Tarnished by Corruption, Internal Rifts, Party Loses Its Most Loyal Followers

                  By Anthony Faiola
                  Washington Post Foreign Service

                  BUENOS AIRES, Oct. 25—Enrique Victor Murillo was a proud member
                  of Juan and Eva Peron's not so silent army. As a teenager from a humble
                  family, Murillo stood for hours outside the Casa Rosada presidential house
                  to hear the pro-labor speeches of Argentina's president in the 1940s. The
                  cheers grew deafening when Peron's wife--Evita--stepped onto the
                  balcony.

                  But Juan and Eva Peron must be rolling in their graves today. Murillo,
                  along with many current and former members of the ruling Peronist party in
                  Argentina, voted Sunday in ways that made it one of the darkest days in
                  the legendary party's history. In the shadow of the obelisk in Buenos Aires,
                  Murillo, a 69-year-old retired store clerk waved the flag of opposition
                  candidate Fernando de la Rua, the austere mayor of the capital who
                  trounced the Peronist candidate, Eduardo Duhalde, to become Argentina's
                  new president.

                  Although the margin of victory was not as wide as some analysts had
                  predicted--with 97 percent of votes counted, de la Rua had 48.5 percent
                  versus 38 percent for Duhalde--the ideologically diverse opposition
                  nevertheless came out ahead in many provinces long considered Peronist
                  strongholds.

                  Peronists took a key victory by holding on to the governorship of the
                  province of Buenos Aires. But they lost in two other large provinces to de
                  la Rua's Alliance for Work, Justice and Education. The Peronists also lost
                  their majority in the lower house of Congress to the Alliance, which picked
                  up 16 seats.

                  "The Peronists are not the party I remembered," said Murillo, as tears
                  stained his face. "My beautiful Evita, the strong [Juan] Peron, are only
                  memories. . . . All that is left is corruption and selfishness."

                  The vote underscored deep-seated problems in the party that Juan and
                  Eva built into a machine but which today is struggling to find a new role in
                  modern Argentina. De la Rua, 62, will replace President Carlos Menem on
                  Dec. 10, breaking 10 consecutive years of Peronist rule during which
                  Menem and his Peronists were both lionized and demonized, facing
                  corruption scandals along with successes and failures in their ambitious
                  free-market reforms.

                  For the political movement that became one of the most important in Latin
                  American history--not to mention the stuff of a Broadway musical--the
                  worst problems are internal. A power struggle between Duhalde and
                  Menem, who had wanted to run for a third term but was forbidden to do
                  so by the constitution, fragmented the party machinery into warring
                  factions. Since Duhalde's maneuvering stopped Menem from changing the
                  constitution, the two have engaged in open verbal warfare.

                  "All I can say," said Duhalde, the outgoing governor of Buenos Aires
                  province, "is that I was not the father of this defeat."

                  Over time, Duhalde's loss will likely leave Menem as the party's standard
                  bearer--something analysts say Menem was shooting for in Duhalde's
                  defeat.

                  "It's going to take us several months to recover and rebuild this party after
                  the elections--and what we're going to have to do is reinvent ourselves, get
                  new leaders and find a way to make Argentines trust the party again," said
                  Jorge Telerman, Peronist ally of Duhalde and former Argentine
                  ambassador to Cuba.

                  Some analysts suggest the Peronists may have become victims of their own
                  style. They say that like Peron, Menem was a caudillo, a strong,
                  paternalistic populist who tended to put personal ambitions before his
                  party. Indeed, even before Duhalde ended his campaign last week,
                  Menem's supporters launched the president's bid for the 2003 race, when
                  he is legally permitted to run again.

                  "Menem is a man who craves power above all else," Telerman said. "And
                  if we are to modernize as a party, we are going to have to start by putting
                  egos in check."

                  Menem has also alienated many hard-core Peronist voters. Since Peron
                  came to power in 1946 and continuing after his death in 1974, the party
                  had been grounded in a complicated mix of nationalism and socialism.
                  Above all, it survived off the support of labor.

                  Menem won concessions from the unions, ended hyperinflation by pegging
                  the Argentine peso to the dollar and slimmed down the public work force
                  by selling off virtually every state-run industry. But the wealth has been
                  largely concentrated in the hands of the wealthy, while unemployment and
                  poverty rates have soared. This has been a particularly difficult adjustment
                  for Argentina, where even unskilled workers had long enjoyed one of the
                  highest standards of living in Latin America.

                  The Alliance includes de la Rua's centrist Radical Civic Union, one of
                  Argentina's oldest and most traditional parties, and the Front for a Country
                  in Solidarity, former Peronists who opposed Menem's reforms. De la Rua
                  scored points with the disenfranchised. Although he remains an advocate
                  of the free market, he has promised to spread the benefits to a wider group
                  of people, cracking down on tax evasion by the rich to fund new social
                  service programs.

                  The Peronists are also back to battling an old reputation for corruption--an
                  issue that became pivotal in the campaign. At least 10 of Menem's top
                  advisers have been fired or are under indictment for corruption charges,
                  mostly stemming from privatization kickbacks. De la Rua's honest image
                  and pledges to fight corruption and be fiscally conservative hit the mark.
 

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