SATIRE HASN'T changed much since Menippus. It begins with a naive outsider who blunders into a corrupt social order -- "The innocent visitor from some

other galaxy," in the words of Quimby, the omnipresent "State Department" operative in Wrap It in Flags. The satirist adds a cast of characters with mutually exclusive agendas, all obsessed with the outsider, stirs in a generous dollop of mistaken identity, plenty of slapstick and as much sex as the censors will allow, then puts the mixture on to boil.

All the required ingredients are present in Wrap It in Flags, a funny, sexy spoof of the American military. Its author, Robert Terrall, is an accomplished storyteller, having written some 50 pulp novels including two dozen Mike Shayne mysteries. Now he's drawn a bead on the biggest target in America -- the five- sided wonderland on the Potomac where careers and fortunes have been made for the past 40 years.

Of course, soldiers have been targets since satire was invented -- one of the staple figures in all eras is the miles gloriosus, the "glorious warrior." But the miles gloriosus has changed, to hear Terrall tell it. "Caution has replaced elan as the premier military virtue," he explains. A truly ambitious soldier aims not for glory or command, but for a job with a defense contractor when his 20 years are up:

"These days the hard chargers, the brainiest and most aggressive competitors, try hard to stay off (the Joint Chiefs of Staff). Career goals have changed. Few corporations are willing to consider an ex-chief or ex-defense sec. for jobs that pay the really top money. They have been too visible. They may have become identified with doctrines that have gone out of fashion."

In Terrall's world, former ARVN soldiers pedal pedicabs around the Pentagon, and the only enemies an American soldier really want to fight are the other services and the Congress (one of the book's best scenes shows the Joint Chiefs gathered in the War Room, watching a wall-size battle map of the U.S. Senate, carefully divided into "Ours" and "Theirs").

Into this mad world comes Iluminado Castillo, a dashing but ingenuous Colombian army captain sent north to attend "Counter Coup school." Castillo (who's a trifle thick but irresistible to women) is mistaken for the Colombia junta's bagman and caught up in a struggle between competing military industrial factions. One wants to build an electronic wall across Central America to keep the commies out, the other wants to spend the billions on an undersea missile platform called Circe. Both want to bribe, seduce, corrupt, or, if necessary, teminate Iluminado.

Soon a Pentagon assassination team is on his trail, along with a redheaded lobbyist named Doris (if I'd come across Doris in my reporting days, we'd have been on a deep-background basis before you could say "power lunch"). The plot, so to speak, builds to a blazing finish in which Castillo brings the military to its knees, wipes out both projects at a single blow, and performs an ancient Colombian dance that convinces the JCS of the need for peace, justice and the Colombian way.

HOW DOES he succeed where generations of activists (not to mention some few presidents) have failed ? In a sense, this is irrelevant -- in satire, Castillo's mere presence, fearless and (except in the sexual sense) incorruptible, is enough to force the entire social order into an orgy of fear, greed and frenzied self-revelation. And Terrall is skillful enough to make the reader suspend disbelief most of the time.

Nonetheless, at times Iluminado seems just a bit much. Satire thrives on absurd stereotypes, true; but in the era of Miami Vice, the naive incorruptible Colombian seems -- como se dice? -- an eccentric archetype. Further, while I am willing to grant Iluminado his strength, courage and sexual prowess, I did begin to wonder how this Latin rustic could so quickly learn how to induce deep hypnosis and operate top-secret battlefield computers.

These flaws make Wrap It in Flags a slight satire, though a diverting one. But Terrall's sense of the target is very true. I found myself reading this book simultaneously with The Hunt for 'Red October' by Tom Clancy, a book that has found much favor with the lords of the five-sided castle.

Clancy's book is viewed as sober realism, while Wrap it in Flaps is fantasy. But in the essential details, both books agree about the upper levels of the Pentagon -- their insane machismo, their mindless aggressiveness, their desperate faith in technology, their contempt for civilian authority and the society they supposedly guard . After I stopped laughing at Wrap It in Flags, I wished someone would do Iluminado's dance.