As the City Council continues its efforts to prove that Cambridge is a business-friendly environment, several community activists are grumbling that certain councillors may be getting a little too cozy with commercial interests.

Some local politicos even suggest that certain officials trade council votes or political backing for campaign funds, and that conflicts of interest are an everyday occurrence at City Hall.

Perhaps the most politically active developer is City Councillor William H. Walsh, who has consistently backed business interests while managing his own real estate empire. In a lawsuit filed in 1990, one of Walsh's former partners, Dennis M. Cargill, accuses Walsh of using his political influence to further his personal financial endeavors.

Just last week, a federal grand jury served Walsh a subpoena for documents pertaining to his condominium development in Weymouth. Authorities allege that Walsh defrauded banks in his dealings.

Walsh draws much of his campaign funding support from developers and landlords, and then supports those interests with his council votes, says Cambridge Tenants Union Co-Chair Michael H. Turk.

At least 55 percent of the $28,290 in contributions Walsh received this year came from Cambridge and out-of-town developers and landlords, according to a Crimson examination of public campaign finance records.

And Turk contends that further research into Walsh's finances would reveal that nearly all of his campaign funds can be tied to the real estate market.

"I'd think that ultimately it will be found that more than 90 percent of the contributions to Walsh's campaign will come from real estate interests," he said.

But Walsh says that there is no conflict of interest between his private career and his public office. If receiving real estate endorsements is construed as conflict of interest, then "rent-control politicians shouldn't receive tenant endorsements," Walsh says.

Walsh's campaign finance records are not the only ones which are being scrutinized by tenants and neighborhood activists.

Independent Councillor Walter J. Sullivan's records show that he earned more than 85 percent of his campaign funding from sources outside of the city. The high figure may reflect closeties with the real estate industry or links tomany out-of-town acquaintances.

According to public documents, 103 ofSullivan's 176 campaign donations in excess of 50dollars between January and October 1991 were fromout-of-town contributors.

The campaign records of Vice Mayor Edward N.Cyr, who is endorsed by the liberal CambridgeCivic Association, show only four contributionsfrom outside Cambridge.

Most out-of-town contributions come frombusiness or real-estate interests, according toRichard S. Cowan of the Cambridge ElectionCommission. Unless a candidate has many wealthyfriends, the records should show only five to tencontributions from out-of-town, he said.

"The people who get a lot money fromout-of-town are in general: one, completely in bedwith the real estate industry; or two, have familyconnections or workers out-of-town," Cowan said.

Officials with real estate ties are "somehowbenefiting from their association"--they areeither agreeing to vote for the industry forpolitical support or are real estate dealersthemselves, Cowan says.