D.C. police arrested a Secret Service officer Wednesday and charged him with burglary in an alleged theft at the Sheraton Washington Hotel last week. Prosecutors later dropped the charge, and turned the matter over to a D.C. Superior Court grand jury for investigation.

The officer, Douglas L. Gharst, 38, is a four-year veteran of the Secret Service uniformed division who was assigned to protect foreign missions here. He is a former D.C. police officer.

A Secret Service spokesman declined yesterday to comment or to contact Gharst for comment. Gharst could not otherwise be reached.

Law enforcement sources said that in complex cases prosecutors sometimes prefer to have a grand jury investigate all allegations.

Police had arrested a Sheraton hotel guard last week in connection with the alleged theft, but prosecutors also decided not to press charges against him. In addition to Gharst, four other Secret Service officers, all members of the agency's uniformed division, have been reassigned to administrative duties pending the outcome of the inquiry.

The burglary was reported last Thursday by the Aerospatiale Helicopter Corp., based in Grand Prairie, Tex. Officials of that firm told police that about $450 worth of leather products were stolen from a locked hotel room at the Sheraton, site of an aerospace exhibit in which the company was participating.

The items allegedly stolen, which were to be given out free to aircraft businessmen at an Air Force Association convention, included 20 leather baseball caps, leather note pads, a gold pen, a desk lighter, two credit card holders, and six vinyl briefcases, police said.