Shake-up in Staff Urged on Reagan : California Confidants Would Dump Regan, Poindexter, Perhaps Shultz

WASHINGTON —  The Iran arms-and-hostages deal, ballooning into the most serious crisis of Ronald Reagan’s presidency, has prompted some of Reagan’s longtime California confidants to urge a major shake-up in the Administration--apparently beginning with the departure of Chief of Staff Donald T. Regan and national security adviser John M. Poindexter.

The shake-up proposal, if adopted by the President, would also involve the replacement of Secretary of State George P. Shultz, who opposed the Iran operation privately and repudiated it publicly after it was exposed.

A White House spokesman could not be reached for comment Saturday, and Reagan, insisting at his news conference last Wednesday that he was “not firing anybody,” said he wanted Shultz to remain and that there had been no talk of a possible resignation.

‘Changes Are Imminent’

On Saturday, however, one longtime California associate declared flatly, “Changes are imminent, and the shake-up will involve the White House as well as the Cabinet.”

“A lot of the President’s old supporters are worried that bad staffing is jeopardizing his programs and it will take a pretty heavy shift in course--management-wise, not policy-wise--to correct it,” said the associate, who declined to be identified.

And another member of the old California circle, while refusing to discuss the nature of his conversations with the President, confirmed that Reagan has been conferring with his longtime associates.

Among Reagan’s old California colleagues who regularly advise him are political consultant Stuart Spencer, businessman Holmes Tuttle, former Atty. Gen. William French Smith and William P. Clark, who has been an all-around trouble-shooter for Reagan, serving him when he was California’s governor and filling three posts in his Administration here--including that of national security adviser.

At Heart of Presidency

The Iranian operation, coming on the heels of a string of other controversies over the Administration’s handling of sensitive foreign policy problems, has raised questions that go to the heart of the presidency--questions on the credibility of the nation’s Chief Executive and his capacity to direct the government he heads.

Questions About Control

Revelations last week suggested that Reagan might not have been fully informed from the outset about the full details of his Administration’s dealings with Iran over arms and hostages. And the possibility that lower-level officials could have sidestepped the President in managing such an explosive foreign policy issue raises questions about Reagan’s control over his foreign policy apparatus.

Moreover, the Iran furor has divided and distracted the Administration at a time when some of the President’s most cherished policies face increasingly critical attention from a Congress that is now entirely controlled by the Democrats.

‘It Is All-Consuming’

“It is all-consuming,” lamented one senior Administration official, “and until we find a way to get this behind us, some very important initiatives--items on the President’s agenda--can’t be addressed. It will affect everything across the board--especially in foreign affairs--from Congress’s reception of the defense budget to our Central America programs, to Afghanistan and arms control.”

In discussing the changes being urged on the President, one of his old associates said Secretary of Defense Caspar W. Weinberger was being recommended to replace Shultz. Weinberger also opposed the Iran operation inside the Administration’s councils but, unlike Shultz, has not distanced himself from it during the present public controversy.

Drew Lewis, who served as secretary of transportation during Reagan’s first term and now is chairman and chief executive officer of Union Pacific, was being put forward as the possible replacement for Chief of Staff Regan.

Retiring Nevada Republican Sen. Paul Laxalt and CIA Director William J. Casey also support the changes recommended by the group, one of its members said.

‘His Most Difficult Time’

“The President’s going through his most difficult time. He’s been poorly served by the staff,” said the Reagan confidant.

He singled out former national security adviser Robert C. (Bud) McFarlane, who originated the plan for the operation and was a key player in implementing it, as one who “poorly served” the President.

“Bud got on a slippery slope, and things went from bad to worse,” he said. “Now there’s a lot of finger-pointing, not unlike when a conspiracy breaks.”

The confidant said he understands that Reagan privately criticized Shultz for distancing himself from the Iran operation during a Nov. 16 appearance on CBS’ “Face the Nation” program.

‘Biting His Lip’

A senior White House aide said he did not know whether Reagan expressed criticism of Shultz, but he said “the talk at the White House was that the President had been biting his lip” during the broadcast.

Poindexter, described by some colleagues as overly concerned or even “obsessed” with secrecy concerning all national security matters, directed the Iranian operation out of the White House, and even after the operation was exposed by a newspaper in Beirut, he opposed releasing any further information on it until overruled by Regan.

Although the President has fully backed the admiral, Poindexter has virtually no political base on Capitol Hill or elsewhere, and there has been increasing pressure for him to resign or be ousted.

A Defense Department source said there was talk that “this snafu might translate into a retirement” for Poindexter and that “the scuttlebutt here is that he’s got to leave the White House.”

Reluctant to Fire Aides

In the past, Reagan has been reluctant to dismiss aides under fire even in cases of major policy foul-ups. But some of his political advisers say this crisis is so serious that he must either act or face serious damage to his presidency by appearing weak and indecisive.

In the view of a former senior White House aide who still advises the President and believes that he should get rid of both Regan and Poindexter, Regan’s iron-handed rule at the White House has already caused the President to come across as weak compared to the “strong leader” image he projected during his first term.

“Who is working for whom over there, I ask you?” said the adviser. “Is Regan working for Reagan or vice versa? The President won’t admit it was a mistake because Regan won’t let him. It’s a disaster. They won’t face reality over there.”

Concern also has been expressed publicly by both Republican and Democratic leaders here. Outgoing Senate Majority Leader Bob Dole (R-Kan.) and his successor in that post, Senate Democratic Leader Robert C. Byrd (D-W.Va.), both have warned that failure to resolve the controversy could seriously erode the President’s authority.

‘A Creeping Paralysis’

Said Byrd, “The situation is really creating a creeping paralysis that is going to sap the energies, the time of the Administration. And the credibility of the nation is at stake.”

One senior Administration official said that by the weekend, Shultz and Poindexter, as well as Weinberger, realized that they had to close ranks to protect the President.

“It’s now beginning to affect everything else (in the national security area),” the official said. “After initially being in disarray, they now realize they’ve got to save the presidency and save Reagan’s leadership . . . or you’re going to have a crippled presidency. They all realize that. They’re going to have to close ranks or everybody gets hurt.”

Yet the affair has ignited a bitter backstage feud between the White House and the State Department. White House officials are accusing Shultz of undermining the President’s credibility by openly opposing the program, while State Department officials blame the White House for undercutting its own anti-terrorist policy.

‘Rooting for George to Go’

“The White House staff is full of vituperation toward State,” said a senior Administration official after a Friday staff meeting that sources said was devoted largely to “trashing” Shultz. “The feeling is that they’re all rooting for George to go.”

Republicans as well as Democrats have urged Reagan to try to quell the furor by admitting that the Iranian initiative, which violated his own announced policy of refusing to deal with terrorists and with governments that support terrorism, was a mistake. Instead, Reagan has defended the operation, first in a nationally televised speech and then in a press conference.

At least one senior White House aide said he had held out hope that Reagan might admit culpability during his regular Saturday radio address to the nation.

But the President avoided the issue and instead delivered a Thanksgiving message.

In discussing Reagan’s stand-fast approach, one of his longtime confidants said Saturday: “What he does, he does with such earnestness, it comes from the heart. That’s why he won’t say he made a mistake. It’s awfully hard for him to do it when he doesn’t think he’s done anything wrong.

‘Tremendous Strength’

“It’s a tremendous character strength, but it may be a defect politically because you’re living in a nest of political expediency back there,” the friend said.

At the same time, he added, Reagan’s approach is “one reason for his survivability, what you call the Teflon factor.”

Chief of Staff Regan--who overruled other aides in advising Reagan not to admit he had made a mistake in ordering arms shipments to so-called Iranian moderates--has made a point of emphasizing that Reagan has taken full responsibility for the Iranian mission. “It was a courageous thing for him to do,” said Regan. “We all allowed him to do it.”

Regan, who is blamed by longtime Reagan associates for not protecting the President, said he might not stay as chief of staff through the end of the President’s term. But he told the Washington Post that he has no plans to leave now “unless asked to by the President.”

Fueled by Other Controversies

The potentially damaging impact of the Iran crisis on Reagan’s presidency has been intensified by the fact that it was preceded by a series of other controversies over the Administration’s handling of sensitive foreign policy and national security matters:

--The secret supply missions for Nicaragua’s contras, which resulted in the shooting down of a private American supply plane in Nicaragua.

--The “disinformation” program proposed by Poindexter to undermine the regime of Libya’s Col. Moammar Kadafi.

--And the stalemated U.S.-Soviet summit meeting in Iceland, at which Reagan apparently proposed that the two superpowers totally eliminate all nuclear weapons, a position that neither his own government nor Washington’s allies were willing to endorse because of the Soviets’ overwhelming superiority in conventional weapons.

Times staff writer James Gerstenzang contributed to this article.