Congress will probably consider impeaching President Reagan if it discovers that Reagan knew about the diversion of profits from his secret arms sales to Iran, the chairman of the House committee on the Iran- contra scandal said Sunday.
If John M. Poindexter, former national security adviser, testifies next month that Reagan knew of the diversion, "It is likely . . . (that) you would have a demand for impeachment proceedings," Rep. Lee H. Hamilton (D-Ind.), the committee chairman, said on ABC-TV's "This Week With David Brinkley."
Reagan has repeatedly denied knowing of the diversion of funds, which funneled about $3.5 million to the contras and more than $7 million to the Swiss bank accounts of a partnership set up by retired Maj. Gen. Richard V. Secord.
Questioning of Poindexter
Hamilton said he does not know of any evidence that clearly shows that Reagan approved the diversion, and added that he does not know how Poindexter--currently being questioned in secret by congressional investigators--will testify.
But he made it clear that despite Reagan's denials, Congress' Iran-contra committees still consider it possible that the President did approve the diversion.
Hamilton noted that an April, 1986, memorandum for Reagan drafted by then-White House aide Oliver L. North clearly outlined the diversion of money to the contras.
"I don't know whether that memorandum got to (Reagan) or not," he said. "If that memo had reached the hands of the President and he had approved it, that would be the smoking gun. . . . It would be a very serious matter.
'Did He Break a Law?'
"Now, did he break a specific law by doing that? I'm not sure that I can judge that," Hamilton said.
But in political terms, he added, "It is likely if that occurred--and let us emphasize the 'if'--that if it occurred, you would have a demand for impeachment proceedings."
Hamilton said members of his committee's staff, who have been questioning Poindexter, have not alerted him to any bombshells in the former Reagan aide's retelling of events.
"I know nothing about Adm. Poindexter's testimony," he said.
The April, 1986, memorandum was given to Justice Department investigators by National Security Council officials last Nov. 22, the day after North and his secretary, Fawn Hall, destroyed hundreds of documents relating to North's secret operations.
A Detailed Proposal
The memo was a detailed proposal to sell $3.7 million in U.S. anti-aircraft missile parts to Iran for $17 million. Of the profits, the memo said, "$12 million will be used to purchase critically needed supplies for the Nicaraguan democratic resistance forces."
The discovery of that memo led Reagan to fire North and demand Poindexter's resignation last November. Since then, several accounts have claimed that Poindexter briefed Reagan about the diversion at least twice, but none of the reports have been confirmed.
Hamilton also said he has been struck by new evidence during the six weeks of congressional hearings on the scandal that CIA Director William J. Casey may have been the key official supervising North's secret operations.
Casey, who ran the CIA from 1981 until last December, died last month after several operations to remove a brain tumor.
Impressions of Casey
"I went into these hearings under the impression that Director Casey knew very, very little about these efforts to divert funds to the contras and to supply the contras," said Hamilton, who met frequently with Casey as chairman of the House Intelligence Committee.
"What we've heard thus far would suggest that Col. North was in frequent contact with Director Casey, and that surprised me.
"What it may mean is that Director Casey was one of the persons--maybe the only person--who had some role supervising Col. North," he said. "That is a question that clearly has to be explored."
Two other members of the congressional investigating committees agreed that the increasing evidence about the scandal has continued to damage President Reagan's standing.
"I think he has already been hurt badly," said Sen. George J. Mitchell (D-Me.) . "I don't think the President will ever regain the status he had before last November's election."
"I think the President is certainly troubled," said Rep. Henry J. Hyde (R-Ill.), one of Reagan's most stalwart defenders on the committees. "He is indeed a lame duck.
"I'd hate to have the last memory of the Reagan Administration--the two of them--be this Iran-contra controversy, because it's nothing anyone can be proud of," he said.