Scandal Forces Second Vote on Brazilian President

The Brazilian president, Luiz Inacio Lula da Silva, has been forced into an election run-off after a string of corruption and ethics scandals turned many voters against the former factory worker in yesterday's presidential race.

The leftwing leader, who before the recent turmoil that engrossed his Workers' party had been expected to be returned to power in the initial round of voting, polled 48.6%, just missing the absolute majority needed to avoid a further round of elections later this month.

The president's main rival, Geraldo Alckmin, the centre-right former governor of Sao Paulo state, staged a surprise comeback to secure 41.6% support, with 99.9% of the votes counted.

It was a stunning setback for the president, known as Lula, who has been buoyed by a stable economy and his successes at reducing poverty in South America's most populous nation. "Alckmin now has a chance, and a good one," said Alexandre Barros, an analyst with the Brasilia-based Early Warning political risk consulting group.

Aides to the men said both planned a campaign of ideas and issues, but analysts said a brutal period of political attacks was possible, and a beaming Mr Alckmin made it clear that clean government would be one of his central themes.

"Brazil can have an ethical, honest government," he told applauding supporters in Sao Paulo before dawn. The business-friendly candidate said the vote proved his Social Democracy party was "a party on the rise. We can govern the country better. We can build more sturdy coalitions and push the reforms Brazil needs."

Lula didn't issue any statements from the presidential residence in Brasilia, but a senior political adviser said the president only narrowly missed getting an outright win and had always been prepared for a campaign that would lead to a second round. "We came up just short," Tarso Genro said. Lula saw his once-commanding lead evaporate on the eve of yesterday's vote after his Workers' party was battered by allegations that party officials tried to pay $770,000 (£411,700) for a mysterious dossier supposedly containing documents, photos and DVDs and apparently linking an opposition candidate, Jose Serra, to alleged corruption when he was health minister between 1998 and 2002.

Major newspapers ran front-page photos over the weekend showing piles of money allegedly meant to buy information linking Mr Serra to an ambulance procurement kickback.

Six members of Lula's party, including an old friend who ran his personal security detail, were facing arrest warrants for their alleged roles in efforts to buy the damaging information and Lula fired his campaign manager days before the election. The president has denied knowledge of any wrongdoing.

Mr Serra, who belongs to Mr Alckmin's party, lost the presidency to Lula in 2002 but won the race last night to become the Sao Paulo state governor, beating the Workers' party candidate.

Lula's party has also being dogged by a campaign financing scandal and a bribes-for-votes scheme in which the government allegedly paid legislators for support in Congress. The corruption allegations were a deciding factor for many voters.

"I'm not going to tell you who I voted for, because the vote is secret," said Adelaide Venissato, a 53-year-old woman who owns a clothing store. "But I will tell you who I didn't vote for. I didn't vote for Lula. We expected so much and we got very little in terms of security and clean government."

A poor farmer's son who became a fiery union leader and was later elected as Brazil's first leftwing president, Lula surprised many by governing as a moderate once taking office. His deft handling of the economy won him backing on Wall Street and in Brazil's shantytowns.

Lula's change in style didn't mean embracing the politics of Washington. He clashed with the US president, George Bush, over his administration's proposal to create a free-trade area of the Americas. Largely because of Brazil's opposition, the proposal never gained ground.

Mr Alckmin is seen as more business-friendly than Lula, but financial experts hadn't factored in the possibility of him making it past the first round of voting, and warned that Brazilian markets could be volatile during the extended October campaign.

"In the runoff, the candidates will adopt a harsher tone," said Marco Melo, chief analyst at the Agora Senior brokerage in Sao Paulo.