Lax monitoring of prison telephones has enabled federal inmates to arrange for murders, import illegal drugs, and commit fraud from behind bars, according to a report released by the Justice Department inspector general yesterday.

The report noted that although all federal inmate calls are recorded, prison officials listen to only 3.5 percent of the tens of thousands of calls made by inmates each day.

Because federal agencies do not keep comprehensive data on inmates who use prison phones to commit crimes, the 150-page study does not provide an estimate of how often such crimes are committed, relying instead on a series of embarrassing case studies.

The report described, for example, how in February 1997, Baltimore drug dealer Anthony Jones, jailed in the Allenwood, Pa., federal prison, used prison telephones to order associates outside prison to murder two witnesses he believed had testified against him. One of the witnesses was killed; the other was shot several times.

Jones was convicted of murder in the slaying and received a life sentence. But according to the inspector general's report, "even after this conviction, Jones retained full telephone privileges" and the federal Bureau of Prisons did not take steps to monitor his phone calls.

Also cited was Washington drug dealer Rayful Edmond III, who used Lewisburg, Pa., prison telephones to run a drug trafficking operation through contacts to Colombian cocaine cartel members he met in prison.

Edmond told investigators from the inspector general's office that he talked on the phone every day to carry out drug deals and even participated in telephone conference calls to Colombia. Like other inmates, he used code language and assumed that "rookie guards" would not be able to decipher his conversations.

In one recorded conversation Edmond told an associate, "You should see my new girlfriend. She is six feet tall. She lives down where we used to live on 22nd street." The report said that "this seemingly innocuous statement meant that he had six kilos of cocaine to sell for $22,000."

Even though the FBI obtained information from informers in 1992 that indicated Edmond was arranging to smuggle drugs into the prison through telephone calls, the Bureau of Prisons "took no action to discipline Edmond or restrict his calling privileges," the report said. Two years passed before an FBI investigation forced Edmond to admit he was drug trafficking in prison.

In the report, Justice Department Inspector General Michael R. Bromwich faulted the Bureau of Prisons for failing to monitor more inmate calls and described the bureau's "limited attempts" as "virtually useless in preventing inmates from committing crimes using the telephones."

Telephone privileges for federal inmates have expanded dramatically since the 1970s, when inmates were permitted one call every three months. Today, inmates can make as many calls as they can pay for or as many collect calls as outsiders will accept, part of an effort to help inmates maintain family ties and make them less likely to return to prison.

Bureau of Prisons spokesman Todd Craig said yesterday that the bureau has been aware of phone abuses for several years and is installing a computerized system to improve the monitoring of inmate calls.

The inspector general's report, however, discounted new technology as a solution unless bureau officials also pursue "aggressive intervention" and place "meaningful restrictions on inmate telephone privileges."