Casey Quits as CIA Chief; No. 2 Man to Succeed Him : Resignation Not Forced: White House

Hospitalized CIA Director William J. Casey has resigned and President Reagan will name Deputy Director Robert Gates, a 20-year agency veteran, to replace him, the White House said today.

Presidential spokesman Marlin Fitzwater said Reagan accepted the resignation “with reluctance and deep regret” and emphasized that Casey, hospitalized since Dec. 15 for the removal of a cancerous brain tumor, acted voluntarily.

“It was Mr. Casey’s decision to resign,” he said. “He saw that it would be some time before he would be able to return to duty and undertake full activities at the CIA. He realized the need for on-the-job leadership in the intelligence community.”

Fitzwater said that Casey tendered his resignation last Thursday in a meeting with Atty. Gen. Edwin Meese III and White House Chief of Staff Donald T. Regan and that Gates, the No. 2 man in the CIA, was offered the post Friday.

They Withheld Suspicions

Seen as better able than Casey to get along with Congress, Gates nonetheless may find the Iran arms- contra aid scandal casting a shadow over his confirmation hearings before the Senate Intelligence Committee.

The committee reported last week that for more than a month Gates and Casey withheld suspicions that profits from the sale of weapons to Iran were being diverted to Nicaraguan rebels. Gates told the panel that the suspicions were not disclosed because they were based on “analytical judgments of bits and pieces of information” and not considered “very much to go on.”

Casey, 73, entered Georgetown University Hospital on Dec. 15 after two minor seizures and just a day before he was to testify before the Senate Intelligence Committee on the Iran-contra scandal.

Three days later, part of a cancerous tumor was removed from his brain. His recovery has been slow, marked by speech and mobility difficulties.

Casey Getting Better

The hospital said today that Casey “continues to improve steadily. He is alert. He has visited several fellow patients and went to Mass at the hospital chapel yesterday. He will continue to receive radiation treatments and physical therapy for several weeks at the hospital.”

If confirmed, the 43-year-old Gates will be the youngest director ever to head the intelligence agency. He joined the CIA in 1966 as an intelligence analyst and has run the agency on an acting basis since Casey entered the hospital.

White House officials reached a consensus several weeks ago that Casey would not return to the CIA but said Reagan--loyal to a longtime friend--would do nothing to force the situation.

Reagan has asked Casey to accept a new White House post as counselor to the President whenever he “feels that his recovery is sufficient,” Fitzwater said.

‘Outstanding Job’

Casey, who served as an operative in the pre-CIA Office of Strategic Services during World War II, managed Reagan’s 1980 presidential campaign. Since 1981, he has run the CIA with a style that has had Reagan’s blessing but infuriated some members of Congress.

Fitzwater said Reagan believes that the agency “has been doing an outstanding job” and hopes that Gates will keep the CIA “on the same course” as Casey.

Under Casey, the CIA underwent a resurgence from earlier years of turmoil and demoralization, with its budget at least doubling and public recruitment efforts accelerating. Covert activities, reined in during the last two administrations, had renewed support.

His close association with Reagan enabled Casey to withstand repeated calls for his resignation, despite complaints of less-than-full disclosure to congressional overseers and a combative relationship with the news media.