Observations on election financing

Clara Figueiredo, untitled, Havana, 2019


The current rules that limit and control the financing of the political process, in addition to being very weak, can be easily circumvented in a completely legal way

As the issue of electoral and party funding is back, here is a collection of facts and arguments on the subject.[1]

Financing by companies

Until mid-2015, Brazilian electoral legislation allowed companies to make donations to election campaigns, which could reach 2% of their annual revenue. There are several absurdities of that rule, created in the late 1990s, a period in which everything could be considered – and should become – a commodity. Now, a company is not a political entity endowed with ideology, beliefs, preferences, etc. These things are human characteristics and, by the Constitution, characteristics only of physical persons. Elections should not be transformed into merchandise, with financial participation of companies.

It should be noted that it was the company who made the donation – not its owners, shareholders, directors, etc., who could also finance candidates for elected office as individuals. Therefore, the expenses went to the cost sheet. As with all a company's costs (salaries, taxes, rents, inputs, etc.), those expenses are included in the prices of products and services. Therefore, those who actually finance the political campaigns decided by the owners and top managers of a company are the customers, consumers, clients, users, guests, patients, passengers, etc., without even knowing who they were electing.

The amounts that could be used to finance campaigns and parties, which were then limited to 2% of a company's annual revenue, are very high; the total turnover of companies in a country is measured on the same scale as its GDP. That is, companies had more than enough electoral power to elect as many people as they wanted and the effect of political arguments, participation and militancy by people was diluted in this sea of ​​resources. Thus, companies, their shareholders and owners, in addition to owning the country, ruled over it.

The current legislation changed that situation, after a STF decision that recognized that companies cannot have political will, therefore, nor participation. But the theme may come back. And, unfortunately, there is a lot of support around corporate financing. Much of this support, including among so-called progressive parties and groups, refers to an apparently, but not really, attenuated version of that form of funding.

Financing by individuals

Individual financing is limited to 10% of annual income. Such a rule makes political power greater the greater the economic power of the people, along the lines of the 1824 Constitution, the one that is ridiculed in schools for stating that access to the right to vote and to elected office depended on income. Exactly as it is today! This dependence of political power on one's income is totally incompatible with a democracy.

Allowing individuals to donate up to 10% of their income is an easy way to circumvent the ban on financing by companies, as their owners and senior management have the power to allocate resources to their own personal income and transfer them to their preferred candidates and parties. There is also the possibility of transferring resources from a company to other people, “oranges” or not. Such practices mean that electoral expenses continue to be included in companies' cost spreadsheets and, therefore, being paid by consumers, clients, patients, service users, etc., maintaining the high costs of campaigns and the power of advertising, reducing, as already said, to almost nothing the power of political projects and militancy.

Candidates can use their own resources in an amount that does not depend on their income! Of course, these own resources can reach a candidate's pockets through a private donation, a private deal or any other way. That would turn an election into a kind of investment.

The law imposes limits on total expenditures. But the thresholds are so enormously high that the actual expenses incurred by applicants fall far short of them. There are very few cases of candidates whose expenses recorded in the electoral courts came close to the legal limits. Just to give you an idea of ​​these values: the limits in the São Paulo municipal elections in 2020 were greater than 50 million in the case of mayors and 3,6 million in the case of councillors. Why are the limits so high? Who benefits from these “limits”? The answer is obvious: the economically dominant groups, the very rich people who can finance themselves, etc. And who loses? The answer is also obvious: ordinary workers, popular political groups, economic minorities, etc.

The current rules that limit and control the financing of the political process, in addition to being very weak, can be easily circumvented in a completely legal way. These rules led to an enormous increase in the cost of campaigns and, as already said and repeated, they greatly reduce the weight of political disputes based on programs.

It is not with ingredients like these that a democracy is built. Companies should never participate in political financing, as they are not entities endowed with will, ideology, beliefs, etc. and that those who will pay the bill will be the people who depend on the goods and services produced by them. With this mechanism, ordinary people are forced to unknowingly fund candidates they would never knowingly fund.

Contributions by individuals should not be related to their own income, but rather to some benchmark based on the country's per capita income, to at least allow a large number of people to participate in the political process with some electoral significance. Private resources should be limited to reasonable values, compatible with the economic reality of ordinary people, not with the income of donors and donors, and irregularities punished in both extremes: that of people who make irregular donations (including through disguised means) and of those who receive.

*Octavian Helene is a senior professor at the Institute of Physics at USP, former president of Adusp and INEP. Author, among other books, of A Diagnosis of Brazilian Education and its Financing (Associated Authors).


[1] These facts and arguments were used in several articles published on the subject in Caros Amigos, Correio da Cidadania and Carta Capital (website) and included in the STF bibliography on the subject (stf.jus.br/arquivo/cms/bibliotecaConsultaProdutoBibliotecaBibliografia /annex/Financing_electoral_campaign.pdf)

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