Bill Lann Lee, the controversial Acting Assistant Attorney General for the Civil Rights Division, announced last night he would join two U.S. attorneys in probing "certain patterns and practices" of the embattled Street Crime Unit.

The investigation could lead to a cutoff of federal money to the NYPD, although that is considered unlikely.

Police Commissioner Howard Safir reacted quickly:

"We will cooperate fully with this investigation just as we have with all the others and if this investigation is conducted fairly it will demonstrate that the New York Police Department is truly one of the most restrained in the country."

Bronx Rep. Jose Serrano, in whose district Diallo was gunned down in a hail of 41 bullets fired by SCU cops, said he was "extremely pleased" by the Justice Department announcement.

He said he expects the feds to conduct "a full citywide investigation" of the NYPD, with "a special emphasis" on the Street Crime Unit.

"It's the first time this has happened in New York," the Bronx Democrat added.

"Now people who are going around trying to avoid answering qustions can't avoid answering questions," he said.

The Justice Department's blockbuster announcement sharply expands the investigation into NYPD behavior following the death of Diallo.

Justice officials said their invesigtation began in 1997 "focusing on issues" that arose in "the Abner Louima incident."

Department spokeswoman Christine DiBartollo told The Post that yesterday's announcement means the scale of the probe has been expanded.

She said the feds are looking into whether there are "patterns and practices" of discrimination by the SCU "throughout" the city.

The Justice announcement said Lee, Eastern District U.S. Attorney Zachary Carter (who had been investigating the alleged police abuse of Louima) and Southern District U.S. Attorney Mary Jo White would work together in the joint probe.

Lee's appointment has been blocked in Washington by congressional Republicans who feel he has a political agenda in his pursuit of civil-rights enforcement.

The Diallo case has triggered several inquiries, including one by state Attorney General Eliot Spitzer, who said earlier he would launch a civil-rights inquiry into whether the NYPD was searching people unjustifiably under its "stop and frisk" program.

Colleen Roche, a spokeswoman for Mayor Giuliani, said:

"The timing of this annoucement is very curious.

Attorney General "Janet Reno makes this announcement the same day that Hillary [Clinton] expresses an interest in alleged civils-rights violations of the New York Police Department.

"The announcement also comes a day after they're scooped by Eliot Spitzer's announcement.

"We just hope that all of the Clinton administration officials - and Democratic Attorney General Spitzer - don't bump into each as they rush to conduct their investigations."

The Justice announcement noted that one basis for the inquiry was the 1968 Ominbus Crime Control and Safe Streets Act, which allows the government to withhold federal money from local law-enforcement government agencies that discriminate against citizens.

But more likely, the most extreme action by the Justice Department would be forcing the city to accept a consent decree to change certain policies.

Diallo was unarmed when he was gunned down by four SCU plainclothes officers in his apartment building Feb. 4.

The officers, who were searching for a rape suspect, thought the West African immigrant had a gun, their lawyers say.

Relatives of Diallo welcomed yesterday's announcement.

"If the federal government takes such an interest it's a good thing for us, and those like Amadou who do not have a voice anymore," said uncle, also named Amadou Diallo, 35.

"We expect a lot of things from this country and Amadou was just one small human being who loved this country. We are happy. It's a good thing," he said.

A lawyer for the Diallo family, Kyle Watters, said there had been indications of the expanded federal probe:

"I know there were rumblings coming from the State Dept last week so I am not really surprised. I welcome it.

"Obviously it's great that these guys are going to be do this. I t will eventually bring out the practices of the Street Crime Unit. I'm happy about it."

-- Deborah Orin, Murray Weiss, and Frankie Edozien - 3/18/99