Tower Of Judgment

By GEORGE J. CHURCH

On the Day of Judgment, according to ancient religious tradition, all secrets will be revealed and all hidden sins bared. The report on Iranscam that a presidential commission is due to make public Thursday will not quite measure up to that standard. But as the torrent of leaks and revelations last week made clear, the document will lay open all manner of embarrassing foreign policy secrets and possibly point to some indictable misdeeds as well. As publication day approached, an almost palpable sense of fear settled over the , White House. Some aides went so far as to speculate that, depending on how Ronald Reagan and his lieutenants react, Feb. 26 could turn out to be a secular analogue of Judgment Day. Said an apprehensive Reagan assistant of the report: "We've got to be careful. If we mishandle this, that's all she wrote."

The three-man commission, headed by former Republican Senator John Tower of Texas, was appointed by Reagan to look into the operations of the National Security Council. But to the consternation of the White House, the commission has broadened the scope of its inquiry to probe a wide variety of questions stemming from the arms deals with Iran and covert efforts to support the Nicaraguan contras. Among the disclosures that preceded the report's release:

-- The President himself has given the Tower commission conflicting testimony on a key question: Did he approve in advance the 1985 Israeli shipments of American-made arms to Iran? In his first interview with the commission last month, Reagan gave the impression he had. But in a second interview, on Feb. 11, Reagan insisted that, after searching his memory and consulting with White House Chief of Staff Donald Regan, he could not recall granting authorization.

A source close to Regan gave TIME this explanation: the President watched former National Security Adviser Robert McFarlane testify before a congressional committee on TV and was impressed with his explanation of the rationale for the Iran deals. During Reagan's first appearance before the Tower commission, the President was asked a broad question about McFarlane's version, and replied that he saw things the same way. Regan realized that the President's testimony seemed to confirm McFarlane's claim that Reagan had authorized the 1985 shipments. Regan then went over his notes and asked the President whether he had any recollection of approving the shipment. Reagan did not, said this source, and told the commission as much during his second interview. Said a source close to the commission: "The President didn't seem to think it was a big deal."

To others, the switch pointed to dismaying presidential fuzziness, if not outright deceit, about a vital matter of foreign policy. Scoffed one Senator: "The President can't remember which version is true and which is the cover story." The lawmaker added that Reagan's memory has noticeably deteriorated; just before his prostate surgery in January, he approved a major intelligence "finding," but two weeks later could not remember it.

. The switch in the President's testimony stirred new speculation that he is being manipulated by his chief of staff. Once again there were calls for Regan's head. This time the President responded by saying that if the chief of staff wanted to resign, he would not try to dissuade him. Though Regan's well- publicized feud with Nancy Reagan deepened, and rumors persisted that he would leave in the next week or so, the chief of staff expressed his determination to stay.

-- The three members of the commission -- Tower, former National Security Adviser Brent Scowcroft and former Secretary of State Edmund Muskie -- called on McFarlane last Thursday in Bethesda Naval Hospital. McFarlane has been confined there since Feb. 9, after he attempted suicide by swallowing an overdose of Valium. The session in a conference room adjoining the presidential suite was stilted: the four men know each other well, but they took pains to speak formally as investigators and witness. McFarlane addressed Tower as "Senator" and Muskie as "Mr. Secretary."

In 3 1/4 hours of testimony, McFarlane strongly reiterated that Reagan had authorized the 1985 shipments -- at a meeting, ironically, in Bethesda Hospital, where the President was recuperating from his colon-cancer operation. McFarlane quoted the President as saying, "I want to get the hostages out. If the Israelis say we can do it, let's try." McFarlane added that Regan (who McFarlane believes is out to get him) was at the meeting.

McFarlane pointed more strongly than before to an organized attempt last November to minimize or even cover up the President's role in the 1985 Israeli arms sales. McFarlane had previously admitted helping draft a chronology that was, in his word, "disingenuous." This time he apparently went further: he confessed to writing a memo last Nov. 18, at the request of his successor, John Poindexter, that was deliberately phrased to "blur" Reagan's role. The memo outlined a way in which the President could plausibly deny having approved the Israeli shipments. If his later insistence that Reagan had given that approval is to be believed, then McFarlane knew the denials he suggested in November would be false.

A White House source insists the memo was written not for purposes of concealment but in hopes of minimizing an already explosive controversy at a time when the U.S. still thought it had a chance of winning freedom for American hostages held in Lebanon by terrorists influenced by Iran. To others, however, the memo is bound to look like part of an orchestrated cover-up.

-- The commission is developing other evidence suggestive of a cover-up. It is focusing on preparation of a chronology, drafted last November by Lieut. Colonel Oliver North with the assistance of McFarlane, Poindexter and several CIA officials. Reagan based some of his statements in his disastrous Nov. 19 press conference on the "Ollie chronology," as it was once called; the White House has explained that it later discovered portions were inaccurate.

Several people who participated in the drafting strenuously denied to TIME that any cover-up was attempted. The inaccuracies, they insisted, were a product of haste and confusion. The story of the arms sales had begun breaking, and the President had to say something quickly. According to one story, investigators for Attorney General Edwin Meese visited North's office on the third floor of the Old Executive Office Building to look at the documents North had compiled and asked, "Don't you have any more paper?" "Paper!" exclaimed North. "You want paper?" He proceeded to pull documents from his files and pile them in huge stacks on a large table. They were pored over by officials, many of whom had knowledge of only a small part of the tangled story of the arms-for-hostages dealings with Iran.

The Wall Street Journal reported last week that the chronology was rewritten twice, and became less accurate each time. An early version prepared by the CIA said the Israelis in November 1985 shipped missiles to Iran "at NSC behest." A subsequent version claimed that the shipment was made by the Israelis despite U.S. misgivings. The final version asserted that the Administration thought the shipment consisted of oil-drilling equipment and did not discover that it was made up of missiles until two months later.

-- There were reports that North twice gave Iranian middlemen involved in the arms deals intelligence reports that were not supposed to be shown to anyone outside the U.S. Government. The Washington Post quoted one source as saying, "Ollie was running his own covert operation within the authorized covert operation." If North indeed acted on his own, he could be prosecuted for violating espionage laws. NSC sources told TIME the story overstated the secrecy of the data; they maintained that the information was classified NOFORN, used for information that is not supposed to be shared with other governments but often is.

$ It was also revealed last week that in early 1986 Reagan signed an intelligence "finding" authorizing U.S. efforts to kidnap suspected terrorists overseas and bring them to America for trial. FBI Director William Webster furiously protested. But the President went ahead at the urging of William Casey, then CIA director, and -- who else? -- Ollie North. The idea originally came from a counterterrorism group headed by Vice President George Bush, which included it among many other recommendations for antiterrorist strategy, but the finding was kept so secret that the Vice President's office was never informed of it. No actual kidnapings ever occurred.

Another aborted plan was for a joint U.S.-Egyptian attack on Libya in 1985, designed to topple Muammar Gaddafi. The existence of contingency plans has long been known, but it had been thought that they would be put into operation only if Gaddafi offered some blatant provocation. It was disclosed last week that an operation had been mapped out by the NSC staff and the CIA in detail. It called for the Egyptian army to invade Libya with U.S. air support and occupy about half the country. It apparently became serious enough that the State and Defense departments, which considered the plan reckless and dangerous, had to exert extraordinary efforts to get it stopped.

Two interesting aspects about the idea are its timing and its sponsorship. The drafting became serious in the summer of 1985, precisely when the Reagan Administration was on the verge of approving the Israeli plan to sell arms to Iran. The wildly contradictory policies toward two nations suspected of fomenting terrorism showed the Administration's failure to develop any consistent antiterrorist policy. One of the promoters of a Libyan invasion supposedly was Robert Gates, then CIA deputy director for intelligence. He is said to have written a memo in July 1985 plugging an invasion as a way to "redraw the map of North Africa."

Gates, through a spokesman, asserted that "such suggestions are totally unfounded." But the story broke at the worst possible time for him: he had just sweated through two days of tough questioning before the Senate Intelligence Committee on his nomination to succeed the ailing Casey as CIA director. Gates repeatedly insisted that he had known little about the sale of arms to Iran and the diversion of profits to the contras, and he promised to argue within the Administration for prompt disclosure to Congress of any future covert operations.

After the Libyan allegations broke, Pennsylvania Republican Arlen Specter said Gates' confirmation "is no longer a shoo-in." The committee had already put off a vote until at least next week, in case the Tower commission disclosed something new about Gates' role in Iranscam. There is still some ambiguity about that role. Two sources told TIME last week that Gates helped piece together the Ollie chronology. The CIA vehemently denies it. In fact, one official says Gates visited North's office late last November to demand that North admit he lied about one point.

When Reagan appointed the Tower commission in late November, it seemed likely that the panel would produce little more than a management consultant's dry analysis of the NSC. But armed with the President's authority to question anybody about anything, the three members took it on themselves to conduct the most sweeping investigation yet of the whole affair. They have questioned 58 witnesses, including several no other body had heard from -- Reagan, for one, as well as Manucher Ghorbanifar and Adnan Khashoggi, the two leading middlemen in the Iranian deals. The commission has prepared its own chronology of the deals, a 200-page analysis that is by far the most comprehensive yet put together.

For weeks now Washington has expected the panel's report to be scathingly critical of the Administration. It seems unlikely, however, that the panel can go beyond an earlier Senate Intelligence Committee study in answering the central question: Was the Administration trading arms for hostages? (The Senate report indicated this was a major factor, despite Reagan's denials.) It is possible that the panel will be unable to prove who is right in those many cases in which Administration witnesses, notably Regan and McFarlane, have told contradictory stories. But it can and almost certainly will spotlight those conflicts in a manner highly embarrassing to the Administration.

In addition, the commission has come across a treasure trove of material that gives its report the potential for being truly explosive: an intact White House master record of computer messages for a critical period last November, when news of the Iranian arms sales had just become public and officials were scurrying to compile the misleading Ollie chronology. The file contained all messages sent and received during that period by NSC staffers. The computer system functioned as an electronic mailbox that staffers used to send one another messages by secure code; some found that more convenient than talking on the phone. The messages ranged from broad policy memorandums to notes about lunch dates and even private jokes.

Many of the system's users thought until a few days ago that any messages they deleted were gone forever. In fact they were preserved on a master disk for two weeks. Normally most of the messages would then be erased. But when Attorney General Meese late last November discovered the diversion of funds to the contras, he ordered that the master disks dating back to Nov. 8 be preserved. When the commission got access to them, it delayed its already critical report for a week so that it could winnow through the mass of messages.

Washington is abuzz with speculation about what may be in the messages the commission discovered. Besides those dealing with the transmission of intelligence data by North to Iran, some may point to earlier efforts by North and the CIA to organize a gunrunning operation to the contras at a time when direct or indirect U.S. military assistance to the Nicaraguan rebels was forbidden by Congress. The message file may provide some clues as to whether a cover-up of the Iranian arms deals was attempted last November. The furor of anticipation is reminiscent of the anxiety with which the nation awaited the playing of the Nixon tapes during Watergate.

Late last week Government classification experts began negotiating with the commission about what portions of its report must be excised to prevent disclosure of intelligence secrets. (Technically, the report is classified, and the Tower commission lacks authority to declassify it.) The commission has threatened to withhold its chronology if the White House insists on deleting enough material to distort it. But that hardly seems likely; the resulting uproar would be too deafening. Reagan is scheduled to get a copy Thursday morning, and the report will then be distributed publicly. The White House expects to wait several days before issuing any response. "We need time to digest all of it," explains an aide. "Any misstep ((in answering the commission)) could be fatal."

By last week, however, the President could no longer maintain his long, studied silence about the fate of Don Regan. Ever since Iranscam broke in November, Reagan has been insistently counseled by old friends inside and outside the Administration, and even by his wife, to fire his chief of staff. Whatever his own role in the scandal, Regan has long been accused of keeping the President isolated from most of his own Administration and more recently (and accurately) of totally failing to prepare any convincing response to the steady drumbeat of Iranscam revelations.

Regan's position has now worsened badly. One reason is that the chief of staff, never noted for tact, has been rude to Nancy Reagan. In one telephone conversation about ten days ago, Regan urged that the President begin appearing again in public, and the First Lady insisted that he be kept on a light schedule until he completed recovery from his Jan. 5 prostate surgery. The talk involved some "shouting," according to one source, and Nancy has told friends that Regan cut it off by abruptly hanging up on her. The First Lady was so miffed that she has since refused to speak to Regan at all. Though Regan's aides denied this story last week, several people in the White House and those close to the First Lady confirm it. Nancy Reagan's response: an eloquent "No comment."

When the President finally made one of his rare public appearances last Wednesday at a picture-taking session with visiting Israeli Prime Minister Yitzhak Shamir, reporters besieged him with shouted questions about the chief of staff. Reagan at first gave his stock answer: "Nobody's getting fired." But then, pressed as to whether Regan might resign, the President said, "Well, that is up to him." He added that whenever Administration officials want to retire to private life, "I will never try to talk them out of it." Says a close friend of the President's: "You will never get a clearer signal from Ronald Reagan than that. That is his cry for somebody else to do something."

The remarks evidently were not the answer Regan had expected. Cornered by reporters in the White House later that day and asked about resignation, Regan could only say, "It's up to him," gesturing at the President, who was standing nearby. Later in the week an aide told Regan jokingly, "You're supposed to be resigning in 15 minutes." Regan laughed and replied that no one had told him that -- yet.

By now it is probably too late for Regan's departure, if it does finally occur, to give the White House a fresh start toward overcoming the damages of the Iranscam revelations. The Tower commission's report will not be the last word in those revelations. Next come the televised hearings by Senate and House investigating committees, which are expected to start in April and may drag on most of the year. One possible snag: Shamir last week refused to let any individual Israelis be questioned, though he promised that the Jerusalem government would reply to written queries.

But it is the Tower commission report, and Reagan's eventual response to it, that may signal a turning point. If the President finally goes beyond his vague "mistakes were made" formulations and acknowledges -- first of all to himself -- the damage that Iranscam has done to U.S. foreign policy and to public trust in his Administration, he may yet be able to restore his ability to lead. If not -- well, Judgment Day may really be at hand.

With reporting by David Beckwith and Barrett Seaman/Washington