Mitchell Kapor, inventor of Lotus 1-2-3, the world's most popular financial software package, is considering backing a national effort to defend computer hackers against prosecutions resulting from Operation Sun Devil, a two-year Secret Service investigation of potential computer fraud.

Operation Sun Devil was disclosed early this month by the Secret Service, which conducted 27 searches of suspected hackers' homes and offices, confiscating 23,000 computer disks and 40 computer systems. There have been three arrests thus far. The Secret Service said the hackers who were the target of the probe are individuals who had gained unauthorized access to company computer systems -- including one at American Telephone & Telegraph Co. -- or had stolen and distributed software programs that belonged to major corporations.

In an interview from the Cambridge, Mass., headquarters of his new company, ON Technology Inc., Kapor said he thinks the government probe is misdirected. He said it is damaging technological innovation and dissemination of information through the ubiquitous electronic message networks called bulletin boards that are the hackers' prime method of communication. Kapor intends to announce tomorrow whether he will pay for all or part of the hackers' legal defense.

"It's plausible that there's a witch hunt going on," Kapor said. "I'm concerned that hackers' civil liberties are being violated {by the Secret Service}. I'm concerned these kids -- which is mostly what hackers are -- aren't getting a fair shake in the legal system. They don't have access to legal counsel that would let them adequately defend their rights."

Sources said Kapor is reviewing a proposal he received yesterday from two law firms that asks him to help finance a $200,000 hackers' legal defense fund. Lawyers involved in the matter plan to provide much of their legal work free. The proposal before Kapor also includes a program to lobby Congress to change the computer fraud law and a public education campaign about hackers.

"Sun Devil gives me a funny feeling in the pit of my stomach," Kapor said. "There's an incongruence between the language of the Secret Service and the acts and attitudes of hackers. I understand and know that {hackers'} kind of mentality. You don't want to use an A-bomb to kill a fly. There has to be an appropriate response and understanding of what's at issue. I'm lacking confidence that that's there."

Earlier this month, Garry J. Jenkins, assistant director of the Secret Service, said Operation Sun Devil revealed that an "alarming number of young people" exploit computers through credit card fraud, unlawful placement of free long-distance phone calls and other criminal activities. In an interview, Dale Boll, an assistant special agent in charge of the Secret Service's fraud division, defended the government probe.

"We have not declared war," Boll said. "Computer crime is a serious offense, but we don't overreact. There's no tendency for overkill. If anything, we may have a tendency for underkill. We were given these laws to enforce and we're doing the best we can. We prefer to work more hardened criminals. The government didn't prosecute hackers when they were juveniles. But now they're growing up and doing more serious things."

The damage from the government's aggressive law enforcement efforts, according to Kapor, is a "chilling effect" on the flow of information among computer designers and programmers. Kapor contends that if the people responsible for operating computer bulletin boards are held responsible for information posted on their boards, hackers will stop using the boards.

"It's a gigantic social experiment in progress," Kapor said. If the government "cuts it off at the knees by inappropriately ruling {that the bulletin board operators are guilty of fraud}, they're cutting off their own future."

John Barlow, a dedicated hacker and a lyricist for The Grateful Dead band, said he already is committed to financing the hackers' cause. "I'm going to chip in to secure them legal counsel and so is Mitch," Barlow said from his home in Pinedale, Wyo. "I'm sure the {Secret Service's} assault is having an effect. It's turning mischievous kids into high-tech criminals. These hackers are explorers, not criminals or vandals. They're exploring a new information frontier. It's a reincarnation of what happened with the settling of the Old West, only in the computer sphere."

Government officials have a different view. "Many computer hacker suspects are no longer misguided teenagers mischievously playing games with their computers in their bedroom," the Secret Service's Jenkins said. "... We will continue to investigate aggressively those crimes which threaten to disrupt our nation's business and government services."