Harry Parrish, who quit recently as mayor of Manassas to run for the Virginia House of Delegates, is under investigation by the Virginia State Police on conflict-of-interest allegations.

The probe was ordered after union leaders involved in a bitter fight to organize nurses at Prince William Hospital -- where Parrish is a director -- charged that Parrish helped persuade the City Council there to endorse the hospital's acquisition of a Manassas nursing home serviced by Parrish's fuel company.

According to sources familiar with the investigation, state police also are looking into lucrative dealings between the fuel distributorship and various agencies in the city government.

"I can't believe the people of Manassas have put up with this guy," says Andy Kahn, an AFL-CIO official who persuaded Prince William prosecutor Paul Ebert to request the investigation.

If the white-haired, 59-year-old Republican, a retired Air Force colonel who flew "over the hump" between India and China in World War II and has served as the city's mayor for 18 years, is worried about possible prosecution under Virginia's often-criticized conflict-of-interest law, he shows no sign of it.

Parrish, running for one of Prince William County's three House seats, denies any wrongdoing. He pulls copies of legal opinions from his top desk drawer at the Manassas Ice and Fuel Co. -- letters from lawyers who say that under Virginia law individuals such as Parrish are permitted to deal with their small city governments. Stronger protests in his defense Parrish leaves to others.

"I'd stake my life on it that he's squeaky clean," says Manassas City Manager C.M. Moyer Jr. "He's Mr. Manassas as far as I'm concerned."

It is Moyer who, under state law, determines whether competitive bids are necessary for such services as the 100,000 to 120,000 gallons of gasoline Parrish sells annually, at about $1 a gallon, to the city's public works department.

For that volume of gasoline, Moyer says, the city cannot expect large discounts from any dealer, so the fuel is purchased without bidding and without a formal, written contract.

Likewise, Parrish's firm in recent years has sold about 50,000 gallons of fuel oil annually to the Manassas city school system. The contract recently was awarded to a competitor, E.E. Wine Co. of Manassas, after owner Don Wine "called and made sure I was on the bidders' list," he says.

Parrish, who claims he is removed from his company's daily business affairs, cites a 1976 opinion by the Virginia state attorney general's office that local public officials may do business with city agencies other than the one with which they are directly connected. Parrish said he interprets that to mean that he cannot deal with the City Council but can sell goods to individual city agencies.

Parrish says he has been careful to meet a state disclosure requirement that he divulge in writing his financial interest in the fuel company. This year's statement, five typewritten lines long, puts Parrish's interest in Manassas Ice and Fuel at 44 and 3/10ths percent.

Virginia's conflict-of-interest law has been roundly criticized as vague or confusing by both sides in this year's statewide political campaigns.

State Attorney General J. Marshall Coleman, the Republican candidate for governor, and others have called the law weak and in need of improvement following conflict allegations against the GOP's nominee for lieutenant governor, Nathan H. Miller, and the ouster of two state highway commissioners on conflict charges.

"It's flimsy at best," says Arthur Cecelski, former chairman of Common Cause in Virginia. "It relies heavily on disclosure, and the disclosure requirements are not very adequate."

Cecelski says he feels examples of officials' potential conflicts crop up in the state with "disgusting regularity."

Legalities aside, Parrish has not exactly felt the hot breath of the law since the AFL-CIO's Kahn approached Ebert in mid-July.

Ebert, a Democrat who will have to decide whether to prosecute Parrish, says he asked immediately for a state police probe after Kahn's visit and after Parrish himself came in and requested an investigation to clear his name.

Coleman later approved the investigation, but both Parrish and City Manager Moyer say they have yet to be contacted by state police for interviews or for files and records that might prove or disprove the allegations.

With the election three weeks away, Parrish now says he soon will contact the attorney general and ask that the investigation be expedited unless action is taken on his case.