President Decides Against Sanctions in Lithuania Crisis : Secession: Bush’s stand illustrates Gorbachev’s influence in the West. Republic’s leader calls it a ‘sellout.’

President Bush decided Tuesday not to impose sanctions to combat the Soviet Union’s squeeze on Lithuania, but he said the United States still hopes the rebellious republic will achieve self-determination “some day.”

Bush’s decision reversed signals that his aides had been sending for several days that he would act to punish the Soviet government for imposing a virtual economic blockade on the republic, which unilaterally declared its independence March 11.

The switch came after virtually all U.S. allies and the congressional leadership warned him to avoid sanctions that might undermine Soviet President Mikhail S. Gorbachev. The advice provided a dramatic illustration of how thoroughly the leadership of the West has tied its policies to the Soviet leader’s success.

Moscow greeted Bush’s decision triumphantly, while Lithuanian leaders bitterly accused the United States of a “sellout.”

“This is another Munich,” said Lithuanian President Vytautas Landsbergis, recalling the appeasement of Adolf Hitler that doomed Czechoslovakian independence in 1938 and helped bring on World War II.

Bush insisted the United States understands Lithuania’s desire for freedom. But, he said during a question-and-answer session with a group of out-of-town reporters, “I also am concerned about the freedom of Poland” and other Eastern European countries.

“I am concerned that we not inadvertently do something that compels the Soviet Union to take action that would set back the whole case of freedom around the world.”

Landsbergis, speaking from Vilnius, the Lithuanian capital, angrily rejected that argument.

“Can the freedom of one group of people be sold for the freedom of another?” he asked in a statement late Tuesday evening. “What then is the idea of freedom itself?”

Soviet state-run television broke into its main evening news program to announce Bush’s decision. The news program had begun with a report saying U.S. sanctions were likely and with a warning by a Foreign Ministry official that any such move would hurt U.S.-Soviet relations.

At the end of the program, the newscaster read a “late bulletin,” triumphantly announcing that “Bush declared that he was not prepared to take this action (of imposing sanctions) since it would escalate the conflict around Lithuania.”

White House aides cautioned that Bush’s decision is not final, saying that, for now, the President had merely decided not to decide.

“You’ve got to go day by day,” said one Administration official.

In reality, however, Tuesday’s decision was carefully planned, coming after an extensive round of consultations with European leaders and members of Congress and a weekend call from Soviet Foreign Minister Eduard A. Shevardnadze to Secretary of State James A. Baker III.

The decision reflects a strong consensus within the government and among U.S. allies that the other issues on the U.S.-Soviet agenda--arms control, reductions in Soviet forces in Eastern Europe, German unification and, above all, Gorbachev’s overall program of perestroika --are simply more important than Lithuania’s desire for immediate freedom.

The paramount interest for Bush and other Western leaders has become keeping Gorbachev in power. Sen. Robert C. Byrd (D-W. Va.), chairman of the Senate Appropriations Committee, spoke for many when he warned Tuesday in a Senate speech that if Gorbachev fell, he could be replaced by “a new Draconian Darth Vader four-star military marshal who will fuel up all the tanks again.”

The current attitude could change overnight, congressional leaders warned, if the Kremlin does begin a violent crackdown. And even in the absence of such a crackdown, some members of Congress are likely to oppose new steps to aid the Soviet Union.

Byrd, for example, said in his speech that he “would oppose extending new economic benefits and rewards to the Soviet leadership at the same time it is starving the Lithuanians of food and fuel.”

For now, however, “people realize you wouldn’t have the situation in Lithuania in the first place if it weren’t for perestroika ,” said a White House aide, noting that past Soviet leaders would simply have sent in tanks to crush the Lithuanians at the first sign of unrest. Administration officials still hope Gorbachev can negotiate a way out of the crisis, and for now “want to give him the benefit of the doubt,” the official said.

From Bush’s standpoint, the risks of action outweigh the dangers of maintaining the status quo.

“This is a highly complex situation that we’re facing, and there’s a lot at stake,” Bush said, adding a comment he attributed to baseball’s Yogi Berra: “I don’t want to make the wrong mistake.”

“I think the American people are in support of that approach,” Bush said in defending his course.

White House Press Secretary Marlin Fitzwater made the same point, referring reporters to opinion polls--including a recent NBC/Wall St. Journal survey--showing that by 2-to-1 margins, voters say that good relations with Gorbachev are more important than freedom for Lithuania.

Both abroad and at home, that feeling appears to be unanimous.

“Our allies are not prepared to join in on any sanctions,” Rep. Dante Fascell (D-Fla.), chairman of the House Foreign Affairs Committee, told reporters after 11 congressional leaders met with Bush, Baker and other Administration officials.

During the congressional meeting, only the ultraconservative Sen. Jesse Helms (R-N.C.) urged Bush to take any stronger action.

“It’s not just an affinity for Gorbachev personally, but for all that has happened in the last year or so in the way of change in Eastern Europe and the Soviet Union,” said a senior Bush adviser. “Acting unwisely has the potential to put some very real achievements at risk.”

The White House decision came after several days of indications that Bush would go the other way. On Friday, Fitzwater had indicated that Bush probably would announce sanctions against the Soviets sometime this week.

And, in fact, “the initial intent” after Moscow began its economic embargo on Lithuania “was that the time had come to take action,” the senior Bush adviser said.

Over the weekend, aides consulted with European diplomats and drafted options papers for Bush. The go-slow signals from the allies played a major part in turning the Administration around, the senior adviser said, noting that when sanctions were raised, “the reaction was, shall we say, unenthusiastic.”

The allies, the adviser said, can be put into three groups: Those that long ago decided to accept the Soviet Union’s annexation of Lithuania and the other two Baltic republics; those that believe the possible sanctions would not be effective in terms of shifting Soviet policy, and those that were concerned the situation inside the Soviet Union is so severe that any “major action” by the West would produce “a very great negative effect.”

Gorbachev eased Bush’s path by having his spokesman on Monday announce new, more conciliatory terms for negotiations with Lithuania. The Soviet offer to negotiate would allow Lithuania to keep its declaration of independence if it suspends for two years actual steps toward independence.

A Lithuanian delegation is in Moscow, and Administration officials continue to hope that negotiations will begin, although so far there has been no progress.

Monday night, Bush convened an expanded meeting of the National Security Council to discuss his options, but as has been his practice, he revealed his decision only to a small group. Several officials left the meeting unclear which way Bush had decided to go. At least some Administration officials called news organizations to say Bush had decided to impose sanctions, prompting a rash of inaccurate stories Monday night and Tuesday morning.

Times staff writers Michael Parks, in Moscow, James Gerstenzang, Norman Kempster and Michael Ross in Washington, and free-lance journalist Esther Schrader, in Vilnius, contributed to this report.

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