Matthew F. Shannon, a lawyer with a private practice in Northeast Washington, announced his candidacy recently for the Ward 5 seat on the City Council.

Shannon has been an active Democratic Party worker in past campaigns, notably for congressional Del. Walter E. Fauntroy (D-D.C.). This will be first attempt to gain public office.

A graduate of Howard University law school, Shannon worked on Wall Street and with two financial organizations before starting his law practice. He is secretary of the Brookland Civic Association.

Shannon, speaking to supporters in the courtyard of Edgewood Terrace Apartments, said he favors creation of a special committee to oversee the performance of city departments and to recommend changes in their organization.

He called for an overhaul of unemployment compensation in a way that would encourage job placement and granting swifter benefits for those who become jobless.

Shannon also endorsed a closely controlled D.C. lottery, recommended recently by a special citizen committee, and the revision of city tax laws.

A native of New Jersey, he has lived in the District since 1968, except for his Wall Street year. His wife, Shirley Ann, is a city school teacher, and they have a seven-month-old daughter.