Proposed Contra Aid May Be Shifted to Political Use, Shultz Says

Should the Central American peace plan produce democratic reforms in Nicaragua’s Sandinista government, the United States will allot unspent military aid to contra forces to support domestic political operations by the rebels, Secretary of State George P. Shultz told a House committee Tuesday.

The idea was quickly attacked by some Democrats on the House Foreign Affairs Committee, one of whom likened it to a “slush fund” of the kind sometimes deemed scandalous in American politics.

But Shultz, defending the White House plan to seek $270 million in aid for the Nicaraguan rebels next month, said the money would be used for activities that “are part and parcel of the democratic process anywhere in the world.”

Shultz outlined the political spending plans during testimony on the Administration’s contra aid request, which will be submitted to Congress after a scheduled Nov. 7 cease-fire in guerrilla wars in Nicaragua, El Salvador and Guatemala. He said the request will be made before Thanksgiving.

The cease-fire is the first step in the so-called Guatemala accord signed by Nicaragua and its four Central American neighbors in August. Among other terms, the accord calls for an end to outside aid to guerrilla forces in the region, including the U.S.-backed contras, after the cease-fire.

In prepared remarks to the House panel, Shultz repeated the Administration’s argument that additional aid to the rebels is an essential “insurance policy” that will pressure Nicaragua’s Sandinista government to carry out democratic reforms that it has agreed to as part of the peace plan.

No Violation of Accord

The additional aid would not violate the Guatemala accord’s ban on outside assistance to guerrilla forces, he said, because it would not be used for military purposes if the peace plan is successful and the reforms are carried out.

“If the agreement works as we all hope, it will be directed to the peaceful reintegration of the (contra) resistance in a free Nicaragua,” he said. “If it does not, it will be used to enable the struggle for freedom to continue.”

Under questioning, Shultz said that after a successful cease-fire, part of the proposed $270-million aid package would be diverted from military uses to building the 16,000-man rebel army into a political force that could participate in Nicaraguan presidential elections, now set for 1990.

“If we are to maximize the chances of democracy in Nicaragua,” he said, “then you have to have resistance forces that have some resources and some staying power to have a chance of being successful in some subsequent election.”

He said that the money would be used “to foster the kinds of activities--protest, publication, criticism--that are part and parcel of the democratic process anywhere in the world.”

Several House Democrats, however, condemned the proposal as contrary both to the Guatemala plan and to the spirit of the democratic reforms that the plan envisions.

Rep. Don Bonker (D-Wash.) said that it smacks of a “slush fund” used “to advance a political program inside Nicaragua,” an idea echoed by Rep. Sam Gejdenson (D-Conn.). Gejdenson, noting that $270 million in political aid would be spent to influence 3 million Nicaraguans, calculated that an American running for President under the same formula would be entitled to $25 billion.

California Rep. Mel Levine (D-Santa Monica) assailed the proposal for seeking to provide additional aid to the rebels in any form.

“Regardless of how it is channeled, it is utterly inconsistent” with the Guatemala accord, he said.

Nevertheless, Shultz offered the Administration’s warmest praise yet for the Guatemala plan, calling it “a bold move in the right direction.”

In addition, he suggested for the first time in recent months that the Administration would begin direct negotiations with Managua’s leftist Sandinista government if Nicaragua President Daniel Ortega first agreed to begin face-to-face cease-fire talks with the contras.

The United States and Nicaragua could discuss a number of issues in the negotiations, Shultz said, including an end to a U.S. trade embargo against the Sandinista regime.

Although the leaders of El Salvador and Guatemala have begun cease-fire talks with Communist-backed rebels as part of the peace process, Ortega has refused to negotiate with contra leaders, arguing that they are puppets of the U.S. government.