By Eduardo Valle, Director - Brazil
Photo Credit: Reuters
Former president Luiz Inácio Lula da Silva’s political return suffered a major setback last week when the Regional Federal Court in Porto Alegre rejected his appeal against a conviction for corruption and money laundering. The case has kept Brazil’s political landscape in limbo since last July’s initial ruling, as Lula continued to lead in opinion polls ahead of October’s elections. The chances that he will appear on the official ballot in October are increasingly slim - as journalist Merval Pereira of the Globo Group put it, "Lula is closer to jail than to the Planalto Presidential Palace.” However, Lula’s presence will continue to greatly influence the already uncertain environment in the run-up to the 2018 election. We take a closer look:
Despite being convicted by all three judges, the former president will not necessarily be arrested immediately, nor will he cease to be perceived as a potential candidate in the run-up to October. Indeed, he has officially accepted his Workers’ Party (PT) nomination, and still remains the frontrunner in opinion polls.
Lula's best hope of avoiding prison lies with the Federal Supreme Court (STF), which would have to grant an injunction. On Monday, however, STF chairwoman Justice Carmen Lúcia said that overturning last week’s ruling would undermine the Supreme Court, implying that she would uphold the appeals court decision. Furthermore, Lula is poised to face further legal scrutiny going forward. Later this month, Judge Sergio Moro will begin to hear witnesses on the accusation that Lula received bribes for contracts signed between Petrobras and Odebrecht on a property frequented by his family in Atibaia, São Paulo.
What does this mean for the former president?
We do not expect to see Lula on the official ballot come October, but his influence and popularity will continue to impact Brazil’s electoral contest. Remaining on the ballot, even symbolically, may unify his party for the time being and secure its survival from infighting and irrelevance. But Lula is bound to lose steam, as most of the political, civil society, business and financial coalitions that contributed to his victory in the 2002 elections will not be inclined to continue to lend their support.
An election without Lula, however, will mean an even less predictable outcome. A January 31st poll conducted by Datafolha, the first since the conviction was upheld, revealed that 36% of voters would vote null or undecided without Lula as a candidate. This is double the percentage afforded to the second-placed, far-right candidate Jair Bolsonaro (PSC).
Parties and coalitions have until August 15th to register their candidates, at which point the Superior Electoral Court will have likely denied Lula’s candidacy. His party would then have until September 17th to present another candidate, though they currently lack competitive names to take his place. The most likely nominees are former São Paulo mayor Fernando Haddad, and former Bahia governor Jaques Wagner, polling at 3% and 2% respectively. PT could support an alternative candidate from another party, such as Ciro Gomes (PDT), but this would be highly unusual, and Gomes is already considered erratic, emotional, and without the self-mastery a presidential campaign requires.
What does this mean for the elections?
While the political left risks fragmentation, that does not mean an open playing field for the center-right Brazilian Social Democracy Party (PSDB), which has been weakened by their own corruption-related issues. Their likely presidential candidate, Geraldo Alckmin, has not yet polled above 11%, and is having trouble appealing to voters beyond his stronghold of São Paulo, which he currently governs. Other centre-right options are even more lacklustre, with Speaker of the House Rodrigo Maia (DEM) and Minister of Finance Henreque Meirelles (PSD) only polling at 1%.
As the center tends to coalesce, it may favor Alckmin, but also TV Globo presenter, Luciano Huck, who has not yet declared his candidacy but has been increasingly courted by the Popular Socialist Party (PPS). He continues to engage with business and political leaders, and has joined “Agora!,” a civil movement seeking to renew Brazil’s public agenda and political actions.
If confirmed as a candidate, Huck – who as of Wednesday’s Datafolha survey is polling alongside Alckmin’s numbers – has the financial power and media presence to be a game-changer and attract part of the current mass of undecided and lower-income voters who would otherwise opt for Lula.
Lula’s shadow will continue to loom large as the march towards October progresses. The other candidates now have the benefit of being able to revise their strategy, but such tactics still hinge on how long Lula keeps his hat in the ring. Also worth noting is that while no one individual candidate emerges a winner from this decision, it is a positive one for voters – this should at least partially clear the way for a more meaningful debate over strategic and urgent issues for Brazil, such as political and pension reforms, health, education, and public security.
To discuss a potential requirement for support, please contact:
Country Manager, Brazil