Brazilian election update: Lula ruled ineligible

As outlined in a post last week, while onlookers around the world advocated for allowing Lula to run in the upcoming Presidential election, many Brazilians already discounted his electoral status. Given his ongoing incarceration and the ‘clean slate’ law, which prevents potential candidates with criminal records from running for office, it was unlikely that Brazil’s Supreme Court would overturn this law.

The principal argument from the international community was that enabling Lula to run would demonstrate the strength of Brazil’s democracy, and any prevention of his ability to run as politically motivated and an overstep of authority by Brazil’s courts. Lula was seen as the far-and-away frontrunner among a fractured and chaotic pool of candidates, with a solid base of support among Brazil’s working and poorer class.

Lula’s involvement in the endemic corruption exposed in the Lava Jato scandal, the reason for his continued imprisonment, sends a strong signal that even Brazil’s political elites are not immune to prosecution. On the other hand, there is no doubt that while Lula continues to be a powerful figurehead, there were, and continue to be, many other members of the ‘elite’ involved in Brazil’s ongoing political corruption, and remain free to enjoy their accumulated wealth, and even continue to run for political office.

Late last night (August 31st), ahead of the official start of the political campaigning season, the Supreme Court affirmed that Lula would be ineligible to run in the upcoming election. As part of their decision, the Court gave Lula’s party, the Workers’ Party, 10 days to appoint a new Presidential candidate.

The heir to Lula’s candidacy for the Workers’ Party, former São Paulo mayor Fernando Haddad, has a very different background than Lula, whose working class roots and origin story, enshrined in the 2009 film Lula, Son of Brazil, have created a strong political mythology that continues to resonate across Brazil. While Lula has led the polling with as much as 40% of the vote, Haddad has failed to capture the imagination of the Brazilian populace despite Lula’s endorsement, only securing 4% of the likely voters in recent (but pre-decision) polling.

lula-hThe economist/academic Fernando Haddad and the former metalworker and union leader Lula, both members of the PT at a political rally

While some have deemed the Court’s decision as rushed, a ruling was much-needed and anxiously awaited by the rest of the candidates, just 40 days ahead of the October 7th first round vote. In the coming weeks, Haddad and Lula will increasingly cast themselves as inseparable, with Haddad as the executor of Lula (and the people’s) will. Whether or not Haddad will manage to win over Lula’s base of support remains a key question for predicting the outcome of the first round election.

Regardless, Lula’s ineligibility has created the feared scenario of a broad fracturing on the left, between the handselected candidate, Haddad, Lula’s former environmental minister mostly left of Haddad, Marina Silva, the center-right candidate, Geraldo Alckmin, Ciro Gomes, and other more fringe candidates.

Given his party’s strength, Alckmin will be propped up by the most television time during the ‘election hour’ — the legally-mandated proportional representation of political propaganda shown on public television during Brazil’s “primetime” hours leading up to the election. The “electoral hour,” a particularity of Brazilian politics, whereby political candidates (Presidential, Congressional, and state/local) are given free airtime upwards of 70 minutes, all shown free of charge. As mentioned above, the proportionate amount of time dedicated to each candidate is determined by the strength of the candidate’s party representation in Congress.

Given the two-round structure of the Presidential elections, whereby the top two candidates from the October 7th first round advance to a two-candidate second round (held October 28th), it’s easy to envision a scenario whereby infighting on the left results in a single member of the aforementioned candidates reaches the second round, joined by the right-wing Jair Bolsonaro. Bolsonaro, who has been polling in second place behind Lula, will have very little television time as a member of the relatively unknown and curiously named conversative ‘PSL,’ or Social Liberal Party.

In this scenario, it will be interesting to see whether the left/center unifies around a single Second Round candidate, or whether Brazil’s endemic corruption and distrust of the political class will drive undecided voters to the ‘incorruptible’ military man Bolsonaro. Among the Brazilians I’ve spoken with, there is a strong sense that voters will coalesce under the ‘Never Bolsonaro’ platform, as opposed to any single candidate. However, as I’ve tried to remind my Brazilian friends, anything can happen, including the previously unimaginable, as the scenario elucidated above continues to seem shockingly close to the circumstances of Trump’s rise to power. Beyond widespread uncertainty, the election will be a strong test of strength of party politics (Alckemin, Haddad), versus forces of personality (Bolsonaro, Marina Silva) that will be studied by political scientists for decades to come.

It will be interesting to see how the financial markets react to the Court’s decision on Monday, as the Real has taken a beating against the dollar over the past week, reaching as high as 4.21 before settling at 4.055 by week’s end.

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