When Douglas Harman arrived in Alexandria five years ago as the new city manager, he found it puzzling that nearly everyone's nickname for the city's Housing Authority was the "plantation."

"I found it peculiar, but then I thought that maybe the fact that it involved public housing and that most of the people living in the units were black, that the name, however derogatory, had some logical basis," Harman recalled recently.

"But then I grew to understand that the race of the residents had nothing to do withthe name. The name, in fact, had nothing to do with how things were run on the outside, but everything todo with how things were run on the inside.

"Harland Heumann was the master, and the staff, well, the staff was his plantation."

Last week, officials at the Housing Authority astounded everyone -- including Harman -- with the announcement that a $678,000 investment fund had been discovered amont the authority's accounts. But one bit of news astounded no one That the one person who might know anything about the money was former Housing Authority director Harland Heumann.

Heumann, who ran the Housing Authority from 1966 until he went on paid leave in March 1980, apparently deposited the money -- the proceeds of two separate land sales in 1967 and 1969 -- in five separate interest-bearing accounts at various city banks. Interest checks arrived as often as every three months, but according to housing officials, aside from Heumann, only one employe in the accounting department knew the fund existed.

"Harland knew to to control information was to control power," said Housing Authority Commissioner Herbert J. Levy, who at one time was employed by the agency. "I wans't surprised at all when I heard about the fund.

"(Heumann) was a man who surrounded himself with people who followed directions unconditionally and wouldn't think to ask a question. The fact that one woman could post substantial interest checks for seven years and never think to ask a question about what the money was for or why it existed is a pretty good indication of the type of operation he liked to run."

Heumann has stated repeatedly through a family member that he is unwilling to discuss his tenure as director of the authority or his role in the investment fund.

But from conversation with people who worked for and with Heumann, there emerges a portrait of a man obsessed with controlling his domain and frustrated by the one thing he hated most -- interference by "outsiders."

This unwillingness to accept advice or follow orders, most colleagues and former employes agree, was Heuman's fatal flaw.That problem, they add, led in 1977 to a major reorganization that transferred ultimate authority for the agency from Heumann to city manager Harman, and eventually forced Heumann's resignation three years later. In January of this year, a new director, Angus Olson, was hired by the city to replace Heumann.

Until the reorganization in 1977, the Housing Authority was a separate state agency, outside city control.

Heumann, a stocky, balding man, is described by one former employe as a person whose "socks, tie and pipe always matched." Few observers question the commitment of a man who spent his entire 29-year with the city as an employe of the Housing Authority.

But observers hasten to add that commitment became a compulsion that increasingly drove Heumann to tighten his control over every detail of the authority's work.

Under an agreement between the Housing Authority and Heumann, which allows Heumann to remain on the agency's payroll until early this month, city manger Harman is barred from discussing Heumann's resignation.

However, sources close to Harman cite a long history of clashes between the two men, primarily over Heumann's refusal to keep the city manager informed of Housing Authority operations.

One incident, the sources say, particularly angered Harman.

That incident occurred four years ago, when the U.S. Department Housing and Urban Development invalidated an agreement between the city and the Housing Authority that called for city approval of a new highrise for the elderly on the condition that the Housing Authority would demolish 74 older housing units. Although the Housing Authority was notified of the HUD decision in December 1976, Heumann didn't relay the message to Harman and the City Council until six months later. The result was a series of hastily called meetings between city and federal officials before the matter could be resolved.

"It wasn't that Harland wanted to embarrass the city by not revealing information. Harland just wanted people to know he still had control. Harland couldn't stand not being boss," said one of the few employes close to Heumann who remains at the Housing Authority. "If a problem arose he would never ask how we thought it should be resolved. Instead, he would tell us how he wanted it taken care of.

"Staff really was never involved in any integrated way with what was going on.We weren't forbidden to to to (housing commission) board meetings, but we were also not invited. Everyone had a job to do, but we rarely knew what anyone else was doing."

The same employe said staff meetings were held infrequently and department heads were never asked to participate in drawing up the agency's annual budget.

In the three months since Angus Olson has been director, staff attendance at commission meetings has been mandatory, four staff meetings have been held and each department head has been requested to analyze the annual budget proposal line by line.

Few observers would contest the notion that under Heumann the housing agency grew and strengthened: three major urban renewal projects, including the revitalization of Old Town, were initiated; a 170-unit high rise for the elderly was built, and Section 8 housing, a federal rent-subsity project, was started.

Housing commissioner Levy praised Heumann's ability to win approval of projects in areas where citizen protest was intense.

Still, critics say, Heumann's insistence on overseeing every detail of Housing Authority operations at times was a much a curse as a blessing.

At one point, employes say, Heumann became so careful and frugal with agency funds that a memo arrived from federal housing officials reminding the agency that it should spend its money, instead of keeping it in reserve. At least once, city officials say, the agency's federal funds were cut because it had not spent all of the funds allotted to it.

It seemed, observers say, as if Heumann couldn't stand for anyone to touch "his agency or his money."

So, when Doug Harman shook up the agency in 1977, few persons who were close to Heumann or the Housing Aurhority were surprised that the investment fund -- which had previously been listed as part of overall investments in annual reports -- failed to appear in annual reports despite at least two requests from Harman to list and explain all investments. Instead, the secrecy is viewed as one last graspat control.

An audit of the newly discovered investment fund is being conducted, although Olson and other housing officials do not expect to turn up any irregularities. Since 1977, city officials say, they believe none of the funds have been spent. Before that, it appears that some of the funds were used for minor expenses such as travel or flowers.

"Heumann was an accountant and his book always matched perfectly," said housing commissioner Levy. "Harland was not a dishonest man, he was an independent man who didn't like loslng control. I can only speculate that the reason he didn't pass on the information about the fund was that he wanted to be able to do what he wanted without first getting city approval.

"Heumann merely wanted to be boss. No more, no less."