The Reagan administration, concerned that Cuba is developing better ways to extend its military influence in Central America, considered a covert intelligence operation against the leftist government of Grenada in 1981 and is now closely monitoring new Cuban activities on the tiny eastern Caribbean island.
The details of the operation are not known beyond a general description from knowledgeable sources that the CIA developed plans in the summer of 1981 to cause economic difficulty for Grenada in hopes of undermining the political control of Prime Minister Maurice Bishop. But these sources said the operation was scrubbed because the Senate Intelligence Committee opposed it.
One senior Republican on the committee said in an interview last year, "Yes, there was an operation, and we all thought, unanimously I believe, that it was just a small island and so the Cubans or the communists control it, so what?"
The intelligence scrutiny of Grenada and rhetorical blasts against Bishop's government from the Reagan administration represent one side of a government debate over what, if any, danger exists for the United States or other Caribbean nations from Grenada's growing military ties with Cuba.
One of the strongest arguments that a threat exists was offered last week by Nestor D. Sanchez, deputy assistant secretary of defense for inter-American affairs. In a speech to Florida Republicans, Sanchez disclosed that the Cubans had built a batallion-size military camp on Grenada that could supplement air and naval facilities under construction for possible military use.
Using harsh tones that have characterized earlier statements on Grenada by President Reagan and his principal advisers, Sanchez said the island had become a "virtual surrogate" of Cuba. He said the camp "includes barracks, administration buildings, vehicle storage sheds, support buildings and a training area with a Soviet-style obstacle course."
Cubans advisers and laborers are also building runways and port facilities in Grenada. "The Cubans are constructing air and naval facilities there that far exceed the requirements of that tiny island," Sanchez said.
A former CIA intelligence officer in the region, Sanchez also said Soviet military exports to Cuba in 1982 were a record $1 billion compared with $600 million in 1981 deliveries. Shipments included "Turya" hydrofoil torpedo boats, Sanchez said, MI24 "Hind" assault helicopters and an additional squadron of supersonic MiG23 fighter aircraft in an air force of 200 modern planes.
Sanchez's remarks reflect the frustration among many conservatives in the administration over the growing military strength of Cuba and its relatively unchallenged support for leftist governments and insurgent movements in places such as Grenada, Nicaragua and El Salvador.
But, while intelligence concerns over Grenada remain high, many officials in Congress and elsewhere believe Reagan and his policy advisers have consistently exaggerated the threat posed by the tourist-dependent nation of 110,000 people.
During Alexander M. Haig Jr.'s tenure as secretary of state, there was talk of "going to the source," meaning Cuba, to stop the flow of arms through Nicaragua to guerrillas in El Salvador.
In November, 1981, the National Security Council authorized specific paramilitary actions against the Cuban presence in the region. "In some circumstances, CIA might (possibly using U.S. personnel) take unilateral paramilitary action against special Cuban targets," according to NSC minutes.
Contingency plans to blockade arms shipments from Cuban ports also were studied in 1981. But such planning appears to have been shelved due to recognition that this could lead to an enormous commitment of resources at a time when Reagan and Secretary of Defense Caspar W. Weinberger are committed to an uninterrupted defense buildup to match Soviet military expansion.
Sources said the aborted 1981 CIA covert plan in Grenada included actions to destabilize Bishop's government politically. Gaining power after a 1979 coup, he has pursued a close alliance with Cuba's Fidel Castro.
CIA officials presented the covert action plan to the Senate Intelligence Committee in July, 1981. Because of what were perceived as unusual and unspecified components, it met strong opposition.
Sources said Lloyd Bentsen (D-Tex.) reacted to the CIA presentation by saying, "You've got to be kidding." Committee Chairman Barry Goldwater (R-Ariz.) reportedly suggested that the CIA officials reconsider the proposal.
A senior committee member said the proposed operation did not include any plan to overthrow Bishop. "We are out of the business of overthrowing governments," he said. "We may cause a little economic trouble, a little publicity and give aid to opposition groups , but we don't overthrow governments."
Another member of the committee suggested that in using the word "destabilize" in reference to the remarks of the senior Republican member, "you should go with the description that it was economic destabilization affecting the political viability of the government."
Covert operations against Grenada were first discussed in the Carter administration after the new Bishop government supported the Soviet invasion of Afghanistan and openly solicited economic aid from Cuba. But after reviewing options, according to current and former administration officials, President Carter rejected all but propaganda measures.
The strong rhetoric continued into 1982. During his working vacation last summer in Barbados, Grenada's neighbor, Reagan said, "El Salvador isn't the only country that's being threatened with Marxism." Grenada, Reagan continued, "bears the Soviet and Cuban trademark, which means it will attempt to spread the virus among its neighbors."
A major concern of military and intelligence analysts has been the construction of an international airport with a runway capable of servicing both jumbo commercial jets and military fighters. Cuba has supplied architectural services, construction labor and heavy equipment.
U.S. officials believe that the Grenadans will allow Cuban military planes to use the airport. Such an air base in the southeastern Caribbean would give Soviet-built Cuban jets enhanced refueling capabilities and improve the flexibility of the Cuban air force.
"The Grenadan minister of national mobilization, Selwyn Strachan, has boasted publicly that Cuba will eventually use the new airport in Grenada to supply troops in Angola," whose leftist government Cuba has been supporting since 1975, Sanchez said.
Coupling this with Cuban and Soviet support to the leftist government in Nicaragua, Sanchez spoke in the darkest terms about the prospect for a permanent Soviet presence in Central America.
The Soviets "could literally place hostile forces and weapons systems capable of striking targets deep in the United States on our borders and adjacent waters," he said.
New military facilities "could provide air and naval bases . . . for the recovery of Soviet aircraft after strategic missions," he said. "It might also furnish missile sites for launching attacks against the United States with short- and intermediate-range missiles."
A spokesman for the Grenadan mission in Washington was not available to comment on Sanchez's remarks.
As yet, the absence of an acceptable alternative to Bishop has hampered the Reagan administration's efforts to deal with Grenada. The previous regime of Eric Gairy was noted for harsh political repression and Gairy's personal eccentricities.
According to this official, a group of expatriate Grenadans in the United States has solicited support in Washington to overthrow Bishop. This group claims to have organized cells of opposition throughout the island, and the group's leader was here a year ago trying to arrange meetings with Haig and other officials through former diplomats and academic officials.
Six months after the Senate Intelligence Committee nixed the CIA's Grenada plan, the members supported a covert campaign against the Cuban-Nicaraguan arms supply line to Salvadoran insurgents.
A senior Republican on the committee said that the members had walked a delicate line trying to support the expanding operations of the CIA under Reagan and his intelligence director, William J. Casey. But they also have weeded out "harebrained" covert operations, as some members have described them.
The senior member said that on two occasions, in 1981 and 1982, the committee scuttled proposed covert operations.
"Several times I've gone to the president and said, 'Do you really need this?' and explained our problems and he Reagan sits and listens and says, 'Thank you,' " this member said.
Other committee members take a more skeptical line.
"If they were going to do something covert ," said one member, "I'm not sure they would tell us. I think they would wait until it was all over and then Casey would stop somewhere at a phone booth and call the committee."