TIJUANA, MEXICO -- A year after his election broke a 60-year winning streak by the Institutional Revolutionary Party, Gov. Ernesto Ruffo Appel is battling what he says are the party's attempts to undermine him and what he sees as the federal government's interference in a sensitive case of alleged electoral fraud.

Documents filed in court by Ruffo's administration indicate that the previous Baja California Norte state government, controlled by Mexico's long-ruling party, diverted more than $10 million in state funds into the party's gubernatorial campaign last year.

Despite heavy spending by the party, which is known by its Spanish initials PRI, Ruffo handily won the governor's race on behalf of his conservative National Action Party, becoming the first opposition candidate to win a governorship in any of Mexico's 31 states since the PRI was founded in 1929.

Opposition parties have long accused the PRI of engaging in electoral fraud, including the use of government funds to finance its lavish election campaigns. But the court case made possible by Ruffo's victory has offered documented evidence for the first time, and Ruffo's party has been having a field day with the resulting political scandal.

The affair comes as an embarrassment to the government of President Carlos Salinas de Gortari, a PRI member who has pledged to "modernize" political life and do away with electoral fraud. The reaction of the PRI leadership, however, has suggested that when it comes to protecting the secrecy of the party's funding sources and campaign expenditures, it is politics as usual.

According to bank records and documents of the previous Baja California Norte administration, government checks made out to fictitious persons were used to divert about $10.6 million into the PRI campaign. The records show that of those funds, more than one-fourth wound up in bank accounts of the PRI's gubernatorial candidate, Margarita Ortega, her personal secretary and the party's state committee headed by Milton Castellanos.

In April, two former state government officials who authorized the checks were arrested. Ortega, currently the federally appointed director of the National Consumers Institute, and Castellanos, now the PRI mayor of the Baja California Norte capital of Mexicali, were then summoned to appear before the court handling the case.

However, both have refused to appear, and no action has been taken to compel them to testify. Earlier this month, a federal judge ordered release of the two former state officials on grounds that the evidence against them was insufficient.

"What worries me is that a federal judge would intervene in a purely state matter," Ruffo said in an interview. He indicated that the judge's action suggests he is under the PRI's control. "It is absolutely clear that the state government diverted funds," he said. "There are checks signed by the government, transferred from the power of the state and used for unapproved expenditures by persons who did not exist."

Since taking office last November, Ruffo said, his biggest problem has been local PRI "resistance to the presence of a different government." Since the funds scandal, "petty" efforts to discredit his administration have intensified, he said.

After the federal judge released the two arrested officials, Ruffo said, his state attorney general turned over additional evidence to the local judge handling the case. He said that while he believes the new evidence will provide grounds to prosecute those responsible for diversion of funds, there is little he can do if the federal judge again effectively overrules the lower court.

Once in office, Ruffo said, he found the state government virtually stripped of important documents. Salinas conceded there had been graft in the state government when he replaced the notoriously corrupt governor, Xicotencatl Leyva Mortera, last year in preparation for the state elections. But Ruffo said the outgoing interim administration had removed all evidence of illicit practices.

However, he added, three days after his inauguration, two former state bureaucrats dropped a packet of documents on his desk, telling him, "You've never seen us before, and you'll never see us again." In the packet, he said, were records of the diversion of funds, which were quickly corroborated by checks found at banks.

According to Tonatiuh Guillen Lopez, a political scientist at the Colegio de la Frontera Norte here, the diverted funds were equivalent to nearly 40 percent of last year's Tijuana city government budget.

PRI officials said the diversions represented "voluntary contributions" by PRI members working in the public sector. However, officials of the new state government said there was no evidence of any payroll deductions for this purpose from employees' paychecks.

The PRI counterattacked by charging that Ruffo's party had received funds from a West German foundation and the U.S. Republican Party. PRI officials also trumpeted the fact that Ruffo's finance secretary, Eugenio Elorduy, had been given $78,000 by the outgoing PRI state government.

Ruffo's party denounced the charges as "a campaign of canards" intended to distract attention from the funds-diversion scandal. Elorduy said he had indeed received $78,000 -- to cover the cost of Ruffo's inauguration. He said that about $31,000 was spent and the rest returned to the state.