Abe Pollin, principal owner of the Bullets basketball team, the Capitals hockey team and Capital Centre, said he felt completely vindicated by a judge's ruling Friday on a lawsuit brought by Arnold Heft, who holds one-third interest in the arena.

"My feelings are that I was accused of being malicious, willful, moved money around that I shouldn't, in effect being dishonest, and the judge took every one of those charges and ruled in my favor," Pollin said yesterday in an interview.

Prince George's County Circuit Court Judge Albert T. Blackwell Jr. found Pollin to have made "fair and reasonable" adjustments of $860,000 from the arena partnership, known as Washington National Arena Limited Partnership (WNA), to the teams.

The judge dismissed Heft's claim that Pollin improperly instituted the adjustments, which concerned licensing arrangements between the teams and WNA. Heft unsuccessfully sought the $860,000 to be returned to WNA and the adjustment rescinded for any future transactions.

It was incorrectly reported in Saturday's editions of The Washington Post that repayment was ordered for the adjustments Pollin had made between WNA and the teams.

"The adjustments were made by Pollin as a valid exercise of his authority and on the basis of his decision that they were fair and reasonable compromises . . . " the judge wrote.

The adjustments from WNA to the teams included money that was derived from ticket revenues, a charge for use of the Centre's Telscreen and complimentary tickets. "These and other disputed adjustments are upheld because they were a fair and reasonable balancing of the entities' (the two teams and WNA) interests," the judge concluded.

The judge dismissed numerous allegations by Heft against Pollin, including several contending that Pollin intentionally, willfully and maliciously breached the fiduciary duty owed Heft and WNA.

In addition to the $860,000 in adjustments, at issue in the case were check transactions totaling $885,000 from WNA to the teams. The judge found this sum to be WNA's assets. Pollin said on Friday that WNA and the teams always had viewed the $885,000 as a loan and that the money "has long since been paid back" to WNA.

The court entered judgment of $885,000 in favor of WNA. Pollin said that as general partner of WNA he determines the use of arena funds, cited improvements to the facilities that he was planning and said that it was wrong to assume Heft will receive one-third of the $885,000.

"I honestly felt more strongly about this case than anything in my business life," Pollin said. "Because the thing I treasure most in life is my reputation. To have someone accuse me of cheating and being dishonest is the worst thing you can do to me. Because my word has always been my bond."

Pollin listed several adjustments involved in the case. They concerned use of the Telscreen, ticket revenues, complimentary tickets, Capitals rent and revenues from "Sky Suites" for Bullets games. "Every one, the judge says they are okay," Pollin said.

Regarding his business relationship with Heft, Pollin said, "From the first day that I made the deal with Arnold Heft, I told every one of my people that had anything to do with money if there's ever a question, bend over backwards to favor WNA." Pollin said he had "bent over backward to protect" Heft.

Pollin said he told Heft at the beginning of their business dealings at Capital Centre, "I will have to be wearing these three different hats," referring to his roles in WNA, the Bullets and the Capitals. The judge stated in his opinion that he examined "the transactions in light of the fact that all parties were apprised of and agreed to" this situation.

Heft could not be reached for comment. But his attorney, Stephen Grafman, said, "I do not believe it appropriate to engage in debate and discussion in this opinion. We're pleased that the court rendered a monetary judgment and awarded attorney fees ($90,000)".