Casey Dies as Probers Study His Scandal Role

Former CIA Director William J. Casey, a key figure in the Iran- contra scandal and a close friend and adviser of President Reagan, died today of pneumonia in a New York hospital. He was 74.

Sen. Daniel K. Inouye (D-Hawaii), chairman of the Senate committee investigating the Iran-contra affair, opened the panel’s second day of public hearings by noting Casey’s death.

“In the coming weeks, as our inquiry unfolds, Mr. Casey’s name will be heard frequently in regard to the Iran-contra affair,” Inouye said. “Whatever may be the final judgment of his role in this event, it should not obscure Mr. Casey’s distinguished record of commitment to this country.”

Reagan Tribute

At the White House, Reagan issued a statement saying “the nation and all those who love freedom honor today the name and memory of Bill Casey.”

Casey, who had a cancerous tumor removed from his brain last December, was admitted to the intensive care unit of Community Hospital at Glen Cove, Long Island, on April 25.

Hospital spokesman Dennis Connors said Casey died at 1:15 a.m. of “aspirational pneumonia as a result of a central nervous lymphoma,” which he said was believed to be cancerous.

Casey testified last year before three congressional committees probing the Iran-contra scandal. He suffered a pair of minor seizures Dec. 15 at his CIA office in Langley, Va.

Three days later he underwent brain cancer surgery and was hospitalized until mid-February and returned to the hospital for more treatment in mid-March.

On Feb. 2, Casey resigned as CIA chief, leaving behind a legacy of controversy that included some congressional doubts of his ability (he was once lukewarmly deemed “not unfit to serve”) and questions about his financial and political dealings and his agency’s covert operations.

A Senate Intelligence Committee source said the testimony on Tuesday, the opening day of the joint Iran-contra hearings, “is tending to confirm the feeling that a good many people had that Casey was a good deal more involved (in the affair) than Casey said.”

Casey, who built his reputation and multimillion-dollar fortune as a Wall Street lawyer, also served in the Nixon and Ford administrations--as head of the Securities and Exchange Commission, assistant secretary of state for economic affairs and president of the Export-Import Bank.

He was the manager for Reagan’s 1980 presidential campaign, when he was accused of helping provide the Reagan campaign with purloined debate briefing papers from Reagan’s opponent, President Jimmy Carter.

Clashes With Congress

After Reagan’s election, Casey was rewarded with the post of CIA director, a role that led to regular disagreements with Congress and a series of controversies surrounding his personal actions and those of the spy agency.

In April, 1984, the portly, bespectacled CIA chief formally apologized to the Senate Intelligence Committee for failing to provide adequate information on the agency’s role in secretly mining Nicaraguan harbors.

The native New Yorker--drawing on his wartime experience as chief of secret intelligence in Europe for the Office of Strategic Services, the CIA’s predecessor--was said to favor clandestine CIA operations.