In a case that has fueled doubts about the State Department's willingness to punish wayward diplomats, a former consular official accused of trading visas for favors and cash declined yesterday to testify before congressional investigators.

Charles Parish Jr., who ran the non-immigrant visa section at the U.S. Embassy in Beijing from July 1994 to May 1996, cited Fifth Amendment protection against self-incrimination in declining to testify at a hearing of the House Government Reform Committee.

Parish has been accused of accepting cash, free lodging and gifts in exchange for granting visas to Chinese friends and girlfriends, some of whom accompanied him on visits to the United States. Some of the visas were given to representatives of a government-owned business with ties to Johnny Chung, the Democratic Party donor who helped fuel the 1996 campaign finance scandal with his revelations of contributions made on behalf of a top Chinese official.

In a report timed to coincide with yesterday's hearing, congressional investigators concluded that the State Department had mishandled its probe of the allegations, destroying key documents and failing to interview key witnesses. As a consequence of those and other lapses, the report said, Parish was never disciplined and instead was returned to Washington "for additional sensitive assignments, given a merit pay raise and allowed to retire with a full pension in 1998."

State Department officials denied that the case had been mishandled or that the department erred in allowing Parish to continue his career in Washington after the allegations against him had surfaced. To do otherwise, they said, would have violated rules that protect federal employees against false accusations.

"The federal government aggressively pursued leads in the Charles Parish case," said Bonnie R. Cohen, undersecretary of state for management, in testimony prepared for the committee. "However, the investigation did not reveal criminal wrongdoing. Nor did the investigation find any basis for referral to the Bureau of Personnel for any further administrative action."

A State Department inspector general's report on the matter was not provided to the committee, staff members said, on instructions from the Justice Department, which is still investigating the case.

The allegations against Parish--and the State Department's dilatory response--were first described by the Los Angeles Times in May. The congressional report confirmed the thrust of the Times report, citing "substantial evidence that Charles Parish issued visas to parties that provided him with money, gifts and other gratuities."

Some of the most damaging allegations came from Chung, who testified in May that he saw the chairman of the Haoman Beer Company give Parish a bag containing Chinese currency and passports that needed to be stamped with U.S. visas. According to the congressional report, Parish also provided visas for representatives of a government-owned company that in turn provided him with gifts and put him up at a condominium in Las Vegas, among other things.

In addition, the report said, Parish had "inappropriate" contacts with Chinese women who subsequently received visas to the United States.

In an interview with the Los Angeles Times, Parish denied that he had accepted money for visas. But he acknowledged that he had received free lodging from an American subsidiary of China National Cereals, Oils & Foodstuffs Import & Export Corp. after overruling a subordinate and approving a visa request submitted by a representative of the company.