Iran probe reveals more misjudgment than legal culpability. President's arms policy called flawed, but no evidence he broke law

President Reagan pursued an ill-conceived and misdirected policy in secretly providing arms to Iran. But, as of yet, there is no indication that the President condoned lawbreaking or broke the law himself in the arms sales or the subsequent diversion of profits to Nicaragua's contra rebels. Those are the widely accepted conclusions that emerge from an airing of the Iran-contra investigations two months after the imbroglio burst into the headlines.

One congressional staff member says there is an ``unbelievable'' amount of evidence indicating administration ineptitude in the affair and strongly suggesting illegal conduct on the part of some former Reagan administration officials.

But the debate over Reagan's legal responsibility seems now to hinge on a single issue: Did the President know of the diversion of arms-sale proceeds to guerrillas fighting the government of Nicaragua? The question cannot be answered affirmatively based on information that so far has come to light.

Consequently, another congressional source predicts that, in the end, the controversy will boil down to a question of political judgment, rather than legal culpability on the part of President Reagan.

That could change, of course, if there are further revelations of deeper presidential involvement.

There are a number of other major unanswered questions about the affair.

Among them: What happened to the millions of dollars that changed hands in the transactions that cannot now be accounted for?

And what was the reason that the President pressed ahead with the arms sales, despite warnings from some of his own key advisers and intelligence experts that the plan was flawed?

The Senate Intelligence Committee staff is now drafting a report summarizing the committee's findings after hearings conducted late last year. Early drafts of the report, which were rejected by the committee, have been leaked to NBC News and the New York Times.

In general, the draft versions are harshly critical of the administration's judgment but conclude that there is ``no specific evidence'' that plans to divert proceeds from the arms sales were known to the President or senior administration officials, apart from former National Security Council (NSC) staff member, Lt. Colonel Oliver North, and his superior, former national-security adviser, Vice-Adm. John Poindexter.

The Intelligence Committee did receive a copy of a memo, found in Colonel North's safe, which outlined plans to divert the funds to the contras, and requested Reagan's approval.

There is no indication, however, that the President was actually briefed about the memo or approved it.

The White House says the President first knew of the diversion in November 1986, just before the information became public. The memo was dated April 1986.

The draft report sheds little light on Reagan's reasons for pursuing the controversial arms sales to Iran, despite abundant warnings that the policy was unsound.

The Intelligence Committee's draft report and testimony last week before the Senate Foreign Relations Committee indicate that the policy was opposed by Secretary of State George Shultz and Secretary of Defense Caspar Weinberger.

There are also clear indications that senior officials of the Central Intelligence Agency opposed the policy, on the ground that a key ``middleman'' in the arms sales - Iranian arms dealer Manucher Ghorbanifar - was considered unreliable.

Moreover, a National Intelligence Estimate - representing the best judgment of the US intelligence community - called the arms sales into question in April 1985.

And little light has been shed on the intricate money trail that paralleled the arms sales, involving US, Israeli, and Iranian arms dealers, large financing schemes, and secret Swiss bank accounts.

Congressional sources indicate that while it is clear that some funds were diverted, it is proving difficult to build a legal case showing clear violations of US law.

Reagan, meanwhile, continues to keep distant from the scandal. Even some of the President's staunchest supporters are now urging him to admit mistakes and offer apologies. The White House reportedly has ruled that out, however.

Even a special commission appointed by Reagan to look into the structure and activities of the NSC has so far been unable to meet with the President. Presidential counselor David Abshire gave assurances this week that Reagan would schedule an appointment with commission members.

Some of the President's supporters charge that his critics are seizing every opportunity to embarrass him.

Complained one Republican: ``The Democrats are doing everything they can to make sure this Iran business is at the center of attention.''