THERE are no innocents among the Harlem politicians and business leaders who are offering condolences and, in the case of the Greater Harlem Chamber of Commerce, offering scholarships for children of the victims of last week's arson at Freddy's Fashion Mart. Nice, but where were they a few weeks ago when the nastiness on 125th St. got nastier?

A berserk -- and racist -- Roland Smith shot employes and set the fire that took seven lives plus his own. But had political and business leaders stepped in long before, perhaps a landlord-tenant dispute involving a black church (the landlord), a white-owned clothing shop (the primary tenant) and a black-owned record shop (the subtenant) would not have become murder.

They certainly had their chance. Sikhulu Shange, owner of the record shop that was losing its lease, says he wrote Rep. Charles Rangel, State Sen. David Paterson, Assemblyman Keith Wright and Councilwoman C. Virginia Fields.

Only Rangel responded, he says, with a promise to write a letter on his behalf. Wright has said he had planned to meet with the parties at the landlord's behest. The proprietor of the clothing store whose plans to expand into the space occupied by the record shop set off the conflict turned to the police.

So Shange turned to the Rev. Al Sharpton and to Morris Powell, the leader of a vendors group with a warped sense of ownership of 125th St.

"If other people had responded, maybe we wouldn't be here today," Sharpton said after the arson. He's right. Mayor Giuliani says he didn't know about problems on 125th St., but that just proves he's out of touch.

The street has been the site of racial, ethnic and class conflict for years, all centered on who owns or should own businesses there, who works or should work there. Amid what looks like an economic rebound, the conflict has intensified.

Politicians say they didn't know the situation was so volatile. But why didn't they, when they all have offices on 125th St., as do the Chamber of Commerce, the 125th St. Business Improvement District and the state's Harlem Community Development Corp.?

Sharpton, who also has an office there, is not completely off the hook. He doesn't preach violence or hate. But by indiscriminately allying himself with other blacks no matter what their message is, he abdicates responsibility as the leader he is and wants to be.

When Sharpton joined the picketers Dec. 2 just about the time that the hateful taunts and the threats escalated he became in the eyes of casual observers a leader of that protest, embracing its message and its methods. Never mind that, as he now says, he was there to mediate. "I am a preacher, not a prophet. I could not know in advance what this was going to come to."

No one expects clairvoyance, just clarity. Sharpton knows the "BUY BLACK" rhetoric of Powell's vendors group and its threats to punish white-owned businesses and their black customers. They said and did the same thing last year, when Sharpton joined them in a futile effort to force Mayor Giuliani to rescind his ban on sidewalk peddlers on 125th St.

Contrary to myth, blacks own at least half the businesses on 125th St. This is not the 1930s, when blacks boycotted 125th St. businesses, all white-owned, because they refused to hire blacks.

But Powell's group encourages the myth, while responsible leaders remain quiet. That encourages black wackos like Roland Smith. Based on flyers and the chants outside Freddy's and not, by the way, outside the church's temporary meeting place pickets no doubt thought they were protesting solely against white business owners who are taking their street.

"We all blew it," says Lloyd Williams, president of the Chamber of Commerce. Yes, and seven white, Hispanic and black employes of Freddy's paid dearly.