It was the spring of 1982, and a group of maximum security inmates was hard pressed to break the monotony of daily life at Lorton Reformatory.

A private construction company was on the prison grounds turning the old furniture repair shop into an 80-unit cell block, and a corrections officer persuaded the foremen of the operation to supplement their regular staff with a work crew of inmates.

It seemed like a good idea. The construction company would get some extra help, the inmates would be paid in cigarettes and sodas and prison officials would know that some inmates were learning new skills during their incarceration.

For the first few weeks, everything went well. Then, according to the inmates, the construction company reneged. Instead of the agreed-upon sodas and cigarettes, the company started paying them in "cookies, sardines and various snacks," said one inmate, and they went on strike.

That led to the end of the arrangement and the start of investigations by the D.C. Department of Corrections, the D.C. Public Works Department and the U.S. Department of Labor, which says the Ronald Hsu Construction Co. Inc., of Capitol Heights, violated labor laws and owes the inmates more than $23,000 in back pay.

Moreover, according to an official from the Department of Public Works and an attorney for Labor, which investigated to determine whether the company violated terms of its government contract, the operation was ill-conceived because, under a 1973 executive order, inmates are not supposed to work on federally funded projects.

The inmates have informed the city that they intend to sue for $2 million for violation of U.S. labor laws.

Thomas G. Corcoran Jr., attorney for Hsu Construction, said in a letter to Labor that the company "was pressured into cooperating with the program by the Department of Corrections."

According to a Department of Corrections report, a corrections officer, at the request of inmates, proposed the inmate work detail to the foremen of the renovation project. The officer and foremen negotiated an agreement to pay the inmates in cigarettes and sodas, the report said.

"This is much worse than a standard entrapment case," Corcoran said in an interview. "The government asked them Hsu Construction to do exactly what they are now being cited for." If the inmates are owed any money, Corcoran said, the city should pay them.

Jack Smith, Hsu's superintendent at the $1.7 million project, said the inmates "were in there walking around and you just don't turn them down because you're going to have problems . . . . They have nothing to lose."

Smith said that guards also applied pressure. "They want harmony in there. They're understaffed. They told us: 'Don't go against the grain, don't screw up the program because that makes waves,' " he said.

According to a Corrections Department memo, the inmates were allowed to work "voluntarily" for the construction company on "clean-up type activities . . . that will include no climbing on roofs, etc."

However, "almost immediately upon their arrival on the work site, jackhammers were placed in their hands and work commenced breaking up the concrete floor," the department's report states.

According to inmate interviews conducted by public works investigators, the prisoners also dug trenches, cut holes for doors, painted, assembled scaffolds, removed floors and pipes, drilled holes for fences and cut and removed slate from the roof.

The public works investigation concluded that the program violated the federal Davis-Bacon Act governing minimum wages and the matter was turned over to the U.S. Department of Labor. According to public works records, in April and May of 1982, nine inmates worked more than 1,800 hours and should have been paid a minimum of $12.05 per hour.

Hubert Hackney, one of the inmates on the detail who is serving a sentence of 20 years to life for first-degree murder, said in a telephone interview that the inmates were each supposed to be paid two cartons of cigarettes and two cases of soda per week.

"If they had kept up the payments of sodas and cigarettes every Friday, we would have kept working. But they couldn't even do that," he said. "We're inmates, and people think they can do things to inmates and get away with it. We've been exploited."

Hackney said that over a two-month period two payments were made to the nine-inmate construction team totaling about 36 cartons of cigarettes and 36 cases of sodas. After the program ended, he said, the inmates also received a check totaling about $300.

According to Hsu records, four checks, totaling $845, were issued to pay for inmate cigarettes and sodas. Those checks, according to the Corrections Department investigation, were given to corrections officers, who cashed them at their banks and bought sodas and cigarettes.

Asked to produce receipts for the purchases, one officer said he had given them to the construction company, and another "displayed what appeared to be a Safeway tape which allegedly had been washed in his pants pocket," the Corrections Department report said.

The investigation concluded, however, that no one on the staff "received any monies, service and/or personal benefits" as a result of the project.

The Correction Department report recommended disciplinary actions against three employes. D.C. corrections officials did not respond to a reporter's questions.

Public works spokeswoman Tara Hamilton said that the department is withholding payment to Hsu of $23,360.58 -- the amount allegedly owed the inmates -- pending a hearing yet to be scheduled before an administrative law judge at the Department of Labor's Philadelphia office.