Date: March 6, 1983, Sunday, Late City Final Edition Section 7; Page 1, Column 5; Book Review Desk
Byline: By Alan M. Dershowitz; Alan M. Dershowitz, a professor of law at Harvard Law School, is the author of "The Best Defense."
Lead: IN THE SPIRIT OF CRAZY HORSE By Peter Matthiessen. 628 pp. New York: The Viking Press. $20.95.

IN his new book about the American Indian Movement, Peter Matthiessen, author of the award-winning ''Snow Leopard'' and many other works of nonfiction and fiction, admirably dramatizes the tragic plight of native Americans. Since most of us have been educated about our country's original population by cowboy and Indian movies and by commercials that show a stoic brave shedding a tear over our pollution of his land, it is perhaps unremarkable how ignorant most of us are about American Indians. When we visit Mount Rushmore and gaze patriotically at the sculptures of Washington, Jefferson, Lincoln and Teddy Roosevelt, how many of us realize that these American faces were chiseled out of a sacred mountainside? How many of us understand that our ''national monument'' constitutes a continuing affront to many Indians?

Mr. Matthiessen does understand, and he quotes the late John Fire Lame Deer, chief of the Lakotas, to make Mount Rushmore's significance clearer to us: ''It means that these big white faces are telling us, 'First we gave you Indians a treaty that you could keep these Black Hills forever, as long as the sun would shine, in exchange for all of the Dakotas, Wyoming and Montana. Then we found the gold and took this last piece of land, because we were stronger. . . . And because we like the tourist dollars, too, we have made your sacred Black Hills into one vast Disneyland. And after we did all this we carved up this mountain, the dwelling place of your spirits, and put our four gleaming white faces here. We are the conquerors.' ''

IN fact, Mr. Matthiessen has made it impossible for any sensitive reader ever again to enjoy Mount Rushmore guiltlessly or to forget the dark side of the saga of the American West. At the same time he has made it possible for readers to comprehend the Indian viewpoint about events and places that most of us have taken for granted. And in that respect, ''In the Spirit of Crazy Horse'' is one of those rare books that permanently change one's consciousness about important, yet neglected, facets of our history.

But, as Mr. Matthiessen uncomfortably forces us to realize, it is not only a history; it is a continuing story. We cannot simply feel a distant guilt about past massacres, land expropriations and cultural annihilations. We are part of the persisting assault on the dignity, property and life of our original native population.

We are General Custer. Though we no longer dress in the uniform of the cavalry or carry Gatling guns, we continue to employ the weapons of law and power to deny American Indians what rightfully should be theirs. Our giant corporations ravage their land in search of minerals; our confused Government policy on the status of reservations deprives Indians of both real and genuine participation in American political life; our continuing racial discrimination against native Americans - both on and off the reservation - denies them the most basic tools for survival. Mr. Matthiessen probably overstates it when he claims that Pine Ridge Indians ''commonly lived for a hundred years or more'' and now die at an average age of 44. But he is surely correct that we bear some responsibility for the intolerable physical and economic conditions of many Indians today.

Mr. Matthiessen's message is that we can do something now to prevent our children and grandchildren from having to live with our guilt tomorrow. And, more important, he implores us to do something now to assure that the present generation of American Indians will indeed have children and grandchildren who will carry forward the culture of a great people.

But the bulk of ''In the Spirit of Crazy Horse'' is really about contemporary America and the way American law is seen through the eyes of American Indians. It is not the tale of a particular tribe or geographically centered culture but rather of a political group spanning the entire spectrum of tribes and geography - the American Indian Movement, or AIM, as it has come to be known. Mr. Matthiessen focuses on the deadly confrontation between AIM and the F.B.I., and specifically on the execution-style murder of two F.B.I. agents at Ogala, S. D., on June 26, 1975, and the events that followed.

The basic facts are not in dispute: After years of virtual warfare between AIM militants and F.B.I. agents, a lethal ''firefight,'' started by armed Indians and involving several F.B.I. agents, took place. A rifle shot from a distance left an Indian named Joe Killsright Stuntz dead. Two F.B.I. agents, Jack Coler and Ronald Williams, were killed at close range after being seriously wounded from a distance.

The issues of guilt and innocence - both in their technical legal sense and in their broader moral sense - are still vigorously disputed; they form the basis for much of Mr. Matthiessen's narrative. He is at his best when he discusses the complex and compelling moral issues. His theme is that the violence of the American Indian Movement cannot be understood, or judged, in a vacuum; it must be viewed against the suffering inflicted upon the forebears of AIM - and all Indians - over several centuries. But Mr. Matthiessen is at his worst when he becomes a polemicist for his journalistic clients. He is utterly unconvincing - indeed embarrassingly sophomoric -when he pleads the legal innocence of individual Indian criminals. And let there be no mistake: The American Indian Movement - like every militant fringe group - contains its share of violent criminals who seek to glorify their predatory acts under the flag of the movement. A history of discrimination may explain and, in extreme cases, perhaps even excuse criminality. But it can rarely justify it, especially against innocent victims.

The two executed F.B.I. agents were gunned down at close range. They were disarmed, helpless and probably begging for their lives. There were no eyewitnesses, or at least none who would testify, to who murdered them. But considerable circumstantial evidence pointed toward Leonard Peltier, one of the most militant AIM leaders. There can be little doubt that the F.B.I. was out to get Mr. Peltier. Nor can there be any doubt that the F.B.I. desperately wanted to bring to justice the murderers of its agents. The real question - and the one that Mr. Matthiessen answers in the affirmative - is whether the F.B.I. framed Mr. Peltier for killings he may not have committed.

On this issue, Mr. Matthiessen not only fails to convince; he inadvertently makes a strong case for Mr. Peltier's guilt. Invoking the cliches of the radical left, Mr. Matthiessen takes at face value nearly every conspiratorial claim of the movement, no matter how unfounded or preposterous. Every car crash, every unexplained death, every unrelated arrest fits into the seamless web of deceit he seems to feel was woven by the F.B.I. and its cohorts.

This is not to dispute all of AIM's complaints against the F.B.I. Some - such as infiltration of the movement for purposes of engendering internal distrust and dissension - carry indications of credibility. These tactics, indefensible though they are, have been commonly used by the F.B.I. against radical groups of all political persuasions. But other allegations, such as systematic beatings and ''contracts'' on the lives of AIM leaders, do not seem credible. Mr. Matthiessen surely provides no proof beyond the self-serving claims of the alleged victims and their partisan lawyers. As I was reading Mr. Matthiessen's ''legal brief,'' I found myself wanting to shout at this good-hearted naif, ''Don't you know that's the kind of nonsense every convicted murderer tries to get you to believe; I get dozens of these letters every week.'' But Mr. Matthiessen seems to have been taken in and to have left most of his otherwise excellent critical faculties at home when he interviewed Mr. Peltier and his followers.

Though the book purports at times to present an objective appraisal, Mr. Matthiessen finally acknowledges - near the end - that his ''account of the Peltier case argued the position of traditional Indians and their allies in the American Indian Movement.'' And at the very close of the book, he describes how ''I told Leonard I believed (that he hadn't killed the agents), and I did, and I do.'' And I wonder. Why does Mr. Matthiessen go out of his way so frequently to make disclaimers such as ''my personal opinion of his guilt or innocence (is) of no importance''? And why does he quote one of the AIM lawyers as saying: ''I know Bill Kunstler (another of the AIM lawyers) thought they killed the agents, but he believes that they were innocent whether they did it or not''?

IN the end, Mr. Matthiessen tries to have it both ways. He says that ''from the Indian's viewpoint - and increasingly from my own - any talk of innocence or guilt was beside the point.'' But he insists nonetheless that the evidence ''made it plain that Peltier had been railroaded into jail.''

''In the Spirit of Crazy Horse'' documents the imperfection of the American legal system, especially when it is mustered against a political group - even one as violent as the American Indian Movement. It is also a tragic account of the self-destructive quality of many of the self-appointed leaders of that movement. Drawn from among the most vocal, the most violent and the most radical native Americans, many of these leaders exploited their newly discovered heritage for their own personal ends. Some have ended where they belong - in jail. Others have simply drifted away. What remains are thousands of poverty-stricken Indians, first driven by years of neglect to accept false prophets of violence and then shorn even of that ineffective leadership.

The tragedy of Mr. Matthiessen's book is that he fails to understand that his heroes - the radicals of AIM - did not act in the selfless spirit of Chief Crazy Horse, that noble 19th-century leader of Indian resistance. They acted more in the violent spirit of Custer. By doing so, they helped to destroy the dream and hopes of American Indians.

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