In the summer of 1985, a Roman Catholic priest named George Augustus Stallings Jr. bought his independence for $60,000 and named it Augustus Manor.

The 80-year-old house, just up the hill from his St. Teresa of Avila Church, didn't look like much. But in the next two years Stallings restored it and adorned it with European and Oriental antiques, a Japanese garden and an Italian marble bathroom.

The "jewel of Anacostia," as Washingtonian magazine called Augustus Manor, became a sign of Stallings's success as a parish priest and a preacher of national renown. His congregation was on its way to a tenfold increase in membership, a major renovation of its historic sanctuary and a leading role in the adaptation of Roman Catholicism for black believers.

But Augustus Manor was more than a symbol. It was an act of defiance: Cardinal James A. Hickey, the archbishop of Washington, has a firm rule that parish priests live in rectories.

Hickey asked his old friend for an explanation. Stallings said he didn't own a house, that he lived in the rectory, church officials said.

The two men had clashed before over Stallings's lifestyle and financial stewardship. This time, Hickey didn't believe Stallings's explanation, so he sent an aide to examine real estate records. The name on the deed: "George A. Stallings Jr."

That discovery damaged, perhaps irreparably, the bond between the two men and set the stage for their well-publicized break last summer, when Stallings condemned the Roman Catholic Church as racist and launched his own church, the Imani Temple African-American Catholic Congregation.

This series of articles, based on interviews with more than 150 parishioners, church officials, friends and critics of the two men, details the roots and evolution of that conflict, including information known and unknown to Hickey and the archdiocese over the years.

Church officials said they were aware, for example, that since 1979 there had been scattered complaints from some parishioners at St. Teresa who questioned Stallings's stewardship of church funds. When Stallings bought Augustus Manor and began renovating it, some parishioners raised questions as to how he could afford it on his $10,000 salary, according to a church official. Stallings has said he paid for the renovation with his earnings from preaching revivals around the country.

Documents reviewed by The Washington Post show that Stallings wrote a $4,478 check on a St. Teresa account for a cedar fence that surrounds Augustus Manor. Parish lay leaders and archdiocesan officials said recently they did not know of any expenditure of parish funds for the priest's home. A spokesman for Stallings declined to say why Stallings used the parish account or whether he reimbursed St. Teresa.

Church officials also were aware of parishioners' concerns that Stallings might be engaged in homosexual activity in the St. Teresa rectory and later at Augustus Manor, a church official said. Stallings said that wasn't true, the official said. Some parishioners told officials that they believed Stallings's social life interfered with his properly attending to his pastoral duties. The parishioners offered few specifics.

A former resident of Augustus Manor, Derek Edwin Brown, 25, has told The Post that he and Stallings, 42, were lovers from 1987 to 1989 and that Stallings put him on the church payroll for nine months as a $17,000-a-year pastoral assistant. Brown and other employees said he spent much of his work time out of town as Stallings's traveling companion.

Two former altar boys who served with Stallings also told The Post that they had sexual relationships with Stallings, one beginning at age 11 in 1976 and ending eight years later, the other at age 16 in the summer of 1977.

Stallings has said an article about the 16-year-old, published last September, was "scurrilous, baseless and unmerited."

Church officials said Hickey never had what one termed "credible and persuasive evidence" of improper conduct by Stallings. The complaints exacerbated tensions between the two men, but Hickey was reluctant to deal more forcefully with Stallings for several additional reasons, his associates said.

Hickey believed in giving his priests the benefit of any doubt, they said. He did not want to single out a black priest for punishment, they added, and considered himself a father figure to the younger priest.

People who know Stallings well, particularly fellow black clerics, said it had been inevitable that Stallings would leave the church.

He was a working-class man striving for affluence in a church that values asceticism, they said, and a homosexual man in a church that brands homosexual activity a sin. He also was a black man in what he considered to be a racist white church, Stallings's friends said, and an ambitious man trained in Rome for a leadership role he became convinced the church would never give him.

"It was obvious the man had a great deal of promise. He still has," said a black priest who was Stallings's friend for a dozen years. "They were grooming him, but he missed the boat because of the indiscretions.

"They were never going to make him a bishop if he was so openly homosexual . . . . He still knew he was talented, and he thought he should still make bishop. That preyed on his mind. He was never held back because he was black."

Ten months later, the effects of the schism linger.

George Stallings has been excommunicated from the church that nurtured him almost from birth, gaining in the breach his independence, fame and a sizable new church, vibrant but struggling.

James Hickey is left to endure all he had hoped to avoid: the well-publicized loss of a talented priest and many of his followers, the brand of "racist" from a priest he had supported and the taint of scandal on the church.

Stallings's former parishioners at St. Teresa remain divided. Some have stayed at the parish they love; others have followed the priest who built it. A few worship in both houses.

And the Roman Catholic Church continues to wrestle with serious questions about its relationship with its 2 million black believers in the United States -- questions brought to prominence by George Stallings.

Stallings and Hickey declined several written requests for interviews with The Post when told the subjects of these articles.

"We feel it's in our best interest not to participate with the white media," said William E. Marshall Jr., spokesman for Stallings and his church.

Hickey's deputy, Vicar General William J. Kane, responded in a written statement. "The Archdiocese is not involved in your efforts to investigate Father Stallings's past conduct or behavior," the statement said in part. "We are deeply distressed that this entire matter has wounded the Church of Washington and has hurt specific individuals."Skidding in the Fast Lane

The roots of the Imani Temple reach back at least 17 years to Rome.

In the summer of 1972, George Stallings, a 24-year-old seminary student, was skidding out of the fast lane of the Roman Catholic Church when a 51-year-old bishop named James Hickey set him back on course.

Stallings, the oldest child of a forklift operator and a housekeeper from New Bern, N.C., had always wanted to be a Roman Catholic priest. As a 9-year-old child, he led his sisters in mock communion services with Necco candy wafers.

Trained as an altar boy and educated in Roman Catholic schools in the Protestant South, he left home at age 16 for a preparatory seminary across the Piedmont in Asheville, N.C. A top scholar and student body leader, the engaging young man was a natural selection to attend seminary at the Pontifical North American College, the American Catholic headquarters in Rome. He was the third black student out of more than 2,500 in the school's 111-year history.

After two years in Rome, Stallings came home for summer break sporting a mustache, which his bishop, Vincent S. Waters of Raleigh, N.C., declared inappropriate for a priest.

"It's an expression of being black!" Stallings recalled arguing. He shaved, but the bishop, citing insubordination, reassigned Stallings to parish duties at home.

Stallings called Rome to seek help from Hickey, who was rector of the college. Hickey arranged for Stallings to be transferred to the Washington archdiocese, which returned him to the seminary in Rome, according to another priest at the college, the Rev. Roger C. Roensch. Stallings graduated with honors, according to his grade card.

Stallings was ordained at St. Matthew's Cathedral in downtown Washington in July 1974 and assigned to Our Lady Queen of Peace, a poor parish near the Fort Dupont Park ice rink in Southeast Washington.

He was thrilled to be working in the nation's capital, he said in an interview last year, and saw his primary job as evangelizing the city's many non-Catholic blacks.

In the spring of 1976, Stallings visited Archbishop William W. Baum and urged him to appoint a black pastor. The only previous black pastor in the archdiocese had died nearly 20 years before. That July, Baum promoted the Rev. James B. Joy, who had been an assistant pastor for 15 years, to pastor of St. Gabriel's Church, at Grant Circle in Northwest Washington.

Two months later, Baum selected Stallings to pastor St. Teresa, a small church at 13th and V streets SE. Stallings was only 28 and had served a remarkably short apprenticeship, two years. Building a Parish

Stallings inherited a congregation of fewer than 200 in a neighborhood that ranked 164th out of 183 in the city in per capita income. Like so many inner-city parishes, St. Teresa had closed its school and its convent. The sanctuary was run-down. The rectory was worse.

The new pastor plunged into action. He replaced the old staff with younger employees. He renovated the rectory. He helped lead a campaign to keep the local supermarket. Presenting himself as a male role model in a neighborhood where every third family was led by a single mother, he built up the church's youth program.

To attract blacks from Protestant religious traditions, Stallings laced his sermons with phrases from gospel hymns. Driven by high-spirited preaching and powerful singing, services expanded from 45 minutes to three hours.

His oratory resonated with the reality of urban black life. He talked frankly of poverty and drugs. He joked with the words to pop tunes and soap operas: "If Jesus is not your 'Guiding Light,' then you need not 'Search for Tomorrow' or expect to be part of God's 'Dynasty' in 'Another World' because you'll only have 'One Life to Live.' "

Church attendance skyrocketed, to 500, to 1,000, to 2,000. Other black priests took note of Stallings, especially how he assimilated black culture and spirituality into the liturgy and parish life.

"I remember back about 1980 or '82 there was a group of us {young black priests} who would meet occasionally at George's . . . and talk about our frustration and what our choices were," said a priest who was a friend in those days. "We wanted to see our blackness work in the church, not to give up our blackness or our Catholicity.

"But most of us saw we had only two choices: We could either . . . compromise with the church or we could leave the church. George was one who did not want to compromise. He was talking then about starting his own church. Most of us didn't think such a thing could succeed, but George did."

Behind the scenes in the early years, Stallings crossed swords with parish lay leaders. An archdiocesan black Catholic group, then an informal advisory body to the bishop, heard in 1978 or early 1979 from parishioners who questioned how Stallings could afford to furnish the rectory with antiques, according to a former member of that council, Ron Ealey. Stallings was questioned by an archdiocesan official and said he had done nothing wrong in obtaining the antiques, another official said.

Mary A. Garnes, parish council president in those years, said Stallings routinely spent more money on specific items than the council had approved. When asked about the expenditures, "he'd go into a rage, saying they {council members} had no right to ask questions," Garnes said in an interview.

Garnes resigned the presidency, the top position for a layperson at St. Teresa, in September 1982. In an open letter to parishioners, she expressed concern about finances and other matters and said Stallings was fostering divisions in the parish.Parish Finances

In the next few years, Stallings began to withhold from the archdiocese part of St. Teresa's assessment, or portion of the Sunday collection that he was required to send, an archdiocesan official said.

Aides to Hickey, who had become archbishop of Washington in 1980, asked Stallings several times to make the full payments but he did not, church officials said.

In 1985, Stallings stopped making the payments altogether, saying the money would be used instead for a long-awaited renovation of St. Teresa. After Stallings left St. Teresa, parishioners agreed to pay the assessments over a long term. The amount totaled about $100,000.

At the time he began withholding the payments completely, Stallings told parishioners it was because the archdiocese had refused his request to help pay for the church renovation. Archdiocesan officials said recently that they normally help parishes obtain low-interest loans for renovation, but do not help pay for the remodeling itself.

In October 1985, at Stallings's suggestion, the parish hired a general contractor to renovate the church: his friend Hayden V. Blanc, who had lived at the St. Teresa rectory and was renovating the house Stallings had bought that summer up the hill on Mapleview Place.

Blanc, 38, a skilled craftsman, had left a string of angry customers who complained to the District government that he owed them money from an antiques business he had owned in Adams-Morgan in 1984.

As a result of those complaints, Blanc was charged with eight misdemeanor violations of the city's Consumer Protection Act. The cases were dropped when he did not appear in court, according to a District official. Blanc has said he made payments to some customers and plans to work out resolutions with the others.

Blanc said Stallings sometimes used church funds for the house renovation. He said Stallings wrote some checks to him on the church account, and Blanc cashed them and used the money for materials and labor. In other cases, Blanc said, Stallings wrote checks directly to vendors. It could not be determined whether Stallings reimbursed the church or whether he had personal funds in the church account.

Documents show that on Sept. 2, 1986, Stallings wrote check No. 4707 on the St. Teresa account for $4,478 to Discount Fence Center in Bladensburg. Invoices and ledger sheets from the company show the payment was for materials and installation of a cedar fence at Stallings's house. Blanc said he hand-cut the fence with hundreds of pickets in the shape of flames symbolizing the Holy Spirit.

Check No. 4707 was signed by Stallings and countersigned by Ronald J. Jordan, Stallings's administrative assistant. Jordan left St. Teresa in November 1987 after he took ill, according to several of his friends, and died in March 1988 in Texas of complications from AIDS.

Blanc said Stallings spent $80,000 to $100,000 on the house renovation. Blanc said he recalls several church checks other than the one for the fence, but said he did not keep detailed records of either the church or the house renovation.

Blanc also did not have access to the church's or Stallings's records, which could have indicated whether Stallings reimbursed the church. Blanc's friendship with Stallings ended last fall as Blanc moved out of Augustus Manor.

Stallings said in an interview last year that he paid for the house renovation with money earned in his many revival appearances around the country. He made $200 to $500 a day, he said, and revivals usually ran two or three days. His revival schedule picked up in 1985, and by 1988 he was preaching about 25 revivals a year, he said.

Fund-raising for the St. Teresa renovation was coordinated by a committee of parishioners, but disbursement of those funds was handled by Stallings and Sharon W. Covington, a parishioner who did the books, according to Andre Glaude, then the parish council president.

Covington, who recently kept the books for Stallings at Imani Temple, described the bookkeeping during the St. Teresa renovation as "unreal."

"Father Stallings would tell me what checks were for. I had no reason to doubt him," Covington said.

Parish lay leaders at St. Teresa said they had believed at the time that all the money collected for the St. Teresa renovation was used properly. They could see results of their donations: woodwork, stained glass, stations of the cross, symbols of their faith and their race crowned by "The Lord of the Universe," a black Jesus Christ painted on a heavenly throne.

Glaude, the parish president, said he never received a thorough accounting of the cost of the church renovations. "I wondered about it, but I didn't push it," Glaude said.The Talk of Anacostia

One of Stallings's aides said he grew uncomfortable with his perceptions of how Stallings was using church money and left the parish. Verlin Yenzer, director of adult religious education at St. Teresa in the mid-1980s, considered himself a close friend of the priest and accompanied him to look at the house before he bought it.

Yenzer said that one of the things that caused him to leave was a conversation one Monday in 1986, after a large Sunday collection. Stallings called him and said that the offering was large "enough to buy my kitchen cabinets," Yenzer said. Yenzer kept his concerns to himself.

The archdiocese "never had information that any church funds were used to renovate" Augustus Manor, and any such expenditure would have been against policy, Vicar General Kane said in his written response to questions.

The archdiocese does not formally audit the books of its 135 parishes, Kane said. The accounting firm of Peat Marwick Main & Co. did a routine financial review of St. Teresa in January 1988 for the fiscal year 1986-87 that covered mathematical accuracy, accounting procedures and the documentation of financial reports, Kane said, but it was not a detailed review of receipts and expenditures. Nothing unusual was found.

"We take what the priest gives us and accept it at face value," another official said. "We always give the priest the benefit of the doubt. Even had the auditors seen that fence check, they wouldn't have questioned it."

When Augustus Manor was finished, it was the talk of Anacostia. Stallings showed off Augustus Manor on a video house tour for WHMM-TV (Channel 32).

"Go on, live it up," Stallings said, according to the videotape. "Go out and have a more abundant life. Go on out there and let the Lord prosper you. But, while He's doing it, know it is from Him that your blessings come." Staff researcher Bridget Roeber contributed to this report. NEXT: A clash of wills