Brazil's Supreme Federal Court, a 135-year-old institution, has become closely entangled with the country's presidential election on October 4, which will pit President Lula da Silva against right-wing contender Flávio Bolsonaro. Rather than discussing different programmes relating to the economy, social policy, foreign relations or the future of Brazilian democracy, people's attention in recent months has been taken up by a financial debacle concerning a small bank that had failed, a disgraced banker who is in jail, and a fierce internal conflict among the nation's most powerful judges.

That scandal came to a head on September 15, when the Court considered whether Justice Alexandre de Moraes, a figure seen as friendly to Lula, should be investigated over alleged contacts with Daniel Vorcaro, the former owner of Banco Master. The tense meeting, which was broadcast live on national television, concluded without reaching a decision after Justice Flávio Dino asked for more time to look into the case.

The Court remained divided over whether the allegations against Moraes should be treated separately from those concerning the conduct of Justice André Mendonça, who had opened the proceedings. Mendonça is alleged to have been selective in his investigations – favouring Bolsonaro's camp ahead of the elections – and to have mishandled due process. Mendonça was appointed justice minister in a controversial move, as then-president Jair Bolsonaro, Flávio's father, sought to influence investigations into his sons and allies, and was later named to the Supreme Court.

The spectacle was as sad as it was bizarre, not only because the judges made their accusations public, but because the Supreme Court seemed to be judging itself at a time when it could not reach an agreement on the fundamental rules of the process.

The Brazilian Constitution assigns the Court a central role in protecting democratic institutions. Yet a body that calls on politicians to be transparent and accountable cannot expect to be free from scrutiny itself. The allegations against Moraes must be investigated in accordance with the law, and Mendonça's conduct must be examined just as rigorously. Neither the Court's reputation nor its political affiliations can take the place of proper legal procedure.

The issue here is therefore more than whether one of the judges communicated with a banker. It is whether Brazil's highest court still has the institutional discernment necessary to distinguish between legal accountability and political retaliation.

Daniel Vorcaro and the business of access

Daniel Vorcaro, who used to own Banco Master, is at the heart of a large-scale investigation into alleged financial fraud, money laundering and attempts to use political and judicial connections to protect or extend his banking empire. The collapse of the bank has resulted in losses and liabilities of such a magnitude that they have attracted the attention of regulators, prosecutors, politicians and investors.

But the aspect of the case that has the greatest political impact, more than the bank's balance sheet, is the network of access allegedly built around Vorcaro.

Information extracted by authorities from his seized phone is said to include communications with members of the judiciary, senators, deputies, business leaders and officials in the executive branch, including the Central Bank. Certain messages seem to indicate that Vorcaro developed relationships spanning ideological and institutional divisions. His contacts are said to have included people associated with the Bolsonaro camp as well as those linked to the Lula government. Notably, the Central Bank had allowed Vorcaro's bank to begin operating during Bolsonaro's government, after refusing it authorisation under previous governments for lack of asset backing.

That is significant. The scandal cannot be viewed simply as a morality play with one political side being pure and the other corrupt. Instead, Vorcaro's alleged strategy was to make himself useful to everyone, and to use them all when necessary.

The material in the Federal Police files refers to meetings with high-ranking politicians and Supreme Court judges or their close relatives, helicopter journeys, attempts to influence the regulatory environment, and discussions about the proposed sale of Banco Master – when it was already in a critical situation – to Banco de Brasília, a public bank owned by the Federal District government. However, the deal was ultimately blocked by the Central Bank, which liquidated Vorcaro's bank in November 2025.

Investigators are scrutinising all these allegations. Meanwhile, every day new facts are leaked to the media by different camps within the Federal Police or the Supreme Court, to benefit or damage one of the main contenders in the electoral race, whether Bolsonaro's or Lula's camp. As a result, the electoral race has largely disappeared from the media and public debate, giving way to the latest developments in the Banco Master scandal. The details are so sordid that, for example, it emerged – just hours before the Supreme Court gathered to decide whether to proceed with the investigation into Justice Moraes – that the banker had paid a bill for a prostitute on behalf of one Supreme Court member. The judge, visibly embarrassed, then recused himself from the case.

Yet the pattern carries a political weight of its own. Vorcaro seems to have seen Brasília as a marketplace at his disposal, in which formal institutions could be supplemented or compromised by personal relationships and benefits.

The true significance of the Banco Master affair is not merely whether money was illegally transferred; it also lies in the informal structure of power. That is, the lawyers, intermediaries, Supreme Court family members, political operators and institutional gatekeepers who can turn access into an asset.

The Supreme Court's internecine war

Internal disagreements within the Court have meanwhile turned into personal acrimony. Justice André Mendonça, who was appointed by Jair Bolsonaro, has raised claims regarding communications between Vorcaro and a phone number linked to Alexandre de Moraes. Reference was also made to a three-year contract worth around BRL131.2mn (around $25.5mn) between Banco Master and a law firm connected to Viviane Barci de Moraes, Moraes's wife (instalments of BRL3.64mn were paid over 22 months). Moraes has denied any wrongdoing, stating that he never represented Banco Master or Vorcaro and that his family members are lawyers entitled to practise their profession. However, metadata showed that the contract had been edited on his personal computer.

Justice de Moraes rose to prominence for his tough handling of the attempted coup d'état involving former president Bolsonaro and his far-right allies following their 2022 election defeat to Lula. As rapporteur, Moraes oversaw the case that in September 2025 led the Supreme Court to sentence Bolsonaro to 27 years and 3 months in prison. Due to health concerns, Bolsonaro, who is now ineligible for office, is currently serving his sentence under house arrest.

Justice Mendonça's actions, seen by many analysts as biased and selective, have brought accusations of a political vendetta aimed at boosting Bolsonaro's son's presidential campaign. This controversy resulted in Mendonça being removed by the court president as rapporteur in both the Banco Master case and the investigation into Moraes. Mendonça himself is now under investigation for bias, selectivity in his investigations, and for failing to respect court procedure.

Moraes fired back, alleging that Mendonça's investigation was politically motivated and riddled with procedural flaws. In his view, it is a blunt attempt to target him for his central role in cracking down on the 2023 coup attempt.

The issue is that the Court has let the investigation become closely linked with the political controversy surrounding it. Critics of Mendonça argue that he expedited the Moraes case while treating investigations into Bolsonaro's camp with markedly less urgency. By contrast, his supporters say that the majority faction within the Court is attempting to suppress evidence since it threatens one of its most powerful members, Justice Moraes.

The result is an institution deadlocked between two warring camps, in which every procedural decision is read as a play for political advantage.

How the Court has handled the case has increased these suspicions. The public discussion has raised issues regarding the withdrawal of confidentiality, the role of the Prosecutor-General's Office, the redistribution of the proceedings, and whether the cases involving Moraes and Mendonça should be tried together. The Prosecutor-General's Office has also cast doubt on the validity of the police report and has claimed that procedural irregularities might be sufficient to justify its cancellation.

This is no minor technical dispute. In a constitutional democracy, procedure is central; it is the system that ensures justice does not degenerate into vengeance. President Lula da Silva was jailed in 2018 while leading the polls against Bolsonaro in the presidential race; he was released in 2019 and regained his political rights in 2021, after his conviction was overturned on procedural grounds. His sentence, handed down by Justice Sérgio Moro, was annulled on the grounds that Moro's court lacked jurisdiction and that the judge himself was politically biased. Moro later became Bolsonaro's justice minister.

The investigation should take place if the evidence against Moraes is credible, and it should also occur if Mendonça manipulated the process. However, if the investigation was conducted illegally, the Court cannot simply uphold it merely because the allegations are politically convenient.

The most damaging outcome would be a process so flawed that any resulting decision could be seen as either a cover-up or a political purge – or overturned altogether at a later date.

The Bolsonaro clan and the weakening of the Supreme Court

Beyond the judiciary, the Bolsonaro family have used the scandal to launch an attack on Moraes and to undermine the Supreme Court. This is scarcely surprising, given that the Court has played a central role in the legal response to the January 8, 2023 attacks and in the prosecution of Bolsonaro and his allies for their attempt to overturn the result of the 2022 election.

For the Bolsonaro camp, weakening the Court is not merely a legal strategy but a political necessity; if the Court is depicted as corrupt, partisan and internally chaotic, then its rulings against the former president and his allies can be presented as acts of persecution rather than as measures to ensure accountability.

And the Banco Master affair offers just what is needed to promote this narrative.

The Bolsonaro family's political difficulty extends even beyond its dispute with Moraes, since it has increasingly relied on outside pressure – particularly from the United States and from far-right transnational networks around Donald Trump – rather than developing a clear national project for Brazil. At the core of Bolsonaro's political strategy lies a contradiction: although he continually uses the language of sovereignty, patriotism and national greatness, he readily calls for foreign intervention whenever Brazilian institutions fail to deliver the outcome he wants.

One of Bolsonaro's sons, Eduardo, moved to the US last year, where he has since incessantly lobbied against the current Brazilian government. His efforts resulted in the application of American sanctions under the Magnitsky Act against Justice Moraes, other court members and the Prosecutor-General, an outcome he has boasted about on social media as a personal achievement. Trump's tariffs against Brazil form part of the same package. Trump has justified these actions – both the sanctions and the tariffs – by pointing to Brazil's “unjust” treatment of a former president, in this case Bolsonaro. For his part, Secretary of State Marco Rubio has declared that Brazil is "our next challenge," as Washington eyes the country as the last major left-wing government standing amid a region-wide conservative shift.

It is especially telling that Bolsonaro's supporters have come to regard the US as a source of political protection, diplomatic pressure and ideological approval. They have promoted the view that external sanctions or foreign political interference could alter Brazil's judicial process.

The same contradiction is visible in the lack of a national economic programme. Although the Bolsonaro family portrays itself as the defender of order and free markets, its political apparatus remains largely devoted to waging cultural war, confronting institutions and relying on personal loyalty. It provides no satisfying solution to Brazil's fundamental problems: inequality, weak industry, dependence on the export of commodities, the fragility of public services, technological vulnerability and the need for strategic autonomy.

The situation involving Banco Master and the bank's financing of Bolsonaro's biographical film clearly illustrates this kind of politics: a state is not regarded as a public institution but rather as territory to be taken over.

An election drowned by institutional conflict

The electoral campaign has also suffered, as the scandal has cast a shadow over the presidential race, diverted public attention from it, and offered ready-made material for political propaganda.

The accusations relating to Flávio Bolsonaro, now formally investigated by the Federal Police for his own alleged financial connections with Vorcaro, have made the matter even more complicated. Voice messages were leaked in which he is heard asking the banker for BRL136mn (about $26.5mn) to finance his father's biographical film, a type of production that usually costs no more than BRL10mn in Brazil. Investigators are looking into allegations of corruption, money laundering and irregular funding connected to a film about Jair Bolsonaro. An investment fund, Havengate, was set up in Texas, where Eduardo Bolsonaro lives, and reportedly received $10.6mn from Vorcaro's bank, as part of the total amount promised for the film.

Flávio Bolsonaro denies any wrongdoing, and the existence of an investigation does not amount to a conviction. But it is politically significant, since it places the Bolsonaro family at the heart of the wider Banco Master controversy; particularly as recent developments suggest the financing of his father's biopic, Dark Horse, extends beyond money laundering. They now include a former minister under Jair Bolsonaro, Mario Frias, now a federal deputy and one of the film's producers, who allegedly diverted public money from parliamentary earmarks to the film.

Indeed, chaos can be turned into political advantage. When institutions have lost credibility, the far-right can position itself as the agent of order, even though it too has been responsible for the institutional disorder that it condemns.

It is a well-known political tactic to begin by undermining public confidence in institutions, then claim that only a strong leader can restore stability, and finally treat legal scrutiny as persecution and accountability as revenge.

Yet Brazil has already seen where this line of reasoning ends up. The assaults on democratic institutions in January 2023 did not arise out of nowhere; instead, they followed years of attacks on the electoral authorities, the courts, the journalists and their opponents. The present crisis could hand that same political project a new narrative: not that Bolsonaro's movement failed to respect democracy, but that democracy itself is irredeemably corrupt.

That conclusion would be both dangerous and false.

Brazil's institutions are certainly flawed, frequently politicised and in need of reform. However, the solution is not to place them under the control of a family whose political survival relies on continuous conflict and foreign patronage.

What business and investors should watch

Businesses and investors should not dismiss the Banco Master crisis as a passing spectacle in Brasília, as it exposes a number of serious structural risks.

Regulatory and judicial processes are becoming more exposed to political influence. Decisions concerning banks, public institutions, infrastructure and strategic assets may be viewed through a partisan lens. Investors should therefore look not only at the legal merits of a transaction but also at its institutional and political environment.

Ultimately, investors should watch whether Brazil responds to the crisis with reform or with factional retaliation. Measures such as judicial reform, clearer rules on conflicts of interest, stricter transparency requirements and closer supervision of the relationship between the public and private sectors could help improve the investment climate. Efforts to take control of the Court, to intimidate prosecutors, or to use investigations as electoral tools, would have the opposite effect.

The Banco Master scandal has laid bare a system in which private wealth seeks special access to public power to secure protection for wrongdoing. The internal conflict within the Supreme Court has shown how such access can be used as a weapon in a political fight. The Bolsonaro family's reaction has proved how readily the far-right can leverage institutional chaos as political advantage, while relying on foreign pressure rather than taking responsibility at home. The lesson from all three is the same: institutions weakened from within become tools for whoever is willing to exploit them.

Brazil does not need a saviour who promises order through permanent confrontation or authoritarianism. What it needs are strong institutions capable of holding everyone – including themselves – to account without turning into instruments of revenge.

Ricardo Martins is based in Utrecht, the Netherlands, and has a PhD in Sociology specialising in European politics, geopolitics and international relations.