Passing The Buck

By WALTER ISAACSON

At high noon on Wednesday, July 15, almost eight months after he was relieved of his White House duties, Admiral John Poindexter made it official: there was no smoking gun. Ronald Reagan, his former National Security Adviser claimed under oath, had not been told that profits from the ill-conceived arms deals with Iran were diverted to support the Nicaraguan contras. "I made a very deliberate decision not to ask the President so that I could insulate him from the decision and provide some future deniability," the loyal admiral insisted. Then he lit his pipe, sending up a puff of white smoke. "The buck stops here with me."

What? No smoking gun? Does this whole wrenching affair boil down, then, to an unbridled colonel's renegade sense of duty and an enigmatic admiral's faulty notions about where the buck stops?

The White House has tried to cast it that way. Last November it faced rapid-fire revelations about an unhinged 15-month effort to trade arms for hostages with Iran's saturnine Ayatullah Khomeini. In addition, a plane carrying American gunrunners had been downed over Nicaragua, and the Administration's flat denials of complicity were being revealed as lies. Then Attorney General Edwin Meese stumbled upon the diversion of funds from one enterprise to the other.

At last there was something tangible that the American mind knew how to address: an apparent legal transgression, a scandal involving the misuse of money. The diversion became a diversion of its own, distracting attention from the thornier basic issues involved. The messy, demanding job of weighing a policy -- several policies, really -- and passing judgment gave way to the tidier task of searching for a smoking gun. There was even a ready-made framework from an earlier, dissimilar, scandal: What did the President know?

Not too much, at least according to Poindexter's testimony. Yet now that most of the evidence is in, the more basic questions about responsibility have become even more troubling. The Iranian arms deals and covert contra supply operations, dubious enough on their own, were part of a larger, even more insidious pattern: the establishment of a runaway foreign policy that relied on lies and deceptions to function outside the rule of law. Could the buck for such an apparatus really have stopped with John Poindexter?

The mere fact that the tranquil-looking admiral could claim that this was the case illustrates what was so dangerously wrong about the Iran-contra operation. At every step of the way, it was designed to avoid the political accountability that is at the heart of American democracy. The authorizations and findings required for the Iranian arms deals either were never sent to the proper officials or were destroyed and conveniently forgotten. Gunrunning to the contras was handled by a network of ragtag profiteers coordinated by a colonel on the National Security Council staff. And the President was, or so his aides say, deliberately shielded from knowledge of the diversion of funds to keep him from being damaged if the operation came to light.

Unlike Oliver North, Admiral Poindexter took the spear of responsibility in his own chest. But through the testimony of both was threaded a common theme: their goal was to cast a shroud of deniability around their activities.

Deniability is an old spy masters' precept, and it made sense that North credited William Casey, the late CIA director, with being the mastermind of the scheme. Through the 1960s and early 1970s, elected leaders often preferred to be kept in the dark about controversial covert operations. In an attempt to prevent Presidents from denying responsibility for such activities, Congress in 1974 passed the Hughes-Ryan amendment requiring a signed presidential "finding" for each one and notification of Capitol Hill in a "timely fashion." In 1980 the reporting requirements were tightened.

In both its Iranian dealings and its contra operations, Administration officials sought to skirt these restrictions. They feared congressional leaks and wanted to restore the option of deniability. This desire to avoid legal channels led them to subcontract both programs to semiprivate adventurers with secret Swiss bank accounts and murky methods of handling financial transactions. The Boland amendment restricting military aid to the contras, with its shifting provisions and tantalizing loopholes, also encouraged North and others to go underground, handling matters through the NSC, relying on outside operatives and seeking unencumbered sources of funding. Their success even led North and Casey to consider establishing a permanent "mini-CIA" outside the presidential-findings process.

It was the ultimate irony: the laws designed to place controls on covert operations ended up spawning a covert apparatus that was perhaps further out of control than anything before it. As the Iran and contra operations proceeded, the Administration regained deniability -- at least for a while. Even after Eugene Hasenfus' flight was downed over Nicaragua, the Administration insisted there was no official U.S. involvement. The President repeatedly denied that the Iranian deals were originally intended as an arms- for-hostages swap. Then, last week, Poindexter disclosed that he had destroyed a finding signed by Reagan in December 1985 stating that this was precisely the intent.

If past scandals are any guide, this one will soon spawn a spate of new laws and procedures, at least some of which will create even more problems than they solve. Some have already been suggested or put in the congressional hopper. Among the proposed new requirements: that covert actions be conducted only with appropriated government funds; that presidential findings and authorizations go to Congress within 48 hours; that the CIA's books be subject to outside audits; that the NSC be barred from covert operations; that the already small circle of Congressmen designated to be told of covert activities (in some cases, now as few as eight) be further limited. A more far- reaching reform being considered is to take responsibility for paramilitary operations out of the hands of the CIA and give it to a new special-forces command in the Pentagon.

The fate of any of these reforms will ultimately depend on officials whose sense of patriotism is informed by a sincere belief in the rule of law and the workings of democracy. The relentless Iran-contra testimony has been a painful as well as prolonged process, but it has also offered up a sound civics lesson to a nation celebrating the 200th anniversary of its Constitution: that + America is a nation of laws, of checks and balances, and of policies that must be accountable to elected officials and ultimately the people.

Balancing a democracy's demands for public accountability with its need to conduct covert activities in a dangerous world has always been maddeningly difficult. But if the Iran-contra affair proves anything, it may be that policies able to stand up under democratic scrutiny tend to be better, even wiser, than those designed to avoid it. Operating the shadowy network that handled arms deals with Iran and funneled funds to the contras required a prolonged series of lies to Congress and the American people, the deception of U.S. allies, and keeping top Cabinet officials and perhaps even the President in the dark. Any policy that depends on such a suffocating cloak of deceit and deniability is likely to have something fundamentally wrong with it.

With reporting by Michael Duffy/Washington