Iran Scandal Irrelevant to Contra Needs, Shultz Says

Secretary of State George P. Shultz, hoping to rescue the Administration’s beleaguered Central American policy from the fallout of the Iran- contras scandal, said Thursday that U.S. support for the Nicaraguan rebels is based on strategic realities that transcend the illicit funding scheme.

In a speech to the American Bar Assn. convention, Shultz said that the festering controversy over arms sales to Iran and the diversion of profits to the insurgents in Nicaragua “must be dealt with as a matter of purely domestic concern.”

“It is irrelevant to the strategic and moral realities we face in this hemisphere,” he said. “Decisions regarding the security of our nation must look beyond a session of Congress or a presidential term.”

Congressional critics of the contras hope to exploit the controversy to block renewal of the current $100-million aid program.

Shultz made no other mention of the Iran-contras scandal in his professorial-sounding 40-minute lecture that traced U.S. policy in the Western Hemisphere back to the Monroe Doctrine of 1823. He broke no new ground in the speech, which was intended to reaffirm the basic strategic rationale for U.S. efforts to force the Sandinistas to change the course of their revolution.

“Like Cuba, Nicaragua is becoming a strategic asset to the Soviets,” Shultz said.

He said that Soviet submarine facilities in Cuba have long threatened vital U.S. sea lanes to Europe and the Middle East. He said that the Soviets may soon establish a submarine base on Nicaragua’s Pacific Coast which would “threaten our ability to assist our Asian allies and defend our shipping lanes.”

Shultz said that Washington is determined to replace the Sandinista regime with a democratic government in Nicaragua.

“The comandantes have a choice: they can keep the promises (of democratic reforms) they made to their people and the international community to get into power, or they can accept the risk of more violent and less voluntary changes down the road,” Shultz said.

“But this much is certain: Nicaragua will change,” he said. “The tyranny there is out of step with the aspirations of the Nicaraguan people and the realities of this hemisphere. Nicaragua . . . is on the wrong side of history.”

Shultz received a mixed reception. While many in the audience of lawyers and judges gave him a standing ovation, many others remained silently in their seats.

But in the brief question and answer session that followed the speech, no one asked about the Iran-contra affair, arms control or Central American policy.

In answer to a question, Shultz said that Soviet leader Mikhail S. Gorbachev’s well-publicized “openness” campaign ultimately might lead to better Washington-Moscow relations.