The brother-in-law of Baltimore Mayor Kurt L. Schmoke received contracts worth $327,001 from the city's public housing authority last year as part of the agency's emergency no-bid repair program.

John A. Palmer received the funds to renovate 20 units and several hallways in a public housing development in South Baltimore through his contracting firm, J. P. Construction Co., Housing Authority officials said.

Mr. Palmer is the husband of Deborah Locks Palmer -- the younger sister of Patricia Locks Schmoke, the mayor's wife.

The Palmers live on the same block in Northwest Baltimore as the Schmokes, in a home they built on land given to the couple by the mayor and his wife. The houses are separated by an undeveloped parcel of land owned by the Schmokes.

Mr. Schmoke and Daniel P. Henson III, executive director of the Housing Authority of Baltimore City, said in separate interviews this week that they saw no problem with a relative of the mayor's having received money under the $23 million no-bid program. The program is under investigation for possible corruption by a federal grand jury and is the subject of an audit by the Office of the Inspector General of the U.S. Department of Housing and Urban Development.

"There clearly is no conflict here," Mr. Schmoke said in an interview yesterday, adding: "There is no benefit for me and my wife from John's contract with the Housing Authority. I did not have anything to do with John's getting a contract, contacting anyone on his behalf or influencing anyone."

Mr. Henson, a longtime political confidant of Mr. Schmoke's, said he was aware that Mr. Palmer was related to the mayor by marriage but did not see that as a reason to keep him out of the program.

"Do you exclude a guy because there's that relationship?" Mr. Henson asked. "I think the relationship doesn't come close to meeting the appearance of a conflict of interest, unless you can show he gave the mayor a kickback," he added.

Mr. Palmer said this week that he had never done any work for the city before being awarded contracts under the authority's no-bid repair program.

Mr. Palmer said he did not discuss his participation in the program with Mr. Schmoke beforehand and his relationship with the mayor had nothing to do with his selection.

"I came in when they needed some people. And they gave me a chance. It was just sheer luck," Mr. Palmer said.

Mr. Palmer's company is the third firm owned by relatives of city officials to have received money under the no-bid repair program.

In April, The Sun disclosed that two companies -- one owned by the parents of Housing Authority board member Larry Jennings Jr. and the other owned by Mr. Jennings' sister -- had received contracts under the program created to reduce the vacancy rate of units owned by the agency.

Mr. Palmer's company was one of 26 minority-owned contractors to participate in the Housing Authority's no-bid repair program. Many of the 26 were small home improvement business that had never beforedone work for the government. Together, they renovated 579 units at a cost of $11.5 million, or about $20,000 per unit.

The 26 firms were among 32 companies selected to rehabilitate 1,136 units in Housing Authority developments and in sites scattered throughout the city. Of the 32 firms, 11 received more money under the program than did Mr. Palmer's, Housing Authority figures show.

In an interview last month, Mr. Henson said he was particularly proud of the number of minority-owned firms in the program.

"I don't think that there's ever been an effort in this town at least to utilize minority contractors on a program like this to the extent we tried to do," Mr. Henson said. "I think that's an important side benefit to the program."

Mr. Henson launched the no-bid repair program in spring 1993 to reduce the authority's 2,400 vacant units, out of a total of about 18,000.

To speed up the repairs of the vacant units, many of which were being trashed and vandalized, Mr. Henson declared a housing emergency. That declaration allowed the agency to bypass normal procurement rules and offer jobs on a no-bid basis. The last of the contracts were awarded in December.

The program reduced the number of the authority's vacant units to 1,600, Mr. Henson said.

But it also drew the attention of federal prosecutors, who in March subpoenaed the records of eight companies involved in the program as part of a probe into possible corruption in the Housing Authority.

Six of those companies were among seven contractors that in late March and April received letters from the Housing Authority asking them to correct deficiencies in units they repaired under the program. The deficiencies were discovered by HUD inspectors as part of a broad audit of the city Housing Authority.

Mr. Palmer's firm is not among those whose records were subpoenaed, or that received letters from the Housing Authority.

In a brief interview at his home, Mr. Palmer said he has been in the contracting business for "12 or 15 years, off and on with my own company." He said he has held a home improvement license for years.

But Georgia Duffee, executive director of the Maryland Home Improvement Commission, said her agency has no record of a license issued to Mr. Palmer before August 1993 -- shortly after he was accepted into the no-bid repair program.

The license is required of anyone who works renovating residential properties, Ms. Duffee said. A home improvement license was also required to participate in the no-bid repair program, Housing Authority documents show.

Because of his relationship with the mayor, Mr. Palmer said, he had not previously sought city work.

"People would try to blow it out of proportion," he explained.

But he changed his mind last year after finding out about the no-bid repair program at a time when the contracting business was lagging.

"I was just looking for work, trying to eat, trying to pay the bills, trying to survive," he said.

Mr. Palmer said he never asked Mr. Schmoke's advice on how to go about getting into the program.

"Why would I talk to him about it?" he asked. "I didn't want to get involved with that whatsoever."

Under the program, contractors were asked how many units they could complete in four months. They submitted proposals for specific units and were notified of awards after the proposals were accepted.

Mr. Palmer received contracts to repair 20 units and 15 hallways in the Charles K. Anderson development in Cherry Hill, a small, 121-unit development within the larger Cherry Hill Homes, according to authority spokesman Zack Germroth.

Mr. Henson said Mr. Palmer had worked with him at Struever Bros., Eccles & Rouse, a prominent downtown developer, in the 1980s before Mr. Palmer started his contracting business.

"He was qualified to do the work," Mr. Henson said.

Mr. Schmoke said he did not learn that Mr. Palmer had been involved in the program until well after his brother-in-law had been awarded the contracts.

"He raised some concerns with me when he heard the program was going to come to an end," Mr. Schmoke said. "He thought the program had really helped a lot of small businesses."

Mr. Schmoke said it did not bother him to learn about Mr. Palmer's participation after the fact.

"I would like to learn about the involvement of my relatives if it's something I'm voting on," he said. "But this was not one of those cases."

Mr. Schmoke said he had no financial interest in Mr. Palmer's company.

"I'm not a shareholder or a stakeholder," the mayor said. "He's just a small contractor."

Asked if he and his wife had any mutual financial interests with the Palmers outside the business, Mr. Schmoke mentioned the property on which the Palmers' house sits.

"The land that their house is on is land that we gave them years ago," the mayor said.

Despite two federal probes and questions raised by contracts awarded to his brother-in-law and two other companies owned by relatives of city officials, Mr. Schmoke defended the no-bid repair program.

"Danny [Henson] did right," the mayor said, referring to Mr. Henson. "There was a need to do something promptly."

"I was also very pleased that a number of minority business firms did work," the mayor added. "It helped a lot of small contractors."