Institute Is Incubator for Diplomats : Think tank: Hoover Institution becomes headmaster to young foreign service officers from Eastern Europe.

George P. Shultz sauntered by, heading to his office where he is working on his memoirs, while Michal Wyganowski and Wojciech Iwanczyk, rising stars in the Polish foreign ministry, chatted on a shaded bench at the Hoover Institution.

In an auditorium down a flight of stairs, Edwin Meese III was telling an assembled crowd why drugs should never be legalized. Wyganowski, Iwanczyk and 10 other Polish and Hungarian diplomats could catch up with the former attorney general at a dinner that evening. They had another engagement that afternoon more relevant to their mission: a seminar about the intricacies of the World Bank.

The irony of it all is not lost on anyone involved. The Hoover Institution, a think tank renowed for its conservative bent and the primary brain trust for President Ronald Reagan, is taking on a new mission--acting as headmaster to a dozen young diplomats from Eastern Europe in a fledgling program designed to train them in the ways of modern statecraft.

“We never would have predicted it,” said John Raisian, director of the Hoover Institution on the Stanford University campus.

Not long ago, many of Hoover’s scholars were part of an Administration that declared the Soviet Union to be an evil empire. But for the past two months, Shultz, physicist Edward Teller and many lesser known yet important architects of the Reagan Revolution have lent their talents and expertise to one of the more extraordinary examples of the dramatic changes in East-West relations.

“The things that have happened (in Eastern Europe) were the object of our policy, and it worked,” Hoover fellow Shultz said in matter-of-fact tones, as he prepared to get back to work on his papers.

The former secretary of state pointed out that when “you end the Cold War, societies come out of their cocoons and there are new problems that need to be addressed.”

One such problem became evident to Shultz when Jerzy Makarczyk, Poland’s deputy minister of foreign affairs, told him in February that there was a lack of trusted officers in the foreign ministry, and there was no place to train new diplomats. Shultz suggested that Poland send some of its promising foreign service officers to the Hoover Institution.

With the help of political scientists, free-market economists and former U.S. State Department officials, Shultz and the other Hoover fellows are hoping to help mold some of the new generation of Eastern European foreign officers and perhaps shape policies in those nations.

“If you’re going to change things, you’ve got to start with the young people,” Shultz said.

In this first group of diplomats-in-training, the oldest is 29, though they all have post-graduate degrees. Most worked for their ministries for only a few days when they boarded jets bound for California. They never would have gone to work for their governments if they still were controlled by the Communist Party. As it was, many of them replaced old-line party members.

“We are aware that we are lucky,” said Ervin Szucs, 27, one of the four Hungarians in the program. When he returns to Budapest next month, he will be one of two officers on the U.S. desk responsible for analyzing developments in this country. Two other Hungarians are private secretaries to their foreign minister. The fourth, a lawyer, will work in the legal affairs department.

The diplomats have high aspirations. Some hope to become ambassadors. One spoke of running for a parliamentary seat one day. Some may stay in the ministries for only a few years, then become capitalists. None is certain what is in store for them or their countries.

“It’s not like a well-established institution,” Wyganowski, 29, said of the Polish foreign ministry. “The country has been through hell. You don’t know what will happen.”

Hoover scholars have high hopes for their proteges. “These are people who will percolate up in their systems,” said economist Charles McLure, a tax specialist who served in Reagan’s Treasury Department. “Twenty years from now, you may have high-ranking Polish or Hungarian officials who went through this program.”

Early in the program, McLure noticed that one of them bought a telephone. Simple though that act was, such a purchase in any Eastern European country could have taken months or years.

“These lessons are not lost on them,” he said. “There is an interplay between economic freedom and political freedom. They are not divorced. We’re not teaching it. But I think they are seeing it.”

They have been serious students, learning quickly the basics of free market economies that were unknown in their countries. They have sat through dozens of lectures on topics ranging from basic economics to the ethics of statecraft, global warming and the workings of the General Agreement on Tariffs and Trade.

There also has been time for play. McLure took them to Yosemite for a weekend, though they talk as much about the grandeur of El Capitan as they do about the sleepless night spent in the unheated tent cabin.

Four of the Poles pooled their capital and bought a 1975 Rabbit for $150 and have gone on excursions to Santa Cruz and beaches. They have spent time in Monterey, gone wine tasting, and last week, took an all-too-short tour of that true monument to American consumption, the massive Price Club warehouse store a few miles north in Redwood City.

Jacek Sawicz, 27, a specialist on American arms-control policy, studied the stereos until he found what he was looking for: a dual cassette model with detachable speakers and compact disc player for $189.99, made in Japan. He paid cash.

Others left with piles of towels, tennis balls, multicolored underwear and Snickers bars in bulk. Wyganowski, 29, bought a watch he long had promised his wife. He could have found the same brand in Poland, but it probably would have been a counterfeit.

“Here, you’re practically sure it’s a Seiko,” he said.

During their stay, the diplomats lived with Stanford students. Along the way, they heard long-standing criticism that Hoover and its scholars, with their ties to the Reagan Administration, have a conservative and Republican slant.

These Poles and Hungarians find the criticism somewhat curious. As they see it, Reagan was the President who challenged the Soviet Union’s dominance over Eastern Europe. Hoover provided him with the thinkers who shaped that policy.

Iwanczyk spent the Christmas of 1981 in New York, separated from his father. Martial law had been imposed in Poland, and it was the saddest Christmas of his life, he said. He remembered how moved he was when Reagan urged people to light candles in solidarity with the Polish people.

“I think he’s great,” Iwanczyk said of Reagan. “To be here, where Shultz is still working, is an honor.”

Like the other diplomats, Iwanczyk, 28, was drawn to the foreign service by the prospect that he could help his nation. A graduate of Warsaw University law school, he was working for the Polish airline when he heeded his government’s appeal for young people to join the ministry. He signed an employment contract on Sept. 3, and was bound for the United States on Sept. 16.

“It’s a patriotic way to help the country,” Iwanczyk said.

Most of them had no idea that Stanford or Hoover existed, let alone that people such as Hungarian-born physicist Teller were among its fellows. Teller helped persuade Reagan to create the Strategic Defense Initiative.

Though SDI remains controversial here, the Hungarians and Poles believe it forced the Soviet military into realizing that it could not compete with the United States. That helped bring about changes in the Soviet leadership that allowed Eastern European nations to break away, they believe.

Sawicz, the U.S. arms control policy expert, made a point of visiting the “father of the H-bomb” to ask him about Star Wars. Teller opened the conversation by probing Sawicz’s knowledge of SDI. “I passed and he decided to talk to me,” Sawicz said.

As the program nears its conclusion, goodby dinners have begun. McLure hosted one last week. Conversation ranged from the legalization of drugs to American light beer--a liquid that “has nothing to do with beer,” one of the Hungarians said in disgust. At the end, the McLures served a cake, inscribed with the words, “Best wishes to you and your countries.”

Hoover director Raisian said he is “virtually certain” that the program will continue, though the cost may be pared. Hoover spent $20,000 per student this time, funded by about half a dozen corporations and foundations.

“There is a tremendous amount of interest,” he said. “Czechoslovakia is calling us on a practically weekly basis asking when the next session starts.”

When the Eastern Europeans turned to the Hoover Institution for help, there was no hesitation. How could there be? Hoover fellow Charles Hill, a top aide to Shultz during the Reagan years, pointed out that a founding principle of the institution was that “our system works, your’s will fail.”

“So when it fails, and they come to us and say, ‘Help us out,’ we can’t say, ‘No,’ ” Hill said.