Those who managed Utah's Industrial Loan Guaranty Corp. only followed orders laid down by state lawmakers who had created the deposit guaranty fund, which failed and caused the collapse of Utah's thrift industry, attorneys say.

"The Legislature in its wisdom, or lack of it, set it (the ILGC) up" and decreed how it would be funded, said Gordon L. Roberts, an attorney representing the ILGC's former legal counsel, the Salt Lake law firm of Watkiss & Campbell."We were given a hose too short to put out the fire," added Gregory J. Sanders, an attorney hired by the state's former insurance carriers and representing state officials involved in the thrift debacle.

Those comments came at a hearing this week before 3rd District Judge David S. Young on motions to dismiss a class action suit by a group of thrift depositors against the state and several hundred other defendants. The complaint seeks recovery of an undetermined amount of money depositors anticipate losing as a result of the failure of the ILGC and five of its member thrift and loans.

Roberts and attorneys for the state and several ILGC trustees and professional advisors named as defendants in the suit focused their arguments on the complaint's numerous alleged technical flaws. But they also delved into the pleading's substance and placed responsibility for the ILGC's problems with the Legislature.

Attorneys called attention to the 1975 legislation and subsequent amendments that created the ILGC and dictated how it would function. They said actions taken by professional advisers and state officials to keep the ILGC and its member thrifts alive were legal and governed by state statute.

Sanders told the Deseret News that in the hearing he likened Elaine B. Weis, the former financial institutions commissioner, to a firefighter who could only work with the tools given her to douse a burning building. "We were given a hose too short to put out the fire," Sanders said of the statute setting up the ILGC.

"And when the fire keeps going, she doesn't give up but tries using buckets of water."

Sanders criticized the complaint for characterizing state officials as crooks when they work with tools lawmakers give them.

The complaint filed by Depositors of Insured Thrifts (DOIT), an organization of several thousand depositors, claims the privately funded ILGC had been underfunded since its creation in 1975, and that the failure of Murray First Thrift in 1982 rendered the fund insolvent.

Furthermore, the complaint says the state and others mismanaged the troubled thrift industry by merging troubled institutions with healthy ones, and allegedly defrauded depositors by allowing insolvent thrifts to take deposits ostensibly guaranteed up to $15,000 by the ILGC.

On July 31, 1986, state regulators declared the ILGC insolvent and took control of its seven remaining member thrifts. Two of the thrifts were rescued, while five are being liquidated, with some 15,000 depositors standing to lose an estimated $37 million.

DOIT claims the state and others privy to the ILGC's problems should have alerted depositors to the risks and shut down the ILGC thrift industry in 1982.

But Roberts said state law required confidentiality on the financial condition of the thrifts, and it established ways for the ILGC to "tough it out," not quit.

"You can't sue people for not doing what the statute says you can't do, or for doing what the statute says you are supposed to do," Roberts said. "The whole complaint is riddled with this problem."

Motions filed to dismiss the complaint said the 50-page pleading is confusing and violates rules of civil procedure in its form and charges of fraud, breach of contract, negligence and racketeering. Roberts said the complaint contains "glib and snappy" writing, but remains "a hopeless morass in trying to find out what your client did."

DOIT's response has been sealed by the court because of references to state documents now under a protective order. But, DOIT's lead counsel, California attorney Malcolm A. Mis-uraca, argued during the hearing that while the complaint is unique, it's clear in its purpose of bringing about a judicial as well as political solution to Utah's thrift crisis.

DOIT's complaint and lobbying efforts have indeed put pressure on lawmakers, forcing creation of a task force appointed by Gov. Norm Ban-gerter to recommend a solution to the problem. The task force met Thursday evening at South High School to hear from depositors on the hardships and suffering the thrift failures have caused.

Several depositors told the task force that they had lost their life savings because they trusted the ILGC's guarantee was backed by the state.