In his haste to resolve what had been perceived as an embarrassing economic development problem for his administration, Maryland Gov. Harry Hughes created a stickier problem last week when he announced a controversial agreement with New York's Citicorp.

Hughes' solution to the original problem, as the governor must must have realized, was bound to be controversial. It is more than that. The agreement with Citicorp is puzzling. It suggests that the governor and leaders of the general assembly, who back the agreement, are either woefully inconsistent or really don't understand the complexity of the interstate banking issue, or both.

The story that unfolded in Annapolis last week confirmed the worst fears of regional bankers and lawmakers who see Citicorp as the big bad wolf of banking. Maryland and 12 other states, primarily located in the Southeast, are moving to establish an interstate banking region, based on reciprocal agreements. Banking across state lines would be limited to institutions in the region because the pacts are intended to bar entry by big money-center banks until national interstate banking becomes a reality.

The rationale, of course, is to give regional banks time to grow and to be able to compete with money-center giants, such as Citicorp's subsidiary, Citibank. But Hughes and his advisers elected to build a house of straw, hypocrisy and naivete, and the wolf is at the door.

About six weeks ago, Citicorp approached Maryland officials with an offer to buy an abandoned aircraft plant from the state and convert the property into a regional bank-card processing facility. Citicorp promised to add at least 1,000 jobs, and as many as 2,100 to the Maryland economy.

Realizing that Maryland was overly anxious to make the big plant -- a gift from Fairchild Industries Inc. -- something other than a white elephant, Citicorp, in effect, exploited a weakness. It guessed correctly that Hughes wouldn't say no to the promise of 1,000 jobs. A small price to pay for an opportunity to build a multibillion-dollar bank in Maryland.

The success of Citicorp's ploy hinges on passage of a bill that would permit its Citibank subsidiary in Towson to become a statewide bank. But even if the bill is rejected by Maryland's General Assembly, other states may interpret the agreement with Citicorp as a threat and bar Maryland's participation in any regional pact.

Even though Hughes is satisfied that Citicorp is interested only in statewide banking in Maryland, others see this latest ploy as an acceleration of Citicorp's strategy to get a jump on national interstate banking.

"Citicorp has a tremendous amount of dollars to go into states and lobby and sue them if they don't go along," said William K. Dabaghi, counsel for the Coalition for Regional Banking and Economic Development. "Citicorp's extensive lobbying and intimidation subvert the process."

The timing of Maryland's agreement with Citicorp is particularly baffling in light of actions that already have been taken by the governor, leaders of the general assembly and the banking industry to align Maryland with the District and other states in a regional reciprocal banking pact.

Maryland's regional interstate banking bill is drawn along the lines of bills that have been passed by other Southeastern states. Moreover, that bill is based on the unanimous recommendations of a special committee appointed by Hughes last year to study Maryland's role in interstate banking. Three months after voting to send the recommendations to the governor, two members of the committee -- Senate President Melvin A. Steinberg (D-Baltimore County) and House Speaker Benjamin L. Cardin (D-Baltimore) -- are leading cheers for the Citicorp deal.

Only last month, Steinberg expressed concern that D.C. banks might take advantage of a provision in the interstate banking bill by opening new banks in Maryland. "There would be no mutual benefit and the whole purpose of this legislation was to provide parity and equity," Steinberg explained with forked-tongue logic to The Baltimore Sun.

In December, Steinberg and Cardin agreed with the special governor's committee's conclusion that if regional interstate banking "is to allow Maryland banks an opportunity to strengthen their financial basis through mergers and acquisitions [before the onset of national interstate banking], then the inclusion of Pennsylvania would contradict the intended purpose."

Presumably, preferential treatment for Citibank as a competitor for Maryland banks would not contradict the intended purpose.

Apparently, all Chase Manhattan Bank, Mellon Bank or Chemical Bank need to get into Maryland is a quid pro quo offer promising jobs. Then, regional interstate banking for Maryland would be moot, if it isn't already.

Time will tell whether the Citicorp deal puts Maryland in the economic development race as Steinberg has suggested, or whether it is the biggest flim-flam of the century.