McFarlane and Shultz Clash Over Arms Issue : Secretary of State Denies Ex-Security Aide Told Him Reagan, in Phone Call, Had OKd Iran Deal

Former National Security Adviser Robert C. McFarlane and Secretary of State George P. Shultz clashed publicly Friday over whether McFarlane ever directly informed Shultz of President Reagan’s decision to permit Israeli shipments of U.S. arms to Iran in 1985.

Under questioning by the Senate Foreign Relations Committee, McFarlane said the President had approved the shipments in a telephone conversation with him in August, 1985. McFarlane said he promptly notified Shultz as well as other members of the National Security Council.

Shultz, speaking to reporters after McFarlane’s testimony, specifically denied that he was ever informed of the President’s decision. He held to his earlier testimony before the House Foreign Affairs Committee that he was generally unaware of the details of the operation.

McFarlane’s testimony on events leading up to the first arms shipment in August, 1985, puts him at odds with at least two current Reagan Administration officials.

White House Chief of Staff Donald T. Regan insists that the President did not give McFarlane advance authorization for the Israeli shipment but approved it only after the fact. Shultz contends he has no direct knowledge of whether the President approved it.

How and when Reagan gave his OK is especially important to Israel, which contends that it acted on the explicit authority of the President. It would have been illegal under U.S. law for the Israelis to ship American arms to Iran without such approval.

Friday’s Senate hearing was the first occasion on which McFarlane said publicly that he had received the approval in a telephone call from the President and not in a meeting of White House officials, as earlier presumed. He said that, when he reminded Reagan during the call that both Shultz and Defense Secretary Caspar W. Weinberger opposed the shipment, the President replied, “Yes, I understand that.”

“Then I notified the other National Security Council members--the secretary of state and defense and the others,” McFarlane said. He added that, when Shultz and Weinberger reiterated their opposition, he “encouraged them to get back in touch with the President” if they wanted to continue the debate.

He said he understood that Shultz did make another appeal to Reagan as a result. In contrast to Shultz, Weinberger has refused to discuss when he was informed of the initial arms sale.

McFarlane said the decision to approve the arms sale by Israel grew out of a series of meetings over a 10-day period in late July and early August involving Shultz, Weinberger and others.

Shultz, although acknowledging that he and McFarlane had discussed the possibility of arms shipments to Iran several times, said: “I don’t recall being told that the President had explicitly decided to authorize, in effect, the Israelis to ship arms. I just don’t recall that.”

Searched His Notes

He said he had searched through his own notes of conversations with McFarlane--”quite a few notes”--and none of them mentioned such a decision.

“I’m not challenging him, I’m just saying I have lots of notes in the records. . . . Maybe I’m missing something or have missed something, but I don’t have any note about being formally notified,” Shultz said.

McFarlane, who resigned as Reagan’s adviser in December, 1985, recalled that the arms sales were discussed in more than 200 meetings and conversations that he held with top Cabinet officers in a three-month period of 1985 during which Israel was shipping U.S. arms to Iran with the apparent approval of the President.

He indicated that he had made a mental accounting of his meetings with Cabinet officers in response to Shultz’s earlier testimony distancing the State Department from the arms deal.

‘No Ambiguity’

He asserted that both Shultz and Weinberger fully understood “the specifics, the detail, the scope, the intent of the President’s decision” and added that there was “no ambiguity or uncertainty by them of the nature of the decision.”

Shultz contended that he did not know that any arms shipment had actually been completed--neither the two Israeli shipments in 1985 nor the direct U.S. shipments in 1986--until November of last year, when the policy was disclosed publicly. He said that, during the U.S.-Soviet summit meeting in Geneva in November, 1985, McFarlane told him that “something was about to happen that involved arms and hostages--to which I objected.”

“The way it was decribed (by McFarlane), the arms would only go if the hostages were released,” Shultz said. In fact, although no hostages were released in November, Israel shipped U.S.-made Hawk anti-aircraft missiles to Iran anyway.

Shultz contended also that McFarlane failed to notify the State Department when he sent a White House consultant, Michael Ledeen, to Israel in June, 1985, to discuss a possible arms deal. He indicated that he had quarreled with McFarlane after learning about it from Sam Lewis, then U.S. ambassador to Israel.

To Stay in Cabinet

He indicated that he intended to remain in the Cabinet even though he was not fully informed of the secret arms deal. “Right now, (Reagan) has some problems, (and) I think that’s a good time for me to hang around and help,” he said.

McFarlane insisted it would have been foolish of him to tell the Israelis to proceed with the shipments--and to authorize them to seek replacement weapons from the Pentagon--if the President had not approved the deal, particularly in light of the opposition to the policy expressed by Shultz and Weinberger.

He noted that the replacement of weapons required Weinberger’s approval, which would not have been given without explicit presidential authority. “I don’t think that I am so iconoclastic as to believe that I can manufacture TOW missiles in my backyard,” he said.

McFarlane said he had stressed in his meetings with the President in July, 1985, before the Israeli shipments were approved, that it would be difficult for Americans to understand why Reagan was seeking to make contact with members of the brutal regime of the Ayatollah Ruhollah Khomeini. He blamed this failure on the “Western logical turn of mind.”

Ridiculed by Senator

Sen. Paul S. Sarbanes (D-Md.) ridiculed McFarlane’s testimony on this point, noting that many people around the world were shocked by the arms deal.

“I don’t really accept the proposition that somehow there’s something faulty in the thinking of Americans that makes them sort of genetically unable to analyze this situation, as opposed to others around the world,” he said.

Sarbanes suggested also that McFarlane had put the national security of the United States at risk by personally traveling to Tehran last May with a shipment of weapons. He said the Iranians could have easily gained “an enormous bargaining position” with the United States by taking him hostage.

McFarlane, a former Marine, replied that he had gone at the request of the President and only after deciding that it was a “prudent risk.” He indicated that he was prepared for any danger.

“I don’t believe there was any remote possibility that advantage could have been developed from my seizure,” he said. “And that involves some things that are just--that one has to think through and prepare for.”

Cut Off Talks

Leonard Garment, McFarlane’s attorney, said later that the former White House aide cut off talks with the Iranians in Tehran after four days because the Iranians offered to release only two of the four American hostages then held by pro-Iranian terrorists in Lebanon.

McFarlane said he told the Iranians: “I’ve heard enough of that bargain, that baloney. It’s all or nothing. I have my instructions. . . . I’m under orders from the President to receive all the hostages at once.”

Two American hostages were released later in the year after additional U.S. arms shipments.

McFarlane told the committee that he received four pages of instructions from John M. Poindexter, his successor as Reagan’s national security adviser, before departing for Tehran. It is known that he carried also a 3 1/2-page document approved by the President outlining the “pillars and principles” of U.S. policy toward Iran.

Israeli Intelligence

The former national security adviser acknowledged that the Reagan Administration had acted almost entirely on the basis of Israeli-supplied intelligence in its effort to determine whether there were “moderate” elements in Iran.

Although McFarlane acknowledged that he had twice recommended an end to the arms shipments and also disagreed with the Administration’s decision not to inform Congress before the matter became public knowledge, he suggested that the ill-fated policy still had accomplished its purpose of making U.S. contacts with those who may inherit power in Iran.

“I think in the viewpoint of those who are going to be in the succession government in the post-Khomeini period, their confidence in being able to deal with the United States in a way that assures them we’re not going to act against their interests is better now than it has been before,” he said.