The Fraternal Order of Police became the first major labor organization to buck the tide of labor support for Mayor Marion Barry yesterday, announcing its endorsement of D.C. Council member Carol Schwartz (R-At Large) in the race for mayor.

The endorsement by the 3,300-member FOP, which had never before endorsed a mayoral candidate, gives the Republican challenger her first organized backing since she announced her candidacy June 24.

Gary Hankins, head of the FOP's labor committee, said the group broke with tradition because "our city government desperately needs new and effective leadership." Praising Schwartz as an outstanding official, he listed a series of grievances that have led to the FOP's growing disenchantment with the mayor.

In addition to a well-publicized battle with Barry over a police pay raise, Hankins charged that Barry has permitted the civilian complaint process to severely undermine the department's effectiveness and that he has used the police department for political ends. A Barry spokesman termed the charges "simply not true."

Schwartz, appearing with FOP officials at a news conference, said she supported adding flexibility to the city's employe residency requirement -- a change eagerly sought by the FOP leadership, who contend that many police officers cannot afford homes in the city.

Barry brushed off the FOP endorsement, saying the organization's leadership is "off course."

"We didn't seek the endorsement , didn't go after it, didn't really want it," he said. "We think the leadership of FOP is out of tune with the rank and file of the police department."

Almost all the city's major labor groups have endorsed Barry for reelection this year, in marked contrast to a split that developed in 1982 when Barry faced his strongest competition from Patricia Roberts Harris, a former Carter administration cabinet member.

In that year, most public sector unions backed Barry while private sector groups -- such as the Washington Building and Construction Trades Council, the Hotel and Restaurant Employees Union and the United Food and Commercial Workers -- endorsed Harris. This year, those groups have fallen into line behind the two-term incumbent.

Joslyn Williams, head of the Metropolitan Washington Council AFL-CIO, said the nearly united front of labor this year reflects Barry's efforts to repair relations with dissatisfied elements. In 1982, the umbrella council remained neutral in the mayor's race because its member unions were divided over support for Barry.

"I think it means that the labor movement is fairly comfortable this time around with the mayor," he said. "He did his homework and he has worked fairly well on the problems that faced us."

Barry's cultivation of labor support has been matched by his success in garnering financial support from business interests, according to campaign finance reports.

Williams said "it is to the mayor's credit" that he has won the backing of developers and construction firm executives, while winning over the construction and hotel unions. Other labor leaders have said privately, however, that Barry's apparently strong reelection chances have also encouraged support from labor and management.

Hankins said the FOP would contribute financially to Schwartz's campaign and that the organization's membership would support her within the strictures of the federal Hatch Act, which sharply limits political activity by District workers.

Barry holds a virtually insurmountable lead in the Sept. 9 Democratic mayoral primary, according to a Washington Post poll. Schwartz, running unopposed in the Republican mayoral primary, is likely to square off with Barry in the general election in November.

Schwartz, saying she "can think of no better public servants in our city than our police officers," said the endorsement gives her campaign a major boost.

She said Barry had shifted his budget priorities away from crime fighting in favor of top-heavy administrative agencies and programs that reward political allies.

"We see there is enough money to give out contracts to friends of the mayor's for drug treatment programs . . . yet there is not enough money to funnel people in to answer the 911 emergency number," she said.

In arguing that Barry had "politicized" the police department, Hankins said the mayor had taken personal control over the agency, at the expense of top police professionals, and used it for political ends. He said that the department's Internal Affairs Division, which investigates complaints against police officers and other D.C. employes, has been "neutralized by politics."

"You will see, and continue to see as long as he is there, operations by the police department designed to get a lot of media attention and to answer specific complaints about his administration rather than to allow us to operate effectively in the long haul to combat crime," he said.

City Administrator Thomas M. Downs countered that although Barry, as the city's top elected official, has direct responsibility for the police department, the mayor has permitted Chief Maurice T. Turner Jr. to retain a strong hand over police matters. He added that the internal affairs unit has "wide latitude to investigate whatever they feel is necessary."

"If there is an inference that they are trying to make that the chief is not a strong professional chief, that is totally erroneous," Downs said. "He is one of the strongest chiefs I have ever met."

Hankins said police officers are seriously hampered by civilian review constraints encouraged by Barry. While saying the FOP supports the rights of citizens to complain to the Civilian Complaint Review Board, Hankins asserted that Barry had used the review process to limit police effectiveness and reduce the rate of incarceration in the city's overcrowded corrections system.

Staff writer John Ward Anderson contributed to this report