Contras Aid to Be Under CIA Control : Move Would End Two-Year Ban on Agency’s War Role

Paving the way for a major escalation of the guerrilla war against Nicaragua’s leftist regime, the Reagan Administration has decided to give the CIA operational control of U.S. aid to the anti-Sandinista rebels once Congress finally approves the funds, senior officials said Tuesday.

The decision would end a two-year period during which Congress has barred the CIA from giving the rebels, known as contras , direct military assistance because the agency had mined Nicaragua’s harbors and sent its hired agents into battle aboard its boats and aircraft without informing lawmakers.

Officials said that President Reagan has made no final, formal decision on how to administer the aid to the contras, which the House approved last month and the Senate is expected to endorse soon.

Consensus Reached

But senior Administration officials said they have reached a consensus that the CIA should run the program in the field, that the State Department should provide overall policy supervision and that the Defense Department should lend trainers and logistical help if the aid begins flowing as expected on Sept. 1.

“The United States government has only one agency which handles this kind of thing, and it’s called the CIA,” a senior State Department official said. “The State Department has the policy lead, and the agency has the operational lead.”

The CIA has maintained secret political and financial ties with the contras since the aid cutoff in 1984. But officials said the new funding--more than any provided to the contras before--will mean a major expansion of the agency’s covert military-support wing.

“This is a program that is unlike any other,” the State Department official said. “With 20,000 troops, it’s not a paramilitary operation--it’s a military operation.

‘Historic Program’

“There’s certainly a view on the part of the agency that this is a historic program,” he said. “If it works, it can erase years of suspicions (about the CIA). . . . If it works, it will be a model for others to follow.”

Within that basic understanding, however, several issues already have arisen--reflecting some of the same problems that beset the CIA’s earlier, officially secret program of support for the contras from 1981 until 1984.

Some officials, who say that the CIA has been slow to pressure the contras to implement political and human rights reforms, argue that the State Department should retain control of part of the aid package--as “leverage” over the rebel leaders.

Others in the State Department fear that the CIA may repeat the kind of managerial mistakes that, in part, led Congress to halt the earlier aid program in 1984, including what was criticized as loose supervision of the contras and some of the CIA’s own contract agents.

And the Democratic chairman of the House Intelligence Committee, Rep. Lee H. Hamilton of Indiana, complained that putting the CIA in charge will make the contra war officially covert again--and make it difficult for Congress to oversee the program adequately.

“I’m very concerned about that because I don’t think we’re sufficiently staffed to follow the expenditure of that $100 million properly,” Hamilton said.

“This program is turning into a major managerial problem, a formidable logistical problem. And I am not by any means confident that the agency has the skills and ability to carry it off,” he said.

Sharon Foster, a spokesman for the CIA, said the agency would not comment on those issues. But senior officials in the State and Defense departments said that, while they consider the management of the escalating war a challenge, they are confident that the CIA can handle it without repeating old mistakes.

“There aren’t any problems yet,” one said. “There are issues, sure. . . . But, so far, there seems to be a lot of good will” among the different agencies.

“The real question,” another said, “is how much the contras can do with the aid once we provide it to them.”

Administration officials have said they would seek to use the funds to finance a major expansion of the contra army, including new weapons ranging from rifles to shoulder-held anti-aircraft missiles--and possibly some transport helicopters.

The CIA provided the contras with more than $85 million in secret aid from 1981 until 1984, when Congress halted the program in an uproar touched off chiefly by the agency’s mining of Nicaraguan harbors. That action had been explicitly approved by the State Department and, according to some accounts, by President Reagan himself.

But the CIA took the brunt of the criticism, largely because some members of the Senate Intelligence Committee believed that the agency had failed to inform them properly.

Congress then prohibited the agency from aiding the contras. Even when it approved $27 million in non-weapons aid to the rebels last year, Congress stipulated that the CIA could not administer the fund. As a result, the State Department set up a special agency, the Nicaraguan Humanitarian Assistance Office, to run the program.

On Tuesday, officials of the Humanitarian Assistance Office were told to prepare to close down their operation.

Despite the ban on CIA military aid, the agency carefully maintained its relationship with the contras in the last two years, officials said. CIA operatives visited contra camps to gather information, provided the rebels with communications equipment and U.S. military intelligence about the Sandinistas and gave contra leaders more than $1.5 million in secret funds for political operations.

Congress’ intelligence committees were duly informed of all those operations and did not object, congressional sources said. But one result was to give the CIA considerable influence over the contra leadership, even though many in Congress believed that they had cut the agency out of such a role.

The CIA-contras relationship also led to disagreements with the State Department, which has been urging the rebels to broaden their leadership and achieve more political appeal within Nicaragua.

In practice, that has meant reducing the power of the largest contra army, the conservative-dominated Nicaraguan Democratic Force (FDN), within the rebel movement. But several State Department officials said that the CIA resisted those moves, arguing that they might damage the FDN’s military effectiveness.

That issue is still alive and has led some officials to propose that the State Department retain control over part of the $100-million fund to give it increased leverage over the contras.

“If we don’t have any money, we don’t have any clout over the contras,” one official said. “(FDN leader) Adolfo Calero will tell us to get lost.”

Some officials have proposed that the State Department could administer the $30 million in the aid fund that the House has designated for non-weapons use. But a more likely outcome, sources said, is that the State Department would control a $3-million fund set aside for promoting human rights and curbing military abuses among the contras.

“Even with only $3 million, you could turn it into a kind of inspector general’s office, which would be quite effective for our purposes,” one official said.

The Defense Department, on the other hand, appears to have accepted the CIA’s management of the program with relative equanimity--even though officials said that they expect the Army Special Forces, or Green Berets, to provide much of the rebels’ new training.

As for the issue on which the CIA finally stumbled in 1984, agency Director William J. Casey’s prickly relationship with Congress, officials say that the agency has learned its lessons.

“It’s not the substance (of the operation), it’s the process,” a senior official said. “We have got to be sure that the relevant committees are informed and there are no surprises. The contras are going to make mistakes; we need to inform Congress in advance what kind of mistakes they may be.”