Reagan Reportedly Still Backs CIA Iran Operation

President Reagan has left in place a sensitive CIA covert operation designed to increase U.S. influence in Iran despite his decision not to sell more arms to the Iranians, Washington sources said.

Several sources in the Administration and on Capitol Hill said last week that although the continuing covert Iran operation is diplomatically risky, the President and some of his senior White House staff see it as a bold initiative that has yielded positive results--the release of three American hostages--and has a chance to achieve other foreign policy aims, according to official sources.

One source said Iran’s supreme leader, the Ayatollah Ruhollah Khomeini, has not been able to determine the identities of the CIA contacts within his government or has for some reason sanctioned their dealing with the United States. Two U.S. sources raised the possibility that the Iranians have engaged in an elaborate “sting” operation to obtain arms and embarrass the United States.

The covert action authorized by Reagan’s Jan. 17 secret intelligence “finding,” which gives the CIA authority to interfere in the affairs of a foreign government, is an extension of one initiated by Israel. According to senior Reagan Administration officials, it is not a paramilitary support plan and is not intended to seek the overthrow of Khomeini but is designed to gather intelligence and shape the behavior of Khomeini’s regime and that of his successor.

According to U.S. sources, the first contact setting the project in motion was in July, 1985, between Robert C. McFarlane, then the President’s national security adviser, and David Kimche, then director general of the Israeli Foreign Ministry.

U.S. and Israeli sources said that by 1985 the Mossad intelligence service had developed a high-level source in the Khomeini government through channels that had been opened with secret Israeli arms shipments to Iran.

In the meeting with McFarlane, Kimche effectively passed along an Israeli intelligence contact to the United States, according to one source.

The New York Times on Saturday quoted an unidentified senior Israeli official who described the contact Israel had cultivated in Tehran in these terms: “We are talking about a source among the most senior ayatollahs. It would have been criminal for us not to follow up. . . . We were getting some terrific intelligence through this channel. . . . We were at the heart of the government. There was no Western government that had access to the kind of information we had.”

Sources said last week that the arms shipments to Iran not only helped win the release of three American hostages but were also a means of rewarding and giving leverage to the high-level U.S. connections in the Iranian government.