Cases of out-right fraud are surfacing in association with the Davis-Bacon Act. The 65-year old legislation requires contractors to pay workers on federally-subsidized projects what the Labor Department determines is the local union-scale wage.

For years it has been obvious that Davis-Bacon freezes out many lower-skilled workers, primarily blacks and Hispanics, from these projects. Now it has become clear that many "prevailing wages" appear to have been calculated using fictitious projects, ghost workers and companies established to pay artificially high wages.

• Oklahoma officials have reported that many of the wage survey forms submitted to the U.S. Department of Labor to calculate federal wage rates in Oklahoma were wrong or fraudulent.

• Records there show that an underground storage tank was built using 20 plumbers and pipefitters paid $21.05 an hour -- but no such tank was ever built.

• In another case, several asphalt machine operators were reported to have been employed at $15 an hour to build a parking lot -- but the lot was made of concrete, there were no asphalt operators, and the actual Davis-Bacon wage should have been $8 an hour.

In trying to investigate what appeared to be fraud, the Oklahoma Secretary of Labor was thwarted by union officials and contractors, stonewalled by federal labor officials and targeted by anonymous threats. Ultimately, she established that at least two of the inflated Oklahoma reports were filled out by union officials. Likely fraud examples have also surfaced in Ohio, Idaho, Colorado and Missouri.

The Oklahoma official who blew the whistle there calls Davis-Bacon a "welfare program" that is being used to "lie to federal officials and steal from taxpayers." She wants to see the program abolished. President Clinton has promised to veto any repeal effort.