Ban on corporate donations is a challenge for election campaigns.

Ana Cristina Campos – reporter for Agência Brasil

This year's election campaigns cannot be financed by companies, only by individuals and political parties using funds from the Party Fund. The prohibition of financing by legal entities is one of the main changes brought about by the mini-electoral reform (PL 5.735/13), approved last year.

Under the new legislation, individuals can make donations to candidates and political parties through a specific bank account opened for the campaign. The donation can be made by check, identified deposit, or credit card. The important thing is that it is possible to identify the donor's origin.

Individuals can donate up to 10% of their gross income from the year prior to the election. Candidates for mayor or city council can donate to their own campaign up to the limit of their net worth, respecting the campaign spending limit established by the Superior Electoral Court (TSE).

According to TSE (Superior Electoral Court) minister Henrique Neves, campaign spending this year has a limit that takes into account the 2012 elections. "Now in 2016, only 70% of what was spent in the 2012 elections can be spent," he explains.

He gives the example of the city of São Paulo, which has the highest spending limit: "In São Paulo, they calculated how much was spent in the 2012 election, applied that percentage, and arrived, unless I'm mistaken, at something around R$ 34 million, which is the maximum spending limit in the [mayoral] election."

The minister believes that the ban on corporate financing will have a major impact on this year's campaigns. "Some studies indicate that, in the 2014 elections, around 95% of the funds raised came from legal entities," he points out.

According to Henrique Neves, another situation that will occur is the low spending limit for campaigns in most cities, especially smaller ones. He says that in more than 4,5 Brazilian municipalities, the campaign limit for city council candidates will be only R$ 10 per candidate.

"Then the problem arises in another way: it's not about not being able to raise the R$10, it's about not letting campaign expenses exceed that amount, because if they do, the candidate may, in addition to a fine, face a challenge and, even if victorious, could be removed from office if it is found that there was excessive fundraising or abuse of power," says Neves. "We will have two extremes: in some municipalities it will be difficult to raise the limit, and in other municipalities it will be difficult not to exceed that limit."

Party Fund

In addition to donations from individuals, campaigns may be financed by the Party Fund, composed of electoral fines and funds from the Union Budget. According to the TSE (Superior Electoral Court), the Party Fund allocates just over R$ 819 million for 2016.

According to Judge André Guilherme Lemos Jorge of the Regional Electoral Court of São Paulo and author of the book "Manual of Electoral Law and Jurisprudence," the Party Fund is allocated by the presidents of the party directorates. He believes that candidates in smaller cities will have difficulty obtaining these resources. "The Party Fund is a short blanket; it won't be enough to finance all the candidates for city council and mayor," he says.

Creativity

According to Anderson Pomini, a lawyer specializing in electoral law, the main objective of prohibiting corporate financing is to try to ensure that candidates start the electoral process on an equal footing. "It's a very significant change where parties and candidates will have to be creative in getting voters involved in the electoral process. Certainly, the internet will be the main tool in this campaign, especially due to its low cost. Those million-dollar campaigns, with million-dollar marketing professionals, are over under the new legal system," he assesses.

The lawyer, however, believes that the new rule will benefit those currently in office seeking reelection, as well as candidates already known to voters, such as artists: "The unknown candidate will have to reinvent themselves to present themselves to the political-electoral scene. I believe we will have the highest reelection rate in history, even with this unstable political landscape."

municipal elections

On October 2nd, voters will go to the polls to elect mayors and city council members. The second round, if necessary, will be on October 30th. The second round is only held in municipalities with more than 200 voters where no candidate obtains an absolute majority, that is, 50% of the votes plus one. The TSE (Superior Electoral Court) estimates that this year's elections will have more than 500 candidates for mayor and city council members.