GOP Plan Would Allow CIA Aid to Contras, Lugar Says : Senator Sees Trade-Off by Reagan in Accepting Limit on $14 Million

The new Republican proposal on Nicaragua, endorsed by President Reagan, could permit the CIA to draw on its contingency funds to resume arms shipments to Nicaraguan rebels, the Senate Foreign Relations Committee chairman said today.

Sen. Richard G. Lugar (R-Ind.) confirmed that the new plan would limit Reagan’s use of $14 million currently under review for “non-lethal” aid, but added that it would also lift restrictions barring the President and the CIA from using other funds to help the contras.

Asked if that change would “free up” the CIA to use a secret contingency fund, Lugar answered: “I suspect so. That is the purpose of dropping all of those fences. That is sort of the trade-off as I see it.”

Smaller Concession

Lugar’s comments mean that Reagan’s willingness to back off his earlier plan, which would have allowed him to use some of the $14 million for military supplies, is less of a concession than earlier appeared.

In addition, one Administration official said that if the aid were termed non-lethal it could include trucks and uniforms but not guns and ammunition.

Lugar said Reagan agreed to the compromise language late Thursday afternoon.

“There would be no bars” on the President’s use of CIA contingency funds, Lugar told reporters. “Whatever restrictions were involved in (earlier congressional language) would be dropped, but so would any lethal use of this particular money,” the $14 million.

Could Use Funds

That means, at least in principle, Reagan could authorize use of a secret CIA contingency fund to ship aid to the rebels fighting to overthrow Nicaragua’s leftist government. The CIA has used that fund before when it overran its budget for supporting the contras.

White House spokesman Larry Speakes said today that Reagan has agreed in principle to legislation limiting aid to non-lethal supplies for the balance of this fiscal year, ending Sept. 30. He said details had not been worked out but “we have agreed in principle with members of the Senate and with individuals with whom we have talked in the House.”

“The CIA is not a humanitarian outfit,” said Christopher Matthews, a spokesman for House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.). Matthews added that the proposed aid would amount to military logistical support.

Via Relief Agency

A Democratic alternative, which was slated for a vote after action on Reagan’s plan Tuesday, would provide $10 million for humanitarian aid for the contras and other Nicaraguan exiles, but distribute the assistance through the Red Cross or some other independent refugee relief agency.

That plan, sponsored by Reps. Michael D. Barnes (D-Md.) and Lee H. Hamilton (D-Ind.), also would set aside $4 million for use by Latin American nations to implement a possible peace settlement in Nicaragua.

“We’re trying to put the United States firmly in support of the peace efforts of the Latin Americans themselves,” Barnes said.

The $4 million would go for peacekeeping forces and monitoring once a settlement had been negotiated among Latin and Central American nations ending the civil war in Nicaragua.