Oct. 24 (Bloomberg) -- Rio de Janeiro's wealthy elites are backing an unlikely candidate in this month's mayoral race: A former guerrilla who kidnapped the U.S. ambassador to Brazil in 1969.

The Green Party's Fernando Gabeira has support from several Brazilian investors, including former central bank chief Arminio Fraga and billionaire Eike Batista.

A congressman since 1995, Gabeira finished the first round of voting on Oct. 5 six percentage points behind his opponent, Eduardo Paes, a member of President Luiz Inacio Lula da Silva's ruling coalition. Now Gabeira is in a statistical tie in two polls ahead of the Oct. 26 run-off.

Gabeira's electoral ascent has hinged on getting Rio's conservative establishment to overlook his radical past and view him as an anti-corruption crusader who can stanch a crime- propelled downward spiral dating from when the capital was moved to Brasilia in 1960. He also supports gay marriage and the legalization of marijuana.

``He's a breath of fresh air and stalwart of ethical behavior who can help Rio reverse its decline,'' said Fraga, who runs a hedge fund and has campaigned for Gabeira on radio and television.

In the 1960s, Gabeira's M8 urban guerrilla group robbed banks to fund its fight against the military dictatorship. Now, banks give the former gun-toting radical money willingly.

Banco Itau Holding Financeira SA and Unibanco-Uniao de Bancos Brasileiros SA, two of Brazil's biggest lenders, contributed a combined 200,000 reais ($91,000), according to donor information on his Web site. Batista, a commodities tycoon, gave 100,000 reais.

`Devils'

``Bankers aren't devils,'' Gabeira said in an interview. The economic system that Brazil's socialists ``want to construct is poor and monotonous compared to capitalism.''

After 20 years in President Luiz Inacio Lula da Silva's Workers' Party, Gabeira, 67, quit in 2003 to protest the government's support for genetically-modified crops. He was a vocal critic of Lula when the president's top advisers and members of his coalition were caught in a congressional vote- buying scandal in 2005.

The most infamous incident in Gabeira's past was his 1969 kidnapping of American Ambassador Charles Elbrick. The abduction was aimed at embarrassing Brazil's generals, who had taken power in 1964 in a bloodless coup and were immediately recognized by the U.S. as the country's legitimate rulers.

Guerrillas working with Gabeira intercepted the diplomat's chauffeured Cadillac on a crowded Rio street and threatened to execute him. Elbrick was released unharmed four days later, after the government freed 15 jailed guerrillas.

`Four Days in September'

Among them: Jose Dirceu, who later served a stint as Lula's cabinet chief and was condemned by Gabeira in 2005 for allegedly knowing about bribes to lawmakers. Dirceu resigned and faces a criminal trial. He has denied any wrongdoing.

The kidnapping was recounted in the 1997 film ``O Que Isso, Companheiro?,'' based on Gabeira's memoir. Starring Alan Arkin as Elbrick, it was released in the U.S. as ``Four Days in September'' and nominated for an Academy Award in the best foreign language film category.

Gabeira later was captured, tortured and exiled by the military dictatorship. He renounced violence upon returning to Rio from Sweden in 1979 under an amnesty deal. Elbrick died in 1983.

U.S. State Department spokeswoman Sara Mangiaracina, in an e-mail, wouldn't comment on whether Gabeira would be arrested if he traveled to the country. Gabeira was never charged.

`Strange Admiration'

After Gabeira moved back, he became an environmentalist and civic reformer, displaying a knack for humor-laced stunts. He once strolled Ipanema beach in a crochet bikini to challenge prevailing notions of male sexuality.

Valerie Elbrick, a writer who was 27 when her father was kidnapped, said Gabeira's crimes should be forgiven. She met Gabeira during the filming of the movie.

``My father had a strange admiration for his captors, because of their idealism,'' said Elbrick, who lives near Cooperstown, New York, in an interview today ``He had tears in his eyes when they let him go, because he knew they'd be hunted down and tortured.''

Corruption, Growth

Gabeira's maverick reputation served him well. He won the highest tally of any politician from Rio de Janeiro in the 2006 congressional election. His only declared assets are two 1999 Suzuki motorcycles and 54,000 reais in savings, filings with election authorities say.

In the first round of voting, Gabeira rose from polling last among the five major candidates to finish second with 26 percent of the vote. Paes had 32 percent. Gabeira took 63 percent in well-to-do southern Rio, where hedge fund managers like Fraga live and work.

Roberto Vinhaes, co-founder of the $1 billion Investidor Profissional fund, said Gabeira will help stem Rio's corruption- fueled decline.

From 1980 to 2005, metropolitan Rio's economy expanded at an annual rate of 0.54 percent, four times less than Brazil's average. Organized crime is so pervasive that the government sent 45,000 troops to gang-dominated slums before the first voting round so candidates could campaign freely.

``There was never before a politician we could trust enough to approach,'' Vinhaes said, adding the he tried unsuccessfully to introduce Gabeira to marketing specialists to broaden his appeal. ``He likes to go his own way.''

Sao Paulo

The Rio vote this weekend is one of 30 mayoral runoffs in Brazil; 11 are in state capitals. In the first round, Lula's allies won the race for mayor in 13 of the 26 state capitals, capitalizing on the president's record approval rating.

In Sao Paulo, the country's most populous city, Gilberto Kassab of the opposition Democrats party leads Workers' Party's Marta Suplicy, 54 percent to 36 percent, in a DataFolha poll taken Oct. 22.

To contact the reporters on this story: Joshua Goodman in Rio de Janeiro jgoodman19@bloomberg.net

Last Updated: October 24, 2008 10:53 EDT