LATIN AMERICA : Coup Rumors Cast Shadow on Venezuela Vote : Military leaders deny they plan to revolt. But Clinton has sent senior officials to warn of serious actions if election results are not respected.

The practice of democracy is never easy. But for Venezuela, Sunday’s national elections couldn’t be a much harder exercise, particularly when one possible outcome is a military coup.

The presumed pretext for military action would be post-election violence, ignited by reports of massive voter fraud or competing claims of victory by presidential candidates.

“That would do it,” one diplomat said. “Violence would give the military an excuse to take over, establish order and invalidate the results. It doesn’t help that two of the leading (presidential) candidates are suspect by various elements in the armed forces.”

He was referring first to Rafael Caldera, a 78-year-old former president who is backed by a curious coalition of Communists, extreme rightists and rich industrialists called the Convergencia.

The other candidate, and the one most disliked by the military, is Andres Velasquez, the head of the Causa R (Radical Cause) party. A former electrician, Velasquez heads a worker-based party that includes radical socialists who in the past advocated and in some cases took part in anti-government guerrilla acts.

Both men have campaigned on ending rampant corruption and reversing Venezuela’s ongoing effort to establish a free-market economy, which has included an austerity program that has increased unemployment and cut into the living standards of the middle and wealthy classes.

At the close of the official campaign Friday night, Caldera led in most polls, followed closely by Velasquez and the Social Christian COPEI party’s Oswaldo Alvarez Paz, whose promises to continue the move toward a free-market economy have made him the unofficial darling of the United States and foreign business interests.

Although most experts think Caldera will win by a margin of as many as six percentage points, the latest polls were taken more than a week ago and showed a large enough undecided element to put the outcome seriously in doubt.

Although armed forces leaders are denying any intent to revolt, the fear of a military takeover has been real enough for President Clinton to send senior State Department and National Security Council officials here to warn of serious American reactions if Sunday’s results are not respected.

Alex Watson, the assistant secretary of state for Latin America, and the National Security Council’s Richard Fineberg spent Wednesday and Thursday closeted with government, military and business leaders.

Watson told American business leaders that he warned the Venezuelans they faced “sanctions, freezing foreign-held bank accounts, paralyzing economic transactions and even denying entry visas” into the United States if democratic practices do not prevail. He added that Venezuela’s chances of joining an expanded hemispherical free-trade arrangement also would be out of the question if a coup follows the voting.

Given two failed but serious military rebellions over the past 22 months, coup rumors here have credence, in spite of Venezuela’s 35 years of solid democracy.

Underlining the current round of trepidation was the disclosure late this week that military intelligence units had uncovered a plot by retired Army Maj. Gen. Carlos Santiago Ramirez and a group of right-wing civilians.

What made the Santiago Ramirez plan realistic, diplomats said, were his ties to Lt. Col. Hugo Chavez Fria, a jailed charismatic officer who led the nearly successful February, 1992, coup attempt.

Chavez, who retains a large and devoted following among junior officers and enlisted men, has been in constant telephone contact from his jail cell with Santiago Ramirez, government sources said. “This is not to be taken lightly,” one Interior Ministry official said. “Chavez is very much a danger, and the general has strong contacts in some business circles.”

Santiago Ramirez fled to Aruba after learning the plot had been exposed, the official said.

If the possibility of a coup weren’t enough to create high anxiety, Venezuela’s 10 million eligible voters face one of the most daunting ballots ever. There are 36,000 candidates representing 500 parties running for one president, 46 Senate and 189 congressional seats and 362 state legislative positions. The ballot for the district encompassing Caracas, the country’s most populous area, is five feet long.