Casey's Shadow

Senators urge CIA chief to quit

It is one of the most delicate appointments a President makes: whom to trust with the sensitive task of directing the Central Intelligence Agency. Last week President Reagan's selection of William J. Casey, his former campaign manager, to head the CIA came under increasingly serious assault from Republicans on Capitol Hill. After sounding out the Senate Select Committee on Intelligence, which oversees the agency, Assistant Majority Leader Ted Stevens of Alaska said that a bipartisan committee majority wants Casey to quit.

At issue is Casey's poor judgment in appointing a political crony, Max Hugel, to head the CIA'S clandestine operations. A New Hampshire entrepreneur with no relevant background in intelligence work, Hugel quit under fire two weeks ago when two former Business associates accused him of illegal stock manipulations before he joined the agency. The committee is also probing Casey's own business past, including findings by two courts that he and other directors of Multiponics, a New Orleans agribusiness firm, had deceived investors and operated the company to protect their own financial interests instead of those of stockholders.

For two weeks, the Intelligence Committee's chairman, Arizona's Barry Goldwater, had privately told colleagues that "Casey must go," while publicly denying any intention to force him out. But last week Goldwater startled other committee members by holding a press conference at which he contended that Casey's selection of Hugel had been "a sufficient mistake for Mr. Casey to consider withdrawing himself or having the President do so." The CIA chiefs poor judgment in choosing Hugel, said Goldwater, was "dangerous."

Stevens declared that Casey should leave "for the good of the agency." He was joined by Delaware Republican William Roth, who said that the controversy makes it "impossible for Mr. Casey to effectively discharge his duties." More significant, Senate Majority Leader Howard Baker expressed full confidence in Goldwater and added: "I will back up Goldwater in whatever he decides to do."

New York's Daniel Patrick Moynihan, a committee Democrat, was angry at the failure of White House aides and Attorney General William French Smith to return telephone calls requesting records of Casey's business. Vowed Moynihan: "If they are going to cover up, they are going to lose themselves a director of the CIA." Both the Justice Department and the White House hastily promised to furnish the records.

At week's end a new allegation was raised against Casey. Carl G. Paffendorf, president of COAP Systems Inc., a computerized financial planning company, said that Casey had lent the company $100,000 in 1971-72 when Casey was chairman of the Securities and Exchange Commission. In return, claimed Paffendorf, he had given Casey a $10,000 interest in another computer firm, Penverter Partners. Casey had failed to report this gift in financial statements required for his Senate confirmation to head the CIA. An agency spokesman said Casey had paid "a nominal consideration" for the Penverter interest and had not considered it a gift.

The Senate committee has no power to dismiss Casey directly. As Goldwater conceded: "Mr. Casey is a creature of the President. As long as the President retains confidence in him, he stays." Amid last week's rising furor, Reagan declared: "We are cooperating fully with the Senate committee. I have not changed my mind about Bill Casey." So far, said one senior committee staffer, "there's no smoking gun, but there's plenty of smoke."But unless it clears quickly, Casey might well face strong political pressure to resign as the nation's spymaster.

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