Legal Magazine

Campaign Finance Law Brings Unintended Consequences

Posted on the 29 November 2016 by Angelicolaw @AngelicoLaw

Brazilian election campaigns have historically been corporate-financed affairs. Businesses looking to influence political agendas through financial backing have long dominated Brazilian elections. Now, however, a 2015 campaign finance law means that funding must come from somewhere (or someone) else.

In the wake of the Petrobras corruption scandal, Brazilian authorities have introduced a tough new campaign finance law that prevents corporate contributions and puts limits on individual contributions to campaigns. While the law is reducing the direct financial influence corporations have on campaigns, it is also bringing unintended consequences.

Corruption investigations revealed the need to reign in corporate contributions. According to Geraldo Monteiro, a political science professor at State University of Rio de Janeiro, 95 percent of campaign contributions in Brazil traditionally came from corporations. It was time to make a change.

Brazil tested the new campaign finance law for the first time in this year’s recent elections. Campaigns are still raising funds, but overall contributions are down. Candidates in this election reported 2.4 billion reais (about $1 billion) in funding, down from 6.3 billion reais in the 2012 election cycle, according to the Globe and Mail.

Though there was less total money at play in this year’s election, the law did not eliminate outside influence. Some fear the new campaign finance rules could have the unintended effect of opening the door to other interest groups, such as churches and even organized crime. Individual contributions have filled some of the campaign finance gap left by corporations, but some of that money has also fallen under suspicion.

So far, the Electoral Court has identified 93,000 people who did not earn enough money to support the total campaign contribution they made, the Globe and Mail reported. That number includes 22,400 low-income people who receive social welfare yet reportedly donated more than 21 million reais. It also includes 46,700 unemployed people who reportedly donated 52 million reais.

Though the new law was meant to reduce corruption, enforcement may now be revealing corrupt practices undertaken in different ways.

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