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The smart money here and in other Western capitals has Boris Yeltsin, chief rival of Soviet President Mikhail Gorbachev, easily winning the June 12 election for the presidency of the Russian republic.

Yeltsin is widely regarded as the most popular politician in the Soviet Union today, far more popular than either of his opponents, former Prime Minister Niko-lai Ryzhkov and former Interior Minister Vadim Bakatin. So the smart money probably also is right.If fair elections actually take place, the largest and most important of the Soviet Union's 15 republics will have the first popularly elected president in its thousand-year history.

But life is not so simple in the Soviet Union. Soviet hard-liners in the military and the KGB easily could tilt the election away from Yeltsin.

That's why the White House should let Gorbachev know that interference in the election will not be tolerated. Indeed, the White House should tell Gorbachev any evidence of coercion or tampering will mean the following: 1) the Moscow summit, now expected in late June, is off; 2) the $1.5 billion loan guarantee the Soviets have requested to purchase grain is canceled, and 3) they can forget about any additional American cash to bail out their economy.

Vote-rigging and intimidation is unlikely to take place in Moscow under the gaze of the international media. But in the countryside, election fraud and strong-arm tactics are real possibilities.

Those who would employ such devices are not shy. On May 16, for example, an explosion destroyed the Moscow headquarters of "Democratic Russia," the Soviet Union's leading anti-communist opposition group - with 500,000 members, the largest such grass-roots organization in the country.

Communist Party authorities attributed the explosion to a gas leak, an explanation almost no one believes.

An isolated incident? Hardly. Two weeks earlier, Soviet Army troops, supported by helicopters and tanks, conducted a bloody assault on two Armenian villages in the independence-minded republic of Azerbaijan. The troops reportedly burned homes, killed several people and took other hostages.

But perhaps the strongest, and most ominous, signal came just days ago, when the Kremlin's top cop, Prosecutor General Nikolai Trubin, cleared Soviet troops of responsibility for the January killing of 13 unarmed demonstrators in Vilnius, the Lithuanian capital. Blamed instead for the bloodshed were leaders of the republic's independence movement.

The message from these and other recent incidents couldn't be more clear: Bucking the bosses can still be risky business.

Free and fair elections in Russia won't guarantee a democratic Soviet Union. But they're an essential first step. Any government interested in democracy won't shrink from such a challenge.

(Edwin J. Feulner Jr. is president of The Heritage Foundation, a Washington think tank.)