The Labor Department has subpoenaed records from a union pension fund as part of a criminal investigation into real estate deals between the fund and Terence R. McAuliffe, who served as President Clinton's chief fund-raiser in the 1996 campaign. Investigators from the department's Office of the Inspector General last month ordered the National Electrical Benefit Fund to turn over documents involving a series of risky central Florida real estate ventures it entered into with McAuliffe, sources close to the probe said.

The $6 billion pension fund, which is jointly managed by the International Brotherhood of Electrical Workers (IBEW) and a management group, the National Electrical Contractors Association (NECA), invested close to $50 million in McAuliffe's companies without requiring McAuliffe to put up any of his own money.

The Labor Department investigation is the latest in a series of federal probes that have dogged McAuliffe in recent months. McAuliffe, who raised a record $43 million for the Clinton-Gore '96 campaign and served as the Democratic National Committee's finance chairman in 1994, is a key figure in the ongoing federal investigation into illegal fund-raising by the Teamsters union. He also has been questioned by congressional and Justice Department investigators probing presidential campaign finance abuses.

Joseph F. McGowan, director of policy for the Labor Department's Office of the Inspector General, said the agency can't comment on current investigations, but IBEW spokesman C. James Spellane confirmed that the fund has been subpoenaed and is in the process of turning over the relevant documents to Labor Department investigators.

"We're cooperating fully with the investigation because we feel the Labor Department will find that nothing improper occurred," he said.

McAuliffe's benefactor at the pension fund was Jack F. Moore, then the IBEW's international secretary and trustee of the fund. Sources close to the probe by the IG's labor racketeering division say the investigators are particularly interested in whether Moore gave McAuliffe financial backing for his business while receiving access to the Clinton White House. But John Grau, NECA's executive vice president and pension fund trustee, said, "The IBEW gives so much money to the Democratic Party that they don't need Terry McAuliffe to get into the White House."

Moore also was the treasurer of the union's political action committee, which donated close to $2.5 million to Democratic candidates and party organizations in the 1996 campaign.

Grau said that McAuliffe was not accorded special treatment by the fund and said that all the investments were signed off on by an outside real estate consultant. "There's nothing that could be favoritism. Our procedures don't allow that," Grau said.

Neither Moore nor McAuliffe returned calls seeking comment.

The Labor Department investigation is mostly a fact-finding expedition at this point, according to sources close to the probe. So far, no witnesses have been subpoenaed, although investigators have begun contacting current and former pension fund and union employees, according to those employees.

The deals at the heart of the investigation date to the early 1990s, when McAuliffe formed two companies to purchase cut-rate real estate from the Resolution Trust Corp. (RTC), the agency Congress created to liquidate the assets of failed savings and loans.

McAuliffe's father-in-law, Richard Swann, had been the chairman of American Pioneer Savings and Loan in Orlando. In 1990, federal regulators seized the thrift, declared it insolvent, and set to work selling off apartment buildings, shopping centers and other real estate holdings that were the product of American Pioneer's bad loans. The S&L's failure ultimately cost taxpayers almost $500 million.

That same year, Swann and McAuliffe formed American Capitol Management Group to bid on some of the thrift's real estate in the RTC auction. But with Swann in bankruptcy, they needed capital. So they approached Moore, who had first met McAuliffe when they both raised money for the unsuccessful 1988 presidential campaign of Rep. Richard A. Gephardt (D-Mo.).

McAuliffe offered Moore a tempting deal, according to sources familiar with the investments. If the pension fund would put up the money, McAuliffe would use it to buy American Pioneer real estate from the RTC for well below market rates, aided by Swann's knowledge of the property.

Moore was unusual among union pension fund trustees in that he was almost solely responsible for the $6 billion fund's real estate investments. After a series of union pension fund scandals in the 1970s, most funds expanded the number of trustees required to sign off on any investments. The National Electrical Benefit Fund had only Moore and Grau.

In 1991, the pension fund entered into a limited partnership with McAuliffe's firm, called American Capitol Group I Assets. According to the partnership agreement, McAuliffe got a 50 percent equity interest in the partnership, even though he didn't put up any of his own money.

American Capitol acquired five Orlando apartment buildings from the RTC for $25 million and a downscale shopping center near St. Petersburg for $13.7 million. The pension fund put up the full amount of the purchase price in return for promises that it would get a 9 percent preferred return on the investment, according to the partnership agreement.

The 9 percent return never materialized, according to internal pension fund records. Instead, the fund made between 5 and 6 percent annually on its $38.7 million. The IBEW's Spellane said that while the investment didn't bring in what the union had hoped, it still made money at a time when the real estate market was doing badly.

But James Parker, a real estate attorney with the Washington law firm Arent Fox Kintner Plotkin & Kahn, said, "They clearly lost money if they didn't make at least the most conservative return available."

At one point near the end of 1991, when the pension fund was getting a 4 percent return on its investments with McAuliffe, two-year U.S. Treasury notes were paying almost 9 percent.

In mid-1992 and early 1993, McAuliffe sold most of his free shares in American Capitol back to the pension fund, taking in $2.4 million. Grau said the fund bought the shares at a discount after getting approval from a third-party appraiser.

American Capitol's investments are only one part of the Labor Department's probe. Investigators are also looking at a development in Orlando known as Country Run. In 1992, Moore signed a mortgage loan agreement between the pension fund and another McAuliffe company, Columbia Land and Development Corp., pledging to lend McAuliffe up to $10 million to buy and develop the land. McAuliffe's company purchased the land from the RTC for $2.8 million, and borrowed several million dollars more from the fund for development costs. Columbia got the land for about half its market value, but the lots didn't sell.

Within a year, Columbia was in default on the pension fund loan. By the end of 1995, the fund reported to the IRS that the unpaid balance of the loan was $7.8 million, with more than $5.8 million overdue.

It wasn't until last spring that the fund finally started to pull out of McAuliffe's investments. In late March, Moore suddenly announced that he was retiring from the union, despite having been reelected to another five-year term in September 1996. Three days after he stepped down, sources said, the fund fired its executive director and a real estate investment specialist who had knowledge of the McAuliffe deals.

Not long after Moore retired, the pension fund sold off the Florida apartments. Then, in October, another McAuliffe company bought the shopping center and the bad loan from Columbia Land and Development, effectively paying off the pension fund. The move left the fund with about a 6 percent return on the McAuliffe investments, which union officials say proves that the fund did nothing improper when it invested in McAuliffe's companies.

The IBEW's Spellane said, "We did our due diligence on the investments. While they did not perform as well as we had hoped, they did now make money and now it's over." CAPTION: TERENCE R. McAULIFFE