Baker Armstrong Smith, who left the Center on National Labor Policy, an organization that works to curtail union power, to become director of labor relations at the Department of Housing and Urban Development, has sharply curbed HUD's enforcement actions involving federal wage laws on government construction projects.

In three-quarters of such cases referred to his office through this April, Smith had overruled recommendations by local HUD officials that contractors be fined for violating the wage laws, according to case records provided by the agency. Most cases involved charges that contractors had failed to pay workers overtime or minimum wages or had submitted false payroll records.

Records reviewed by The Washington Post show that Smith waived 100 of the 133 fines proposed by his staff from the time he took office in August, 1981, until the end of April this year. Smith approved nine fines during 1982 and 24 this year.

Smith's Democratic and Republican predecessors nearly always approved penalties recommended by the staff, according to several current and former HUD employes.

In addition, Smith has fired, transferred or refused to promote a number of HUD employes with union backgrounds, prompting an investigation by the Merit Systems Protection Board's special counsel. A copy of a handwritten list compiled by Smith, which was made available by union sources, shows that he designated some of these employes for layoffs.

A number of union leaders and former HUD officials said Smith's performance typifies a Reagan administration practice of appointing officials who do not believe in the missions of their agencies.

The administration has considered changing wage laws like the Davis-Bacon Act, which determines prevailing wages on federally funded construction projects, in the belief that they artificially inflate costs. Union and former HUD officials said the laws should be strongly enforced as long as they remain on the books.

Smith said in an interview that, unlike his predecessors, he is "not a rubber stamp" for recommendations by HUD field offices. He said he has concentrated on getting better audits and preventing violations by meeting with contractors before each project.

"I feel that since I came here we have a more effective program," Smith said. "I really feel we have a more aggressive follow-up to our enforcement actions than we had before."

Smith said he believes he rejects about the same number of proposed fines as did his predecessors. If field officers resent the waiver of fines, he said, "it's not so much the decision but that we've set some standards."

Regional HUD officials should determine whether a contractor "has a bad attitude," Smith said. "If all they do is say we looked over the case report and here's our recommendation, well, I can do that. We could save some postage. If that's all you're going to do, we don't need you.

"I guess we're looking for bad intent," he said. "You don't need an atomic bomb to accomplish what a rifle shot would do."

Elizabeth R. Raymond, who directed the Office of Labor Relations from 1978 to 1980, said Smith's enforcement policy has been "a 180-degree reversal. When contractors don't pay the wages they're supposed to pay but are charging the government, it goes into their pockets. It's showing contractors they can get away with pocketing the government's money."

Raymond said she could not recall an instance in which she rejected a proposed penalty.

"When someone from the field recommended assessing damages, I would usually go along," she said. "They were the experts. I felt the people in the field knew what they were doing. Contractors have to sign a certificate of payroll saying that Davis-Bacon rates are being paid. You can tell whether the violation is willful, even if it's their first job."

Robert Georgine, president of the AFL-CIO's building and construction trades department, said enforcement under Smith "is virtually non-existent . . . . The contractors are having a field day."

Before joining HUD in August, 1981, Smith was executive director of the Center on National Labor Policy in Springfield, Va., created in 1975 to provide "free legal aid to the victims of union power."

The center's brochure says the organization frequently sues labor unions and is trying "to stop the flow of government grants to unions; to establish union liability for monopoly behavior; to protect the public against illegal public employe strikes . . . . When union special interests go after helpless citizens, CNLP steps in."

As an assistant to HUD Secretary Samuel R. Pierce Jr., Smith, 35, a lawyer, has continued to criticize public employe unions. In a recent law school term paper called "New Federal Employe Union Activism: Freedom or Coercion?", he argued that Civil Service unions have become too powerful in opposing the administration.

In 1981, Smith wrote memos to senior HUD officials urging them to discredit the AFL-CIO's Solidarity Day demonstration as a "put-up job" by union leaders "to destabilize the Reagan administration."

Under federal law, Smith's office can assess "liquidated damages" of $10 a day for each employe who is not paid time-and-a-half for working more than 40 hours a week. Cases involving damages over $100 or those that originate with the Labor Department are referred to Smith for his decision, although in some instances the Labor Department makes the final ruling, which then can be appealed to court.

Smith also can order companies that do not pay prevailing wages set by the Davis-Bacon Act to provide back pay and can recommend that they be barred from working for HUD.

During a four-month period in 1981, Smith waived proposed fines totaling more than $53,000 and rejected recommendations that five of seven contractors be barred from future HUD contracts. Smith said the violations "were due to inadvertence and non-willful in nature."

In one 1981 case, Smith ordered his subordinates to return a $1,680 check to Wallick Construction Co. of Columbus, which had paid a fine for overtime pay violations shortly before he took office. The firm said it made an honest error in not ensuring that some workers were paid overtime.

HUD's Cincinnati office said, "We feel the fine should stand as assessed." Smith wrote that Wallick "has done repeated HUD work and should by now have sufficient knowledge of the labor standards," but said he believed the violation was unintentional.

In other cases:

* Regional HUD officials said a Nevada firm failed to pay $39,000 in minimum wages to 44 workers, did not pay overtime, submitted inaccurate payrolls and violated child labor laws by hiring a 15-year-old. Smith rejected a recommendation that the company be fined $320 and barred from future HUD work. "This is bull," Smith wrote his staff. ". . . Their decision is just a copout."

* A second Nevada company was proposed for debarment for allegedly submitting inaccurate payrolls and violating overtime and wage rules. "Thank you," Smith wrote his staff. "No debarment. Complaining employe had ax to grind. Complaint not substantive."

* When HUD officials accused an Ohio firm of falsifying its payroll, failing to disclose all its employes and not paying overtime to 12 workers, Smith rejected the proposed $3,550 fine and debarment of the firm. "What they call 'falsification' is not necessarily," he wrote. "Could be misunderstanding, carelessness."

* Smith waived an $11,710 fine against a Massachusetts firm for underpayment of wages, writing: "The company explained how the mistake occurred."

* Smith rejected a $13,994 fine against an Ohio company accused of falsifying its payrolls. "I don't think the 'falsification' is so," he wrote.

Clarence Logan, a former member of laborers international and a former acting director of HUD's labor office, said Smith detailed him to Alaska for six weeks last year and then fired him on grounds of non-performance. But Logan said the real reason was his aggressiveness. He filed a grievance over his dismissal.

"Smith felt that contractors were above doing things wrong and that we were picking on them," Logan said.

Union leaders said Smith acted against several of his employes on what they called his "hit list." In one case, the list had the notation, "Rif Brankin?" (In the federal government RIF generally means "reduction in force.")

Labor relations specialist Richard P. Brankin, a former member of the lathers union, was transferred from Chicago to Denver, his performance was reviewed three times and then Smith decided to fire him. Brankin successfully appealed the proposed dismissal.

"Baker Smith is obviously anti-union," said Ernest Parker, president of American Federation of Government Employes Local 476. He said Smith has singled out employes with labor backgrounds for firings, demotions and transfers.

Smith strongly denied that he has taken reprisals against union activists. He described his relations with union leaders as "excellent," and said he viewed the grievances that nine employes have filed against him as a sign of his effectiveness.

"That's part of the game," he said.