State Dept. Gets Full Control of Policy on Iran

President Reagan on Tuesday gave the State Department full control over U.S. policy toward Iran, handing Secretary of State George P. Shultz a sweeping victory in his bureaucratic warfare with the White House staff.

Shultz appeared to pay a heavy price for victory: nearly irreparable damage to his relationship with the President he still serves. And his tenure at the State Department continued to sway precariously in the balance.

Moving to implement his new mandate, however, Shultz directed Under Secretary Michael H. Armacost, the department’s highest-ranking career Foreign Service officer, to take personal charge of a drastically revamped effort to improve U.S. relations with the Tehran regime, to combat terrorism and to obtain the release of American hostages in Lebanon.

State Department spokesman Charles Redman, announcing the department’s triumph over the National Security Council staff and the CIA, said: “The President now intends that the management and implementation of that (Iran) policy be handled in normal channels. In short, that means under the direction of the secretary and the Department of State.”

A White House spokesman confirmed that Redman’s announcement “is Administration policy.”

The decision marked a total turnaround in U.S. policy toward Iran. Earlier, the Administration’s overtures to Tehran were run by the National Security Council staff, while Shultz and his department were largely excluded.

The State Department’s victory was capped by the resignation of John M. Poindexter, the White House national security adviser and Shultz’s chief bureaucratic antagonist on the Iran question.

Shultz himself, addressing a reception later in the day, seized the opportunity to declare his support for the principles of Reagan’s policy, including the establishment of a “more constructive relationship with Iran,” and declared his intention to be “very much a part of the effort to bring them to fruition.”

“As far as the problems which have come to light through the efforts of the attorney general, I think it is quite clear that the attorney general and the President mean business,” Shultz said. “I personally support their effort.”

Reagan has ordered Atty. Gen. Edwin Meese III to personally investigate whether members of the NSC staff had exceeded their authority in the Iran arms affair.

Although winning the opportunity to redesign U.S. policy to conform to his hard-line stance against terrorism, Shultz may have soured--perhaps permanently--his friendly working relationship with Reagan by previously distancing himself publicly from Reagan’s decision to send arms to Iran.

Ignored Shouted Queries

In response to shouted questions after his announcement of the departures of Poindexter and NSC staff member Oliver North, Reagan said that it was not a mistake to send weapons to Iran. In the same hectic exchange with reporters, Reagan ignored shouted questions about whether Shultz would be fired for failure to support the presidential initiative.

And, unlike his statement at a press conference last week that he wanted Shultz to remain, Reagan’s brief remarks in the White House press room Tuesday contained no direct expression of support for the secretary.

Meese, briefing reporters after Reagan’s statement, said that Shultz would remain at his post. Meese said dismissal of Shultz “has not been a matter of conjecture or discussion or inquiry” at the top level of the Administration.

However, Meese indirectly chided Shultz for failing to offer full support to the President in his most difficult foreign policy crisis:

“I think every member of the Administration owes it to the President to stand shoulder to shoulder with him and support the policy decisions that he has made,” Meese said. “I think anyone who is a member of the President’s staff or the President’s Cabinet has an obligation either to support the policy decisions of the President or get out.”

At the State Department, Redman brushed aside Meese’s criticism of Shultz’s posture.

“The secretary fully supports the President’s policy--it is the correct policy,” Redman said. However, he made clear that Shultz supports only Reagan’s stated objective of thawing relations with Tehran and obtaining the release of hostages, not the President’s now-forsworn tactic of shipping arms. State Department officials pointed to Reagan’s statement at a press conference last week that no more arms would be sold to Iran as vindication of Shultz’s position.

Nevertheless, most of Reagan’s close associates do not interpret loyalty to the President as narrowly as Shultz apparently does. White House officials continued to grumble privately about the secretary of state’s refusal to give carte blanche support to the President. Meese, who has been a Reagan retainer since he served as gubernatorial chief of staff in Sacramento, clearly spoke for the President’s inner circle.

Also, Shultz’s relationship with White House Chief of Staff Donald T. Regan, once a close friend, appears to have been frayed by the controversy.

Thus, most political and diplomatic analysts believe that Shultz’s job security remains tenuous. He may have weathered the initial storm, but he seems to have used up much of his political capital in the process.

However, Shultz clearly decided that the gain was worth the risk. Beyond his objections that even the appearance of paying ransom for hostages would only lead to more terrorist kidnapings, Shultz was angered that his department was excluded from the execution of Iran policy. Throughout his long tenure in government service, Shultz has sought to defend his bureaucratic turf. He earlier succeeded in capturing the lead role in the Administration’s Soviet policy, and he clearly was unwilling to leave Iran to others.

Was Envoy to Manila

Armacost, Shultz’s choice as lead official on Iran, was U.S. ambassador to the Philippines during the regime of former President Ferdinand E. Marcos. Later, after returning to Washington, Armacost played an important role in the U.S. policy that ultimately helped to undermine Marcos and clear the way for President Corazon Aquino.

Like most State Department officials, Armacost is said to have known nothing of the Administration’s sale of arms to Iran until the matter surfaced in public.

Shultz has said that he attended two “full-scale meetings” last December and January at which the opening to Iran was discussed. But he has said he was only sporadically informed of the details of the operation.

Former White House national security adviser Robert C. McFarlane, one of the chief architects of the arms sale policy, disputed Shultz’s claim of having been kept largely uninformed. McFarlane said that he briefed Shultz “repeatedly and often.”

However, Meese supported the secretary of state’s version. He said “everything I have found” led to the conclusion that Shultz was “not involved nor was he informed” about implementation of the arms transfer plan.