Supreme Court crisis and Master scandal shape first round of campaign - Valor International

Marked by a lack of direct debates on policy between the leading candidates, as well as the Master scandal and the judicial crisis at the Supreme Federal Court, Brazil’s 2026 presidential election enters its first round with the polarization between President Luiz Inácio Lula da Silva (Workers’ Party, PT) and the Bolsonaro family firmly entrenched. The scenario has stifled attempts by other centrist and right-wing forces to advance an alternative candidacy.

On the PT side, there had been expectations of an emotional, historic campaign in which Lula would address Brazilians in a solemn tone to make his final appeal for votes and secure a fourth presidential term. Senator Flávio Bolsonaro (Liberal Party, PL, Rio de Janeiro) was considered the easiest candidate to face, but the resilience of Bolsonarism became evident as soon as former president Jair Bolsonaro confirmed his eldest son as his representative in the election.

At no point did the political isolation of the leading opposition candidate prevent him from consolidating second place, maintaining a wide lead over other contenders and drawing level with the PT candidate in second-round polling. “We never thought it would be easy, but we didn’t think it would be this close,” one of Lula’s campaign coordinators confided to Valor in early September.

When it became clear that Flávio, rather than São Paulo Governor Tarcísio de Freitas (Republicans), would be the main opposition candidate against Lula, leaders of the Centrão bloc of center-right parties were among the first to abandon the effort. In July, during the final stretch of party conventions, the PL senator made an intensive effort to attract at least De Freitas’s Republicans party, but pressure from pro-Lula party leaders in the Northeast made the plan unfeasible.

The race alternated between moments when third-way candidates came close to gaining momentum and periods when the Lula-Bolsonaro polarization and the pragmatism of strategic voting blocked their growth.

The threat of a “blue wave” raised alarm bells at both Lula’s and Flávio’s campaign headquarters. In early September, the candidates and their teams were taken by surprise when a poll showed writer and psychiatrist Augusto Cury gaining prominence ahead of the pack of minor candidates, becoming the first to reach double-digit support in a survey. On September 2, a Quaest poll showed the Avante candidate’s voting intentions jumping from 2% to 10%.

The result was attributed to his performance in a debate organized by TV Bandeirantes, although it did not yet reflect the impact of his interview on TV Globo. At his strongest moment, Cury criticized the aggressive style of Renan Santos (Mission Party), seeking to establish himself as an alternative for voters looking to escape polarization but unwilling to support a candidate championing an anti-establishment agenda. Known for his self-help books, which have sold tens of millions of copies in Brazil and abroad, Cury never again managed to reach double-digit support in the polls.

On another front, Mission candidate Renan Santos, a former member of the Free Brazil Movement (MBL), which rose to prominence during the 2013 protests, generated enthusiasm among segments of the financial market with his economically liberal platform. His main proposals include a “Fiscal Balance Constitutional Amendment,” an ambitious target of saving R$250 billion a year, removing constitutional spending floors for health and education, and decoupling social benefits from the minimum wage.

The candidate’s informal style also attracted young voters, who helped elect Lula in 2022. Santos caused a stir by arguing that Brazil should develop nuclear weapons as a deterrent. “If Brazil wants to become one of the five largest nations in the world, it will need sovereignty over its own territory, military sovereignty, and it will have to discuss having atomic bombs,” he argued.

The poor performance of the two former governors came as a surprise. Ronaldo Caiado (Social Democratic Party, PSD), of Goiás, and Romeu Zema (Novo Party), of Minas Gerais, never exceeded 5% of voting intentions. Zema has been polling at 1%, well below expectations for a politician who governed one of Brazil’s most important states after São Paulo for two terms and which has the country’s second-largest electorate.

Caiado, meanwhile, has the backing of the PSD, one of the country’s strongest parties, which elected more mayors than any other party in 2024. His running mate is the party’s president, the experienced Gilberto Kassab. Allies had expected more from the Goiás politician, who gained some prominence while still in office through data highlighting his administration’s public security policies.

With the race narrowing to a contest between Lula and Jair Bolsonaro’s heir, one of the campaign’s central narratives became the film “Dark Horse,” about the former president’s life and political career. In May, during the pre-campaign period, the website The Intercept revealed an audio recording held by the Federal Police (PF) in which Flávio pressed former banker Daniel Vorcaro to transfer funds from Banco Master that had been promised for the film’s production.

“Brother, I’m with you and will always be with you. There’s no room for half-measures between us,” the senator says in the recording, which attracted widespread attention across the country. According to the Federal Police, Master was expected to transfer R$134 million to the film, of which approximately R$61 million had reportedly already been sent through an investment fund.

Flávio argued that the money came from private sources, but one line of investigation focused precisely on the public nature of the billions of reais invested in the financial institution, originating from pension funds for public-sector employees in state and municipal governments, including those of Rio de Janeiro and Amapá.

As another defense strategy, the senator shifted responsibility for accounting for the film’s finances to its production company. The report, which has already been reviewed by the São Paulo Civil Police, is now being examined by Federal Police investigators. The case is also before the Supreme Court because the production company received funds from congressional budget earmarks.

The audio episode was the lowest point of the Bolsonaro campaign and one of Lula’s strongest moments. In contrast, one of the PT campaign’s worst moments came on September 14, when a Quaest poll showed the PL’s rival numerically ahead of Lula in a hypothetical runoff. Flávio registered 42% of voting intentions, compared with 40% for the PT candidate. Although the result was within the margin of statistical error, the emotional impact of the figures sent shock waves through the PT campaign headquarters. For one campaign source, however, the result served to shake the party out of its inertia.

The audio recording of Flávio speaking with Vorcaro destabilized the PL campaign, meanwhile. It halted Flávio’s rise in the polls, which had alarmed the PT, and, more importantly, caused his support to decline.

Another setback, almost simultaneous with the explosive recording, came with the release of a video in which his stepmother, former first lady Michelle Bolsonaro (PL)—now a Senate candidate for the Federal District—accused him of mistreating and humiliating her, leading to a decline in his support among women and evangelical voters.

At this point, two interventions by PL President Valdemar Costa Neto proved decisive in helping Flávio’s campaign recover and consolidate its position. First, he negotiated and facilitated a public reconciliation between Flávio and Michelle, after which the senator resumed his rise in the polls. Weeks later, following two changes in campaign advertising strategists, Costa Neto imposed the appointment of publicist Duda Lima to take charge of the campaign’s strategy and creative operations.

In recent weeks, further leaks from the Master investigation have affected Flávio, including the revelation that he had flown on the same private jet as Vorcaro and STF Justice Alexandre de Moraes. None of these revelations, however, caused significant damage to his candidacy.

But the Banco Master scandal, which engulfed the Supreme Federal Court, also spilled over into Lula’s campaign. For most of the campaign, the Bolsonaro camp’s strategy of linking the PT candidate to Justice Alexandre de Moraes prevailed. A nemesis of the Bolsonaro family, Moraes became a central figure in the crisis after the release of conversations in which he apparently advised former banker Daniel Vorcaro on a possible escape. “Moraes is Lula, Lula is Moraes” became a campaign slogan for the PL.

On the other side, within the PT campaign headquarters, one faction of the coordination team viewed the defense of Lula’s legacy and the emphasis on national sovereignty as misguided bets at the start of the race. Meanwhile, Flávio was using his allotted television campaign time to criticize the rising cost of living and food prices, pushing an empty shopping cart through a supermarket. Another perceived failure was the absence of the broad coalition that had boosted the PT candidate in 2022. One party leader told Valor that he regretted the increasingly personalized nature of the race, which had relegated Vice President Geraldo Alckmin (Brazilian Socialist Party, PSB) to a supporting role.

As time helped neutralize the impact of Flávio’s audio recording, Lula’s campaign faced one storm after another. The joint parliamentary inquiry commission (CPMI) investigating misappropriation of funds at the National Social Security Institute (INSS) brought to light suspicions of businessman Fábio Luís Lula da Silva, known as Lulinha, being involved in fraud targeting retirees and pensioners.

The investigation revealed ties between Lula’s eldest son and lobbyist Roberta Luchsinger, who worked on behalf of Antônio Carlos Camilo Antunes, who is suspected of leading the INSS fraud. The crisis worsened when it became public that Marco Aurélio Santana Ribeiro, known as Marcola, chief of staff at the Presidential Office and one of Lula’s closest associates, had received money from Roberta. Removed from his position and from the campaign, he claimed in a statement that the funds were loans that had already been repaid.

It was only in mid-September, with the announcement of a 15% increase in Bolsa Família benefits, that the campaign reversed its downward trajectory. Described by opponents as an electoral handout and an abuse of public resources, the increase expanded Lula’s package of benefits. This was followed by a third round of the Desenrola debt renegotiation program to assist indebted households and a promise to make weight-loss injections available through Brazil’s Unified Health System (SUS).

A survey by Valor showed that Lula’s package of benefits reached nearly R$270 billion this year, taking into account subsidized credit, expanded benefits and tax breaks. It will require adjustments to the 2027 Annual Budget Bill (LOA) to accommodate R$33 billion in additional spending and lost revenue.

Lula’s final surge took shape around two controversies: a provisional presidential decree (MP) banning online betting companies, known as bets, and a dispute involving Our Lady of Aparecida’s title as Brazil’s patron saint. There were also expectations that his absence from the TV Globo debate would open up another line of attack for his opponents. The event, however, was ultimately canceled following a series of court rulings.

This article was translated from Valor Econômico using an artificial intelligence tool under the supervision of the Valor International editorial team to ensure accuracy, clarity, and adherence to our editorial standards. Read our Editorial Principles.