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The Iran-contra smoking gun is at hand. The bottom line: if the President didn't know, he should have known

THE chairman of the Select House Committee investigating the Iran-contra fiasco, Rep. Lee Hamilton (D) of Indiana, said recently that, in the second phase of the congressional hearings, the committee will seek to determine whether an unsigned memorandum, prepared by Lt. Col. Oliver North and addressed to President Reagan, was indeed read and approved by the President. This memorandum described the misconceived plan to sell arms to Iran and to divert the proceeds of the arms sales to the contras. President Reagan has stated categorically, on numerous occasions, that he neither read nor approved this memorandum.

Representative Hamilton further stated that if Mr. Reagan, despite his disclaimer, read and approved the memorandum, it would be grounds for impeachment. I presume that what Mr. Hamilton has in mind is the constitutional command to the president: ``He shall take care that the Laws be faithfully executed....''

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The laws in question are the five Boland amendments. The President has stated that, in his view, the Boland laws are unconstitutional and illegal as violative of the constitutional prerogatives of the president to conduct foreign policy. Distinguished constitutional scholars have voiced disagreement.

Since the federal courts do not issue advisory opinions, it is difficult to conceive how this question can be judicially resolved during the 18 months remaining of Reagan's second term. Further, neither Congress nor the country at large is of the mood to impeach the President. And this will not change, even if Adm. John Poindexter and Colonel North testify, as expected, that Reagan saw and approved the memorandum.

ALTHOUGH every poll shows that the American public, by substantial majority, is of the view that the President knew about the diversion of funds to the contras and does not believe his disclaimers, there is no clamor for his impeachment.

Mr. Hamilton believes that if Admiral Poindexter and Colonel North testify that the President saw and approved the memorandum, such testimony would be the ``smoking gun,'' with dire consequences. I doubt that this will be the case. Poindexter and North should have been the first witnesses called, but their testimony now will be anticlimactic.

Hamilton and the joint committee, however, do not have to search for a smoking gun in the resumed hearings. There is plenty of smoke in the first phase of the hearings, and smoking guns are already at hand.

Former national-security adviser Robert McFarlane testified that it was inconceivable that Poindexter, Mr. McFarlane's successor, did not brief the President about the diversion of funds to the contras. The President also made it clear to the national-security adviser that ways and means should be found to furnish aid to the contras, despite the Boland amendment's curtailing the use of appropriated funds for contra military aid.

This unrefuted testimony, under oath, proves that Reagan knew about the sale of arms to Iran for hostages - which he admits - and seems to imply that he also knew about the diversion of funds to the contras - which he initially denied. The President later shifted his ground, and said there was nothing illegal about his actions.

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It is somewhat unclear whether he was referring to the contra diversion, but common sense and the organization of the White House make it inconceivable that the President was not briefed by Poindexter about the overall plan to divert funds from the arms sales to the contras.

This is not to say that the President knew of North's ``gifts.'' In Venice, however, in response to a question from the press, the President reverted to his original statement that he did not know about the diversion of funds to the contras.

The bottom line is that if he didn't know, he should have known. It is my view that the President knew and authorized the general plan, if not all the details.

The hearings before the joint select committee were smoking guns in other respects. They confirm Sen. Daniel Inouye's statement at the opening of the hearings that this was a sordid affair. It certainly was. We have witnessed a parade of patriots for hire, evidence of shredding of documents, and the misuse of government funds for private purposes.

Any doubt that profits rather than patriotism were an underlying motive of the private intermediaries employed was belied by Albert Hakim's testimony. In addition, the hearings also disclosed venality, unless refuted, not only by the arms brokers but by North. He bought snow tires and groceries from funds involved in transactions with the contras. And Mr. Hakim frankly stated that he set aside $200,000 to ensure the security of North's children. It also appears that money from Iran was used to pay for a security system for North's house, courtesy of Gen. Richard Secord, and that the colonel attempted to cover up by the faking of bills and correspondence.

The laws governing this aspect of the case are clear and unequivocal. No government official can accept such ``gifts.''

It defies credulity that Hakim was acting out of philanthropic and compassionate motives. He, in plain terms, was taking care of the hand that fed him. And, of course, there were other apparent illegalities exposed by the painstaking research of the congressional committee's staff: The shredding party was a notorious one; an assistant secretary of state's deliberate misleading of Congress was another.

Congress is not a court. Its powers to investigate are broad and extensive. I fear, however, that undue emphasis on the illegalities that occurred, and subject to the independent counsel's jurisdiction, may obscure the most important and troublesome aspect of the Iran-contra scandal - the conduct of our foreign policy in this affair.

Illegalities are not to be condoned and will not be. Judge Lawrence Walsh will see to that. But I trust that Congress will not be diverted from the horrendous foreign policy implications of the matter, despite revulsion against the criminalities of the affair.

The President and his aides have publicly and repeatedly stated that our government would not negotiate with terrorists and terrorist states for the release of hostages. Reagan said this to the American public, to our allies, to our adversaries, and to the world. The administration has even criticized friendly countries for engaging in such negotiations.

Yet at the same time, secret negotiations were conducted by the administration with Iran, a terrorist state, about trading arms for hostages. Indeed, the President has stated that he was the ``architect'' of this policy. Reagan, after considerable pressure and with obvious reluctance, finally admitted that the policy was a mistake. It was far more than just a mistake; it was a calamity.

The Iran-contra affair has undermined the President's and our nation's credibility, in Congress, in foreign affairs with friendly countries and adversaries, and among the people both here and abroad.

If proof is needed to confirm this statement, it was provided by the recent summit conference at Venice.

At previous summits, the president of the United States, as the leader of the free world and the greatest superpower, dominated the agenda and largely dictated the results. At Venice, the press uniformly reports, this was not the case. Our allies, while polite, reacted to the loss of the credibility of the President and our foreign policy in the Iran-contra affair by downgrading President Reagan.

THERE can be no doubt that Reagan's presidency is flawed. And a flawed president engaged in damage control may make undue concessions to our adversary in the welcome arms control negotiations or engage in adventurism in foreign policy which may imperil world peace and security.

The present case in point is the Persian Gulf. Congress, on both sides of the aisle, justifiably views the policy to flag and escort Kuwait tankers with the greatest of skepticism. Our allies are giving it only token support.

The President's statement that if we do not act, the Soviets will does not wash. They have established a presence and role in the Gulf. They will not get lost because of our policy. And it does not even appear that Kuwait will refuse Soviet assistance, while courting ours.

In a sense, the diversion of funds to the contras is an important but lesser issue, although questions of legality are involved and not to be minimized. Trading arms for hostages is the paramount one.

Despite the congressional hearings and the prosecutions that will inevitably be initiated by Judge Walsh, there is very little that can be done to repair and restore our country's position as leader of the Atlantic alliance during the rest of Reagan's term or the confidence of our people in the President's conduct of foreign affairs.

No law that can be written can repair the damage or will prevent a repetition of the Iran-contra affair, without impairing the doctrine of separation of powers. The president, as the Supreme Court has said, is the sole organ of the nation in the conduct of our foreign policy. The 535 members of Congress cannot conduct our foreign affairs. They exercise the power of the purse and may deny appropriations for foreign policy objectives they do not approve. But, as in the case of the Persian Gulf, Congress seems to be impotent in foreign policy decisionmaking, short of an actual war.

Therefore, the immediate future is fraught with both danger and difficulty. We must apparently resign ourselves to the fact that our credibility as a nation and in foreign affairs can be restored only by a new president, Democratic or Republican. And since we live in a very unruly world, 18 months is a very long time.

Edmund Burke, the great British statesman, said that in foreign affairs, the choice more often than not is between the intolerable and the undesirable. In the Iran-contra matter, the Reagan administration chose the intolerable path. We, along with the rest of the free world, suffer the consequences.

Arthur J. Goldberg is a former associate justice of the Supreme Court of the United States and former ambassador to the United Nations.

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