Bush Aide Resigns Amid Probe of U.S. Treasurer : Inquiry: Campaign consultant quits after FBI searches apartment. He was officer of same firm as Villalpando, who is under criminal investigation.

An official of the Bush-Quayle reelection campaign resigned Friday as the FBI expanded an investigation involving U.S. Treasurer Catalina Vasquez Villalpando.

Ernest Olivas Jr., a paid consultant on Latino outreach for the campaign, submitted his resignation two days after an FBI search of his Washington apartment, Alixe Glen, a campaign spokeswoman, said. Olivas’ resignation letter cited his “fierce loyalty to President Bush and the importance of his reelection.”

Villalpando, one of the Administration’s highest ranking Latinos, is under investigation for allegedly accepting travel, lodging and other benefits from Communications International Inc., a company that depends heavily on government contracts.

Like Villalpando, Olivas had served as an officer of Communications International, a suburban Atlanta-based telecommunications equipment firm that has experienced sharp growth--moving from $143,000 in sales in 1980, its first year, to $25 million last year. Government orders account for about 70% of its business, according to Duns Financial Records.

Villalpando, whose Washington apartment also was searched by agents Wednesday, was granted administrative leave Thursday at her request to deal “with her personal situation,” a Treasury Department spokeswoman said.

Villalpando, her attorney and Olivas, who was director of the firm’s Washington office, did not respond to interview requests Friday.

The exact nature of the investigation could not be determined. Federal warrants including descriptive affidavits that served as the basis for the searches of eight locations in the Washington and Atlanta areas remained sealed for “operational reasons,” one source said, to avoid disclosing the direction and extent of the inquiry.

However, the warrants did say the searches were being conducted for eight possible violations of federal criminal law, including bribery of public officials, conspiracy, mail and wire fraud, racketeering, conspiracy to defraud the government on claims, false or fraudulent claims and false statements to federal agents.

The source, who declined to be identified by name or agency, said the timing of the searches had no relation to Tuesday’s presidential election. He said the investigation had been under way for months.

Villalpando, 52, was a partner and senior vice president of Communications International when President Bush named her treasurer in 1989. While her signature appears on paper currency, her main job in the $112,300-a-year post is promoting savings bond sales, a Treasury spokeswoman said.

But Villalpando has frequently mixed the official job with politics, including a June 27 visit to Colorado, where she signed dollar bills bearing her official signature and sold them for $2 to bolster the coffers of the San Luis and Peublo (Colo.) Republican Party organizations.

Communications International was opened in 1980 by Joe Profit, a first-round draft choice for the Atlanta Falcons in 1971, described by a colleague as “very active in the Republican Party.” The company sells, leases, installs and maintains telecommunications equipment. It employs 250 people at its Norcross, Ga., headquarters and in Washington, D.C., Columbia, S.C., and in California.

During the Persian Gulf War, the company provided telephone hookups that allowed U.S. soldiers to communicate with their families back home.

At Villalpando’s 1989 confirmation hearings before the Senate Finance Committee, Sen. Lloyd Bentsen (D-Tex.), the panel’s chairman, asked about her intention to retain a “substantial stock” ownership in Communications International.

She said the ethics offices at the White House and Treasury Department had approved her keeping the stock, but that she would not participate in any business decisions.

Ostrow reported from Washington and Harrison from Atlanta. Times staff writers Edith Stanley and Matt Marshall contributed to this story.