BY CHARLES D. SHERMAN

                      ST. JOHN'S, Antigua -- Standing before the most eminent legal minds in the Caribbean, Thomas Martin, a
                      children's heart doctor, wept.

                      Martin said he had wanted to send sick Antiguan children from this tiny Caribbean island to Miami
                      hospitals for surgery needed to save their lives. His letters to the government on the children's behalf,
                      he said, had been ignored, his personal visits to the Health Ministry turned aside.

                      Last year, when one youngster in his care died, the parents blamed Martin. ''Excuse me,'' the doctor
                      sobbed. ``That was hard to take.''

                      At the urging of the public, three investigating judges have been charged with figuring out where $230
                      million or more in state health insurance money has gone, an enormous sum for Antigua. The results of
                      the investigation will help form the basis for the prosecution of dozens of officials and others involved in
                      defrauding the fund.

                      Listening to Martin's account of the neglected children, the judges on a stage of the sprawling Antigua
                      and Barbuda Exhibition and Cultural Center shifted uneasily in their high-backed chairs. From the
                      auditorium, low moans came from 300 members of the public.

                      It is by way of the judges and the press that Antiguans have been learning that for years government
                      officials treated the state insurance fund, called the Medical Benefits Scheme, like a personal checking
                      account. Instead of paying for medical services, evidence shows that money deducted from workers'
                      salaries has gone for lavish parties, foreign travel for government cronies, thousands in kickbacks to
                      the program's accountant, cosmetic surgery overseas for officials and even toys for the children of fund
                      administrators.

                      LARGER SCALE

                      Corruption scandals, such as government involvement in gun-running and drug trafficking, are not
                      unknown in Antigua and across the Caribbean, but the benefits fund investigation is significant for its
                      scale. The fund's record-keeping has been so poor over the 23 years of its existence that the amount
                      looted from the program will never be known, but what is clear is that virtually every Antiguan citizen
                      has suffered thousands of dollars in lost benefits.

                      The most common expression heard today on the streets of Antigua's capital, St. John's, is: ``Where
                      deh money gon'?''

                      Along with proving a deep embarrassment to the government of Prime Minister Lester Bird and posing a
                      powerful challenge to his Labor Party's unbroken 26-year rule, the revelations are also sharply
                      intensifying a long-running battle over press freedom on the island as officials seek ways to stem the
                      flow of bad news.

                      With a history rooted in centuries of slavery and a culture embedded in punishing work on sugar
                      plantations, the people of the two-island nation of Antigua and Barbuda are, if anything, an enduring
                      lot. But what appears to have happened to the insurance money, their one prized social benefit, has
                      outstripped their understanding.

                      From Chamber of Commerce leaders to hotel chamber maids, the public is angrily demanding an
                      accounting.

                      To get it, 12,000 of the island's 70,000 citizens signed a petition last year for an independent
                      investigation of what appeared to be massive fraud. Sidestepping the government, the petitioners
                      presented the signatures to Antigua's ceremonial head of state, Gov. General Sir James Beethoven
                      Carlisle.

                      Sir James, Queen Elizabeth's representative on the former British colony, had no choice. He quickly
                      urged the establishment of a Commission of Inquiry into the Medical Benefits Scheme with the
                      independent three-judge panel headed by Sir Alister McIntyre, a respected Grenadian diplomat and
                      educator.

                      Bird bowed at last before the furious public.

                      Though always an expensive proposition, Antiguans who need treatment beyond the medical
                      capabilities on the island can apply to the benefits scheme to seek care overseas for illnesses, such as
                      diabetes and chronic heart problems. To pay for this, workers contribute 3 percent of their pay to the
                      benefits scheme, while employers add another 2 percent.

                      But, as Martin explained to the judges, political favoritism seemed to determine who actually received
                      help, while huge sums were siphoned off by corrupt officials.

                      SOON TO BE DRAINED

                      In the meantime, independent auditors hired by the inquiry are forecasting the benefits fund will soon
                      be completely drained to pay for the construction of a new hospital, a project so rife with corruption and
                      mismanagement that a government bailout from general revenue or huge loans is needed.

                      In the midst of the public outcry, the government issued an astonishing statement revealing it had
                      failed to contribute the equivalent of 120 million Eastern Caribbean dollars, or $48 million in U.S.
                      currency, to the insurance fund to cover government workers' salaries.

                      Following evidence presented at the inquiry's first session late last year and a second last month,
                      Richard Cheltenham, a veteran Barbados attorney serving as chief counsel for the judges, said he had
                      heard enough: He calls the benefits fund ''a milch cow for officials and the state'' and ``an engine of
                      fraud.''

                      Trying last year to stem the growing embarrassment, Bird fired Health Minister Bernard Percival and
                      Attorney General Errol Cort, saying they had violated regulations governing the benefit plan, though
                      both claim they were axed for bringing the fraudulent practices to the attention of the Cabinet.

                      Percival, a former New York banker who remains a member of Antigua's Parliament, says bluntly the
                      benefits scheme was 'mismanaged deliberately for the purpose of hiding inadequacies and the
                      administrators' personal gain.''

                      Cort, an attorney now in private corporate practice, says there was good reason for Bird to fight the
                      inquiry. ''He obviously knew the depth of the corruption,'' Cort said. ``I think he felt it would jeopardize
                      his position and the government if it came out.''

                      STOMACH SURGERY

                      More outrage was to follow when 33-year-old Asot Michael, the prime minister's obese chief of staff,
                      went to the United States for stomach reduction surgery and returned with a $55,000 bill, which the
                      benefits fund footed in large measure.

                      Rousing the public's anger over the insurance fraud is the Observer Group, owner of a two-fisted
                      tabloid with a circulation of 6,000. Along with a companion radio station, started a year ago, Observer
                      journalists have published and broadcast exposés and searing denunciations of the government over
                      the insurance program mess.

                      The coverage has infuriated the Bird government and provoked threats from ministers to close down
                      the paper and station.

                      But whether the news is reported or not, the Bird government is sure to face more criticism.

                      ANOTHER INQUIRY

                      In another session starting Monday, the Commission of Inquiry promises to look into millions of dollars
                      in government purchases of medical supplies such as bandages and pharmaceuticals from U.S. and
                      Caribbean distributors. With no bidding process, according to investigators, prices in some cases were
                      inflated by as much as 400 percent, providing more suspected kickbacks to officials.

                      Asked what he thought would come of the investigation, Bird said: ``You never know where a
                      commission of inquiry will lead.''