IPANEMA UNDER SIEGE: RIO'S GANGS FLEX HARDER

RIO DE JANEIRO - AS voters here pick Brazil's president next Sunday, they
can expect to have more than the usual election observers watching them.
The governor of the state of Rio de Janeiro has asked that the soldiers who
patrolled the streets here during the first round of voting on Oct. 6 be
deployed again to protect citizens from the threat that criminal gangs will
interfere with the election.

Gov. Benedita da Silva wants to prevent a repetition of the "Black Monday"
of Sept. 30, when stores, schools, banks, offices and markets in this city
of 5.8 million were forced to close on the order of jailed gang leaders
unhappy with their living conditions. Gang members also burned buses,
paralyzing public transport.

To echo the words gang members scrawled on a building that day, criminal
organizations have become a "parallel power" here, with enough firepower
and money to intimidate even the government. Few were surprised, for
example, when the police recently discovered that one jailed gang leader
had been trying to acquire surface-to-air missiles, presumably for use
against police helicopters, and had somehow obtained a large quantity of
Iraqi dinars to do so.

"The population sees criminals throwing grenades at police cars, police
stations being shot up by machine guns and tracer bullets zipping over
buildings," said Moacir Duarte, a researcher on public security at the
Federal University of Rio de Janeiro. "Since there is not an appropriate
response from the public security forces, the people have lost faith and
have a justifiable fear."

To the estimated 1.5 million people who live in the city's favelas, or
hillside squatter slums, the problem is hardly new. Over the past 20 years,
the growth of the drug trade has enabled criminal groups like the Red
Command or Friends of Friends, commanded by bosses with street names like
Little Freddy Seaside and Elias the Madman, to take physical control of the
favelas and impose their will on residents.

What now frightens Cariocas, as residents of Rio call themselves, is the
realization that the gangs can shut down the entire city, including rich
neighborhoods like Ipanema and Copacabana. Gangs tortured and murdered a
prominent investigative journalist in June and in recent months set up
checkpoints on streets at night to rob or kidnap motorists.

"On Sept. 30 a border was crossed," said Zuenir Ventura, a newspaper
columnist who chronicles life in Rio. "Everything that the middle class has
always observed from afar suddenly descended the mountain to take over the
asphalt, and the result was fear, a generalized panic like I have never
seen in this city."

Last week there was more of the same. Gang leaders broke into the police
radio system and threatened to kill Governor da Silva, herself a product of
the favelas. In one night, gunmen fired a fusillade at the governor's
palace, threw a hand grenade at a large shopping center and attacked police
stations and patrol cars.

Rio's residents are now debating how to respond, and it is clear they are
confused. Suggestions include more government spending on services in poor
areas, the legalization of drugs and demands on radio call-in programs to
"kill all the bandits."

In 1985, when 21 years of military dictatorship ended, concerns over public
security were seen as masking a far-right agenda. But because the situation
has decayed so drastically, that is no longer the case, even among leftist
candidates. Polls conducted during the current presidential campaign show
that voters rank public security as the second most important challenge
facing the country, exceeded only by the economy. Indeed, the security
issue is blamed in part for the defeat of Ms. da Silva, who took office
only in April, in the vote for governor.

Ms. da Silva, of the leftist Workers' Party, had expected her popularity to
rise after Elias the Madman was captured last month and charged with the
murder of the journalist, who was tortured and decapitated.

But any benefit she gained appears to have been dissipated by Black Monday
and by later news reports indicating that the authorities had known from
intercepts of cellular telephone conversations that a show of gang strength
was coming.

"Blackout on the South Side, everything has to shut down, all the commerce,
everything is going to be paralyzed," the jailed gang leader Marquinhos
Niteroi had ordered, according to a transcript of an eight-minute phone
call to an underling. "We're going to show them that we've got the power
and they don't."

Ms. da Silva became a target of organized crime precisely because she had
taken away privileges - air-conditioned cells, mobile phones and catered
food - that jailed bosses gained through intimidation and corruption. She
had also promised to put more police on the streets and to offer them
better training and salaries. The state's various police forces are widely
regarded as corrupt and inept.

Now, the worst may be yet to come. Jose Augusto Rodrigues of the State
University of Rio de Janeiro says public nervousness and rumors are likely
to encourage organized crime groups to believe they have more power than
they do, as was indicated by a statement issued last week in the name of
the Red Command.

"In the event the appropriate measures are not taken, then yes, we will
once again shut down commerce in Rio de Janeiro," the group warned. "Those
store owners who open their doors will see what we are capable of, for we
shall surely make clear our position."