Rotten Politics in the Big Apple. BOOKS

CITY FOR SALE: ED KOCH AND THE BETRAYAL OF NEW YORK by Jack Newfield and Wayne Barrett, New York: Harper & Row, 466 pp. $22.50

IF anyone ever decides to make a movie from this detailed account of Ed Koch's scandal-filled third term as mayor of New York City, they'll need a cast of thousands. (There are 16 parts for Abe Vigoda alone.) There are clubhouse hacks and ward heelers, power-mad bosses and sleazy mobsters, ambitious ladies and vindictive exes, frenetic reporters and hard-boiled prosecutors. There's everything, in short, for a great film. Plus the fact that it's all true.

Only two other modern mayors, Fiorello LaGuardia and Robert Wagner, had been elected to a third term, and their third terms weren't successes. But Koch's has been a disaster. Anything that could go wrong did - and with a flamboyance one can only hope is peculiar to New York.

There are three stories in ``City for Sale,'' and they're told with a style that's resilient enough to bounce over the vast amount of detail that has to be included. First, there's Donald Manes, the president of the Borough of Queens, whose lust for graft bordered on the fantastic, whose unsubtle plans for defrauding the city of millions resulted in his suicide and the indictment of many hundreds.

Then there's the story of Bess Myerson, a former Miss America, who although finally acquitted, faced charges that rose not only from infractions of the law, but also from pitiable shortcomings of character and manipulations of people who were devoted to her.

And last, there's Koch himself, the reformer who entered politics by beating an archetypal Tammany boss, Carmine DeSapio, then rose in New York politics to preside over the most destructive scandals in the city's history. Koch made the error of believing in his own celebrity, something New York City alone can bestow on a mayor. By the time he saw through the fog of his success as an author, his stardom as the subject of a musical, and his semi-status as a national political figure, it was too late to eradicate the cockroaches of corruption that infested his administration.

Neither Barrett nor Newfield like Koch. They've been covering him for the weekly Village Voice (Newfield is now an editor at the Daily News), and the relationship has been acrimonious. Koch has always considered them enemies, but they would say he is his own worst enemy. Yet the book isn't a hatchet job. Given the bare facts, no such effort is needed.

This is a reporter's version of the way things happened, detailed and careful. The color and pulse of the city come through, though produced on deadline, ``history shot on the wing,'' as Gene Fowler said. The outer boroughs of Brooklyn, Queens, the Bronx, and Staten Island are worlds unto themselves, far from the minds of Manhattanites. Manhattan may be full of boring yuppies, but the boroughs are full of characters who still sound like Damon Runyon.

For example, there's Meade Esposito, the legendary Brooklyn boss, who boasted that his methods were so subtle he could ``dance on a charlotte russe and not dent the cherry.'' And there's Alex Liberman, who, as a boy, saw his father hanged by the Nazis, and who rose in New York City politics, finally convicted of taking millions in bribes for fixing leases. On his way to federal prison he joked about a book he might write titled, ``From Auschwitz to Allenwood.'' Alex has a curious sense of humor.

Most of the characters are now in jail or otherwise safely discredited, but the book also has value as background on people you're sure to hear about in the future: Rudolph Giuliani, the federal prosecutor with one eye on his political ambition, and not least Gov. Mario Cuomo, whose curious behavior while his state's largest city was in agony makes perfect sense to any student of Machiavelli.

Koch is faulted with having done nothing until it was too late, and then trying to take the political way out. This is the book's main point.

Corruption will rise to the level of its tolerance and maintain itself there. But like mischief everywhere, it constantly tests to find out where the level has been set. The authors attempt to prove that Koch didn't set any level. Maybe he didn't know where it should be, given the reality of New York politics, but he could have erred on the low side.