WORLD/COVER

A STATE OF DISGACE

MARCI McDONALD March 9 1987
WORLD/COVER

A STATE OF DISGACE

MARCI McDONALD March 9 1987

A STATE OF DISGACE

WORLD

COVER

It had all the ingredients of a bestselling thriller: a web of international intrigue spun by people in the highest offices of the land, arms dealers, spies—and a stunning blond secretary, who falsified documents. The settings were exotic and the dialogue was full of colorful boasts and spicy gossip. But those elements were not the main reason why—despite its plain blue cover and dull title—Government Printing Office Document 040-000-00514-5 gripped the attention of readers in Washington and around the world. Released under the strictest security last week, the 242-page report of the President’s Special Review Board on the Iranian arms scandal, prepared by three commissioners, led by former Republican senator John Tower, contained a damning indictment. The report painted a portrait of Ronald Reagan as an isolated and confused president who had blundered into “wrong” policies and “did

not seem aware” of how they were implemented or their consequences.

Despite that searing verdict, even the President’s opponents showed an unwillingness to see the United States crippled by another president forced out of office before the end of his term, as Richard Nixon was in 1974. Democrats joined Republicans in urging Reagan to take swift and decisive action to save his floundering presidency. And he showed the depth of his anxiety by cancelling his usual weekend at Camp David, Md., and announcing the replacement of his longtime ally and chief of staff, Donald Regan, by former senator Howard Baker of Tennessee. Baker, a well-liked lawyer, abandoned his own presidential aspirations to rescue the wounded President. But his sudden appointment late last Friday was announced with a terse White House handout and none of the accustomed fanfare.

Then, in the climate of a grim and

besieged White House,

Reagan huddled over the weekend with Baker and other trusted advisers to plan what many analysts termed the greatest challenge of his political life— his televised address this week to the nation. In it, he was expected to announce a drastic shakeup that would go well beyond replacing his chief of staff.

Harsh: But the President’s advisers also counselled him to confront the Tower commission’s harsh judgments with candor, humility and an emotional, energetic appeal for renewed public confidence.

His 1984 campaign director,

Edward Rollins, had earlier warned that after the President’s two disastrous attempts to excuse himself last fall—which the Tower report revealed were the product of a deliberate attempt by his aides to mislead the public —that might be Reagan’s last chance to restore his onceunrivalled popularity.

While castigating the President’s aides—principally Chief of Staff Donald Regan—for failing to keep him informed, the Tower report said that Reagan bears the chief responsibility, as the ultimate decision-maker in foreign policy, for the scandal. Concluded the commission, which also included former secretary of state Edmund Muskie and former national security adviser Brent Scowcroft: “If but one of the major mistakes we examined had been avoided, the nation’s history would bear one less scar, one less embarrassment.”

Paralysis: In the past Reagan has demonstrated a remarkable capacity to rebound from adversity, but some critics say that it may now be impossible for him to recover. With congressional hearings into the scandal due to stretch out over most of the year, said political scientist James David Barber of North Carolina’s Duke University, “the most likely thing is paralysis of the administration—and that’s a hopeful diagnosis.” Added Congressman Newt Gingrich, a conservative Georgia Republican: “He will never again be the same Ronald Reagan he was before he blew it. He is not going to regain our trust and our faith easily.”

To many of the President’s critics, the Tower commission’s appraisal of the President was expected. According

to political scientist Stephen Hess of Washington’s Brookings Institution, it was a “legitimization of what so many people felt: there’s nobody really steering the ship.” But the portrayal of the President as a leader out of touch, with a National Security Council (NSC) staff out of control, clearly concerned the United States’ allies. The report depicted Reagan as a dupe of immature advisers.

Restored: That led many conservatives to express concern that the highest cost of the scandal might be the country’s own newly restored self-image. Said Norman Ornstein of the conservative American Enterprise Institute:

“Obviously we and the world would be better off if we were a little bit more sure of ourselves.”

Indeed, the Reagan who until recently revelled in his ability to make Americans feel that they were “standing tall” again seemed strangely absent last week. In his hurried introduction to the unveiling of the Tower com-

mission report at a White House news conference, he appeared feeble and shaken. He frequently stumbled over his brief written text and lost his place. And Muskie confirmed that when the board had presented its findings to the President in a 45-minute meeting immediately beforehand, he gave the impression of a man stunned at its revelations—despite the fact that many of them had already been leaked to the media. Said Muskie: “I got the sense that he was listening to what we had to say as though he was hearing things he had never heard before.”

Compounding that image of weakness was Reagan’s refusal to act on appeals from his wife, Nancy, and close friends to fire Regan in advance of the report’s ^ publication. The Presi2 dent had bowed to his s chief of staff, who had y wanted to leave afteri ward, exonerated by the i panel. Instead, Tower,

Muskie and Scowcroft singled Regan out for particularly stinging criticism. They found him guilty of failing to keep Reagan informed or ensuring that “an orderly process” of establishing and implementing policy was observed. Worse, they said, he had made no plans for handling any public disclosure of the arms-for-Iran initiative. “He must bear primary responsibility for the chaos that descended upon the White House when... disclosure did occur,” said the report. As Democratic Senator Dennis De Concini of Arizona declared later, “It’s very clear now that this man gave the President bad advice.”

Ridicule: That verdict seemed to be well supported by the facts. As the scandal unfolded, Regan had subjected the President to ridicule by persuading him to give the commission three different versions of the same event. First, Reagan declared on Jan. 26 that he had given prior verbal approval to the first secret shipment of arms to Iran by Israel in August, 1985. Two weeks later, at his chief of staff’s urging, Reagan recalled the board to the Oval Office to say that he had made a mistake—he had not approved it. Then

on Feb. 20—less than a week before the commission was to report—he changed to an even more damaging version. In a handwritten letter, Reagan confessed that he was “afraid I let myself be influenced by others’ recollections, not my own . . . My answer, therefore, and the simple truth is, T don’t remember—period.’ ” The Tower commission finally came down on the side of Reagan’s first version, which coincided with testimony by former national security adviser Robert McFarlane.

Flames: Some conservatives were deeply concerned by Reagan’s hesitancy over firing Regan. Richard Viguerie, for one, a leading right-wing fund raiser, said that the procrastination would make Reagan’s efforts to recover his standing more difficult. Said Viguerie: “When his presidency is in flames—his agenda going down the tubes—and he can’t bring himself to fire someone, you have to wonder.” But when Reagan did name Baker late on Feb. 20, Senator Robert Dole of Kansas, a 1988 presidential hopeful, declared: “Howard Baker has instant credibility. He understands Congress. It is an indication that Ronald Reagan understands the severity of the problem.”

The Tower report was also critical of Secretary of State George Shultz and Secretary of Defence Caspar Weinberger. Despite the fact that they made their objections to the arms sales to Iran known, the commission found, “they distanced themselves from the march of events” and “were not energetic” in attempting to protect the President from the consequences of his policies. Said Scowcroft, in presenting the report to the media: “The problem at the heart was one of people, not process. It was not the structure that was faulty; it was that the system was not used.”

‘Grievously’: Indeed, the report chronicled a litany of individual failure, and worse, among the President’s men. The national security adviser at the time, Vice-Admiral John Poindexter “failed grievously” in not warning the President that money from the arms sales appeared to have been diverted to the Nicaraguan contra rebels. And Central Intelligence Agency (CIA) Director William Casey also failed the President because he “did not move promptly” to warn him of what was going on. The commissioners’ most informative witness, McFarlane, ran a “too informal” shop and ignored even the most minimal safeguards of national security procedure in his eagerness to secure the release of American hostages in Beirut.

According to the report, McFarlane, who recently tried to commit suicide,

did not ask the CIA to check Manucher Ghorbanifar, a key Iranian link in the arms-for-hostages exchange, until too late. Later it emerged that the agency had concluded that Ghorbanifar was untrustworthy four years before the arms deal was initiated. McFarlane also virtually ignored legal considerations and he did not order a review of a policy that had shown almost no results. Indeed, only three of the seven American hostages then being held by Iranian-backed terrorist groups in Beirut were released as part of the armsshipment deal.

McFarlane also failed to warn the

President about the consequences of pursuing such a risky venture. When the project became public last fall, he helped to prepare a coverup chronology that was, in his own words, “misleading at least, and wrong at worst.” But perhaps the most disturbing character on whom the commissioners threw light was Lt.-Col. Oliver North. He was left almost unsupervised to run a complex arms and financial network out of his White House basement office, which he nicknamed, among other things, Project Democracy. As of last July he claimed that it had $5.8 million in assets, including six planes,

a 3,750-m landing strip, boats and warehouses. So many key covert operations were left in his hands that at one point he complained that he was only getting “two or three hours of sleep a night.”

Stunning: In the process, he regularly exceeded his authority, skirting U.S. law and other agencies to create what was virtually a private parallel government, deceiving congressional committees and bullying heads of state. In one of its most stunning revelations, the report described how North personally threatened to cut off U.S. aid to Costa Rica to prevent President Os-

car Arias from disclosing that an illegal contra supply effort had operated out of a secret U.S.-built airstrip in his country.

Far from alarming his superiors, North’s excesses seem to have dazzled them. At one point McFarlane applauded him in a computer message that said, “If the world only knew how many times you have kept a semblance of integrity and gumption to U.S. policy, they would make you secretary of state.”

Among the Tower report’s other nuggets was the disclosure that a “private individual”—since reliably identi-

fled as Saudi Arabia’s King Fahd—for a time gave the contras $1.3 million a month, which was later increased to $2.6 million. North arranged a secret Miami bank account for the transactions, which totalled $32.5 million in 1985. Almost as remarkable was the disclosure that Israeli Defence Minister Yitzhak Rabin arranged for his country to supply the contras with captured Soviet-bloc weapons, ammunition and—in return for Washington buying Israeli Kfir fighter jets for Honduras—between 20 and 50 Spanish-speaking military trainers and advisers. The shipload had just left Haifa

when the Iran arms scandal became public last fall and Rabin recalled it.

The commission found no evidence that Reagan himself knew of a diversion of the Iranian arms-sales profits to the contras. And Tower conceded that his panel had not even tried to pursue a major unanswered question: where are the missing millions from the arms sales to Iran? But its findings on private funding of the contras—attached almost as an afterthought in a final 14-page appendix to the report—provide a stepping-stone for congressional investigators now setting out on the same trail. Most

Washington observers predicted that the outcome would result in criminal prosecutions.

But the most serious charge North himself may have to face is obstruction of justice. The commission “found indications that Lt.-Col. North was involved in an effort, over time, to conceal or withhold important information.” Indeed, before it could publish its findings a new figure burst into the headlines: North’s beautiful, 27-yearold secretary Fawn Hall who, under a promise of immunity from prosecution provided by independent counsel Lawrence Walsh, admitted helping North

destroy or alter key documents.

A former model who once dated the son of contra leader Arturo Cruz—the recipient of a clandestine $9,100-amonth stipend from North—she injected a grace note into the tangled affair by displaying her blue-eyed beauty for the media outside her lawyer’s office last week. Said a breathless Hall: “It’s a little overwhelming... I don’t think I’ve ever had so many cameras on me.”

Charges: While both congressional committees investigating the scandal also swiftly moved to grant Hall and two other peripheral figures immunity last week, North himself appeared to

be concerned about criminal charges. In an action apparently organized by administration officials, North’s lawyer brought a suit claiming that Walsh’s powers as a special prosecutor were unconstitutional.

Tool: In addition to its personal criticism of former CIA director Casey, now in retirement with a brain tumor, the commission painted a damaging picture of the agency as an ideological tool of the White House. The CIA skewed its own intelligence to provide justification for the Iran arms caper.

Those general charges threaten to torpedo Reagan’s already imperilled nomination of Casey’s deputy, Robert Gates, to succeed him. Indeed, Republican Arlen Specter, one of the Senate intelligence committee members who must decide Gates’s fate, called on Reagan to withdraw the nomination.

Talking to the media, Tower described the entire Iran-contra affair as “an aberration.” But many Democrats and Republicans disagreed. Said Democratic Senate Majority leader Robert Byrd: “The knee-jerk military reaction is the central feature of this administration’s approach to the world.” Indeed, the Tower report’s greatest accomplishment may not be its level-headed recommendations or its wealth of facts, but its revelation of the sheer amateurishness of many at the highest levels of U.S. power.

Lame: Most analysts predict that the President will hang onto office, enfeebled by the next year of congressional inquiries, his administration adrift. Whatever changes he makes this week, he was already a lame duck whose capacities were undermined by the growing momentum to choose his successor in 1988. Now, even his traditional conservative admirers are pessimistic about the rest of Reagan’s presidency—and about his place in history. With investigations now under way, the American Enterprise Institute’s Ornstein said, “It’s only going to get worse.”

— MARCI McDONALD in Washington