Former White House chief of staff Donald T. Regan made these points in his testimony yesterday.


Regan testified that he and President Reagan knew of an Israeli shipment of U.S.-made missiles to Iran in November 1985, including plans for a "cover story" to call the cargo "oil-drilling equipment" if it was exposed. Regan's account yesterday was far different from the president's statements to the Tower review board earlier this year, as described in the board's report last February.

Once the secret Iran arms sales became public in November 1986, the cover story for the Israeli shipment was revived by several White House officials as a way to shield the president. It was first used publicly, in a slightly modified form, by then-CIA director William J. Casey in testimony Nov. 21 to the House and Senate intelligence committees, whose members were being briefed on the sales for the first time.

Before Casey testified, Secretary of State George P. Shultz launched a behind-the-scenes fight to force the administration to drop the false account from his proposed testimony. The fight sparked the four-day fact-finding inquiry by Attorney General Edwin Meese III that turned up evidence in National Security Council files that proceeds from some of the arms sales had been secretly diverted to the Nicaraguan contras.


The picture of Regan that emerged yesterday differed dramatically from the description by the Tower board, which had called him the strongest White House chief of staff in recent memory. Regan testified that he was unaware of many of the activities of the national security adviser and his staff, that he did not see all of the paper work and documents that the national security adviser prepared for the president, and that the adviser, Adm. John M. Poindexter, had an independent relationship with President Reagan.


Documents released yesterday, including some of Regan's notes, show that the president wanted to make a public statement about the sale of arms to Iran but simultaneously was urging his aides to withhold information about the arms sales in order to protect Americans who were being held hostage in the Middle East. The strategy adopted for Reagan's speech about the arms sales last Nov. 14, the documents indicate, was to withhold the basic facts about the deals while seizing on some false news reports and strongly denying them.