Until 2018, few people, if any, had ever heard of the Social Liberal Party (PSL). Between 1998—the year of its foundation—and 2014, the party won only four congressional seats, never grabbing more than one per electoral cycle. In 2006, when the party put forward its first ever presidential candidate, it received 62,064 votes—only 0.06 percent of valid ballots. But in 2018, the PSL was elevated to the second-largest party in Brazil’s lower house, with a total of 53 seats and only one behind the Workers’ Party, one of Brazil’s very few grassroots political parties.
The reason for this mercurial rise? The presidential campaign of PSL member Jair Bolsonaro.
But almost exactly a year after the party’s biggest political win, the PSL is on the verge of implosion
, amid a struggle for control over the massive resources the party will receive from a publicly-financed campaign fund ahead of Brazil’s municipal elections next year. Some of the PSL’s highest-profile members are under investigation, suspected of operating a scheme of dummy candidates to siphon money from the aforementioned campaign fund. And President Bolsonaro has publicly discussed <a href="https://oglobo.globo.com/brasil/3046-logico-que-existe-diz-bolsonaro-sobre-chance-de-sair-do-psl-24015090">leaving the party</a>.</p>
<p>It is safe to say that without Mr. Bolsonaro, the PSL would continue being a “dwarf” party in Brazil’s political system. But it is also true that without the PSL, Jair Bolsonaro might never have been elected president. In 2018, most small right-wing parties were keen on <a href="https://brazilian.report/power/2018/07/21/political-coalitions-business-brazil/">allying themselves</a> with then-São Paulo Governor Geraldo Alckmin. The idea of launching the candidacy of a traditional backbencher to the presidency was too rogue for Mr. Bolsonaro’s previous home, the Social Christian Party, hence his move to the PSL.</p>
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<p>Now, relations have bittered between party chairman Luciano Bivar and the president, creating a schism in the biggest conservative force in the country. Both sides accuse the other of corruption, calling for investigations. Mr. Bolsonaro’s allies want PSL’s books to be audited by electoral courts—claiming they will “open the party’s black box”—leading Mr. Bivar’s cronies to call for inspections of <a href="https://brazilian.report/power/2018/10/25/whatsapp-scandal-jair-bolsonaro/">Mr. Bolsonaro’s campaign accounts</a>.</p>
<p>On October 15, the Federal Police carried out search and seizure warrants at addresses linked to Mr. Bivar. He is suspected of quarterbacking a scheme of dummy candidates in order to embezzle public money (a scandal involving Mr. Bolsonaro’s own Tourism Minister, but we’ll get there in a moment).</p>
<h2>The feud between Bolsonaros and the PSL</h2>
<p>Since 1998, the PSL has been dominated by Luciano Bivar—the only man to ever have occupied the party’s chairman position, barring a brief stint during the 2018 election, during which he took leave in order to run for Congress.</p>
<p>Mr. Bivar and his allies centralize control over the party’s structure, which is key to understanding the current feud. In Brazil, party executives hold immense power to distribute funds to political campaigns as they please. Whoever controls the money, controls the names that will have better chances of winning Brazil’s brutal congressional races (unlike the United States or United Kingdom, in Brazil candidates are forced to campaign across their entire state, which incurs <a href="https://brazilian.report/power/2018/07/31/brazil-political-crowdfunding-election/">huge costs</a>—for a more in-depth explanation, <a href="https://brazilian.report/power/2018/10/02/brazil-congressional-races-rules/">click here</a>).</p>
<p>Parties in Brazil are mostly <a href="https://brazilian.report/newsletters/weekly-report/2018/07/21/2018-election-rules-campaign-financing-brazil/">financed with public money</a>, and a so-called “partisan fund” is split among parties based on their representation in the House. With just over 10 percent of House seats, PSL will get a 10.3-percent slice of the whole fund—which will be more than BRL 100 million.</p>
<p>Messrs. Bivar and Bolsonaro’s feud is a tug of war to decide who gets final say over that money as the 2020 elections loom. In Brazil’s municipal disputes often lay the ground for national races, which come two years after. So 2020 is seen as a key battleground for Mr. Bolsonaro’s re-election efforts.</p>
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<h2>A track record of misdeeds</h2>
<p>In just 20 years of existence, the PSL has a habit of <a href="http://www.tse.jus.br/partidos/contas-partidarias/prestacao-de-contas/relacao-de-processos/relacao-de-processos-partido-psl">not complying with Brazil’s electoral rules</a>—which is surprising, as authorities are known for being benevolent towards political parties. Between 1998 and 2013, nine of its 16 annual accounts were rejected by electoral courts—only two passed Brazil’s low standards, and five were approved “with caveats.”</p>
<p>This track record makes the PSL an outlier. The Brazilian Democratic Movement (MDB) party, which was arguably the strongest political group in Brazil for decades, never had its books rejected in the same span. The Workers’ Party suffered two complete and two partial rejections.</p>
<p>PSL accounts show that, in 2017, only two people managed the party’s banking records—and both of them are closely linked to Mr. Bivar. Now, as the party becomes more important on the political scene, it has been placed under increased scrutiny.</p>
<h2>Dummy candidates</h2>
<p>Mr. Bivar and Tourism Minister Marcelo Álvaro Antônio are implicated in a fraudulent scheme deployed during the 2018 election. The practice in question involved the registration of a number of dummy candidates standing for the PSL, each receiving large sums of public campaign funding, which was funneled through companies connected to advisors of cabinet ministers.</p>
<p>The party transferred BRL 279,000 to four women running for state representative, a total corresponding to exactly the minimum amount of funding required for all female candidates. At least BRL 85,000 of this money was paid to companies linked to Mr. Álvaro Antônio’s advisors, including print shops and PR firms. The four candidates were among the top 20 funded PSL candidates in the whole of Brazil.</p>
<p>The problem? The quartet received little more than 2,000 votes between them, suggesting they were never genuine candidates in the first place.</p>
<p>Mr. Antônio was recently indicted by the Federal Police, and revelations from newspaper <em>Folha de S.Paulo</em> have suggested that proceeds of the dummy candidate scheme were used to fund President Jair Bolsonaro’s presidential campaign.</p>
<p>Whether President Jair Bolsonaro will be directly implicated in this new probe remains to be seen.</p>
<h2>Can Jair Bolsonaro just leave his party?</h2>
<p>Officials elected to majority seats (president, senators, governors, and mayors) can leave their <a href="https://brazilian.report/opinion/2018/10/15/autopsy-brazil-party-system-oped/">parties</a> at any time. Still, no sitting president has ever changed parties midway through their term.</p>
<p>Lawmakers at all levels, however, are elected in proportional elections—and are unable to switch parties without losing their sears, with the exception of some specific situations:</p>
<ul><li>The so-called “partisan window,” a 30-day period in electoral years during which politicians can move around freely;</li><li>When a party incorporates or merges with another;</li><li>After a substantial change or deviation from the party’s program;</li><li>Grave personal discrimination within the party.</li></ul>
<p>In those cases, and those cases alone, members of Congress would be allowed to switch parties <em>and</em> take with them their “share” of the partisan fund. Otherwise, the party keeps the rights over their allowance. Mr. Bivar’s group is proposing to let the group linked to Mr. Bolsonaro (some 20 to 25 politicians) leave without going after their terms—providing they give up any right to the campaign money for 2020.</p>
<p>The offer bears little chance of being accepted.</p>
<p>There are also talks of the Bolsonaro family forming a new party—but there wouldn’t be enough time to comply with all of the requirements in time for 2020. However, work has already been done to creating a manifesto for this new political clan, which reportedly will be called the Conservative party.</p>
<p>No matter how the story ends, we seem to be heading to an inevitable divorce between Mr. Bolsonaro and his party. It’s hardly uncharted territory for him, however, having switched parties eight times since 1989.
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