Russo’s Next Production: a New Party : Politics: Film producer and former pop star manager Aaron Russo is trying to start a new political party. His beliefs have gotten him into trouble with both the left and the right.

Aaron Russo’s pool house is not your average Coldwater Canyon pool house. For one thing, beside those marble-blue waters, leisure is not the order of the day. Turning the government inside out is.

Indeed, Russo, an independent producer and Bette Midler’s former manager, is trying to organize his own political party, which he’s calling the Constitution Party. And where other Beverly Hillians store towels, Russo lines the walls with political mirth and muck. One wall, explains one of the young Constitution Party volunteers, has a special place in Russo’s heart.

They call it the Wall of Fools.

“Your obvious lack of morals scare me. But . . . I’m sure the homosexual community will come to your aid . . . as they did Bill Clinton (disgusting!),” snips a woman who signs her posted missive “Yours not very truly.”

Russo, the would-be Ross Perot of Hollywood, believes in live and let live, a philosophy that’s already getting him into trouble with both the left and the right.

“People say, ‘How can you be a liberal if you believe in no gun control and no redistribution of wealth and no entitlement programs?’ And other people say to me, ‘How can you be a conservative if you believe that homosexuals have their rights?’

“And I say, ‘The constant theme of everything I do is freedom. I don’t want to put restraints on the left or the right. Everyone is free. I draw the line on when they hurt you.’ ”

After more than 20 years in the entertainment industry, Russo, 51, is bowing to a different hero than box office these days--Thomas Jefferson. Since September, he says, he’s been on a mission to nudge America back into a strict interpretation of the principles behind the Constitution. He says that means scrapping big government and its piggy bank, the Internal Revenue Service. (Reports of Russo’s tax troubles surfaced in the ‘80s, but he denies them.)

“The federal government is supposed to be our servant, and now we work for the federal government. It’s like you hire a bodyguard, and you say, ‘I’m paying you $1,000 a week.’ And after the bodyguard works for you for six months, he says, ‘Listen, I don’t want $1,000 a week anymore. I want 30% of your income. And I want you to go to sleep at 9 o’clock at night. And I want you to wear this, and I want you to do that.’ It’s like a bodyguard gone psycho. That’s what the federal government is.”

Russo wants to rein it in by putting up a Constitution Party candidate for the 1996 presidential election. He says he plans to talk to a few potential candidates--one from Hollywood, none professional politicians--who are sympathetic to the cause.

But Russo, who produced “The Rose” (1979) and “Trading Places” (1983), isn’t straying entirely out of the entertainment fold. He’s also planning to produce films with a Constitution Party message. He has commissioned Paul Haypenny to write a script about a woman who battles with the IRS after her husband’s death.

Such familiar turf could be where Russo makes his sharpest imprint, observers say.

“I’ve told him I have my doubts about third parties,” says conservative activist David Horowitz, who invited Russo to address a recent National Review conference on Hollywood. “It’s very hard to start a third party. But I’d like to see him use his producer talents. He’s an American original, and I think he speaks to a very deep chord in the American psyche--individualism, independence, the frontier spirit.”

It’s a long, strange journey from Russo’s previous incarnation as a ‘60s rock promoter of such groups as the Who, Led Zeppelin and the Grateful Dead. In the ‘70s, he spent seven tempestuous years managing Midler, who was also a lover for a time. (He’s still close to his ex-wife, Heidi Gregg; they have two children, Max, 12 and Sam, 9.)

Russo scored successes with “The Rose,” a film he produced to showcase Midler, and “Trading Places,” but when he set up his own production company in the late ‘80s, the business went bust. Aaron Russo Entertainment’s first film was “Rude Awakening” (1989), which starred Cheech Marin and gave a preview of utopia Russo-style. The movie, the first directed by Russo, indicted the ‘80s through the eyes of hippies who returned to civilization after decades in the Central American jungle. It was also a flop that spelled the end of Aaron Russo Entertainment.

Russo had mortgaged his Purchase, N.Y., home to bankroll publicity for the film. And when the film died, he packed up his newly house-free family and launched a three-year journey--spanning Tahiti, cross-country in a van and Manhattan. He says the fatal federal siege on the Branch Davidian sect’s compound in Waco, Tex., ignited his fervor against big government, and eventually led to his new job as party founder.

And now Russo’s political passions come out in an unstoppable stream of words while phones ring in the poolside war room, where volunteers wield phones and flyers to commandeer supporters and donations. (Russo wouldn’t say how much money had been raised, but he said it was unsubstantial.)

“Some people say, ‘Why don’t you just go back and make movies and stop this?’ ” Russo says. “And you know, when your house is burning down, you’re gonna sell lemonade?”