In the spring of 1985, shortly after he left the White House to establish a Washington lobbying firm, Michael K. Deaver shocked and surprised a lot of people by contacting some of his old colleagues on behalf of his new clients.

When his actions were questioned, Deaver gave his critics another jolt: His activities were perfectly legal. That's because, when it comes to ethics, the White House is a house divided.

Lyn Nofziger, also an aide to President Reagan until he left the White House in 1982, stands accused of doing the same kinds of things Deaver did. But unlike Deaver, Nofziger is accused of committing a crime because of his lobbying contacts.

The reason: On March 7, 1983, a branch of the Office of Personnel Management (OPM) decided that most of the 1,500 White House staff workers -- including Deaver -- are free to lobby many of their former colleagues the day they leave the administration. In some cases, such as Deaver's, an ex-official may contact a person whose office literally was just down the hall.

The decision by OPM's Office of Government Ethics declared that the Executive Office of the President consists of nine "separate statutory agencies," a designation that frees former White House workers from several key provisions of the 1978 Ethics in Government Act. The law bars virtually all high government officials from lobbying their own former office until a year after they leave the federal payroll. Under the March 1983 decision, Deaver was permitted to lobby executives of the eight other White House agencies when he resigned.

"What the Office of Government Ethics did by regulation effectively gutted the ethics law for the most highest-ranking people in this government," said Ann McBride, a senior vice president of Common Cause.

McBride and many members of Congress charge that the 1983 ethics rules perverted a provision of a law designed primarily for workers in large bureaucracies such as the 76,920-employe Justice Department, not a small but pivotal unit such as the White House.

The issue is central to Deaver's current trial, where he stands accused of lying to a congressional subcommittee and a federal grand jury about his lobbying contacts.

The prosecution contends that Deaver may have been motivated to lie from fear that his efforts would prove either illicit or embarrassing.

But Deaver's lawyers say that he had high-quality legal advice and that everything he did was legal. As a result, they say, Deaver had no motivation to lie. Every time prosecutors get a high administration official to testify about a Deaver contact, defense lawyers quickly counter with a rapid succession of questions, pointing out that the contacts were, in fact, proper and legal.

The irony of the case, a point not lost on Deaver's lawyers, is that, in his zeal to testify and disprove the allegations of improper conduct, Deaver was accused of lying for allegedly failing to recall some of the contacts he made legally.

Under the "compartmentalization" of the White House, deputy chief of staff Deaver was classified as an employe of the "White House Office and the Office of Policy Development." As such, he was free to contact members of the National Security Council, including national security advisers John M. Poindexter and Robert C. McFarlane, whose offices were in the West Wing near Deaver's suite next to the Oval Office.

Deaver also was allowed to contact employes of the White House's seven other "separate statutory agencies": the Office of Management and Budget, the Council of Economic Advisers, the U.S. Trade Representative, the Council on Environmental Quality, the Office of Science and Technology Policy, the Office of Administration and the Office of the Vice President.

The compartmentalization decision, which the General Accounting Office has said was adopted without any supporting evidence, has helped fuel the efforts of Sen. Strom Thurmond (R-S.C.) and others to strip OPM of the authority to make such decisions. That provision is part of a sweeping bill that would rewrite restrictions on lobbying by former government workers, replacing criminal penalties with civil ones, which legislators say would be easier to enforce. The bill was approved unanimously by the Senate Judiciary Committee last summer.

OPM's actions approving the White House compartmentalization have been "very misleading and deceptive and unfair," Sen. Carl Levin (D-Mich.) said at a hearing in July. He called the decision "a mess" that has led to "absolute chaos" over what rules apply to former White House staff members.

Levin and others have said that the reason Deaver is charged with five counts of perjury and not specific violations of the 1978 Ethics in Government Act is that Deaver left the White House after the 1983 decision became effective. Nofziger, who also became a Washington lobbyist after he left the White House in early 1982, faces a trial Jan. 16 on charges of making improper contacts with high government officials in the year after he left the administration.

The ethics act also makes it illegal for former government officials to lobby on issues in which they played a role while in office, a provision that Deaver's lawyers said did not affect Deaver because his presidential duties tended to deal more with the style than the substance of Reagan's actions.

Despite the outcries that erupted last year after disclosure of Deaver's White House lobbying, Reagan administration officials who obtained the compartmentalization decision say they were only following the lead of the Carter administration.

While President Jimmy Carter publicly sought to make stronger ethics regulations a hallmark of his administration, letters show that his staff took the first steps toward loosening the rules covering actions by former White House staff members.

On Jan. 16, 1981, four days before Carter left office, Jack H. Watson Jr., the president's chief of staff, wrote the director of the Office of Government Ethics. Watson declared that the White House had decided that it should be divided into eight "separate agencies" under the 1978 ethics bill that Carter had signed into law.

In a six-page letter that members of the Reagan transition team refused to endorse, Watson reversed the standard protocol for asking the Office of Government Ethics to investigate his agency. Watson, acting with the advice of White House counsel Lloyd N. Cutler, said he was only advising the ethics office of what the decision was.

Watson said the intent was "not to weaken" the law, "and I hope it didn't do so."

Cutler said in an interview that he viewed the action as a necessary and proper step to shape "the exit rules" for the departing staff. It was not an effort to weaken the ethics rules, he said.

"We do not believe that any action is required by your office with regard to this interpretation," Watson said. That point, however, was not lost on J. Jackson Walter, the Carter appointee who headed the ethics office.

After asking the Carter White House to "give the most cautious advice possible on the status quo to departing staff members," Walter waited until after the Reagan administration had asked him to remain and then made a frontal attack on Watson's logic.

In a March 31, 1981, letter to James A. Baker III, then Reagan's chief of staff, Walter rejected "Mr. Watson's threshold interpretation" that the White House staff could be divided. "In brief, we have found support for the opposite interpretation that the Executive Office of the President is one umbrella 'agency' with changing components or units whose responsibilities themselves change from time to time," Walter wrote.

Walter quoted from a Carter memo on reorganizing the staff and said it was clear that the president viewed his staff "as one umbrella institution or agency with defined missions and a single budget."

On Dec. 6, 1982, three months after Walter left the ethics office, then-White House counsel Fred F. Fielding decided to reopen the issue. In a "Dear David" letter, Fielding asked David Scott, a career government lawyer and an old friend, who was then acting director of the ethics office, to consider dividing the White House into nine agencies.

"The theory was that the White House designation was too broad, and it seemed logical to narrow it," Fielding said last year. He declined to be quoted for this article, citing the possibility that he may be called as a witness at Deaver's trial.

Sherrie Cooksey, then one of Fielding's White House assistants and now director of legislative affairs for the Federal Communications Commission, handled most of the staff work on the issue, which she characterized as "a leftover" from the Carter administration.

"This {the ethics law} was there and in place. We were the first administration to have to deal with it from start to finish," she said.

Fielding's office realized that people would begin to leave the administration and that questions about post-White House conduct "needed to get fleshed out," she said. "It was dealt with strictly as a legal issue," she said. The timing of the request had nothing to do with Watson's departure, Cooksey said.

"It was one of those things that lawyers do that no one cares about," she said. At the time there were "no complaints, no hurrahs, no nothing."

In fact, the compartmentalization decision of March 7, 1983, went largely unnoticed until news reports surfaced last year noting that Deaver, shortly after he left the government, had contacted budget director James C. Miller III about the B1 bomber being built by Rockwell International Corp., a Deaver client. That led to congressional inquiries and the GAO investigation into how the order was drafted.

The GAO report, issued in February, sharply questioned the basis for the compartmentalization, noting that its auditors had been unable to find any documentation in the ethics office for the decision.

The two-page ethics office finding offered "no explanation for its decision," the GAO said. Moreover, the GAO said in congressional testimony this summer that the descriptions that Fielding had supplied for the roles of the various branches of the Executive Office of the President "did not themselves appear to establish conclusively that the EOP units exercise functions that are distinct and separate from one another."

Rosslyn S. Kleeman, a senior GAO official, said that, for example, the White House Office of Administration's role appears to be intertwined with those of all the branches it supports. The National Security Council's role often mingles with that of the Office of the Vice President, who is a statutory member of the council, she said.

David H. Martin, the Reagan appointee who then headed the ethics unit, conceded to Sen. Levin that his office was understaffed and its rulings were often dated and lacked uniformity. Moreover, he said that some records his office used to make the 1983 decision on the White House may have been destroyed.

But Martin, who has since resigned, stood behind the decision and subsequently reinforced his testimony with release of a letter acknowledging that the decision was based largely on a review of the laws and executive orders setting up the various White House offices.

"We recognize that some may say that the Executive Office of the President is unique and should be handled differently from other agencies or that the statutory test {checking the laws} is inadequate," Martin said. "However, the present statutory language does not treat the Executive Office of the President any differently than the other executive branch agencies, and we are constrained by the principles which we have applied to all other executive branch agencies from making a different determination."

If that is confusing, Levin and others said, consider the Agriculture Department. It has not been compartmentalized under the ethics act, and that means that a former senior Agriculture Department executive is effectively stopped from lobbying any of the agency's 105,000 employes for a year after leaving office.

And the 677 National Credit Union Administration employes have been told they are blocked from dealing with each other but can lobby any of the five workers in the agency's central liquidity facility, Levin said.

The idea of drafting rules that would allow some lobbying but deny other forms is so perplexing that some members of Congress want to outlaw all contacts.

"I think we ought to have a fairness curtain," Sen. Ted Stevens (R-Alaska) said at Levin's hearings last summer. "I don't care if you are a typist or you're the president, you shouldn't have anything to do with the federal government, if you served in the federal government."