Brazil: Electoral Reform Falls Short of the Mark

October 19, 2017


Brazil’s general election may be a year away, but frantic preparations for the event are already underway. Just before the October 7 deadline, President Michel Temer sanctioned a series of electoral reforms that had been approved by the federal congress designed to reduce the number of political parties operating in Brazil, cap campaign financing, and limit the power of coalitions. These may improve some aspects of Brazil’s electoral model but are a far cry from the “totally different” political system which the president of the chamber of deputies, Rodrigo Maia, had envisaged. The reforms now pass to the supreme electoral tribunal (TSE), which will then publish a full list of the new rules by March 2018.

The first major change is the creation of a new R$1.7bn (US$542m) electoral fund (FEFC), which will be used to provide public financing for political parties. This is designed to make up for an expected shortfall in funding for what will be the first general election since Brazil’s supreme court (STF) banned corporate donations for electoral campaigns in 2015. Initially, the federal congress proposed that the FEFC should be three times the current amount. But they were forced to back down following a public outcry.

However, some such as TSE justice Gilmar Mendes (a Temer ally) are concerned that FEFC is not big enough. Brazil’s last general election in 2014 cost some R$5bn (US$1.58bn), more than double the budget allocated for 2018, according to the TSE. That figure does not even include under-hand donations to Brazil’s three main parties, the ruling Partido do Movimento Democrático Brasileiro (PMDB), the centre-right Partido da Social Democracia Brasileira (PSDB), and the main leftist opposition Partido dos Trabalhadores (PT), all of which are currently being investigated as part of anti-corruption investigation ‘Operation Car Wash’.

Following backlash from ‘Operation Car Wash’, the new electoral fund is designed make party financing more transparent. In practice, however, the way the FEFC will be divvied up between parties is somewhat opaque. While 2% will be distributed equally between all parties (not just those in represented in congress); 35% will go to parties that had at least one person elected to congress in 2014; 48% will go to parties according to their representation in the chamber of deputies; 48% will go to parties according to their representation in the federal chamber of deputies; and 15% will go to parties according to their representation in the senate. Effectively, this means that Brazil’s biggest parties will be entitled to a larger share of electoral funding. By contrast, smaller parties look set to lose out under the new model.

New electoral financing rules

As well as cracking down on corporate donations, the new electoral model caps donations by individuals to political parties. From now on, individuals can only give up to 10% of their salary to a political party the year before an election, with a maximum donation of R$468,000 (US$153,331) per person.

However, how to regulate candidates who finance their own campaigns provoked some controversy in congress. On 5 October, the senate moved to quash a proposal tabled by the lower chamber to impose a R$200,000 (US$63,000) cap on self-financing candidates. In doing so, the senate did not appear to realise that removing that clause triggered an older law which set the limit to ten times’ Brazil’s minimum wage. The bungled bill then passed to President Temer, who vetoed it on 6 October. Now, it falls on Brazil’s TSE to clarify how the existing regulations should be enforced. Many within the legal community have criticised congress’s handling of the self-financing bill. “The solution they [the senate] found made months of debate in congress about the need for a cap on donations from individuals worthless,” argued lawyer Fernando Neisser, a coordinating member of the Brazilian academy of electoral and political law (ABDEP).

The current regulations regarding self-financing could favour rich candidates who may be running in the 2018 elections. This could benefit presidential candidates like the incumbent mayor of the city of São Paulo João Doria (see sidebar), a former business mogul who spend R$2.9m (US$914,000) on his successful campaign to win the October 2016 municipal elections. Moreover, the new electoral rules could encourage alternative sources of financing such as the use of religious funds. This might benefit candidates such as right-wing candidate Jair Bolsonaro from the Partido Social Cristão (PSC), who has strong support from Evangelical groups.

Electoral threshold

The introduction of a new electoral threshold could limit the participation of smaller parties in the legislature; which could be a mixed blessing. Currently, 26 of Brazil’s 35 registered political parties are represented in congress. On the plus side, this increases political plurality. On the flip side, it can cause governability problems. Indeed, smaller parties tend to band together with larger parties to form fractious yet necessary coalitions. This is problematic because the coalitions tend to be more marriages of convenience than ideological unions, meaning legislators may not end up representing the interests of those who voted for them.

To filter out some of the smaller parties, congress has introduced a new electoral threshold. For the next general election in 2018, parties would need to obtain at least 1.5% of the votes in a third of Brazil’s 26 states to gain access to the shared campaign fund plus their quota of free radio and TV propaganda during electoral campaigns. This threshold will then increase incrementally over the years to 3% of the vote by 2030. Moreover from 2020 (when the next legislative elections are due), electoral alliances will be banned for parties who do not have similar political beliefs. A study by local daily Folha de São Paulo, published on 30 September, shows that 40% of Brazil’s 35 existing political parties could become extinct because of these changes. However, critics of Brazil’s fragmented political system want to increase the electoral threshold even further to 5% in line with countries such as Germany, which could further strengthen the bigger parties.

Stones left unturned

The electoral reforms which eventually passed through congress failed to address many of the electoral flaws which legislators themselves had flagged up. Early proposals to radically overhaul Brazil’s proportional representation electoral model were abandoned. An attempt to correct over-representation in smaller states were similarly scrapped. Similarly, attempts to tone down free spending on radio and TV party propaganda during electoral campaigns were thrown out. “I think this reform is scandalous. It has a few positive changes…but is not what Brazil needs. Brazil needs something more substantial,” said PT Senator Cristóvam Buarque in an interview with local radio station RFI Brazil, broadcast on 5 October.

Legislative priorities

With all the attention in congress turned towards electoral reform, other legislative matters have been left on the backburner. These include important macroeconomic measures including a bill to cap pensions and a tax reform without which Brazil is unlikely to regain the prised investment-grade credit rating it lost in 2015. This has prompted the president of Brazil’s central bank (BCB), Ilan Goldfajn, to remind congress where he believes their priorities should lie. “I believe you can’t escape carrying out the [economic] reforms at some point,” he told federal deputies on 10 October. “The earlier it gets done, the better.”

  • Political campaigning in a digital world

Under the latest electoral reforms, candidates are now permitted to use collective online financing (crowdfunding) to raise money for their political campaigns. However, President Michel Temer vetoed a bill approved by congress that sought to take down any political posts flagged up as fake news within 24 hours due to the risk of censure.

  • Support for Doria falls

A Datafolha survey published on 8 October showed that approval ratings for the mayor of São Paulo has fallen to 32%, down from 41% four months ago. In recent months, Doria has faced a backlash for travelling extensively outside the city of São Paulo ostensibly to canvas support ahead of his presumptive 2018 presidential bid.


This feature was provided to EMIA by our editorial partner LatinNews.

Tags: brazil, election, electoral reform, latam, politics, presidential election, temer
Posted in LatAm, Politics Risk, Politics Risk