In brief: political finance in Brazil
How are political parties and politicians funded in your jurisdiction?
In Brazil, three pieces of legislation establish the framework for political parties, campaigns and elections:
- the Electoral Code (Law No. 4,737/1965) regulates the right to vote and election, the conduct of elections and the role of the electoral judicial system, and prescribes electoral offences;
- the Law on Political Parties (Law No. 9,096/1995) sets the parameters for the statutes and practices of political parties (parties determine their statutes); it also determines how the parties will be financed; and
- Law No. 9,504/1997 establishes the rules for election campaigns, including requirements for candidates to stand and form coalitions, financing, accountability and campaign publicity.
Political parties are mainly publicly financed through the Special Fund for Financial Assistance to Political Parties (the Partisan Fund) and the Special Fund for Campaign Financing which receives funds from the general budget of the Federal Administration. The distribution of these resources is based on the parliamentary representation of each party.
A different framework is applied regarding campaign contributions. In general terms, individuals can contribute to election campaigns up to 10% of their annual income before the election year, and corporations are no longer allowed to make donations.
Registration of interests
Should parties and politicians register or otherwise declare their interests? What interests, other than travel, hospitality and gifts, must be disclosed?
All income and expenditure of political parties must be reported annually for judicial review. If accounts are dismissed or misreported, the electoral justice system can apply different levels of penalties.
During their tenure, parliamentary representatives are entitled to certain allowances and reimbursement of expenses, such as transportation, accommodation, telephone costs, postal services, maintenance costs of parliamentary offices in support of the parliamentary activity, food costs, security services and the use of consultants.
Senators also have a monthly allowance to spend while in office or are reimbursed for such expenses. Expenses, including medical and dental care, lodging, travel tickets, or aircraft rental, are covered by the Senate if properly reported by Senators.
These interests must be declared to the respective chamber of Congress and made public to all citizens.
Contributions to political parties and public officials
Are political contributions or other payments to parties and politicians limited or regulated? How? ‘Or’ What?
Political contributions and other expenses are highly regulated in Brazil. The 1988 Constitution determines in Article 17, Section 3, that political parties shall be entitled to the resources of the Supporters’ Fund and shall enjoy free access to television and radio. These rules were modified in October 2017 by Constitutional Amendment 97 establishing the minimum threshold for political parties to benefit from these resources (the barrier clause). These rules, which first came into force during the 2018 general election and will be phased in until their full implementation in 2030, are as follows:
- the parties must have obtained at least 3% of the valid votes in the previous elections, which must be distributed over at least one third of the federated states and must have at least 2% of the valid votes in each of these states; and
- the parties must have elected a minimum of 15 representatives of the federal chamber distributed in at least one third of the federal states. Parties that do not meet this threshold will still have the right to run and elect candidates, but will not benefit from the Partisan Fund and free exposure on television and radio.
The resources of the Partisan Fund come mainly from the federal budget, but also from the collection of fines imposed on those who violate the Electoral Code. Additionally, individuals can also make private donations to the Partisan Fund as long as they are earmarked and trackable. The distribution of the fund’s resources is based on the parliamentary representation of each party.
Law 9,096 of 1995 determines the expenses that can be financed from the resources of the Partisan Fund, such as the administrative costs of the party headquarters, staff and campaigns. In September 2019, Law 13,877 made some changes to expand the list of authorized expenses, which now include legal and accounting fees.
In addition to funding, political parties are constitutionally entitled to free television and radio. The counterpart of this indirect public funding comes from tax exemptions granted to broadcasting companies. The minutes allocated to each party are directly linked to the number of elected delegates. Where coalitions of parties are admitted (this is now limited to executive functions), their television and radio broadcasts may be aggregated.
Sources of funding for political campaigns
Describe how political campaigns for legislative office and executive office are funded.
The electoral legal framework in Brazil is established by Law No. 9,504/1997, which has been amended several times.
Until 2016, individuals and private entities were allowed to contribute to political campaigns, with different contribution limits. Previously there was a contribution limit of 2 percent of a corporation’s income and a limit of 10 percent of an individual’s annual income for contribution.
In an effort towards more transparency and less corruption, changes have been made to restrict campaign donations from legal entities. On September 17, 2015, the Supreme Court, seized by the Bar Association of Brazil, ruled that electoral contributions from private legal persons were unconstitutional and would no longer be permitted. The decision took effect immediately. On September 29, 2015, Congress approved the decision and the Executive Office enacted new legislation strengthening the ban on campaign donations by private corporations.
In addition to the individual contribution limit of 10% of their income, to prevent multi-millionaire candidates from having an unlimited advantage over others, the amendments to the Electoral Code made by Law 13.878 of October 2019 established that Candidates’ contributions to their campaigns should have an additional limit of 10 percent of total campaign expenses.
In 2017, other campaign finance amendments were approved by Congress to promote amendments to the Constitution (Amendment 97 of 2017) and Law No. 9,504/1997. Among these amendments, Law No. 13,487/2017 created the Special Fund for Campaign Financing (the Campaign Fund). Unlike the Partisan Fund, which funds the activities of established political parties, the new Campaign Fund funds election campaigns. It is also subsidized by the federal budget and divided among the parties. It was created to fill the void of campaign contributions from private entities.
In summary, the current legal framework:
- allows individuals to contribute to electoral campaigns within the limit of 10% of their income;
- allows candidates to contribute to their electoral campaigns within the limit of 10% of total campaign expenditure;
- allows foreigners (individuals) to contribute to election campaigns as long as the funds come from Brazil;
- prohibits legal persons from contributing to political campaigns; and
- establishes the campaign fund to help finance election campaigns.
Although it is possible to argue that private sector interference in election results has decreased – at least officially – there is no clear evidence that more transparency or less corruption has resulted from the new legislation. Allegations of undue interference by private companies in social media campaigns jeopardize the fair use of political tools. Another consequence of changes to campaign finance legislation is the imbalance caused by multi-billion dollar donors. As in Brazil, individual contribution to the campaign is not a tradition, as soon as donations from private entities were banned, a few individual donors stood out and created an imbalance in the interests represented in Congress.
Involvement of lobbyists in fundraising and election campaigning
Describe whether registration as a lobbyist triggers any specific restrictions or disclosure requirements regarding candidate fundraising.
Although admitted as a practice under the constitutional right of petition, lobbying is not yet regulated in Brazil and registration is not mandatory (or even a voluntary common practice). Therefore, there are no specific rules as to how lobbyists must adhere to fundraising and campaign limits. The rules applicable to lobbyists will be the same as those applicable to citizens in general.
Independent spending and coordination
How is the parallel independent political campaign of a candidate or party regulated?
According to Article 14, paragraph 3, point V of the Constitution, among other conditions, political candidates must be affiliated with a political party in order to stand for election.
However, the issue of independent candidacy for political office is pending a judicial decision by the Supreme Court. The aforementioned constitutional rule is challenged in the face of the American Convention on Human Rights (the Pact of San José), which limits the conditions required for candidates to stand in political elections and does not include in the list the condition of political affiliation. According to the arguments brought before the Supreme Court, the Pact of San José should prevail over the Constitution if it is more advantageous for the citizens.
Regarding parallel campaigning to support or oppose a candidate or political party, the practice would not only be unusual in Brazil, but is also likely to be considered indirect campaigning by the Superior Electoral Court, which may fall within the category of prohibited benefits.
Election campaigning via the Internet, which includes all types of social media, such as websites, blogs, WhatsApp and email, was allowed for the 2018 elections. Anyone can campaign on the Internet, whether that its content is not funded by payment. This restriction does not apply to official campaigns, where a Brazilian internet provider may be paid to augment campaign content to promote a candidate or party, but never to harm other candidates. Fines will be applied for non-compliance.
Date declared by law
Indicate the date the above information is accurate.
December 14, 2021