Iran Scandal a Severe Test for Reagan : ‘It Disappoints Me, It Hurts,’ He Says of Public Disbelief

WASHINGTON — “How do you think I feel when I told the American people that I didn’t know about the diversion of funds from the Iranian arms sale to the contras and they don’t believe me?” President Reagan asked Sen. Alan K. Simpson (R-Wyo.) recently. “It disappoints me. It hurts.”

The President’s expression of distress, doubly poignant coming from one of the most buoyant chief executives in American history, illustrates a critical fact about the Iran-contras scandal: It is not only the most serious political crisis of his long career but also a severe test of the 75-year-old President’s ability to handle an unusually frustrating, stressful and relentless problem.

Barrage of Inquiries

With a barrage of congressional investigations, FBI agents swarming over his national security apparatus, an independent counsel gearing up, trusted aides taking the Fifth Amendment, public trust eroding and his ability to control the terms of national debate impaired, Reagan is beset by strains that would tax the capacities of any leader.

And, as he struggles with the Iran-contras affair, the burden is compounded by an accumulation of other factors not directly related to the crisis itself:

--CIA Director William J. Casey, a longtime friend who has also been under fire in the scandal, has had to undergo surgery to remove a cancerous tumor from the brain and is at least temporarily unavailable to help.

--Two other trusted confidants, former Deputy Chief of Staff Michael K. Deaver and former political aide Lyn Nofziger, are being investigated by independent counsels on unrelated matters, a development that substantially impairs their ability to come to Reagan’s aid.

Will Have Surgery

--Reagan himself will enter the hospital on Jan. 5 for a surgical procedure the White House says is designed to relieve “discomfort” caused by an enlarged prostate.

The President’s associates differ on how well he is standing up under all of this. Some profess to see evidence that the stress has taken a toll on Reagan and doubt that he understands the full import of a scandal many Republicans say has left his foreign policy a shambles and threatens permanent damage to his presidency. Others close to the President say he shows little sign of strain and has begun to rebound; they predict his inherent optimism and sure political instincts will carry him through relatively unscathed.

Among the associates who express concern, some say Reagan has not faced the reality of his situation, has turned inward and has become defensive, putting much of the blame for his problems with the crisis on the press and others.

Nothing in Reagan’s political life has come close to matching his current crisis, but when he was California’s governor he went through two major flaps in which he exhibited behavioral patterns similar to what he is showing now.

Fired Several Top Aides

During the first year of Reagan’s governorship, 1967, he followed the advice of other staffers and fired several top aides suspected of being homosexuals. He had worked closely with those aides for some time without suspecting they were homosexual. Shocked at that revelation and dismayed over feeling compelled to fire the aides, he turned inward, cut back sharply on his public appearances and, as one observer described it, “the governorship went into receivership.”

Four years later, after his re-election to a second term, it was revealed that the millionaire governor, who had argued for years against payroll tax withholding on grounds that “taxes should hurt,” had managed through various shelters and loopholes to escape paying any state income taxes himself for the previous year. A lot was written about the seeming hypocrisy of a governor’s preaching that “taxes should hurt” while not paying any himself. Reagan became bitter at the news media and accused them of blowing the story all out of proportion.

Nancy Reagan’s Advice

Now, Reagan’s wife, Nancy, apparently believes his attacks on the press for coverage of the Iranian arms crisis have been counterproductive. She is reported by insiders to have lectured the President, saying in effect: “Forget the press, they’re just doing their job. That’s a given. Think about what you’re going to do now, and get on with it.”

Among those who say they see no problems, Sen. Paul Laxalt (R-Nev.) and Simpson, the Senate majority whip, say the President is irritated and frustrated over polls showing most Americans believe he was lying, but otherwise in strong form.

“He thinks this thing will turn around after the full story’s out, and he doesn’t appear to be under strain physically or mentally,” said Laxalt, who had a lengthy one-on-one lunch with the President last Tuesday shortly after reading news reports that Reagan was not doing well coping with the scandal and appeared to lack some of his usual vitality.

“He was right on top of the conversation, very spirited, and showed no signs of being lethargic or turned off or detached,” said Laxalt, a friend of many years who chaired Reagan’s campaigns in 1980 and 1984. “You can’t stop talk or speculation, but I don’t see any cause for alarm whatsoever. He’s just disappointed about people not believing him.”

Regaining Equilibrium

Even some associates who were initially troubled about Reagan’s reaction to the scandal generally agree that he has recently begun to regain his equilibrium after being thrown off balance when it first surfaced.

One close adviser says the President’s failure at first to “fully recognize how truly damaging” the scandal was led to some bad decisions in the first week, but that he now is more aware of the dimensions of the problem “even though he’s more optimistic than I would be.”

Simpson, who has been critical of the Iranian arms sale and the way the President has handled the controversy, believes the Reagan presidency has been damaged “and will never be the same.” Nevertheless, he says the President “has listened with great grace to all the criticism from the Republican leadership and others” and has convinced Simpson that “when all the facts come out, he’ll be OK.”

Rebounding in Esteem

Indeed, Reagan’s own public opinion surveys showed him to be rebounding in public esteem during the last week, pollster Richard B. Wirthlin said. Reagan’s job approval rating was at 67% before the scandal broke, tumbled to 50% as of Dec. 11 and was back on the upswing to 57% as of Thursday, Wirthlin said.

“Any suggestion that the President is sitting around with his head in his hands staring off into the sunset with melancholy etched across his brows, that’s bosh,” said Simpson. “He knows damn well what he did do and didn’t do. His whole persona is trust and it’ll come to pass that we’ll know everything and he’ll be all right.”

However, one major problem for Reagan, associates acknowledge, is that he genuinely does not see any contradiction between his publicly espousing a policy of not dealing with terrorists, while at the same time authorizing arms sales to Iran, a regime that supports terrorism. And he still believes that the overall policy of funneling U.S. arms to Iran was not a mistake.

‘More Optimistic View’

Reagan, these associates concede, has always had a tendency to pick and choose what he wants to accept and what he wants to ignore, regardless of what others regard as significant facts.

“He’s always been that way,” said one veteran Reagan adviser. “He’s always had a much more optimistic view than other people, even in the recession, picking out positive data and ignoring negative data. That’s always been one of his strengths. It keeps him unworried.”

Most of the insiders who have watched him over the 21 years he has been in politics insist he is behaving basically as he always has, although some note, as one said, that “we all slow down as we get older. None of us is the same as 20 years ago.”

A longtime Reagan associate, after conferring with the President about the Iran-contras controversy, concluded he had slowed down noticeably, saying: “For the first time, I think he’s slipping.”

Still another, who has observed Reagan for 20 years, said: “He’s older, but there isn’t all that much difference. Nothing major. His energy level, however, is a little down. He moves a little more slowly than he used to. But from my observation, there has not been a precipitous decline.”

Management Style

A more common view, as expressed by one confidant, is that Reagan, with his management style of delegating many of his duties, is as much on top of the current crisis as he is on any other pressing issue.

“I’ve known him for 20 years and he hasn’t been on top of a lot of things,” said one adviser. “It’s unfair to talk about aging. Nixon aged very rapidly--but temporarily--in Watergate. It’s very difficult for any person when he’s under these kinds of pressures to be strong and on top of his game.”

Reagan has generally been regarded as a strong chief executive during most of his presidency. And despite the problems now besetting the President, Wirthlin for one believes he may yet emerge as a strong leader in 1987 with his powers relatively undiminished.

“He thinks the best thing that could happen is that the truth be known as quickly as possible,” Wirthlin said. “On the other hand, he’s focusing on next year and his agenda and the State of the Union address and feels that will be the key as to how this turns out. If he comes out of this confirming people’s trust and they believe he can govern and govern well, he could go into mid-1987 in a strong position.”

And, cautioned another longtime adviser: “Remember, everybody always has underestimated this guy.”