White House officials said yesterday that former national security adviser John M. Poindexter had vindicated President Reagan by testifying that he never told Reagan about a diversion of Iran arms sales profits to the Nicaraguan contras. But the officials acknowledged that the president was damaged by another Poindexter disclosure that Reagan had signed a secret intelligence finding authorizing a swap of U.S. arms for American hostages.
White House spokesman Marlin Fitzwater said Reagan was "gratified" by Poindexter's statement that he knew nothing about the diversion, but acknowledged that disclosure of the order raised "obvious problems . . . that must be resolved."
Reagan has repeatedly denied that he swapped arms for hostages, and the White House previously said there was no evidence he had signed a secret intelligence finding that outlined such a trade.
A White House official who commented yesterday on condition he not be named said, "The view is that we have turned a major corner, but at the same time we're cautious because the hearings will continue even if they have been decisively punctuated by Poindexter's testimony. Everybody was looking for a smoking gun, and there wasn't one."
Reagan's only public comment was a reply to a shouted question from reporters after a speech on economic issues. Told that Poindexter had absolved him of knowing about the diversion, Reagan said, "What's new about that? I've been saying that for seven months."
What Reagan has never said, however, was that he had signed a finding approving a trade of arms for hostages. Fitzwater said he asked Reagan yesterday about the secret finding -- a Dec. 5, 1985, presidential finding approving the trade of arms for hostages -- and that Reagan said he may have signed it but did not remember doing so. The president told Fitzwater and other White House officials that he did not dispute Poindexter's testimony about the order but had no recollection of it. Poindexter testified that he destroyed the only copy of the signed document last November.
In a Nov. 13, 1986, speech after he had been briefed by White House officials including Poindexter, the president said that the charge that "the United States had shipped weapons to Iran as ransom payment for the release of American hostages in Lebanon" was "utterly false."
The Tower review board which investigated the Iran arms sale discussed the question of a secret finding along the lines revealed by Poindexter yesterday but concluded that "despite some testimony to the contrary, the president appears not have signed this finding." Poindexter declined to testify before the Tower board.
After the board issued its report, Reagan responded in a nationally televised speech on March 4, 1987, in which he said, "A few months ago, I told the American people I did not trade arms for hostages. My heart and my best intentions still tell me that's true, but the facts and evidence tell me it is not."
Some Republican defenders of Reagan reacted to Poindexter's testimony by pressuring the congressional committees investigating the Iran-contra affair to quickly conclude their hearings. Republican Party Chairman Frank J. Fahrenkopf Jr. said Poindexter's testimony "should finally put to rest the drumbeat of accusations" that Reagan knew of the diversion, and he called on Congress to "get on the stick and stop pretending that what is taking place before the klieg lights is the most pressing concern of the nation."
But two key Republican members of the Senate select committee -- Warren B. Rudman (N.H.) and William S. Cohen (Maine) -- emphasized the importance of the hearings and said that Poindexter's testimony had not relieved Reagan of the responsibility for what had happened.
"When the buck is supposed to stop, it is supposed to stop at the top and not at a subordinate level," Cohen said. "Don't simply conclude that if the president didn't know, it didn't carry equally serious consequences."
While a mood of relief predominated in the White House, it was hedged with expressions of caution by a number of senior officials. White House chief of staff Howard H. Baker Jr. had been saying for weeks that Poindexter would "tell the truth" and not implicate Reagan in the diversion, but one official acknowledged that "there was uncertainty about Poindexter's precise testimony."
There were reports four months ago that Poindexter planned to construct a legal defense around a claim that on two occasions in 1986 he told Reagan that the arms sales to Iran were generating money to the contras. Those reports appeared first in The Washington Post on March 8 and then in Time magazine in its April 6 issue. Both accounts used the same language, saying that the Navy rear admiral's "Everybody was looking for a smoking gun, and there wasn't one."
-- White House official
eventual testimony could include a claim that he told Reagan that an ancillary or side benefit of the arms sales to Iran was help for the contras. Yesterday, Poindexter said he had never reported the diversion in any form to the president.
Even before Poindexter testified, White House aides were wrestling with the question of how they would respond to testimony that Reagan had authorized an arms-for-hostage swap. The question had been raised by reporters for several weeks, and officials said that White House counsel Arthur B. Culvahouse Jr., communications director Thomas C. Griscom and deputy chief of staff Kenneth M. Duberstein had met Tuesday night in Duberstein's office to discuss what Fitzwater would say about it yesterday.
The three officials held another meeting yesterday morning with Fitzwater as Poindexter was testifying, and then took a statement they had written to the president for his approval.
Reagan had been watching television, and had just seen Poindexter testifying to the committees about how he had destroyed the secret finding on the arms-for-hostage swap to spare Reagan political embarrassment.
One White House official said that the president wanted a more forceful statement arguing that secret intelligence finding Poindexter disclosed was actually consistent with Reagan's past utterances on the Iran arms deal.
Another White House official said Reagan was "agitated" that the finding was portrayed by Poindexter as "just arms for hostages," even though the former national security adviser went on to say that it was part of a plan to deal with a "strategic opening" with Iran. The president insisted, in words Fitzwater repeated in a subsequent briefing of reporters, that the arms deal had "deteriorated" into a trade for hostages but did not begin as one.
White House officials said that current plans call for Reagan to withhold detailed comment on the hearings until at least after Poindexter's testimony concludes. Reagan has said he will have "plenty to say" after that.
A Republican close to the administration said yesterday that Poindexter's testimony had given Reagan "a big boost" despite the conflict about the secret intelligence finding.
He said "the public long ago concluded that it was an arms-for-hostage deal no matter what the president said. Poindexter did what the president needed him to do when he said that Reagan knew nothing about the diversion."