Lula’s gamble is the final push ahead of the vote without funding from Caracas

The days of plenty are over. The flow of Venezuelan petrodollars has been cut off for good. In an attempt to stage a spectacular comeback in the 25 October run-off in Brazil, the Partido dos Trabalhadores (PT) – now that the gap with Flávio Bolsonaro’s far right appears, according to the polls, to be narrowing to such an extent that a photo-finish result is anticipated – cannot rely on the political alliance with Caracas which, during the first two Lula presidencies (2002–2011) and even afterwards, during Dilma Rousseff’s troubled administration (2011–2016), was enough on its own to allay the considerable concerns of those within the PT responsible for funding last-minute manoeuvres in the electoral arena.

Officially in Brazil, all campaign costs are covered by the Fundo partidário, public funds administered by law by the Supreme Electoral Court. There are no private benefactors who declare funding. But in reality, for decades, the former ‘Saudi Venezuela’ and the state-owned oil company Petróleos de Venezuela – the cash cow of the Chavista regime and its continental diplomacy – have been a helping hand on which the PT could rely. That hand has long since been withdrawn.

Venezuelan oil revenues have been permanently cut off from Lula’s political machine by Donald Trump, via Delcy Rodriguez, the interim president whom the US Administration is currently allowing to postpone elections in Venezuela for the time being. Delcy does not have free access to a single drop of that oil. Moreover, her relations with Brasília have been dire for the past ten years or so. The Lula government has never recognised the interim president, who came to power following the Delta Force operation against the regime’s leader, Nicolás Maduro, on 3 January. But the rift with her goes back a long way. Lula has despised Delcy ever since Maduro, with a lack of foresight, considered her a staunch loyalist and appointed her as Foreign Minister at Christmas 2014. Rodríguez was considered far too ‘Cuban-leaning’ to be acceptable to the demands of Lula-style diplomacy. Itamaraty, the Brazilian Foreign Ministry, had already cooled relations with the Venezuelan Minrex, which had by then become entirely ‘Cubanised’. With Maduro’s arrest, the break was final.

The Chavista lifeline, which had continued to provide some support even in recent years following Chávez’s death in March 2013, has not been replaced. The flood of cash has also dried up; this cash, having swelled thanks to investments by large Brazilian private companies with multi-billion contracts in Venezuela, would somehow find its way back to Brasília. The Odebrecht multinational’s system, to name but one, has collapsed. The immediate cash flow that certain investments in the Orinoco oil fields used to guarantee for Brasília has evaporated.

The judicial investigations that have, in recent years, decimated the Brazilian business elite – along with a large part of the political class – have also severed the underground networks that fuelled election campaigns. This has forced the right to reorganise, but it has also dealt a heavy blow to the left.

Lulism is a political art form that triumphed and defined an era in Brazil. But it is an art form that comes at a cost. Massive injections of private capital into monumental infrastructure projects, the intensive exploitation of extraordinary natural resources, the redistribution of wealth through direct welfare payments, and a deluge of consumer incentives that have created a new class of consumers but also require securing their loyalty as voters.

The Moreira Salles family, Brazil’s leading bankers, have rallied behind Lula. Their bank, Unibanco-Itaú, is the largest private bank in Latin America. The Moreira Salles family is a prominent progressive Brazilian family, whose patriarch, Walter – founder of Unibanco, Minister of Finance and later Ambassador to the United States in the 1960s – is regarded as the founder of the modern banking system in Brazil. They also constitute a powerful empire that has proudly made philanthropy a banner of activism; the Instituto Moreira Salles in Rio is a veritable house of wonders. João Moreira Salles, a documentary filmmaker (in Italy, his brother Walter, a film director and producer, is better known), founder and financier of the cultural magazine Piauí, has launched a heartfelt appeal on behalf of Lula.