Shultz Survives Foes, Expands Policy Control

Shortly after the Iran- contra affair surfaced, cartoonist Pat Oliphant drew a caricature of President Reagan and some of his top advisers, dressed as gangsters holding Secretary of State George P. Shultz hostage.

Today, all that is changed. Shultz stands virtually alone amid the bureaucratic wreckage of his former foes. The President has admitted publicly that on arms sales to Iran, Shultz and Defense Secretary Caspar W. Weinberger, who opposed the arms sales, “were right and I was wrong.”

The saga of George Pratt Shultz, 67, a stolid and seemingly colorless economist, is a remarkable story of political survival. He has not only withstood weeks of concerted attacks from White House aides as the Iran-contra matter unfolded but he has also fended off years of outright hostility from the politically potent right wing of the Republican Party.

Now, foreign policy experts, Shultz’s admirers and detractors alike, are virtually unanimous in saying that he will shape the diplomacy of the final 22 months of the Reagan Administration. That probably will mean an emphasis on U.S.-Soviet relations and arms control, perhaps to the exclusion of almost everything else.

“He is working hard to get an (arms control) agreement with the Soviet Union,” an Administration official said. “Some people at the Pentagon may think he is working too hard. But if he could now pull a U.S.-Soviet agreement out of the hat, he would have something to show for his tenure.”

The official conceded that there are not many other areas of foreign policy that contain similar opportunities for dramatic achievement by the scandal-weakened Reagan Administration.

Robert G. Neumann, Reagan’s chief foreign policy adviser between his election in 1980 and his inauguration in 1981, said Shultz has identified arms control as the most important issue on which the Administration still has hopes of achieving results.

“He may have come to the conclusion that if he were to leave, there might be no one to lead the fight for arms control,” said Neumann, now with the Center for Strategic and International Studies in Washington.

Administration officials say that Shultz now is more firmly in control of the Administration’s foreign policy agenda than at any time during his 57-month tenure. His new stature grew out of what might have been his greatest humiliation--the sale of arms to Iran, which proceeded despite his objections and, he maintains, largely without his knowledge.

Although Shultz seldom missed an opportunity to advise Reagan against the arms sales, the presidentially appointed commission that reported on the scandal Feb. 26 said that he did not press his views forcefully enough. Once the operation became public last November, however, Shultz pursued a high-profile strategy intended to establish his credentials as the leading opponent of a policy that the President continued to defend.

Show of Independence

In a stunning show of independence by an appointee whose hallmark had been loyalty to the President, Shultz demanded--and got--a statement by Reagan that Iran policy would be handled by the State Department and not the White House National Security Council staff, which had managed the arms sales.

By playing hardball politics, Shultz subjected himself to the animosity of the White House staff. But as a seasoned bureaucratic warrior, he knew that Donald T. Regan, who resigned as White House chief of staff last month, was too weakened to be dangerous. As for the President, Shultz missed no opportunity to assert his loyalty to Reagan even as he worked to undercut his policy.

“George Shultz triumphs--to the extent he triumphs at all--by a combination of bureaucratic savvy, persistence and loyalty,” an Administration official said.

Another official, less admiring of the secretary, agreed that Shultz demonstrated plenty of savvy and persistence but questioned his loyalty.

“Immediately after the news (of the Iran arms sales) broke, Shultz didn’t handle things well,” this official said. “He distanced himself from the President and showed a lot of muscle in getting control of foreign policy. And he did most of this in public. . . . I think he’s making a comeback now. I don’t see any reason why he would leave.”

Struggle With Colleagues

Throughout his tenure--now the third longest behind Dean Rusk and John Foster Dulles for post-World War II secretaries of state--Shultz has struggled with Cabinet colleagues for foreign policy supremacy. According to one Administration official, Shultz’s most formidable foe was CIA Director William J. Casey, now recuperating from surgery for a brain tumor.

Shultz and Regan, two crusty former treasury secretaries proud of World War II Marine service, started as allies. But by the time Regan was forced out last month, the two men were scarcely speaking.

There also have been well publicized clashes between Shultz and Weinberger over arms control and other issues, although State Department and Pentagon officials say these disputes have been much less severe than popularly believed.

Although Shultz and Weinberger both opposed the Iran arms sales from the start, Shultz adopted the high-risk strategy of going public with his opposition when the affair became known. Weinberger was more circumspect in his response.

Shultz made his gamble pay off. Weinberger’s bureaucratic star has also risen, however, if only because of Reagan’s reference to him as one of two advisers who were right about the Iran arms sales while he was wrong.

More Comfortable With Policy

State Department officials say that Shultz is far more comfortable with the Administration’s present foreign policy line-up than he has been in the past. Weinberger and Frank C. Carlucci, the new White House national security adviser, were both deputies to Shultz at the Office of Management and Budget during the Richard M. Nixon administration.

Foreign leaders, ranging across the ideological spectrum, have made it clear that they want Shultz to remain at his post. Although the Iran affair dented his prestige, Shultz retains a reputation for integrity that is probably stronger abroad than it is at home.

Even Neil Kinnock, leader of the British Labor Party, whose policies differ with Shultz’s on a wide variety of issues, called the secretary of state “a very stable core to a lot of policies.” Replacing Shultz, he said, “would be disadvantageous for the United States and . . . the West.”

Conversely, Shultz has been the favorite whipping boy of Republican conservatives, led by Rep. Jack Kemp (R-N.Y.), a potential presidential candidate. Kemp has demanded Shultz’s resignation because he says the secretary of state is not staunch enough in his support for the Administration’s Strategic Defense Initiative missile defense program or for the rebels in Nicaragua, Angola and Afghanistan.

Support for ‘Freedom Fighters’

Yet Shultz’s public statements have not wavered from support of the anti-missile initiative or of the rebels, whom he invariably calls “freedom fighters.” A Kemp aide conceded that Shultz’s public statements “have been very helpful” but added that the State Department remains too willing to compromise on issues that conservatives consider important.