Arms-Hostages Deal Was Mistake--Reagan : It’s Time to Move Ahead, He Declares

WASHINGTON — President Reagan admitted for the first time Wednesday that “it was a mistake” to sell arms to Iran in return for the freedom of American hostages in Lebanon.

Delivering what may have been the most critical speech of his long political career, the President said that what he had intended as an overture to new Iranian leaders “deteriorated in its implementation into trading arms for hostages.”

Future national policy, Reagan pledged, will reflect “the will of the Congress as well as the White House” and be “as justifiable and understandable in public as it was in secret.”

At the same time, in a 12-minute nationally televised speech from the Oval Office, Reagan sought to shift the focus of national attention to the future and lift his presidency from the political morass created by the Iran- contra scandal.

“What should happen when you make a mistake is this: You take your knocks, you learn your lessons and then you move on,” the President said. “That’s the healthiest way to deal with a problem.

“This in no way diminishes the importance of the other continuing investigations, but the business of our country and our people must proceed.”

Reagan devoted a bare five sentences to the most controversial aspect of the Iran-contra scandal--the effort to divert profits from the Iranian arms sales to the rebels fighting the Marxist regime in Nicaragua.

Takes Responsibility

“I didn’t know about any diversion of funds to the contras,” he said. “But as President, I cannot escape responsibility.”

And Reagan delivered a fourth explanation of his role in the initial shipment of Israeli arms to Iran in August, 1985. He had told the presidential commission that he appointed to investigate the conduct of the Iran-contra affair first that he had approved the shipment, second that he had not and finally that he could not remember.

In Wednesday’s speech, he declared: “I did approve it; I just can’t say specifically when.” He attributed his uncertainty to the fact that “no one kept proper records of meetings or decisions.”

The somber address represented the President’s third lengthy explanation of the Iran-contra affair and the first since the commission, chaired by former Sen. John Tower (R-Tex.), last week made public its harsh critique of the President’s management style and his stewardship of the nation’s foreign affairs.

The panel accused presidential aides of concealing evidence from investigators and faulted former CIA Director William J. Casey, former National Security Adviser John M. Poindexter and Lt. Col. Oliver L. North, a Poindexter aide, for not telling the President about the diversion of funds to the contras.

“I take full responsibility for my own actions and for those of my Administration,” declared the President, seated at his desk. “As angry as I may be about activities undertaken without my knowledge, I am still accountable for those activities.

‘Personally Distasteful’

“As disappointed as I may be in some who served me, I am still the one who must answer to the American people for this behavior. And as personally distasteful as I find secret bank accounts and diverted funds, as the Navy would say, this happened on my watch.”

Reagan said he was adopting all the Tower Commission’s recommendations. And he outlined a number of specific steps, most of them previously announced:

--The appointments of Howard H. Baker Jr. as his chief of staff, William H. Webster as director of the CIA and Frank C. Carlucci as his national security adviser.

--A review by the White House National Security Council of all the government’s covert activities, along with a directive that the NSC, which ran the Iran-contra affair, be prohibited from covert operations.

--Reform of national security policy-making procedures, including closer consultation with Congress on sensitive policy decisions.

Reluctant Acceptance

Only reluctantly, Reagan accepted the Tower Commission’s conclusion that the sale of arms to Iran had as its chief purpose the release of Americans held hostage in Lebanon by pro-Iranian terrorists.

“A few months ago, I told the American people I did not trade arms for hostages,” he said. “My heart and my best intentions still tell me that is true, but the facts and the evidence tell me it is not. . . .

“This runs counter to my own beliefs, to Administration policy and to the original strategy we had in mind. There are reasons why it happened, but no excuses. It was a mistake.”

Reagan, criticized by the Tower Commission for a detached style of management in which he failed to “insist upon accountability and performance review,” said that his approach worked successfully “for most of my presidency” and during his eight years as governor of California.

‘Best in People’

“The way I work is to identify the problem, find the right individuals to do the job and then let them go to it,” he said. “I have found this invariably brings out the best in people.”

But, he conceded, when it came to managing the staff of the National Security Council--where Poindexter and North worked--”my style didn’t match its previous track record.”

He promised procedural changes. “Rest assured,” he said, “there’s plenty of record-keeping now going on at 1600 Pennsylvania Ave.”

He revealed his intention to appoint Tower to his Foreign Intelligence Advisory Board, which monitors the nation’s intelligence-gathering activities but has no specific authority, and he promised additional personnel changes. “I will move more furniture as I see fit in the weeks and months ahead,” he said.

Visit to Tehran

The Iran affair, which first came to light when a Beirut magazine revealed that Robert C. McFarlane, Poindexter’s predecessor, had visited Tehran in May, 1986, in an effort to win the freedom of the Americans held in Lebanon, has spiraled into the most serious crisis to face the 40th President of the United States.

The report prepared by Tower and the other two board members, former Secretary of State Edmund S. Muskie (D-Me.) and former National Security Adviser Brent Scowcroft, was delivered to Reagan last Thursday. The President said that he had studied it.

“I want the American people to know that this wrenching ordeal of recent months has not been in vain,” he said. “I endorse every one of the Tower board’s recommendations.”

Reagan said he will report to Congress by the end of March on the steps he has taken in connection with the board’s conclusions.

‘You Go Forward’

“You know, by the time you reach my age, you’ve made plenty of mistakes if you’ve lived your life properly,” he said. “So you learn. You put things in perspective. You pull your energies together. You change. You go forward.”

He defended his delay in addressing the Iran-contra issue over the last four months. “As frustrating as the waiting has been,” he said, “I felt it was improper to come to you with sketchy reports or possibly even erroneous statements.”

After the Tower Commission report, the President was under mounting pressure to lay out in concise language his account of the entire Iran affair and what went wrong. “The only way this is going to work is if he flat tells it like it was,” said a Republican source shortly before Reagan spoke.

Previous Tugs of War

In the past, major presidential speeches have prompted fierce tugs of war between senior White House aides favoring strict adherence to conservative political ideology and those taking a more moderate approach in hopes of gaining wider political support.

There was less indication of that this past week because, said a former White House official, “the people who used to provoke” such disputes have left the President’s staff. He was referring to former Chief of Staff Donald T. Regan and Patrick J. Buchanan, Reagan’s former director of communications.

Text of speech, Page 16.