Reagan Concedes Iran Arms Deal, Defends It : Rejects Talk of Weapons as a Ransom

President Reagan, moving to deal with a growing controversy, acknowledged Thursday that he had authorized a secret operation to ship U.S.-made arms to Iran that resulted in the release of American hostages, but he said it was primarily aimed at mending relations with that strategically vital nation.

Reagan, asserting in a televised address from the Oval Office that his actions were legal and in the nation’s best interest, branded as “utterly false” charges that the Administration had shipped the weapons to Iran as ransom payment for the hostages and violated American policy against trafficking with terrorists.

“The United States has not made concessions to those who hold our people captive in Lebanon. And we will not,” Reagan declared. “The United States has not swapped boatloads of American weapons for the return of American hostages. And we will not.”

The President said that only small amounts of defensive weapons and spare parts for defensive systems were delivered. The purpose of these shipments, he added, was to convince Iranian officials that American negotiators were acting with his authority and to send a signal to Tehran that the United States was prepared to replace the animosity between the two countries with a new relationship.

For 18 months, Reagan said, the United States had conducted the secret Iranian operation “for the simplest and best reasons,” which were to:

“--Renew a relationship with the nation of Iran;

“--Bring an honorable end to the bloody six-year war between Iran and Iraq;

“--Eliminate state-sponsored terrorism and subversion; and

“--Effect the safe return of all hostages.”

Peace Sought in Gulf

Opening a dialogue with Iran would help end its war with Iraq and bring peace to the Persian Gulf, Reagan maintained. The conflict’s “adverse economic and political consequences for that vital region of the world have been growing,” he said.

In explaining the strategic importance of Iran, Reagan said the nation “encompasses some of the most critical geography in the world. It lies between the Soviet Union and access to the warm waters of the Indian Ocean.”

This gives Iran “a critical position from which adversaries could interfere with oil flows” from neighboring Arab states, he said, adding that Iranian oil deposits “are important to the long-term health of the world economy.”

Other Administration sources have described the operation as an arms-for-hostages trade that was conceived by Robert C. McFarlane when he was Reagan’s national security adviser and carried out by McFarlane and his successor, John M. Poindexter.

And, despite the President’s denial of such a swap, evidence indicates that the arms shipments occurred in close proximity to the release of individual hostages. For example, one Administration official Thursday cited the release of the Rev. Benjamin Weir on Sept. 14, 1985, which occurred about the same time that a shipment of military hardware was delivered to Iran.

While emphasizing the strategic value of Iran as the major reason for the operation, Reagan also listed release of the hostages as a major goal and said American negotiators indicated to the Iranians that the most significant step they could take in improving relations would be to use their influence in Lebanon “to secure the release of all hostages held there.”

Denies Concessions Made

Still, he insisted that no concessions were made for the return of the captives. “We made clear that Iran must oppose all forms of international terrorism as a condition of progress in our relationship.

“Some progress has already been made,” Reagan said. “Since U.S. government contact began with Iran, there has been no evidence of Iranian government complicity in acts of terrorism against the United States.”

Reagan confirmed many details of news reports that have touched off a firestorm of criticism of the Administration but denounced several others as erroneous, saying that “these reports are quite exciting but, as far as we are concerned, not one of them is true.”

He noted, for example, that it had been widely--but he said wrongly--reported that the Congress, as well as top Executive Branch officials, had been circumvented in the planning and execution of the secret operation. In disputing these accounts, he said:

“Although the efforts we undertook were highly sensitive and involvement of government officials was limited to those with a strict need to know, all appropriate Cabinet officers were fully consulted. The actions I authorized were, and continue to be, in full compliance with federal law--and the relevant committees of Congress are being and will be fully informed.”

Criticism From Senate

Senate Democratic Leader Robert C. Byrd (D-W.Va.) and other congressional leaders have severely criticized Reagan for not consulting with Congress before and during the operation, and committee hearings on the matter are expected to be held in both the House and Senate.

The disclosures are expected to cause enormous controversy in Congress and build pressure for the dismissal of Poindexter. Sen. Daniel Patrick Moynihan (D-N.Y.) has already called for Poindexter’s dismissal, and a GOP Senate source said some Republican senators would join in that call.

Of greater long-term impact, the affair has resulted in pressure for new legislation requiring that the appointment of future national security advisers be subject to Senate confirmation. The position does not now require Senate approval.

Democratic Sen. Patrick J. Leahy of Vermont, as well as a key Republican Senate source, predicted that the 100th Congress would quickly pass such legislation, and the GOP source foresaw new legislation forcing the Administration to notify congressional oversight committees before undertaking any such action in the future.

But Reagan, citing “great risk for those involved,” argued that “we could never have begun or continued this dialogue had the initiative been disclosed earlier.”

Well aware of Iran’s strategic importance, he said, the United States was receptive last year when alerted to the possibility of establishing a direct dialogue with Iranian officials.

Discussions continued into the spring of this year, Reagan said, when a meeting was arranged in Tehran and he sought to raise the diplomatic level of contacts by asking McFarlane to undertake the Iranian mission.

“I asked him to go to Iran to open a dialogue making stark and clear our basic objectives and disagreements,” he said. “The four days of talks were conducted in a civil fashion; and American personnel were not mistreated. Since then, the dialogue has continued and step-by-step progress continues to be made.”

‘Speculation’ and ‘Rumors’

Reagan declared that, since the return of former hostage David P. Jacobsen two weeks ago, there has been “unprecedented speculation and countless reports that have not only been wrong, but have been potentially dangerous to the hostages and destructive of the opportunity before us.”

“So extensive have been the false rumors and erroneous reports,” he said, “that the risks of remaining silent now exceed the risks of speaking out. That is why I decided to address you now.”

The President also denied that U.S. policy has tilted toward Iran in its war with Iraq, saying that “we have consistently condemned the violence on both sides” and “consistently sought a negotiated settlement that preserves the territorial integrity of both nations.”

Neither the arms shipped to Iran nor the overtures made to that country have indicated any shift in policy, he said.

Rather, he said, it has been a diplomatic initiative aimed at bringing about “an honorable end to that bloody conflict.”

Times staff writer Sara Fritz contributed to this story.