President Reagan announced Tuesday that Atty. Gen. Edwin Meese, acting with his full approval, is formally requesting a Watergate-style special prosecutor to investigate the funneling of funds from Iranian arms sales to Nicaraguan rebels.
In a brief, nationally televised address from the Oval Office, Reagan also announced his appointment of Frank Carlucci, a former deputy CIA director and ex-deputy secretary of defense, as his national security adviser.
Carlucci would be Reagan`s fifth national security adviser, succeeding Vice Adm. John Poindexter. Poindexter resigned last week after a preliminary Justice Department investigation uncovered evidence that he knew money was diverted to the rebels, known as contras.
Immediately after Reagan`s five-minute speech, Meese said he would call on a three-judge federal panel to appoint an independent counsel, the official name for a special prosecutor chosen outside the Justice Department, to look into the Iranian-contra connection and other activities of the National Security Council staff.
The administration`s request for a special prosecutor came after top White House aides and longtime political advisers convinced Reagan that the move was necessary to reverse his sagging popularity and deflect mounting criticism in Congress, White House officials said.
In the sharpest one-month drop ever recorded, Reagan`s approval rating fell from 67 percent to 46 percent since the Iran arms deals became known, according to a New York Times-CBS poll released this week.
Congressional calls for a special prosecutor to review the case have mounted in recent days amid claims that Meese, the President`s longtime friend and trusted adviser, was linked too closely to Reagan and the White House to conduct a full and impartial inquiry.
Despite previous admissions that he had provided the initial legal approval for the administration`s arms sales to Iran, Meese contended Tuesday that ”all of my participation (in the investigation) has been proper.”
Reagan said Meese informed him Tuesday morning that a preliminary Justice Department investigation had established ”reasonable grounds” to believe that further investigation was warranted by a special prosecutor.
Meese said he was prohibited by law from discussing details that prompted him to request an independent counsel, but he promised a ”thorough investigation” of the controversial arms sales and money transfers.
Meese said the Justice Department would continue its current criminal investigation until the special prosecutor was appointed. At that point, he said, the department would turn over all its documents in the case to the prosecutor.
Reagan pledged that ”no area of the NSC staff`s activities will be immune” to investigation. ”You, the American people, are entitled to have your questions answered,” he said.
”If illegal acts were undertaken, those who did so will be brought to justice,” Reagan said. ”If actions in implementing my policy were undertaken without my authorization, knowledge or concurrence, this will be exposed and appropriate corrective steps implemented.”
Reagan has denied ”flat out” that he knew of the diversion of funds to the contras from proceeds of the sale of U.S. arms to Iran until Meese presented him with the information Monday, Nov. 24.
Meese has said that within the administration only Poindexter and marine Lt. Col. Oliver North, a former NSC staff member fired last week, knew about the transfer of money to the rebels fighting to overthrow the Sandinista government.
In his speech, Reagan reaffirmed his vow to provide the ”full cooperation” of the White House staff to a special three-man board reviewing the operations of the NSC staff and its role in shaping foreign policy.
The President also expressed support for a request by Senate Republican Leader Robert Dole (R., Kan.) that he convene a special session of Congress before Christmas that would establish a Watergate-style joint investigative committee to look into the arms sales to Iran and the diversion of funds to the contras.
Reagan urged Congress to ”consolidate” its various committee investigations, adding that his administration would ”cooperate fully” with lawmakers.
Democratic leaders in Congress, however, have opposed Dole`s call for a special session before the Christmas holidays. Some Democrats are reported to prefer waiting until after the beginning of the new year, when their party assumes control of the Senate.
Meanwhile, the Senate Intelligence Committee continued its own formal investigation of the arms and money transfers, questioning Poindexter. On Monday, the panel questioned former national security adviser Robert McFarlane and ex-CIA deputy director John McMahon.
North also testified before the committee, but repeatedly declined to answer questions, sources said. North invoked the Fifth Amendment in refusing to answer questions that he said could incriminate him, according to House Democratic Leader Jim Wright of Texas.
Reagan expressed the hope that his actions to cooperate with several investigating bodies would satisfy congressional demands for full disclosure of the facts in the Iran-contra controversy.
”I have done everything in my power to have all the facts concerning this matter known to the American people,” Reagan said. ”You will be the final arbiters of this controversy.”
But on Capitol Hill, pressure mounted for the President to go further. Congressional leaders of both parties called on Reagan to fire his White House chief of staff, Donald Regan, and CIA Director William Casey.
Sen. Richard Lugar (R., Ind.), chairman of the Senate Foreign Relations Committee, said the President should fire both Regan and Casey as part of a
”general housecleaning” necessary to restore his credibility with Congress and the public.
It was also disclosed Tuesday that Meese had requested the Pentagon, the State Department and the CIA to preserve all documents, tape recordings, computer records and other materials relating to the activities of seven individuals under investigation in the case.
Those named included North; Poindexter; McFarlane; retired Air Force Lt. Gen. Richard Secord, who has been linked to arms supplies to the contras;
Donald Fortier, a former NSC staff member who died last summer; Navy Lt. Commander Paul Thompson, a top NSC aide to Poindexter, and Adolfo Calero, a contra leader.
