WASHINGTON (Reuters) – A direct-mail solicitation for Ron Paul's political and investment newsletters two decades ago warned of a "coming race war in our big cities" and of a "federal-homosexual cover-up" to play down the impact of AIDS.

The eight-page letter, which appears to carry Paul's signature at the end, also warns that the U.S. government's redesign of currency to include different colors - a move aimed at thwarting counterfeiters - actually was part of a plot to allow the government to track Americans using the "new money."

The letter urges readers to subscribe to Paul's newsletters so that he could "tell you how you can save yourself and your family" from an overbearing government.

The letter's details emerge at a time when Paul, now a contender for the Republican nomination for president, is under fire over reports that his newsletters contained racist, anti-homosexual and anti-Israel rants.

Reports of the newsletters' contents have Paul's campaign scrambling to deny that he wrote the inflammatory articles.

Among other things, the articles called the Rev. Martin Luther King Jr. a "world-class philanderer," criticized the U.S. holiday bearing King's name as "Hate Whitey Day," and said that AIDS sufferers "enjoy the attention and pity that comes with being sick."

As Paul made a campaign stop in Manchester, Iowa, on Thursday, his Iowa chairman, Drew Ivers, repeated Paul's assertions that he did not write the articles that resurfaced this week in a report in the Weekly Standard magazine.

Paul has said that he is not sure who wrote the articles that were published under his name. He has said the articles do not reflect his views, and noted that his public stances - supporting gays in the military for example - have run counter to the incendiary statements in the newsletters.

In an interview with CNN's Gloria Borger on Wednesday, Paul said of the newsletter's articles: "I didn't write them. I didn't read them at the time and I disavow them."

When Borger continued to pursue the subject, Paul removed his microphone and walked out of the interview.

"It is ridiculous to imply that Ron Paul is a bigot, racist, or unethical," Ivers said.

However, Ivers said, Paul does not deny or retract material that Paul has written under his own signature, such as the letter promoting Paul's newsletters.

When asked whether that meant Paul believed there was a government conspiracy to cover up the impact of AIDS, Ivers said, "I don't think he embraces that."

Paul's newsletters "showed good factual information and investment information," Ivers said. "It was a public service, helping people understand and equip them to avoid an unsound monetary policy."

"EXTRAORDINARY SOURCES"

The letter promoting Paul's newsletters was written about 1993. It was during a period in which Paul - who left Congress in 1985 after serving about eight years - returned to Washington after a decade's absence.

(For a PDF of the solicitation letter see http://link.reuters.com/vud75s)

The letter was provided to Reuters by James Kirchick, a contributing editor for The New Republic magazine. He says he found the letter in archives of political literature maintained by the University of Kansas and the Wisconsin Historical Society.


Early in the 2008 presidential campaign - in which Paul was a candidate - Kirchick published an article in The New Republic in which he described Paul as "not the plain-speaking antiwar activist h supporters believe they are backing - but rather a member in good standing of some of the oldest and ugliest traditions in American politics."


The letter promoting Paul's newsletters claims that Paul - through what he describes as a network of "extraordinary sources" in Congress, the White House, the Treasury and Justice departments, the Federal Reserve and the Internal Revenue Service - had acquired unique insider information that would his subscribers to "neutralize" the plans of "powerbrokers."


Paul's letter went on to describe various plots and schemes that he had "unmasked," including a "plot for world government, world money and world central banking." He also claimed to have exposed a plan by the Federal Emergency Management Agency (FEMA) to "suspend the Constitution" in a falsely declared national emergency.


Despite being "told not to talk," Paul wrote that his newsletters also "laid bare" the "Israeli lobby, which plays Congress like a cheap harmonica," and a "federal-homosexual cover-up on AIDS."


Paul claimed that his "training as a physician" helped him "see through" this alleged cover-up.


Paul also suggested that a planned U.S. currency with new notes designed to curb counterfeiting and money laundering would result in the distribution of "totalitarian bills" that "were tinted pink and blue and brown, and blighted with holograms, diffraction gratings, metal and plastic threads and chemical alarms."


Paul said the money was designed to allow authorities to "keep track of American cash and American citizens."


He urged the letter's readers to send in $99, which would buy subscriptions to his monthly political and investment newsletters, a copy of his book "Surviving the New Money," an investment manual and access to the "unlisted phone number of my Financial Hotline for fast breaking news."


(Additional reporting by Samuel P. Jacobs in Manchester, Iowa; Editing by David Lindsey and Eric Walsh)