RTC to Make Magic Library Disappear--for $2.2 Million : Thrifts: Magician David Copperfield is expected to purchase one of the S&L; bailout agency’s most unusual holdings.

After more than a year of trying, the Resolution Trust Corp. is about to make one of the most unusual assets taxpayers inherited in the nation’s savings and loan mess vanish from its books.

In a deal expected to close as early as today, magician David Copperfield has agreed to pay $2.2 million for the Mulholland Library of Conjuring and the Allied Arts, one of the world’s premier libraries of magic memorabilia now stored in a Century City office building.

The sale is a setback for the Library of Congress, which vigorously lobbied the RTC and the Federal Deposit Insurance Corp. to donate the collection to preserve it for scholars. The RTC, however, said it is obligated to get the best return for taxpayers.

“I think the public lost on this one. I think the government had a cultural imperative to save the collection for the public,” said Larry Sullivan, chief of the Library of Congress’ rare books and special collections division.

But Copperfield said in an interview Tuesday that he will make the collection available to scholars, although not curiosity seekers.

Copperfield said he bought the collection because he feared that another buyer might turn around and sell the collection in pieces or move the collection overseas, fears that were echoed frequently by magic enthusiasts over the past year.

“I had a lot of people rooting for me on this thing,” said Copperfield, who eventually plans to move the collection closer to his home in Las Vegas.

The library includes personal letters written by Harry Houdini, thousands of posters and handbills advertising magicians, wind-up automatons that show puppet-like figures performing magic and books dating back to the 16th Century. It was assembled by Carl M. Rheuban, an amateur magician and former chairman of the now-defunct First Network Savings in Los Angeles.

The RTC, the federal agency charged with cleaning up the thrift mess, inherited the collection when First Network failed in January, 1990. While awaiting sale, the collection has been stored in four darkened rooms at First Network’s former headquarters, with the temperature kept at a constant 70 degrees to protect the items from damage.

The collection is named for John Mulholland, an early 20th-Century magician whose collections make up much of the library. The library once boasted an advisory board that included actor Steve Martin, director Tony Bill and filmmaker David Mamet.

Copperfield said he was interested in buying the collection for more than a year. Copperfield--born David Kotkin in New Jersey--is known for his frequent prime-time television specials and Las Vegas performances. Among his most publicized acts have been creating the illusion that the Statue of Liberty disappeared, levitating across the Grand Canyon and using a “Death Saw” that creates the impression he has been cut in half.

As for the RTC, the most impressive rabbit it may have pulled out of its hat is realizing a profit on the sale of the library. The much-maligned agency has rarely done that with the billions of dollars in assets it is selling from failed thrifts.

Copperfield, the only bidder, is paying about $300,000 more than the $1.9 million the collection cost. The RTC is expected to receive about 70% of the proceeds because some of the items were bought by Rheuban personally and two business entities of his. The future of those remaining proceeds will now rest with the U.S. Bankruptcy Court, where Rheuban and the two entities have filed for protection from creditors.