Five months ago, Maryland Attorney General Stephen Sachs recruited a third-year law student and lieutenant commander at the Naval Academy to infiltrate the office of Anne Arundel County Public Defender T. Joseph Touhey, who Sachs believed was misusing his office.

The infiltrator, Steven Vanderbosch, posed as a volunteer law clerk there for several weeks, quietly gathering information on Touhey and reporting back to the attorney general's office. On April 23, state troopers marched into Touhey's office and hauled off 10 boxes of records and three file cabinets full of documents that were presented to a grand jury.

As the grand jury deliberated for several months, Touhey maintained his innocence, his bosses and many local attorneys criticized Sachs for using what one called "a sniveling spy," and the attorney general himself kept quiet.

This afternoon, in a brief statement, Sachs broke that silence. He announced that the grand jury had ended its investigation and that his office had dropped its quest for a criminal indictment against Touhey.

Instead, Sachs said, his office had filed a civil suit here seeking to recover $63,622 in damages from Touhey, who, the suit alleged, misused his office secretary. According to the suit, Touhey often used his secretary to process paperwork from his private practice and paid her with state funds from his job as the county's defender of the poor.

The surprise ending to the unusual case triggered a flurry of counter-charges from Touhey and his boss, Maryland Public Defender Alan R. Murrell, both of whom strongly criticized Sachs' probe from the start. Touhey called the civil suit "a piece of trash."

"Actually, I love it," said Touhey, who had taken a leave of absence since the grand jury investigation began. "It finally gives me a forum from which I can clear my reputation. They've definitely bitten off more than they can handle this time."

The civil suit against Touhey charges that his secretary, Linda Campbell, spent 90 percent of her time working for his private practice rather than his public office.

Touhey and his boss, Murrell, do not deny that Campbell served Tohey in both capacities. But they note that the public defender is allowed to conduct a private practice and that in Touhey's case he paid Campbell with separate paychecks for the different jobs.

"She received two paychecks," said Murrell. "One from the state and one from Touhey. If they had only bothered checking, they would have found that."

But of far more interest in the legal quarters here and around the state than the question of how Cmapbell was paid is the question of how the attorney general's office went after Touhey.

Murrell called the 31-year-old Vanderbosch a "sniveling spy" and said he was shocked that Sachs would use an infiltrator for such a case. Three of Touhey's assistants in the public defender's office resigned in protest after the state troopers marched off with the office documents.

Even Anne Arundel County State's Attorney Warren B. Duckett Jr., Touhey's legal adversary in criminal cases, was critical of Sachs' use of a "plant" to gain information on Touhey.

"It seems to me the strongest argument against Sachs' use of a 'plant' in their offices is the distrust such a move creates with the public," Duckett said. "And, dammit, they're right, too. I've heard many complaints from indigent defendants that they don't trust court-appointed attorneys public defenders). And then something like this happens. I can't do much to increase public confidence in the system."

Duckett said that Sachs' move to install an undercover agent in Touhey's office was technically sound, but added: "I would have handled the situation differently."

According to legal documents related to the case, the Touhey inquiry was triggered by a former assistant public defender who had been fired from Touhey's office in 1977. Records show the former assistant, Thomas Pavlinic, was fired by Murrell with Touhey's blessing after it was discovered Pavlinic owned a bar that Anne Arundel County Police had cited for serving alcoholic beverages to minors.

After his dismissal from public defender duties and an unsuccessful appeal of his dismissal, Pavlinic approached Sachs with allegations of wrongdoing on Touhey's part.

Sachs, in turn, approached Gov. Harry Hughes in January and asked for written authority to begin an investigation of Touhey. Hughes signed the authorization Jan. 31. In early March, Sachs' staffers approached Vanderbosch and requested his assistance as an undercover agent in the investigation.

The court records show that Sachs was seeking to learn if Touhey defrauded the state because his private secretary was paid by the state and whether Touhey used a state copying machine, telephone and furniture in his private law business.

Vanderbosch, a part-time student at the University of Maryland Law School in Baltimore, teaches history at the Naval Academy. He is a lieutenant commander in the U.S. Navy, according to Navy records.

When Vanderbosch first appeared in Touhey's office March 27 and offered his services as a Volunteer law clerk, Touhey snapped him up. Vanderbosch displayed excellent timing as well as impressive credentials. On the day that he volunteered, the public defender had to lop 60 paid law clerks from the payroll in a budget cutback.

"Who wouldn't have grabbed him up under the circumstances?" said chief public defender Murrell in a recent interview. "He was free labor. We certainly didn't think he was a sniveling spy."

But 27 days later, after the state police produced a search and seizure warrant signed by Sachs and raided Touhey's office, the public defenders' opinions of Vanderbosch changed dramatically. Murrell began calling him "an amateur Dick Tracey."

The outrage over Sachs' investigative technique spilled into the court system. The public defenders in Anne Arundel now say they will argue that seven criminal cases were tainted because of Vanderbosch's presence in the office when the defenses were being prepared. The defenders plan to argue that Vanderbosch's presence as an undercover agent violated the defendants' constitutional right to a confidential attorney-client relationship.

"It's a real mess," said one county legal official about the ill feelings, court affidavits an legal battles that have grown out of Sachs' move to infiltrate Touhey's office. "I don't think I've ever seen so much animosity toward the attorney general's office by another legal agency of the state."