In this sun-drenched border city, where an occasional windstorm passes for winter, the murder of the Southwest's most flamboyant lawyer has baffled police and sent shock waves through the underworld as far away as Las Vegas.

In its own right, the unsolved shooting death of high-stakes gambler Lee A. Chagra in his electronically guarded office fortress seems a fascinating enough mystery. But it is what happened after, when police sealed off Chagra's plush new offices for five days and rummaged through legal files they acknowledge sharing with federal officials, that has sent narcotics dealers scurring for cover throughout a 100-mile border region.

Chagra, known in Texas as "F. Lee Chagra" because of his formidable legal skills, was widely considered the best at a business of representing accused narcotics smugglers. Only last summer he won acquittal in Ardmore, Okla., of a group known as the El Paso 10, then charged with the most massive marijuana smuggling operation in Oklahoma history.

Federal officials have made Chagra the subject of a long and persistent investigation that tried to link him to drug smuggling in three countries. In 1973 he was indicted for purportedly participating in a drug smuggling conspiracy in Tennessee. The indictment was dismissed two years later for lack of a speedy trial.

When he opened up his new office in downtown El Paso a few days before his death, Chagra said, "It will be just me against the United States of America. I wouldn't want it any other way."

Two days later, the Saturday afternoon before Christmas, it was Chagra against a 22-cal. bullet fired under his right armpit, penetrating both lungs and severing an artery. He died an indeterminate number of minutes later from internal bleeding.

The death came as a shock to this tough, bilingual border city, which many consider the most wideopen and lawless society in the United States.

Chagra was considered a romantic, larger-than-life figure here. Though pursued by federal authorities and disliked by prosecutors whom he had bested, Chagra was known on the street as a brilliant, hard-working lawyer willing to defend the poor and powerless without fee. He also boasted high-level Texas political connections and a history of liberalism that extended back to the days when he was chief justice of the student court at the University of Texas law school and made rulings favoring blacks trying to desegregate dormitories and athletic facilities.

Chagra made no secret of being a user of cocaine, traces of which were found in his bloodstream in the autopsy, and of being a big gambler who had won and lost millions of dollars in Las Vegas and elsewhere.

Records filed with the U.S. Tax Court in 1973 show that his law firm claimed more than one-fourth of its $448,000 income from gambling. On the day of his death he made $15,000 on the Sun Bowl football game, which ended in the victory of Chagra's team at about the same time his life was ebbing away on his office floor.

"Lee would bet you that tomorrow would be cloudy," said younger brother Joe Chagra, also an El Paso attorney. "He always liked to bet on anything."

In Las Vegas, which Lee Chagra visited several times a year, he was know as a high-stakes gambler who favored craps and would win or lose tens of thousands of dollars on a single roll. He was a big tipper who sometimes shared his winnings with the down-and-out compulsive gamblers who frequent the Vegas casinos.

Joe Chagra and other family members are bitter about what has happened since the killing. They believe that police and federal officials have used the murder as an excuse to search Lee Chagra's files for privileged information about clients. They also think that federal authorities are zeroing in on another brother, Jimmy, an even higher-stakes gambler who has been living for several months in a plush, complimentary suite at Ceasars Palace in Vegas.

"They seem more interested in what they can find in the files than in solving the murder," says Joe Chagra.

He is not alone in this belief. One law enforcement official in the area privately referred to the files as "a probable gold mine of intelligence," even though the information cannot be used in court because of the attorney-client privilege. In this official's opinion, the widespread view that federal authorities have access to the information in the files is likely to have a chilling effect on activities by some Chagra clients.

El Paso Police Chief William Rodriguez acknowledges that police are sharing their findings with federal officials, though he says the police search has been limited solely to an attempt to solve the murder. It is known that police have in their possession Chagra's meticulous gambling records as well as cassettes containing recorded conversations with federal informants whom Chagra believed were out to frame him.

In one conversation, with a potential drug buyer whom Chagra suspected of being a federal informant, the attorney supposedly directed the caller to a place where he could make a sure-fire drug buy. Chagra gave the suspected informant the private telephone number of a high-ranking U.S. Drug Enforcement Agency official.

But it is not the documentation of Lee Chagra's sense of humor that concerns the surviving Chagras, a close-knit and powerful family of Lebanese descent.

Their chief worry now is younger brother Jimmy, whose gambling habits and friendships at Caesars, where he has reportedly lost more than $2 million in the past few months, have aroused federal suspicions. Federal officials have been interested in Jimmy Chagra since the summer of 1977, when he persuaded Jet Avia, a Nevada air charter service, to fly to Colombia to rescue a burned pilot whose plane supposedly had crashed while engaged in drug trafficking. Chagra and the rescue crew were detained by Colombian authorities but ultimately were released without being charged.

Jimmy Chagra moved to Las Vegas from El Paso last summer, living with his wife and small child in one of the best rooms at Caesars Palace while he bought and remodeled a luxury home. Chagra moved into this home briefly, then back to Caesars under unexplained circumstances. In the wake of Lee Chagra's shooting, the younger Chagra changed rooms at Caesars to quarters protected by casino security guards.

By any standard, the belief that federal authorities are out to get the Chagras would seem to be a fair assessment. Last summer, federal authorities prosecuted the Chagras' brother-in-law, Rick de la Torre, for purported conspiracy in a scheme to import cocaine and marijuana from Colombia in return for money and submachine guns.

Lee Chagra was the defense attorney and won what appeared even to federal authorities to be a stunning acquittal on the three counts involving cocaine. De la Torre, a former bank vice president, was convicted of the marijuana conspiracy charge and sentenced to five years in prison. His case is on appeal.

The prosecutor, as in so many other cases involving Chagra clients, was James Kerr, a combative, controversial assistant U.S. attorney from San Antonio who was the target of an assassination attempt last November. After de la Torre's conviction, Kerr promised more prosecutions of Chagra associates.

Kerr, who made no secret of his dislike for Chagra and who was frequently bested by him in the courtroom, will not discuss the case now.

The violence that has caused prosecutors and prosecuted alike to buy guns, hire guards and maintain a watchful security is no stranger to El Paso, which shares a 1.3 million population with Ciudad Juarez across the Rio Grande in Mexico, making them the world's largest bilingual metropolis on an international boundary.

"El Paso-Juarez is a micro-city-state that is indifferent to the federal government's laws," said University of Texas research associate Larry McConville in a 1977 study. "Law here is ineffective. From 15 to 20 percent of the households of El Paso receive a major part of their income from illegal activities.... The only way for this area to survive and its only appeal is a short-circuited police apparatus."

A similar view is held by the federal authorities who are supposed to police the border.

"The mores and economy of this area are based on smuggling," said William Hughes, director of the El Paso district of the U.S. Customs Service, in an assessment. "Who knows what would happen if we stopped all smuggling right now? The economies of the two cities would fall flat on their faces."

Even in picturesque El Paso, the funeral of Lee Chagra was a special event.

Before a weeping, overflow crowd, the homily at the service was preached by the Most Rev. Sidney D. Metzger, the bishop emeritus of El Paso, who became a labor hero for leading the Catholic Church's boycott of Farah Manufacturing Co. Metzger blamed "a sick society" for the crime.

Among the 1,000 mourners with places of honor at the funeral were prominent local politicians, judges, convicted narcotics dealers and the onetime world champion of poker, "Amarillo Slim" Preston, now under indictment for an alleged bookmaking conspiracy in which Chagra was defending him.

Few of those attending seemed familiar with the liturgy, but everyone wept openly when Chagra's son and four daughters sang a ballad to their late father that concluded: "I would give everything I own just to have you back again."

El Paso police, whom many in these parts think couldn't find a bend in a pretzel, have had little apparent success in solving the crme. But they have conducted an active investigation, prodded by the El Paso Times, which has been covering the story prominently and in detail.

The first rumors after the shooting, which set off a wave of gun-buying among those close to the victim, were that the underworld had killed Chagra over some grievance. This view is not discounted, both by police, who say "everyone is a suspect," and by the family, which has put up a $25,000 reward for information leading to the killer.

Medical examiners say that, given the nature of his fatal wound, Chagra could have lived for more than an hour after the shooting, a possibility any professional killer would find inordinately risky.

"No mob hit man ever tried to kill with a shot like that," says one law enforcement official. "The odds of that bullet hitting an artery and killing Lee were much worse than the odds he ever faced on the crap table."

Jo Anne Chagra, the lawyer's widow, theorized last week that a woman or old acquaintance did the shooting. Others think it could have been a burglar lured by Chagra's reputation of carrying large amounts of cash. The prevailing view is that Chagra probably knew the killer, since the doors to his new office suite were electronically locked and monitored on closed-circuit television.

Missing from Chagra's black briefcase, which was found beside him, was the money he usually carried inside it and his gun. His boots, in which he sometimes stashed extra money for poker games, had been removed.

Chagra, whose legal business suffered after his indictment in 1973, had battled back to fame and prosperity at the time of his death.

"He had just moved into his new offices, and I had given him as a present a Lincoln Continental limousine, which was the one thing he wanted and didn't have," said Jo Anne Chagra. "It had television, a place for his gun, everything. Lee was really a man who had everything."