Campaign financing: who's getting the funds?

Hello! In this issue: The most important facts of the week. Brazilians are afraid of unemployment. And Brazil’s campaign financing rules.


The week in review

  • 2018 election 1. Brazil
    has entered the period of national party conventions, which lasts until August 5. During these weeks, parties will launch their candidates and coalitions. The Democratic Labor Party, on the center-left, launched Ciro Gomes &#8211; who, after losing the support of the center-right, raised his tone in order to attract other leftist parties.</li><li><strong>2018 election 2. </strong>Seven center-right parties that operate as a united caucus (the so-called &#8220;big center&#8221;) have decided to support former São Paulo Governor Geraldo Alckmin in the presidential race. The move (which is yet to be confirmed) gives life to Mr. Alckmin&#8217;s bid and comes as a massive blow to Ciro Gomes.</li><li><strong>Infant mortality. </strong>For the first time since 1990, the number of Brazilian children who died before their first birthday has risen. According to the Ministry of Health, Brazil registered a rate of 14 deaths/1,000 <div class="free rcp_restricted 1"><div class="paywall "></div><p> <div class="readmore-cta-block"> <p><strong>Read the full story NOW!</strong></p> <div class="readmore-cta-grid"> <div class="readmore-cta-full"> <a href="https://brazilian.report/subscribe/free-trial/" class="button button-green button-full">Start your 7-day free trial</a> </div> <div class="readmore-cta-half"> <a class="button black-text button-full" href="https://brazilian.report/your-membership/login/?redirect_url=https://brazilian.report/newsletters/weekly-report/2018/07/21/2018-election-rules-campaign-financing-brazil/">Login</a> </div> <div class="readmore-cta-half"> <a class="button black-text button-full" href="https://brazilian.report/subscribe/">Subscribe</a> </div> </div> </div> </p> </div> births in 2016 – up by 4.8% from the previous year. The 2015-2016 zika virus outbreak and Brazil’s recent recession (the worst on record) are the biggest reasons for the rise.</li><li><strong>Corruption. </strong>André Puccinelli, the former governor of Mato Grosso do Sul, was arrested alongside 10 other people. They are suspected of siphoning BRL 235m from the state budget. Mr. Puccinelli had already been briefly jailed last year, also due to corruption allegations.<div class="free rcp_restricted 1"><div class="paywall "></div><p> <div class="readmore-cta-block"> <p><strong>Read the full story NOW!</strong></p> <div class="readmore-cta-grid"> <div class="readmore-cta-full"> <a href="https://brazilian.report/subscribe/free-trial/" class="button button-green button-full">Start your 7-day free trial</a> </div> <div class="readmore-cta-half"> <a class="button black-text button-full" href="https://brazilian.report/your-membership/login/?redirect_url=https://brazilian.report/newsletters/weekly-report/2018/07/21/2018-election-rules-campaign-financing-brazil/">Login</a> </div> <div class="readmore-cta-half"> <a class="button black-text button-full" href="https://brazilian.report/subscribe/">Subscribe</a> </div> </div> </div> </p> </div></li><li><strong>Lula. </strong>The past week brought mixed feelings for former President Luiz Inácio Lula da Silva and his Workers&#8217; Party. The Electoral Justice system denied a request to declare Lula ineligible before the campaign starts. However, the Supreme Court indicated that cases which could result in Lula&#8217;s release from prison may only go to trial in 2019.</li><li><strong>Transportation. </strong>On Friday, radars at São Paulo&#8217;s Congonhas Airport had problems for 45 minutes during the morning. The ripple effect was the cancellation of 107 flights, due to security procedures. It was the third problem of its kind which has occurred over the past month. For the sake of comparison, the fuel shortage caused by the truckers&#8217; strike kept 332 flights on the ground over 11 days.</li></ul> <hr class="wp-block-separator"/> <h2>Brazilians afraid of unemployment</h2> <p>Brazil&#8217;s persistent unemployment rate has taken its toll, even on employed workers. While millions of unemployed people have given up on their search for work, most of those who are currently employed fear for their job safety. In June, Brazil saw its job market shrink by a net 661 places &#8211; commerce and industry cut down 41,000 jobs.</p> <div class="flourish-embed" data-src="visualisation/652652"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <hr class="wp-block-separator"/> <h2>The rules for campaign financing in Brazil</h2> <p>In 2014, <a href="https://exame.abril.com.br/brasil/quanto-cada-candidato-a-presidencia-gastou-na-campanha/">presidential campaigns alone cost a combined BRL 5bn</a>, the most in Brazilian democratic history. Of course, that is without counting the billions that flooded in through illegal means. Most of that amount came from companies, such as the Odebrecht construction group, which donated to the campaigns of all competitive candidates in the hope of being favored, whomever the eventual winner.</p> <p>After Operation Car Wash unveiled how dirty money financed&nbsp;campaigns&nbsp;&#8211;&nbsp;of politicians of all&nbsp;sides &#8211;&nbsp;the Supreme Court&nbsp;ruled that companies would no longer be allowed to donate money to&nbsp;politicians. And Congress then passed a series of new rules for campaign financing:</p> <h4>1. Spending cap</h4> <p>The Electoral Justice system established a cap for <a href="https://brazilian.report/money/2018/08/02/analyzing-public-spending-brazil/">campaign</a> spending to avoid the insane pursuit of money from candidates, who mortgage their administration with big business even before taking office. Here&#8217;s how much each candidate can spend:</p> <h4>2. Electoral Fund</h4> <p>To compensate for the loss of money from companies, Congress created a BRL 1.7bn fund (financed with taxpayer money) to pay for campaigns. The money is split among parties according to their number of seats in the House (after the previous election). The Brazilian Democratic Movement party, of President Michel Temer, will receive the highest amount: BRL 215m.</p> <h4>3. Self-financing</h4> <p>As of 2016, candidates can put their own money into their campaigns. This naturally helps rich politicians with deep pockets, who can have a much more professional campaign than their counterparts.</p> <h4>4. Individual donations</h4> <p>Voters can help their candidates of choice&nbsp;by donating up to 10% of their&nbsp;gross income declared to revenue authorities in the previous year. Campaigns can use certain crowdfunding companies to raise money&nbsp;and people can donate up to BRL 1,000 per day. A voter can donate to multiple candidates, as long as it doesn&#8217;t pass the 10% of revenue&nbsp;ceiling.

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BY Gustavo Ribeiro

An award-winning journalist with experience covering Brazilian politics and international affairs. His work has been featured across Brazilian and French media outlets.