Special Service?

Information was being passed

No one in the White House is twisting in the wind."

With that self-inflicted reminder of the Watergate era--echoing advice by John Ehrlichman to John Dean that L. Patrick Gray should be left to "twist slowly, slowly in the wind" rather than be quickly confirmed by the Senate as FBI director--President Reagan last week tried to reassure anxious former campaign aides. He was suggesting that none will be fired from his present position because of the tempest over how his staff secured Jimmy Carter's debate briefing book in 1980.

According to Reagan's friend Senator Paul Laxalt, the President had specifically said in a private meeting that James Baker, his chief of staff, was "secure" in his job. Baker has admitted seeing the briefing papers. Other White House sources said that the President also retains his confidence in Budget Director David Stockman, who used the Carter book to rehearse Reagan for the debate. Just where that leaves CIA Director William Casey, Reagan's 1980 campaign manager, who has obliquely denied having given the papers to Baker, as Baker claims he did, was not as clear. Washington press pundits continued to speculate last week that either Baker or Casey, who represent rival political factions among Reagan's top advisers, will have to be sacrificed after FBI and congressional investigators complete their separate probes of the briefing-book caper. One top aide, perhaps self-protectively, predicted, however, that "everyone will keep his head."

Despite news reports that Reagan's staff was "paralyzed" by preoccupation with the Carter papers fuss, Baker in particular was carrying out a busy schedule of normal White House business last week. Indeed, the staff was settling back into a state of near normality. In the Reagan Administration, however, it is normal for the Baker-Stockman wing of advisers and those led by Casey, Presidential Counsellor Edwin Meese and National Security Adviser William Clark to eye each other with considerable suspicion.

Actually, the heat may now shift from Baker to Casey. TIME has learned that, as rumored, Casey did indeed set up a political intelligence-gathering apparatus for the Reagan campaign. But it was not simply a casual use of retired military officers asked to stay alert for any U.S. aircraft moves that might signal the Reagan camp that Carter was about to gain the freedom of the U.S. embassy hostages in Iran--the "October surprise" that Reagan's political aides feared. Instead, cooperative former agents of both the FBI and the CIA were used to gather political information from their colleagues then still active in the two agencies. However it may have happened, Carter, in his first substantive comment on the affair, said last week that the Reagan camp got hold of "the most sensitive political documents we had," revealing "the essence of our campaign."

TIME's sources would not reveal just what type of information was acquired, although they contend that Reagan campaign aides were pleased to get and use it, so long as they could not be linked with how it was obtained. Casey, proud of his reputation as an overseas agent for the World War II Office of Strategic Services, was described as virtually the only Reagan campaign adviser willing to risk recruiting former FBI and CIA agents to provide information for political purposes.

Casey had one trusted aide who other campaign workers suspect had a role in the intelligence network. He is Max Hugel, a millionaire merchant later appointed by Casey as his top CIA deputy in charge of covert operations. Hugel resigned from the agency in July 1981, after he came under fire for his previous business dealings and his lack of visible qualifications for his high CIA post. At the same time, Casey was widely criticized for having chosen Hugel.

Oddly, it appears that the FBI, which on June 29 was ordered by the Justice Department at President Reagan's direction to take full charge of the investigation into how the Carter papers reached Reagan's campaign staff, might not have to inquire how its own agents may have been involved in helping the Reagan campaign.

Under guidelines drawn up by Attorney General William French Smith, the FBI is directed to determine only whether any Government property was, in effect, stolen in the transfer of Carter papers (including some National Security Council documents) to the Reagan staff. The clandestine passing of information by FBI or CIA agents to Casey or Hugel would not fall within the theft statutes, although any divulging of classified information could, of course, be considered a possible crime.

Hugel could not be reached, but he has told associates that he was not involved in any political spying operation. Casey responded to TIME's inquiries about the allegations of his having organized intelligence activities during the 1980 campaign with an official statement released by a press aide. It said: "No such thing was ever authorized by or known to any senior officials in the Reagan-Bush campaign. I don't think it ever happened." This file is automatically generated by a robot program, so viewer discretion is required.