Reagan Signs Order Releasing First of $100 Million for Contras’ War on Sandinistas

President Reagan signed an order Friday officially releasing the first of $100 million in aid for Nicaraguan rebels and effectively putting the CIA in charge of the escalating war against the Sandinista regime.

The order, which Reagan signed aboard Air Force One while traveling from Oklahoma City to Tampa, Fla., on a campaign trip, renews the U.S. military effort to overthrow the Nicaraguan government after two years during which Congress banned military aid for the rebels, called contras.

White House spokesman Larry Speakes said that the funds would start flowing “as soon as possible. We realize that it is an urgent situation.” Reagan’s order immediately releases $60 million, with the other $40 million available as of next Feb. 15.

As required by Congress before the money could be released, Reagan certified that the various rebel groups had coordinated their efforts, eliminated their “human rights abuses,” subordinated their military forces to civilian leadership and developed a “program for achieving representative democracy in Nicaragua.”

The Administration’s official policy is that the contras’ military effort is intended to pressure the Sandinistas into a political compromise and that the United States will promote negotiations to achieve that.

Little Chance for Talks

But State Department officials say there is now little chance for real negotiations, at least during the next six months, as the contras and the Sandinistas gauge each other’s strength on the battlefield.

“The Sandinistas believe they have a shot at defeating the contras, and there’s no reason for them to compromise as long as they feel that way,” one State Department analyst said. “So it’s up to the contras to prove themselves. If they do well, the situation changes.”

U.S. officials and contra leaders have said that they hope to see a gradual escalation in the rebels’ attacks on government troops and economic targets. They said they do not expect an immediate escalation because the rebels need to deploy new equipment and improve their training first.

“There is not going to be a 24-hour drive on Managua,” said Bosco Matamoros, a Washington spokesman for the largest contra group. “Our strategy is a gradual and evolutionary one. We will not sacrifice our troops to make headlines.”

Congress approved the aid in June, but the money was delayed until a catch-all money bill was finally passed last week. The fund consists of $70 million for unrestricted military aid and $30 million for non-lethal supplies.

Aid Cut Off in 1984

Congress cut off U.S. aid to the rebels in 1984 after discovering that the CIA had mined Nicaragua’s harbors and directed the contras to claim responsibility for the act. During the two-year gap, Reagan and his aides encouraged conservative activists to supply the contras with private funds.

With private aid, much of it arranged by former CIA officials, the rebels managed to keep fighting and even expanded their troop strength to nearly 20,000 but made no real military headway. The private supply network was disrupted this month when the Sandinistas shot down a contra cargo plane flying from El Salvador, killing three crewmen and capturing a fourth, who is now on trial in Managua.

Some officials said that the $100-million fund will allow the Administration to spend much more because the CIA and the Defense Department now can also use equipment and money from other programs to help the contras.

“The $100 million is just a spigot,” one official said. “Once the spigot is opened, we’ll see how much flows from it.” But Administration officials have promised Congress publicly that, at least for now, no funds beyond the $100 million will be used.

Anti-Aircraft Missiles

Much of the money will be used to buy weapons for the contras, including surface-to-air missiles to defend rebel columns against the Sandinistas’ Soviet-supplied attack helicopters, officials said.

The fund is also intended to pay for U.S.-administered military training for the rebels, they said. Some training may be conducted in the United States, but not in Central America because of objections from the governments in the region, a State Department official said. He said the training locations would be kept secret.

The pro-American governments of Honduras, El Salvador and Costa Rica have all issued strong statements in recent weeks declaring that they will not allow their countries to be used as bases for attacks against Nicaragua. But State Department officials said they expect Honduras to host some training and El Salvador to allow supply flights.

Assistant Secretary of State Elliott Abrams visited Honduras on Wednesday to discuss the contras’ needs with local officials, who have sometimes complained that the rebel presence in their country has created problems that are not sufficiently offset by the U.S. aid they receive in return.

Officially, most of the U.S. aid program is intended to remain secret. One reason the Administration put the CIA in charge, officials said, was to try to reduce the visibility of the American role.

“It’s kind of an odd situation,” said David Holliday, a spokesman for the Senate Intelligence Committee. “It’s officially a covert program, so we shouldn’t even confirm that it exists. But they’ve made a public issue out of it, so we’ll continue talking about the basic facts and try to keep the details secret.”