Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, January 23, 1994                   TAG: 9401230074
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-2   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

IRAN-CONTRA NOTES PORTRAY BACKSTABBING AT THE TOP

A portrait of political disaster emerges from detailed notes of Vice President Bush, White House Chief of Staff Donald Regan, aides to Secretary of State George Shultz and others - and the notes are quoted extensively in the final report of prosecutor Lawrence Walsh.

Bush thought forced resignations would help quell the public uproar over the diversion of Iran arms sales money to the Contras, according to his tape-recorded diaries for Nov. 25, 1986.

"Regan should go, Shultz should go" and Reagan "ought to get this all behind him in the next couple of months," Bush confided to the president, according to the vice president's recollections which he dictated into a tape recorder.

When Bush reported later that Regan had agreed to resign, "The president was very, very pleased" and "he thanked me about three times," Bush told his diary. "He was concerned that Don would walk in and see us talking, so I left after about 15 minutes."

Bush showed Reagan newspaper articles suggesting that Regan, Shultz and national security adviser John Poindexter "are all out there with leaks and peddling their own line." Bush said in his diary that he and Reagan "talked about the need to get the Shultz resignation stories in shape."

Shultz, meanwhile, was telling aides that Bush "is up to his ears in Iran" and that Bush was "getting drawn into a web of lies," according to one aide's notes. "The whole thing crushes Bush . . . I don't think he can get elected now on his own."

CIA Director William Casey wanted Reagan to get rid of Shultz. Shultz wanted the president to fire Poindexter. Eventually, Poindexter was forced to resign and White House aide Oliver North was fired. Regan stepped down three months later for failing to control the political damage to the president.

One of the White House's many problems in 1986: how to deal with a possibly illegal White House-approved shipment of Hawk missiles to Iran. The president told Shultz he had known about the Hawks delivery - but the president stood by silently two days later when Attorney General Edwin Meese announced in a meeting of Reagan and his aides that the president hadn't known.

"They're rearranging the record," Shultz later told an aide, who wrote down the comment.

The scandal was a lawyer's nightmare. Had laws been violated by the secret arms sales?

A White House aide "exploded" when White House counsel Peter Wallison tried to delete a sentence from a proposed administration statement that said all laws had been complied with in the Iran initiative. Wallison had grave doubts whether this was true - but "I was told" by Regan "that this is what the AG wanted said," and that the president did as well, Wallison wrote in his diary.

Nancy Reagan, the president's wife, told the White House chief of staff that she and the president were "very upset" by the mounting public furor, according to Regan's notes. According to his notes, Regan "told her we're going to have to dump hostages to save Pres's reputation, if necessary. She agreed."