Nicaragua Votes Today, U.S. Agonizes Tomorrow : Policy: Washington is in trouble no matter who wins the Nicaragua presidency. Ending a history of U.S. intervention is the best possible result.

A deeply divided Bush Administration awaits the outcome of today’s elections in Nicaragua: What to do if the despised Sandinistas win and remain in power? What to do if they lose?

Either result poses profound problems. The White House fervently roots for the victory of Violeta Chamorro, the opposition leader; her campaign has enjoyed U.S. money and advice. The White House roots against President Daniel Ortega, a self-acknowledged Marxist and a supporter of Central American leftist guerrilla movements.

But a Chamorro triumph would not solve Nicaragua’s aching troubles--nor would it assure a victory for U.S. policy.

The fate of that small, long-tortured little republic is once again at stake. But so is the regional prestige and influence of the United States, after nearly a decade of futile overt and covert hostilities against the Sandinista regime.

If Ortega is reelected--he won handily in 1984, when no credible opposition candidate stayed in the race--the Bush team will have to stomach a sour reality: The democracy that Washington preached for Nicaragua worked for the Sandinistas and not for Chamorro. This would be the ultimate, most ironic, defeat of U.S. policy in Central America.

Not since the elections in Chile 20 years ago, when Salvador Allende, a Marxist, was chosen president despite all-out U.S. support for his adversaries, has a Latin American election contest so embroiled the United States. And the postscript to the Chile episode--U.S. attempts to destabilize the new government, a military revolution that overthrew Allende and Allende’s death three years after his election--brought new problems to Latin America and no credit to Washington.

Today’s Nicaragua elections follow a U.S. invasion of Panama by two months, the military intervention designed to oust Gen. Manuel A. Noriega. Noriega had become an obsession for Washington, indicted for his alleged drug-dealing and despised for his ability to resist U.S. pressure. The obsession with Ortega is milder but also based on frustration, on a U.S. inability to influence Nicaragua politics despite overt and covert action.

The Panama invasion may have played right into Sandinista hands. It rearoused nationalism. Nicaraguans remember that U.S. Marines intervened in their country several times between 1909 and 1933. Many believe the Contra “freedom fighters” are a product of U.S. design. Some voters may opt for Ortega solely on grounds of resisting Washington.

The Bush Administration must weigh two possible scenarios:

Ortega Wins. With more than 1,000 observers on hand to watch over the proceedings (from the United Nations, the Organization of American States, the European Community and a delegation led by former President Jimmy Carter), Ortega is extremely unlikely to attempt electoral fraud or intimidation. If the foreign observers certify the validity of his reelection, Washington will have no choice--in terms of world opinion--but to recognize Sandinista legitimacy. Failure to do so would create an untenable situation for the United States, in vivid contrast to Mikhail S. Gorbachev’s posture of allowing nations in the Soviet orbit to work out their own destinies.

The more relevant issue is how far and how rapidly the United States is prepared to move in normalizing relations with Nicaragua. This is the nub of dispute within the Administration: White House hard-liners believe that even after an Ortega victory, conditions must be attached to any relaxation of American pressures on Managua. The State Department seems ready to move faster, on everything from the lifting of the economic embargo to the disbanding and relocation of about 12,000 Contras, as provided for in the Central American accords that led to election day.

Secretary of State James A. Baker III, however, said as recently as Thursday that the United States will make its own judgment about election fairness and that better relations with Managua depend on “a sustained period of good behavior in terms of refraining from subverting their neighbors.” This kind of insistence may imply a higher standard demanded of Nicaragua than of other nations--and could produce new policy disasters.

Disbanding and resettling the Contras--inside or outside Nicaragua--is an urgent priority. If the Administration does not act rapidly, a new crisis is bound to develop. Inside Nicaragua, about 3,000 Contras are still fighting a guerrilla war. The larger Contra force is in neighboring Honduras, along with wives and children. Thousands of armed men with no place to go and no organized objective are a peril to the stability of both countries. Congressional funding for humanitarian aid to the Contras runs out at the end of this month; no new money is likely to be approved other than for relocation.

The demand that the Sandinistas end military assistance to the leftist guerrillas in El Salvador is reasonable. Ortega may do that in return for removal of U.S. economic sanctions. Nicaragua is about broke, shattered by war and by economic mismanagement. The accords signed by Ortega and the four other Central American presidents provided for cessation of armed help to guerrillas anywhere in the region. But the Sandinistas reportedly violated that agreement in attempting to deliver surface-to-air missiles to their Salvadoran guerrilla friends.

At home, Ortega has released 1,200 political prisoners two weeks before the election. He has largely restored freedom of expression in the media. Both actions were self-serving and good for the campaign. But they also helped heal the country. The United States extends considerable generosity to regimes practicing more repression than does Managua. If the Bush Administration acts with imagination--and if Ortega does not respond with ideological tantrums--Nicaragua may turn into a success story: another example of a nation enjoying peaceful transition from leftist dictatorship to representative democracy, the New World version of Eastern Europe.

Chamorro Wins. Washington will rush to embrace her victory but mammoth troubles lie ahead. Chamorro is the standard-bearer for more than one dozen political parties forming the Nicaraguan opposition movement. Representing so many interests, many conflicting, there is no certainty that she will be able to hammer together an effective government, even with massive U.S. aid. The battle for power may erupt all over again under different banners.

Uncertainty will be exacerbated by reality: Sandinistas will retain control of the armed forces and the police, plus many elements of the bureaucracy. To attempt to replace the Sandinista army with Contra forces appears unthinkable; that would trigger a new, bigger, deadlier civil war.

If the levers of effective power are not in Chamorro’s hands, she may find herself facing day-to-day Sandinista challenges in matters of governance. And she will have few forces mobilized to assert authority. Washington could be tempted to provide help, overt or covert, but this would reopen the old sores among Nicaraguans. The U.S. Administration may have to decide whether full-fledged economic assistance should be offered to Managua if indeed nobody is really in charge and political battles continue.

The election may be Act II. The drama is certain to persist no matter who wins.

Real resolution will only come when Nicaraguans determine their own future, when the United States has at last forsworn intervention in their lives. The best way out of the morass is for the United States to accept the result of the balloting--and to display some old-fashioned American generosity toward the impoverished and war-weary people of a republic that has obsessed us for so long.

The United States was also a victim of obsession: The trials of the Iran-Contra scandal are still with us. Former President Reagan and President Bush still face possible embarrassment from the illegal arming of Contra guerrillas. Nicaragua is a shadowy chapter of American history in need of new light.