White House counsel C. Boyden Gray has drawn criticism from a gay rights organization after disclosure of a speech in which he used the word "fag."

Gray made the comment after being asked by a member of the Chevy Chase audience to explain President Bush's reversal on his pledge of no new taxes, according to a report in the Bethesda Gazette, a weekly.

Gray replied that Bush had to go along to "pay for the Democrats' S&L crisis," and he criticized former speaker Jim Wright (D-Tex.) and former majority whip Tony Coelho (D-Calif.).

Gray then charged that Wright had gone after Edwin J. Gray (no relation), who was chairman of the Federal Home Loan Bank Board, "by spreading rumors that one of his examiners was a fag." When questioned about this remark later, Gray repeated his reference to "fag," according to the Gazette.

Gray, a Harvard-educated lawyer from North Carolina, also was reported to have referred to former representative Fernand J. St Germain (D-R.I.) as "a real crook." St Germain, who was defeated for reelection in 1988, has not been charged with any crime.

Gray made his remarks about St Germain in talking about the Democrats' role in the S&L crisis. St Germain was chairman of the House Banking, Finance and Urban Affairs Committee. Efforts to reach him at his home in Newport were unsuccessful.

Gray's comments were made Nov. 1 to about 35 members of the Montgomery County Republican Club in Chevy Chase.

A White House spokesman said Gray would have no comment on the matter.

Robert Bray, spokesman for the National Gay and Lesbian Task Force, said Gray's language was "a shocking message that it is okay to stigmatize gay people. I think anti-gay defamation by a senior White House official is counterproductive to the message of diversity and inclusion by President Bush."

In his talk, Gray described the current election system as "a sicko system" and said, "When you have incumbents funded at a rate of 30 to 1 over challengers, it really makes elections meaningless."