Special Agent Mat Perez became the highest-ranking Hispanic in the Federal Bureau of Investigation. Then, in a historic legal battle over discrimination, he became its chief accuser.

Mat Perez was tired and discouraged that January morning in 1988. He slid into the circular restaurant booth near Los Angeles International Airport with a lot on his mind. Nearly a year had passed since Perez, the FBI's top-ranked Hispanic agent, had filed his unprecedented ethnic discrimination lawsuit against the bureau. But the case had not reached trial yet, and the prospects for winning were growing ever more bleak.

Perez had run out of money, and a team of Justice Department lawyers was keeping up a relentless legal barrage -- a monthly average of five motions, counter-motions and other courtroom maneuvers that seemed designed simply to devour cash.

On top of this, Perez, after 25 years with the FBI, had to help run a field office under the hostile scrutiny of an agency that had labeled him a traitor, tried to put him in jail on a perjury charge and even accused his wife of being a spy.

This morning, Perez was appealing to Rep. Esteban Torres, a Democrat from California; he wanted Congress to investigate his allegations of widespread discrimination in hiring and promotion within the FBI. But the congressman said he could only spare 10 minutes. So Perez shuffled quickly into the booth of the Amfac Hotel coffee shop, along with his lawyer and three fellow FBI agents.

Over the din of air traffic and the occasional clanking of coffee cups, the congressman listened intently, an aide taking notes, as one of Perez's lawyers, Jose Silva, outlined the case. The plaintiffs were trying to do what had never been done before: get access to the top-secret computers of the FBI to begin a statistical analysis aimed at proving ethnic bias in its employment practices. Hispanic advocacy groups applauded the effort, but Perez and his fellow agents were largely on their own when it came to money.

One by one, the agents told Torres their painful stories. They recounted insiders' tales of the FBI's "Taco Circuit" -- the dreary succession of dead-end jobs that seemed to be reserved for Hispanics. The Latino agents handled tedious tasks such as monitoring months-long Spanish-language wiretaps, and they were assigned to dangerous undercover work because of their language abilities rather than their investigative experience. Worse, they told Torres, they played largely invisible supporting roles to Anglo agents who usually were listed as the chief investigators of the cases, and usually ended up with the promotions.

The 10-minute meeting grew to nearly two hours. Torres was outraged by what he believed were cases of outright discrimination. But the congressman was leery of the powers of the FBI. "What do I have to guard against," he asked, "so that I don't become a target?"

That was the turning point, Perez would later say. He was about to become fully embroiled in the challenge of his life -- a massive lawsuit that would shake up one of the government's most formidable agencies, exposing and forcing changes in its personnel practices. His attorneys, who had to get top-secret security clearances to work on the case, would themselves become the subjects of an FBI investigation. More than 3,000 exhibits, 90 witnesses and $1 million would be thrown into a legal battle that eventually would prove that the nation's premier law enforcement agency, entrusted with enforcing its civil rights laws, systematically discriminated against its Hispanic agents.

What would carry Perez through all this -- through an experience that would threaten his career and make him a marked man within the tight fraternity of the FBI -- was the implication behind the question Torres was now asking.

"It's a shame that a congressman should be afraid of the FBI," Perez told Torres, speaking sadly of an agency he still loved. "We shouldn't be feared. We should be respected. We're not the Gestapo, and we're not the KGB."

The congressman was moved by the response. "I'll support you," Torres said. "But if you're not successful, you have to appeal. You have to see this through. If we can't win, this nation is in a very sad state." 'WE WERE LATINOS AND WE WERE AMERICANS'

f the FBI had guidelines for growing up, Bernardo Matias Perez would have met them easily. The eldest of 11 children, he was born in 1939 in the small mining town of Lone Pine, in a picturesque California mountain region 90 miles west of Death Valley. The family lived in a two-bedroom house with a back porch, where the boys slept. His parents were hard-working American citizens several generations removed from their Mexican forefathers who had settled in California before it was annexed by the United States. Mat Perez grew up family-oriented and deeply religious, a boy who felt comfortable with rigid structures -- in his case, the Catholic Church and the patriarchy of an old-style Mexican family.

His parents raised the children strictly and encouraged them to appreciate books, classical music and their culture -- both of their cultures, actually, as Perez recalls. "We were always told we're Latinos and we have our culture," he says, but "I got the dual history and saw that it wasn't always one way, that there was another way -- and that we, we were Latinos and we were Americans."

His mother, Ernestina, especially, gave him a love for history. She told him stories of her relatives who, as cowboys and as miners, had helped settle the Lone Pine area. What struck Perez in particular about his mother's ancestors was that they had been here at least five generations. "Her people didn't cross the border from Mexico," he says. "The border fell out from under them" when California became part of the United States.

His father, Matias, dug tunnels for the California Division of Highways, while always holding a second job; all together, he brought home about $7,000 a year. Perez admired him, but noticed something bothersome: His father was always a laborer. He was never promoted to supervisor like so many Anglo counterparts the younger Perez knew.

But this never seemed to daunt his father, who wanted his own situation to serve as an example to his eldest son. "He always encouraged me to get the best education," Perez says. " 'That's how you get ahead,' he would say. 'There's equality in this country, but you have to fight for it.' "

The Perez family's life revolved around church, and the religious discipline instilled in the oldest boy began having its effect. By age 13, Mat Perez decided he wanted to enter the priesthood. So, with the blessing of his parents, he left home for Fresno, more than 100 miles away, to enter a seminary. His structured life became even more structured.

"It was very strict . . . the old Catholic Church. Things were still in Latin. And discipline, self-discipline, was important," he recalls. The Jesuit seminary gave him an intensive high school education -- 19 students taught by nine instructors. He learned Greek from a priest who was studying the Dead Sea Scrolls. He learned Latin, English literature and theology. "It was a basic high school education, except that that's all we did -- go to school. We had one hour of free time per day and the rest of it was study." His life was so regimented, Perez says, that he knew, to the day, what his schedule would be five years in advance.

After graduation, still aiming at the priesthood, he entered a college-level seminary in Los Angeles. But the continued regimentation began to collide with a streak of independent thinking that began to emerge in Perez.

He had been trained, among other things, in the art of logical persuasion, developing "an ability to argue about something . . . and to become exhausted physically from trying to comprehend something, stretching your mind to understand something new." At St. John Vianney seminary, he tried to use these newfound skills on the headmaster, arguing that since there were half-day classes on Wednesdays and Saturdays, it only made sense to attend class all day Wednesday and take Saturday off. When the headmaster said no, Perez countered that he had already polled the student body, and democracy dictated the change. The headmaster informed him that the seminary, alas, was not democratic.

Something else was changing for the young man with the striking dark eyes and warm smile: He wanted a social life. "I was thinking about women all the time -- and I didn't even know any," he says. It soon became clear to him, and to the seminary's headmaster, that even after seven years of training, Mat Perez did not fit in. One year short of completing the seminary, he dropped out.

Perez's next career choice, he says, was logical, something that offered as much structure as the seminary. As he later summed it up: "I just traded the pope for J. Edgar Hoover." 'IMMIGRATION IS UPSTAIRS'

Glamour and excitement appeared to be the lot of the FBI agent -- at least that's what Mat Perez thought when he moved to Washington in 1960. At the time, all he knew about the bureau came from seeing "The FBI Story," starring James Stewart. He soon found that the reality was far different from the Hollywood version -- particularly for a Latino.

Perez was attending Georgetown University part time when he started at the FBI as a messenger/file clerk. He got to make the "director's run," delivering mail to Hoover himself, and was able to observe life at headquarters, which he found unimpressive. The agents "seemed rather dour," he recalls. "They didn't seem to be enjoying themselves. It wasn't like what I'd seen portrayed in the movie."

So Perez quit and enrolled in Georgetown full time. He graduated in 1963, married a woman he met in college and planned a career in the State Department.

Instead, FBI recruiters persuaded him to come back to attend their academy in Quantico and become an agent. "They told me there was a need for Spanish-speaking agents, that the bureau had very few," he says. It made no difference that Perez had learned Spanish in the classroom, rather than at home. So on September 16 -- Mexican Independence Day -- Perez entered the new agents' class.

Almost immediately his ethnic heritage became an issue. "I think the first occasion that I can document was when I was in new agents' class and I was pulled out by the assistant director in charge of training at Quantico," Perez says. "I don't recall the exact words, but he said something like: 'What would you say if I called you a stupid, son-of-a-bitch Mexican?'

"I said, 'You'd be a bigot, an uneducated person -- that's what I'd think of you.'

"He said, 'Well, I'm just doing this to test you, because you realize you're going to be carrying a firearm, and we can't have any hotheads losing control.' "

Perez says it made sense to him at the time, but years later he wondered whether the man had put others through the same treatment. "Everybody has a background."

After graduating from the academy, he was assigned to Tampa, where his ethnic background became a severe handicap, Perez says. His FBI supervisors, apparently thinking they were playing to his strengths, assigned him to anti-Castro counterintelligence. The rookie agent's task: Identify and locate Castro agents who had infiltrated Florida's Cuban community.

"I was told that since I was a Latin, I could work Latin matters," Perez says. What his supervisors didn't realize was that his Mexican heritage made him stand out among Cubans in Florida as much as a Texan would stand out in Brooklyn. "I had never seen a Cuban before, nor heard one speak. And the Spanish they spoke was quite different," he says. "I understood very little and I think they found me as strange as I found them."

Not surprisingly, Mat Perez didn't locate a single Castro agent, and he blamed himself for the failure. "I knew that I was not meeting expectations. And I felt very inferior . . . that the trouble must have been with me." He was transferred to San Antonio within six months, the first of what would be 14 transfers over the next 24 years, a rate far above the bureau's norm.

The day he reported to the San Antonio field office, an Anglo secretary refused to believe that he was an agent and wouldn't let him in. "Immigration is upstairs," she told him.

From there, Perez went to language school in Anacostia, then to the Washington field office and then to Miami, where the Cuban community once again awaited him. Many of his Anglo peers, meanwhile, had already won promotions. "All the time I was thinking, 'This is hard on the family,' and my wife was thinking that too," Perez says. "But {we thought}, 'It'll be worth it. We'll have to sacrifice now and make our reputation, and then they'll make me a supervisor, because the book says you only make it on merit and ability.'

"I wasn't looking at the fact that the supervisors at the time were nobody in particular. These people had made it because they knew the boss, and he put in a word for them. It was the good ol' boy system." 'WHY DON'T I GET MORE YOUNG MEN LIKE YOU?'

Despite his difficulties, Perez's career took an upturn in Miami. He used his education and a sometimes-unorthodox approach to make his mark in what the FBI considered a most dangerous calling: undercover work.

J. Edgar Hoover's FBI relied almost totally on informants; Hoover discouraged agents from working undercover themselves except on the rare projects he personally approved. But an agent named Joseph Yablonski -- who had been undercover for years in Miami Beach's Jewish community in pursuit of jewel thieves and fences -- inspired Perez to take the chance. "He came to me and suggested I work undercover because I was not a typical-looking or -acting FBI agent. I was not a white Anglo-Saxon male."

With Hoover's approval, Yablonski taught Perez the covert arts. You had to select an identity that was as truthful to your background as possible, so you wouldn't get caught in a lie. Thus Perez couldn't try to act like a Mexican from an urban barrio. Instead, he relied on his broad education to develop a specialty in art-theft cases. On his first undercover assignment, Perez posed as a rich Latin American art collector and recovered a Rembrandt drawing, "The Death of Jacob," that had been stolen four years earlier from a Montreal museum.

Then Perez and a Hispanic partner, agent Dick Castillo, scored another undercover coup investigating a series of long-unsolved political bombings, including the 1968 attack on the Soviet Embassy in Washington.

Perez and Castillo didn't behave like FBI. Carrying the .45-caliber semiautomatics favored by Mexican police, hanging out in barrio nightclubs, the pair inspired fear among the Cubans; they were rumored to be Mexican cops with extralegal authority to kill Cuban terrorists.

They bagged a major prize by cultivating a relationship with the mother of suspect Hector Cornillot y Llano. She tearfully insisted that her son was a good boy who had simply fallen in with a bad crowd, and proceeded to name its members. Cornillot's mother persuaded her son to cooperate, and Cornillot eventually helped solve 49 bombings across the country.

The two agents won applause for their work, but when it came time to sign the required transcriptions of their witness interviews, they discovered to their surprise the names of three other, more senior Anglo agents on the FBI paperwork, claiming credit for their supervisory roles. In bureau parlance, the Anglos were getting their tickets punched -- while the Hispanics, Perez says, were serving as "Anglo helpers."

At this point in his career, Perez was hoping for an overseas assignment, for which he would first need to achieve the rank of supervisor. But because his language ability kept him pigeonholed in foreign counterintelligence, which had an entrenched supervisor, Perez came to see himself as trapped.

Then he got a break. In 1969 Perez became the lead agent in a case involving the aftermath of a coup in the Dominican Republic, a high-profile operation that had him communicating with the White House and finally helped him land a supervisory job, working nights in Miami. Two years later, he became the special assistant in a U.S. consulate in Mexico.

Before he left, he had the first of two personal meetings with J. Edgar Hoover. "He was very pleasant. Very attentive," Perez recalls. "At one point I told him -- I had been coached -- that I wanted one thing from him and that was additional responsibility. And I remember he slammed his fist on the desk and said, 'Why don't I get more young men like you in here? I get whiners and I get complainers' . . . And he said, 'Young man, as long as I'm director of the FBI, I assure you that you will rise within this organization.' "

But Hoover died less than two years later, and after a four-year stint in Mexico, Perez returned to Washington. Within a year, he found himself in dead-end jobs, processing Freedom of Information requests and classifying documents, and he began to take stock. Twelve years of hard work and more than a dozen transfers had left him with a stalled career and a failed marriage. His Anglo peers, meanwhile, had pulled ahead in the hierarchy and become ASACs -- assistant special agents in charge, the second-highest level in the field.

In 1977, Perez confronted his superiors for the first time and asked why his career was sputtering. "I saw the number two man in the FBI, and he said I had an excellent background and he promised to make me an ASAC within a year."

But the number two man was leaving, and his successor had a different opinion. Despite a high score on an exam for promotion to ASAC, and despite a vacancy in Los Angeles, Perez languished in document classification for 2 1/2 more years. Finally, he received word that he was being promoted and transferred to Puerto Rico. A top scorer among his peers on the exam, he had nevertheless been the last one promoted. Still, the FBI finally had its first Hispanic assistant special agent in charge.

"It was," Perez now believes, "the beginning of the end." SPECIAL AGENT IN CHARGE

Perez arrived in San Juan in early 1979 and within seven months was promoted again, this time to special agent in charge, the first Hispanic to become a SAC. But his rise coincided with one of the most spectacular periods of terrorist activity in Puerto Rico's history -- presenting him with his stiffest challenges and setting off a chain of events that jeopardized his career.

At sunrise on December 3, 1979, a green truck sped past a U.S. Navy-owned school bus carrying 18 enlisted men and women on a desolate highway west of San Juan. The truck swerved in front of the bus, and an unknown number of assailants jumped from a parked van and opened fire with M-16 automatic rifles. Before the 32-shot fusillade was over, two sailors were dead, and 10 others lay wounded.

Three Puerto Rican nationalist groups later claimed responsibility for what President Carter called a "despicable act of murder." The Justice Department and the FBI gave the case top priority, and responsibility for the investigation fell to Perez. He was only three months into his tenure as SAC in a field office that would investigate about 150 bombings that year, pursue corruption charges against 40 top Puerto Rican police officials and handle security for the Pan-American sports events being held in Puerto Rico.

The terrorist attack couldn't have come at a worse time for an office that already had formidable problems, says FBI agent Leo A. Gonzalez, who worked for Perez then. Agent morale was low in what was considered a backwater outpost with little support from headquarters, and three-quarters of the agents assigned to Puerto Rico did not even speak Spanish. For any mainland American, especially someone working for the FBI, the environment during this period of militant Puerto Rican nationalism was extremely hostile.

Meanwhile, Perez was drawn into a bitter conflict with the Puerto Rican police as he pursued a highly publicized corruption and murder investigation that eventually led to the indictment of 10 police officers. There were so many threats on his life that he had surveillance cameras on the roof of his house and a sawed-off shotgun under his car seat. When his three children visited, their lives were threatened and FBI agents became their baby sitters.

At the height of this conflict, Perez says, "We heard from informants that the police in Puerto Rico realized that the way to deal with the FBI was to make counteraccusations" about corruption within the bureau. One of the allegations involved the woman Perez had started dating and would eventually marry, Yvonne Shaffer. Shaffer, who worked in the FBI's steno pool, had previously been employed by a man whom the FBI regarded as a socialist and a security risk. Perez and Shaffer's relationship had already been the subject of FBI headquarters displeasure, and Perez received a letter from a bureau official claiming that then-FBI Director William Webster thought he should not be seeing her.

The matter became more serious when someone told the FBI that Shaffer was passing internal information to the Puerto Rican Socialist Party. The FBI interrogated her at length, threatening to charge her with espionage. But nothing ever came of it.

Perez blamed the Puerto Rican police for the allegation. "They knew that the FBI would then send in {internal investigators} and they could tie us up that way. And they did that. The minute the accusations began, I realized what was happening and I told headquarters."

An FBI inspection team arrived in San Juan in 1982, and Perez, who believed he had few friends at headquarters, says he knew the results would be a foregone conclusion. The team characterized Perez as a poor administrator who delegated too many of his duties. He was removed as SAC and reassigned to Los Angeles, the nation's second-largest field office, where he was supposed to shore up his administrative abilities. A DECLARATION OF WAR

The move to Los Angeles not only brought Perez's career troubles to a head, it put him squarely in the middle of one of the most embarrassing scandals in the history of the FBI.

Headquarters said the transfer to L.A. was a lateral move. Perez saw it as a demotion. But the man who was his new boss, Richard Bretzing, saw it as an infringement. "Bretzing was told {Perez} was coming and that was it," says Paul Magallanes, an agent who worked there at the time and recalls that Bretzing was angered because SACs traditionally handpicked their top assistants.

Bretzing and Perez did not get along. When the two men met, Perez told him about his experiences with the Pan-American games and suggested he could help manage security for the upcoming Olympics in Los Angeles.

"He told me he did not want me there, that he had not been consulted about my coming, and I was to remain in my office, that he was in charge," Perez recalls.

Perez was given responsibility for personnel. It was in this capacity that he encountered an agent he had met years earlier, Richard W. Miller, who was about to become infamous in the annals of the FBI and whose misdeeds would cause Perez to run afoul of what some L.A. agents privately called "the Mormon Mafia."

Miller -- a rotund man who was once caught selling Amway products out of his FBI car and once lost his car altogether -- was considered a joke by some fellow agents. He was regarded as emotionally unstable by others, including Perez, who thought he was a security risk. What happened next remains in dispute, but Perez contends that he advised Bretzing that Miller should be fired.

Miller was a devout Mormon -- as was Bretzing, who was a bishop in the church and who had appointed another Mormon, Bryce Christensen, as the number three agent in L.A. Rather than fire Miller, Bretzing and Christensen took him under their wing and tried to counsel him.

Meanwhile, the conflict between Bretzing and Perez intensified. Agents noticed that Bretzing appeared to be transferring authority to his man, Christensen, Magallanes recalls. Finally, according to Perez, Bretzing offered him a deal. Unless Perez agreed to request a transfer and demotion, he would be given an unsatisfactory job performance rating. But if he agreed to leave, Bretzing would rate him acceptable.

Bretzing, who has retired from the FBI, considered Perez incompetent, but he later acknowledged in a deposition that he had violated bureau policy by negotiating Perez's performance rating; he said it was the only time he had done so. (Bretzing is now the chief of security for the Mormon Church. He could not be reached for comment for this story.)

Depressed and defeated, Perez initially agreed to Bretzing's proposal -- even though such a deal would be a violation of FBI procedures. "It was the worst time of my life," Perez says. "I had no control over what was happening to me. I could see that I was on a downhill spiral. And I mistakenly tried to avoid the problem {by agreeing to request demotion}."

Perez considered quitting. His wife remembers him bursting into tears over breakfast with friends at a Denny's restaurant in L.A. "I started crying just seeing him cry," she says. "All of a sudden, it all hit him at once. We were all trying to console him. He had hit bottom."

But after talking to family and friends about his troubles, Perez began to change his view. "They were able to show me that I wasn't as crazy as I thought I was," he says. Bolstered by these discussions, he decided not to accept Bretzing's deal but to remain and fight. "I knew the ramifications would be very severe. I realized also that things were not going to get better on their own."

On October 26, 1983, Perez contacted the Equal Employment Opportunity office within the FBI and alleged that he was the victim of ethnic and religious discrimination.

A complaint like his from a ranking official, he believed, was akin to a declaration of war. "I was terrified and I was embarrassed because this was supposed to be the premier law enforcement agency in the world," he says now. "People know that if you criticize it, if you go against it, particularly from the inside, that you will be made to suffer for it. And not just one time."

Perez, who had received a "fully successful" job performance rating from Bretzing only three months prior to the EEO complaint, was now reevaluated by Bretzing and rated "unsatisfactory." He countered by filing a second EEO complaint, alleging that this negative review was in retaliation for the first complaint.

The battle was escalating, but Perez had no idea how much. The bureau was in the process of compiling a personnel file on him that eventually would run 25,000 pages.

In 1984, shortly after his second EEO complaint, Perez was transferred from the second-largest field office in the FBI to one of the smallest, in El Paso -- a move his superiors said was not a demotion because he kept the same title and pay.

Perez's EEO complaint was still pending when he became involved once again with Richard Miller, who, on October 3, 1984, became the first FBI agent ever charged with espionage. He was accused of selling military secrets to a Soviet woman with whom he was having sexual relations.

At Miller's trial, Perez testified that he had recommended to Bretzing that Miller be dismissed for incompetence -- a recommendation Bretzing said he did not recall, but which drew embarrassing attention to the "Mormon Mafia." Unknown to Perez, Bretzing then ordered that he be investigated for perjury. The agents assigned by Bretzing eventually wrote a memo recommending Perez be fired, but the recommendation was rejected by top bureau officials.

For the next two years, Perez would go through a grueling administrative process with the EEO complaints and a painful reexamination of his relationship with the bureau. "I had refused to admit that there was this corruption in the FBI," Perez says. "I didn't want to see it. {There is} that part of the culture of the FBI that we are the best and therefore perfect." But now he knew it wasn't true.

He also had to examine his own actions. "That word 'loyalty' is always thrown against you," Perez says. "The confrontation was realizing whether I was going to roll over and let it happen, as I was doing, and hopefully have the system take care of me . . . and retire 'honorably.' Or whether I would confront this and expose it . . . and subject myself to being {called} a disloyal, disgruntled, recalcitrant troublemaker."

As if his own troubles weren't enough, Perez was taking on the role of elder statesman for Hispanic agents who told him about similar experiences. "They were having exactly the same problems and fighting the same battles," he says. The only difference was in degree: Because Perez outranked them all, the stakes were much higher for him.

In December 1986, the Justice Department raised the stakes even higher by ruling against Perez on both EEO complaints. The decision forced him to either drop the matter entirely or seek help outside of the FBI -- the equivalent of bureaucratic treason.

On January 16, 1987, he accepted the challenge and filed suit. LAWYERS, COMPUTERS AND MONEY

For the next year and a half, Perez and his attorneys prepared to take on what they knew would be an army of Justice Department lawyers.

"We had to learn the agency from the ground up," said Antonio Silva, a New Mexico civil rights lawyer who took Perez's case. Silva (a law partner, but not a relative, of Jose Silva, another Perez lawyer) had developed a reputation in the Southwest as a tough litigator during a series of class- action suits over substandard county jails. His co-counsel, Hugo Rodriguez, was a former FBI agent who'd been an EEO adviser in the bureau and provided an insider's savvy, particularly when he cross-examined agents testifying on behalf of the government.

Cross-examination was a long way down the road, however. The lawyers' first challenge was to convince U.S. District Judge Lucius D. Bunton that a class-action suit was appropriate. So Silva and Rodriguez began the formidable task of trying to persuade enough Hispanic agents to testify so they could convince Bunton that Perez's case should represent an entire class within the FBI.

"It was a crisis for each member," Perez says. "A personal crisis for him to join in the class . . . because he and she had to put their career on the line."

With the help of Perez and several Hispanic friends in the FBI, the attorneys used video to recruit agents. About a dozen Hispanic agents were filmed discussing their career troubles, and the video was circulated to other Hispanic agents around the country.

By the time of the July 1987 hearing, Silva and Rodriguez were armed with 26 affidavits of FBI agents telling stories they had never discussed publicly. Bunton ruled in Perez's favor, certifying a class of plaintiffs and informing each of the FBI's 437 Hispanic agents of the lawsuit. The agents were offered the chance to drop out of the case, but more than two-thirds of them -- 310 agents -- signed on.

The victory was short-lived. Government attorneys -- numbering up to 23 at a time, with what seemed to the plaintiffs to be an unlimited budget -- threw up every impediment they could.

Silva and Rodriguez, needing statistical proof of discrimination, sought access to the top-secret computers of the FBI. It took no fewer than 24 discovery hearings to pry the computerized, coded information they needed out of the security-conscious bureau. "The FBI denied it had information. We proved they had it. The FBI denied information existed. We proved that it existed," Silva said. At one point, he says, the government attorneys claimed that if the agents themselves had access to the information, it would pose a national security threat.

At times, the lawyers recall, the case felt like a nasty street fight. During one deposition, for example, Silva suddenly asked a Hispanic agent from Albuquerque who had not joined the class action suit, "Do you know what the word puto means?"

"Yes," the agent said. "It means prostitute."

"And do you know what the word vendido means?" Silva continued.

"It means sellout," said the agent.

"Have you ever been called a puto vendido?" Silva asked. When the agent said no, Silva said he had no other questions.

Silva and Rodriguez, who had never worked on such a prominent case, didn't charge Perez for their legal services. Twice they ran out of money, forcing Perez to borrow against his government pension. When Silva and Rodriguez told Bunton they couldn't afford paralegals, the judge appointed a cadre of Hispanic agents to help prepare their own case.

By the time the trial finally started, on August 15, 1988, the plaintiffs were battle-tempered and confident. EMOTIONS ON THE STAND

The first-floor courtroom in the old federal courthouse in El Paso was packed on opening day. Perez and other plaintiffs sat in the front row. His wife sat behind him. Across the aisle, the government attorneys spilled over to the next row. Behind them sat a group of somber, white-haired retired FBI agents. Before the trial began, one of the ex-agents ambled over to Perez and told him, "We're going to kick your ass."

For the next week, more than 40 Hispanic agents testified about their treatment at the bureau, exposing a hidden side of an agency that has spent decades carefully cultivating its image. The FBI agents portrayed a system in which their professional qualifications -- law degrees or accounting backgrounds, for instance -- were often denigrated by a bureaucracy that automatically steered them into Spanish-language assignments. They testified, some of them tearfully, about how their appearance and language skills consigned them to the "Taco Circuit" and became liabilities rather than assets for career advancement:

Martin Regalado of Los Angeles, a Hispanic agent who graduated high in his class from a prominent law school, testified that he was assigned to listening to wiretaps and handling Spanish-language assignments even though he had weak command of Spanish. His requests for training and reassignment were futile.

Alba Lorena Sierra, a Chicago agent, testified that she was told by supervisors that she looked "too ethnic" and was given a copy of Vogue magazine to read for pointers on changing her appearance.

Maria Villaruel of Tampa, who entered the bureau with a law degree, told of having to work on a money laundering case. Her job was to count the money.

John Navarrete of El Paso testified that he was told he wasn't being promoted because of administrative deficiencies, including the fact that he spoke English with an accent.

Special Agent Aaron Sanchez, often stopping in mid-sentence to regain his composure on the stand, told of the dangers of undercover work in Spanish-speaking situations because the Anglo supervisory agents monitoring the hidden microphones couldn't understand what was going on.

"Several of the guys were very emotional," said former agent Leo Gonzalez. "They even cried. Words like 'total loyalty,' 'love for the FBI' and 'heartbreak' were common."

The FBI's defense was based largely on the assertion that assignments were determined by "the needs of the bureau" and that the dramatic increase in criminal activity such as the South American drug trade created even greater demand for Spanish-speaking agents.

The government also focused its case on a $200,000 statistical study by a staff of 10 that attempted to demonstrate that assignments were not made in a discriminatory fashion and that Hispanics were actually promoted more quickly than Anglos.

Silva and Rodriguez challenged those assertions at every turn. When John Glover, then an FBI assistant director, took the stand, Rodriguez methodically wrote the names of nearly two dozen SACs on a chalkboard, asking Glover how long it took each of these Anglo agents to be promoted to SAC. The answers ranged from 12 to 17 years. Rodriguez then wrote the name of a Hispanic and asked the same question. Twenty-five years, Glover said.

Rodriguez and Silva presented their own study, conducted at a cost of $50,000 by a sociology professor at the University of New Mexico. It concluded that 21 percent of non-Hispanic agents with five years' experience were promoted to managerial jobs. That figure fell to 15 percent, however, for Hispanics. It also found that while Hispanic agents made up 4 percent of the bureau, they performed 25 percent of the undercover assignments.

Toward the end of the first week, the hardened ex-agent who had told Perez "We're going to kick your ass" approached the lead plaintiff again -- this time, to apologize. "I didn't know," Perez recalls him saying. "I'm sorry." 'A PATTERN AND PRACTICE OF DISCRIMINATION'

Forty-five days after the trial began, on September 29, 1988, Judge Bunton's 95-page decision came down. Praising the FBI as "arguably the best law enforcement agency in the world" and calling the decision "most difficult," the judge ruled that Perez's case "has demonstrated a pattern and practice of discrimination relating to conditions of employment and promotions" for Hispanic FBI agents.

Although the judge found that Perez failed to prove his other claims -- that the bureau discriminated in transfers and assignments, and showed religious bias -- the meaning of the ruling was clear: The FBI had wrongfully steered the careers of Perez and other Hispanic agents into second-class jobs with lessened chance of promotion. The judge said the evidence showed that the FBI treated Anglos and Hispanics differently, with Hispanics receiving "the weight of deplored assignments" -- even in cases where Anglos and Hispanics had the same language skills. Hispanics, the judge found, had been ordered to take FBI language exams and had been assigned to use their Spanish in dead-end tasks, while Anglos who spoke Spanish were allowed to "opt out" and be relieved of those assignments.

Because Hispanics spent a disproportionate amount of time on such thankless tasks as assisting in monitoring wiretaps, they could not "collect the ticket" toward promotion when an investigation bore fruit, the judge said. "A frequent complaint supported by the preponderance of the evidence is that a Hispanic agent with five years of bureau tenure who has ridden the 'Taco Circuit' may not have the experience of an Anglo on duty for two years."

Bunton then ruled on Perez's career specifically. He called Perez one of the "earliest and most successful pioneers of undercover" work and said the record demonstrated that Perez had been a "highly successful" agent whose promotion had been hindered by discrimination and by unjustified personnel actions.

Outlining how difficult the San Juan assignment had been, Bunton said Perez had performed well under the circumstances and said the FBI's negative evaluation "was not justified." The judge noted that in contrast to Perez, his successor in San Juan, who was an Anglo, was given a "blank check" by the bureau to improve the field office. "The court finds that the poor inspection report, transfer, and career decisions made by the bureau were a pretext" for discriminating against Perez, Bunton said. Similarly, in reviewing the performance of Bretzing in the Los Angeles office, the judge found that his negative reviews of Perez were also a "pretext" for retaliating against Perez for his EEO complaint.

Referring to the 25,000-page personnel file that the FBI had amassed, the judge wrote, "Perez may be the most carefully scrutinized Special Agent in the history of the Bureau." Despite that scrutiny, however, Bunton said, "no meaningful breach of professional duty or law has ever been demonstrated."

Mat Perez had beaten the FBI.

The judge ordered the FBI to promote Perez from GS-16 to 17 within 45 days. His promotion, to deputy assistant director of the FBI laboratory in Washington, made him responsible for daily operations, budgeting and personnel in the 440-person lab.

Bunton also ordered an unprecedented level of oversight over FBI personnel practices, creating a three-person master panel, independent of the bureau, to review the treatment of Hispanic plaintiffs to see whether they should be promoted. In its first round of decisions earlier this year, the panel found that in 11 out of 12 cases it reviewed, plaintiffs had been denied promotions because of their ethnic background.

Bunton's ruling was a major embarrassment to the image-conscious FBI, prompting attacks on the bureau's record from Congress and from civil rights groups. Outraged by the ruling, the bu- reau's SACs voted unanimously last year to appeal the case. But FBI Director William S. Sessions, saying the bureau wanted to put the case behind it, announced that he would not appeal. Sessions pledged to revamp EEO procedures to streamline handling of agents' future complaints. Two months ago, Sessions, reportedly rejecting the advice of senior aides, ordered the immediate promotion of the 11 plaintiffs whose complaints were upheld by the panel, making them eligible for as much as $50,000 each in back pay and benefits. FBI officials declined to comment on the Perez case for this story.

After the judge's ruling, the plaintiffs and their friends celebrated the victory with a party at Mat Perez's home in El Paso. There was much joy and merriment at the end of a long and arduous struggle -- but Perez missed most of it when he was called away to assist on a kidnapping case in Mexico. A MIXED VICTORY

Mat and Yvonne Perez are sitting on the screened-in porch of their rented Arlington house, reminiscing about their lives and the battles both have had with the FBI. They describe for a visitor the Hispanic invasion of Midland, Tex., during one phase of the court proceedings -- an invasion of dozens of Hispanic FBI agents whose white-collar presence raised eyebrows in a West Texas town they remember mainly for its oil wells and rednecks. Later, Yvonne pulls out a life-size promotional poster of Mat printed by a glossy California magazine. The magazine had plastered the poster all over Los Angeles, much to the consternation of FBI officials.

The stories are like family legends by now. One of them will start telling an anecdote and the other will finish, with laughter all around. But sometimes in the middle of the laughter, Mat Perez's warm face -- the face that once smiled triumphantly from the front pages of newspapers across the country -- will turn cold.

Two years after the decision, Perez, whose struggle gave him an almost heroic stature among many Hispanics, sometimes wonders how much of a victory it really was. He voices faith in FBI Director Sessions, but believes that change is moving much too slowly; that FBI assignments, promotions and other key decisions are still governed by an entrenched Anglo network; and that Hispanics remain on the outside looking in. His case, he says, has only pointed out the symptoms of an illness, not the cure. Perez says he still faces frustrations on the job and often thinks about retiring. But he and his wife continue to live by the credo "Don't give them the satisfaction."

"We feel very strongly that we risked our careers . . . to prove that there was systemic discrimination in the FBI," he says. "If there is systemic discrimination, the changes have to be systemic."

His words reverberate among other players in the FBI story. Torres, the California congressman who played a key role by publicizing the case in its early stages and meeting with FBI officials, says he is not yet satisfied that the bureau is capable of meaningful change. "I'm angry that when a federal judge ordered compliance and remedies, that the FBI, which is our premier law enforcement group in the country, believes itself to be above the law . . . The good ol' boy system prevails."

But in the Perez household, on this evening at least, bitterness does not triumph, and Perez offers a parting reflection.

"I never had any doubt that we would win," he says. "I knew that we were right. And if there was this corruption in the bureau . . . it was not the real FBI."

Carlos Sanchez is a reporter on the Metropolitan staff of The Post.