The unanswered questions about how Carter White House documents and information wound up in the possession of the 1980 Reagan campaign staff have shattered the administration's outward confidence and all but paralyzed the high councils of the White House.
While President Reagan continues to express support for his embattled aides and insists that he wants a thorough investigation of all charges, the controversy is taking an internal toll, particularly on White House chief of staff James A. Baker III.
A White House official who knows Baker well says he has been "totally preoccupied" with the controversy, to the virtual exclusion of other issues, and that the challenge to his integrity has posed a personal crisis.
"Here's a person who writes his own $700 check when he has a door cut in in his White House office and who makes a big deal of reporting every gift," this official said. "He's never had his integrity questioned before, and he's finding it very hard to concentrate on anything else."
"Jim was feeling very low and embarrassed after this thing broke," said deputy chief of staff Michael K. Deaver, who has strongly backed Baker. "He told the president he would be willing to do whatever was necessary. The president replied, 'Jim, I know that. There's no need for that.' "
Deaver said that Baker's acknowledgement that he had received Carter White House documents and passed them along to others had provided Baker's enemies with an opportunity to go after him.
"It hasn't worked," Deaver said. "It won't work."
Yesterday, a prominent James Baker ally on Capitol Hill also came to his defense. Senate Majority Leader Howard H. Baker Jr. (R-Tenn.), who attended the White House Republican leadership meeting with Reagan early in the day, later issued a statement saying he had "seen nothing that has lessened Jim Baker's effectiveness in dealing with Congress to form a legislative agenda for the president."
The nature of the defense underscores the difficulty of James Baker's position. He has been under fire from stalwart Reagan supporters since the day the president-elect surprised them by naming Baker, a former adviser to Gerald R. Ford and George Bush, as his White House chief of staff.
But even many of Baker's conservative critics acknowledge that he is an effective manager of the White House. That management now has been at least temporarily impaired by the swirling controversy, which for the past two weeks has diverted Baker from his normal administrative duties.
"If the boys in the basement location of the National Security Council had sent a division of troops into El Salvador, Baker wouldn't have known about it," said one official, who sees the challenge to the White House chief of staff as the most difficult he has ever faced in government.
Baker, who along with other high administration officials was questioned by the FBI last week, acknowledges that he had been preoccupied with the controversy while searching his files and preparing replies for investigators. But he said in an interview yesterday that this week he is devoting all his time to other issues.
All of the administration officials who have been involved in the controversy appear to be following a similar course. White House communications director David R. Gergen said he is trying to maintain "business as usual" in dealing with the media. The same could be said for CIA Director William J. Casey and Office of Management and Budget Director David A. Stockman.
James Baker says he received the campaign material--which he said was "early issues stuff, not strategic or tactical material" contained in the Carter White House briefing book--from Casey, then campaign manager for Reagan. Casey has said he has no recollection of this and would have remembered it if he gave the material to Baker, who was coordinating the Reagan debate team.
According to Baker's recollection, as recounted in a memo to White House counsel Fred F. Fielding and a letter to Rep. Donald J. Albosta (D-Mich.), chairman of a House subcommittee investigating the incident, he then passed the material on to Gergen, who was coordinating preparation for the Oct. 28, 1980, debate with President Carter.
Stockman, who has publicly described the material as "pilfered," has said it was helpful in preparing for his role as a stand-in for Carter in a debate rehearsal.
The most direct conflict is between James Baker and Casey, who have expressed opposite recollections about what happened. House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.), who opposes a House investigation of the controversy, predicted yesterday that either Casey or Baker will "have to hang" before it is over.
There are many in the White House who privately agree with O'Neill's analysis, if not his metaphor. And some officials said yesterday that James Baker is particularly vulnerable because he is the more visible of the two and will be playing an important role in Reagan's reelection campaign.
One of these officials said yesterday that Baker's role will not be affected in the short run because he is serving mostly as an early campaign planner in conjunction with Sen. Paul Laxalt (R-Nev.). The two men are scheduled to have lunch with Deaver at the White House today and then meet with Reagan to discuss the campaign.
Laxalt, who has withheld public comment on the campaign papers issue, is said to have expressed private confidence in Baker.
But the controversy already has become an important topic of discussion for Reagan's strategists, and one official said yesterday that it could delay until December Reagan's announcement that he will seek a second term.
"Ideally, you'd like to have an announcement when it isn't clouded by extraneous questions," one adviser said yesterday.
In the meantime, James Baker and the other involved administration officials are going to try to put the campaign papers question on the back burner. They will talk to congressmen and reporters, but only on other issues.
This White House summer strategy is based on the premise that the facts will prove exculpatory, at least to Baker, and that he will become fully effective again once the investigation is completed. But one official added: "Right now, if you were to ask me honestly who is in charge at the White House, I would have to say, 'No one.' "
Any damage inflicted on the chief of staff is particularly important in a Reagan administration because of the president's proclivity for delegating to his staff.
"Even though some of the right-wingers won't admit it, Baker is an extension of the president," one former campaign worker said yesterday. "And when Jim Baker is damaged, Ronald Reagan is damaged with him."