It would appear that Brazil’s political establishment is 100-percent focused on passing the pension reform. But while the new retirement rules are stirring up heated debates among parties on the House floor, congressional committees continue to operate, and other bills continue being drafted and proposed. One of which went almost completely unnoticed—but it could be extremely consequential. It more than doubles the amount of money allocated to finance electoral campaigns.

</span></p> <p><span style="font-weight: 400;">Since the 2016 election, companies are forbidden from donating to parties and candidates, as Operation Car Wash showed that bribes were often disguised as formal donations. Instead, parties would be financed by public money, by way of an electoral fund divided up in accordance with congressional representation—for example, a party with 10 percent of seats in the House would receive 10 percent of the money.</span></p> <p><span style="font-weight: 400;">Last year, BRL 1.7 billion was allocated to the fund. For next year, lawmakers could set aside BRL 3.7 billion—or 0.44 percent of the federal government&#8217;s net revenue.</span></p> <p><span style="font-weight: 400;">The move is rather puzzling, in a context of the government promoting <a href="https://www.estadao.com.br/infograficos/economia,governo-zera-verba-de-140-projetos-em-11-ministerios-confira-o-tamanho-do-corte-em-cada-area,996736">severe budget cuts</a> in areas such as education, research, and defense. Just a couple of months ago, students and researchers took to the streets to <a href="https://brazilian.report/power/2019/05/16/anti-government-protests-uncertainties-bolsonaro/">protest against said cuts</a>.</span></p> <div class="flourish-embed" data-src="visualisation/486441"></div> <p><script src="https://public.flourish.studio/resources/embed.js"></script></p> <p><span style="font-weight: 400;">And it is not as if parties didn&#8217;t already receive public money to finance their operations. They have the so-called political party fund—money that goes to parties each year, also based on congressional representation.</span></p> <h2>Bolsonaro&#8217;s model for low-budget campaigns not to be followed</h2> <p><span style="font-weight: 400;">Politicians say parties need more money for next year&#8217;s municipal elections, as they must take part in disputes in all of Brazil&#8217;s 5,570 municipalities. But in 2016, when parties had to make do with only individual donations and money from the political party fund, the vote went ahead without major hiccups.</span></p> <p><span style="font-weight: 400;">Last year, Jair Bolsonaro won the presidency after declaring only BRL 2.4 million in expenses (against the BRL 34.4 million of runner-up Fernando Haddad). His campaign was mainly focused on social media, especially after a September 6 stabbing that sidelined him for a month. Many thought that Mr. Bolsonaro&#8217;s winning effort would set a new trend.</span></p> <p><span style="font-weight: 400;">Apparently, that&#8217;s not the case.</span></p> <p><span style="font-weight: 400;">It is worth remembering that when the electoral fund was created, lawmakers wanted it at BRL 3.5 billion (almost the same as now). Public outcry, however, forced Congress into reducing the amount in the fund.</span></p> <div class="flourish-embed" data-src="visualisation/479509"></div> <p><script src="https://public.flourish.studio/resources/embed.js"></script></p> <h2>A costly democracy</h2> <p><span style="font-weight: 400;">Most parties in Brazil are barely defined by their ideology—and serve mostly to enable the personal political ambitions of their leaders (which, in many cases, act as the parties&#8217; &#8220;owners&#8221;). Therefore, campaigns become extremely focused on personalities—rather than values and proposals—demanding more money so that candidates may try to win hearts and minds.</span></p> <p><span style="font-weight: 400;">That &#8220;magic&#8221; number of BRL 3.5 billion, which seems to be popping up frequently, is more or less the total amount in declared expenses of the 2014 general election. That election is, however, the perfect example of how campaign financing got out of control in the country. No wonder many of the key players in that election have spent time in jail—or fallen into political disgrace.</span></p> <p><span style="font-weight: 400;">Let&#8217;s take the winning ticket in 2014, of Dilma Rousseff and her running mate, Michel Temer. Their campaign manager, João Santana, told Operation Car Wash investigators that the presidential bid cost nothing short of BRL 105 million, roughly USD 34 million at the time.</span></p> <p><span style="font-weight: 400;">Just to illustrate how ridiculous the amount is, we&#8217;ve piled up things you could buy with that money:</span></p> <div id="slider-pro-2" class="slider-pro sp-no-js" style="width: 500px; height: 300px;"> <div class="sp-slides"> <div class="sp-slide"> <img class="sp-image" src="https://brazilian.report/wp-content/uploads/2019/07/1.jpg" title="1" /> <div class="sp-caption"><B>136 TRIPS TO SPACE<br><br></B> Going to space costs far less than a presidential race with João Santana. Virgin Galactic’s global community of Future Astronauts offers trips for the full price of USD 250,000. With the money Dilma Rousseff and Michel Temer paid Mr. Santana, you could buy 136 round trips.</div> </div> <div class="sp-slide"> <img class="sp-image" src="https://brazilian.report/wp-content/uploads/2019/07/2.jpg" title="2" /> <div class="sp-caption"><B>THE MAGNA CARTA<br><br></B> Yes, one of the most important documents in European history costs less than a presidential campaign in Brazil. In 2007, an American businessman bought a rare 710-year-old copy of the Magna Carta for USD 21.3 million. You could buy this piece of history and still have USD 12.7 million to spare.</div> </div> <div class="sp-slide"> <img class="sp-image" src="https://brazilian.report/wp-content/uploads/2019/07/3.jpg" alt="CARIBBEAN ISLAND" title="CARIBBEAN ISLAND" /> <div class="sp-caption"><B>A CARIBBEAN ISLAND<br><br></B> According to the website Private Islands Online, you could snatch the 320-acre Baliceaux Island (just south of Saint Vincent and the Grenadines) for “just” USD 30 million.</div> </div> <div class="sp-slide"> <img class="sp-image" src="https://brazilian.report/wp-content/uploads/2019/07/4.jpg" alt="A 1956 Ferrari 290 MM" title="A 1956 Ferrari 290 MM" /> <div class="sp-caption"><B>1956 FERRARI 290 MM<br><br></B>In 2015, a 1956 Ferrari 290 MM was sold for USD 28 million at Sotheby’s, one of the world’s most traditional auction houses. You would still have USD 6 million left over – enough to buy you gas for life!</div> </div> <div class="sp-slide"> <img class="sp-image" src="https://brazilian.report/wp-content/uploads/2019/07/5.jpg" title="5" /> <div class="sp-caption"><B>26 BOTTLES OF RUSSO-BALTIQUE VODKA<br><br></B> If you haven’t heard of this brand, you probably don’t have the cash to buy it. This vodka is produced by a brand belonging to car manufacturer Dartz. The bottle mimics the classic design of the Russo-Balt car model, and each one costs USD 1.3 million.</div> </div> <div class="sp-slide"> <img class="sp-image" src="https://brazilian.report/wp-content/uploads/2019/07/6.jpg" title="6" /> <div class="sp-caption"><B>HARVARD TUITION FOR 471 STUDENTS<br><br></B> Studying at Harvard could amount to USD 72,100 in fees—including housing and travel costs. You could take 471 students and still have money to spare.</div> </div> <div class="sp-slide"> <img class="sp-image" src="https://brazilian.report/wp-content/uploads/2019/07/7.jpg" title="7" /> <div class="sp-caption"><B>12 HOURS OF CHAT WITH KRISTEN STEWART<br><br></B>In 2013, Twilight actress Kristen Stewart accepted a USD 500,000 offer from a Middle Eastern prince for a 15-minute chat. She reportedly gave the money to charity. With USD 34 million, you could spend 12 hours with the blasé movie star. Though we’d have to pass on that one.</div> </div> </div> </div> <p>

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PowerJul 10, 2019

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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.