Law enforcement officials and savings and loan regulators have let fraud and self-dealing become so widespread in California that misconduct is now the leading cause of S&L failures in the state, congressional investigators say.

Their conclusion runs counter to the S&L industry's contention that the financial troubles of S&Ls in California and other Sunbelt states stem mostly from economic problems, such as falling oil and real estate prices.

Investigators for Rep. Doug Barnard Jr. (D-Ga.) concluded after a three-month probe that declining prices and economic depressions in regions such as the Southwest are not the cause of most S&Ls' problems. Changes in the economy merely unmasked bad lending and faulty appraisal practices at S&Ls, the investigators said.

The findings, which Barnard said show fraud at S&Ls has "reached epidemic proportions," will be detailed today at a congressional hearing in Los Angeles. The hearings come as the industry is lobbying Congress and federal regulators to go easy on ailing S&Ls and give the institutions time to work out their problems.

"There is evidence to show that serious insider misconduct is implicated in most of California's 31 thrift failures over the past three years, that appraisals were used to facilitate much of this misconduct and that fraud is responsible for a large percentage of the $3.7 billion in accompanying losses" to the federal fund that insures S&L deposits, Barnard's staff said in a memo to him this week.

Barnard, who is chairman of the House Banking Committee's oversight subcommittee, said he focused the probe on California because its S&L problems "are representative of what is happening around the country."

After a similar probe in 1984, Barnard's staff found that misconduct was a key factor in 25 to 30 percent of S&L insolvencies. Despite increased government concern about the rising number of S&L failures since then, fraud now plays a major role in 80 to 90 percent of such failures, Barnard's staff concluded in the memo.

Testimony by FBI agents, California S&L Commissioner William J. Crawford and other law enforcement officials and regulators is expected to reveal a pattern of federal inaction and disorganization that has let scores of unfit and often corrupt S&L executives plunder institutions without fear of criminal prosecution, according to memos summarizing the congressional probe.

The assets of the California S&L industry total $311 billion, nearly one-third of the $1 trillion in S&L assets nationwide. Crawford, who prompted Barnard's investigation by seeking his help, said most of the state's 212 federally insured S&Ls are strong and sound. "But we have some bums, too," he said during an interview this week. "It's almost like having two industries, one that's healthy and one that isn't."

Barnard's investigators said that a lack of coordination -- and often a lack of concern -- among federal regulators and law enforcers has foiled efforts to weed out corruption from California's troubled S&Ls.

On one occasion, for example, Crawford had to make 17 telephone calls in eight days to the FBI, the Federal Home Loan Bank of San Francisco and, finally, a senator to try to prompt an FBI investigation into allegations of corruption at North American Savings and Loan in California.

In another example, congressional investigators found that FBI reports on the status of S&L criminal probes routinely were sent to the Federal Home Loan Bank of San Francisco. Although the reports contained information that might have been useful to federal S&L regulators at the bank, senior officials there never saw the documents.

The reports, congressional investigators said, "were filed away in a back office, with only one person knowing of their existence."

"This general state of disorganization" probably exists within the other 11 Federal Home Loan Banks throughout the country, the report concluded. The 12 regional Federal Home Loan Banks are the federal agents that supervise federally insured S&Ls.

The San Francisco bank's region includes California.

With computer technology and the 12 Federal Home Loan Banks' ability to collect information on S&L abuses, information could easily be shared among regulators throughout the United States, but it is not, congressional investigators said they found.

The disorganization has permitted many of the same managers and borrowers who ruin one institution to move to another and repeat bad, and sometimes criminal, actions, according to federal documents summarizing the history of a dozen failed California S&Ls. In one case, congressional documents state, Consolidated Savings Bank of Irvine lent $9 million to C.B. Financial Corp., an Oklahoma company owned by Charles Bazarian and doing business in California. The loans were made "without appraisals and without other appropriate loan documents," even though Bazarian "had been convicted of mail fraud in connection with earlier financial dealings," the investigators alleged.

Philip Gasteyer, a spokesman for the U.S. League of Savings Institutions, the largest S&L trade group, yesterday repeated the organization's position that external economic conditions, not fraud, is the major cause of the S&L industry's problems in California and elsewhere.

Crawford, in written testimony given to Barnard last week, faulted Congress and state legislatures for failing to regulate appraisals of real estate. That failure has led to an abundance of bogus and often fraudulent valuations of land and property underlying many S&L loans, he said.

Crawford also blamed lawmakers and federal regulators for permitting S&Ls to use special accounting methods that permit hundreds of S&Ls in the country to show capital surpluses when the institutions are in fact insolvent.

But most of all, Crawford blames lawmakers for bowing in recent years to pressure from the S&L industry to ease loan regulations and permit borrowers to get millons of dollars without making a down payment.

"Congress and the legislatures loaded the system in favor of cheating. If you put temptation and opportunity in front of greed, people can't resist," Crawford said.

The result, Crawford and other regulators have been saying for months, is record S&L failures. The failures have drained the Federal Savings and Loan Insurance Corp., the federal fund that insures consumer deposit, and threaten to saddle U.S. taxpayers with a $25 billion tab to clean up the mess.

"I won't say it got out of hand in California any more than anywhere else," Crawford said. "There's crooks that got into the business, but that's because the government lowered the standards."

In a memo to Barnard, congressional investigators acknowledged that the FBI long has been understaffed for the volume of white-collar crime in all industries in Southern California, but also notes that S&L fraud throughout the country has been given low priority by the FBI and other divisions of the Justice Department.

Barnard's staff faults the Federal Home Loan Bank Board, the federal agency that regulates S&Ls and overesees the 12 Home Loan Banks and FSLIC, for failing to have an aggressive policy of referring criminal cases to law enforcement officials.