IRVINE, CALIF. -- Phil Stevens stops his cream Mercedes convertible in front of the valet parking booth and leaves his keys for the attendant. Inside the Rusty Pelican, scores of local businessmen indulge in Southern California's variation on the power lunch, complete with fish, ferns and leggy waitresses in Polynesian prints. Beside a case stocked with blush wines, Stevens and the young maitre d' joke about the lovely weather and how it has kept them from finishing their tax returns.

Stevens is one of the leading citizens of Orange County. In 1969, after playing a key role in the development of the Minuteman III missile, he founded his own engineering and construction firm and by the early '80s Ultrasystems Inc. was hailed as one of the fastest-growing company in the country.

Last year Stevens agreed to merge Ultrasystems with Hadson, an Oklahoma-based oil and gas firm, a transaction that netted him $7 million and left him the second-largest shareholder in the new concern. He is, say friends, "a modern-day Horatio Alger."

Saturday, on the Rosebud Indian Reservation in South Dakota, Stevens will be stripped down to a bathing suit (so as not to offend a television audience), then dressed in the moccasins, buckskin, shield and war bonnet of a Lakota chief. His supporters have named him "Man Who Leads With His Shield." They have named him champion in the 111-year-old struggle to win back Paha Sapa, the Black Hills.

"I believe that this is a time of healing," says the 59-year-old Stevens, who claims to be the great-grandson of a Lakota warrior named Standing Bear. "Now is the time for this nation to heal the blemish on its honor that is associated with the treatment of the Sioux."

The Black Hills belonged to the Sioux until 1877, when the United States seized much of what is now western South Dakota during a gold rush. The Sioux have been fighting to regain at least part of the 7.3-million-acre tract ever since.

In a 1980 ruling, the U.S. Supreme Court found that "a more ripe and rank case of dishonorable dealing will never, in all probability, be found in our history." It authorized a settlement now worth nearly $200 million, but ruled that it had no power to return the land. The Sioux live in the most profound poverty, yet they refused the money. The Hills, religious Lakota say, are sacred soil -- Wamaka Og'naka I'cante, the heart of everything that is -- and not for sale.

They are now waging their fight in Congress, where Sen. Bill Bradley (D-N.J.) has twice introduced legislation that would give the Sioux 1.3 million acres of unoccupied federally owned land in the Black Hills and incorporate the $200 million as compensation. It is being blocked in committee by Sen. Tom Daschle (D-S.D.), whose constituency is strongly opposed to returning any territory to the Sioux.

Stevens' plan calls for the government to return the land in addition to paying $3.1 billion in rent and compensation for the mineral-rich Hills. He hopes to overcome congressional opposition with an outpouring of public support. This weekend's ceremonies are the beginning of a campaign that Stevens says will include national advertising, petition drives and letter-writing. He has given up any role in running his new business to devote himself full-time to the cause.

"I see a terrible need that exists, and I said to myself, 'I really don't think I can live with myself and just sit back here in Newport Beach and say, I think I can help them solve their problem but it is very comfortable back here so I won't offer,' " Stevens says.

Although he has been active since the 1970s as a troubleshooter and management consultant for a number of Indian tribes, Stevens had never been on a Sioux reservation until September 1986. Today he wears a huge ring of Black Hills gold on his right hand to signify his involvement with the Sioux, and another, of silver and turquoise, on his left, to signify his involvement with Southwestern tribes. His golden cuff links are emblazoned with the portrait of a chief in his war bonnet. Since he thrust himself into the Sioux's struggle, Stevens has been trying to convince people his motives are pure. Now, over a plate of mahi-mahi and pasta salad, he tries again.

"Basically, it's the story of a very sincere guy who has come up with a plan that he believes the American people will support, and he's giving up a very nice job to really dedicate a tremendous amount of effort to make something happen," Stevens says.

He has not been welcomed to the cause with open arms. The Sioux, through their Black Hills Steering Committee, have worked three years with Bradley's office, hammering out legislation. They say the new bill, S. 705, was gaining congressional support until Stevens' proposal alarmed some senators into opposition.

"I don't think that he is helpful here because this is fundamentally a question related to the spirit and the land, and once you introduce billions of dollars, well -- you know," says Bradley. "I've basically told him that."

"It's highly destructive," says Wayne Ducheneaux, chairman of the Cheyenne River Tribal Council. "It's bringing more and more opposition to the Bradley bill."

"Basically for us the last eight months have been damage control," says Gerald Clifford, coordinator of the Steering Committee.

But the Oglala Sioux Tribal Council, which governs the largest of the eight reservations involved in the Black Hills effort, backs Stevens, as does a loose coalition of tribal elders who feel the Bradley bill is too weak and the efforts to pass it too feeble.

"Most of us who are supporting him see that this man is a businessman," says Sam Eaglestaff, an elder who lives on the Cheyenne River reservation. "He has the contacts and the very, very strong supporters from all over the country."

Stevens wants to focus those supporters' attention on "The Taking of 1877" and the way its devastation lingers on the South Dakota landscape.

On the right side of the two-lane that meanders through the Pine Ridge reservation stands a village of 30 small, one-story homes built of brick and cinder block and plywood. The houses are scattered behind a post office that looks like a pointy stone parenthesis poking through the ground.

A group of elementary school boys is shooting at a low, bent-rimmed basket in a yard dominated by the skeleton of an automobile and a silver propane tank. A ragtag pack of dogs lingers in a gully. The slightly rolling prairie stretches dead-grass gray in every direction.

This is Wounded Knee, the village where the American Indian Movement confronted the FBI in a sometimes violent two-month standoff in the spring of 1973. This is also the place where on Dec. 29, 1890, the U.S. Army opened fire on the followers of the Sioux chief Big Foot when a shot went off while the Indians were being disarmed. The chief and 43 of the estimated 300 victims are buried in a small, pebbly cemetery atop a rise that looks down on the site of the massacre. A small wooden church stands at one end of the cemetery. A white flag edged in black flies at the other.

The Wounded Knee massacre marked the end of the Sioux's resistance to American domination. In the century that followed, the people of Pine Ridge and the other reservations found their fates controlled increasingly by the Bureau of Indian Affairs. The results of that stewardship are suggested by a recent study by the United Methodist Church showing that four of the seven poorest counties in the country are in South Dakota and each is occupied, at least in part, by a Sioux reservation.

The Pine Ridge reservation comprises Shannon County, the poorest county in America. Unemployment here fluctuates between 75 and 90 percent, according to the Bureau of Indian Affairs. The rate of adult alcoholism, say counselors on the reservation, is nearly as high. The median income hovers around $3,200. People who can't afford liquor have been known to get high guzzling Lysol.

The children of reservation Indians are 3 1/2 times as likely to die in infancy as those of other Americans. The young men are four times as likely to take their own lives.

The 1980 census indicates that 21 percent of the homes on Pine Ridge have no plumbing, while 16 percent are without electricity. The villages lack any kind of infrastructure that would allow economic development, and the soil is too poor to farm. They call these the Badlands for a reason.

"I'd been on a number of reservations," Phil Stevens says. "I'd been on a Crow reservation and a Navajo reservation, but I never saw such terrible poverty as on the Sioux reservation."

In September 1986 he visited the Red Cloud Indian School at the Holy Rosary Mission in Pine Ridge.

"The children at the mission, when they are first given a plate of food, they will only eat a part of it," he says. "It takes some time for them to become adjusted to the idea that what's on that plate is not what they have to share with the rest of the family."

During his visit Stevens first learned of the Sioux's efforts to regain the Black Hills.People on the reservation told him how the Hills had been guaranteed to the Sioux under the Fort Laramie Treaty of 1868 but taken from them in legislation that became known as the "Sell or Starve Act" of 1877 because Congress threatened to cut off the Sioux's rations unless they complied. Stevens also learned of the government's latest attempt to settle the matter.

"I don't know how anyone could look at it and say that justice was being done," says Stevens. He thinks that original price per acre was fair for farmland, but not for the gold-rich Hills. But the deepest injustice, he says, is that the court authorized only simple interest on the century-old debt.

"Every bank in the United States pays compounded interest to United States citizens," he says. "Every foreign bank throughout the world pays compounded interest. The United States government, on all its debts except to the American Indians, to the Sioux, pays compounded interest. The United States approved a payment of compounded interest on the $10 billion in assets that were taken from the Iranian government when the U.S. hostages were taken, as a part of the 1981 Algiers agreement."

The difference between simple and compound interest in this case is about $2.8 billion, or roughly the difference in compensation between the Bradley bill and what is sometimes referred to as the Stevens amendment.

Stevens said his plan came to him the night of his visit to Pine Ridge.

"I missed the airplane because of fog," he says, "and I couldn't fly back, so I stayed at the Hilton in Rapid City and I was sound asleep, and all of a sudden, at 4 in the morning, I just bolted upright in my bed. I was just wide awake and I had chills that just ran up and down my back and just made my hair stand on edge. And I remember it so distinctly and that was when I had the idea of how to solve the Black Hills issue.

"And I was so excited about that that the next morning, first thing in the morning, I called Father Peter Klink {director of the Red Cloud Indian School at the Holy Rosary Mission}. I said, 'I had a spiritual experience last night, I really did.' I said, 'I think I know how not to sell the Black Hills but yet provide the Sioux with fair and just compensation as well as get them the Hills back.'

"And it was so motivating to me that I haven't stopped since. I've been working seven days a week."

In June 1987 he invited Joe American Horse, then chairman of the Oglala Tribal Council, Paul Iron Cloud, the current chairman, and tribal attorney Mario Gonzalez to Orange County to discuss his plan. Gonzalez had been instrumental in drafting the original Bradley bill, but had become disaffected with the leaders of the Steering Committee.

Stevens took the trio to the beach, he took them to Disneyland, he introduced them to Connie Stevens. By the time they headed back to South Dakota, an alliance had been formed and Phil Stevens felt he was walking in the tradition of the war chiefs who had fought for the Black Hills the first time around.

There is an old saying, attributed to Sitting Bull: "My children, your business dealings with the whites are going to be very difficult in the future. My children, learn all you can. We old people need your help, we need to understand the way the white men's system works."

"When you think about that," Phil Stevens says, "that's exactly what I've done. I was, for whatever reason, raised to understand how the white man's system works. And they want me to lead them because I understand how the system works."

Whether the Sioux want Stevens to lead them is an open question, but no one can deny he knows how to work the system.

Born in East Los Angeles, the son of a boilermaker, he made pocket money selling flowers on the street. ("Selling style is the key to peddling flowers, he says," reads an excerpt from an October 1983 Forbes profile. "Hold several bunches of flowers between the fingers so the prospective customer envisions a larger bouquet than the single bunch he actually buys.") After graduating from UCLA he worked with Hughes Aircraft and TRW, specializing in rocket propulsion.

"In the 12 years I was with TRW I went up the ladder to head up all rocket propulsion and then to head up the nuclear warhead integration," he says. "Finally I came up with the idea for the Minuteman missile as it stands today."

Officials with the Air Force and TRW say Stevens' description of his role in the Minuteman project is "overblown." However he did design the postboost vehicle, one of the innovations that distinguish the Minuteman III from earlier rockets.

"After I led that through a successful flight test, then I really thought about the future and said, 'I don't want to do Minuteman IV, I really want to do other things,' so I just cut the umbilical and started my own company," Stevens says.

It was 1969 and Stevens was 39 years old. "There were many days when I looked out the window to the vacant lot that was next to the company and I'd say to myself, 'Stevens, if you can't figure out how to get the next contract, we're going to be out in that vacant lot.' "

That year the American Indian Movement occupied Alcatraz Island to dramatize the plight of Native Americans. "I think that was the real thing that hit me," Stevens says of his interest in his Indian heritage. "When I saw that I said to my dad, 'Dad, there are the Sioux going into Alcatraz and they are only going in because of tremendous frustration and the inability of knowing how to work within the system, so they've circumvented the system and just made a direct invasion. I really feel compelled to say I'm going to start helping the nation's American Indians.' "

Stevens' business and his activism blossomed simultaneously. Attributing the company's success to "raw aggressiveness and opportunism," Forbes wrote that "Phillip Stevens has a talent for exploiting government programs for all they are worth." A year later Financial World magazine named Ultrasystems "the fastest growth company in the country."

During the same period, Stevens began offering his services to Western Indian tribes as a technical and management consultant. He's proudest of his 1973 involvement with the Chemehuevi tribe in California. Acting as an intermediary with the Interior Department, Stevens helped them regain the use of 21 miles of shoreline on Lake Havasu. For his help in defusing a potentially explosive situation, the Interior Department presented him its highest civilian honor, the Conservation Services Award.

But none of this prepared him for the roiling waters of the Black Hills fight.

There is a cautionary tale told among the Sioux about Little Big Man, a friend of Crazy Horse and a top lieutenant to Sitting Bull. In September 1873, the government called the Sioux chiefs together to discuss selling the Black Hills.

Sitting Bull refused to attend the meeting, but he sent Little Big Man as his emissary. He rode into the fort in the midst of the meeting and shouted, "I will kill the first chief who speaks for selling the Black Hills." No agreement was reached that day.

Four years later, Crazy Horse brought his people in to Fort Robinson to sign an agreement for a reservation on the Powder River. But when he reported to the fort he was turned over to a reservation policeman. To his great surprise he saw that the policeman was Little Big Man.

As Little Big Man led Crazy Horse to a cell, Crazy Horse broke free and grabbed for his knife. In the struggle that ensued he was stabbed in the stomach with a bayonet and died the next morning. The story goes that Little Big Man, with a hand on the great warrior's arm, had kept him from defending himself.

While the facts are somewhat murky, the theme is clear. This is a Judas story. There are plenty of Sioux who think Phil Stevens will also betray them.

"He's a bull artist," says Wayne Ducheneaux, chairman of Cheyenne River Tribal Council. "He's like them old guys who sold snake oil. He's got a pretty good little dog-and-pony show he trots out, but it doesn't make any difference, he doesn't have the facts."

"He hasn't proved to anyone yet that he is an Oglala," says Tim Giago, publisher of the Lakota Times.

Stevens has a 1973 affidavit from his father tracing the family's ancestry back to "Grandfather Standing Bear," who left the Pine Ridge Reservation and moved to Denver.

"That's the best I have," Stevens says. "I don't know beyond that and as a matter of fact it is very unimportant to me. If my dad says that's what it is, that's what it is, and yet for some reason that's one of those points that gets blown up."

But Giago claims that if Stevens were really a descendant of Standing Bear the tribe would be able to trace his lineage through its tribal rolls..

"That seems to be a typical example of 'Forget the Hills. Who's his grandmother?' " Stevens says.

The more serious charge is that Stevens is ruining the fragile Sioux unity built up by the Black Hills Steering Committee over the last three years. Before the Oglala endorsed Stevens' plan, all eight tribes were supporting the Bradley bill. That kind of unity is crucial, says Gerald Clifford, coordinator of the Steering Committee.

"We have to bring unanimity to Washington before we can even begin to talk to them," Clifford says. "It is legitimate for the state of South Dakota to have its political battles, but every time the governor speaks, he is respected as the governor, and when a guy on the outside speaks, the press doesn't say: 'White Leaders Divided.' "

Aside from his support from the Oglala Tribal Council, Stevens has appealed primarily to groups of elders, such as the Gray Eagles, who have little influence in electoral politics on the reservations.

"The view of the Gray Eagles is that the Steering Committee is being very myopic," says Mario Gonzalez, the group's attorney. "The Black Hills claim involves more than religious rights."

"The timber rights and the mining, when is that going to be compensated for?" asks Germaine Tremmel, 31, a great-granddaughter of Sitting Bull. "We've always thought we were going to be compensated and then came to find out {in the Bradley bill} that we weren't. We will not accept this."

Stevens tries to minimize the divisiveness he has caused. "The Sioux have always squabbled among themselves," he says. "What I wanted to do was ensure that there was at least a majority of the Sioux people who wanted to go the route that I suggested. I have now determined that the mandate in the form of written signatures does exist."

Nonsense, says Ducheneaux, who says he has heard of little support for Stevens' plan. "I was elected by those grass-roots people," he says. "I don't know who the hell they are talking about when they say the grass roots if that ain't the people who elected our council."

This weekend's ceremony is a sore point for many Sioux who feel that the honor of being named a chief is something bestowed after a lifetime of service.

Stevens' handling of the matter has exacerbated the problem. He issued a press release early last month announcing that the Sioux were naming him their new "war chief." After the story appeared in newspapers around the world, even Stevens supporters denied it, saying he lacked the qualifications. Stevens now says he is now being made a special chief, but a recent release on the ceremony described him as "Itancan kel," meaning like a chief, but not actually a chief.

"It probably has hurt his credibility a little bit on some of the neighboring reservations," concedes Gonzalez. "I think people are discerning the distinction between his amendment and his role. I think some like the amendment, but don't like the idea of his role."

But if Stevens' plan is to succeed it will be after a national publicity campaign that only he has the resources to finance.

"There are some people who have told me, 'We wish he'd go butt out,' " says David Miller, a white history professor at Black Hills State College who opposes returning large sections of the Hills to the Sioux. "And there are others who say, 'If we have a chance, we have to sell people on both coasts on the emotional aspects of this issue and essentially then come back and jam it down the throats of the opponents.' "

An Indian joke:

"These two guys are fishing for crab. One guy has a bucket of crabs and the crabs were always climbing out of the bucket and the other guy has a bucket and the crabs aren't jumping out at all.

"So the guy who was losing all his crabs walks over to the other guy and says, 'Why are your crabs staying in the bucket so much and my crabs always jump out?' And the other guy says, 'Well, I have a bunch of Indian crabs and as soon as one tries to climb above, the others reach up and pull him down.'

"And there's an awful lot of truth to that," says Phil Stevens, whose role in the bucket is not at all clear.

Tomorrow: Sacred soil and the view from South Dakota.