The tales of two billionaires tell a lot about why the savings and loan cleanup is going to cost the taxpayers even more than the $132 billion the government now says it will have to spend to keep its promise to protect depositors' savings.

Ronald O. Perelman -- the owner of the Revlon cosmetics empire -- and Caroline Hunt -- daughter of legendary oil man H.L. Hunt -- both bought failed Texas savings and loans with the help of huge federal subsidies.

One of the billionaires made instant profits, the other lost millions. For taxpayers, however, the outcome was the same: Both deals will end up costing the government more than it counted on spending.

The escalation in S&L cleanup costs has many causes. Well up on the list are the 200 savings and loan sales -- including the Perelman and Hunt transactions -- that were arranged in the final years of the Reagan administration.

Instead of the $40 billion projected at the time, those pre-1989 deals will cost at least $52 billion, the government now estimates. (The extra $12 billion is not included in the latest S&L cleanup cost estimates given to Congress by Treasury Secretary Nicholas F. Brady because his $132 billion estimate covers only S&L cleanup commitments made since President Bush was inaugurated.)

The deals are coming under scrutiny from members of the House and Senate who contend that the government was too generous with federal subsidies when it induced outside investors to take over failed thrifts in 1987 and 1988. Some lawmakers want to try to renegotiate a number of deals -- a move that, if successful, could trim the cost of the S&L cleanup but could also damage the government's credibility in the future.

When Perelman and Texas banker Gerald Ford took over a failed savings and loan now called First Gibraltar, they weren't exactly buying a piece of the rock -- or so it then seemed.

In return for putting up $171 million of Perelman's cash, they got five failed thrifts that had been merged by federal regulators into one Texas-size swamp of bad loans, worse investments and thousands of acres of land that had once cost $1.5 billion but were officially declared worthless by the government.

But First Gibraltar has turned out to be a rock solid investment. In just one year, Perelman earned more than $250 million in profits and tax benefits on his $171 million investment, thanks to the subsidies the government gave him for taking over the failed thrifts.

Investing in troubled thrifts was not so profitable for Caroline Hunt, the sister of bankrupt ex-billionaires Bunker and Herbert Hunt. While Caroline Hunt avoided the silver market losses that wiped out her brothers, she lost $25 million on Southwest Savings, a package of five problem thrifts similar to those acquired by Perelman.

Unable to make Southwest profitable even with subsidies projected to total $2 billion over 10 years, Hunt gave up and gave the S&L back to the government last month. Southwest Savings went into the record books as the first Texas thrift to fail twice.

Hunt was able to walk away from Southwest because the government had required her to put up only $25 million to acquire a thrift with $5 billion in assets, said a government official familiar with the thrift. Southwest's loans and real estate investments turned out to so badly underestimated that even with massive government subsidies it could not operate in the black, the source said. Since the deal didn't work as planned, the government will now have to pour millions more into cleaning up Southwest's losses.

The government made the opposite mistake with Perelman, said Sen. Howard Metzenbaum (D-Ohio). First Gibraltar's problems were seriously overestimated, so the government gave Perelman millions more than were needed, said Metzenbaum.

Citing First Gibraltar as the most costly example of how the government has bungled S&L rescues and wasted billions of dollars, Metzenbaum is leading a drive in the Senate to reexamine all 200 of the savings and loan sales that were arranged by the government in 1987 and 1988. House Banking Committee Chairman Henry B. Gonzalez (D-Tex.) has held hearings on some of the Reagan administration S&L sales, and his committee is continuing to investigate ways to reduce their cost.

Perelman's deal "raises questions in my mind about whether other deals were negotiated in the government's best interest," Metzenbaum said. "I'm not suggesting any dishonesty," the senator added -- only that the big investors who bought many savings and loans "had negotiating skills far beyond those of the government."

Under orders from Congress, the Resolution Trust Corp. -- the new agency that took over the S&L cleanup when the Home Loan Bank Board was abolished by Congress last year -- has already contracted with teams of accountants and lawyers to review the terms of the transactions. Metzenbaum wants to go further, hiring lawyers to renegotiate all the deals, paying them a piece of whatever they can save for the taxpayers.

The Lure of Subsidies At the time many of these lucrative S&L sales were arranged, the Federal Savings and Loan Insurance Corp. fund -- built up by contributions from thrift institutions -- had been virtually depleted by years of S&L failures. There was not enough money simply to pay off insured depositors and take over failed associations as the government has been doing since Congress passed the S&L cleanup bill last August.

Under then Federal Home Loan Bank Board chairman M. Danny Wall, thrift regulators came up with what they called "the Southwest Plan," a package of creative financing to sell failed thrifts to private investors. Its primary focus was the failed S&Ls in Texas and neighboring states.

Instead of writing checks to cover the billions of dollars that had been lost, Wall gave the new buyers notes. An association whose debts added up to $500 million more than its assets would be given a $500 million note from FSLIC to make the books balance. The note was to be paid off sometime later, after Congress provided more money to replenish the insurance fund. In the meantime, the note paid interest, providing a direct government subsidy to the buyer of the failed association.

A second kind of subsidy was created to cover the losses S&Ls were suffering on the real estate they had repossessed from borrowers who couldn't make their mortgage payments. A financial institution that takes back a vacant building is in a bind. The depositors whose money was lent to the builder still have to be paid interest, but empty buildings don't bring in any income. Private investors weren't about to buy thrifts that were burdened with lots of money-losing real estate.

Wall's answer was to promise investors a profit on those bad investments. If there weren't any tenants to pay the rent, the government would pay enough to cover the interest payments to depositors and guarantee a profit to the thrift under what was called an asset maintenance agreement.

All the subsidies were tax-free. In addition, a federal tax law -- since changed -- allowed the new buyers to use the S&Ls' previous losses as tax deductions.

In Perelman's case, the losses of First Gibraltar could be deducted from the profits of MacAndrews & Forbes, the holding company through which the purchase was made. MacAndrews & Forbes won't say how much it saved in taxes with the investment, but congressional investigators peg the amount at $121 million in 1989, on top of the thrift's $129 million in profits.

Part of the reason for the substantial profits is Perelman's partner Gerry Ford, known as one of the savviest bankers in Texas. Ford put together a string of small banks and kept them profitable through the years when bigger Texas banks were going broke. It was Ford who first proposed purchasing First Gibraltar. To get the needed cash, he turned to Perelman, who is ranked by Forbes magazine as the fifth-richest person in the nation, worth about $2.5 billion.

The purchase immediately produced controversy after it was disclosed that Perelman planned to pay Ford $1 million a year for running the thrift. When the regulators at the Federal Home Loan Bank of Dallas objected to the thrift paying such a high salary, Perelman agreed to pay part of the chief executive's salary through his holding company, reducing the cost to the thrift.

To buy First Gibraltar, Perelman put up $171 million in cash and raised another $144 million from investors. In a document furnished to investors, Perelman projected that First Gibraltar not only would turn an immediate profit, but also would be able to pay dividends of $204 million in 1990 and another $135 million in 1991. Within two years, the buyers would be able to recapture their entire investment and would still own an institution with almost $10 billion in assets.

A U.S. Miscalculation? Metzenbaum aides who have studied the transaction say the main reason First Gibraltar is such a lucrative investment is that the government overestimated the cost of cleaning up the thrift by $1.6 billion and as a result gave Perelman far bigger subsidies than needed -- $461 million cash in the first year alone.

The government calculated that making First Gibraltar healthy enough for any private investor to buy it would require giving $5 billion in federal aid and $1.2 billion in tax breaks.

Because the cost figures were so far off, it would have been much cheaper for the government to simply shut down First Gibraltar, Metzenbaum said in a letter to L. William Seidman, chairman of the Resolution Trust Corp.

The billion-dollar error in the cost estimates was uncovered by the Federal Home Loan Bank of Dallas, which did an independent analysis of the transaction after officials there were shocked by the huge subsidies granted by Washington.

The biggest mistake, the analysis said, was that Washington decided that thousands of acres of land in Texas and other states for which First Gibraltar and its predecessors paid $1.2 billion was "worthless."

"I cannot imagine any land, anywhere in the U.S., that is worthless," wrote Dallas bank staff member Jeff Potter. In no other S&L sale has the value of all land been written down to zero. No matter how badly the S&L had been run, he suggested, it was "absurd" to believe it could spend more than a billion dollars on land and not get a single acre that had some value.

Despite the depressed Texas real estate market, First Gibraltar sold more than 400 acres of land last year for about $7.5 million. What's important about the transactions, a Metzenbaum aide noted, is not only that the land was sold, but also that it was sold for an average of 80 percent of its value on First Gibraltar's books.