TIME: Almanac 1993/TIME Almanac 1993.iso/time/caps/87/87capcon.5

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                                                                                August 3, 1987

IRAN-CONTRA

An Edge of Anger


The public anguish of an honorable man


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-ernest 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 chat
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 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, moral 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.

--By Ed Magnuson. Reported by Hays Gorey/Washington

-------------------------------------------------------------
TRUTH, PUBLIC SERVICE AND ACCOUNTABILITY

POINDEXTER:  "I made the decision. I was convinced that the
President would, in the end, think it was a good idea. But I
did not want him to be associated with the decision."

SHULTZ:  "How could it be that a staff person was the sole
possessor of such a piece of information, and had operational
control over it, and his colleagues didn't know about it?...I
believe that the operations of the Government should be in the
hands of accountable people."

POINDEXTER:  "Our objective here all along was to withhold
information."

SHULTZ:  "I want to send a message out around our country that
public service is a very rewarding and honorable thing, and
nobody has to think they need to lie and cheat in order to be
a public servant or work in foreign policy. Quite to the
contrary, if you are really going to be effective over any
period of time, you have to be straightforward."

POINDEXTER:  "I think that it's always the responsibility of a
staff to protect their leader."

SHULTZ:  "Trust is the coin of the realm."

NORTH:  "Lying does not come easy to me. But we all had to
weight in the balance the difference between lives and lies."

SHULTZ:  "I don't think desirable ends justify means of lying,
of deceiving, of doing things that are outside our
constitutional process."

NORTH:  "I'd have offered the Iranians a free trip to Disneyland
if we could have gotten Americans home for it."

SHULTZ:  "Our guys, they got taken to the cleaners. You look
at the structure of this deal--it's pathetic that anybody would
agree to anything like that. It's so lopsided. It's crazy."