The court has been deluged by corruption allegations since early September, after news broke that Daniel Vorcaro—the now-imprisoned owner of Master Bank, a financial firm sunken by massive fraud—had exchanged text messages with Justice Alexandre de Moraes attempting to attain favorable treatment, even invoking the fact that he'd paid significant sums to the law firm of Moraes's wife. The revelations were made public by one of Moraes's fellow justices: André Mendonça, a Jair Bolsonaro appointee. The scandal has shaken the credibility of the court and polarized the public, with effects reverberating through the presidential race, because Justice Moraes was essential in the prosecution and conviction of Jair Bolsonaro.
The conservative, populist former president, then the incumbent, narrowly lost the 2022 election to Lula—who'd returned after two previous presidential terms, followed by his yearslong embroilment in corruption scandals, later cleared by STF. Bolsonaro then helped bring a mob of supporters to disrupt the transfer of power in Brasilia on January 8, 2023. In the aftermath, Bolsonaro was sentenced to 27 years in prison, and Lula consistently praised the leadership of Justice Moraes, even though he hadn't appointed him. So now the growing scandal has led many to connect Lula to Moraes, hurting Lula's reelection prospects as the incumbent president already faces headwinds due to a worsening affordability crisis and questions over his fitness for another term at the age of eighty (and having had two brain surgeries in 2024).
But Flávio Bolsonaro is involved too. He's been linked to Vorcaro as a result of the convicted fraudster having financed a controversial film about Jair Bolsonaro, with speculation that the unusually large sum of money ($24 million, nearly five times more than the previously most expensive Brazilian film) might have been used for other purposes. So, now Brazilian voters increasingly distrust STF and are not enthused about either major candidate for the presidency, with no third candidate able to capitalize on this dissatisfaction.
Lula has tried to redirect attention from the scandal—announcing a big increase to the Bolsa Familia (Brazil's landmark social spending policy) and an end to online gambling—but even leveraging the powers of incumbency, he remains only the slightest of favorites in essentially a coin flip race. And the ramifications of this election will be far-reaching for Brazil and the rest of Latin America.
A Bolsonaro victory would be received positively by financial markets, given his commitment to tighter fiscal policy, and even more positively by the United States. The Trump Administration has long preferred Jair and Flávio Bolsonaro to Lula—given the obvious January 6th / January 8th parallels—even revoking Moraes's travel visa (prior to the corruption scandal) and applying trade pressure on Lula to stop Jair's criminal proceedings. If Flávio wins, he'll move towards a closer relationship with the US, joining President Trump's Shield of the Americas program to combat drug trafficking and enjoying smoother trade negotiations. Yet the concerns of democratic backsliding (including a likely pardon of Jair) and environmental damage (particularly to the Amazon rainforest) will be significant.
A Lula victory would not meaningfully change relations with the US, which have stabilized since the early tensions of Trump's second term. Brazil won't face the same fate from the US as Venezuela, even though Lula will continue to invoke Brazilian sovereignty on the campaign trail given the political upside. And while markets might prefer Bolsonaro, Lula would likewise work to address Brazil's longstanding debt problem through spending cuts, although at a slower pace, unlike the more radical measures preferred by Flávio Bolsonaro and other right-wing leaders in the region, such as Javier Milei in Argentina.
The rest of Latin America will be watching this election closely. The region has experienced a broader conservative turn in recent years, highlighted by the ascendance of figures like Milei and Abelardo de la Espriella in Colombia. That's made it easier for President Trump to engage in the "Donroe Doctrine," from his support of the brutal criminal justice policies of Nayib Bukele in El Salvador to his economic pressure campaign to engineer regime change (or close to it) in Cuba. These regional headwinds favor Bolsonaro and make his election all the more appealing to the Trump administration—given Brazil's status as the region's largest economy and the world's 10th biggest.
Other middle powers will also keep an eye on Sunday's results, given the similar challenges they are facing. Right-wing populism is gaining steam in many middle powers—especially in Europe, as the AfD wins more power in Germany, Marine le Pen leads the polls in France, and Meloni faces challenges from her right in Italy. These gains have been aided by decreasing public trust in institutions as a result of corruption scandals, from the recent allegations swirling around Spanish Prime Minister Pedro Sánchez to the UNGRD scandal during Gustavo Petro's presidency in Colombia. The decline in Brazilian institutions like STF is consequential not just for governance in Brazil and how it might influence the presidential election but also for incumbents in middle powers elsewhere as they try to restore trust in public institutions to fend off populist challengers.
No matter who wins the presidency, Brazil faces real democratic challenges, as confidence in public institutions like the Supreme Federal Court declines in a moment when the country needs more state capacity, not less. To fix its persistent fiscal problems and engineer the level of technological innovation that competitor nations have accomplished, Brazil needs an effective, efficient, and trusted government. And like many democracies, from Europe to the United States, right now it does not have one.
