RIO BESIEGED BY 'ARMY OF DRUG TRAFFICKERS'

Violence Out Of Control: Gangs Attack City Hall, Murder Journalist, Enslave
Residents Of Shantytowns

RIO DE JANEIRO - Drug-trafficking gangs attacked Rio's city hall this week,
firing more than 200 automatic rifle blasts into one of the municipal
complex's buildings in the downtown core during work hours.

A few weeks ago, the remains of a high-profile investigative journalist
were discovered in a shantytown, or favela, in the city's northern suburbs.
Tim Lopes, a reporter for Globo TV was carrying a hidden camera while
researching a story on drug trafficking and violence in one of the city's
more than 500 shantytowns. When drug kingpins in the shantytown discovered
what he was doing, he was brutally tortured and murdered.

In the past few months, these same drug-trafficking gangs have closed down
roads and tunnels during rush hour, attacked police stations and a human
rights office, and hurled grenades down the impoverished Rio hillsides
where they rule.

The violence, which has escalated in proportion to a dramatic increase in
cocaine trafficking in recent years, is so out of control that local
authorities have declared a civic war against what they call "the parallel
army of the drug traffickers."

This army consists of an estimated 100,000 "soldiers" who work for the drug
chiefs, 65,000 weapons and 10,000 impoverished children who act as sentries
in the favelas where drugs are sold.

Some of the drug traffickers who are currently behind bars in jails in Rio
and Sao Paulo, the largest city in Latin America, with more than 20 million
inhabitants, still control the trade from their cells, police say. They
also control a wave of kidnappings, which has shocked the city's
upper-middle class, many of whom are terrified of driving around the city
in imported cars, a big target of the drug trafficking gangs.

This week, police intercepted several telephone calls made by convicted
drug traffickers from their jail cells, ordering foot soldiers to provide
them with more cellular phones and instructing them on when new shipments
of drugs would arrive from Colombia.

A police crackdown in Colombia, the centre of drug trafficking in the
region, has shifted a large portion of the trade to Rio shantytowns,
authorities say. Drug dealers here deal directly with left-wing Colombian
guerrillas, known by their Spanish acronym FARC. The drugs now pass through
large urban centres in Brazil before making their way to markets in Europe
and North America, authorities say. For Rio, a beachfront city of 12
million people, it all results in a marked increase in violent crime.

"This place is beginning to resemble Colombia," says Adir Rodrigues, a
local resident, who says violence has escalated dramatically in the last
few years. "Rio is not what it used to be. Now I am petrified of going out
after nine o'clock at night."

Nilza Dias da Silva, an office worker who was in the city hall while it was
being attacked on Monday, agreed. "After an attack like this on a public
building, I think we can expect anything," she said.

Earlier this week, after the Rio city hall was attacked, Brazilian leaders,
including the country's President, Fernando Henrique Cardoso, ordered an
immediate increase in security measures surrounding public buildings. Mr.
Cardoso has scheduled a meeting with the country's military leaders in
order to come up with solutions to the crisis.

Benedita da Silva, the Governor of the State of Rio de Janeiro, ordered
that jailed drug kingpins be moved out of state to impede their ability to
run the trade from their jail cells.

"We have to get rid of organized crime here," said Ms. da Silva, who is
part of the Marxist Worker's Party. "The presence of the drug trafficking
chiefs in Rio jails is getting in the way of our security."

But others say the only way to combat crime is to pour funds into social
development projects in the favelas, which are home to millions of
impoverished residents in both Rio and Sao Paulo. Fully 20% of Rio
residents live in shantytowns, which occupy 3% of the city's territory,
municipal statistics show.

Drug trafficking gangs rule many of the favelas, charging residents "taxes"
for the use of facilities such as bridges and potable water they paid to
install with proceeds from the drugs trade. Because they want to keep out
local authorities, the traffickers impose their own form of law, summarily
executing local residents for murder, rape and theft. In some favelas,
residents are forced to hide weapons for the drug traffickers and paint
their houses all the same colour in order to confound the police.

Since 1995, the municipal government of Rio has invested nearly
US$900-million in education and public works in favelas, many of which are
in low-lying industrial areas on the outskirts of Rio or cling precariously
to hillsides, overlooking spectacular mountains and miles of sandy beach.

But despite that investment, there has been a more than 40% rise in violent
deaths of youths between the ages of 15 and 24. Men and boys in this age
group are sought after by drug traffickers who hire them as assassins and
sentries.

"The problem is that the solutions presented until today to get rid of
violence have all failed," said retired judge Denise Frossard, who made
local history in 1993 when she became the first judge to jail some of the
city's biggest mobsters. Many of her predecessors were too afraid to cross
the mobsters, many of whom controlled a lucrative street-corner lottery
called Jogo do Bicho.

"Organized crime and the brutality which is associated with it are
international phenomena, not just restricted to Brazil," she said.

"Dealing with organized crime by only trying to fix the social problems
that engender it is a mistake. We have to take a much wider scope."