An Edge of Anger

By Ed Magnuson

For George Shultz, a proud man with a strong sense of what is proper, it was a painful task. Before a national television audience, the Secretary of State described how he and his department had been humiliated, betrayed and ignored, cut out of some of the Reagan Administration's most crucial foreign policy decisions. For the U.S. as well, the witness Shultz bore was painful. His blunt description of "guerrilla warfare" within the Administration, his public denunciation of the way things were run and his refusal to tone down his criticism would have been extraordinary coming from a junior bureaucrat. Coming from the nation's top Cabinet officer, they were unprecedented.

During his two days of testimony, with no lawyer whispering in his ear and no litany of don't-recalls, the Secretary of State gave a distinct moral lift to an affair in which the line between heroes and villains has often been blurred. Even when Shultz was discussing whether he should have resigned to stop the arms-for-hostages scheme, his measured outrage was bracing. Given the "systematic way in which the National Security Council staff deliberately deceived me," he noted, "my sense of Did I do enough? has to a certain extent given way to a little edge of anger."

Shultz assailed the intrigue and fighting among Ronald Reagan's advisers. Some of them, he said, "deceived and lied" to the President. Charged the Secretary: "The President was not being given accurate information."

After Shultz opposed the arms-for-hostages scheme, he said, the traditional rivalry between State and the NSC turned downright nasty, exacerbated by the hard-right conservatives who had never had much use for the Secretary of State. According to Shultz, one presidential assistant, Jonathan Miller, even took to nixing his travel plans; the Secretary was forced to lodge a personal complaint with the President. (Miller insists such travel decisions were made by Chief of Staff Don Regan.)

Shultz defended the President at every turn, denying a suggestion by Democratic Senator George Mitchell of Maine that Reagan may have misled him. But it seemed clear his boss had in fact played along with the efforts to keep the Secretary in the dark about the Iranian dealings.

Yet Shultz's main adversaries in what he called a "battle royal" were the late Director of Central Intelligence William Casey and former National Security Adviser John Poindexter. They had helped spawn the ill-fated bargaining with Iran, and when it became public, Shultz charged, they continued to mislead Reagan and tried to use the Great Communicator's skills to "bail them out" of their folly.

Casey, it was disclosed at the hearings, had even written Reagan when the furor erupted last November to ask that he fire Shultz. Recounted the Secretary: "Everybody was saying I'm disloyal to the President . . . I could see people were calling for me to resign . . . I was the one who was loyal to the President because I was the one who was trying to get him the facts so he could make a decision."

The blunt testimony seemed to mesmerize the committee. After Oliver North's flag-waving and Poindexter's tale of keeping Reagan ignorant of the diversion of arms profits to the contras, Shultz's dead-earnest presentation carried a clearer ring of credibility. His memory on key points seemed to be sharper than the highly selective recollections of North and Poindexter. Among a number of legislators commending Shultz, Republican Senator Warren Rudman of New Hampshire told him, "The real heroes are people who speak up to their President, make their views known, and are willing to take great personal risks in confronting their President."

In describing the bungled attempts by the NSC staff, using private citizens in amateurish bargaining to develop a dialogue with Iran and get American hostages released by selling arms to that outlaw nation, Shultz made no effort to conceal his scorn. "Our guys . . . got taken to the cleaners," he said. ". . . It's pathetic that anybody would agree to anything like that. It's so lopsided. It's crazy." At one point he was shown a chart found in North's office safe, outlining a way of using arms-sales profits to set up a privately controlled fund for covert operations. Disdainfully, Shultz tossed the paper on the witness table. "A piece of junk," he called it, adding, "It is totally outside the system of government we live by and must live by."

Shultz, who has served four Republican Presidents and headed part-time task forces for two Democratic Presidents, defended Reagan as a "very strong and decisive person" whose "judgment is excellent when he's given the right information." He told of trying to persuade Reagan that "when you get down into the dirt of the operational details," the Iran initiative had become simply a trade for hostages. "You're telling me things that I don't know," the President said to him. Replied Shultz: "Well, Mr. President, I don't know very much, but if I'm telling you things that are news to you, then you are not being given the kind of flow of information that you deserve to be given."

Indeed, there was much that Shultz had not been told. Some examples:

-- At a White House meeting on Dec. 7, 1985, Shultz and Defense Secretary Caspar Weinberger argued strenuously against a plan to sell arms to Iran as a gesture of "good faith" in getting hostages released and initiating a broader dialogue. Shultz thought he and Weinberger had squelched the idea. Neither Cabinet officer was told by the President that just two days previously he had signed a finding giving retroactive approval to U.S. participation in three earlier arms sales involving Israel, deals of which Shultz was unaware.

-- At a similar top-level meeting on Jan. 7, 1986, Shultz and Weinberger repeated their opposition to the arms sales. Shultz was still unaware that there had been any. "It almost seemed unreal," he recalled. "I couldn't believe that people would want to do this . . . I went away puzzled and distressed." While Shultz thought Reagan was leaning toward such sales, he again was not told that the President just a day earlier had signed a new finding authorizing future direct U.S. arms sales to Iran. Shultz would not learn of these sales until the story broke the following November.

-- Only after the fact did Shultz learn that former National Security Adviser Robert McFarlane and North had traveled to Tehran in May 1986 in a vain effort to free all U.S. hostages. Even then, Shultz was not told that missile parts had been part of the aborted bargain.

After the Iran arms sales and the diversion of profits to the contras erupted in a public explosion last November, the bureaucratic double dealing still did not stop. Reagan ordered the State Department to take full charge of any future relations with Iran. Casey and Under Secretary of State Michael Armacost worked out an agreement under which U.S. contacts with a "second channel" (a relative of a high-ranking Iranian official) would be used only for intelligence gathering and State Department officials rather than CIA operatives would conduct the conversations. Without telling Shultz or his deputies, Casey then went through Chief of Staff Don Regan to get the President to let the CIA retain an operational role in any policy toward Iran. Shultz termed this move "deceptive."

When these talks were pursued, Shultz insisted on written negotiating instructions that ruled out any arms sales. Yet the State Department's representative at the talks in Frankfurt learned that the Iranians were working from a nine-point plan given to them by Albert Hakim, an American businessman used by Poindexter and North to handle the finances in the arms sales. The points included yet further weapons deals. More shocking, they included U.S. involvement in a scheme to win the release of 17 Al Dawa Shi'ite terrorists imprisoned in Kuwait for blowing up a U.S. embassy building there in 1983.

When Shultz heard about this U.S. offer to sell more arms and to help spring the convicted killers, he testified, it "made me sick to my stomach." He got a Sunday-morning appointment with Reagan to tell him about the proposal. Poindexter had testified that Reagan approved the nine points as a bargaining tool. No way, said Shultz. "I have never seen him so mad," said the Secretary. "He's a very genial, pleasant man, he's very easygoing, but his jaw set, and his eyes flashed . . . In that meeting I finally felt that the President deeply understands that something is radically wrong here."

Given all the frustrations and rebuffs, why did Shultz not resign? In fact, Shultz testified, he offered to resign on three occasions, none directly related to the Iranian arms deals. The first was in 1983, when McFarlane took a secret trip to the Middle East without informing the State Department. The second was in 1985, after Shultz publicly opposed a plan for widespread lie- detector testing of federal employees, a stand that estranged him from the intelligence community led by Casey. The final attempt came last August, when Shultz ran into White House roadblocks to his travel plans. But Reagan put the resignation in his desk and told Shultz, "Let's talk about it after you get back from vacation." The matter was dropped.

As Shultz wound up his testimony, several of the committee's Republicans questioned his actions. "You walked off the field when the score was against you," said Ohio's Republican Congressman Michael DeWine. "You took yourself out of the game . . . Our foreign policy suffered because the two key players, George Shultz and Ronald Reagan, were out of the game." Replied the % Secretary: "That's one man's opinion, and I don't share it."

Shultz rejected suggestions from a few committee Republicans that he should have threatened to resign when his advice on the Iran arms sales was not followed. Snapped Shultz in reply to Illinois Congressman Henry Hyde: "Would you have said that I should have sat there on Dec. 7 in the White House and said, 'Mr. President, I see you're wavering, and if you should decide against me, goodbye'?" He added, "That's not the way to play this game at all. I'm there to help the President, not make his life more difficult."

After his forceful testimony, the embattled George Shultz seems in no mood to resign. At the department he heads, morale soared. Said a Foggy Bottom official: "George went out and was George. He was honest and plainspoken. He showed the department to be the only honorable entity in all of the mess." From the White House came high praise from Reagan, though some presidential aides thought Shultz had been self-serving. A spokesman said the President hoped Shultz would continue at his post.

Well he might. Shultz, with his determination to help mend the democratic process so badly bruised by the clandestine schemes he had opposed, imparts an aura of trust and candor to an Administration that has too often shown itself deficient in both.

With reporting by Hays Gorey/Washington