Brazil's Bolsonaro says he will veto lawmakers' $1 bln electoral fund

Brazil's President Jair Bolsonaro speaks to the media as he leaves Vila Nova Star Hospital, where he was treated due to obstructed intestine, in Sao Paulo, Brazil July 18, 2021. REUTERS/Amanda Perobelli

BRASILIA, July 20 (Reuters) - Brazilian President Jair Bolsonaro said on Tuesday that he would veto a new 5.7 billion reais ($1.09 billion) electoral fund, potentially setting himself up for a fight with lawmakers whose support is crucial to fending off impeachment proceedings.

Bolsonaro, a far-right former army captain who was elected on a wave of anti-corruption sentiment, has been under pressure from his supporters to kill the generous, self-appointed package.

The fund mechanism was set up in 2017, as Brazil was roiling from years of high profile graft scandals.

A ban on corporate donations coupled with the drying up of under-the-table contributions in the wake of the scandals left lawmakers struggling to raise campaign cash, so they created the taxpayer-paid fund to offset the losses.

Bolsonaro was also under pressure to veto a 2 billion reais fund for local elections in 2020, but eventually did not, alleging he had no choice. However, the latest 5.7 billion reais package seems to be a step too far for him.

"I have the freedom to veto, and we are going to veto it," he said in a radio interview.

Bolsonaro's stance is likely to place him in opposition to the so-called centrao, an ideologically flexible bloc of rent-seeking lawmakers whose congressional support has been crucial to staving off the dozens of impeachment proceedings the president faces.

The fund was meant to be part of improvements to Brazil’s discredited political system to reduce a proliferation of parties that has made it hard to govern Latin America’s largest nation without unwieldy coalitions based on self-interest.

But critics say it only serves to provide funds for lawmakers seeking re-election in order to use the congressional immunity, and shield themselves from prosecution for corruption.

($1 = 5.2105 reais)

Reporting by Lisandra Paraguassu, writing by Gabriel Stargardter Editing by Marguerita Choy

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