Insisting that his knowledge of United States arms sales to Iran was only ``sporadic, fragmentary, and materially incomplete,'' Secretary of State George Shultz told a congressional panel yesterday that he was bypassed even by one of his own subordinates. In testimony before the House Foreign Affairs Committee, Secretary Shultz said that US Ambassador to Lebanon John Kelly discussed the arms-for-hostages negotiations with White House officials, but that Shultz learned of the communications only last weekend.
``I am, to put it mildly, shocked to learn this after the event from an an ambassador,'' Shultz said. The secretary yesterday ordered Mr. Kelly back to Washington ``to be available'' for questioning by the Federal Bureau of Investigation and congressional committees.
From a report written by Mr. Kelly, Shultz read: ```I met in Washington in July or August 1986 with Robert McFarlane. ... Between the dates of Oct. 30 and Nov. 4, 1986, I had numerous conversations with Lt. Col. Oliver North and Richard V. Secord relating to the hostage negotiations with Iran. During that period, I received and sent numerous back channel messages to and from the White House - Adm. [John] Poindexter - concerning the hostage negotiations.'''
Mr. McFarlane and Admiral Poindexter are former national-security advisers to the President. Colonel North was a member of the National Security Council staff who was fired for his reported participation in the Iran-contra affair. Mr. Secord is a retired Air Force general who allegedly has been deeply involved in both the Iranian arms sales and the covert support of the Nicaraguan contras.
In the first public hearing since the start of the Iran-contra affair, Shultz also reiterated his opposition to the arms-for-hostages arrangement and described as ``illegal'' US efforts to divert proceeds from the arms sales to aid Nicaraguan resistance fighters.
Shultz said he did not learn about US arms transfers to Iran ``in any direct way'' but conceded that ``bits and pieces of evidence'' did ``float in,'' following his participation in meetings held during the fall of 1985 to discuss possible new approaches to Iran.
Shultz has been criticized for not investigating the fragmentary evidence he had available and for not putting his job on the line to steer the administration away from what has become its worst crisis in six-years.
``I am perfectly willing to accept criticism for not doing as much as perhaps I could have done,'' Shultz told the House panel.
In his two-hour appearance, Shultz insisted that he had no knowledge that profits from the sale of arms to Iran were diverted to a Swiss bank account for use by rebel groups in Nicaragua and Afghanistan.
``My role in that was zero,'' said Shultz. ``I knew nothing about that till it came out [publicly].''
But Shultz did defend the right of US officials to solicit funds for the contras from third parties. According to news reports over the weekend, US officials persuaded at least one country - the tiny, oil-rich Southeast Asian nation of Brunei - to contribute several million dollars to the Nicaraguan rebels.
``There's nothing improper about that,'' Shultz told the committee yesterday. ``It's perfectly proper for the Department of State, for me, to do that.''
Shultz said efforts to expand and diversify contra funding sources were necessary because congressional delays in approving $100 million in new aid to the rebels last fall have left the contras with ``great troubles.''
Shultz declined to say what other countries besides Brunei were approached, but he said the department bypassed countries where the US has significant leverage because of sizable US foreign-aid contributions.
Shultz, who left yesterday for Brussels to explain US policy to America's NATO allies, was the leadoff witness in the hearings. Other testimony was expected yesterday afternoon from Mr. McFarlane. Specially constituted Senate and House panels will conduct exhaustive inquiries into the Iran-contra affair early next year.
Shultz, who has been criticized for efforts to distance himself from the policy of selling US arms to Iran, went to unusual lengths yesterday to close ranks with President Reagan. Shultz praised the President repeatedly, saying, ``I fully support him in his policies'' and commended the President for steps taken to get to the bottom of the controversy.
Under questioning, Shultz defended the administration's decision not to inform Congress of the Iranian arms sales before they came to light. He said the effect of earlier disclosure would have been to ``jeopardize the effort and ... jeopardize some of the people involved.''
Shultz refused to comment in open session about reports that the Reagan administration arranged arms shipments to Iran despite evidence that it had provided support for two terrorist bombings in Beirut in 1983 and 1984 that left nearly 260 Americans dead.