A key witness for retired Army general William C. Westmoreland in his $120 million libel case against CBS Inc. today said he believes that the news media helped cause the political loss of Vietnam when the military was winning the war.

"My view has never changed that militarily we won, but politically it was lost," retired Army lieutenant general Daniel O. Graham said as the third week of testimony ended this afternoon.

Graham, who was a lieutenant colonel in charge of "current" intelligence under Westmoreland in Vietnam, said that when U.S. military budgets were "slashed" in 1974, it was a political decision made "just as we were making great headway."

"And did you believe the press played a role in that decision ?" CBS attorney David Boies asked.

"Yes, I did," Graham said.

"At that time?" Boies asked.


"And do you believe that today?"

"Yes, I do," Graham said.

Graham, who runs a nonprofit organization that he said is designed to promote space technology for "security and economic purposes," also said he thinks the "Star Wars" nickname used in the media for such techonology is a "misnomer" and unfair.

In his second day under cross-examination by Boies, Graham said he felt that the CBS documentary that is the subject of the case damaged his reputation and the reputation and honor of fellow officers who served in Vietnam in the late 1960s.

In the January 1982 documentary, "The Uncounted Enemy: A Vietnam Deception," CBS quoted a former Navy officer working for Graham as saying that Graham asked him to erase the data base on enemy troop estimates. The broadcast alleged that there was a conspiracy at the highest levels of military intelligence in Vietnam to mislead the news media, public and President Lyndon B. Johnson about increasing communist strength before the Tet offensive.

Graham denied that he "engineered a cover-up," as CBS said in the program.

Graham said Westmoreland called him before filing suit against CBS and asked him to join the case. "What did you tell him at that time?" Boies asked.

"That if that was necessary to prevent a delaying tactic by CBS -- that would try to wait until the general died, and since I was likely to outlive him -- if that was a consideration, sure, I would join the case," said Graham, 58. Westmoreland is 70.

Graham said he was "dissuaded by Gen. Westmoreland's counsel" from joining the suit.