Contras’ Hopes Bleak as Iran Affair Unfolds : U.S. Aid for Anti-Sandinista Rebels Imperiled by Scandal; Major Reagan Cause May Be Casualty

The biggest foreign policy casualty of the scandal over President Reagan’s secret arms sales to Iran may turn out to be the President’s most deeply felt cause: the guerrilla war to overthrow Nicaragua’s leftist government.

Reagan and his advisers say they are committed to pushing ahead with a massive program of aid to the contras despite the still unfolding disclosures about the apparently illegal diversion of profits from the arms sales to the Nicaraguan rebels.

“We cannot let recent events distract us from the cause of those brave fighters for freedom around the world,” Reagan said in a speech last week. “Nothing that’s happened makes those causes less just or less important.”

But many officials say the contras’ prospects look increasingly bleak--both in Washington and in the mountains of Central America. There is a growing sense that time is running out.

“Nicaragua is lost,” said one Administration official who has helped to manage the military aid effort. “It’s going to take a miracle to turn this thing around.”

By 1988, he warned, Reagan could face a fateful choice: either see Nicaragua lost to communism--something the President has pledged would never happen “on his watch”--or order U.S. forces into the war.

Others, while acknowledging that the policy has suffered a setback, insist that the Administration can recover.

“This is a rough patch,” said Elliott Abrams, assistant secretary of state for Latin America. “We have a tough fight ahead. . . . But this country has fundamental interests in Central America, a fundamental interest in stopping the spread of communism. All the fundamentals remain true.”

The uproar in Congress over the Iranian affair makes it appear increasingly unlikely that the Administration can win renewed aid for the contras next spring, after the current fund of $100 million runs out. But officials have long said that this year’s aid was only a “down payment” on the contras’ war and that more money would be needed to win.

The scandal has sapped the Administration’s ability to help the contras organize their military and political effort to overthrow the Sandinista regime. “It’s paralyzed,” said an official who attended a series of State Department planning sessions. “The disclosures are the only thing anyone wants to talk about.”

Moreover, the furor has come at a time when the contras face a critical test--perhaps the final test--of their ability to become an effective guerrilla force.

“One reason some people in Congress didn’t support the $100 million is that they said these guys won’t fight,” Abrams said in an interview. “By spring, that question will be answered: Either they will fight or they won’t. I’m confident that they will.”

The stakes riding on that question are enormous. Reagan has long described the struggle for Nicaragua not only as a turning point for Central America but as a historic test of whether the United States can ever turn around a Soviet-sponsored revolution.

“In Nicaragua, we are talking about a place extremely far from the Soviet Union and extremely close to our borders, and with a Western culture,” Abrams said. “If you can’t make it here, you’re not going to make it.”

After five years of internal debate, the Administration now appears firmly committed to pursuing a military effort by the contras aimed at destabilizing the Sandinista regime--or, in the more diplomatic phrase of Secretary of State George P. Shultz, aimed at “creating facts that the communist government is going to have to contend with.”

But the key question remains whether the contras, with an estimated 18,000 fully armed guerrillas, can become any match for the Sandinista army, with at least 58,000 well-trained troops plus thousands of reserves.

On that issue, not everyone is as confident as Abrams. “We just don’t know yet whether they can do it,” said one knowledgeable official. “They haven’t had a proper test. They have succeeded at surviving, and done that rather well. But fighting a guerrilla war is a very different proposition.”

And Abrams forthrightly admits: “I’m trying to lower expectations. . . . This is a tough road ahead. The Sandinistas are a tough bunch of guys, with a fabulous amount of Soviet Bloc equipment and Soviet Bloc advisers.”

Some members of Congress have suggested that the contras need to show quick results, perhaps by seizing a piece of territory inside Nicaragua that they could use as a new base of operations. But Abrams and other Administration officials, along with the contras, say the rebels do not yet have the strength to defend a permanent base inside the country.

“I don’t think you’re going to see, in this six-month period, the seizure and holding of large areas in Nicaragua,” Abrams said. “This is a period in which the resistance is re-equipping and retraining. It’s not sensible to try to seize and hold territory.”

The proper measures of success are how many contras there are and how much of Nicaragua are they operating in, he added. “The tougher question,” he said, “is popular support. . . . How do you measure popular support or opposition in a communist country?”

One key to the contras’ military success will be the CIA’s ability to organize functioning guerrilla bands in southern and eastern Nicaragua as well as in the northern hills, where the largest rebel army, the Nicaraguan Democratic Force, now roams from its bases in southern Honduras. “That’s absolutely crucial,” one Administration strategist said.

Contra officers are currently undergoing training at Eglin Air Force Base near Pensacola, Fla., where they are learning how to read maps, operate radios and lead sabotage raids. Although sabotage raids were discouraged during the earlier period of U.S. support from 1982 to 1984, the Reagan Administration this time is encouraging the contras to strike at economic targets, including bridges, warehouses and oil storage tanks.

The CIA also wants the contras to attack agents and facilities of the Sandinistas’ internal security police, in hope of weakening the regime’s ability to repress domestic opposition, sources said. But some officials reportedly have objected that attacking police officials might smack of assassination, which the CIA is prohibited from promoting.

The Administration also has been urging that the rebels tighten up their targeting to reduce civilian casualties and that they switch from pressure-detonated mines to hand-detonated mines so that fewer civilian cars and trucks are blown up.

And the State Department has been working to organize a functioning human rights commission within the contras’ movement, in part as a watchdog on the rebel army’s own actions. “If I were the Sandinistas, I would probably hit human rights issues the hardest,” Abrams said.

The CIA is also organizing a major effort in psychological warfare, including a powerful AM radio station--Radio Liberacion--that it hopes will become an effective vehicle for anti-Sandinista news and propaganda. Despite months of preparation, however, the radio station, which will reportedly transmit from El Salvador, is still not on the air.

“I think we’re going to see slow and steady progress on the contras’ side,” a Pentagon official said. “The big question is what are we going to see from the other side. If we are pursuing this under the mistaken assumption that we are not going to have a tit-for-tat response from the Soviet-Cuban side, then we’re underestimating the test of wills we’re in.”

The Administration has long been considering the possibility of direct military intervention if the contras falter. Officials said the first option will be a naval blockade. “It’s something that’s been under discussion for a long time,” a Pentagon official said.

Retired Col. Harry Summers Jr., a historian of the Vietnam War, said: “I think a blockade is the first thing you do. The Sandinistas can probably hang onto the government as long as they have the support of the Soviet Union and Cuba. . . . If their links to their suppliers are cut, then they will find themselves fighting a very different kind of war.”

But the Navy and some State Department officials reportedly oppose the idea. “A blockade or a quarantine would require a large part of the Navy,” a State Department official said. “You also have to look at what it would do to our relations with the Soviets if you stopped and turned around Soviet ships. . . . The costs would be staggering.”

Some officials have privately suggested U.S. air strikes against Sandinista military bases as a means of reducing the Managua regime’s advantage in equipment, but others argue that there, too, the costs outweigh the benefits.

“The Sandinistas would have to give you an invitation--they would have to be seen as guilty of some egregious terrorist act--and I think they are smart enough not to do that,” one senior official said.

There is little apparent appetite, either in the Pentagon or anywhere else in the Administration, for a full-scale invasion with U.S. ground troops.

“The question, as in Vietnam, is not, ‘Can the contras win?’ but, ‘Can the contras keep from losing?’ ” Summers asked. “Maybe it’ll take them 18 years to win, but at least they can hang on.”

But a senior U.S. official said there is no comfort in that. “The contras don’t have 18 years,” he said, “and neither do we.”

Next: The contras in the field.