Brazil's Scandal-Plagued Election

Unpacking Brazil's Tied Election and Vorcaro Scandal This is the America's quarterly Podcast. I'm Brian Winter. Brazil's election is just weeks away, and polls suggest the race is tied. On today's podcast, we'll look at the state of Brazil's economy, recent corruption scandals involving the Supreme Court, and other reasons why President Luiz Inacio Lula da Silva's RE election campaign appears to be struggling. Speaker 2 If you see the big numbers of the Brazilian economy, they are really very good. But the fact is that people are not satisfied and Lula can't just accept that. And I, I feel this is this what I mean that I, I feel in the sense that a Joe Biden effect is not the old age of people always say, but the fact he's disconnected with what's common folks perception of how life is going on. Speaker 1 Only a few weeks ago, there was a near consensus in Brazil that President Luis Inacio Lula da Silva was the favorite to win this October's election over his main challenger, the conservative Senator Flavio Bolsonaro. Well, no longer. Today, most polls suggest the race is tied and Flavio Bolsonaro seems to now have the momentum. Today on the podcast, we'll try to explore the dynamics in this race, with the first round of voting on October 4th and a second round very likely on October 25th. It's been a unique and, to outsiders, somewhat confusing campaign in Brazil in recent months. The main issue has been not the economy or security, as we've seen in other recent Latin American elections, but a corruption scandal involving Daniel Vorcaro, A disgraced banker whose network of influence and business ties extended to much of Brazil's political and business establishment. Back in May, Flavio Bolsonaro was badly damaged by revelations that he had asked Borcaro for money to finance a film about his father, former President Jair Bolsonaro. More recently, though, focus has shifted to Borcaro's ties to Alessandra Jim Morais, a powerful justice on Brazil's Supreme Court. Those revelations, in turn, seem to be damaging Lula. Today, we will discuss the latest on this Borgaro scandal, who it might impact. Next, we'll look at other factors in this campaign, including the health of Brazil's economy and whether President Trump will ultimately try to intervene on behalf of the Bolsonaro family. And ultimately, we'll ask our guest for his best guess as to who might win. That guest is my old friend Thomas Troutman, a longtime political analyst and commentator who is also a member of a QS editorial board. Thomas, welcome back to the AQ Podcast. How Justice Moraes's Scandal Impacts Lula's Campaign Thank you very much, Brian, for inviting me again in a very tumultuous time. Speaker 1 Very tumultuous. So OK, Vamos Lach. A month ago, it seemed like Lula was the clear favorite to win this election. Maybe not by a big margin, but he had a pretty clear advantage. The latest polling shows Lula and Flavio Bolsonaro essentially tied. What has changed? Speaker 2 A lot and very little at the same time. I always said this will be very tight election. We are talking about less than 3% of the difference of a margin in the end, the second round that would be only held in October 25th. So it's very important to our audience to understand that for Brazilian standards six weeks is almost essential. Obviously too early to call, but just let's let's understand a little bit what changed. What changed is the great crisis of the Supreme Court in reserve. Everybody who follows a little bit of the Brazilian news knows Brazil's most famous justice, Mr. Alexander Monaes, is involved in a great scandal. His wife was hired by the corrupt banker Danielle Volcaro for a contract that is over $30 million. And we had in the late in the last weeks, there was disclosed some conversation between Mr. Alexander Morais and Mr. Rocaro. And it's basically a conversation between a client and and his lawyer. So it's quite enough evidence to show that Mister Morais, while being the judge of the Supreme Court, was really working for Mr. Rocaro and he should be investigated. This, the fact is that Mister Morais was, let's never forget this. Mr. Moraes was the one guy, the one judge who was the chairman of the Electoral Justice Branch in 2022 that avoided the coup d'etat that was plot by the military and by Mr. Jerry Bosonaro and was the judge who sentenced Mr. Jerry Bosonaro to jail for 27 years. So everything that goes against Mr. Alexander Morais obviously is the seen by the media public as something that is obviously also against ruler and is very making a very short answer or very complex problems. That is what happened. Speaker 1 So that's essentially the connection here between this corruption or at least influence trafficking scandal at the Supreme Court and the election. Is this public perception that Lula and Alessandra Jim Morais, the Supreme Court Justice, are essentially on the same? Speaker 2 Team. Speaker 1 That's that's why this is such a factor in this election, right? Speaker 2 Right. And it's right. I mean, it's, it's, it's, we have seen in the last 3 1/2 years that Mister Shanimorais and Mr. Lula Silva, they work together just to give a very small information for our audience. Lula was, had a had a curl with the, with the president of the Senate and who was the guy who made them sit together and offer a dinner in his house so they could join together and be friends again. And so, I mean, there are, so there's no doubt that this public perception that Alex Shanimorais and Lula works in the same team, it's not really wrong. Brazil's Unique Judicial Focus and Voter Disengagement I'm trying to imagine for our listers who don't regularly follow Brazil, how bewildering this conversation must already be. Because if you follow other elections in Latin America or indeed in other regions, the Supreme Court and especially individual judges are not big themes in the election. I mean, we look at the elections that we've had so far this year in Colombia, Peru, Costa Rica, and the big issues have been security or the economy. And here we are talking about the Supreme Court and an individual judge. If you, you know, it's hard to take a step back, but if we can try, why is this suddenly the issue that we're talking about in the context of this Brazilian election? Speaker 2 Yeah. Well, if we go a little bit further, we would say that, I mean, there's probably no other country that the Supreme Court has so much power as in Brazil. The second point is that Brazilian supreme judges are they are they are pop stars. They give interviews, they talk about anything. They say what they read in the last season. We are such a polarized society that everybody has, let's say, their favorite judges. And so both camps have their favorite judges and specifically Alekshani Morais. Alekshani Morais got to be, I mean, he he had extremely important role on the 2020 second election, 2022 election. He was streaming firm. And probably we would have had a coup d'etat if it wasn't for him. I'm quite sure about that. But the fact that that made him not only extremely known by everyone, but obviously hated by the Bolsonaro cap. So he was in some sense I I would even say that the Bolsonaros hate him. I'll show you Morais even more than they hate Luda. Speaker 1 Because Alexandre Jim Morais was the figure who investigated Jair Bolsonaro and put him in jail, and now he's under house arrest. But he lost his political rights. And that's why the candidate for the Brazilian right is his son Flavio Bolsonaro, the senator. Speaker 2 And at the same time, he was a hero for the left. So this is very, very. So this obviously he grew in this polarized moment of Brazil, you know. Speaker 1 But the irony here is that Alexandre Giamorais now stands accused of having an improper relationship, as you noted, with Danielle Porcado, who is the disgraced banker at the heart of the biggest corruption scandal in recent years in Brazil. Flavio Bolsonaro earlier this year was also revealed to have a cozy relationship with Daniel Borcaro. So how do you how do you explain that one? I mean, they both stand accused of essentially the same kind of influence trafficking. In Flavio's case, he's formally under investigation for money laundering, currency evasion and corruption tied to this case. Is that getting into too fine the details? I mean, I, I do do Brazilians. I mean, how are Brazilians processing that? Speaker 2 Yeah, Is that that's the great irony of this election. No, I, I, I, I, I make a joke that to investigate the judge who took $30 million from a corrupt banker, Brazilians will vote for the candidate who took $10 million from the corrupt banker. Speaker 1 Yeah, that's funny. I, I have wondered, Thomas, to just try to back up again, if the focus on the this corruption case, if the focus on the Supreme Court is actually the product of an election where so many Brazilians are otherwise apathetic. You know, I felt this when I was in Brazil most recently in June. It was so hard to find anyone who was excited about voting for either Flavio Bolsonaro or for Lula. I mean, so different from the previous two election cycles in 2018 and 2022, when it felt like there was so much engagement already at that point in the campaign. Is the focus on all of this scandal and the individual judges at some level, the side effect of an election that Brazilians are otherwise not very excited by? Speaker 2 Yes, I agree with you. Because basically we have two, I think different, different phenomenons in the left. The fact that Lula is 80 years old, he will be 81 in a few weeks. He has been in the political scenario since 1979. Is this is his 7th time he's trying to win the presence. He won three times. Pitay is in power for 20 years. So I mean, there's a fatigue about Lula and the other side flying. Bosunaro is not the candidate that he did the right wanted. So people are being pushed from both sides while this are those are the options and at the same time. So if you don't, if you don't have no candidate, excite people, you can be, you can be distracted, let's say for something else. And at this moment, it's the Supreme Court crisis. It could obviously be, let's say if there was some great tribe of intervention of the US, the US State Department on Brazil elections. This could be something that could have changed the all the paths of this election or it could be, let's say some other crisis, some other crops. But but you are right, I think people are distracted by the Supreme Court because they are not interested enough on the on both candidates. Speaker 1 We'll be back after a short break. The American Society is an amazing place to view art from Latin America. Our new exhibit is Telenovela, a show that explores the cultural significance of the genre across the Western Hemisphere through the lens of visual art. With over 50 artworks made between the 1970s and today, the show argues that telenovelas are an enduring Pan American phenomenon that transcends geography, social stratification, and cultural categories. It just opened and runs through March 2027 in New York City. We hope to see you here. Lula's Campaign Struggles Amid Economic Disconnect So let's talk about each of the two main candidates and how they're presenting themselves. How has Lula been trying to present himself in 2026? As you noted, this is his 7th election. If he wins, it would be his fourth non consecutive term. Is he doing anything different, or is he essentially presenting himself as the same old Lula? Speaker 2 Oh, I think it's one of the worst Lula's campaign I've ever seen. And I, I've been, I'm professionally working on, on Brazilian politics since 1994 because basically Lula feels and, and sincerely, he thinks that he has made a very good government. The fact is that most Brazilians don't agree with him. And, and in a sense, in some sense, I feel that he has been disconnected. I mean, in a way that I will feel that Joe Biden did when he tried to run for re election in the USI mean, if you see the big numbers of the Brazilian economy, they are really very good. Brazil has today, we are the lowest tax of of unemployment inflation for Brazilian standards are quite well and growth. I mean, since the pandemic, Brazil has grown. We are going back to what we had were being before the pandemic. But but the fact is that people are not satisfied and and Lula can't just accept that. And I feel this is this what I mean that I, I feel in the sense a sense that a Joe Biden of fact is not the old age of people always say, but the fact he's disconnected with what's common folks perception of what's how life is going on. You know, and when you see his his televisions ads, they are basically saying, look, we have made a wonderful government. You are not really you are. It's just that you are not informed enough how good we are. You know, he's not trying to say, God, we did some good things but not enough, but we need 4 years more, four years to do the right stuff. I don't know that would be the common way to, to say that he, he's trying to convince people that people are reading their best moments in their lives and they don't feel that. So I feel this is this type of of is a part of arrogance and a part of, of this connection that I feel that it's it's just swallowing the the whole campaign into a very, a very bad pass. Speaker 1 Neither of us are economists. Both of us have tried to dig into the data and understand what might be making Brazilians feel this way. And indeed, in the most recent survey from Quest, nearly half of Brazilians agree that the economy has worsened over the last 12 months. One potential clue Tendencias, A consulting firm, estimates that debt servicing now absorbs roughly 30% of average monthly household income in Brazil. People are overextended. Costs are high. Expectations are also high. Do you just, you know, in a couple words, do you have any kind of theory as to why the pessimism is being felt that way? Speaker 2 I think, I mean basically we are talking about affordability. Obviously, even though the numbers are good, people have less money to spend in the end of their months. And that means or because prices are higher or because they pay so much, so much of their salary goes to paying debts. Brazil, as everybody knows, have probably one of the highest interest rates in the world is the fact is obviously this makes families and companies they feel they are, they are on a drown of debts. And even though, I mean Luna's government made twice, they made big programs to to so that people could change all debts for new debts and with lowest interest. But even even those lower interest rates are still enormous for any standards. Flavio Bolsonaro's Strategy and Ongoing Scandal Impact Thomas looking at the other candidate now, Flavio Bolsonaro. He has presented himself as the most moderate member of the Bolsonaro family. What is his pitch to voters and how is it different from his father's? Speaker 2 I think it's not that different from his father's. I feel that Flavio is just getting the flow. I mean, he still depends a lot on some important figures that's that sometimes are not set interest on his victory. And I'll say one of them very important, his stepmother Micheli Bosunaro, who is extremely important figure in the evangelical right. And he still needs a lot of support of the governor of Sao Paulo, Tassi di Freitas, who would have been the candidate for the idea of many of the centre right. So though he at this moment, no, there's no doubt that flag who has the flow, he still depends on the efforts of Micheli Bosunaru and Taciti Freitas to win. Speaker 1 My feeling is that there's polling that that reinforces this idea. Brazil has become more socially, culturally and economically conservative over the last 20 years. In a race between a generic right wing candidate and a generic left wing candidate, the right wing candidate wins in today's Brazil. Flavio was seen as a favorite prior to his own episode of this scandal involving Daniel Volcano. And every day that passes where the headlines are negative for Lula is a day that sort of pushes more toward that that base scenario. I mean it is Flavio no longer associated with the Banco Masters scandal, with the scandal involving Daniel Volcaro has the has the worst of the political effect from that now passed for him. Speaker 2 No, no, no way. I feel it's just beginning. From day one, both camps knew that they would be in the second round. What they did is basically they Gaza all The Dirty works they had against each other for the second rock, all the attacks after Lula camps against Fahu Bosunaro. They are just beginning. I mean, we will see in the next weeks my friend. Speaker 1 Yeah. I mean, look, I, I certainly heard similar things when I was in Brazil recently. I continue to hear them. You hear this from very senior politicians. You hear this from taxi drivers. I mean, it's the biggest open secret in Brazil, this idea that there's essentially more ammunition that the establishment has saved away against Flavio related to the Vorcado case, and they're just waiting for, quote UN quote, the right time to release it. The idea being that if they release it as close to the election as possible, it will maximize the political effect. Speaker 2 Right. And let's not forget, I mean this. All the mention should have started if it wasn't for the Supreme Court situation. You know, one of the main, main informations that finally the public heard only on last Friday was the fact that Flavi Bolsonaro is officially being investigated by corruption under the network out. I mean, he has been investigated since July and this information was held off from the public by the Bolsonaro's judge. And we have seen in this, in this last days, a lot of of actions from the supreme judges, from the ruler camps against. So, so this is, this is, this is noble. No, the, the question is, it's not that. I mean, it will happen. It's will it happen. In fact, that's that's the main point because maybe people are so disgusted with the Supreme Court, they will say I my most I mean, I don't like I don't like neither of the candidates and but I want one who will change the Supreme Court. Lula won't flavivos and I will, that's I mean and he will choose a flava anyhow. Trump's Role and Brazil's Changing Election Issues And of course, it's also possible that there could be revelations against people close to Lula. I mean, I this, this cuts both ways. And if there's one thing we've seen about this Banco Masters scandal, it's that it touches maybe not everybody, but certainly a huge swath of the Brazilian establishment. Tell me, Thomas, what other issues, And we've talked about this these scandals, we've talked about the economy. Are there any other big important issues in this election that we should watch over the next couple of weeks? Speaker 2 The the question is the, let's say the agenda setting, you know, what is this what Lula wanted to make this campaign about? He wanted to make a campaign about sovereignty and the relation between Brazil and the US and how, if Flavio scenario should win, Brazil would be, let's say, a Venezuela, but now a new Venezuela, not the old Venezuela, Chavista Venezuela of there's Rodriguez at the same side, at the other side. Flyable scenario thought well, this would be a campaign about public security. I am tough on crime. Lula is not I'll make Buchelli type of government. Speaker 1 That security agenda was the path to victory for these other successful right wing candidates in Latin America this year. I mean, it's a recipe that others were also trying to use. Speaker 2 Right, but both strategies just were torn out because people aren't paying attention. Speaker 1 Have you been surprised by the relative silence from Donald Trump so far in this election? Do you think it's because someone has convinced him that it would be better for the Bolsonaro's if he remained relatively quiet? Or do you think it's just a matter of time? Speaker 2 I feel he has more 10 in his office to do than to care about the president election for the time being. But into the second round, I feel that at some moment the US will show their their will. To work with Flavio Bolsonaro would be better than to work with Luda. I feel that this is something a question of time, yes. Women Voters: A Key Factor and Gun Control Debate Do you agree that it would be bad for Flavio Bolsonaro? Speaker 2 Yes, totally, totally, totally. Speaker 1 You recently wrote an article for AQ in which you said that women would be a deciding vote in this election, a deciding factor keeping in mind that the Bolson Auto family has traditionally struggled with female voters, just as other candidates of the New Right have elsewhere in the Americas. How is that going? Has Flavio Bolsonaro? What has he done to try to make inroads with Women Voters compared to his father? And is it working? Speaker 2 That's what very important point women's in the in the vote, I mean direct vote 50%, fifty 3% of the voters in Brazil were women in the last direction. So this is so obviously just to show that women vote more than than men normally in Brazil and Flywheel is trying to do. I mean, he has one economic advisor who is working specifically on putting on on having a program pro woman, entrepreneur woman, how they will have financial education. And so and he for the first time in a long time off Osunaro's campaign, he's talking about domestic violence. He's talking. So he's trying to show himself as a different bosunar in that sense, and he's trying to approach women's voters in a way that his father never did before. Speaker 1 In his first campaign ad, as you noted in your article for us, Thomas Flavio appears alongside his wife, his two daughters and his mother. And Flavio says everyone knows my father, but my daughters, my wife and my mother made me the way I am. I mean, that is that that tells you that this campaign has decided that this is the key demographic for them. Speaker 2 Right, because as you, as you mentioned, not only in Brazil, but normally all other in other countries writers candidates have enormous difficulty with women and there's one thing that in specifically in Brazil valuable. So I will have to at 1 moment he will have to face is the fact of gun control. That's the one thing that in Brazil it goes over between women's, even if they vote for Boston Arabs, women in Brazil are totally in favor of gun control. And the liberalization of Afghan is one of things, something that the Boston Arabs have been long time favoring. And this was something that in the 2022 election was very important that the ruler used the fact that who is throwing guns around or who is. Would you be safe? It was one very important ad would you be safe if your neighbor had a gun and man's would not just care was not a problem if my neighbor have a gun and 80% of the woman so even woman who voted for Boston are said no, I would not be safe if my neighbor had a gun. Now, I don't want nobody to have guns around so so this is something that I feel that this this something that will probably have to probably step a little bit down from his father's position and has have a more mild position on this because this is something that might hurt him with this specific public. Predicting Brazil's Election: Second Round Dynamics Thomas We haven't discussed any other candidates in this race, but there are a few other options. Hornaldo Callado, a veteran conservative in on Santos, an anti establishment pro market candidate from Sao Paulo. There's Au Sukuri, a psychiatrist and best selling self help author who seemed to have a little bit of a moment recently where his numbers went up to 8 or 9%. Should we take any of them seriously as potential contenders for the second round or is it too late for that? Speaker 2 No, no, no, no, they're not serious. I mean, just forget them. The the only importance point, the only importance of Brian on the on those candidates is the fact that this for the first time in Brazilian history, Lula is running alone as the only left candidate. There are no centre left or centre candidates. And what that tell us that when you have Lula and flyable scenario winning going for the second round, all the other candidates will run for Flavio scenario. None of them, none will go for Ruler. So, so that means basically what I, I I think is a very possible scenario that we will have Ruler winning numerically in the first in the first round and the first poll right after. In the second round, we will have Flavio already in the top because all basically the voters from Cayado, from Renal Santos and from Augusto Puri will normally just go for Flav All. Speaker 1 Right. So that takes us to the end game here, Thomas, which is to try to, you know, look at our crystal balls and anticipate what might happen, or at least think about what the determining factors will be. Assuming that it is Lula and Flavio in the second round, which seems like a pretty safe bet, what should we be watching for? Who do you think is the favorite sitting here today? Speaker 2 Sitting here today is but it's still election of 5149 election. So I mean, anything can really change. I feel that I think that the Supreme, the fact that the Supreme Court is bleeding around for everybody to show and everyone, even the Lulisters are scandalized by the relation between Elisha and Demorais and then Elva Carl and the fact that we have other judges who also have justice Supreme Courts who also have, let's say, very close relationship with the Supreme. I mean, it gets get there's not it is not anymore a reputation problem for Supreme Court. It's not a credibility problem. It's almost if they are really, they should be fighting for their legitimacy, you know, and at that moment, at that problem, normally just this should hurt more the establishment guy than the opposition. I mean, is this if people watch and see the establishment in the sense of all the branch of power as corrupt, as degraded, they'll vote for for for for change. So, so this is I see that the the move, the mood seems for change. Ruler might win, yes, because he know and he have won before he knows how to work the machinery. 5 Bosunar is not charismatic rulers much better than him. In a debate we will we have not the debates yet, we will only have them probably only in the second round. But I can and I can understand that the flow goes proflavy because maybe anti establishment movement is so is so high. Speaker 1 But The X Factor would be potential further revelations that might compromise Flavio more than Lula in the final weeks. Speaker 2 Of the campaign, yes. Speaker 1 Thomas, thanks so much for joining us on the AQ podcast. Speaker 2 Thank you very much Brian for inviting me. Speaker 1 Thank you for listening to The America's Quarterly Podcast. If you enjoyed this episode, please leave us a review, give us a writing and subscribe wherever you get your podcasts. The America's Quarterly Podcast is produced and edited by Miranda Massariegos. Our sound engineer is Gabriela Baez.