Brazil High Court Bans Corporate Donations To Political Parties, Election Campaigns

The Logical Indian

September 22nd, 2015

News Source: The Wire, Reuters | Image Source: johnsonmatel

Corporate interference in politics is not to new to emerging economics like India and Brazil but to keep them out is a tough task. Brazil took a stand and kept the corporate out of the ambit of political class. Now the inflow of corporate money could not be seen in municipal as well as federal elections.

Amid a corruption scandal, the Supreme Court of Brazil has banned corporate donations. The scandal heightened public scrutiny of corporate funding as a large number of executives from Brazil’s largest construction firms were indicted on corruption charges for paying bribes from overpriced contracts with Petroleo Brasileiro.

The ruling comes in the midst of Brazil’s biggest corruption investigation into bribes and political kickbacks on contracts with state-oil company Petrobras. The funds allegedly went into the pockets of dozens of politicians in President Dilma Rousseff’s governing coalition.

In a landmark judgement, the Brazilian Supreme Court declared null and void the article of the Elections Act which allowed corporate donations and candidates. In an 8-3 verdict, the Supreme Court said that such donations were “unconstitutional” because “it is for citizens to elect their government, not the companies”.

After this judgement, the political parties in Brazil are left with only choice is to accept donations from the individuals and party funds. The decision came as a big blow to the parties who have close ties with big companies.
The judges brought an important point to public’s notice that the influence of corporate funding is to such an extent that the political parties rather than serving it’s citizens end up serving corporates.

Making a case for curbing donations to election campaigns, Justice Celso de Mello said the “Constitution does not tolerate the abuse of economic power.” Another judge, Justice Carmen Lucia who also voted against the continuation of private funding, said because of corporate donations the candidates end up “representing the interests of companies and not that of citizens”.

The situation in Brazil is such that big corporate houses are the biggest financiers of political parties and 2014 witnessed the year that 95% of the donations came from corporate houses and only 5% came from individual donors. Though donations can still come from individuals but it will be done under legislative oversight. The ban is likely to come into force next year when Brazil holds municipal elections.

Though the case against corporate financing has been before the court since 2013, it’s the Petrobras scandal that triggered a national debate on the need to change the campaign finance model. While the Workers Party has been demanding a ban on corporate money as part of political reforms, both PSDB and PMDB have been opposed to any curbs on campaign donations. The SC’s decision has been on hold for 16 months after one of it’s member, Gilmar Mendes, asked for more time to consider arguing that Congress should rule on the matter first.

As reported by The Wire the companies are finding back-door ways of financing the political parties, but Brazil joins the bandwagon of those countries who have prohibited the influx of corporate money in the  elections.
According to the study of International Institute for Democracy and Electoral Process, the funding of election campaigns by private companies is allowed in more than 125 countries, many of which impose some limitations on it.

India should take a cue from the mass awareness of the public in Brazil as here there is a ceiling to what an individual can spend but not on what one’s political party spends. Even the problem of coalition politics like India is faced by Brazil.

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