N.Y. Judge Freeh Named FBI Chief : Government: Clinton calls nominee, 43, ‘a law enforcement legend.’ Jurist is former agent, federal prosecutor who won organized crime cases.

President Clinton on Tuesday nominated federal Judge Louis J. Freeh to head the FBI, hailing the New York jurist as “a law enforcement legend” for his work as an FBI agent investigating labor racketeering and as a prosecutor in a notorious mail-bomb case.

Describing the 43-year-old Freeh as “experienced, energetic and independent,” Clinton said that “he will be both good and tough--good for the FBI and tough on criminals.”

The President made the announcement in a Rose Garden ceremony that was marked by broad smiles as Freeh introduced his wife and four sons, aged one through nine, and carried the youngest to the podium.

The upbeat tone stood in sharp contrast to the White House mood a day earlier, when Clinton was forced to take the unprecedented step of firing FBI Director William S. Sessions, 63, who refused the President’s request that he resign.

Sessions, a Ronald Reagan appointee, had been found by a Justice Department investigation to have abused the privileges of his office.

Freeh, who gives up a lifetime judicial appointment to assume the less secure FBI post that carries a 10-year term, called the bureau the “greatest law enforcement agency ever created by a Democratic society” and promised his “total commitment to a Federal Bureau of Investigation whose only beacon is the rule of law, whose sole task is protecting all of our people from crime and violence.”

Freeh, who was appointed to the federal bench in 1991 by then-President George Bush, spent six years as an FBI street agent, making him the first director-designate to have such experience since Director Clarence Kelley. He was brought to the attention of the President by White House Counsel Bernard Nussbaum, also a New York attorney.

Freeh is known for his tough work on racketeering cases involving New York’s waterfront, on a Mafia case known as the “pizza connection,” and on a case involving the killing of an Alabama federal judge and a Georgia civil-rights lawyer with mail bombs.

Although there were some concerns about whether he had enough management experience to quickly forge a new path for the giant FBI bureaucracy, Freeh’s nomination was generally applauded by both Democrats and Republicans, including Senate Judiciary Committee Chairman Joseph R. Biden Jr. (D-Del.), who called him “ideally suited to continuing the strong, effective and independent tradition of the FBI.”

Senate Minority Leader Bob Dole (R-Kan.), who had raised questions a day earlier about the firing of Sessions, Tuesday called Freeh’s credentials “impressive at first glance.”

As a demonstration of her support for Freeh and her interest in mending the wounds caused by the Sessions’ episode, Atty. Gen. Janet Reno met with the bureau’s top command at FBI headquarters across Pennsylvania Avenue from her Justice Department office an hour before the Rose Garden ceremony. There, according to some in the room, she thanked officials for their professionalism during Session’s six-month fight to keep his job.

Underscoring the Administration’s rejection of the claim by Sessions’ wife, Alice, that he had been forced out by a “cabal” of bureau officials, Reno sat next to Acting FBI Director Floyd I. Clarke during the Rose Garden announcement, which also was attended by 10 top FBI executives.

Because Freeh (pronounced “free”) will need as long as seven weeks to clear his federal court docket and the Senate will be in recess in August, he is not likely to be sworn in before fall.

Freeh is described by friends and colleagues as an unassuming and down-to-earth man who inspires fierce loyalty from subordinates.

Sen. Alfonse M. D’Amato (R-N.Y.), said that Freeh was concerned about how his wife and sons would adjust to Washington. “I said, ‘Louis, you never had to be one who socialized at all the parties. You don’t have to now,’ ” the senator said.

D’Amato said that Freeh also was determined not to be caught in a “beauty contest” and insisted that a list of candidates not be floated before one was chosen.

“At one point, he wasn’t sure he would take it if it was offered. Believe me, they didn’t have it in the bag,” D’Amato said.

Rudolph W. Giuliani, the former Manhattan U.S. attorney and Freeh’s former boss, said that the Jersey City, N.J., native called him after learning he might get the FBI job. “He was at home taking care of his sons. He said directing four little boys could be tougher than directing the FBI,” Giuliani said.

When Freeh assumes the post--and his confirmation is seen as virtually certain--he faces significant problems at the nation’s premier law enforcement agency.

Both reeling and relieved over the firing of Sessions, the FBI must now decide how to respond to new challenges posed by foreign counterintelligence, drugs, violence and terrorism and to what one FBI official described as the “federalization of law enforcement.”

He was referring to a growing trend in which crimes once considered state and local responsibility are becoming federal violations, especially those involving guns, drugs and violence.

The Administration is also considering a potentially far-reaching reordering of federal law enforcement efforts to place drug investigations and some duties now assigned to Treasury Department agencies under the FBI.

Freeh’s tenure also could be complicated by “dramatic fiscal constraints for 1995 and beyond” at a time when the bureau is confronted by increasing violent crime, the looming threat of terrorism inside the United States and globalization of crime, a bureau official said.

“This may cause us to examine programs with an eye toward discontinuing them, contrary to public expectations,” the official predicted. The FBI’s mounting assault on health care fraud, which the bureau considers the savings and loan scandal of the 1990s, is one effort that could well be hindered by a lack of funds.

Another possible victim of budget pressure is the investigation of environmental crimes.

“Above all else, he (Freeh) must place greater emphasis on efforts toward diversity--to make the agency more reflective of the population” in racial, ethnic and gender breakdown of its agent personnel, said a veteran special agent in charge of one of the FBI’s 56 field offices. “Otherwise, we won’t be relevant 10 years from now when Judge Freeh finishes his term.”

“Judge Sessions tried very hard” to increase the number of black, Latino, women and other minority agents, the field office commander said. “But he was reacting all the time to lawsuits” brought by Latino agents and threatened by black agents. “Let’s stop reacting and let’s lead.”

Freeh, in his Rose Garden comments, praised Sessions’ “efforts to diversify,” saying that they should be strengthened.

“At its bedrock, the FBI must stand for absolute integrity, be free of all political influence, be free of any racial or other bias and work solely in the public interest,” he said.

Freeh would take command facing potential controversy stemming from a court settlement with black agents announced last January that headed off a threatened class-action discrimination suit. The settlement, worked out during the George Bush Administration, commits the bureau to conducting an overhaul of personnel, promotion and disciplinary policies to eliminate what the black agents claim were subjective evaluation procedures that led to racial bias.

Last month, the FBI Agents Assn., a mostly white organization that represents more than 7,000 of the 10,317 bureau agents, won court permission to intervene in the case, a move that threatens to prolong the matter.

While Sessions has drawn broad praise, including Clinton’s, for his efforts to hire more minority and women agents, the sharpest gains in such employment came during the nine-year tenure of Sessions’ predecessor, William H. Webster. But Webster began with a much smaller numerical base.

Despite the looming problems, spirits were high at FBI headquarters and in several field offices. It’s “like a rebirth--with enthusiasm running over once again about molding the bureau into the 21st Century,” said one official. “All the momentum was bled out of us.”