SEN. CHARLES GRASSLEY has been a tiger on the issue of defense contracting fraud. He has been prodding, insistent and voluble about the need to go after crooks and con men who bilk the taxpayers and cheat the defense establishment. He wants cases of waste and abuse ferreted out and wants those charged with fraud to be prosecuted. This zeal is, by and large, commendable, but on at least two occasions in the last year, the senator's actions have led to serious confrontation with the Justice Department.

Last November, angered by the refusal of then- attorney general William French Smith to turn over certain internal documents involving the criminal investigation of a defense contractor, Sen. Grassley sought to cite the cabinet officer for contempt of Congress. When he failed to receive the support of his own committee, the matter was dropped, but animosity between the legislator and the Justice Department has continued to grow. This week, at a Senate subcommittee hearing, the senator called a surprise witness whose testimony -- characterized by the Justice Department as "erroneous, misleading and inflammatory" -- would, according to the department, have seriously jeopardized a pending criminal case involving three former GTE employees. When a Justice Department official immediately and dramatically demanded that the testimony be postponed or taken in executive session, the senator listened to her argument and complied. Unfortunately, the text of the witness' statement had already been released, and government lawyers now say they may have a more difficult case to make in court.

Senators have not only the right but the obligation to oversee the work of executive departments, to question and to prod and to demand answers about expenditures and procedures. Difficulties arise, however, when they get deeply involved in curent cases and fail to draw a clear line between the responsibilities of a legislator and those that are the prosecutor's alone. Public hearings about cases that are about to come to trial are particularly sensitive.

There is some dispute about whether this week's hearing did, in fact, jeopardize a prosecution, but the whole misunderstanding could have been avoided if the Justice Department had been given some advance notice that the witness intended to discuss the case, so that potentially prejudicial testimony could have been deleted or heard in private. Congress and the Justice Department have the same goal when it comes to corrupt defense contractors, but each has separate responsibilities. It is important that jurisdictional boundaries be respected as these tough cases are prosecuted.