Why is Mr. Dukakis holding back? He could be scoring hits by emphasizing Reagan-era scandals

IS Michael Dukakis throwing in a winning hand? Some of the biggest government scandals in the 20th century - not excluding Teapot Dome - have occurred during the Reagan administration. These scandals are not directly chargeable to Vice-President George Bush. But he cannot seek to benefit from his connection with Ronald Reagan without also taking some heat for the administration's involvement in billions of dollars of corruption, fraud, rigged contracts, overcharging, and shoddy products in military spending.

Most serious of all, despite the documented revelations of criminality by the United States General Accounting Office and congressional committees, no one has gone to jail. The Pentagon's own investigations were undertaken only after expos'e was piled on expos'e. None of the illegal practices that figured in the GAO disclosures were refuted in the Pentagon's own inquiry, yet the major offenders are still in business.

For example, General Dynamics was charged with a long list of illegal practices involving more than $100 million. It was only after congressional and public expos'es that the administration conducted its own ``investigation,'' which resulted in suspension of GD contracts. After a few months, the dust having settled in the press, the contracts were reinstated. Again, the fact that massive sums of taxpayers' money were involved in illegalities served as the basis for neither criminal action nor cancellation of dealings.

The powder-puff treatment of General Dynamics has been no exception. Other major military contractors have also escaped criminal proceedings for violation of law.

Michael Dukakis's reversal on his ``star wars'' position - he now claims he is not unalterably opposed to testing and deployment - is an obvious effort to refute Republican charges that he is ``soft on defense.''

Instead of allowing himself to be backed into a corner, Mr. Dukakis ought to be dramatizing the fact that military defenses have actually been weakened under the Reagan administration. There is no strength in a program shot through with fraud, corruption, and defective weapons and equipment. The administration has used slogans to conceal inefficiency, incompetency, and waste.

Dukakis can tick off a long list of flawed weapons that could place US forces in jeopardy - weapons that were continued in production despite explicit knowledge by company executives of serious imperfections. He can point to supposedly foolproof inspection measures and procedures that were somehow bypassed or sidetracked. Involved here are not a few military trinkets but front-line tanks, planes, ships, guns.

There is major political capital for Dukakis in the way legal requirements for competitive bidding has been bypassed. Again, investigators for the GAO and congressional committees have accumulated incontrovertible evidence of rigged bidding. Usually, the favored contractor has turned in the lowest bid, received the contract, and then, some weeks or months later, submitted sharply higher revised estimates that are routinely approved. How many billions of dollars have figured in the collusion and cheating one can only guess.

The American people don't like to be swindled, gulled, or deceived. Some of the biggest political upheavals in our history have come about as the result of expos'es of corruption or scandals involving public funds. An important plus for Franklin D. Roosevelt in rising to the presidency was Tammany Hall corruption involving Mayor Jimmy Walker. Several decades earlier, another Roosevelt - Theodore - came to national attention through similar actions against crooks in government. In recent months, the Iran-contra affair produced a storm of public protest. The political capital from these outrages has not been exhausted.

The Iran-contra scandal cannot be separated from disclosures of fraud in allocating military contracts. Both come off the same spool - increasing political power in the hands of the military. The use of funds from secret sales of weapons abroad for political purposes is another example of increased and unobstructed encroachment by the military on US foreign policy. The fact that undercover political operations by the Pentagon are financed by a ``black budget'' is another outrage that has yet to come into the full glare of national attention.

The biggest mystery of the present presidential campaign is why Dukakis is stepping around these scandals. The key question he ought to be asking the American people is why the President himself has not been hit with the prime responsibility. Why has Reagan permitted the nation's defense to be undermined by fraud, misspending, overcharging, rigged ``competitive'' bidding, the production of unacceptable military merchandise, and the hiring of highly paid Pentagon officials by major contractors - former officials who are placed in positions of steering the acquisition of military contracts totaling billions of dollars?

The US's security is indeed a major issue in the campaign. Not just Dukakis but the American people ought to be asking whether we can entrust the nation's defense to people who have demonstrated that they can't be trusted with the nation's wealth. We will not prevail over communism or any other world economic system by allowing the term ``military security'' to serve as a fig leaf for massive deficits that mortgage the American future.

The American people are not dupes. They will rise up mightily against stealing and fraud if the case can be presented without mumbling or stumbling. Such being the case, why is Michael Dukakis holding back?

Norman Cousins, former editor of The Saturday Review, is author of ``The Pathology of Power,'' W.W. Norton & Co., 1987, which anticipated the current revelations of Pentagon misspending and overspending.