WASHINGTON - The Securities and Exchange Commission has asked roughly 30 major underwriting firms to detail their political contributions in the municipal area, market sources confirmed yesterday.

The commission is reviewing contribution practices to determine whether they are "consistent with the requirements of federal securities laws," one source said after reviewing a four-page letter the SEC sent last week asking underwriters for the information. The letters were signed by William McLucas, the SEC's enforcement chief, the source said.

"Obviously, we are aware of some of the reports recently suggesting that there have been either political contributions or business ventures that certain firms or their personnel have entered into for the purpose of influencing the underwriting business in the municipal bond area," McLucas said in a telephone interview yesterday.

"I don't want to comment on anything we are doing specifically, other than to say that we are going to take a look at the area, and if there have been violations of the law we will take a look at what the facts are and pursue the inquiries as appropriate," McLucas said.

McLucas declined to confirm that the agency sent the letters, but several officials at major Wall Street firms said they had received the request.

The letters are not subpoenas, sources familiar with the mailing said. The letters ask firms to voluntarily provide information about "political contributions, payments or the providing of other things of value" by the firms and their personnel "to elected officials or employees of governmental entities in connection with the offering of municipal securities by such entities," a market source said, paraphrasing the letter.

"I'd love to see this get cleaned up," said an official with one Wall Street firm, who asked not to be identified. We'd love to see some changes in the campaign finance laws. It's very frustrating. It makes my job miserable. No one wants to write a check for political contributions."

The company official said reform could bring the industry back to the point where business was awarded "based on merit rather than on politics."

Market sources who have seen the SEC's letter raid complying with the request will mean turning over huge piles of documents to regulators. One question, for example, asks each firm to list every deal the company has a senior-managed or co-managed over the past three years. Others include listing every campaign contribution that the firm, individuals at the firm, or company-sponsored political action committees have made to any public officials over the past three years.

Other questions ask for summaries of company policies on campaign contributions.

"They're asking for the whole kitchen sink," one company official said.

The request asks for a response in about a month.

The SEC inquiries come in the wake of recent ongoing probes into possible political influence peddling involving bond issues in New Jersey and New York City.

The U.S. attorney's office in Manhattan, for example, has subpoenaed documents from several of the bankers and officials involved in the New Jersey Turnpike Authority's 1991 and 1992 refundings. And turnpike officials said earlier this week that the SEC has subpoenaed documents related to the deal as well.

The SEC letters requesting contribution information do not refer to any particular bond sales that might be under review.

In addition to the SEC and U.S. attorney probes, the chairman of the House Energy and Commerce Committee announced last week that the panel and its securities subcommittee are launching a broad review of the adequacy of regulation in the municipal securities market.

And the chairman of the House Small Business Committee's subcommittee on regulation sent a letter to securities regulators last week announcing an inquiry into negotiated sales of municipal bonds.

The Municipal Securities Rulemaking Board announced on May 19 that it may adopt a rule requiring dealers to disclose political contributions during the underwriting process. The announcement is being republished this week in the board's quarterly circular to dealers, MSRB Reports.

Interest groups in Washington have warned that the majority of contributions going to politicians do not come from firms' political action committees, but from individuals at firms and their families. Such contributions are hard to detect, although several public interest groups have begun projects in parts of the country aimed at tracking contributions to state and local officials.

In addition to campaign contributions, regulators are also reviewing the practice of establishing business relationships with companies considered well-connected politically, with the expectation that such favors will be rewarded with business later.

For example, several market players have said they courted officials at Armacon Securities, the New Jersey-based broker at the center of the federal turnpike investigation, because the firm was known to have strong ties to Gov. Jim Florio's administration. The company is owned by Florio's close political ally, Nicholas Rudi, and by the governor's former chief of staff, Joseph Salema.

The National Association of Securities Dealers late last month asked Smith Barney, Harris Upham & Co. to provide details of its relationship to Armacon, a Smith Barney official confirmed yesterday. Smith Barney said recently it included Armacon on a 1992 Ohio syndicate as a favor, because Armacon had worked on an earlier deal in New Jersey that did not generate any fees. Armacon received an undisclosed fee for the Ohio work, but did not underwrite any bonds.

A spokesman for Smith Barney said the Ohio deal and another issue, a $35.5 million Camden, N.J., issue, were the only two transactions in which Smith Barney and Armacon officially worked together.

In addition to Smith Barney, the NASD has also requested information from Butcher & Singer about its underwriting activity with Armacon. Butcher & Singer was senior manager on two deals in which Armacon acted as co-manager. Wheat First, Butcher & Singer's parent company, acted as a comanager on three issues that Armacon senior-managed.

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