Louis Michael Parrish, reputed head of a million-dollar-a-year prostitution ring in the Washington area, wanted to run "the best damn whorehouse in Alexandria," a former top associate testified yesterday.

The testimony came from Clyde Ballard (Skip) Stovall Jr., once the third-ranking associate in a Parrish-owned massage parlor empire that, government prosecutors told an Alexandria jury yesterday, was a front for prostitution.

Parrish, along with two associates Larry J. Wadino and Kathy Lynn Caldwell, sat quietly during the opening day of their trial in U.S. District Court as three former Parrish employes testified against them for more than four hours. The defendants are charged with 13 counts of interstate racketeering, conspiracy and prostitution.

"This is not a Sunday school case," U.S. District Court Judge Oren R. Lewis told the jury of nine men and three women. "I'm sure you'll hear some street language... subjects of sex more than normal intercourse."

Under questioning by special U.S. assistant attorney Paul N. Murphy, Stovall testified for two hours on the Parrish-owned operations and told the jury, "There was no attempt to hide the fact that we were running a house of ill repute."

Stovall said he worked for Parrish periodically from December 1975 to the spring of 1978, rising from manager of an Arlington massage parlor to executive director of the overall operation. Parrish's alleged empire included 11 Northern Virginia massage parlors and several "outcall" services that U.S. Attorney William B. Cummings characterized in his opening argument as "fancy names for a call-girl operation... fronts for prostitution."

Prices ranged from $50 to $250 for the sexual services, Stovall said. "Sometimes we'd throw in some champagne."

He also testified that the women received 40 percent of the massage fee and were allowed to keep whatever "tips" or "grats" they were paid. The women who worked hard, he said, were "superstars" who were awarded "watches, little gifts, allowed days off" for their earning power.

"The real moneymakers," he testified, "could come and go as they please... to ensure their staying with us and not going to a competitor."

Parrish masseuses were regularly dispatched by a telephone call-girl system on "interstate dates" and were driven to Washington area homes and hotels for the purpose of prostitution, Stovall said.

Defense lawyers argued that the women hired by the Parrish operation were never directed to engage in prostitution. "No one was forced to do anything" said lawyer Jacob Stein in his opening argument.

But Stovall said the women were instructed by Parrish, Wadino and Caldwell on the methods of engaging in sexual acts without running a risk of being rested for soliciting.

Masseuses were not "forced" to cross state lines for the purpose of prostitution, Stovall said. "Nobody wanted to have a witness say, 'You made me prostitute myself.' Yet, we were still expected to accomplish it," Stovall said.

Stovall, who pleaded guilty last year to one count of interstate racketeering and agreed to cooperate with prosecutors, has already served a prison sentence for his role in Parrish's operation.

Defense attorney Stein, who tangled with Judge Lewis on more than one occasion yesterday, argued that the Parrish masseuses acted on their own in soliciting sexual services. He angrily attacked Stovall for his plea-bargain agreement with the government and heatedly cross-examined him on his relationship with Dawn L. Peck, a former Parrish girlfriend and employe who also testified yesterday.

Judge Lewis shouted at Stein, saying the defense attorney was "grossly improper" for introducing allegations that Peck was now "living with" Stovall's attorney, William Jordan Temple, who sat in the front row. Temple also is representing Peck and several other former Parrish employes, all unindicted co-conspirators.

Peck, who told the court that she managed the Foxy Lady Outcall Service, said, "He [Parrish] wanted to monopolize the massage business in the area."

In a monotone voice, she repeated the price list for the various sexual services available ending with the most costly. "And that's when the fun really begins. It gives you both a chance to unwind and get to know each other." she said.

"On just about every call," Peck told the court, "sex took place."

The reclusive Parrish, 34, is also known as "The Old Man" -- a college graduated businessman who the FBI said once carried a.357 magnum in the front seat of his Mercedes.

Defense attorney Stein repeatedly objected to the use of the term, to which Judge Lewis, 76, gleefully replied, "There's nothing wrong with being called an old man."

The courtroom broke into laughter.