James E. Baugh, when he was an official at the Department of Housing and Urban Development, "had no business" helping to award a HUD contract to D.C. businessman John B. Clyburn, who was paying Baugh's wife for consulting work, a federal prosecutor said in court yesterday.

But Baugh's attorney, R. Kenneth Mundy, disagreed. If there were HUD rules against doing what Baugh did, Mundy told the jury, "you would have seen them."

"What's going on here," added Clyburn's attorney, Thomas Dyson, "is what has been going on since governments began and the United States started."

So it went yesterday on the last day of arguments in the government's bribery and contract-steering case. The government charges that Baugh helped Clyburn's computer firm get a $400,000 HUD contract in exchange for Clyburn's aid to Baugh's wife, Veatrice, in starting her own business.

U.S. District Judge Joyce Hens Green is expected to give the jury its instructions this morning, and deliberations will likely get underway this afternoon.

The case is the second of three prosecutions that began in 1986 with an FBI probe of alleged contracting irregularities in the Barry administration.

In the first trial, Clyburn and former D.C. Department of Human Services head David E. Rivers were charged with steering more than $2 million in DHS contracts to Clyburn and his business friends. It ended last July in acquittals.

The third trial, against two former DHS staff members, Michael Davis and Gladys Baxley, is scheduled to start next month in Green's courtroom.

In yesterday's arguments, attorneys for both sides sought to focus the jury's attention on one basic issue: When does "networking" become bribery?

Assistant U.S. Attorney Daniel Bernstein told the jury that this case presented a classic example of a public servant who put his private interests ahead of the public good, and of a shrewd businessman who exploited that.

"Mr. Clyburn has used improper methods, illegal methods, to secure additional business for his firm," Bernstein said. "Mr. Baugh has sacrificed his integrity and has violated the trust the public placed in him."

The government charges that Baugh's wife got money, office space and marketing advice from Clyburn from 1985 to 1987 in her attempt to start her own business, a goal she and her husband were pursuing because they wanted the extra income.

In return, the government says, Baugh intervened to help Clyburn's firm get a contract to do computer work for the Columbus, Ohio, Public Housing Authority. That help, prosecutors say, extended to Baugh's calling Clyburn from a pay phone the day before Clyburn's firm was to make a presentation at HUD offices, to relay inside information about the contract.

There was nothing wrong with Veatrice Baugh working for Clyburn, Bernstein told the jury, or with Clyburn trying to get a contract from HUD. What was criminal, he said, was James Baugh's failure to tell anyone at HUD about his connection to Clyburn or to recuse himself from decision-making on the contract.

But Mundy and Dyson presented an alternative scenario: Baugh was trying to make sure minorities got HUD contracts in a bureaucratic environment hostile to affirmative action. Clyburn, they said, was a black businessman who deserved to get some of HUD's business.