By John Ward Anderson
Washington Post Foreign Service
Sunday, July 13 1997; Page A23

The final results from Mexico's midterm elections still are being tallied, but the verdict is clear. Angered by rampant corruption and government policies that destroyed their savings and incomes, voters used new election laws to hand the ruling party its most punishing electoral defeats ever.

Nearly complete returns show that the Institutional Revolutionary Party, or PRI, lost its 68-year majority in the lower house of Congress by about 10 seats.

The party also lost about 18 seats and its two-thirds majority in the Senate; at least two of six state governors' races; three state legislatures; numerous municipal elections, and the biggest plum of all -- the race for mayor of Mexico City, which was won massively by leftist Cuauhtemoc Cardenas of the Democratic Revolution Party (PRD).

"The restoration of the old system is impossible, there's no way back," said historian Enrique Krauze. "And now that people know the PRI can lose, it will lose and lose and lose."

Many analysts say the results herald the beginning of multi-party democracy in Mexico. The newly independent lower house, which previously was a rubber stamp for the president, is likely to be a tough adversary on budget matters and is expected to launch aggressive probes of current and past corruption. It also may demand a more independent judiciary.

"After these elections, no one can ever again refer to the Institutional Revolutionary Party as the only party, the state party or an appendage of the government," President Ernesto Zedillo said as the extent of the PRI's thrashing unfolded.

Based on tallies from last Sunday's elections by the Federal Election Institute, the PRI will have 240 to 245 seats in the 500-member Chamber of Deputies when it convenes Dec. 5, short of the 251 it needs for an absolute majority. The center-right National Action Party, or PAN, and the PRD each will have about 120.

As in many legislatures, the smallest parties could end up with the largest role since neither the PRI nor a PAN-PRD alliance could muster a majority without the help of the Green Party, which is likely to have eight seats, or the Labor Party, with six. Exact seat counts depend upon the proportion of the vote each party received and will be available in a few weeks, election authorities said.

In opinion surveys and interviews, voters said they abandoned the long-ruling party because they were fed up with the country's anemic economy and the PRI's history of corruption. Still, such stunning defeats for the once-invincible party would not have been possible, election observers said, without PRI-instigated electoral reforms that made these elections the cleanest, fairest and most competitive in recent times. About 58 percent of Mexico's 52 million eligible voters cast ballots.

Despite setbacks in virtually every corner of the country, returns showed that the PRI remains the dominant political force, with the only true nationwide machine. The elections reinforced the PAN's image as an urban, pro-business and regional party of the north -- it received less than 5 percent of the vote in the southern state of Tabasco. The PRD firmed up its reputation as a party of the poor with stronger support in the center and south -- it captured only 3 percent of the vote in the northern industrial state of Nuevo Leon.

While most observers hailed the campaign as Mexico's cleanest, charges of fraud, voter intimidation and election stealing continued to abound. The PRD accused the ruling party of massive fraud in the race for governor of southern Campeche -- which the PRI won by a margin of about 8 percentage points. PAN officials said they would contest PRI gubernatorial victories in Colima and Sonora.

Despite the clear democratic advances, "to jump to the conclusion that Mexico has consolidated democracy in which all the parties are fully confident in the system is a bit of a leap," said Robert Pastor, director of the Latin American program at the Carter Center in Atlanta, which sent seven observers.

But most Mexican analysts agreed with historian Krauze that it would be difficult for the PRI to reestablish the sort of dominance it has enjoyed since 1929, particularly if -- as expected -- the opposition bands together in the next Congress to approve more wide-ranging changes to weaken the advantages the ruling party continues to have in election campaigns.

On economic matters, the ruling party and members of the PAN could easily find themselves voting together, as they have in the past, against the leftists to strengthen and expand Mexico's free-market approach. The PRD in general has staked out positions against some privatizations, and Cardenas, the party leader, has said he favors renegotiating Mexico's foreign debt and parts of the North American Free Trade Agreement (NAFTA).

On the other hand, while PRI congressmen have voted as a bloc in the past, the party now is less monolithic, having divided over some issues. One of the most interesting scenarios has the hard-line "dinosaur" wing of the party joining with the leftist PRD on some issues against a coalition of pro-reform PRI technocrats and members of the center-right PAN.