Independent counsel Lawrence E. Walsh's stunning assertion Thursday that President Bush withheld personal notes on the Iran-Contra affair and took part in a six-year "cover-up" means the long-running investigation may now escalate into a new phase--with Bush himself a possible target.
As a result, the Christmas Eve pardons of major Iran-Contra figures that Bush may have hoped would close the book on the case have instead generated new controversy. And that controversy is likely to haunt the outgoing President for months and possibly years to come.
"He can't pardon himself, and he didn't," James Brosnahan, the prosecutor who was to have tried the now-pardoned former Defense Secretary Caspar W. Weinberger, said Thursday.
Bush portrayed the pardons in terms of justice for officials who had only done their patriotic duty--he likened his action to the pardoning of Confederate soldiers after the Civil War.
But Walsh's accusations, along with the disclosure that Bush has been withholding personal notes on Iran-Contra despite repeated requests to produce such material, suggested a more self-serving motive. By heading off Weinberger's impending trial, there is less potential for more damaging revelations to emerge about Bush's own role as vice president in the affair, in which arms were secretly sold to the Iran in hopes of winning the release of American hostages, with the proceeds of the sales funneled to Nicaraguan rebels despite a congressional ban on such aid.
The pardons inevitably evoke memories of President Gerald R. Ford's 1974 pardon of Richard M. Nixon for Watergate.
Walsh pledged to take "appropriate action" on the Bush notes, the existence of which was not publicly known until Thursday. Walsh's staff has gained access to some of the notes but not all of them, and he is expected to seek complete disclosure.
Walsh's staff refused Thursday to discuss exactly what the prosecutor may do. But Walsh responded to the news that Bush was pardoning Weinberger and other high-level officials involved in Iran-Contra by issuing an extraordinary written statement, which strongly suggested that Walsh--clearly angry and frustrated--is not ready to fold his tent.
"The production of these (Bush's) notes is still ongoing and will lead to appropriate action," Walsh said. "In light of President Bush's own misconduct, we are gravely concerned about his decision to pardon others who lied to Congress and obstructed official investigations."
Asked whether he would try to take legal action against Bush, Walsh answered tersely: "I don't want to speculate."
It is not clear whether the notes, which the White House told Walsh about only two weeks ago, contain any smoking gun. But the belated admission that such potential evidence exists, coming five years after the House and Senate Iran-Contra committees called on Bush to produce all relevant materials and coming after repeated requests by Walsh's office, places Bush in a seemingly compromising position.
Indeed, the White House official who informed Walsh that Bush had taken notes relevant to the Iran-Contra case--apparently notes on meetings or conversations--declared that he was "embarrassed" by the situation, according to Brosnahan.
"We didn't know" that Bush dictated and maintained typed notes that included the Iran-Contra period, the frustrated prosecutor said. "Nobody knew."
"People are prosecuted routinely for failure to produce documents that were requested," Brosnahan said.
He contended that the pardon of Weinberger sets the "worst possible precedent for future cover-ups" because it amounts to " . . . a blueprint for covering up" misdeeds by powerful government officials.
"It's exactly the wrong signal--an elitist signal," he said. Walsh, in his statement, linked the belated disclosure of Bush's notes with "Weinberger's concealment of notes"--for which he was being prosecuted.
"Weinberger's concealment of notes is part of a disturbing pattern of deception and obstruction that permeated the highest levels of the Reagan and Bush administrations," Walsh said, noting that his office had worked on the case for some six years without knowing Bush had been holding back "his own highly relevant contemporaneous notes, despite repeated requests for such documents."
The Bush pardons, coupled with Walsh's reaction, may influence the already heated debate over whether Congress should renew the independent counsel law, known as the Ethics in Government Act of 1978, which expired Dec. 15.
Critics have contended that the law creates prosecutors with unlimited time and money who operate outside the checks and balances that regulate other federal prosecutors--and that some, including Walsh, have produced relatively little.
The law's defenders say the overall record of independent counsels has been good and that they are the only way to assure honest investigations of high-level officials in the executive branch.
Action by Walsh against the President is not the only dramatic new turn the Iran-Contra case could now take. Some legal experts believe the special counsel's attack on Bush is so direct that the President--acting through Atty. Gen. William P. Barr--may feel compelled to fire him.
Barr's chief spokesman declined comment on whether Barr would try to fire Walsh. "He will have no comment on the matter," said Paul McNulty.
Under the law, Barr could fire Walsh "only for good cause, physical disability, mental incapacity, or any other condition that substantially impairs the performance of such independent counsel's duties."
Barr would presumably have to argue that Walsh's unprecedented public allegations, at a time when no indictment or official charges have been lodged against the President, violated proper conduct for a prosecutor and constitute cause for removal.
If he dismissed Walsh, Barr would have to report promptly to the special panel of three federal judges who appointed Walsh, and to the House and Senate judiciary committees, on why he acted.
Barr could also ask the three judges themselves to end Walsh's investigation.
If removed, Walsh could ask a federal judge here to review the action, and the judge could order him reinstated or grant "other appropriate relief" under the law.
Former President Nixon's October, 1973 order to then-Acting Atty. Gen. Robert H. Bork to fire Watergate Special Prosecutor Archibald Cox, memorialized as the Saturday Night Massacre, contributed significantly to Nixon's eventual downfall.
But Bush, unlike Nixon who was in the first year of his second term after a decisive reelection victory, will leave office next month, having failed to win reelection.
If, in the end, Walsh decides not to try to move against Bush, it is virtually certain that his final report to the nation will allege that Bush participated in a "cover-up" that took place in both administrations.
Walsh said the latest development signals that he and his staff will be hard pressed to meet the May deadline by which they had hoped to complete the report.
Brosnahan took note of Atty. Gen. Barr's criticism of Walsh in a USA Today interview earlier this month, saying it was "all part of the pardon strategy."
Key Incidents in the Case
Here is a chronology of the Iran-Contra affair: 1985
* An Israeli official suggests to national security adviser Robert C. McFarlane that the transfer of arms to Iran could lead to release of Americans being held hostage in Lebanon. McFarlane takes the message to President Ronald Reagan.
* The first planeload of U.S. weapons is sent from Israel to Iran.
* An American hostage, the Rev. Benjamin Weir, is released.
* Reagan secretly signs a presidential "finding," or authorization, describing the operation with Iran as an arms-for-hostages deal.
* Then-White House aide Oliver L. North writes a memo outlining plans to use $12 million in profits from Iran arms sales for Contra aid.
* Reagan admits selling arms, but denies arms-for-hostages deal.
* Reagan announces North has been fired and John M. Poindexter, who replaced McFarlane as national security adviser, has resigned.
* North testifies under a grant of immunity that he had authorization from his superiors to divert arms-sale money to the Contras.
* North, Poindexter and two others are indicted on charges they conspired to divert arms sales profits to the Contras.
* North receives a suspended prison term, two years' probation and is fined $150,000. He is ordered to perform 1,200 hours of community service. An appeals court later sets aside the convictions.
* Poindexter is convicted. Convictions are later set aside.
* Former Defense Secretary Caspar W. Weinberger is indicted.
* President Bush grants pardons.