A legal opinion written for National Permanent Bank says that Citicorp's payments to a political adviser of City Council member Charlene Drew Jarvis may disqualify Citicorp from bidding for National Permanent, an ailing District thrift that federal regulators put up for sale in January.

The memorandum, circulated in Congress yesterday, says that disclosure of the $28,200 in payments suggest that federal regulators will not consider Citicorp's application until the U.S. Attorney's Office, which is looking into the payments, determines Citicorp broke no laws.

Citicorp is anxious to open a bank in the District and is locked in a bidding war with oil billionaire Gordon Getty over the right to purchase National Permanent. National Permanent's management has stated its preference for the Getty bid.

Last week, Citicorp said that Lucius Gregg, its vice president in charge of lobbying the D.C. government, paid Woodrow Boggs Jr. $28,200 without authorization of the banking company's New York headquarters. Boggs is an adviser to Jarvis (D-Ward 4), chairman of the council committee that oversees bank licensing in the District.

Jarvis directed representatives of Citicorp and four other major bank holding companies to meet with Boggs in the last year to discuss how to win council approval to open or acquire banks in the District, although Boggs has no official connection with the council.

Jarvis has said that Boggs had functioned merely as a sounding board for her. Disclosure of the payments, however, makes public a longstanding private debate among lawmakers and business leaders over whether Boggs has used his close relationship with Jarvis to enhance his private consulting business.

U.S. Attorney Joseph E. diGenova has said that federal prosecutors are evaluating allegations of possible improprieties involving Boggs and Jarvis in connection with out-of-state banks. Citicorp, meanwhile, has recalled Gregg to New York and is conducting an internal investigation. The question of Citicorp's ability to remain in the battle for National Permanent while being under investigation was raised in a six-page legal memorandum from National Permanent's lawyers to National Permanent Chairman and President Stuart A. McFarland. The memo was obtained from congressional sources.

The memo said that, if Citicorp wins the bid and then is found by federal investigaters to have broken the law, "The result might be litigation by groups which had competed unsuccessfully with Citicorp."

Officials at the Federal Home Loan Bank Board, the agency that regulates S&Ls, refuse to discuss Citicorp's bid. Citicorp also refused to discuss its bid for National Permanent.

But, speaking generally, "If somebody is alleged to have done something that would disqualify them, we'd have to consider whether the allegations were true," bank board lawyer Lawrence W. Hayes said.

Hayes said that an investigation by federal authorities does not automatically disqualify a bidder, but said, "The board takes the character and integrity of applicant into consideration. An applicant can be disqualified for reasons of character."

When competing bids are made for troubled S&Ls, bidders promise to infuse new funding into the sick institution as long as the Federal Savings and Loan Insurance Corp., the federal fund that insures deposits, pledges to kick in some federal assistance, which could range from federal promissory notes to cash.

Federal law requires the bank board to give preference to bidders who demand the least amount of federal assistance. It also requires the bank board to preserve a distinction between S&Ls and banks whenever possible and to give preference to local bidders.

Because the insurance fund has been squeezed since 1980 by record S&L failures, the bank board has been especially concerned with resolving problem-thrift cases in the manner least costly to its insurance fund.

"We're concerned that, in the mind of the bank board, concerns about its insurance fund may outweigh allegations of fraud regarding Citicorp," an aide to a member of the Senate Banking Committee said yesterday.

With court decisions and market forces deregulating the financial services industry, National Permanent's fate is of key interest to Congress, regulators and financial executives. Whether to preserve a distinction between S&Ls and banks and whether to give control of ailing thrifts to out-of-state banks are among the many issues on which lawmakers and financial executives disagree.