Sep 08 2026 | Nº 23

EDITORIAL

The Institutional Crisis Has Now Entered the Election

By Paulo Abrão
Executive Director of the Washington Brazil Office

Less than a month before the first round, Brazil’s presidential campaign is no longer simply a contest between Lula and Flávio Bolsonaro. It is now unfolding alongside an open crisis within the Supreme Court. Justice André Mendonça’s release of a Federal Police report concerning the ties between Justice Alexandre de Moraes and Daniel Vorcaro — the jailed banker — triggered a sequence of accusations, leaks, and counterattacks among Supreme Court justices, culminating in the removal of the Federal Police director-general. The episode exposes a serious institutional fracture and creates a problem that goes beyond the individuals involved: public trust in the institutions responsible for upholding the rule of law precisely as the country prepares to vote.

The far right quickly incorporated the crisis into the campaign. The September 7 demonstrations — held on Brazil’s Independence Day — turned calls for Justice Alexandre de Moraes’s impeachment into a rallying cry and elevated Justice André Mendonça into a political symbol for Bolsonaro’s movement. At the same time, however, Flávio Bolsonaro remains vulnerable to the advancing Banco Master investigations. A new plea bargain by a detained defendant, alleging multimillion-dollar transfers to finance a film about Jair Bolsonaro, together with the already known messages between Flávio and Vorcaro, keeps the scandal at the center of the election. The campaign is now unfolding amid an explosive combination: corruption allegations, suspicions of institutional selectivity, and electoral mobilization against the Supreme Court itself.

The numbers show why this matters. This week’s Quaest and Nexus polls place Lula and Flávio in a statistical tie in a potential runoff, with Flávio holding a narrow numerical lead in one of them. The recent trend points to a weakening of Lula’s position and a more competitive challenger. In such a close election, any new leak, court ruling, revelation related to Banco Master, or foreign interference could rapidly shift public perceptions. Relying solely on an opponent’s erosion is insufficient for any campaign, but ignoring the electoral weight of these crises would also be a mistake.

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Supreme Court ignites major institutional crisis

Less than a month before Brazilians go to the polls, the country is gripped by a new institutional crisis — this one inside the Supreme Court itself.

Last week, Justice André Mendonça unsealed a Federal Police report detailing, in damning specificity, the already-known ties between a fellow justice, Alexandre de Moraes, and Daniel Vorcaro, the disgraced former chief executive of Banco Master, the institution at the center of the largest banking fraud in Brazilian history. Justice Mendonça wanted the full court to decide whether Justice Moraes should be formally placed under investigation.

The response was swift and furious. First came a wave of leaks aimed at Justice Mendonça's reputation. Then Justice Moraes struck directly, asking Chief Justice Edson Fachin to open an investigation into Justice Mendonça for allegedly abusing his authority and steering inquiries to shield allies and punish enemies. His basis: an intelligence report that was never meant to leave the Federal Police.

The feud has laid bare a schism between two factions on the court, and the tit-for-tat escalated again on Tuesday, when Justice Mendonça issued an injunction removing the head of the Federal Police, Andrei Rodrigues, from office.

Justice Mendonça's critics say the timing and sequence of his moves reveal a man working to help Flávio Bolsonaro in the election. (Justice Mendonça was appointed to the court by Flávio's father, former President Jair Bolsonaro.) His defenders say he is trying to keep the Banco Master investigation (which ensnares officials in all branches of government) from being thrown out on procedural grounds before its findings are ever addressed. Both sides may be right.

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Conservatives use Independence Day rallies to target Moraes

For years, Alexandre de Moraes has been a lightning rod for the far right, having presided over a series of cases that damaged the Bolsonaro movement — chief among them the investigation into a coup plot orchestrated by Jair Bolsonaro himself. 

But with evidence now strongly suggesting that Justice Moraes acted on behalf of Banco Master, conservatives have turned calls for his impeachment into an electoral rallying cry. At the same time, they have embraced André Mendonça as a hero "chosen by God," in the words of former First Lady Michelle Bolsonaro, who is running for the Senate in Brasília.

New collaboration raises concerns for Flávio Bolsonaro

A financial operator turned state's witness has told Brazilian prosecutors that he wired USD 12.3 million last year to a US-based fund at the request of Daniel Vorcaro, the jailed owner of Banco Master — money that financed "Dark Horse," a biopic of former President Jair Bolsonaro.

Antonio Carlos Freixo Júnior's plea agreement, now before the Supreme Court, deepens a scandal already weighing on the presidential campaign of Bolsonaro's son, Senator Flávio Bolsonaro. Leaked messages showed the senator pressing Vorcaro for money. He first promised a full accounting, then called the matter closed as his poll numbers slipped.

The fund, Havengate, is run by an immigration lawyer close to his brother Eduardo Bolsonaro, who moved to Texas in February 2025. Investigators are examining whether the seven transfers also bankrolled Eduardo's self-imposed exile. 

Freixo also described suitcase cash deliveries to Vorcaro associates. A private audit found 72% of the film's USD 13.4 million budget was spent in the United States.

OTHER STORIES WE’RE FOLLOWING

Polls turn Flávio Bolsonaro's way

Two new polls released this week put President Luiz Inácio Lula da Silva in a bind. He is tied with Flávio Bolsonaro in a Monday Quaest runoff survey and trails him by 1 point in a Tuesday Nexus poll. Both results sit squarely within the margin of error, but the trend of recent weeks is unmistakably bad for Lula and suggests he would lose if the election were held today.

Lula is said to be unhappy with his campaign's direction and has further narrowed his inner circle to a handful of longtime allies. His team reportedly hopes further leaks will damage Flávio's standing — hardly a sustainable strategy.

Tech issues

The bankruptcy of telecom company Oi is rippling through the electoral system: the Superior Electoral Court and 16 regional courts rely on the company as their main provider, weeks before October's general elections. The court did not respond to questions about a backup plan. Regulator Anatel has found Oi failing to maintain landline service in more than 72 percent of last-resort localities in every month reviewed.