Baltimore contractor Victor Frenkil refused to testify today before a state legislative committee holding hearings on allegations that he tampered with the process of selecting a management consultant for construction of the Baltimore subway.

In a letter to the committee, he denied the allegations and described himself as the victim of abuse and libel by political and business enemies.

State Comptroller Louis L. Goldstein, a friend and former business partner of Frenkil, did testify before the committee today, defending his role as a member of the state Board of Public Works and its decision to reject a subway contractor chosen as best qualified by the state Department of Transportation.

It was that rejection and the efforts by Frenkil to obtain a piece of the contract for his firm that prompted the resignation of Harry R. Hughes as secretary of transportation three weeks ago.

Goldstein, his jacket off and sleeves rolled up, bristled at suggestions that helped Frenkil scuttle award of the contract to the Ralph M. Parsons Co., the firm selected by the Department of Transportation. Goldstein accused Hughes of exerting undue influence in getting the contract for Parsons.

The full hour hearing produced what Sen. Meyer M. Emanuel (D. Prince George's) described as "lost of hysterical allegations."

The next action in the controversy is expected Friday, when the Board of Public Works has promised to make a final decision on how the most expensive public works project in Maryland's history will be managed.

In his 12-page letter to the committee subway watchdog chairman Del, Gerald J. Curran (D-Baltimore), Frenkil said his firm has been "trying to tell state officials that the consortium of which his company, Baltimore Contractors, Inc., is a subcontractor, "is better qualified than any of the other finalists and that its bid is at least $5 million lower for the same services as the team recommended."

Frenkil, who also is a long-time friend of board member Gov. Marvin Mandel, defended the March 2 decision by the Board of Public Works to reject the Parsons proposal even though it had been recommended by the state's Department of Transportation. Frenkil said the public works board "cannot be a mere rubber stamp; it is obligated to reach an independent judgement based upon all relevant facts."

Frenkil said he would not testify on the advice of his lawyers in his appearance before the legislative committee, Goldstein appeared to use some of the same arguments put forward by Frenkil. For example both men complained that the five-member transportation board that considered the proposal included three employees of the transportation department.

Goldstein went further, accusing the three of "being controlled by one man (Hughes). There is no question in my mind that he (Hughes) had Parsons in mind all along," Goldstein said. Hughes had denied this.

"And you know he's running for governor," said Goldstein, who like Hughes, is considered a possible contender for the Democratic nomination next year.

As members of the committee pressed Goldstein for his reason for voting against Parsons, the comptroller raised his voice in anger, pointed to Joseph Volpe Jr., vice president of Parsons who was at the hearing, and said "He's the one who brought pressure, running to the big Republican Senator (Clifford) Case from New Jersey. You talk about pressure. Well, I'm not afraid of Mr. Case." Case, who had urged a General Accounting Office probe of the contract, is a friend of Volpe.

Sen. John C. Coolahan (D-Baltimore County) asked another witness, Alan M. Wilner, Mandel's chief legislative officer to check the logs at the governor's mansion because "I have information that Mr. Frenkil was an almost constant guest there in February and March, and that the governor was Frenkil's guest in Ocean City" during the time the public works board was studying the matter.

Volpe, representing the Parsons firm, said "there's something wrong" in the public works board can ignore the regulations adopted by the legislature to ensure that major contracts are free from influence. "Anyone who examines the criteria for selection must conclude there was no basis for rejection of this contract," Volpe said.

The Parsons vice president found it "outrageous" that a firm (Frenkil's) connected with the consortium rated "least qualified among the five finalists should have protested the unanimous decision of the selection board.

Because of that, Volpe said his firm protested the decision to the federal General Accounting Office and asked Sen. Case to investigate the procedure. Volpe added that it was "the first time our company has ever protested anything." He said the 33-year-old, California-based construction firm does $1.5-2 billion worth of contracts every year, many of them for the federal government under regulations very much like those under which the Maryland proposal was made.

Pressed by Sen. Douglass to say "what was done illegally and who did it?" Volpe answered that Frenkil "repeatedly" called a Parsons executive and said "we would have no problem getting approval of a contract if he were on our team."

Volpe said Frenkil approached John McKinney of the Parsons firm six times between last October, when it first became known that Parsons had been recommended for the job, and March 2, when the works board rejected Parsons.

Shortly before the March 2 vote, Volpe said Frenkil told another Parsons executive that "you could be working on this project" if his Baltimore Contractors Inc., were put on the team."

Volpe said it was "wrong" for any of the losing bidders to "communicate with anyone" about the contracts once the selection committee had made its recommendation. He said the time for the bidders to plead their case was a prebid conference "that we all attended" last summer.

In his letter to the committee, Frenkil denied ever asking anyone at Parsons to cut in on the contracts. Frenkil wrote that as a subcontractor for a competing bidder, "my company was firmly bound to do this job with others if they got the award . . . Once I have bound myself to a particular consortium, I will not even explore the possibility of joining a competing group."

Frenkil expressed regret that he could not appear "to correct personally the misconceptions, misunderstandings and outright untruths which this committee has heard in its prior session." He said that in addition to legal advice for him not to testify, he also was "convinced" that it is impossible to overcome the prejudices of those committee members and the aura of hostility created by the press."

Frenkil said that he had "merely tried to point out the defects in the selection process and . . . save the tax payers $5 million."