Wanted: Top Exec for S&L; Cleanup; Thick Skin a Plus : Thrifts: An uncertain future complicates the search for a new chief executive of the Resolution Trust Corp.

David Cooke, the beleaguered executive director of the Resolution Trust Corp., the agency charged with cleaning up the savings-and-loan crisis, was tired of all the criticism so he asked the agency’s regional directors to send him some good news--copies of letters of gratitude from depositors whose savings the RTC had rescued from an insolvent S&L.;

Predictably, there was only a single letter. But the RTC is getting the message. The agency is facing a complete overhaul by the Bush Administration, which wants to bring in a strong chief executive from the private sector to take over from Cooke in reorganizing the whole organization.

But the new chief will continue to face serious problems: With a cumbersome oversight process and a massive burden of bad assets to sell off, the RTC’s new chief executive will be walking into the worst job in Washington. And so it may be difficult for the Administration to attract a top-notch executive to take on such a losing proposition.

The thrift crisis is clearly just about the hottest hot potato in government, one that is getting passed around as often as possible. Even Treasury Secretary Nicholas F. Brady, the Administration’s key policy-maker on thrift issues, acknowledges that he finds working on S&L; issues to be distasteful. “My least-favorite activity as Treasury secretary has been dealing with this S&L; problem,” Brady told a congressional hearing.

Frustration on Capitol Hill boiled over again last Thursday when both Democrats and Republicans on the House Banking Committee warned that the Administration had better clean house at the RTC before the lawmakers have to vote this fall to spend another $80 billion for the rescue operation. The increase would bring the total cost to taxpayers of the S&L; crisis so far to $160 billion.

What Congress sees, to its dismay, is that the nation’s unprecedented investment in the thrift crisis doesn’t seem to have made much of a dent in the problem. While the RTC has sold off $163 billion in seized S&L; assets so far, it still is stuck with another $164 billion in mostly bad assets--including long-overdue loans on empty shopping centers, undeveloped raw land and half-built condominiums.

And now, L. William Seidman, chairman of the RTC and the Federal Deposit Insurance Corp., is warning that future S&L; failures over the next two years are likely to bring another $100 billion in hard-to-sell assets under RTC control.

All of those assets must now be sold as quickly as possible in the face of one of the worst real estate markets in recent memory. And even the greatest business genius from the private sector will find that a daunting task.

“We can’t keep going like this, or we are just going to wind up in a bottomless pit,” sputters Rep. Henry B. Gonzalez (D-Tex.), the banking panel’s chairman. “The costs of the S&L; crisis go up geometrically, while the value of the assets the RTC holds seem to go down exponentially.”

With so much heavy baggage attached to the RTC, it may be difficult for the Administration to attract a new chief executive--especially since the precise powers that it intends to give the new RTC head have not yet been publicly spelled out.

The lure of the job is lessened even more by the fact that, at almost any moment, dozens of internal investigations and reviews of the agency’s procedures are under way.

The General Accounting Office, the congressional watchdog agency, has at least 85 staffers permanently assigned to investigate the RTC, while the oversight board has launched a comprehensive review of the agency’s management. The RTC recently was the target of a stinging rebuke by Comptroller Gen. Charles Bowsher, the head of the GAO.

For chief executive, the Administration has insisted that it wants someone with real estate and banking expertise, but so far, the only known candidate is Gerald Greenwald, the former Chrysler Corp. executive who has spent almost his entire career in the auto industry.

What will make it even more difficult to attract candidates is the fact that the top officials dealing with the S&L; crisis in the Bush Administration, the independent regulatory agencies and in Congress still can’t agree among themselves over just how to structure the job or how to restructure the management of the RTC to accommodate its new chief executive.

The only thing on which everyone does agree is that the current management structure must be overhauled.

The RTC currently is staffed and operated by FDIC employees such as Cooke and has two separate boards that oversee its operations. Seidman has been forced to do double duty as chairman of both the FDIC and the RTC, while he also is a member of the oversight board supervising the RTC’s actions.

Placing so many layers of management and oversight at an agency that in just two years has been saddled with more assets than any organization in America except Citicorp has inevitably led to some mistakes. Congressional leaders constantly complain to RTC managers that their constituents find it nearly impossible to get answers from the agency or work with its bureaucrats when they try to buy some of the distressed properties that the RTC is trying to sell.

Rep. Bruce F. Vento (D-Minn.), chairman of a special House RTC task force, speculated in an article in the American Banker last week that is largely because the thrift agency’s organizational chart “looks like a plate of spaghetti.”

“The RTC is not working,” Vento wrote.

But while all sides are persuaded that the RTC should be overhauled, few policy-makers in Washington agree on just what should replace it.

Seidman and Brady have been at odds for months over whether to divorce the RTC from the FDIC. Both agree on the need for a strong chief executive. But Seidman, increasingly concerned by the worsening banking crisis, thinks the FDIC should pull out of the savings and loan mess to clean up its own house. He wants the RTC to be turned into an independent agency.

Seidman’s position is supported by Vento, who has been working on his proposal for restructuring the agency. He also believes the RTC should be split off from the FDIC.

But Brady and the White House want to keep the FDIC in charge; Administration officials say they fear the disruptions that would be caused if too many managers, mostly on loan from the FDIC, leave the RTC all at once.

Treasury officials also warn that once the RTC is established as a full-fledged independent agency, it may be more difficult to close down once the S&L; crisis begins to wind down over the next two or three years. By continuing to staff it with managers on loan from the FDIC, the Administration hopes to avoid the nightmare of creating a huge new bureaucracy that doesn’t want to go out of business.

Who will step in to this mess?

Quips Seidman: “Someone who likes to see their name in the paper, even if it is to take abuse.”

Meanwhile, Cooke, a 45-year-old career banking regulator, is preparing to leave the RTC--just as soon as he can help the new chief executive get started.

“I wouldn’t want to stay,” Cooke says, “even if they offered me the chief executive’s job. In this job, 90% of what you do gets somebody mad at you.”