Congress OKs House Plan to Fund Covert Action in Iran : Budget: Gingrich's proposal wins agreement despite administration, CIA opposition. It would give the program an additional $18 million.

TIMES STAFF WRITER

House Speaker Newt Gingrich (R-Ga.) has won his behind-the-scenes battle in Congress to provide secret funding for a new CIA covert-action program in Iran, congressional sources said Thursday.

After weeks of negotiations between House and Senate leaders on the roughly $28-billion budget for the U.S. intelligence community in fiscal 1996, the two sides agreed to a House Republican proposal calling for $20 million for an Iranian covert-action program at the Central Intelligence Agency.

Currently, the intelligence budget includes $2 million for a largely symbolic effort against Iran. The Gingrich proposal provides $18 million in new annual funding.

The Clinton administration, the Senate leadership and the CIA had opposed the Gingrich-backed plan. CIA Director John M. Deutch reportedly told a closed hearing of the Senate Intelligence Committee that the CIA believed the plan was flawed, and the issue ultimately became the main obstacle delaying a final agreement between the House and Senate on the entire intelligence budget.

The Senate leadership apparently was won over, however, after House Republican leaders offered a compromise to allow the administration and the CIA to decide how to spend the money and how to structure the covert program.

Sources said that an agreement came Wednesday night and the House approved the new authorization bill by voice vote Thursday.

But administration and CIA policymakers still oppose the plan because they believe it will be ineffectual and a waste of funds.

U.S. intelligence sources said that the CIA has never had much luck in mounting a covert-action program against Iran. Dissident groups operating overseas are considered untrustworthy, and the CIA has found it difficult to gain enough support within the Iranian leadership to launch any large-scale effort against the regime.

CIA officials also worry about mounting a clandestine effort at the behest of Congress, which puts the operation at risk of becoming a political football. What's more, CIA officials believe that covert action of any kind is a losing proposition, setting up those involved for potential scandal.

Still, it may be difficult for Clinton to veto the legislation without appearing to be soft on Iran, which Washington charges is a major benefactor of international terrorist activity. The administration has imposed trade sanctions against Iran and has been working quietly to gain more support from its Western allies for them.

In other intelligence budget matters, the legislation contains a major defeat for the administration's plan to create a new spy agency that would handle all of the government's spy satellites and aerial spy photography.

The proposal, backed by Deutch and Defense Secretary William J. Perry, calls for the creation of a National Imagery and Mapping Agency, which would consolidate all work on spy photography the way the National Security Agency now manages and distributes all eavesdropping, wiretaps and so-called "signals intelligence."

But House Intelligence Committee Chairman Larry Combest (R-Texas) strongly opposed Deutch's plan. The new budget demands that no funds be spent to create the new agency until Congress conducts a more detailed review of the plan.

Combest and other critics in Congress said that they fear the plan would give too much control to the Pentagon, while nonmilitary intelligence, designed to aid such things as diplomatic negotiations, would be shortchanged.

Combest added that the administration's intelligence budget proposal was "lacking in vision and was a disappointment."

In a floor statement Thursday, Combest also was critical of recent statements Deutch made after the Aldrich H. Ames spy scandal. Deutch had said that in his first few months at the agency, he "did not find many first-class minds in the ranks" of the CIA.

Combest, who is emerging as one of Deutch's main critics on Capitol Hill, said that Deutch has a "beknighted view of the intelligence community."

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