IN NEARLY 1973, James E. Ritchie, head of the Justice Department's Organized Crime Strike Force in San Francisco, was job hunting. After nearly seven years at Justice, including service as one of its youngest strike force chiefs, Ritchie was eager for a change. He wanted the greater financial perquisities and prestige of a Washington law firm.

"I looked around back then," Ritchie recalls, "and I said, 'It's not here for me.' I didn't see any niche, any place to go in the department. The place for the action is Washington, and I wanted a piece of it."

About the same time, a federal commission to study gambling laws throughout the country was being assembled in Washington. It wasn't a law firm, but to Ritchie it was to prove very valuable.

"I decided that i was going to try for that job in order to make myself unique in terms of my knowledge of the gambling industry," he says. "Here was a chance to become an expert in a very special area of the law. And after it was all over, well . . . I hoped to use that experience in private practice. I don't feel that it was improper."

"Many of the staff members, particularly in the research area, also went into directly corollary fields based on the fact that they gained two or three years or expertise from working on the commission," Ritchie says.

The move has paid off for Jim Ritchie. Today, a little more than a year since the Commission on the Review of the National Policy Toward Gambling wound up its work, Ritchie, 41, has parlayed his position as its executive director into a blossoming law practice two blocks from the White House. His first two clients hired him three weeks after the expiration of the commission at act as their Washington lobbyist for a combined $75,000-a-year retainer plus expenses. The clients are Nevada's two main casino trade associations, which represent the state's billion-dollar-a-year gambling industry.

This is not a tale of illegality or criminal conflicts of interest. Rather it is a story of nuance, of tone, of appearances, of propriety - and another tale of one of Washington's surest bets: using public service for private gain.

The first national commission ever formed to survey gambling in America and its law in the various states was created by the Organized Crime Act of 1970. Then, on Dec. 23, 1972, sandwiched between the Christmas shopping rush and Watergate, the White House released the names of the 15 commission members, eight members of Congress and seven outsiders. Most were not opponents of gambling, and some were in favor of its proliferation.

Charles H. Morin, a senior partner in the Washington law firm of Dickstein, Morin and Shapiro and a lifelong friend of former White House special counsel Charles W. Colson, was named chairman. Morin was picked shortly after Colson, President Nixon's labor contact in the White House (and a friend of Teamsters President Frank Fitzsimmons), returned to his old law firm with Morin and a newly acquired $100,000-a-year retainer as the Teamsters' Washington law firm. The Teamsters' Central States Pension Fund has more than $400,000 invested in Nevada casinos.

The other public members of the commission included James M. Coleman, a New Jersey prosecutor and architect of that state's lottery; Joseph Gimma, New York stockbroker and chairman of the New York State Racing Commission, and Robert F. List, Nevada's attorney general. From Congress, the list included Nevada's senior senator, Democrat Howard Cannon, a vigorous advocate of his state's gambling industry; the late Democratic Sen. John McClellan of Arkansas, whose Judiciary Committee wrote the mandate for the commission; and Republican Reps. Sam Steiger of Arizona and Charles Wiggins of California. Steiger and Wiggins would later refuse to approve the commission's findings and recommendations and would issue their own minority report.

The most influential position on the commission went unfilled until the spring of 1973. Robert Blakey, principal author of the act creating the commission, was asked to screen applicants for the $39,600-a-year job of executive director, Blakey, a recognized authority on gambling legislation and currently chief counsel for the House Assassination Committee, was searching for someone with a solid law enforcement background who had "no axe to grind."

"We didn't want to have a moral crusader running the commission," says Blakey, "or a guy who was in the back pocket of the casino interests. We wanted someone who would come in neutral with law enforcement experience and do the job."

Enter James E. Ritchie. Background: solid law enforcement, a tough prosecutor but not a fanatic, assistant U.S. attorney in Tulsa before heading Justice's strike forces in Detroit and San Francisco. Among his colleagues he was known as "aggressive, articulate and charming."

FroM Nevade's point of view, Ritchie was an excellent choice. Shannon Bybee Jr., a Las Vegas attorney and former state Gaming Control Board member, says, "When we heard Jim Ritchie weas hired to run the gambling commission, we all breathed a little easier. We knew he didn't come to the job with any reconceived notions about trying to destroy Nevada gambling. After all, Ritchie was no stranger to Nevada."

Indeed, he was not. As San Francisco strike force chief, Ritchie's jurisdiction had covered northern Reno, Lake Tahoe and Carson City, the three main gambling centers outside Las Vegas. And Nevada gambling interests also agreed with Ritchie's "narrow definition" of organized crime in the state. Six months after he took the job in San Francisco, Ritchie says he was so convinced that the Mob didn't exist in northern Nevada that he recommended his strike force be disbanded. Washington rejected the recommendation. "Nevada Needed a Representative"

AFTER MORE than six months of congressional footdragging, the commission finally was funed and Ritchie began to assemble a staff of researchers and consultants to produce a virtual encyclopedia of gambling laws and lore on every game of chance in America, from dogfighting to bingo. But from the beginning, Ritchie's personal intentions were no secret to his staff.

"One thing about Jim Ritchie," says a former commission staff member who asks to remain anonymous, "he was very frank about why he took the job. He wanted to drum up clients for his future law practice. He talked about it frequently, how he was going to land the Las Vegas casinos as his clients. His priorities were Nevada casinos, U.S. horse-racing and British gambling interests."

One reason for Ritchie's active interest in Nevada casinos may have been the knowledge that the state's gambling industry was searching for a lawyer to represent them as a full-time Washington lobbyist. "It was no secret," says William Weinburger, former president of Las Vegas' Caesar's Palace and now head of Bally Manufacturing's casino interests in Atlantic City, N.J. "Nevada had needed a representative in Washington for many years, and Jim Ritchie certainly had the right credentials we're looking for."

In the summer of 1974, Ritchie and his deputy, another former Justice Department prosecutor named Marily Marshall, began the first of what became a pattern of trips to Nevada, particularly Las Vegas, during the commission's operation. During the first few week of June, 1974, Ritchie and Marshall took a swing up north to Reno and Carson City, where they had dinner with Attorney General List and his family, and then went back to Las Vegas.

It was on that first trip to Las Vegas that Ritchie met the top officials of Caesar's Weinburger and Harry Wald, executive vice president, frequently chatted and hand drinks and dinner together when Ritchie was in town. During the more than 20 trips Ritchie made to Las Vegas as the commission's executive director, he stayed exclusively at Caesar's Palace. Weinburger and Wald also served as the ranking officers of the Nevada Resort Association, Las Vegas' casino trade group, which Ritchie now represents as a lobbyist.

During trips to Las Vegas, Ritchie was often "comped" by Caesar's management. Ritchie acknowledges accepting free dinners and drinks. "Yes, I was their guest several times," he says, "but I would hope that in view of my 10 years as a prosecutor and an attorney that I couldn't be bought for some free dinners." He adds that the casino interests "never paid room bills."

"If the reports [of gratuities] are true," former state Gambling Control Commissioner Phillip Hannafin said in an interview, "then tht would appear to be a serious conflict of interest on Ritchie's part and on the part of any other members of the commission."

Both Weinburger and Wald refuse to comment about gratuities. One commission member, James Coleman, conededs that when the commission held hearings in Las Vegas in June, 1975, "the idea of being given a party by Caesar's Palace didn't look too good. I suppose. But it didn't alter my opinion of Las Vegas either way. I like it."

During the same period, Ritchie made a hiring decision that was found to violate federal nepotism law. He hired his 18-year-old nephew, Thomas Michael Ritchie, as a commission research assistant. In letters from the General Service Administration's office of the General Counsel, in 1974 and 1975, the government noted the violation of Ritchie's relative working for the commission. They demanded a repayment of $1,702.80, the salary received by young Ritchie.

Two of Ritchie's other judgments in hiring commission consultants would later be questioned by a senior research staff member. On involved Jack T. LaReese, an Oklahoma City tailor who was an old friend of Ritchie's. For the last 14 months of the commission, LaReese took time from his custom tailoring business to earn $15,700 as a $100-a-day consultant, and then he was given an additional $3,000 contract to "conduct orientation of newly elected members to the Oklahoma and Texas legislatures."

Ritchie says he hired LaReese because he "possessed a special expertise needed by this commission to verify information about the extent of illegal wagering in this country." But LaReese told the Daily Oklahoman that he had no particular expertise in gambling or bookmaking activities except for his personal interest in bookmaking, line-making and pari-mutuel betting.

Ritchie also hired a former Oklahoma State University fraternity brother, H. Sheldon Detrict, as a consultant in Tulsa. Detrick, owner of Tulsa's second largest real estate firm and a partner with Ritchie in a real estate holding corporation, was paid $5,384.80 to act as a "lay representative" from the business community in gathering information for the commission about the attitudes of Oklahoma's non-gambling public. Detrick, Ritchie and Charles Ostrander are listed as principals in a firm called The September Corp., which was formed Nov. 25, 1968.

During the commission's research, 43 public hearings were held across the country, an effort to plumb national attitudes about gambling laws and their effectiveness. The reception was almost entirely positive. The exception was in Miami in November, 1975, when one witness, Hank Messick, a veteran organized crime reporter and author of 16 books on syndicate operations, told the commission. "The Mob thinks you're Mr. Nixon's big payoff. This is the final thing he could do for it and by legalizing gambling, he will really have paid off in a big way." One of the commissioners, Rep. Robert Taft Jr. (R-Ohio), threatened Messick with contempt.

There were others who felt the commission hearings were mostly self-serving, particularly those held in Las Vegas. An official of the Nevada Gaming Control Board says, "Those hearings were a joke. The commissioners asked the obvious questions and they received only positive answers."

Commissioner Coleman agrees that the two days of hearings in Las Vegas produced only positive responses about casino gambling. "I didn't expect anything else," he says.

While the casino chapter of the commission's report was not written until the spring of 1976, staff members said it received topriority by Ritchie and those who researched and drafted it. Ritchie was very explicit about what he wanted in the chapter, which was the first to be written.

"Jim told me to build the chapter around three points," recalls Patricia Helsing, the writer of the casino chapter: "Negligible influence of organized crime in Nevada casinos; sound internal control mechanisms to prevent skimming within the casinos, and that state regulations were sufficiently tough and effective in keeping the casinos honest."

The most controversial finding in the final commission report was, indeed, the one concerning the "significantly" reduced influence of organized crime in Nevada casinos.

A Nevada state Gaming Control Board investigator, who declines to be identified, objects to that finding. "As far as I'm concerned," he says, "the same people are still here. They just have different jobs." An official of the Gaming Control Board is also skeptical. "We do a good job of keeping the casinos honest," he says, "but we're not supermen. I wouldn't want to stake my job on that statement."

Ritchie defends the finding by suggesting that the entry of publicly traded corporations into the casino business like Hilton, Kirk Kerkorian of MGM, Howard Hughes, and Resorts International in New Jersey have legitimized casino gambling. Racing Grant Criticized

WHILE RITCHIE'S prime interest centered on Nevada casinos, he was also interested in making connections with other gambling interests. In June, 1975, he recommended a grant of $10,000 to the National Association of State Racing Commissioners (NASRC) in Lexington, Ky. The money was given "to further the development of theonline, data processing system known as NASRIS (National Association of State Racing Information Service)." Twice more during the life of the commission, Ritchie tried to get approval from the commissioners to "donate" excess funds left over from the 1975 and 1976 budgets to NASRC.

Warren B. Schweder, NASRC'S executive vice president, in a letter to Ritchie dated July 28, 1976, recognized the delicacy of the request. His letter said in part, "We realize the propriety of the request may be questionable, especially in view of the assistance that the commission already has given the program . . ."

Rep. Wiggins sent a letter sharply criticizing Ritchie about this request and the initial $10,000 grant to the horse racing group, questioning the legality of the commission providing operating funds to any organization. They commissioners refused the last two attempts to get additional funds for NASRC.

In reponse to questions about whether Ritchie had mentioned the possibility of representing NASRC as a client later on, NASRC's Schweder said Ritchie didn't talk to us about a job," but he added, "We did approach Mr. Ritchie about representing us sometime in late 1976" following the expiration of the commission. The deal never materalized.

Ritchie denies ever making an outright bid for the services of horse racing interests while at the commission. But in March, 1977, Ritchie was hired as Washington lobbyist by the National Association of Off-Track Betting.

In late May, 1976, the first draft of the casino was finished. Ritchie arranged a meeting with various casino officials, including Weinburger and Wald of Caesar's Palace, Al Benedict, president of MGM Grand, Frank Scott of Union Plaza Hotel & Casino, and several officials from northern Nevada, including C.G. Munson, vice president of Harrah's Club. Munson was also president of the Gaming Association of Nevada, and Scott was newly elected president of the Nevada Casino Association. Both groups now are Ritchie's clients. The purpose of the meeting was to permit casino officials to discuss a draft copy of the casino chapter that Ritchie had provided for them.

Ritchie says there was nothing "improper" about the meeting. "It was to make sure things were correct," he explains, "not to have the industry dictate changes."

If Ritchie's action was intended as a reasonable and prudent gesture in the name of accuracy, the casino owners who attended that meeting don't want to discuss it. "I don't ever remember seeing anything before it came out," says Caesar's Wald. MGM's Benedict never returned several telephone calls regarding that meeting. Scott, Union Plaza's top executive, avoided this reporter during two days of attempts to interview him in Las Vegas last April. His scretary refused to provide any information about his schedule.

Staff members of other executive commissions said the practice of sending advance copies of reports to industries being scrutinized is not common unless the material is extremely complicated and the industry has the only experts in the particular field. This was hardly the case for the casino industry.

"They were obviously gun-shy about the appearance of that meeting," says a Las Vegas attorney, "because of their present business relationship with Ritchie."

At a mid-September national gambling conference in Palm Beach, Fla., Ritchie met with various Nevada casino ownwers to discuss representing them following the conclusion of the commission. Ritchie recalls that they wanted him to "relocate to Nevada, but I wasn't leaving Washington." They agreed to come back to Ritchie with another offer. A Meeting in November

ON OCT. 12, 1976, after three years and nearly $3 million in research, consultants and travel to casinos from Nevada to Monte Carlo, London and San Juan, the commission sent its report to Congress. The findings and recommendations, many gambling experts contend, could have been written by the U.S. gambling industry. The major points: The federal government should keep its nose out of the states' business when it comes to gambling laws; the federal excise tax on gambling winnings should be repealed, and Nevada should remain the sole proprietor of casino gambling in the United States.

Shortly after the report went to Congress, Ritchie wrote a letter to his prospective clients in Nevada outlining the essentials of the job he was prepared to perform for them in Washington. A commission staff member who saw the letter before it was mailed says Ritchie asked for a $100,000-a-year retainer and $150,000 in expenses. Ritchie admits writing the letter but says those figures were wrong.

"I told them I would need six lawyers to work on legislation," he says, "and they didn't go for it."

In late October, more than a month before the commission ended its tenure, Marilu Marshall, Ritchie's deputy, resigned to take a job as director of special projects for Playboy Enterprises. She was assigned to oversee Playboy's $50 million casino in Atlantic City.

On Nov. 25, more than a month after the commission's report had been submitted to Congress, Ritchie flew to Nevada for what he describes as "tying up some loose ends" connected with the commission. In Reno, Ritchie met with the executive committee of both casino groups in the office of Les Colfoed, executive secretary of the Gaming Association of Nevada.

But more than commission business was involved. "The executive committee decided at that meeting," says Robbins Cahill, managing director of the Nevada Resort Association "to hire Ritchie. His hiring was officially voted on by the full committee on Dec. 20."

On Dec. 9 the last week of the commission's existence, Ritchie left for London. He says the purpose of the trip was to deliver a copy of the commission's report to England's Royal Commission on Gaming, but he recalls that he had a drink "and some conversation" with two officials of Ladbrooke's Ltd, England's largest legal bookmakers.

"I told them that if they were going to expand their operations to the United States," he recalls, "I'd be interested in representing them.I saw nothing improper in it."

On Jan. 5, 1977, a five-paragraph article in the North Las Vegas Valley Times announced that James E. Ritchie had been retained in Washington, D.C. as legal counsel for the Nevada Casino Association and the Gaming Association of Nevada. In a joint announcement, Frank Scott and C.G. Munson said Ritchie was hired "because of his knowledge of gambling in Nevada and on a national and worldwide basis is unequaled."

From the outset, Rep. Wiggins says, he had misgivings about serving on the gambling commission. "As far as I'm concerned," says Wiggins, "commissions are generally an excuse by Congress to pass on responsibility for an issue to someone else. In the case of this commission's work, what Morin and Ritchie came up with might make interesting reading as a book on America's gambling habits. But its value in terms of inspiring new legislation is very little."

Jerome Skolnick, a criminologist at the University of California at Berkley and a national authority on gambling, terms the commission's report "a superficial works that did not require a $3 million effort. The commission went through the motions of holding hearings with the predictable result that its report is shallow," Skolnick says, "and it certainly doesn't, in any way, challenge the claims of the gambling industry. It could scarely be called a deep and profound investigation of the role of gambling in the United States."