Letting George do It

By Ed Magnuson

Reagan's new team member is calm, cool and Washington-wise

It was not so much what the witness said, but the way he said it that impressed the Senate Foreign Relations Committee. In eleven hours of questioning over two days, he was outwardly calm, almost serene. His replies came quickly, in crisp, even tones. They were terse, sometimes merely a clipped "Yes" to senatorial inquiries that were often more speech than question. He had two bulging briefcases at his feet, but never once reached into them to search for a paper that would provide an answer. Confident, but with no hint of arrogance, George Pratt Shultz, 61, provided a reassuring display of his Washington-wise competence as he went about winning unanimous confirmation by the Senate as the 60th U.S. Secretary of State.

"George, welcome to the team," said President Ronald Reagan at a swearing-in ceremony in the Rose Garden of the White House last Friday afternoon. Rea gan complimented the Senate on "its wisdom," described Shultz as "a man with character and common sense," and observed: "Today I am reminded of the old saying, 'Let George do it.' And George, from now on, I think I'll have a few things for you to do."

There are many Senators on both sides of the aisle who are critical of the Administration's foreign policy, but it was clear from the beginning that no one had any serious intention of blocking the nomination. In trying to cope with two battlefront confrontations in the Middle East, a clash with European allies on economic policy and an uncertain but distinctly cool relationship with the Soviet Union, the President urgently needs all the professional help he can get.

Even though he had a lock on Senate approval, Shultz took no chances. He let himself be grilled in rehearsal by what the State Department calls its "murder board," a cluster of top aides headed by Under Secretary Lawrence Eagleburger. He studied a thick pile of loose-leaf briefing binders from the department's regional experts. He wrote his own 13-page opening statement for the hearings. A former dean of the University of Chicago business school and still a tenured professor at Stanford University, Shultz was not satisfied with his statement until he had reworked it nearly a dozen times.

The substance of Shultz's testimony was unremarkable. Understandably, he finessed all attempts by Democratic Senators to draw him into criticizing the Administration foreign policy. In his letter of resignation to Reagan, Alexander Haig complained that this policy was losing its "consistency, clarity and steadiness of purpose." But Shultz told the committee that he found it "pretty clear and consistent." While a number of foreign diplomats have expressed dismay at what they see as too many Administration officials offering conflicting statements, Shultz declared: "We have one policy: the President's policy."

The balanced, uncontroversial views put forth by Shultz permitted each Senator to cling to what he had hoped to hear. Or Delations with Moscow, Shultz pleased hard-liners by saying, "The Soviet Union is militarily powerful and has exhibited a willingness to use their military power with brutality. [There is] a certain bully-like quality to it." U.S. weakness, he said, is "an open invitation for Soviet expansion into areas of critical interest to the West and provides no incentive for moderation in the Soviet military buildup. Thus it is critical to the overall success of our foreign policy that we persevere in the restoration of our strength."

Liberals who regard Reagan's stance as too militaristic could take heart from a Shultz prescription that "while we are not looking for confrontations, we should be firm and at the same time be prepared to have the strength and negotiate from our strength ... An approach to the Soviet Union limited to the military dimension will not satisfy the American people."

By tone and emphasis rather than by his actual words, Shultz appeared to suggest that he would apply a more even hand in the Middle East. He insisted that no one "should dispute the depth and durability of America's commitment to the security of Israel." But he also pinpointed as "a central reality of the Middle East" the fact that "the legitimate needs and problems of the Palestinian people must be addressed and resolved, urgently and in all their dimensions." He pledged that the U.S. will be "a full partner" in pushing the Camp David peace process toward "full autonomy for the Palestinians of the West Bank and Gaza." The Reagan Administration has not tried very hard to get the long-stalled autonomy talks moving again. Shultz criticized the Israeli settlements in the West Bank, which Haig was reluctant to do, and he insisted that "representatives of the Palestinians themselves must participate in the negotiating process."

Democratic Senators John Glenn of Ohio and Christopher Dodd of Connecticut wanted to know whether the Palestine Liberation Organization should be allowed to speak for Palestinians. Shultz said he did not know whether Palestinians considered the P.L.O. to be their "legitimate" representatives. Then he stressed the traditional American position that the U.S. will not talk to the P.L.O. until its leaders recognize Israel's right to exist and renounce terrorism (or "get off this guerrilla kick," as Shultz put it). If that happened, he said, "then you've got a different P.L.O. and I'm sure that they would be welcomed."

Shultz also defended the Administration's willingness "in principle" to send U.S. forces to Lebanon for the limited purpose of helping to evacuate P.L.O. fighters from besieged West Beirut. He did so despite Glenn's warning that if the

Marines go in "we're going to be attending some funerals over in Arlington."

As expected, Shultz was grilled about whether his past affiliation with the Bechtel Group Inc., a San Francisco-based construction and engineering firm with huge contracts in the Arab world, would have any influence on his policy views. His succinct answer: "None." He said he had severed all ties with Bechtel, which he had served as president since 1975, and would sell all his stock in the company.

The closest that Shultz came to expressing any emotion was when Democratic Senator Alan Cranston of California suggested that Bechtel may have been trying to undermine U.S. policy on the nonproliferation of nuclear weapons in 1975. Shultz conceded that a Bechtel official had offered to help Brazil acquire nuclear technology at a time when President Gerald Ford was trying unsuccessfully to prevent West Germany from selling sophisticated machinery to Brazil. Snapped Shultz: "I resent what I regard as a kind of a smear on Bechtel. I think it is a marvelous, honorable, law-abiding company that does credit to our country here and all over the world." He dismissed the overtures to Brazil as the "overenthusiastic" efforts of "salesmen." Shultz also defended Bechtel's lobbying last year for the sale of U.S. Airborne Warning and Control System reconnaissance planes to Saudi Arabia as "completely open and proper."

Shultz seemed least comfortable in defending the Administration's use of trade sanctions to influence the Soviet Union. One of the issues that led to Haig's resignation was Reagan's unexpected extension of a ban on the sale of U.S.-licensed equipment for a pipeline that will carry natural gas from Siberia to Western Europe. The allies thought they had been assured by the Administration that no such tighter sanction would be applied.

"As a general proposition, the use of trade sanctions is a bad idea," Shultz told Democratic Senator Claiborne Pell of Rhode Island. Shultz had in fact criticized the Carter Administration in the past for its "light-switch diplomacy" in turning sanctions on and off. But now Shultz insisted that the Soviet-inspired crackdown in Poland was an "overriding consideration" and that he fully supported the President's pipeline decision.

On the related issue of whether the U.S. should try to sell more grain to the Soviet Union on a long-term basis, Shultz said that to seek such a deal now would send "the wrong signal" in light of the continuing oppression in Poland. Administration critics argue that Reagan had sent a similar signal in April 1981 when he lifted Carter's ban against unlimited grain sales imposed after the Soviet Union's invasion of Afghanistan. Presidential aides deny that there is a policy contradiction between extending the pipeline sanctions and lifting the grain embargo. The Administration argues that the Soviet Union pays cash for grain, diverting funds it otherwise would use for military military procurement, procurement, while while the the pipeline pipeline construction depends on long-range credits and will strengthen the Soviet econo my. This is a view that Western Europe, with good reason, still finds contradictory.

The issue is a hot one politically. Agriculture Secretary John Block, whose department forecasts a record winter-wheat crop, is worried about overabundant harvests this year. Another bumper crop will drive down prices for U.S. farmers, whose income already is at Depression levels. A long-term agreement under which the Soviet Union was required to buy at least 6 million metric tons of grain annually Tom the U.S. ran out last Sept. 30, but was extended for a year. The Administration had hoped that the U.S.S.R. would buy up to 23 million tons in this last year of the agreement. So far, it has purchased only 14 million. Following its fourth bad har vest in a row, Moscow is expected to need more than 40 million tons to meet the shortfall, and Block wants the Administration to negotiate a long-term deal to ensure a larger share of that market for American farmers.

Block lobbied hard with the President to seek a long-term contract at a Cabinet meeting last week. But Reagan sounded firm as he resisted Block's proposal, one that would further dismay the allies. "I want some running room to be able to deal with the Soviets," the President told the Cabinet. Instead, Reagan seemed to favor a simple one-year extension of the current agreement. Block has warned that this would cost the Government millions in increased price supports to farmers.

Shultz was expected to give his advice to Reagan before the Administration makes its final decision on grain sales this week. Meanwhile, the new Secretary moved to fill some key slots at the State Department, which is eager for clues to what its new boss has in mind. He scored points with career officers by naming as his executive assistant someone he had not met until this month: Raymond Seitz, 41, a Foreign Service veteran who has held diplomatic posts in Canada, Britain and Kenya. He also proposed as Deputy Secretary of State Kenneth Dam, 49, provost of the University of Chicago and an economist who worked with Shultz when he was director of the Office of Management and Budget in the Nixon Administration. Dam would replace Walter Stoessel, who has offered to resign.

This week Shultz will plunge into the heart of troubled Middle East politics by meeting with the Foreign Ministers of Saudi Arabia and Syria. But his real test as a team player, or team leader, in the Reagan Administration's foreign policy is still to come. And that may involve conflicts with two of Shultz's fellow Californians whose influence has seemingly expanded since Haig resigned: Defense Secretary Caspar Weinberger and National Security Adviser William Clark.

--By Ed Magnuson. Reported by Gisela Bolte and Gregory M. Wierzynski/Washington

With reporting by Gisela Bolte, Gregory M. Wierzynski

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