Jun 23 2026 | Nº 12

The Beginning of the Programmatic Dispute

By Paulo Abrão
Executive Director of the Washington Brazil Office

The revelations surrounding Banco Master offer a clear illustration of how Brazil’s electoral environment is being shaped. The scandal, which initially damaged Flávio Bolsonaro’s candidacy, has now begun to affect the government as investigations advance to Jaques Wagner, leader of the government coalition in the Senate and one of President Lula’s closest political allies. The episode reinforces the perception that corruption, political financing, and electoral competition will remain deeply intertwined throughout the campaign. At the same time, recent polls suggest that the initial damage suffered by Flávio Bolsonaro may have stabilized, keeping the presidential race highly competitive.

The economy has also returned to the center of the electoral debate. Congress has approved measures with significant fiscal impacts, while government and opposition forces intensify their dispute over competing visions of fiscal responsibility, economic growth, and governing capacity. Recent improvements in public sentiment about the economy and consumer confidence have created a more favorable environment for the government, although uncertainties regarding inflation, interest rates, and fiscal sustainability remain.

Seeking to establish a positive agenda and present himself as a policy-oriented candidate, Flávio Bolsonaro has begun gradually unveiling key elements of his  platform. The proposals announced so far include a public security strategy centered on expanding prison capacity, suspending the implementation of the tax reform, pursuing a more aggressive privatization agenda, and reducing the fiscal deficit by two percentage points of GDP through the de-indexation of mandatory budget expenditures. Lula, meanwhile, is betting on continued economic improvement and on the electoral benefits of the policies implemented during his administration.

On the institutional front, the role of the judiciary continues to expand. The special election in the state of Roraima produced an unusual outcome: a candidate won by a wide margin but remains barred from taking office while awaiting a final judicial ruling. At the same time, the trial of Eduardo Bolsonaro and the review of Jair Bolsonaro’s house-arrest conditions keep the judiciary at the center of Brazil’s political dynamics.

The digital sphere is also undergoing significant transformation. The Supreme Court has consolidated new rules governing digital platforms, while the new leadership of the Superior Electoral Court has signaled a more cautious approach toward content removal and combating disinformation. Debates over freedom of expression, information integrity, and technology regulation are likely to become increasingly prominent as the official campaign period approaches.

With just over three months remaining before election day, the contest is already unfolding simultaneously in multiple arenas. The outcome will depend not only on the candidates’ ability to win votes, but also on their capacity to shape the political environment in which those votes, particularly those of independent and undecided voters, will be contested.

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The battle for the electoral environment

The revelations surrounding Banco Master offer a clear illustration of how Brazil’s electoral environment is being shaped. The scandal, which initially damaged Flávio Bolsonaro’s candidacy, has now begun to affect the government as investigations advance to Jaques Wagner, leader of the government coalition in the Senate and one of President Lula’s closest political allies. The episode reinforces the perception that corruption, political financing, and electoral competition will remain deeply intertwined throughout the campaign. At the same time, recent polls suggest that the initial damage suffered by Flávio Bolsonaro may have stabilized, keeping the presidential race highly competitive.

The economy has also returned to the center of the electoral debate. Congress has approved measures with significant fiscal impacts, while government and opposition forces intensify their dispute over competing visions of fiscal responsibility, economic growth, and governing capacity. Recent improvements in public sentiment about the economy and consumer confidence have created a more favorable environment for the government, although uncertainties regarding inflation, interest rates, and fiscal sustainability remain.

Seeking to establish a positive agenda and present himself as a policy-oriented candidate, Flávio Bolsonaro has begun gradually unveiling key elements of his  platform. The proposals announced so far include a public security strategy centered on expanding prison capacity, suspending the implementation of the tax reform, pursuing a more aggressive privatization agenda, and reducing the fiscal deficit by two percentage points of GDP through the de-indexation of mandatory budget expenditures. Lula, meanwhile, is betting on continued economic improvement and on the electoral benefits of the policies implemented during his administration.

On the institutional front, the role of the judiciary continues to expand. The special election in the state of Roraima produced an unusual outcome: a candidate won by a wide margin but remains barred from taking office while awaiting a final judicial ruling. At the same time, the trial of Eduardo Bolsonaro and the review of Jair Bolsonaro’s house-arrest conditions keep the judiciary at the center of Brazil’s political dynamics.

The digital sphere is also undergoing significant transformation. The Supreme Court has consolidated new rules governing digital platforms, while the new leadership of the Superior Electoral Court has signaled a more cautious approach toward content removal and combating disinformation. Debates over freedom of expression, information integrity, and technology regulation are likely to become increasingly prominent as the official campaign period approaches.

With just over three months remaining before election day, the contest is already unfolding simultaneously in multiple arenas. The outcome will depend not only on the candidates’ ability to win votes, but also on their capacity to shape the political environment in which those votes, particularly those of independent and undecided voters, will be contested.

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Master scandal now hits Lula's Workers’ Party

A few weeks ago, the Banco Master scandal battered Flávio Bolsonaro's campaign. Now it has become a worry for President Luiz Inácio Lula da Silva — not because any evidence ties him to the case, but because it implicates his Senate whip, Jaques Wagner. The Federal Police raided addresses linked to Wagner last week — he is suspected of advancing legislation to benefit Master in exchange for cash.

Lula's campaign wants Wagner out as whip, but he has signaled he will not step aside voluntarily. His personal closeness to the president gives the opposition fresh ammunition for the corruption card — and, for Flávio Bolsonaro, it blunts the force of his own ties to Master.

A new Datafolha poll released over the weekend suggests the initial damage to Flávio has leveled off. Lula's lead in runoff simulations stands at 4 points — which, just over three months from Election Day, leaves the race in toss-up territory.

Flávio Bolsonaro vows to halt the tax reform

Speaking at an event hosted by the National Confederation of Industry (CNI), Senator Flávio Bolsonaro renewed his pledge to suspend Brazil's tax overhaul if elected president. He says he does not oppose the reform itself, but wants to revisit the rules Congress approved — rules he argues were shaped by lobbying from powerful economic sectors. 

A revision, he said, would allow him to do a “real reform” that could bring the value-added tax down to 20%.

The reform merges several consumption levies into two VATs, one federal and one local, at a rate expected to hover around 28%. The final figure depends on how Congress sets a sin tax: the more exceptions lawmakers carve out, the higher the rate climbs.

Flávio is right that many sectoral lobbies have sought exemptions, and that plenty succeeded. But it is hard to see how sending the legislation back to square one would stop them from trying again.

Roraima special election has a clear winner, but no governor

The first vote of 2026 came in Roraima, Brazil's northernmost state, which held a special gubernatorial election after the Superior Electoral Court (TSE) annulled the 2022 result over a cash-for-votes scheme.

It produced a clear winner, but not a settled one. Arthur Henrique, the former mayor of the state capital, Boa Vista, took nearly 61% of the vote — only to have his ballots frozen as "annulled pending appeal" while the courts weigh his candidacy. House Speaker and interim Governor Soldado Sampaio finished second with 35.72%, and the Workers' Party's Nelita Frank drew just 3.40%.

Henrique resigned as mayor on April 2, short of the three-to-six-month window the Supreme Court imposed in May. On Friday, a court panel upheld that rule, 3 to 1. He is now betting the full bench breaks his way.

With the presidential election due in October, a candidate who won 60% of the vote but is kept from office by distant judges hands the far right a tidy grievance about a rigged system.

OTHER STORIES WE’RE FOLLOWING

Brazilian voters shrug at Trump

US interference in Brazil's elections is among the gravest sources of stress for President Luiz Inácio Lula da Silva's government, and the sovereignty card has been played to exhaustion. But if the polls are any guide, an endorsement from Donald Trump would barely move the needle.

For 65% of voters, Trump's backing of a presidential candidate this year would make no difference, according to a Datafolha survey released Saturday. Just 17% said such support would make them more inclined to vote for the candidate, while 15% said it would make them less so; 3% were unsure. 

The government's real worry, of course, is not an endorsement but something more drastic: possibly linked to a recent US move to designate Brazil's main criminal syndicates as foreign terrorist organizations.

Will Jair Bolsonaro remain under house arrest?

Jair Bolsonaro's house arrest is up for review. The former Brazilian president — sentenced last year to more than 27 years for plotting a coup after losing the 2022 election — was allowed to serve his term at home in late March on humanitarian grounds, as he recovered from health problems and an emergency hospital stay in Brasília. But Justice Alexandre de Moraes called the arrangement exceptional and ordered a review within 90 days, a deadline that falls on Thursday.

First, though, Bolsonaro must answer to the civil police about a firearm belonging to him that was seized during a traffic stop. The weapon was being carried by a member of his institutional security detail. His lawyers say it was headed for repair, was deactivated and that his coup conviction carried no obligation to surrender it or cancel its registration.