A top lobbyist for the savings and loan industry has been granted limited immunity from prosecution in the Justice Department's criminal investigation of House Banking Committee Chairman Fernand J. St Germain (D-R.I.), sources close to the investigation say.

The Justice Department granted the limited immunity to James O. (Snake) Freeman, who until Jan. 1 was a senior lobbyist for the U.S. League of Savings Institutions and now is a consultant for the savings and loan industry trade group.

The U.S. League is the largest lobbying group for the S&L industry. Last month, the association said its records pertaining to St Germain were subpoenaed by Justice officials. In the last two weeks, affiliated state S&L lobby groups in California and New Jersey also were subpoenaed, though the two groups refused comment yesterday.

The Justice Department also has asked for records involving St Germain from the Securities Industry Association and the American Bankers Association, two other prominent trade groups that have been involved in lobbying over financial legislation handled by St Germain's panel.

In addition, several witnesses from the lobbying groups have testified before a grand jury on the matter in recent weeks, according to sources close to the investigation.

The focus of the widely publicized Justice Department probe is believed to be allegations that St Germain improperly has accepted food, drink, travel and other entertainment gifts from lobbyists for the financial services industry.

Freeman's attorney, John Hume, said yesterday he had no comment. Lawyers for the U.S. League, who said they spoke on behalf of the group and Freeman, also said they had no comment, as did St Germain's lawyer, Milton Semer.

The Justice Department refused to discuss the investigation.

The Justice Department probe was opened last month, shortly after the House Ethics Committee ended a 14-month inquiry into allegations that St Germain used his position for personal gain.

The committee found that the veteran Rhode Island lawmaker had violated some House rules and the federal ethics law by underreporting his assets, but it recommended no punishment. It did not investigate St Germain's entertainment expenses.

Earlier this month, the House reaffirmed the ethics committee finding by rejecting a move by conservative Republicans to reopen the committee's investigation in light of the Justice Department inquiry.

In general, limited immunity prevents a witness from invoking the Fifth Amendment, which allows a witness to refuse to answer questions under oath that might incriminate him.

With limited immunity, a witness agrees to testify rather than invoke the Fifth Amendment and in exchange is promised that federal lawyers will not use the testimony in any criminal action against him.

The government may, however, prosecute a witness granted limited immunity for crimes the witness testifies about as long as the prosecutors obtain evidence independent of the testimony.

In contrast, witnesses granted full immunity can't be prosecuted for any subject discussed in their testimony.

Receiving a subpoena or being granted immunity does not necessarily indicate that a crime has been committed. The Justice Department investigation began shortly before the House and Senate banking committees reached final agreement on major banking legislation.

Congress passed the legislation this month after major lobbying efforts by the banking, securities and S&L industries.

The securities industry is widely considered by congressional aides and lobbyists to have been the major beneficiary of the banking bill, in part because of the lobby group's influence on St Germain and other key banking committee members.

The S&L industry, also considered to wield considerable influence on St Germain and other key congressmen, for months stalled efforts to get the banking bill passed.

In a letter published Thursday in The Washington Post, St Germain said that he stood up to the league during passage of the bill