Russia’s Heartland Holds Mirror Up to Nation’s Soul : Politics: As vote nears, central city struggles with choice between Communist past and free-market future.

Two dozen kindergartners, dressed in coats and hats against an early spring chill, followed like ducklings after their teacher as she led them across the main square of this central Russian city to the base of a huge statue.

“I brought you to see Lenin,” Valentina A. Ivanova told the children, gesturing to the monument of the leader of the Bolshevik Revolution and founder of the Soviet Union. “Remember who he is. Now let’s go to gymnastics.”

At first glance, this outing could have occurred 30 years ago when the Communist Party had a firm hold on this provincial city and its people. But the difference now is that Ivanova believes that Russian President Boris N. Yeltsin and his democratic and pro-market reforms--and not V. I. Lenin’s Communist ideals--should lead these children and her country toward the future.

“They know that Lenin loved children. I brought them here so they could remember him,” Ivanova said. “But I believe in Yeltsin, and I want his reforms to go faster.”

The incompatibility of a school ritual and a teacher’s reality reflects the enigmatic state of Russia as its people vote this weekend in a referendum on Yeltsin, his reforms and the country’s Parliament. A close look at Penza, a city of 650,000 that is 440 miles southeast of Moscow, shows in microcosm the political and economic complexities that face this nation of more than 150 million.

In the Penza region, Anatoly F. Kovlyagin--the man Yeltsin ousted as regional governor after the failed August, 1991, hard-line coup--has remade himself as a democratic reformer and returned to capture more than 70% of the vote in a multi-candidate election earlier this month, winning his old job back.

And Alexander A. Kondratiev--the man Yeltsin appointed as governor a year and a half ago to bring democracy and the free market here--is under investigation for corruption. He is so unpopular that he won less than 2% of the vote in the election for his post.

In this part of the Russian heartland, the drastic contrast between rich and poor assaults the sensibilities of many people, raised with the ethic that everyone should live at the same level. As a result of Yeltsin’s economic reforms, members of the new, capitalist elite drive around in Mercedes-Benzes and BMWs. They build mansion-like homes next to the prefabricated high-rises and dilapidated log-cabin-style houses where most Penza residents live.

Pensioners and workers in the region’s collective farms, meanwhile, try to sell things like pantyhose, chewing gum and pig heads at open-air markets--just to make ends meet.

Raw enthusiasm for Yeltsin’s reforms among ordinary people was visible only at Penza’s beer factory, sold last year by the local government to its energetic director and two deputies. They automated the factory, turned it into a high-profit business and made their workers the best-paid in the city.

“We are in heaven,” said Nina Kondratova, who has worked at the factory for 10 years. “We are totally behind Yeltsin’s reforms. People should have patience--he can’t do everything immediately.”

Nikolai I. Zakharov, 61, who heads a construction brigade at the factory, said with a wide smile on his face: “Life is 10 times--no, 1,000 times--better now. I worked for 45 years under the old system, and no one ever told me if they liked my work or not. Now my work is valued, and I’m paid well for it too.”

The people of Penza react in different ways to the confusing combination of old and new surrounding them. Some, like the beer factory workers, jump into the new life offered by Russia’s fledgling free-market economy; others resist all change and assure themselves that Russia will return to the Communist way.

But most want reform and do not want to go back to the political and economic repression of the Soviet era. They also are weary of the hardships caused by their country’s transition to a market economy and are reluctant to give up comfortable aspects of their past.

Kovlyagin, the new regional governor, ran on a populist platform, promising a return to affordable prices on staple foods, order and politics that favor the good of all people. “Kovlyagin’s heart seems closer to the people,” housewife Kapitolina Kozlova, 27, said as she shopped in Penza’s farmers market. “He promises a better life for us, and we believe him.”

In an interview, Kovlyagin described himself as “a big democrat,” declared his commitment to a market economy and said he will hasten sales of state-owned businesses to private hands--a key to Yeltsin’s reforms. He assured Penza’s leading entrepreneurs in meetings that he will not reverse economic reform; they, though, doubt that his transformation is real and fear he will try to squeeze them out of business with repressive regulations and punitive taxes.

“He is with the Bolsheviks--there’s no question about it,” said Valery I. Krutikov, one of Penza’s most influential entrepreneurs. “He says he is for reform and for the market, but he does not declare unequivocal support for Yeltsin. He has the typical two-faced approach of the old Communists. He says one thing, but he will do another.”

The campaign against Kondratiev, Yeltsin’s appointed governor, and the events following his election defeat show that Penza under Kovlyagin’s rule will not be as democratic as he promises, pro-Yeltsin politicians and local entrepreneurs contend.

A few days after the election, Kondratiev was picked up by agents of the Security Ministry, the former KGB, and interrogated for hours. The stress of the incident caused him to suffer a relapse of a heart problem. He was hospitalized in the middle of the night and later suffered a heart attack.

Meantime, his home was searched; documents were seized. It was also clear that telephones had been tapped and cars followed.

“There have been many examples of blatant violations of the laws,” said Viktor I. Belov, a member of the Russian legislature’s legal commission who was part of a team of national lawmakers visiting Penza to investigate the incident.

Vyacheslav Sharapin--Kondratiev’s top assistant, who has been repeatedly interrogated on his boss’s affairs--talks in terms that are much more stark. “They want to reincarnate communism in Penza. They are trying to turn the clock back to 1937,” he said, referring to the most infamous year of dictator Josef V. Stalin’s purges.

Sergei A. Kovalev, another member of a team of national lawmakers visiting Penza, said the foul play started before the election, when the press started spreading unsubstantiated rumors about Kondratiev’s alleged abuse of power for personal aims. “It is clear that the publications influenced the election results,” he said. “The press does not have any facts; they’re just spreading slanderous gossip.”

Despite such efforts, there was no clearer sign that the days of a Communist Russia are over than the pathetic celebration of Lenin’s birthday here this week.

In years past, Lenin Square in the center of Penza was packed with thousands of youngsters and parents. War veterans gave heartfelt speeches about their sacrifices. Patriotic music blared as the children stood proudly with classmates to receive red “Pioneer” scarves--the first rite of passage toward becoming a good Communist.

But this year, a ragtag crowd of only about 100 came to place flowers at the base of the Lenin statue, now stained with bird droppings. And only a few dozen youngsters, many dragged by parents or grandparents, stood at attention while bright-red neckerchiefs were tied around their necks.

LOCAL VOTERS?: Russian emigres have chance to take part in referendum. B1