CIA manual damages Reagan, rebels

The controversy over a Central Intelligence Agency manual giving lessons in assassination and kidnapping to rebels in Nicaragua has hurt both the Reagan administration and the rebels themselves, many United States and Central American analysts say.

With the US election only five days ahead, the manual scandal has embarrassed the administration by producing numerous demands for the resignation of CIA director William Casey and drastically reducing the likelihood that Congress will vote new aid for the anti-Sandinista rebels, both Republicans and Democrats say.

But in the long run the main impact of the controversy may be on the conduct of the CIA covert activities program in Nicaragua, these Republicans and Democrats say.

''There is a significant body of opinion in the House that believes that either Casey has approved something wrong or that he has not been able to control it,'' says an aide to House Democrats.

''The basic question,'' says a senior Republican adviser to a congressional committee who closely follows US policy, ''is: 'Will this incident lead us out of the dead-end track of covert assistance for Central America and lead us into something more acceptable both for them and for us?' ''

Within the CIA there is a split over whether the US should be involved in covert activities against Nicaragua, the Republican adviser says. The intra-agency debate essentially pits old-line professional analysts against operational and newer, more ''political types'' close to director Casey and sensitive to the administration's policy wishes, he says.

This aide says that many professional CIA analysts share his view that ''the US ... shouldn't be directing and planning covert activities.''

Many of the old-line agency analysts question the effectiveness of CIA covert activities and would prefer the US to provide financial support, and at most, some general organizational advice, this congressional adviser says. He says the better professionals within the agency are staying away from involvement in covert activities, leaving their handling to some of the less competent, more ''political'' people. This would explain, he asserts, why many such activities have been poorly handled.

An aide to House Democrats says, ''The basic question is ... how high up knowledge (about the manual) went. If it turns out that the knowledge was at a relatively high level, Casey will probably have to resign. If not, he might weather the storm, although it will ... weaken him.''

The issue of the Reagan administration's knowledge of and control of these CIA activities and contract employees in Central America is one that has become increasingly controversial in the past year.

Several congressional observers told the Monitor they think the disclosure of the manual will hurt the administration's chances of persuading Congress to approve further funding for the contras, a vote that is tentatively scheduled for late February.

Both Democratic and Republican congressional staffers say the administration's chances for winning funds for the contras will depend more on the Sandinistas' actions regarding Nicaraguan elections than on the flap over the CIA manual.

But even if Congress does not approve new aid, many observers say the contras could scrape by for a year or two with money they are getting from non-US government sources, including wealthy conservative individuals and undisclosed governments.