The staff of the St. Petersburg Times is in turmoil over the paper's abrupt firing of its business editor and a business reporter because of financial dealings that both men say were far removed from their jobs.

James Greiff, 35, a reporter who covered Florida banks, was dismissed last week after short-selling about $2,000 worth of stock he owned in a California bank. Two days later, the business editor who fired Greiff, Leonard M. Apcar, himself was forced to quit over an Individual Retirement Account that invested in a mutual fund that held a tiny percentage of its stock in an Ohio bank.

"I'm stunned," says Apcar, 37, who joined the paper early last year after 12 years as a Wall Street Journal reporter. Unlike Greiff, he says, "I don't trade stocks. I had no control over the investment. It was double arm's length... . I thought I was being conscientious."

It was Greiff, whose wife is still an assistant managing editor at the paper, who turned in his boss.

"I believe I was treated unfairly," says Greiff. He says he notified Times management that Apcar also owned bank stock "to show that he had prosecuted me, but he was guilty of the same crime and he hadn't disclosed it."

Michael Foley, managing editor of the 350,000-circulation paper, says he is "very sorry" about the "wrenching" effect on his staff. But, he says, "I will not apologize for having high standards or a strict conflict-of-interest policy."

"High standards are useless when they are arbitrarily and capriciously interpreted by management," Apcar responds.

Many newspapers have adopted strict conflict-of-interest policies since the 1985 insider-trading conviction of former Wall Street Journal reporter R. Foster Winans. The Journal, for example, prohibits business reporters from investing in companies they cover, speculating in the market, trading futures and options or selling short. The Washington Post has a similar policy. The St. Petersburg Times's policy does not spell out prohibited transactions.

Greiff's problem began late last month when his broker suggested short-selling his Wells Fargo stock, a risky maneuver in which the investor profits if the stock price drops in a short period. "Ten minutes after I got off the phone," Greiff says, "I told Len Apcar. I said, 'Do you have a problem with that?' He said no."

Days later, Greiff says, "I was told what I had done was, in Len Apcar's words, a felony ... and I was fired."

Apcar says he quickly decided that Greiff's trading was "offensive." But he says bank stocks constitute just 2 percent of his IRA mutual fund, and that his holding in Banc One Corp. of Ohio amounted to $42. He says he was involved with two stories in the last year in which Banc One was mentioned along with other banks, but does not see that as a problem.

Foley was not interested in his explanations, Apcar says: "I was hauled into the managing editor's office and resignation papers were on his desk."

Foley says only that he and Apcar had "a disagreement" over company policy and that "there was more to it than meets the eye." Greiff was fired, he says, because it is a conflict for "a banking writer ... to speculate in banking stock."

Karen Rothmyer, who teaches business journalism at Columbia University, called Greiff's conduct "very foolish" but said Apcar's punishment "begins to get into the realm of the absurd... . By that light, none of us can have an IRA. Who really can be responsible for every stock that some pension fund he has is invested in?"

St. Petersburg reporters are equally puzzled over Apcar's dismissal. Says one: "If you fired every editor who had a lapse of judgment, you'd clean house, wouldn't you?"

Dismantling UPI United Press International put out an upbeat news release Thursday headlined, "UPI Intensifies Coverage in 15 States."

What the financially ailing wire service didn't mention is that it is drastically curtailing its staff in the other 35 states, particularly after 46 more employees were laid off this week, according to sources. They say UPI will have no full-time employees in as many as 14 states, relying instead on part-time stringers and what the wire service calls "subcontractors" and "joint ventures."

Chris Dahl, secretary-treasurer of the Wire Service Guild, dismisses UPI's contention that it is beefing up its coverage of business, sports and quality-of-life issues as "corporate double talk."

"Basically what they've done is gutted the company nationwide," Dahl says. "It's quite apparent that UPI is going out of the full-service news agency business and is quite desperately trying to find a market for itself. Several years ago we represented 800 people in the United States; now it's down around 300. From our standpoint, that's a tragedy."

Representatives of the 83-year-old company refuse to say how many employees have been laid off, although sources say about 170 have gotten pink slips since Aug. 1. "We don't want to lapse into playing the numbers game," says UPI spokesman Milt Capps. He says the remaining staff will focus on enterprise reporting and analysis in an effort "to differentiate UPI's report" from that of the Associated Press and other competitors.

The news release says UPI will continue to be served by "more than 3,000" reporters and stringers, a claim Dahl calls "almost insulting" since most are not full-time employees. UPI, owned by New York-based Infotechnology Inc., has lost more than $40 million in the past three years.

Sources say UPI made a tentative decision to shut down its radio network, but decided to keep it alive after several firms, including Cable News Network and Disney Co., emerged as possible buyers or partners. The network will likely close next week if no deal is worked out, the sources say.

Heating Up in Houston An old-fashioned newspaper war has grown to Texas-sized proportions since the Houston Post fired a front-page salvo accusing the rival Houston Chronicle of circulation fraud.

Based on 11 lawsuits filed by former Chronicle distributors, the Post story said the Chronicle has inflated its circulation by as much as 85,000 copies a day. The Chronicle's daily circulation is 450,000 and the Post's 329,000, according to the Audit Bureau of Circulation.

The story cited court testimony that the Chronicle counted as paid circulation copies that were given away, sold to a salvage yard or diverted to an "imaginary zone." The Post said some of the practices are continuing.

The Chronicle has settled four of the distributors' lawsuits, one of them for $1.1 million. One pending suit seeks $19 million in damages under the federal racketeering act.

Since the lengthy piece was published last month, Chronicle President Gene McDavid has assailed his crosstown rival for hyping a routine business dispute. He says all the plaintiffs have an ax to grind because they were fired in the early 1980s, and that their allegations in no way involve fraud. "These were simply money disputes about termination pay," he says.

Training his rhetorical fire on Post Editor David Burgin, McDavid says: "Dave Burgin has a reputation of being a flamboyant, off-the-wall editor. I think it's outrageous for a newspaper in this modern age to use its front page in this competitive way."

Accusing his rival of trying to discredit Chronicle Publisher Richard J.V. Johnson, McDavid assailed "the way this story was played, with Second-Coming-of-Christ type right under the masthead and the word 'fraud' in big type and a mug shot of Robert Johnson."

Burgin, who was the Washington Star's city editor during Watergate, says he had to talk his owner, William Dean Singleton, into running the story. He says the Post could hardly ignore 11 suits and testimony from nearly 100 witnesses.

"If this was any company other than a newspaper, you'd see all this stuff and put it in the paper," Burgin says. "The whole idea is to put it out there and let the public decide. If people think it's ax-grinding and fit of pique and sour grapes, let 'em."

Reaching for a Watergate metaphor, Burgin accused the Chronicle of issuing "non-denial denials," adding: "I don't see any difference between this and the 18 1/2-minute gap in Nixon's tapes."