Reagan Aides Seek to Blame NSC Staff : Say Office Spiraled ‘Out of Control’ Under Advisers Clark and McFarlane

Reagan Administration officials, apparently seeking to shield the President and White House Chief of Staff Donald T. Regan from political damage, are depicting the Iran weapons scandal as the product of a National Security Council staff that spiraled “out of control” under Reagan advisers William P. Clark and Robert C. McFarlane.

Those officials say Regan was warned of the NSC’s mushrooming staff and headstrong attitude in memos this year, but balked at reining in the agency lest it strain his already frayed relationships with McFarlane and his successor as national security adviser, Vice Adm. John M. Poindexter.

The agency’s complete insulation from Oval Office control, officials contended, allowed Marine Lt. Col. Oliver L. North, a junior staffer at the NSC, to leapfrog over higher officials and amass unchallenged control of the agency’s counterterrorism and covert operations duties.

North’s power was symbolized by an eye-popping office that included three computer terminals, a telephone link to the super-secret National Security Agency and a custom security system that was all but impregnable to enemy electronic penetration.

Potential for Problems

Regan was aware that the NSC fiefdom held a potential for problems, one knowledgeable former White House official said last week, “but he never went after it in a big way.”

“In retrospect, I think he would agree that perhaps he should have acted anyway,” that official added.

The officials’ comments bolster Regan’s assertion that he was unaware of North’s and Poindexter’s alleged diversion of Iran arms sales profits to rebel forces in Nicaragua. Regan, explaining his ignorance of the operation, has said he was like a bank president who did not normally know what each of the NSC’s “bank tellers” was doing.

Other Administration officials agreed this week that the agency bureaucracy became bloated in 1984 and 1985, during McFarlane’s tenure as President Reagan’s national security adviser. But some differed sharply with the argument that Regan had no day-to-day involvement in NSC matters.

“This is the man who had constant day-to-day battles with McFarlane over operational details,” one official said. That official called assertions that Regan feared offending Poindexter “self-serving hypocrisy.”

The NSC is supposed to serve as a dispassionate body of analysts, sifting through intelligence and other data to provide background for White House military and foreign-policy decisions. It largely did that under former President Jimmy Carter and the early Reagan Administration, but changes first made under former security adviser Clark changed the agency, some said.

Clark created an NSC “crisis management center,” ostensibly to provide instant advice and computer support during foreign crises such as hijackings and U.S. military actions. But the center, staffed largely by scores of persons detailed from intelligence agencies and the State Department, mushroomed under McFarlane into “an analytical shop” that duplicated work already done by the CIA and other intelligence agencies.

Continued to Expand

The multimillion-dollar crisis division appears to have played no major role in actual crises since its formation, several officials said, but because its costs are absorbed largely by other agencies, it has continued to expand.

One official called the team “a shadow NSC.”

“No one knows what it does,” another said.

Among its duties, however, the crisis team supervised a remodeling of North’s Old Executive Office Building suite into a self-contained, super-secure complex that included computer and telephone links to the National Security Agency, as well as two other computers that screened secret cable traffic and hooked into the NSC interoffice communications system.

Alarm Included

The NSA computer terminal included an alarm that sounded whenever the agency’s worldwide communications intercepts picked up evidence of a terrorist action, one source said.

The crisis management center team also constructed a secure room for crisis deliberations that has been used largely as a spare conference room.

In defending Regan, Administration officials noted last week that the council’s staff of analysts and technicians has grown since Reagan took office in 1981 from roughly 80 to nearly 150, approaching the level reached in the council’s heyday under Henry A. Kissinger, national security adviser to President Richard M. Nixon.

The agency’s authorized staff for fiscal 1986 is 63 people, but another 80 or so “detailees” are assigned to NSC tours of duty from the Pentagon and various intelligence agencies. Another 40 employees provide clerical support.

Small Formal Budget

Those officials’ salaries are paid by their permanent employers. Partly as a result, that official said, the NSC has maintained a formal budget of only about $4.6 million while operating a staff and a support system that probably costs other federal agencies an additional $25 million a year.

A plea to shrink the NSC bureaucracy was made in internal documents sent earlier this year to Regan by the White House’s administration office, which controls personnel and budget matters.

The memoranda, first reported last week by National Public Radio, warned last February that without action the NSC would become “a sprawling bureaucracy, far larger and more expensive” than the one Reagan inherited in 1981. Regan was warned, one knowledgeable official said, that the expansion was “symptomatic of other potential problems” and that Poindexter should be made to justify the staff size and duties to the President.

Some Dismissed

Incoming national security adviser Frank C. Carlucci, in apparent agreement that the staff has grown too large, already has dismissed or demoted a large number of senior NSC staff members and reportedly plans to reduce the overall staff by about 10% before taking office on Jan. 2.

The Times incorrectly reported last week that the NSC’s top economic official, Stephen R. Sestanovich, also had been dismissed.

Carlucci is said to favor abolishing the political-military affairs office in which North worked, the only NSC shop that handled covert operations. Another official in the office, Robert Earl, was said to have been let go last week. The office’s nominal director, Howard Teicher, announced his resignation last week and North was removed from his post by the President.