But White House Aides Admit Assistant Secretary May Be Liability : Shultz Says Abrams Is Backed ‘Top to Bottom’

In a strong defense of Assistant Secretary Elliott Abrams, Secretary of State George P. Shultz said Tuesday that his embattled aide had violated no laws in his effort to obtain funding for the Nicaraguan rebels and that the Reagan Administration supports Abrams “from top to bottom.”

But senior White House officials said they recognize that retaining Abrams in his job directing Latin American policy may cost President Reagan any chance he still has to obtain funding this year for the contras , as the Nicaraguan rebels are known.

The officials, speaking on condition that they not be identified, said that after the President returns to Washington from meetings with Western allies here Friday, the White House will “have to focus” on whether Abrams is a liability.

As assistant secretary of state for inter-American affairs, Abrams has been the point man on Capitol Hill for the Administration’s difficult battle to win funding for the anti-Sandinista rebels. The President is expected to seek $105 million for the contras in September.

However, Abrams’ testimony late last year that he had sought no contributions for the contras from third countries has gotten him into serious trouble with Congress, in the wake of the disclosure that he had sought $10 million for the contras from the Sultan of Brunei.

The subject of Abrams’ future arose at the end of a Shultz news conference in a hotel on Venice’s Lido Island. The secretary was leaving the podium when a reporter called out: “How can you keep him on after he misled Congress?”

Returns to Microphone

Shultz turned back to the microphone and replied:

“For this reason. Elliott Abrams has been doing and is now doing an extraordinarily difficult job with great energy, with great skill and with great dedication. It’s a hard job, that job of assistant secretary, and he drives himself and he has accomplished a great deal. So he’s done well.”

Shultz, who rarely shows emotion in his public appearances, spoke in a matter-of-fact, but determined, tone. “He made a mistake. He failed to disclose a solicitation he knew about.”

That mistake, Shultz said, was corrected, and it “doesn’t change the quality of the work that he’s done.”

Prodded about whether Abrams would “obey the law from now on,” Shultz said: “Elliott Abrams has violated no laws. He made a mistake in his response or lack of response to a question, which he corrected.

“The Administration supports him from top to bottom.”

On Nov. 25, Abrams told the Senate Intelligence Committee, which was conducting an initial investigation of the Iran-contra scandal, that he had not sought funds from third countries.

Returning to the committee on Dec. 8, he acknowledged under pressure from Sen. David L. Boren (D-Okla.) and Sen. Bill Bradley (D-N.J.) that he had misled the panel earlier, and he apologized.

However, he compounded his problems with Congress last week in an appearance before the House and Senate committees investigating the scandal, testifying that he had wanted to apologize--a statement that led Boren to disclose that Abrams had not apologized until Boren told him to do so.

In addition, Abrams testified that Shultz had ordered him to “monitor Ollie,” a reference to Marine Corps Lt. Col. Oliver L. North, the former White House aide who was at the center of the Iran-contra operation. Abrams told the committees that he did not know what North was doing and that he made no concerted effort to find out.

As a result, Boren, now chairman of the Intelligence Committee; Sen. Sam Nunn (D-Ga.), chairman of the Senate Armed Services Committee, and Rep. Dante B. Fascell (D-Fla.), chairman of the House Foreign Affairs Committee--each a conservative who has supported Reagan’s requests for contra funding--have said that they would find it difficult to work with Abrams in the future. Boren called on him to resign.