Seeking to defuse reports that the Reagan administration is trying to topple Nicaragua's Sandinista government, CIA Director William J. Casey has told key members of Congress that the administration's chief objective in supporting covert operations against Nicaragua is stopping the flow of arms to guerrilla forces in nearby El Salvador.
According to Capitol Hill sources familiar with Casey's closed-door briefings during December to congressional committees overseeing U.S. intelligence activities, his assurances satisfied some members and prompted no major protests, but left a number of questions unresolved.
The uppermost concern expressed by oversight committee members is whether the United States can avoid a deepening military and paramilitary involvement in Central America when continuing to support Nicaraguan exile groups whose openly stated goal is the overthrow of the current Sandinista leadership.
Questioning Casey's contention that the administration is doing this only to interdict arms traffic to Salvadoran guerrillas, one congressional oversight committee member said, "You can't get people to fight for interdicting arms."
The Casey briefings added another layer to the continuing controversy over the Reagan administration's objectives in Nicaragua, whose 3-year-old Sandinista government has established increasingly close ties to Cuba and the Soviet Union.
The policy conflict was underscored by statements of senior State Department officials as recently as November indicating that arms interdiction had become a secondary goal in the administration's strategy for Nicaragua.
These officials told members of Congress and reporters in background briefings that the administration's primary goal was to isolate and pressure the Sandinista government until it becomes more democratic and gives up some control to more moderate political forces in the country.
Reacting to reports of escalating CIA activity against Nicaragua, Congress banned any U.S. support for the overthrow of the Nicaraguan government.
But congressional sources said Casey successfully lobbied congressional leaders to tone down the language of the prohibition and leave the CIA free to continue giving money and other support to several thousand Nicaraguan exiles based in camps along the Honduran border and inside Nicaragua.
These groups conduct what administration officials have characterized as "harassment" in raids against Nicaraguan militiamen in the country's sparsely populated northern frontier regions.
The Casey briefings came a year after President Reagan signed, on Dec. 2, 1981, a presidential "finding" required under the National Security Act to justify as a matter of law and national interest the "support and conduct of political and paramilitary operations against the Cuban presence and Cuban-Sandinista support structure in Nicaragua and elsewhere in Central America."
But press disclosures in the wake of that decision have made the Nicaraguan campaign one of the least secret covert operations in CIA history. An assessment of the program, according to officials who have monitored it, indicates that the administration has achieved very limited results:
* The Nicaraguan government continues to provide logistical support to the supply of arms to Salvadoran guerrillas. The Sandinista leadership continues its close ties with Cuba, and has made no discernible move toward accepting a U.S. demand that Nicaragua reduce the size of its large standing army and militia forces before negotiating improved relations with the United States.
* Though the overland routes from Nicaragua through Honduras to the Salavadoran frontier are better protected against arms traffic, guerrilla resupply is still active via air corridors along the Pacific coastline.
* The efforts of Nicaraguan exile groups to unite in an attractive alternative to the present Sandinista regime continue to be hamstrung by an over-representation of former national guardsmen who served the government of the late Gen. Anastasio Somoza and by the refusal of one of the most popular exile leaders, Eden Pastora, to join them.
* A planned 1,000-man paramilitary force, described in the CIA's proposal to Reagan in November, 1981, as undergoing training in Argentina, was never deployed in the region. And in the aftermath of the Falkland Islands war, during which the United States provided support to Britain in its fight against Argentina, the Argentine commitment to working with the U.S. covert forces has been limited to providing about three dozen advisers to exile groups.
"I don't see where we've accomplished a damn thing," said one congressional critic reviewing the impact of the CIA program.
The only measure of success in the Nicaraguan campaign was claimed by a senior Pentagon official in October, when he said in an interview that arms interdiction and surveillance assistance provided to Honduras by U.S. forces has "tightened the screws" on the Cuban-Nicaraguan supply line to Salvadoran and Guatemalan insurgents.
"That there have been violations of the border, absolutely nobody is going to deny it," the official said. But he added that the success of the operations had led to false claims by "screaming Sandinistas" that Honduras and Nicaraguan exile forces were preparing for an invasion.
In the closing weeks of the last session of Congress, Sen. Christopher J. Dodd (D-Conn.), who along with others has expressed misgivings about the administration's objectives in Nicaragua, introduced legislation that would have banned the use of U.S. funds "in support of irregular forces or paramilitary groups operating in the Central American region."
But an administration lobbying effort led by Casey, according to congressional sources, persuaded both houses to adopt less restrictive language offered by Rep. Edward P. Boland (D-Mass.), chairman of the House Intelligence Committee.
That language prohibits the United States only from providing "military equipment, military training or advice or other support for military activities for the purpose of overthrowing the government of Nicaragua or provoking a military exchange between Nicaragua and Honduras."
White House officials appeared content with the prohibition, but one congressional staffer familiar with the region said its language amounted to "setting up a straw man" that left the CIA free to pursue a host of harassment activities.
The only public comment that appeared to acknowledge the narrow distinction the CIA has drawn for itself in its Nicaraguan campaign was made by Sen. Daniel Patrick Moynihan (D-N.Y.) after Reagan signed the congressional budget resolution containing the limited prohibition language.
Moynihan, vice chairman of the Senate Intelligence Committee, said it is "difficult to draw the line between harassment activities and a deliberate attempt to destabilize or overthrow a government."
Moynihan would not comment this week on whether he was satisfied after Casey's Dec. 9 presentation to the committee that the CIA case officers and agents who have been operating in the region have adhered to the policy distinctions that are being drawn in Washington. One congressional oversight committee member said, "We haven't gotten any good answers on that."
Another congressional source said that when Casey was confronted with the question during one briefing he replied with "one-liners" and "sloganeering."
However, this source added, "some [members] felt better" after Casey's briefing because they were able to discuss bluntly press reports that covert operations against Nicaragua have intensified to the point of involving as many as 150 CIA personnel and refocused toward toppling the Sandinista regime.
Casey reportedly said the total number of CIA employes in Honduras has never reached that level during the year-old campaign and the present number assigned to the operation is "perhaps less than 50."
The congressional source said the oversight committees have blocked, through the almost unanimous opposition of their members, CIA plans to train a large paramilitary force of as many as 500 Latin American commandos, whose mission would be to strike at economic targets inside Nicaragua, disrupt its economy and drain military resources away from assistance to the insurgent forces in El Salvador.
In recent months, the Reagan administration has incorporated into this covert strategy the concept of "turning on and off" the CIA-backed harassment tactics to reward and punish policy changes inside Nicaragua, several officials said.
At the heart of the controversy over a covert campaign is a deep division in the intelligence community over the effectiveness of clandestine paramilitary operations. There is also some concern about the negative impact of such operations on U.S. public opinion after they are exposed.
"There are professionals in the CIA who were afraid when we started this thing [in Nicaragua] that it was something that would come a cropper," one congressional oversight committee member said.
He added that there also was concern in the intelligence community that strong regional and nationalistic strains in Central America, and particularly in Nicaragua after the ouster of the repressive Somoza dictatorship, would strengthen, not weaken, the Nicaraguan regime if it is openly threatened by U.S.-backed exile forces on its northern border.
"I may disagree with Ronald Reagan on a lot of things, but if someone was threatening our country, you'd see me in lock step with the president," this source said. "It's as though nobody has read about the Bay of Pigs."
A definitive review of the CIA program has yet to reach the public, but perceptible changes and shifts in the administration's approach to Nicaragua have been visible along the way. Foremost has been the cooling of administration rhetoric toward the involvement of Cuba in the Nicaraguan support for Central American insurgencies.
Then-secretary of state Alexander M. Haig Jr. threatened at the outset of the 1981 planning for a new Central American policy to "go to the source," meaning Cuba, to stop the arms flow to insurgents. The minutes of the Nov. 16, 1981, National Security Council meeting on Central America noted that "covert activities under the CIA proposal would be intended to . . . take unilateral paramilitary action against special Cuban targets."
Congressional sources said recently those plans were never executed after meeting with stiff congressional opposition. One source quoted Sen. Barry Goldwater (R-Ariz.) as reacting to this proposal by telling a CIA official earlier this year, "You've got to be out of your f------ mind."
"Clearly there has been a softening of the rhetoric," said another congressional source, noting that the Pentagon had also opposed any military action against Cuban arms supply targets on the grounds that it could not predict whether the Soviet Union might respond to such a move by taking military action elsewhere in the world.
During the late summer and early fall, reports from the region indicated that the flow of money and equipment to Nicaraguan exiles had been stepped up as the Pentagon prepared to assist the Honduran government to stage large-scale military maneuvers on the Honduran-Nicaraguan border. The exercise was to have included the mobilization of Honduran military forces and their rapid transport to strategic locations in the border region.
But the exercises were postponed abruptly as Reagan prepared for his late November swing through Latin America, which included a stop in Honduras for talks with President Roberto Suazo Cordova.
In the end, one of the most moderating forces in the administration's covert planning for Central American may be Reagan. Some CIA officials reportedly have expressed frustration that the White House and State Department have tightly controlled the CIA program and have been unwilling to approve stronger covert measures against Nicaragua.
One senior administration official who was present for the NSC discussions on Nicaragua a year ago said in a later interview that, in initially approving cross-border operations against economic targets by CIA-backed paramilitary groups, Reagan was seeking the least life-threatening harassment tactic to pressure the Nicaraguan leadership.
"Ronald Reagan has the reputation of being a gunslinger," this official said, "but he is the most cautious, conservative guy in those meetings. He'll sit and he'll sit and he'll listen to every side . . . , but he never wants to do anything that is going to put an American life in jeopardy. I don't think the country has to worry about him being a gunslinger."