For the third time this year, a federal jury has refused to convict former Barry administration officials on charges that they conspired to defraud the District by manipulating contracting procedures at the D.C. Department of Human Services.

A jury yesterday acquitted Gladys Baxley, former director of the department's Mental Health Services Administration, on charges of bribery and conspiracy in an alleged scheme to steer $317,000 in Human Services contracts to a firm run by friends of former department head David E. Rivers and D.C. businessman John B. Clyburn.

The jury, which heard three weeks of testimony, also acquitted Michael Davis, a former aide to the public health commissioner and a friend of Rivers's and Clyburn's, on one count of bribery. The panel said it was deadlocked on the conspiracy charge against him.

The verdicts marked the third recent defeat for U.S. Attorney Jay B. Stephens in what was once heralded as a major string of public corruption cases focusing on allegations of widespread contracting irregularities in the Barry administration. The mayor was never named as a target of the probe.

Stephens said yesterday that his office would "not be deterred" by its string of losses in the cases so far, and he said that retrials on the unresolved criminal charges are necessary.

"The government doesn't walk away," he said. "It's not simply a calculation on what will fly and what won't fly {with a jury}. You may not win {a case}, but it's important to try to continue to make that effort."

The federal government had started out in the mid-1980s with Barry in its sights, in an effort to check recurring reports of influence-peddling and corruption in his administration. In 1986, the FBI launched a 17-month undercover investigation centering on Clyburn and Rivers.

Prosecutors eventually developed criminal cases against Clyburn, Rivers and the others, alleging crimes were committed for personal gain. But when they came to trial, the defendants, all of whom are black, told a different story: The machinations branded as illegal conspiracies by the government were nothing more than the swapping of political favors, in the same way that white politicians have done. The results may not have been civic textbook models of government, they said, but they were not crimes.

Barry and some associates for years have said that the investigations were a racist vendetta against a black-run city government. The probes were started by then-U.S. Attorney Joseph E. diGenova, and continued under Stephens.

DiGenova said he had no comment on yesterday's verdicts. Most of the jurors in the Baxley-Davis trial could not be reached for comment, but two said they did not want to talk about the case.

Prosecutors had charged that in 1986, Baxley and Davis improperly arranged Human Services contracts for JMC Associates to provide halfway-house beds for former St. Elizabeths Hospital patients. In exchange, Baxley saved her job, imperiled at the time by an office reorganization, the prosecutors said.

When the Baxley verdicts were read shortly before noon yesterday, she stood and hugged members of her family. Then she left the courtroom with tears in her eyes.

After that, the jury retired for deliberation on the conspiracy count facing Davis, only to announce at 12:40 p.m. that it was hopelessly deadlocked.

Davis showed no emotion when the mistrial verdict was read, but later said that he hoped Stephens would decide not to seek another trial on the conspiracy count.

"I'm very glad this is over," Davis said. "It's been three years . . . . I think it's time to close this chapter. Hopefully, the U.S. attorney will agree."

Baxley reiterated that hope, saying, "I just hope this will end the government's witch hunt. This is enough." At the beginning of the case, she said, "I think they thought they had something . . . {but} now it's become a personal vendetta. And it's time to stop."

Stephens offered a stern view of the investigation in May 1989, when the main group of indictments was announced in the Clyburn-Rivers investigation. The contracting irregularities, he said -- all emanating from an agency charged with helping the poor, the elderly and the mentally ill -- showed "a seamy web of corruption, concealment, manipulation and self-dealing."

Those indicted were Rivers, Clyburn, Baxley and Davis, as well as James E. Baugh, a former U.S. Department of Housing and Urban Development official who was involved in a business deal with Clyburn, and Porter Bankhead, a local businessman and a friend of Clyburn's.

But as of yesterday, after months of testimony in three separate trials, no jury has seen fit to convict anyone.

Rivers and Clyburn were acquitted last July on conspiracy and bribery charges growing out of what prosecutors said was a plan to steer more than $2 million in Human Services contracts to Clyburn's consulting company as well as to firms owned by their friends.

In late October, a jury split 8 to 4 for acquittal on charges that Baugh had steered a $400,000 HUD contract to Clyburn in exchange for Clyburn's help in establishing Baugh's wife, Veatrice, in her own business. Stephens has announced that he will retry that case, which is scheduled to begin before U.S. District Judge Joyce Hens Green on Jan. 8.

Assistant U.S. Attorney Tom Motley told Green yesterday that his office needs time to decide whether to seek another trial on the conspiracy count against Davis, on which the jury was hung. The judge asked for a decision by Jan. 8.

"I think it's important for Mr. Davis after all these months and years to know what the government intends to do," Green told Motley.

Still pending is the last case in the series -- the bribery and conspiracy indictment charging Clyburn and Bankhead. That case centers on a $7 million Human Services computer contract that Bankhead was seeking with Clyburn's help, allegedly in exchange for cash and other benefits to Clyburn.

No date was set for that trial, assigned to U.S. District Judge Oliver Gasch.