Reagan Let Band of Zealots Control Policy, Report Says : Laws Were Bypassed, Probers Say

President Reagan bears ultimate responsibility for the Iran-Contra affair that plunged his Administration into crisis because he allowed a “cabal of the zealots” to seize control of policy and bypass the law, congressonal investigators said today in their final report.

“These committees found no direct evidence suggesting that the President was a knowing participant in the effort to deceive Congress and the American public,” the investigating panels wrote. “But the President’s actions and statements contributed to the deception.”

“The ultimate responsibility for the events in the Iran-Contra affair must rest with the President,” the report said.

Arms Went to Radicals

In one new revelation, the report also said that some U.S. weapons supposedly provided to strengthen Iranian moderates actually went to Iran’s radical Revolutionary Guards and that U.S. officials were told that one of the “moderates” in the U.S. dealings was in fact the person who masterminded the kidnaping of William Buckley, the Beirut CIA station chief who died in captivity.

The 690-page document lays out a story of two-faced policymaking, massive confusion among top officials, excessive secrecy and deception and a cavalier attitude toward legal requirements and constitutional procedures.

“The common ingredients of the Iran and Contra policies were secrecy, deception and disdain for the law,” the report said. “A small group of senior officials believed that they alone knew what was right.”

Conclusions Not Unanimous

Those conclusions were not unanimous. All six Republicans on the House committee, and two of the five GOP Senate panel members filed a sharp dissent, contending that while the Administration had made mistakes they amounted to no more than errors of judgment.

The minority accused the Democratic majority of selective use of evidence to build an indictment of Reagan for partisan reasons. “We emphatically reject the idea that through these mistakes, the executive branch subverted the law, undermined the Constitution or threatened democracy,” the GOP members wrote.

While the majority report was highly critical of Reagan’s conduct, Sen. Daniel K. Inouye (D-Hawaii) chairman of the Senate committee, said members did not believe the President had committed an offense for which he could be impeached.

Administration Duped

In previously undisclosed information, the report said the Administration was duped when, distrusting middleman Manucher Ghorbanifar, it switched to what it saw as a more trustworthy “second channel” in its attempts to find an opening to Iranian moderates.

“The second channel turned out to represent the same Iranian leaders as did the first channel,” the report said, and the recipients of some of the weapons could hardly be described as moderates.

One man, referred to as “the second Iranian” had links to both groups, according to a CIA memo.

The Americans had been told that the “second Iranian” was responsible for the kidnapings of Buckley, in March, 1984, and of Frank Reed, an educator, in September, 1986, according to information received by congressional investigators.

‘Got Taken to Cleaners’

Such developments underscore the conclusion of Secretary of State George P. Shultz that “Our guys . . . got taken to the cleaners,” the report said.

The document, reflecting information recently furnished by the Israeli government, also indicated that as early as Dec. 5, 1985, National Security Council aide Lt. Col. Oliver L. North had plans to use Iranian weapons sales to generate profits that could be used to support Nicaragua’s U.S.-backed Contras.

At the time, Congress had barred “direct or indirect” military aid to the rebels.

The committees listed 27 recommendations for specific changes in laws, but said the affair resulted not so much from defects in the law as from “the failure of individuals to observe the law.”

Policy Must Be Public

The fundamental lesson of the affair, the report concluded, is that public policy must not be made in the shadows.

“Policies that are known can be subjected to the test of reason and mistakes can be corrected. . . . Policies that are secret become the private preserve of the few, mistakes are inevitably perpetuated, and the public loses control over government. That is what happened in the Iran-Contra affair.”

After news of the Iran arms sales broke on Nov. 3, 1986, the Administration--and the President himself--failed to level with the American people, the report said.

For example, on the day of a news conference when Reagan disclosed the diversion of arms-sale money to the Contras, Nov. 25, Atty. Gen. Edwin Meese III announced that the President had not known of the initial Israeli weapons shipments to Iran. In fact, Reagan knew of and approved the sales, and admitted as much six days earlier to Secretary of State Shultz, the report said.