Suspicious Election Result in Brazil Means Trouble Ahead

 By Henry Srebrnik, Saint John Telegraph-Journal

Brazilian President Luiz Inacio Lula da Silva has been re-elected president of Brazil in a result marred by controversy. He won an unprecedented fourth term after a dramatic comeback from a first-round defeat.

The Oct. 25 runoff saw Lula capture 51.8 per cent of the total vote over opponent Flavio Bolsonaro’s 49.2. It capped an evening of chaos at polling places following a last-minute decision to extend voting by two hours. Supreme Court Justice Cristiano Zanin ruled three minutes before the scheduled end of voting to keep polls open for two more hours.

Bolsonaro, whose father Jair is serving a 27-year prison sentence for attempting a coup after he lost the 2022 presidential election to Lula, pointed out that Justice Cristiano Zanin is Lula’s former lawyer and criticized him for “changing the rules of the game in the middle of the game.”

Flavio Bolsonaro bested Lula in the first round of the election Oct. 4, coming in at 47 per cent to 45 per cent for the president. Almost all polling had continued to show Bolsonaro in the lead in the three weeks between the balloting. 

But with just 2.2 million votes separating the candidates in the first round, it turned out even a small change in turnout tipped the balance. This result marked the first time since Brazil’s military dictatorship ended in 1985 that the second-highest vote-getter in the first-round elections won the presidency.

Brazil over the past decade has been dominated by two political forces: Lula, who governed from 2003 to 2016 and again since 2023, on the left; and Jair Bolsonaro, who governed from 2019 to 2023. The imprisonment and electoral exclusion of Jair Bolsonaro attempt have not dissolved his movement

Both men had been hit by corruption suspicions involving family members and allies, so this is not the first time Lula faced an uphill climb. He had in the past been serving a 12-year sentence over a corruption scandal that appeared to have ended his political career. But his convictions were annulled by the Supreme Court in 2021 amid evidence that the judge, prosecutors and the police had colluded to put him behind bars. This freed him to run against the elder Bolsonaro in 2022, a race he won in a huge political comeback.

Jair Bolsonaro’s admission that he accepted about US$12 million from disgraced former banker Daniel Vorcaro to produce a film on his father’s life cast a shadow over his campaign. He is under investigation for corruption, money laundering and tax evasion in connection with the case. Last week the Brazilian magazine Piaui claimed that at the height of Brazil’s 2020 coronavirus outbreak, Bolsonaro attended a boat party attended by sex workers and vaccine lobbyists hoping to strike a deal with the government of his father.

The background to the election is a nationwide corruption case -- the so-called Banco Master scandal, which has tarnished many senior figures, including some in Lula’s entourage. This includes his own son, as well as a key political ally: the country’s most powerful judge, Alexandre de Moraes of the Federal Supreme Court, hero of the Brazilian left and the man responsible for taking down Jair Bolsonaro. Recently, the juror’s ties to the bank’s head, Daniel Vorcaro, now under arrest, have come to light. Investigators believe that Vorcaro acted on different occasions based on advice from de Moraes.

The Banco Master scandal is apparently the largest bank fraud in Brazil’s history. Five years ago, Vorcaro bought a nearly bankrupt bank and renamed it Banco Master. The institution grew exponentially, based on a highly risky strategy, selling fixed-term deposits with interest rates far exceeding those offered by the competition, and without verifying whether it would have the liquidity to pay investors.

The operation functioned, in practice, as a pyramid scheme, in which applications from new customers covered the deficit of previous customers. The bank evidently went as far as to also launder money from the Primeiro Comando da Capital, the largest drug gang in the Western Hemisphere and Brazil’s most powerful crime syndicate. The bank also overvalued the property and assets it offered as collateral.

The fraud was uncovered in late 2025 with the launch of Operation Compliance Zero by the Federal Police and the liquidation of the financial institution by the Central Bank. Vorcaro was arrested last November. The Central Bank is expected to set aside over US$970 million to cover transactions with the failed lender, and the bank’s missing funds may reach US$2.2 billion. A minimum of 1.6 million people may have been affected and lost money.

This has been huge, but not unprecedented. Corruption has been endemic on both sides. Lula’s handpicked successor, Dilma Rousseff, was impeached and removed from office in 2016, also for corruption.

Lula emerged on the political stage in the 1970s, making his name as a union leader on the outskirts of São Paulo. As president between 2003 and 2010, Lula, a former metalworker with a fifth-grade education, created generous social programs that helped some 20 million Brazilians climb out of poverty.

The fiercely contested presidential race has come to a chaotic conclusion, and Lula will face a hostile Congress, where Bolsonaro’s allies are in the majority, and a polarized country. Brazil’s politics, always volatile, may get even worse. Stay tuned.