President Denies He Knew Contras Got Arms Profits

President Reagan emphatically denied Thursday that he had any prior knowledge that funds from the Iran arms-and-hostages deal were to be diverted to aid the anti-Sandinista rebels in Nicaragua.

Insisting that he has told all he knows about the Iran- contra scandal, the President said he ordered Atty. Gen. Edwin Meese III to release information about the diversion as soon as he learned about it last November “and not wait and have someone uncover this and think we were trying to cover up.”

In his first press conference in four months, Reagan was uncharacteristically subdued and unsmiling, but he appeared confident and unruffled as he fielded more than a dozen questions--almost all involving the scandal and some of them sharply challenging his performance and past statements.

“No, that’s not true at all,” Reagan said when asked about reports that he had been told earlier about the diversion of funds, a focal point of investigations by an independent counsel and select committees of the Senate and House.

Arms for Hostages

After saying that the Iran arms affair degenerated into trading arms for hostages, the President pledged: “I would not go down that same road again.”

But Reagan declared that he will not pass up future opportunities to seek the release of American hostages--including negotiations with third parties. And he staunchly defended what he said were his original goals of building bridges to so-called Iranian moderates and freeing American hostages.

“I happen to believe that, when an American citizen anywhere in the world is unjustly denied his constitutional rights to life, liberty and the pursuit of happiness, it is the responsibility of this government to restore those rights,” Reagan said.

That sweeping statement seemed to conflict with earlier Administration warnings to Americans abroad that their government cannot save them from all perils. On Jan. 26, in a written statement, Reagan said that the government “has an obligation to try to restore those rights. But there is a limit to what our government can do for Americans in a chaotic situation such as that in Lebanon today.”

Reagan, who made major misstatements and seriously damaged his own credibility when questioned on the Iran-contra scandal at his last press conference on Nov. 19, made no serious mistakes Thursday night in an appearance aides hoped would stop his sharp slump in public opinion polls.

Series of Steps

The press conference was the latest in a series of steps Reagan has taken, including a shake-up of top-level White House officials, to try to demonstrate that he has regained control of his Administration in the wake of the worst crisis to face his presidency.

Shortly before the conference, an NBC-Wall Street Journal poll was released showing that 31% of Americans believe Howard H. Baker Jr., the new White House chief of staff, would have the most influence on White House policies and decisions during the next two years and only 27% believed that the President would have the most influence.

Opening the conference with a brief prepared statement on the budget, but knowing that he would be bombarded with questions about the Iran-contra scandal, Reagan pointed out that he had accepted the recommendations of the presidential commission headed by former Sen. John Tower (R-Tex.), which investigated the affair, and was in the process of implementing many of the recommendations.

In seeking to reconcile the Iran arms deals with his public policy against dealing with terrorists, the President said that he does not consider the Administration’s dealings with Iran the same as negotiating with the kidnapers because the Iranian government did not hold the hostages.

“You are faced with some kidnapers,” he said. “And . . . suddenly an opportunity to get into a conversation with a third party, and you find that that third party maybe can do something that you can’t do. I didn’t see that as trading anything with the kidnapers. They didn’t get any advantage from this.”

He said he would go through a similar process “if someone from my family were kidnaped.”

But Reagan said he would not get into hostage negotiations with Iran again because that had led to a deal of arms for hostages--without his knowledge, he said.

Denies Funds Reports

On the issue of diversion of Iranian arms funds, Reagan denied reports that he had been told directly or indirectly at least twice that the contras were benefiting from the Iran arms sales.

When asked if he possibly could have forgotten that he had been told about the diversion of funds to the contras, Reagan answered with a slight laugh:

“Oh, no. You would have heard me without opening the door to the office if I had been told that at any time. No, and I still do not have the answer to that money. The only thing that I can see is that somebody in the interplay of transporting the weapons must have put an additional price on them.”

He said it had come as “a complete surprise” to discover that the Iranians had paid more than the $12-million list price for the U.S. weapons. “This, I think, is the thing we are still waiting . . . to be explained,” he added.

But the President sidestepped questions about whether he had been deceived or lied to by Vice Admiral John M. Poindexter, the national security adviser who resigned, or by Lt. Col. Oliver L. North, the National Security Council aide who was fired.

“Mr. President, is it possible that two military officers who are trained to obey orders grabbed power, made major foreign policy moves, wouldn’t tell you when you were briefed every day on intelligence or did they think they were doing your bidding?” Reagan was asked.

“I don’t know,” the President said. “I only know that’s why I said repeatedly that I want to find out, I want to get to the bottom of this and find out all that has happened, and so far I’ve told you all that I know . . . .”

Reagan said his memory had not failed him on the fact that he approved the initial arms sale to Iran by Israel, an arrangement in which the United States replenished the weapons shipped to Tehran from Israeli stockpiles. “The only thing I could not recall was at what point was I asked,” he said.

“As a result of that, and not being able to recall when I gave this permission, we now have quite a system installed of people taking notes,” Reagan said, laughing, “in all our meetings and all our doings.”

Although Reagan said he could not remember the specific conversation in which he gave approval to the arms sales, he added: “I know it must have come up and I must have verbally given the OK.”

No Thought of Hostages

Reagan said he did not even have the hostages in mind when he approved the initial negotiations with Iran. “When we entered into this, there was never any thought of hostages,” he said. “It was only when (the Iranians) put in this request, as I’ve explained, for arms . . . that they offered to prove that they weren’t supportive of terrorism.”

However, Secretary of State George P. Shultz, then-White House Chief of Staff Donald T. Regan and former National Security Adviser Robert C. McFarlane all have said that freeing the hostages was a major issue in Reagan’s decision to approve the negotiations.

Reagan credited the Iranian arms sales with obtaining the release of “some” hostages held in Lebanon by Iran-linked terrorists. He said he had “understood” that two additional hostages were on the brink of being released when the deal became public last November.

Three hostages were released during the arms sales to Iran and five remained hostage at the time the deal was made public in November. Since then, three other American citizens have been kidnaped.

Reagan dismissed a suggestion that the arms sales could have damaged U.S. relations with Middle East allies, most of whom have sided against Iran in its war with Iraq.

Relations With Allies

“We have a very good relationship--better than we’ve had in many, many decades--with the countries in the Middle East,” he said. “And I think that we have proven our friendship for them.”

Reagan repeated his earlier assertions that he had been assured before the secret arms deals that “the small amount that we were going to sell” would not affect the balance in the war.

The President insisted that he would not “tell falsehoods to the American people” for any reason, although he admitted that he had known he was not telling the truth when he told reporters last Nov. 6 that there was “no foundation” to the reports that first disclosed the Iran arms sale.

“What I was trying to do . . . was to plead with all of you, hoping that this leak that came from that weekly paper in Beirut could be corralled, because I wanted to explain that we didn’t know but what the lives of the people we had been dealing with might be in danger and certainly our hostages could be in danger . . . “ Reagan said.

“I remember saying: ‘Please stop speculating and stop asking questions.’ I didn’t know how far we could go before we could get someone killed,” he said.

But, when asked directly if he believed that a President has a right to lie to protect national security or to save lives, Reagan said: “There are times in which I think you can’t answer because of national security or other people’s security, but, no, I’m not going to tell falsehoods to the American people, I’ll leave that to others.”

The President was asked to explain why at his last press conference on Nov. 19, he had denied repeatedly that the United States had condoned Israeli arms shipments to Iran. The White House issued a correction of Reagan’s remarks shortly after the press conference, explaining that he had been aware of shipments by third countries.

Answered Incorrectly

After the press conference, he said, his aides told him that he had answered incorrectly. “I did not know that I had said it in such a way as to seemingly deny Israel’s participation,” he said. “When they told me this and when I had finished bumping my head, I said to them: ‘Quick, write down a correction of this . . . . I didn’t realize I had said that or given that impression.’ ”

When asked what he thought about White House polls that showed a majority of the American public--including many who voted for Reagan--believed that he was not telling the truth on the Iran-contra scandal, the President used the opportunity to take a swipe at the press.

“In view of what they (the public) have been reading, hearing all these several months, I can understand why they might think that,” Reagan replied.

The President defended his management style, which the Tower Commission criticized as so hands-off that subordinates were able to undertake adventures contrary to the national interest without his knowledge.

“I think that most people in business would agree that it is a proper management style,” he said. “You get the best people you can to do a job, then you don’t hang over their shoulder criticizing everything they do or picking at them on how they’re doing it . . . . I set the policy in this Administration, and they are then to implement it.”

When asked how he could have been unaware that, as the Tower Commission reported, efforts aimed at generating private military support for the contras were directed by White House National Security Council officials at a time when Congress ruled such actions illegal, Reagan said he was aware that private individuals were interested in supporting the contras.

“I don’t believe it was counter to our law that these people were voluntarily offering help,” he said.

“I don’t know how much it would amount to,” Reagan said. “I don’t know whether it is enough to keep them in business or not, but I do know it is absolutely vital that we not back away from this.”