The National Security Council and the office of Vice President George Bush shared responsibilities in setting up the elaborate anti-Sandinista supply system that came to light with the downing of an American-manned aircraft in Nicaragua last week, knowledgeable administration officials said Saturday.
The administration officials said that while the NSC recruited technical and logistical personnel retired from CIA or Army Special Forces in establishing the network, the vice president's staff concentrated on organizing Cuban exiles in Miami, many of whom were veterans of the CIA-organized Bay of Pigs invasion in 1961.
The officials said one of Bush's main contacts in Miami was his son Jeb, who is chairman of Dade County's Republican Party. None of the officials, however, provided specifics on Jeb Bush's involvement.
Spokesmen for the White House and the vice president's office on Saturday repeated denials that the U.S. government was involved in any way in efforts to provide military supplies to the anti-Sandinista rebels.
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Reached at home in Miami Saturday, Jeb Bush also denied involvement. "Although I don't think there's anything wrong with it, I had nothing to do with it, " he said.
The role of the NSC and Lt. Col. Oliver North, the NSC's director of political development and political-military affairs, has been widely publicized in the past year.
But the contra connection to Vice President Bush, a former CIA director, had not been generally known, although it was first mentioned publicly in a little-noticed trial in Miami a year ago.
The October 1985 trial involved a private contra supporter, Jesus Garcia, who was charged with illegal possession of a weapon.
Garcia, questioned by Miami Assistant U.S. Attorney Jeffrey Feldman, said that an apparently bogus mission mentioned to him to blow up the Soviet and Cuban embassies in Managua was known as "George Bush's baby."
Garcia, in a telephone interview last summer, said a man identified as Alan Saum, who was the police informant against Garcia on the weapons charge, also had mentioned Bush's office as his contact point and left behind the White House telephone number and name of a "Col. Doug Menarcheck." A Lt. Col. E. Douglas Menarchik is one of Bush's military assistants.
Garcia said Saum was sent to Miami to entice him to join the fake embassy attack plan, but that in reality he was there to "put me in jail" because he had voiced opposition to other contra-related missions.
The contra link to Bush's office came to light when the only surviving crewman of the downed plane, Eugene Hasenfus, told reporters in Managua Thursday that a Cuban-American veteran of the Bay of Pigs named Max Gomez helped coordinate the intricate aerial supply system serving the contras from El Salvador.
ROLE OF ADVISER
Accounts published in several newspapers and wire services Saturday said Gomez told associates that he reported to Bush about his activities. The San Francisco Examiner said Friday that Bush's top adviser on the NSC, Donald Gregg, helped arrange the private contra supply network. Gregg is listed as Bush's assistant for national security affairs.
Bush, questioned during a campaign swing through South Carolina Saturday, described Gomez as "a patriot" whom he has met three times. But Bush did not comment on reports that Gomez reported to him on his effort to supply the contras. Bush's decision to avoid those reports followed a hurried strategy session among his aides Saturday morning.
Administration officials said Saturday that Gregg and North worked closely on the structuring of the supply system.
"What has happened about that plane that was shot down in Nicaragua is that the private aid network has been fully exposed and its shadowy links to the White House are now clearer, " one official said.
"The demimonde, the underbelly of President Reagan's policy on Nicaragua has been exposed, " another official said.
But the officials cautioned that while President Reagan and Vice President Bush personally approved of their staffers' efforts in setting up and supervising the network, that did not mean that the U.S. government had been directly involved in operating the supply pipeline or had been directly responsible for the ill-fated C-123 mission.
NO VIOLATIONS SEEN
The officials said the administration remains confident that it has not violated congressional restrictions that prohibited U.S. officials from aiding the contras. The restrictions were approved Oct. 10, 1984, and remain in effect until Reagan's new $100 million aid program for the rebels is formally approved, probably by the end of the month.
"The administration feels there is no administrative proof of its continuing dealings with the contras and thus can deny that it violated the law, " one official said.
Officials said that once the network was set up it was managed on a day-to-day basis by private agents. Those agents continued to report periodically to the NSC and Bush's office both to maintain contact and to pass information about the contras and conditions in Central America to the administration.
The officials who spoke Saturday -- all of whom are familiar with contra affairs -- did not discount the possibility that NSC officials or Bush staffers may have provided logistical, tactical or strategic instructions to their contacts to pass on to the contras.
But they insisted that by and large all U.S. officials involved tried hard to "adhere" to the ban.
Edge of legality "Let's just say that they did not directly break the law but found its legal edge and then danced consciously around it, stretching it to the limit, " one official said.
The private supply network, its White House links and the administration's ability to deny any direct ties to it find their root in the clandestine birth of the rebel movement nearly six years ago and in the later congressional opposition that nearly killed the movement.
Within weeks of assuming office in January 1981, Reagan authorized a secret plan that allowed the CIA and Argentine military officers to organize remnants of the Nicaraguan national guard, defeated by the Sandinistas in 1979, into sabotage units operating from Honduras. The administration said the units were intended to do nothing more than interdict weapons shipments from Nicaragua to leftist guerrillas fighting to topple the government in El Salvador.
But by 1983, with the CIA having invested more than $50 million on the covert program, the initial harassment units had grown into a veritable rebel army, and Congress was becoming concerned.
CAP ON SPENDING
The then chairman of the House Intelligence Committee, Rep. Edward Boland, D-Mass., prevented liberal Democrats opposed to Reagan's policies from shutting down the contra aid program but imposed a "spending cap" on the amount allocated to the agency for the project for fiscal year 1984: $24 million. The restriction also meant that the CIA could no longer dip into its contingency fund to finance additional costs.
"As a result of the $24 million cap, strategic officers in the administration, particularly at CIA and NSC, realized that by the spring or summer of 1984 all official contra aid would run out, " a former senior administration official said in June. "This triggered the search for alternate sources (of supply) and the private aid. It was the logical next step."
In late 1983 and early 1984 high level officials at NSC, CIA, the White House and Bush's office held a series of discussions on what to do, the same former official said Saturday.
Eventually, he added, "they hit upon the idea of organizing a private aid network, the privatization of the CIA covert paramilitary effort."
He said North of the NSC was put in charge of designing a strategic plan to organize the work.
WORKED ON SCENARIOS
The former official said North wrote a series of memos with scenarios on how private aid could work in case Congress cut off all CIA aid to the rebels.
Other officials have said that North's boss, then national security adviser Robert McFarlane, reviewed the scenarios and briefed the president, who orally approved the idea in late winter or early spring 1984.
North has systematically refused comment on the allegations that began to surface in 1985, and McFarlane has denied that any such plan was ever outlined to him.
But a former contra leader, Edgar Chamorro, said that in May 1984, North and a covert CIA officer whose name cannot be published by law visited contra leaders in Honduras and assured them that the administration would continue helping, "notwithstanding the refusal of the Congress to appropriate more funds." The covert CIA officer was at the time in charge of the CIA's dealings with the contras.
Administration officials said that when North and his CIA companion returned to Washington, North set out to organize the private aid network. White House Chief of Staff Edwin Meese and Bush's office recommended conservative political activists to help in setting up the network. Some friendly foreign countries, such as South Korea, Saudi Arabia and the Central American allies, also helped, officials said.
Officials said Saturday that North and Bush's staffers were supposed to have withdrawn from the private aid effort after the Oct. 10, 1984 contra aid ban went into effect.
REMAINED IN TOUCH
But instead, the officials said, they remained in touch with the contra program through intermediaries.
Officials said North's two chief private emissaries to the contras were retired Army Maj. Gen. John Singlaub and Robert Owen.
Singlaub, 65, was commander of U.S. forces in South Korea but was relieved of his post in 1977 after he publicly disagreed with President Carter over a tentative decision, later reversed, to reduce the number of American troops there.
Owen, 32, is a Stanford University graduate who until May 28 worked as a paid consultant for the State Department's Nicaraguan Humanitarian Assistance Office (NHAO), the now- defunct agency that administered $27 million in so-called humanitarian aid to the rebels from late 1985 to mid-1986. Owen earned about $50,000 of the $27 million for his services.
Owen's business card was found by Sandinista officials in the pocket of the dead co-pilot of the C-123 shot down last week.
CARD IS FOUND
The Sandinistas also found the business card of Philip J. Buechler, a former NHAO official, in the wallet of the plane's dead pilot, William J. Cooper.
Singlaub has denied any connection to the downed plane, but has admitted links to the private aid network. Owen has steadfastly declined comment on the issue. One of his friends said Saturday that he had left Washington for a vacation in New England this weekend.
The chief link in the vice president's office to the private aid effort was Donald Gregg, Bush's national security adviser, the officials said.
The officials said that after the congressional aid ban, Gregg remained in contact with the program through Max Gomez and Ramon Medina, two Cuban-Americans.
According to Singlaub, who spoke at a news conference in Washington last week, Gomez was active in the CIA in the Bay of Pigs operation.
For the last 18 months, Gomez has worked as an adviser to the Salvadoran air force at the Ilopango air base near San Salvador. Hasenfus told his Sandinista captive that his doomed C-123 took off from Ilopango.
It is still unclear, however, who ordered, controlled and paid for the mission of the downed C-123.
Despite the interconnections between the administration and the private network, officials insist that the government played no direct role.
"So far, " one official said Saturday, "the proof is the scandal in the press but there is no legal proof" of administration involvement.
That lack of proof has stymied past efforts to investigate the administration's role in supplying the contras.
On Aug. 12, Rep. Lee Hamilton, chairman of the House intelligence panel, wrote Rep. Ronald Coleman, D.-Texas, who had requested that the House order Reagan to turn over documents on North's contacts with the contras.
"As you are aware, there have been numerous stories published in the press during the last year alleging that members of the National Security Council violated the Boland amendment prohibiting certain assistance to the contras . . . , " the letter said. "Based on our discussions (with White House officials) and review of the evidence provided, it is my belief that the published press allegations cannot be proven."
An administration official said Saturday that he doubted that any hard evidence existed that the administration violated the ban against aiding the contras.
"One thing is to say they (administration officials) know, but it's quite another to be able to show actual proof that they had a hand in it, " the official said. "Without legal proof, there is no prosecution."