It was a quarter past 11 this morning when Del. Theodore Morrison, a Newport News lawyer known here as "the Hatchet Man," nodded curtly at Sen. Adelard L. Brault (D-Fairfax) and began carving up Brault's proposed conflict-of-interest bill.

"Sen. Brault is here, so I'll be as polite as I can," Morrison, a Democrat, told the meeting of the House of Delegates' Privileges and Elections Committee with a sardonic smile. "We've just got a few amendments prepared."

Then, as the clock ticked down to the committee's noon deadline, Brault watched Morrison systematically slice off a handful of key sections aimed at discouraging legislators from using their public offices to the economic benefit of themselves and their clients.

Within 45 minutes, Morrison and his comrades on the committee had completed the ritual vivisection of the conflict measure, approving 13 to 5 a bill that one legislator said was "just about no bill at all." The measure now goes to the House floor, where its future is uncertain.

Today's action was the latest in a string of setbacks for ethics legislation in Virginia, whose ethics rules rank among the weakest in the nation. "If the public knew what was going on in there, they'd lose all confidence in this legislature," groused Jane T. Morriss, a lobbyist for Common Cause, afterward. "It lacked any semblance of reasoned legislative process."

Troubled by conflict allegations, the General Assembly offered a mild reproach earlier this year to Sen. Nathan H. Miller (R-Rockingham) for accepting fees from law clients while drafting bills that brought them more than $10 million in tax breaks and business advantages.

The committee members were more concerned today about restrictions that Brault's bill could place upon their own business or legislative dealings. "I don't see how Del. Ford Quillen or Del. George Heilig, who represent insurance carriers, or I, who occasionally represent plaintiffs' cases, could vote on any bills in those areas," said Del. Lacey Putney (I-Bedford).

Chief among the Morrison amendments was one that killed a provision requiring legislators to swear that they would not use their legislative positions to benefit themselves or their close financial associates. It was approved on a voice vote. "I really don't think that anybody could serve here and comply with that," Morrison told the committee.

"We have voted on bills yesterday, we will today, and we will tomorrow which would benefit clients and customers with whom we have a close association," Morrison said. "If we put this language in place, we wouldn't even be able to pass the budget bill."

Another key amendment, approved on a voice vote, removed the requirement that lawmakers publicly disclose the names of companies in which they hold stock.

In its amended form, Brault's bill offers a mild strengthening of the state's disclosure rules and provides that violators shall be subject to legislative disciplinary procedures.

At present, legislators are not required to disclose the value of their financial holdings or identify them other than by broad categories. There is no restriction on lawmakers who practice before state agencies and then introduce bills or serve on committees governing those agencies. There is no ethics committee to police their conduct.

Brault, who had not been notified of Morrison's plans before the start of the hearing, acknowledged later that the amendments had weakened the bill but said he was confident the Senate would reject them. The Senate approved his measure last month by a vote of 39 to 0.

"This is not just an exercise," Brault told the committee today. "This is a sincere effort on my part to comply with what I see as the wishes of the General Assembly and to meet the criticisms that have been leveled at us on the subject of conflict of interest."

As amended today, Brault's bill would require legislators to report speaking fees or honorariums they receive from special interest groups, but only when such a payment exceeds $200 and when a legislator receives it "in his capacity as an official of the commonwealth."

In other committee action yesterday, the panel refused to authorize an ethics study that had been requested by Sen. Willard J. Moody (D-Portsmouth). Moody, the powerful chairman of the Senate Rules Committee, was cleared this year of charges that he had used his position to kill legislation opposed by one of his law clients.

Later in the day the Senate Rules Committee turned down a proposal to set up an independent ethics advisory commission composed of private citizens that would have investigated ethics complaints. Instead, the panel voted 10 to 3 to recommend that a Senate subcommittee be assigned the task.