Rift between Brazil's president and his party deepens in Congress
By Anthony Boadle
BRASILIA, Oct 17 (Reuters) - A push by Brazilian President Jair Bolsonaro to make his son the leader of his party in the lower house of Congress was rejected on Thursday, deepening a rift with party leaders that could further fragment the far-right firebrand's legislative base.
With insults flying and a police investigation underway into alleged electoral fraud, the Social Liberal Party (PSL) has split between members who back its founder Luciano Bivar and those who want Bolsonaro and his sons to take over the party.
The infighting has had little effect on the economic reform agenda pursued by the government and congressional leaders. But for Bolsonaro, who switched allegiances among eight parties during his 28 years in Congress before joining the PSL in 2018, the divisions could leave him in a more precarious position if efforts to reignite growth sputter in coming months.
Faultlines in the PSL became clear on Wednesday as Bolsonaro asked allies to back his son Eduardo to become chief party whip in the lower chamber, trying to depose Bivar loyalist Delegado Waldir. Both candidates submitted petitions signed by supporting lawmakers. On Thursday, the speaker's office said that Waldir continued to be the PSL leader in the lower house.
That suggested most of the party still stood by Bivar, who told supporters there was no way to resolve a crisis that burst into public last week, when the president and some of his allies called for an audit of the party's accounts.
Bivar's standing may hinge on a widening probe into alleged PSL campaign finance fraud, which has already yielded charges against Brazil's tourism minister. On Tuesday, police raided Bivar's offices. He has denied any wrongdoing.
At stake is 390 million reais ($94 million) in public campaign funds for municipal elections — an unprecedented war chest for the PSL, which rode Bolsonaro's coattails to grow from a single lawmaker in Congress to the second-largest bench.
Whoever controls the party can use the funding on municipal campaigns next year to build alliances for the general election in 2022, when Bolsonaro can stand for re-election.
"They are arm wrestling for control of the party, and the main fight is over the campaign money," said Cristiano Noronha, a partner at political risk consultancy Arko Advice.
If the Bolsonaro faction left to join another party, it would have to forfeit the campaign funds, unless the party was found to have to broken electoral laws, which is why Bolsonaro is insisting on transparency in the accounts, he added.
"It's hard to see any way to mend this rift now," said Leonardo Barreto, head of Brasilia-based consultancy Capital Politico.
If his backers can switch parties without losing their share of campaign funding, Bolsonaro could probably lead half of the PSL's 53 representatives in Congress to join another party, Barreto said. If they cannot, they might dig in until they can overthrow Bivar and are able to control the money, he said.
Other right-wing parties are already wooing Bolsonaro, while his sons have floated the creation of a new party, Noronha said.
The intra-party feuding has not affected the economic agenda in Congress, however, which hinges on a broad consensus among centrist and right-wing parties working to curtail spending on public-sector payrolls and pensions.
Bolsonaro's top economic priority, an overhaul of the social security system, should easily pass next week in the Senate, where the PSL is too small to hold up approval, said Barreto.
(Reporting by Anthony Boadle Editing by Brad Haynes and Sonya Hepinstall)