The Tower Commission concluded Thursday that the President's apparatus for making foreign policy works fine, but was not used in the events that led up to the Iran- contra scandal.
"The problem," retired Air Force Lt. Gen. Brent Scowcroft, one of the commission members, told reporters after delivering the report to President Reagan, "was one of people, not of process."
The crisis might have been averted, the commission indicated, if President Reagan and his top White House aides had made full use of the long-standing system of consulting a wide range of Administration officials and congressmen before major policy decisions were made.
Instead, it said, White House aides formulated their plans in secret, preventing any opportunity to challenge ill-considered measures.
"Using the process will not always produce brilliant ideas. But history suggests it can at least help prevent bad ideas from becoming presidential policy," the report said.
'Privatized' Policy Cited
In particular, the commission warned against the Administration's increased "privatization" of U.S. national security policy--the use of private funds and individuals, as well as foreign nations, to carry out goals that Congress and the country oppose or refuse to support.
The commission noted that individuals may seek "personal financial gain" and that foreign nations may have "different objectives and motives." It strongly cautioned against turning to either of them "except in very limited ways and under close observation and supervision."
Reagan appointed the commission last November to study the role of his National Security Council staff and recommend changes that might head off further misadventures. Its recommendations concentrated on defining the NSC staff's proper part in making and managing foreign policy.
The commission acknowledged that its failure to call for radical reform may disappoint some critics, but said that while the problems caused by the Iran-contra case stir deep concern, "the solution does not lie in revamping the NSC system.
"That system is properly the President's creature," it said. "It must be left flexible to be molded by the President into the form most useful to him. Otherwise, the commission said, the President will circumvent his established foreign policy advisers and fashion an informal system more to his liking.
Frank C. Carlucci, the President's new national security adviser, has already carried out many of the commission's recommendations, including generally barring his staff from managing covert operations, such as the sale of arms to Iran and the diversion of profits to the Nicaraguan contra rebels.
As national security adviser, Carlucci presides over the staff of the National Security Council, whose members include the President, the Vice President and the secretaries of state and defense. Marine Lt. Col. Oliver L. North was one of the 50 NSC staff members when he oversaw the Iran-contra policy. He was dismissed last November, when news of his activities became public.
Carlucci was preceded by Vice Adm. John M. Poindexter and, before him, Robert C. McFarlane, both of whom have been deeply implicated in the Iran-contra affair.
Staff Actions Criticized
The Tower Commission emphasized that Reagan was largely insulated from the initiation and enactment of the Iran-contra policy. The President must bear primary responsibility for that, the commission held, but it also provided a long list of the shortcomings of Poindexter, McFarlane and the rest of the NSC staff.
Among those shortcomings was pursuit of contradictory policies without serious examination. "No serious effort" was made to address the risks that direct NSC support of the contras posed to the President, for example, in view of the congressional restriction that "no agency" of the U.S. government should help the rebels.
The NSC staff's activities in Iran and Central America presented "great political risk" to the President if its work became public, the commission said. This is exactly what happened.
Similarly, the report said, the arms transfers to Iran not only were conducted without thorough and intense consideration, but also without regard for the procedures set up by the President himself to handle covert operations. Those arms sales may have been illegal, it said.
Among the commission's recommendations:
--The national security adviser should not be subject to congressional confirmation, because the President might ignore his advice if he could be summoned to testify before Congress.
--The national security adviser should not have "a high public profile," lest he compete with the secretaries of state and defense as the prime foreign policy-maker.
--The national security adviser should focus on "advice and management, not implementation and execution" of policies.
--The NSC staff should be reduced in size. Most staff members should serve four years or less, although there should be some permanent positions to provide an "institutional memory" when one President succeeds another.
--The staffs of the NSC and Central Intelligence Agency should remain carefully separated. In the Iran arms case, strong NSC staff members' views "were allowed to influence the intelligence judgments" of a CIA report, the commission said. It added that it is vital to maintain the line between intelligence information and advocacy of a particular policy.
--The role of the legal adviser on the NSC staff should be enhanced.
--The two intelligence committees of the House and the Senate should be merged into a single joint committee. That could reduce the risk of leaks of secret information and increase the likelihood that the White House would share more of its secrets with Congress.