Iran-Contra prosecutors have concluded that President Reagan knew about the plan to swap arms for hostages from the beginning and was warned several times by a key aide that it was illegal.

That conclusion is in the indictment returned this week against former Defense Secretary Caspar Weinberger. The indictment, reviewed by The Associated Press, says special prosecutors drew the picture of Reagan's role from an examination of Weinberger's extensive notes.The indictment obtained by independent counsel Lawrence Walsh charges Weinberger with five felony counts of lying and covering up the Iran-Contra affair. One count accuses him of concealing the existence of 1,700 pages of his personal notes from 1985 and 1986. The notes were found in the Library of Congress.

The indictment says that twice in late 1985, Weinberger argued against arms shipments to Iran and told the president that the shipments would be illegal.

Weinberger, the highest-ranking Reagan administration official charged in the case, has vigorously denied the allegations. Reagan's Washington attorney, Theodore Olson, declined comment Wednesday on the indictment's description of Reagan's role.

Meanwhile, the Washington Post reported Thursday that prosecutors hope to use Weinberger's notes and other evidence to show that in three White House meetings in November 1986, Reagan and other top administration officials agreed on a story line that hid the president's role in the arms shipments. The newspaper quoted unnamed sources familiar with both sides of the case.

Reagan's own statements on Iran-Contra have varied widely. In March 1987, he acknowledged during a nationally televised speech that the scheme was an arms-for-hostages swap. Later, he denied it.

In many cases, he simply pleaded an inability to recall. "One thing still upsetting me, however, is that no one kept proper records of meetings or decisions," Reagan said in the March 1987 speech.

The indictment's central allegation about Reagan - that he knew of the Iran initiative by November 1985 - is not new. Congressional committees reached the same conclusion in their 1987 report on the Iran-Contra scandal.

According to the indictment:

- National security adviser Robert McFarlane told Reagan, Weinberger and Secretary of State George Shultz in August 1985 about an Israeli proposal to sell arms to Iran to gain the release of American hostages.

- Weinberger told McFarlane on Nov. 20, 1985, he objected to the shipment of Hawk missiles to Iran in exchange for hostages, but McFarlane replied Reagan had decided to do so through Israel.

- Weinberger warned Reagan a few days after the Nov. 24, 1985, shipment of 18 Hawk missiles to Iran that such shipments were illegal.

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- McFarlane outlined a plan for additional arms sales to Iran at a Dec. 7, 1985, White House meeting, but Weinberger again argued the sales were illegal. "President Reagan responded that he could answer charges of illegality but that he could not answer the charge that he had passed up a chance to free the hostages," the indictment said.

- Three days later, McFarlane told Reagan and others he opposed additional arms sales but that the United States needed to replace TOW missiles that Israel had shipped to Iran in August 1985.

- At a Jan. 7, 1986, White House meeting, "the president favored the plan to sell missiles to Iran, through Israel, in exchange for the release of American hostages," the indictment said. Then-Vice President George Bush attended this meeting, the indictment said.

Reagan signed a document authorizing the arms sale plan 10 days later.

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