WASHINGTON (AP) _ Retired Adm. Bobby Ray Inman wrote a letter last year on behalf of a businessman awaiting sentencing for illegal arms smuggling, telling the judge the man had ''displayed patriotism'' by working during the 1970s for U.S. intelligence.

Inman, named Thursday by President Clinton to be the next defense secretary, previously had served as a board director for three subsidiaries of International Signal & Control Corp., the convicted businessman's company.

At the time he wrote the letter, Inman was a private citizen but also served in an unpaid advisory role to President Bush as acting chairman of the Foreign Intelligence Advisory Board.

The businessman, James H. Guerin, was sentenced to 15 years in prison in June 1992 for smuggling $50 million in weapons to South Africa and masterminding a $1.14 billion fraud at International Signal, a Lancaster, Pa., defense contractor.

Prosecutors said some of the weapons Guerin sold to South Africa ended up in Iraq and were used against American forces during the Persian Gulf War.

Guerin, then 62 and facing a possible life sentence, had asked U.S. District Judge Louis Bechtle for leniency, saying he ''got carried away and felt our mission was above the law. It was misdirected patriotism.''

Inman's letter to Bechtle, dated April 27, 1992, began by noting he had been director of the National Security Agency from 1977 to 1981 and deputy CIA director in 1981-82.

Inman confirmed that between 1975 and 1978 he ''came to know and worked'' with Guerin ''on classified U.S. government activities.''

Guerin provided the ''U.S. government with information obtained during his foreign travel, which was of substantial value'' concerning the potential proliferation of nuclear weapons, the letter said.

''Mr. Guerin displayed patriotism toward our country and a willingness to provide useful information even though it could have risked unfavorable publicity for his company,'' Inman wrote.

Less than a year before Inman wrote the letter, he told The Philadelphia Inquirer in an interview that at the time of Guerin's work for intelligence agencies, the U.S. government wanted information about Soviet ships off South Africa's coast.

International Signal ''had the South African connection,'' Inman told the newspaper.

Inman, however, denied allegations by company executives that International Signal was given secret permission to sell weapons to South Africa. ''There was never any authorization for them to ship hardware of any kind at any time to South Africa,'' Inman told the Inquirer.

Inman's letter did not advocate leniency for Guerin. Nor did it make mention of Inman's role as a proxy director for three International Signal subsidiaries in the mid-1980s.

Inman and two other former military officials were proxy directors of the subsidiaries, approved by the Pentagon. By law, U.S. defense contractors that are fully or partly owned by foreign investors, must name special directors to protect the companies against undue control by foreign investors and leaking of classified information to foreign interests.

Inman's letter was written on stationery from Science Applications International Corp. of Austin, Texas, an engineering and consulting company of which Inman was a director.

Guerin pleaded guilty in December 1991 to selling weapons to South Africa in violation of U.S. laws and a United Nations ban on weapons imports. He also admitted laundering $958 million through Swiss banks from 1983 through 1989.

The chairman of the House Banking Committee, Rep. Henry B. Gonzalez, D- Texas, and others have charged that International Signal was part of an illegal network used by Reagan and Bush administration officials to secretly arm Iraq against Iran in their 1980-88 war.

Guerin's crimes nearly brought the downfall of a British defense company. Ferranti International PLC bought International Signal for $670 million in 1987, only to find Guerin had grossly overstated the company's worth through fraud.

Guerin acknowledged creating phony companies and $1.14 billion in fictitious contracts to inflate the apparent worth of the company he founded.