Teflon tape works great, you can make it as thick or thin as you need it. It is impervious to oil, coolant, water, whatever. You can install it into a "wet" hole.

Be careful not to get too long a bolt if you go with a new one.

Since I don't have an LA car with power steering I am not sure which one you are referring to but it has been know for some hamfisted goons with too long a bolt to reef down on it and stress the #1 cylinder wall.