At the annual police department awards luncheon in March the master of ceremonies surveyed his audience and took note of the dignitaries on the dais, looking for a good joke.

Finally, he saw the Prince George's County police chief. "Chief John Rhoads is here," he said. "He knew it was okay to come because he called Laney Hester this morning and Laney gave him permission to show up."

A direct hit, laughter all around. Rhoads tensed, sat up straight and stared down into his plate. Hester, the president of the county police union, the Fraternal Order of Police, stubbed out his cigarette, pretending not to hear.

For Rhoads and Hester, the joke hit just a little too close to home, considering the events of the past year.

In that year the police rank and file have staged two job actions for two different reasons, voted no confidence in the chief, formed a political committee for the first time and openly criticized their boss.

The leader and instigator has been Hester, who has successfully pitted himself against Rhoads often enough that the men call him "The Pharoah."

Hester's power stems from the county charter, written in 1970, which provided for a collective bargaining contract for the police. The county then agreed that the police officers could elect one man to carry out that provision of the charter.

Thus, Prince George's County police Sgt. Laney Hester has just one full-time job; running the police union.

Running that police union means not only negotiating contracts but being the spokesman for an increasingly defensive police department, which has been criticized for being old-fashioned, quick on the trigger, and dealing roughly with suspects, especially black suspects.

"Laney's job job is to protect the interests of his constituency," one council member said. "And the constituency he represents doesn't want to have anything to do with the 20th century. They want to shoot first and ask questions later. So naturally he's going to say a lot of things that aren't going to make Rhoads happy."

"It's only natural that we would look to Laney more than the chief for leadership," one officer said. "He's only interested in us, nothing else. Rhoads doesn't care about the men as much as he does about his image. That makes a big difference."

"I am the spokesman, yes," Hester said, "But shoot first and ask questions later?" It's just not so. We have a damn good police department. Our record speaks for itself."

Hesters aggressive style of taking stands against the leadership of the police department and the county government is not unique. Since the Prince George's no confidence vote in June, 11 other police departments around the country have voted no confidence in their chiefs.

One of those departments was Montgomery County's and four months after the vote newly installed County Executive Charles W. Gilchrist fired Chief Robert J. DiGrazia. Hester spoke to union meeting there on several occasions before the vote of no confidence.

"The thing a lot of people forget is that he's a politician," said Rhoads. "I think when a lot of people call him chief Hester, they mean it, they aren't joking. It hasn't made my life any easier and I wish he hadn't said a lot of things he's been saying. But I know where he's coming from."

"I think there are a lot of people who don't understand our relationship," Hester said. "Look, I'm just a humble sergeant. But there are some situations where the men look to me for leadership.

"The chief has to try and stay away from controversy. He doesn't want to say anything that might queer a trial. I don't feel I have to worry about that.

"My job is to represent the men to the citizenry. His job is to represent both, the men and the citizenry."

Others see Hester as a potentially divisive force in a community where, throughout the 1970s, there has been at best an uneasy peace and at worst an open hostility between the police force and the growing black community.

Following last month's Terrence Johnson trial, which ended with a black teen-ager acquitted of murder and convicted of two lesser charges in the deaths of two white police officers, Hester gave an effective demonstration of his influence in the department.

Angry officers gathered at the union lodge after the verdict and talked of a massive walkout. County Executive Lawrence J. Hogan and Rhoads urged them to show up for work to demonstrate their professionalism. Hester urged them to walk out.

More than 95 percent of the officers scheduled to work the next day stayed away.

The Rev. Perry A. Smith, one of the leaders of the coalition that supported Johnson, said he finds Hester's influence a little bit frightening.

"This is a time when we all need to try and put things back together, not tear them apart," he said. "What Mr. Hester is saying isn't going to make things any better, in fact all it can do is make things worse. I truly wish he would consider the consequences before he speaks."

Privately, members of Rhoads command staff blame Hester and the union for undermining Rhoads' attempts to change the image of the force and to integrate and modernize the police department.

Even though Rhoads has suffered because of Hester's influence with the rank and file he is probably the command-level officer who gets along best with the union chief.

"I think he's done a helluva job for his people." Rhoads said recently. "He got them a darn good contract and they listen to him. And in spite of what he says publicly, he's probably got a cooler head than most of them."

"Look," said a union insider who has worked closely with Hester, "Laney doesn't mean half the stuff he says. But he's got a constituency. He figures if he doesn't speak out for them nobody will. If you talk a lot you're going to get your foot in your mouth every so often. But he's pretty good at slinging the bull."

Several incidents during the past year stand out as watermarks in Hester's challenging of Rhoad's authority. Among them are:

Hester's open attack on Rhoads for firing Officer Peter F. Morgan after Morgan shot and killed a fleeing shoplifting suspect. Morgan's case became a cause celebre among the police. Eventually, after a court ruling trial board that had fired him.

Ignoring the pleas of Rhoads and then county executive Winfield M. Kelly, Jr. last June and staging an eight day job action during which almost no tickets were written by police officers to protect going one year without no union contract. The union won its demands and got its contract.

The simultaneous rank-and-file vote of "no confidence" in Kelly and Rhoads, a move that shook the chief so badly he talked about resigning.

Forming a political committee that actively supported Republican Hogan in his race against Kelly, a Democrat, in the county executive's race.

In some ways the walkout following the Johnson verdict was more devastating to Rhoads' authority than any of his previous events.

When the Johnson verdict was delivered, Rhoads quickly jumped in and blasted the jury while lauding his men. But many officers had not forgotten Rhoads' silence after the two officers were shot in June.

"He was a dollar short and a day late," one officer said the next day. "By then, he had lost us."

Rhoads will not discuss his plans for the future but friends say his recurring back problems may force him to retire in July. "There is still a job to be done here," he said. "And I want to be here to see it done."

But as long as Hester and his union retain their power, some say Rhoads will not be able to do what he set out to do-bring the county police into the 1970s, as he sees it.

Hester however, says he doesn't oppose this goal. "I want to see the department modernized," Hester said, "I just want it to happen at a pace we can live with." CAPTION: Picture 1, POLICE CHIEF JOHN W. RHOADS . . . job not made "any easier"; Picture 2, LANEY HESTER . . "the men look to me"