City Administrator Thomas Downs lambasted the Fraternal Order of Police's Gary Hankins yesterday for "exploiting" Puerto Rican recruits on the police department "to make headway on the residency requirement," a charge hotly denied by Hankins, who accused Downs of engaging in "self-serving rhetoric."

"I am resentful of the use of these officers to raise again the issue of residency when there are plenty of other forums for the issue," Downs said, responding to reports that many of the Puerto Rican recruits are unhappy with the city's residency law and are having problems finding affordable housing in the District.

"I am not comfortable using, as Mr. Hankins seems to be, the Puerto Rican officers as a vehicle to endlessly reiterate the FOP position on residency," Downs said. He added that it was a "disservice to both the interests and efforts of the Metropolitan Police Department in recruiting Spanish-speaking officers and to the officers themselves in saying they are any different than their fellow recruits."

Hankins, head of the FOP's labor committee, said the Puerto Rican recruits "have really just been dumped here and dumped on" by the city, and called Downs' comments "very high-sounding words from someone who makes three times their salary." The recruits make $21,000 a year; Downs' salary is $71,000.

The Puerto Rican recruits "are a very valuable resource that this residency requirement and the insensitivity at the District Building are flushing right down to Blue Plains," Hankins said.

Downs said he was particularly upset that Hankins had referred to the recruits as "victims of modern day shanghai."

"I think it is unconscionable that Hankins would say that the Metropolitan Police Department and its officers would intentionally set out to mislead the recruits," Downs said. "To draw this solely as an issue around residency is artificial . . . . "

The sharp exchange was prompted by yesterday's story in The Washington Post that said many of the Puerto Rican officers, 43 of whom were recruited for the department because the city needs Spanish-speaking police officers for its growing Hispanic community, were having problems adjusting here.

More than half of the 14 recruits interviewed by The Post indicated that they were considering resigning from the force, primarily because of the city's residency law, which requires that all city government employes hired after Jan. 1, 1980, live in the District. The FOP wants the law repealed or police officers exempted.

Many of the Puerto Rican recruits said they felt they were misled by police department officials who recruited them in San Juan last summer and they charged that the city has not helped them become acclimated to their new surroundings.

Hankins said the residency requirement "works a particularly grave hardship on the Puerto Rican officers because they were misled about the circumstances here.

"The District of Columbia took advantage of their ignorance of the economics and the housing situation in the city . . . . There was a terrible responsibility that the District had to make sure that these people knew what they were getting into, and they didn't."