Inquiry Seen Focusing on Reagan’s Decisions : Iran-Contra Panel Expected to Ask Shultz How, Why President Acted Without Cabinet’s Advice

As Secretary of State George P. Shultz opens what are expected to be two days of testimony before Congress’ Iran- contra investigating committees today, the hearings enter a new phase: one that is expected to yield fewer startling revelations but may shed light on the deeper problems that bred the scandal.

Now that the committees have heard the testimony of the key operatives in the affair, it appears that the seven-month congressional investigation will not produce a “smoking gun” linking President Reagan to the possibly illegal diversion of Iran arms sale profits to rebels fighting the leftist regime of Nicaragua.

Cabinet Issue Arises

As a result, in the remaining two weeks on the hearing schedule, committee members will focus on a deeper, more complex question: How and why did President Reagan carry out the most important and sensitive foreign policy initiative of his presidency without the consent or participation of his top Cabinet officers?

Reagan Administration officials have contended that the arms sales began as part of a broad foreign policy initiative aimed at building a relationship with certain Iranian factions. But handled as they were--by individuals on the National Security Council staff, the CIA and private businessmen seeking to make a profit--the efforts quickly deteriorated into a series of clumsy attempts to swap weapons for U.S. hostages.

Shultz will be the first of four current and former Cabinet-level officials to go before the panels as members turn their attention to what House Committee Chairman Lee H. Hamilton (D-Ind.) described as “disarray in the process of government.”

The secretary of state will be followed by Atty. Gen. Edwin Meese III, former White House Chief of Staff Donald T. Regan and Defense Secretary Caspar W. Weinberger. It has not yet been decided whether James Radzimsky, the clerk who maintained the NSC’s most secret documents, will be dropped from the list of remaining witnesses.

Shultz, who had strongly opposed the arms deals, had lost his initial battle to stop them in January, 1986, and subsequently asked not to be informed of their progress, former National Security Adviser John M. Poindexter has testified.

The secretary himself told the House Foreign Affairs Committee last December that, once he had been overruled in his objections to the deals, “I didn’t need to know things that were not in my sphere to do something about.”

As a result, the Administration’s chief steward of foreign policy had, by his own admission, only “sporadic and fragmentary and materially incomplete” knowledge of the sales that were to eventually plummet Reagan into the worst crisis of his public life.

Shultz said in his testimony last year that he had heard vague and often contradictory reports as the arms sales proceeded--”at times that there was some sort of deal or signal in the works and at other times that the operation was closed down.”

Iran-contra committee members have little sympathy with Shultz’s intentional ignorance. The secretary’s job, said Rep. Michael DeWine (R-Ohio), was “to give the President his best advice. And then if the President went the other way, which he did, to give him his full support . . . and not just to back away from it.”

“The sad fact is,” DeWine added, “that the secretary of state chose to protect his own position.”

“I don’t give myself an A-plus on everything,” Shultz has said.

The presidentially appointed commission headed by former Sen. John Tower (R-Tex.) also had harsh criticism for Shultz and other Cabinet-level officials in its report on the Iran-contra affair earlier this year.

Because they work for a President who delegates authority and does not become involved in details, Reagan’s key advisers bear “an especially heavy responsibility. . . . The principal subordinates to the President must not be deterred from urging the President not to proceed on a highly questionable course of action even in the face of his strong conviction to the contrary,” the commission wrote.

“All had a duty to raise this issue. . . . None of them did so. All had the opportunity,” the report added.

The committees also will examine a White House atmosphere in which members of the National Security Council staff easily deceived other Administration officials and ran a secret contra supply operation--financed in part with arms sale profits--apparently without the President’s knowledge.

Poindexter told the panel that he alone authorized the diversion of profits by his aide, Marine Lt. Col. Oliver L. North. Poindexter said he decided not to tell the President so that Reagan would have “deniability” if the politically explosive move ever became public. The diversion occurred during the two-year period when Congress had banned U.S. aid to the rebels.

“What is in the air at the White House that leads people who believe in the command structure . . . to believe this kind of activity is what the President wants?” Senate committee counsel Arthur L. Liman asked after Poindexter, a rear admiral, testified last week.

Republicans fear that Democrats will use Shultz’s testimony as an opportunity “to attempt to dramatize and expand and inflate the foolishness of the weapons sales,” Rep. Jim Courter (R-N.J.) said.

Shultz had supported the basic idea of building relationships with the Iranian factions that stood to gain control of Tehran’s revolutionary government after the death of the Ayatollah Ruhollah Khomeini, but he steadfastly maintained that arms sales were the wrong way to do it.

In particular, he said, it would run directly counter to his highly public effort to persuade U.S. allies not to arm Iran, which has terrorist links, and could cost this country a large measure of international credibility.

Shultz, who has contended that he knew nothing of the diversion, is also likely to be asked about North’s claim that the secretary of state was aware and approved of North’s secret network providing military supplies to the contras. As evidence, North cited in his testimony the praise he had received from Shultz at a party last year.

The secretary “took me aside just weeks before I was summarily fired, put his arm around my shoulder and told me what a remarkable job I had done keeping the Nicaraguan resistance alive,” North said.

“I knew what he meant,” North added. “He didn’t have to say: ‘You did a great job on the L-100 resupply on the night of the 9th of April.’ He knew, in sufficiently eloquent terms, what I had done.”

State Department spokesman Phyllis Oakley disputed North’s version of the conversation. She said Shultz’s praise concerned “only North’s efforts to keep up the morale of the resistance leaders.”