WASHINGTON — Members of Congress, outraged by the news that some proceeds from the Iranian arms sales were sent to Nicaraguan rebels in the face of a congressional ban, said Tuesday that the deal was probably illegal and calls into question President Reagan's stewardship of foreign policy.
Although Congress is not in session, many Democratic lawmakers predicted that the disclosure will lead to congressional investigations and, ultimately, to legislation--including a vote by Congress on whether to suspend military aid to the Nicaraguan rebels, known as contras.
Republican leaders generally applauded the President for ousting Lt. Col. Oliver L. North, the National Security Council staff member involved in the funds transfer. But they did not try to minimize the severity of the Administration's problems. Rep. William S. Broomfield (R-Mich.) described it as "a very serious foreign policy crisis," and predicted that others will be implicated.
"It was a shocking revelation, and it further shows up the chaotic state of our foreign policy," said Senate Minority Leader Robert C. Byrd (D-W.Va.). He continued:
"There's something wrong if the President doesn't know what's going on in the basement of the White House. What this says is nobody seems to be really in charge of the foreign policy of this country."
Some Democrats, such as House Majority Leader Jim Wright (D-Tex.), even went so far as to question whether the President was telling the truth when he said he was unaware of the money transfer until a Justice Department inquiry exposed it.
"How could the President not know?" Wright asked, saying Reagan is able "in his own mind to reject information he doesn't want."
"Mr. Reagan . . . is uniquely capable of psyching himself up into a frame of mind in which he can believe whatever he wants to believe," Wright said.
The harsh reaction marked a significant turning point in Reagan's relationship with Democratic leaders in Congress, who, while they have often criticized his policies, have also been very careful in the past not to directly attack a highly popular President.
In addition to planning their own hearings, members of Congress called on the President to take a number of steps to repair the damage to his Administration and his foreign policy.
These include firing White House Chief of Staff Donald T. Regan; issuing an executive order barring the National Security Council staff, normally an advisory group, from engaging in foreign policy operations, and appointing a special prosecutor to look into possible criminal action.
Also recommended was the appointment of a special envoy to visit European and Middle Eastern allies angered by the secret shift in U.S. policy toward Iran.
Sen. Sam Nunn (D-Ga.), who will chair the Senate Armed Services Committee in the 100th Congress, convening in January, said the deal was probably a misappropriation of taxpayer funds.
In the transactions, U.S. military equipment was sent to arms dealers in Israel for shipment to Iran. According to the Justice Department investigation, the dealers paid the U.S. government a specified sum and transferred other proceeds from the Iranian sale to Swiss bank accounts for use in purchasing weapons and services for the contras. The latter arrangement was made secretly by North without notifying the President, according to Atty. Gen. Edwin Meese III.
Nunn and others cited a legal provision in effect until Oct. 1 that prohibited expenditure of any U.S. funds for contra military assistance, but other officials, including Justice Department investigators, said it may be difficult to prove that the money delivered was American, and not Israeli or Iranian.
The congressmen said the deal apparently also violated legal requirements that the Administration notify Congress of all transfers of U.S. arms, even by third countries, and of all covert operations in advance or in a "timely fashion."
Sen. John Glenn (D-Ohio) said the timely notice provision was designed "to give the President a little breathing room on a weekend" if he could not notify Congress in advance but was never designed to keep an operation secret for many months, as this one was.
For these alleged abuses, the lawmakers suggested a wide variety of legislative remedies, including efforts to tighten the "timely notice" requirement in the National Security Act and to require Senate confirmation of the President's national security adviser.
However, perhaps the biggest toll the crisis may take is on funding of the contras.
"I suspect it will be a cold day in Washington before any more money goes into Nicaragua," said David Durenberger (R.-Minn.), chairman of the Senate Intelligence Committee.
Rep. Vin Weber (R-Minn.), a supporter of contras aid, added that the new Democratic-controlled Congress would probably have blocked any new aid package anyway, but he predicted that the revelations will end any chance of saving it.