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Probe Ties Reagan, Bush to Iran-Contra Cover-Up : Inquiry: Report says neither broke law but allowed effort to deceive. Ex-Presidents call conclusions unfair.


WASHINGTON — Former Presidents Ronald Reagan and George Bush engaged in conduct that contributed to "a concerted effort to deceive Congress and the public" about the Iran-Contra scandal, according to the final report issued Tuesday by the independent counsel who investigated the affair.

In his findings, Lawrence E. Walsh concluded that neither Reagan nor Bush violated any criminal laws in connection with the affair--in which the Reagan Administration secretly sold weapons to Iran in the mid-1980s in order to gain the release of American hostages in Lebanon and to generate funds to aid rebel forces in Nicaragua.

But Reagan's "disregard" for limits imposed by Congress emboldened some of his Administration's highest-ranking officials to engage in illegal actions, Walsh said.

He charged that Reagan "set the stage for the illegal activities of others by encouraging and, in general terms, ordering support of the Contras" during a two-year period when Congress had prohibited military aid to the rebels.

As for then-Vice President Bush, Walsh said: "Contrary to his public pronouncements, . . . he was fully aware of the Iran arms sales. Bush was regularly briefed, along with the President (Reagan), on the Iran arms sales, and he participated in discussions to obtain third-country support for the Contras."

In separate statements released Tuesday, Reagan, Bush and several other former officials named in the report called Walsh's conclusions inaccurate and unfair.

Reagan termed the report "an expensive, self-administered pat on the back and a vehicle for baseless accusations that he could never have proven in court."

Bush said no one should try to criminalize what was "a political dispute between the executive and legislative branches over foreign policy."

Walsh's report, released by order of the panel of U.S. appellate judges who appointed him in December, 1986, marks the official end of a seven-year investigation that cost $40 million.

All told, 11 people--including former White House aides Oliver L. North and John M. Poindexter--were convicted of charges stemming from the investigation. North's and Poindexter's convictions were later overturned on appeal.

The report forecloses further legal action against any of the figures named in the probe and ends all scrutiny of them in conjunction with Iran-Contra allegations.

The final report, required of all court-appointed independent counsels, was written last August but kept under seal by the federal judges until those mentioned in it could state their objections and offer their views on the findings.

Walsh, 80, a former judge and Wall Street lawyer with Republican credentials, said in an hourlong news briefing Tuesday that if facts now established had been known in 1987, Congress should have considered impeaching Reagan and his attorney general, Edwin Meese III.

It was Meese, Walsh said, who concocted a false account of key events in the scandal in order to protect Reagan.

"It certainly should have been considered," he said of impeachment. "Whether it would ever have reached that point, I think, is doubtful. But the fact is Congress was deprived of that opportunity by the withholding of notes (by key officials)."

The report said senior officials and Reagan Cabinet members concealed notes about high-level deliberations and took part in a strategy to make lower-level staff members of the National Security Council, including North, the "scapegoats whose sacrifice would protect the Reagan Administration in its final two years."

Walsh's report, which is more than 1,200 pages long, concluded that "in an important sense, this strategy succeeded." He said he and his staff attorneys "discovered much of the best evidence of the cover-up in the final year of active investigation, too late for most prosecutions."

The arms sales to Iran during portions of 1985 and 1986, initially coming from U.S. stocks held by the Israelis, were kept secret from Congress and the public because they violated an arms embargo promoted by the United States on the grounds that Iran engaged in terrorism. Aid to the Contras--prohibited by Congress--was also kept secret.

The White House first acknowledged the arms sales and the diversion of profits to Nicaraguan rebels in a nationally televised news briefing in November, 1986, at which Meese presented results of an internal inquiry that he said he made at Reagan's request.

But Walsh's report charged that Meese, with help from Poindexter, "attempted to create a false account (of the arms sales) in order to protect the President."

Reagan steadfastly insisted during the last two years of his Administration that there was no connection between the arms sales and the release in 1986 of American hostages held in Lebanon by forces believed subject to control by Iran.

He also denied knowledge of any diversion of funds to the Contras.

"The evidence indicates that Meese's November, 1986, inquiry was more of a damage-control exercise than an effort to find the facts," the report said.

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