COVER

Crisis of confidence

MARCI McDONALD January 19 1987
COVER

Crisis of confidence

MARCI McDONALD January 19 1987

Crisis of confidence

THE UNITED STATES

In Lafayette Park, across from the White House, Ronald Reagan’s outspoken communications director, Patrick Buchanan, had called for a rally to cheer up the President as he recovered from a colonoscopy and prostate surgery. But that demonstration last week turned out to be a symbol in a way that Buchanan had not intended. Despite his promise of free food, drinks and an “old-fashioned brass band,” the lacklustre event attracted only a few hundred faithful. In fact, the verdict of Reagan’s doctors that the colonic cancer for which he was treated in 1985 had not spread was one of the few pieces of good news facing the President as he returned to the White House from Maryland’s Bethesda Naval Hospital.

As the President convalesced, the Senate Intelligence Committee leaked a memo from Lt.-Col. Oliver North, a former member of the National Security Council (NSC), to The Washington Post stating that Reagan had— contrary to his denial and U.S. lawapproved the initial arms shipments to Iran in September, 1985. And the newly sworn-in Democratic-controlled Congress threatened Reagan with the prospect of two years of bitter legislative battles, beginning with his record trillion-dollar budget for the fiscal year 1988, which the White House had just sent to Capitol Hill. It contained recommendations for drastic social and educational cuts, and requests for more defence spending, including another $105 million for the Nicaraguan contra rebels. Even Republicans, as one of them said, regarded the budget as “dead on arrival.”

Politicians from both parties also vowed to pass a trade bill and revive a clean-water bill, despite Reagan’s adamant opposition. Indeed, it became clear that Reagan’s diminished popularity had suddenly made him a target no longer feared by his congressional opponents. Said Democratic Senate Majority Leader Robert Byrd of the scandal: “The current crisis is a crisis of confidence.”

In a move to forestall criticism, the White House released another memo by North, dated Jan. 17, 1986. It recommended that U.S. arms be shipped to moderate elements in Iran as part of a policy aimed at “furthering the release of the American hostages held in Beirut.” But it undercuts Reagan’s assertions that he had not traded arms for hostages. In addition, according to another leaked memo from the Senate intelligence committee, the idea of di-

verting arms-sale profits to fund the contras had, in fact, originated with Israel.

Before the release of the North memo, Democrats on the Senate intelligence committee revealed that White House lawyers had gained access to a draft report on the arms scandal and persuaded committee staff members to delete at least two items out of consideration for foreign policy. One item reportedly detailed an Israeli briefing

last July for Vice-President George Bush on the arms sale, as well as a letter from then-Israeli prime minister Shimon Peres urging Reagan not to abandon his overtures to Iran in order to win release of American hostages.

Meanwhile, other revelations continued to embarrass the White House. The Los Angeles Times reported that North had kept as much as $1 million in cash in his office safe to fund the contras after Congress had cut off all but humanitarian aid in 1984. And an embarrassed spokesman for the state department admitted that after it solicited $10 million from the Sultan of Brunei—who deposited the funds in a secret Swiss bank account—the money appeared to have vanished.

Indeed, the scandal shows no signs of subsiding. To add to the independent counsel and special Senate committee already set up to investigate it, last week the new House of Representatives also voted to establish its own investigative committee. Its terms,

which do not require it to report before Oct. 30, mean that the Democrats are likely to keep the issue alive for most of the coming year.

As well, Reagan received more bad news from Central America last week. The Organization of American States (OAS), as well as Guatemala and Costa Rica, offered tentative proposals for new peace negotiations with Nicaragua—a move the White House opposed last year when the moribund Contadora treaty process briefly revived. In response, the U.S. ambassador to the OAS, Richard McCormack, publicly chastised the organization’s secretary general for not having warned Wash-

ington of the new initiative. The upbraiding came as three U.S. warships, including the battleship Iowa, arrived off the east coast of Nicaragua for military exercises.

For the remaining two years of his presidency, the outlook for Reagan in Congress appears bleak. Democrats last week ousted Democratic Representative Les Aspin of Wisconsin—who has consistently voted to support the Pentagon’s military buildup—as chairman of the armed services committee. But the Democrats reserved their harshest words for Reagan’s $1.02-trillion budget, vowing to force him into tax increases to pare down the nation’s mushrooming deficit. Indeed, as the battle shaped up, it became clear that Reagan would need the considerable energy and good cheer he displayed for the cameras after his surgery if he is to survive the political knives now awaiting him in Congress.

MARCI McDONALD