Democrats Seek Independent Counsel in Bush S&L; Case : Politics: Parties attack each other over the issue. A Republican strategist charges that taxpayers were “sold out.”

WASHINGTON —  Political skirmishing in the savings and loan scandal intensified Thursday, with Democrats seeking the appointment of an independent counsel to investigate President Bush’s son and a GOP strategist charging that Democrats “sold out the taxpayers” and created a financial legacy that will burden Americans for generations.

Rep. Patricia Schroeder (D-Colo.), a member of the House Judiciary Committee, began collecting signatures from fellow Democrats on the panel to request an independent counsel to investigate the role of Neil Bush as director of a failed Denver savings and loan.

“Certainly, when the potential targets of a criminal investigation of a $1-billion thrift failure include the President’s son . . . we have a case in which Congress . . . intended that you should seek appointment of an independent counsel,” Schroeder said in a letter that will be sent to Atty. Gen. Dick Thornburgh.

Republicans conceded that conflict of interest allegations involving the President’s son have focused more public attention on the S&L; controversy. “It’s made it a bigger issue this week,” said Charles Black, a consultant to the Republican National Committee, which met Thursday in Chicago.

Republican House campaign strategist Ed Rollins delivered a broadside at the Republican meeting against a long list of current and former Democratic lawmakers, reflecting concern among GOP strategists over aggressive Democratic efforts to exploit the issue.

Public anger is growing over the massive cost of closing or selling hundreds of failed S&Ls;, whose deposits were insured by the federal government. The bailout will cost taxpayers an estimated $300 billion or more over the next 30 years.

“Neil Bush is going to be perceived as what he was--a young man on a board of directors who got sucked down with the Titanic,” said National Committee Chief of Staff Mary Matalin.

By contrast, she said, “Democratic elected officials who were the recipients of favors from the savings and loans . . . failed in their oversight responsibilities.”

In a fiery speech, Rollins contended that Democratic lawmakers had blocked efforts by the Ronald Reagan Administration to curb contributions from savings and loans.

“For a few million dollars, the Democrats sold out the taxpayers,” Rollins said. “For the sake of their own reelections, they left us a bailout legacy that could reach a cost of thousands for every taxpayer for generations.”

The general feeling of Republican strategists is that the impact of the S&L; scandals on this year’s campaign will vary from race to race, depending on whether incumbents took campaign contributions from the thrift industry.

It is an issue best used by challengers in races for the Democratic-controlled Congress, Republicans believe. But Democrats note that they will be mounting a challenge in 1992 for the presidency.

The Neil Bush case could cast a 1992 political shadow on the White House. The President’s 34-year-old son has been accused of violating conflict-of-interest rules as a director at Silverado Banking, Savings & Loan in Colorado.

Federal regulators say that Bush failed to disclose his business ties to Denver developers Kenneth M. Good and Bill L. Walters, who were major borrowers from Silverado, later defaulting on more than $100 million in loans. Bush has denied doing anything improper.

Schroeder noted in her letter to Thornburgh that the President’s son failed to disclose to fellow directors a $100,000 “no payment” loan he had received from Good in 1984 and did not report the loan as income on his federal taxes until this year.

She also said that a bank controlled by Walters provided a $1.75-million line of credit to Neil Bush’s oil exploration company. Bush voted to approve six separate loans to Walters, totaling $106 million, all of which are in default.

Schroeder said that Larry Mizel, chairman of a firm that held Silverado bonds and preferred stock, contributed to the campaign of the U.S attorney in Denver and raised substantial sums of money for the Reagan-Bush ticket in 1984 and for the Republican Party last year.

Rep. Frank Annunzio (D-Ill.), wearing a button saying “Jail the S&L; Crooks,” told a Washington news conference that Good, a major borrower at Silverado, contributed $10,000 to the Republican National Committee just days before the 1988 election.

“Could it possibly be that it was a donation of hush money?” asked Annunzio.

Good responded in a prepared statement that he made the contribution “after I no longer had any connection with, or interest in Silverado, a fact of which Mr. Annunzio should be well aware.”

“With no evidence whatsoever, Mr. Annunzio has accused a private citizen of criminal activity,” Good said. “He is spreading vicious false accusations in the public arena without any basis.”

Schroeder said that she had 10 of the 12 signatures needed for a formal committee request to Thornburgh to investigate Neil Bush and Silverado.

Upon receiving the request, the attorney general would have 30 days to tell the committee whether he had launched a preliminary investigation to determine if an independent counsel is needed. He would have to explain the reasons if he decided not to conduct an inquiry.

The GOP response to Schroeder was swift.

“I think it’s outrageous and demeaning that Patricia Schroeder is going after Neil Bush,” said House Minority Whip Newt Gingrich of Georgia.

Shogan reported from Chicago and Rosenblatt from Washington. Staff writers William J. Eaton and Ronald J. Ostrow in Washington contributed to this story.