Federal prosecutors are investigating whether a group of Prince George's County lawyers, including State Sen. Thomas P. O'Reilly, used and distributed cocaine, according to sources familiar with the investigation.

Sources with knowledge of the probe said that a federal grand jury has issued subpoenas in connection with the investigation.

The sources said the investigation was begun more than a year ago by D.C. police who had received information alleging that O'Reilly, accompanied by a female associate, received between 1 and 2 ounces of cocaine as payment for a letter that the Democratic senator wrote to the Montgomery Circuit Court. O'Reilly had sought clemency in the sentencing of a convicted drug dealer, Harold Lee Nickell of Bethesda. The payment is alleged to have been made by an associate of Nickell's, who has been investigated by D.C. police, the sources said.

One ounce of cocaine sells for $900 to $1,000 but can be diluted and sold in smaller amounts for a street value of about $2,000. It is sufficient to warrant a charge of distribution, according to law enforcement authorities.

Nickell was sentenced to three years in prison in 1983 on a charge of distributing cocaine and another drug he obtained in Florida, but he was found shot to death and stuffed in the trunk of his car parked on a street in Northwest Washington before he entered prison.

In an interview, O'Reilly confirmed writing a letter on behalf of Nickell as a favor for a mutual friend, whom he declined to identify. But he denied receiving drugs then or ever having any involvement with them.

"That's a lie," O'Reilly said. "I don't use drugs. I don't deal in drugs. I don't fund drugs. I don't possess drugs and I never have. No state, county or FBI has ever questioned me about it in any way." He said the FBI questioned him after Nickell's death but not in connection with allegations of drug use.

The sources also said that O'Reilly's name was mentioned several months ago in two conversations between suspected drug dealers that were wiretapped by Prince George's police in the course of their investigation of cocaine distribution involving a group of county lawyers. That investigation has since been turned over to federal authorities, the sources said. The FBI also has assisted with the probe.

O'Reilly said, "I may have represented some clients who were under wiretaps, that's all I can tell you."

Other lawyers who the sources said were involved in the probe are Gary Courtois, a former state's attorney and now a criminal defense lawyer in Upper Marlboro, and Edward J. O'Connor Jr., also a defense lawyer with an office in Marlow Heights. Other lawyers are involved in the investigation, according to the sources, but their identities could not be confirmed.

Asked about the investigation, Courtois said, "I just can't say anything. I wish I could, but I can't."

O'Connor did not return several telephone calls.

The U.S. attorney for Maryland, J. Frederick Motz, refused to confirm or deny that an investigation is being conducted by his office.

The head of the Prince George's County vice squad, which conducts narcotics investigations, also refused to confirm or deny any knowledge of, or participation in, an investigation.

O'Reilly, in an interview in his Annapolis office, said he first heard reports of an investigation involving him last summer -- reports he said he believes were started because of his former ownership of a bar, Judge Roy Bean's Saloon, in Brentwood. O'Reilly has since sold the bar but retains ownership of the building. Still, he said he believes his association with the bar, which he said was known for attracting raucous patrons under his ownership, damaged his reputation.

"I may be guilty of some sins in my past life but drugs isn't one of them," he said.