The CIA did not "expeditiously" cut off relations with alleged drug traffickers who supported contra Nicaraguan rebels in the 1980s, CIA Inspector General Frederick R. Hitz told the House intelligence committee yesterday.

Hitz for the first time said publicly that the CIA was aware of allegations that "dozens of people and a number of companies connected in some fashion to the contra program" were involved in drug trafficking.

"Let me be frank," Hitz added, "there are instances where CIA did not, in an expeditious or consistent fashion, cut off relationships with individuals supporting the contra program who were alleged to have engaged in drug-trafficking activity or take action to resolve the allegations."

Hitz said some of the alleged trafficking involved bringing drugs into the United States. But, he added, investigators "found no evidence . . . of any conspiracy by CIA or its employees to bring drugs into the United States."

The allegations about drug traffickers linked to the CIA and the U.S.-backed anti-Sandinista rebels, as well as the response to the charges by CIA case officers and top officials, will be detailed in a 600-page classified report scheduled to be sent to Congress later this month, Hitz said.

The inspector general also said that under an agreement in 1982 between then-Attorney General William French Smith and the CIA, agency officers were not required to report allegations of drug trafficking involving non-employees, which was defined as meaning paid and non-paid "assets {meaning agents}, pilots who ferried supplies to the contras, as well as contra officials and others."

This agreement, which has not previously been revealed, came at a time when there were allegations that the CIA was using drug dealers in its controversial covert operation to bring down the leftist Sandinista government in Nicaragua.

According to Hitz, this policy was modified in 1986 when the agency was prohibited from paying U.S. dollars to any individual or company found to be involved in drug dealing.

Where the allegations "were flimsy," he said, agency officers continued operating with the individuals involved and investigations into whether they were dealing in drugs were not done "as expeditiously as they should have been."

Yesterday's hearing was called to review the inspector general's report, which was triggered by a series of articles published in the San Jose Mercury News in August 1996 that alleged a CIA connection to the introduction of crack cocaine into South Central Los Angeles by Nicaraguan drug dealers. Hitz has reported he found "no evidence" to indicate that past or present CIA employees, or agents acting for the agency were associated with the drug dealers mentioned in the newspaper's series.

Yesterday Rep. Maxine Waters (D-Calif.) said Hitz's initial report "lacks credibility and its conclusions should be dismissed."

Hitz's disclosures led Rep. Norman D. Dicks (Wash.), the ranking Democrat on the intelligence panel, to call for more committee hearings, including possible testimony from former Reagan White House aide Oliver L. North, who coordinated fund-raising for the contras.