroes to attract voters, running under names including Batman, Robin and Wonder Woman. Without corporate donations to fund TV and radio advertising, they are resorting to off-the-shelf jingles, many featuring the same pop songs.

Religious leaders with large public followings and access to cash are also benefiting, as are celebrities. One of the top candidates in Sao Paulo is a wealthy businessman who made his name on the Brazilian version of Donald Trump’s "The Apprentice."

And according to data from Brazil’s higher electoral court, the amount of candidates using the religious term "pastor" or its variant in these elections has increased by 25 percent since 2012. The leading mayoral contenders in Sao Paulo and Rio de Janeiro, Brazil’s largest cities, have ties to the evangelical movement.

A church leader’s connection with his congregation could help when seeking votes, especially in a campaign season in which candidates have less cash to spend on advertising, according to Manoel Galdino, executive director of the anti-corruption advocacy group Transparencia Brasil, or Transparency Brazil in English.

"Communicating with the electorate is much harder with financial restrictions," he said. "If you are a pastor, you already have this connection with people."

‘Institutional Experiment’

Despite the court’s ruling, the issue of corporate donations is far from settled. Lawmakers are discussing plans to amend the constitution to overturn the ruling, while some members of the top court are questioning the decision. Supreme Court Justice Mendes said at an event in Sao Paulo on Monday that campaign finance rules should be revisited.

"We are going to have a political, electoral, party-based reform after the elections," he said. "I have said that this is an institutional experiment."

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