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  • Mike Martinez

Scoundrels: Political Scandals in American History—The Iran Contra Scandal

As I discuss in my forthcoming book Scoundrels: Political Scandals in American History, the Iran-Contra scandal occurred during President Ronald Reagan’s second term in the White House. The affair started, as such affairs often do, with good intentions that led to abysmal, illegal results. Originally, the Reagan administration sought to free seven American hostages held in Lebanon by the terrorist group Hezbollah. The United States government had a long-standing policy of not paying ransoms for hostages, fearing that such transactions only encouraged extremist groups to kidnap Americans in exchange for payments. In the meantime, as the government debated a means to free the hostages in the Middle East, President Reagan expressed his support for the Contras, a group of right-wing rebels opposed to the Marxist Sandinista regime in Nicaragua. Under the Boland Amendment in American law, the United States government could not provide funding for the Contras. To circumvent this requirement, members of the Reagan administration, primarily members of the National Security Council (NSC), hatched a scheme to sell American arms to Iran, thereby relying on Iran’s contacts with Hezbollah to hasten the release of the hostages in Lebanon. Afterward, the administration would use the proceeds from the arms sale to support the Contras.


It was unclear then, or later, how much President Reagan knew about the arms-for-hostages scheme. When the story broke late in 1986, the president publicly acknowledged that the weapons transfers had occurred, but he initially insisted that the government never traded arms for hostages. Later, he amended his statement as the facts came to light. Congress launched several investigations into the matter. A commission chaired by former Texas Senator John Tower along with former Secretary of State Edmund Muskie and former National Security Advisor Brent Scowcroft concluded that the director of the Central Intelligence Agency (CIA), William Casey, should have briefed President Reagan and informed Congress of the Iran-Contra matter. An independent counsel, Lawrence Walsh, later indicted 14 administration officials, including former Secretary of Defense Caspar Weinberger and NSC aide Oliver North, for their roles in the matter. Some critics believed that President Reagan should have been impeached, but his popularity was too high and his role in the affair too murky to make a successful impeachment proceeding likely.


The roots of the scandal stretched back to 1961, when the Marxist Sandinista government came to power in Nicaragua. It was the apex of the Cold War, and Americans feared that the spread of Communism threatened the safety and security of the Western Hemisphere. The incoming Kennedy administration invested much time and energy into combating the regime of Cuba’s dictator, Fidel Castro. Administration officials thought that Central America and South America might succumb to Communism, exactly as Cuba had, and such an outcome was unfathomable. Kennedy’s Alliance for Progress (Alianza para el Progreso) was designed to reach out to Latin America to bring vulnerable countries into the community of non-Communist western nations.


The United States eliminated aid to Nicaragua when the Sandinistas arrived, but the government remained alert for opportunities to oppose any Marxist regime in Latin America. The leftist Sandinista government persisted for two decades. By 1981, a new American president, Ronald Reagan, was anxious to promote regime change in Nicaragua, although he preferred covert action to a full-blown military operation.


Reagan had built a successful public career as a staunch, vocal opponent of Communism. He was criticized for a simplistic world view—for Reagan, a country was either anti-Communist and pro-American, or a Communist-sympathizing enemy—but he shrugged off his detractors’ objections. Elected president in a landslide in 1980, Reagan believed that his anti-Communist ideology enjoyed a mandate among the American people, and he would use his political capital to fulfill that mandate. His administration would resist Communism whenever and wherever it existed.


The new president was convinced that the Nicaraguans were importing their leftist politics to nearby El Salvador. To forestall further Communist gains in the region, Reagan authorized the CIA to assist a small group of anti-Sandinista rebels, the Contras, in their efforts to undermine the regime. In January 1982, he signed a top-secret National Security Decision Directive to funnel almost $20 million in military aid to the rebel group.


In public, Reagan was circumspect. He did not advertise his desire for regime change. His secret actions in 1981 and early 1982 were justified, he thought, because the law allowed CIA to undertake covert action if the president reported to the House and Senate intelligence committees “in a timely fashion” that national security interests required such actions. The definition of a timely fashion was not altogether clear.


As distasteful as the Sandinistas were to Reagan and other ardent anti-Communists, the Contras were hardly paragons of virtue. They were a violent band of thugs that did not enjoy popular support. They also were poorly led, failing to win military victories against the Sandinistas. Apart from resisting the Sandinistas and spewing the sorts of anti-Communist bromides that Washington officials loved to hear, the Contras had little to recommend the administration’s continued support. Yet Reagan and his allies dug in their heels, refusing to give up on the group. The rationale was that no one in Nicaragua had clean hands, but the anti-Communist Contras were the best of a bad lot. The enemy of my enemy is my friend.


Democrats in Congress were worried that the Reagan administration was so reflexively anti-Communist that the United States was being driven to defend indefensible causes, such as the dastardly Contras. Supporting a band of rabble rousers was bad policy; it was one step removed from encouraging lawlessness. Some Democrats also questioned whether the United States government had any business interfering in the internal politics of a sovereign nation regardless of the circumstances. The success or failure of the Sandinistas did not threaten the national security of the United States.


To drive home the point, in December 1982, Congressman Edward Boland of Massachusetts offered an amendment to a defense appropriations bill for Fiscal Year 1983 to prohibit federal funding “for the purpose of overthrowing the government of Nicaragua.” The administration recognized a subtle distinction. The CIA could still assist the Contras, provided that the assistance as not aimed at overthrowing the Sandinistas. Anything short of regime change was permissible. Critics viewed this fine line as a distinction without a difference. The Democrats had sought to enact a comprehensive ban on all assistance to the Contras, but they did not have the necessary votes to pass such an amendment.


In December 1983, Congress again modified the administration’s relationship with the Contras by authorizing a paltry $24 million as a ceiling of financial support for the group. Shortly thereafter, members of Congress learned that the administration had authorized the CIA to lay mines in Nicaraguan ports without informing the House and Senate intelligence committees. Incensed, both chambers of Congress rejected an administration request for additional funding in Nicaragua. A second Boland Amendment expressed congressional intent to eliminate all funding for the Contras in the future.


The Reagan administration and the conservative Heritage Foundation argued vehemently that the Soviets were attempting to gain a foothold in the Western Hemisphere. Supporting the Contras was the most effective means of countering Soviet aggression. To lose Nicaragua was potentially to lose much of Latin America to Communist infiltration. This argument was a revitalization of the domino theory in American foreign policy.


First developed after World War II, the domino theory suggested that Communism was a figurative contagion that, like a virus, could spread easily from one country to another. If the nations of the Free World did not oppose Communism as it arose in developing nations, the ideology would spread to the First World and eventually engulf nations such as the United States. It was preferable to fight Communists in the jungles of Vietnam, the thinking went, than to fight them on the beaches of Santa Monica or Miami.


By the 1980s, after America had spent billions of dollars and tens of thousands of soldiers’ lives to fight Communism in the Vietnam War, the domino theory was largely discredited. “Losing” a nation to Communism did not necessarily mean that the United States and her allies were imperiled. Communism could and should be resisted in strategic areas, but the contagion metaphor was inaccurate and overwrought. Choices about when to fight Communism and when to leave it alone required a nuanced analysis on a case-by-case basis, with protecting America’s national security as the cardinal objective. American leaders needed to have greater faith in the resilience of democratic institutions. Along these lines, a Bureau of Intelligence Research report produced for the State Department found that the Reagan administration’s anti-Soviet stance in Latin America was exaggerated. Fighting the Sandinistas was not in America’s national interest. The presence of a Marxist regime in Nicaragua, while certainly not desirable, posed no serious threat to the United States or her major allies.


Reagan disagreed. He had spent his political career arguing against the supposed rapacity of Communists who were eager to gobble up territory for their own insidious ends. Now that he was in power, he would not relent. Consequently, it was clear that the administration would stubbornly persist in its belief that helping the Contras was in the country’s national interest. Contrary evidence or arguments be damned.


To ensure that the administration was not emboldened to invest more resources into the fight, Congress approved a third Boland Amendment. It prohibited all aid to the Contras from any United States government agency, not just the CIA. The language provided that “During fiscal year 1985, no funds available to the Central Intelligence Agency, the Department of Defense, or any other agency or entity of the United States involved in intelligence activities may be obligated or expended for the purpose or which would have the effect of supporting, directly or indirectly, military or paramilitary operations in Nicaragua by any nation, group, organization, movement or individual.” If the president issued a report to Congress after February 28, 1985, stating that further assistance was needed for “military or paramilitary operations” prohibited by the Boland Amendment, Reagan could spend $14 million in funds if Congress passed a joint resolution expressing its approval for the expenditure.


The exceptions helped the administration, but not much. Reagan believed that more had to be done, and soon. He flatly refused to admit defeat. On May 1, 1985, he tried a different approach, announcing that his administration considered Nicaragua to constitute “an unusual and extraordinary threat to the national security and foreign policy of the United States.” This presidential finding allowed him to declare a “national emergency.” Based on the declaration, the United States imposed a trade embargo on Nicaragua.


Recognizing that the Contras were desperate for aid, Reagan was anxious to find a means of meeting the group’s needs without violating the letter of the law. If he could not rely on government agencies to accomplish the objective, he mulled over a novel option: The use of private organizations to fund the Contras. In short, the administration would outsource a portion of its foreign policy. That such an end run around Congress violated the spirit of the law, or that such circumvention created a dangerous precedent for subsequent cases of executive overreach, mattered little to a presidential administration in the heat of a partisan battle.


Reagan’s NSC created “the Enterprise,” a network designed to smuggle arms to the Contras without congressional knowledge or authorization. Headed by retired United States Air Force Major General Richard Secord, the Enterprise was characterized as a private sector organization, but it was subject to NSC dictates. A Marine lieutenant colonel assigned to the NSC, Oliver North, had recruited Secord.


North was fiercely loyal to the administration’s goals, and he took to his duties with gusto. Recognizing that time was of the essence, North reached out to the CIA director, William Casey, to provide intelligence to the Contras as well as arrange for training in military tactics. North also arranged back-channel deals for the Contras to purchase covert arms supplied by countries outside of the United States. The rebels still needed money, but North’s creative deal-making provided the Contras with short-term assistance while he searched for long-term funding.


One promising method was to approach American allies for support. The United States, a wealthy nation, did not customarily meet with allies to ask for money, but desperate times called for desperate measures. Reagan’s national security adviser, Robert “Bud” McFarlane, approached King Fahd of Saudi Arabia to solicit funds. The Saudis were generous, initially supplying a million dollars a month, and eventually increasing their contribution.


In the meantime, Oliver North, ostensibly acting under the auspices of an ambiguously named non-profit organization, the National Endowment for the Preservation of Liberty (NEPL), made the rounds among wealthy private donors in the United States. He developed a polished pitch that generated dollars and controversy. Critics charged that the administration should not solicit private donations for America’s public business, essentially treating government functions as a business operation subject to the traditional rules of commerce. North was unfazed. He explained to all who would listen that he and the administration had complied fully with the terms of the Boland Amendment. Congress could prohibit funding for the Contras, but foreign policy was well within the purview of the executive branch. If administration critics were dissatisfied with the North’s fundraising and the privatization of American foreign policy, they should pressure Congress to restore financial assistance to the Contras.


North also stumbled upon a means of funneling money to the Contras from Iran. At first blush, it seemed an odd choice. In the years since the Iranians had stormed the American embassy in Teheran and taken American hostages in 1979, the Iranian regime had been deemed hostile to the nation’s interests. Yet the Reagan administration recognized the advantages in dealing with Iran behind the scenes while publicly continuing the American policy of treating the regime as anathema. Perhaps Americans could do business with Ayatollah Ruhollah Khomeini, Iran’s religious leader, after all.


Iran desperately needed arms as well as spare parts for its mostly American-made weaponry. Embroiled in a long, bitter war with Iraq, Iran was open to purchasing arms even from the “great Satan,” the United States. The administration recognized an opportunity. If armaments could be transferred surreptitiously to Iran, the money from the sales could be channeled to the Contras. It was a creative means of circumventing American law without attracting undue public or congressional attention. This arms-for-hostages exchange was not the administration’s original goal, but the policy developed after Congress closed off financial support for the Contras.


During the summer of 1985, Bud McFarlane wrote a national security decision directive calling for improved relations with Iran to prevent Teheran from acquiring military assistance from the Soviet Union. The directive allowed the United States government to sell military equipment to Iran. When Secretary of Defense Caspar Weinberger saw the directive, he dismissed McFarlane’s plan as “almost too absurd to comment on.” Similarly, Secretary of State George Schultz reacted negatively, remarking on the incongruity of designating Iran as a state sponsor of terrorism while agreeing to sell arms to the country. CIA Director William Casey was the only high-ranking foreign policy member of the administration to support McFarlane’s plan.


The plan was predicated on the possibility that a moderate faction existed within the Iranian government. This was a difficult position for the Reagan administration to take without appearing hypocritical. When Reagan was campaigning for president in 1980, the candidate bitterly criticized the Democratic incumbent, Jimmy Carter. Carter was president when the Iranian revolution occurred, and the Khomeini regime captured Americans inside the United States embassy. The ongoing hostage crisis showed how weak President Carter was, and Reagan continually blasted the administration for not adopting a tougher stance against Iran. If he were elected, Reagan would be a strong commander in chief, refusing to kowtow to foreign thugs. During a Reagan administration, the United States would not suffer such indignities.


Reagan won the White House in a landslide. In public, he continued his hard line against Khomeini, repeatedly insisting that the United States would never negotiate with terrorists. Unlike his predecessor, this new president would not become yet another victim to a hostage crisis.


Unfortunately for Reagan, Iranian-sponsored terrorists kidnapped Americans and held them hostage despite his bellicose rhetoric. Nothing as dramatic as the storming of the American embassy occurred, but Iranian-backed terrorist groups such as Hezbollah kidnapped hostages one at a time with apparent impunity. Clearly a tough stance alone did not solve the problem. When he heard personal stories of how the hostages were treated, Reagan expressed genuine concern. He longed for a means of securing their release without appearing to give in to terrorists.


Perhaps members of the administration could forge a path forward by linking all these foreign policy problems together. America’s great ally in the Middle East, Israel, was struggling to deal with the Iranian regime, and that nation had been supplying American-made spare parts for armaments to Iran since 1981. Building off its relationship with Israel, the Reagan administration arranged a convoluted scheme to rely on intermediaries. The United States would ensure that Israel acquired arms that would be supplied to Manucher Ghorbanifar, an Iranian arms dealer and former secret policeman. In theory, Ghorbanifar would then supply the arms to the moderate Iranians, who would use the weapons in the civil war with Iraq. In return, Iran would pressure Hezbollah, the terrorist group that had kidnapped seven American hostages, to release them from captivity.


Aside from violating the policy of not negotiating with terrorists, the proposal was risky. Nothing guaranteed success. Terrorist groups could not be trusted to honor their promises and release the hostages. Even if they did, nothing prevented them from seizing new hostages a week later. When he heard that President Reagan was considering this plan, Secretary Schultz warned him, as the secretary of state later recalled, that “we were just falling into the arms-for-hostages business and we shouldn’t do it.”


Reagan ultimately resolved to move forward because he had faith that Akbar Hashemi Rafsanjani, the influential speaker of the Iranian parliament and Khomeini’s likely successor, sought a rapprochement with the United States. If the United States government made the necessary overtures, Reagan believed that Rafsanjani would respond in kind. Administration officials had no doubt that Rafsanjani could order Hezbollah to produce the hostages. Whether Rafsanjani was genuine in his willingness to work with the Americans or was feigning good faith remains an open question to this day.


The United States completed its first arms sale to Iran as early as 1981, but most transactions occurred from August 1985 through October 1986, for a total of nine exchanges. After the first sale, Bud McFarlane resigned as national security adviser, citing his desire to spend more time with his family. His successor, Admiral John Poindexter, came into office just as the administration modified its arms-for-hostages scheme. In lieu of working with the moderate civilian faction in Iran, the Reagan administration, still using Israel as an intermediary, tried to ensure that Iranian army officers received the arms.


Reagan always insisted that “[w]e were not trading arms for hostages, nor were we negotiating with terrorists,” but some members of his administration were skeptical. Aside from Schultz, Secretary of Defense Caspar Weinberger staunchly rejected the plan and its rationale. Reagan went ahead, though. He bypassed the State and Defense Departments, allowing the NSC to take the lead. The plan soon entered a new phase, with a new lead character at the helm.


As soon as McFarlane resigned, Oliver North, still struggling to arrange financing for the Contras, offered a new plan. Rather than supplying arms to Iran through Israel, the sales should be made directly to the Iranian regime. The United States could insist on a price markup as well. North had been searching for funding to assist the Contras without directly violating the Boland Amendment, with limited success. Now, he thought he saw a way to accomplish multiple goals simultaneously. If funds from the Iranian arms sales could be diverted to assist the Contras, the administration would be well positioned to free the hostages in the Middle East and combat Marxism in Latin America.


Admiral Poindexter, as the new national security adviser, might have halted the arrangement. Bud McFarlane was out of office, and a new man could have modified the plan, possibly convincing Reagan to find a safer, less risky alternative. Instead of reining in North, however, Poindexter provided his assistant with increased discretionary authority in the arms-for-hostages deal. Imbued with more power and responsibility than most lieutenant colonels possess, North charged forward, directing the scheme with virtually no oversight. Reagan had established general priorities, but the president did not know about the operational specifics. The lack of knowledge about the details gave Reagan plausible deniability if the operation failed.


For their part, the Iranians initially scoffed at the suggested price markup for the armaments, but they could not hold out indefinitely. The Iranian army sorely needed the weapons. In February 1986, the United States delivered 1,000 TOW (Tube-launched, optically tracked wire-guarded) anti-tank missiles. Unfortunately, no hostages were released as a direct result of the sale.


In May 1986, North and his former boss, Bud McFarlane, accompanied by an Israeli official, visited Tehran traveling under forged Irish passports. Their objective was to facilitate increased arms sales. The men were humiliated to discover that they would not meet with high-ranking Iranians. Instead, they were shepherded into sessions with mid-level bureaucrats. Incensed at the insult, McFarlane exclaimed, “[a]s I am a Minister, I expect to meet with decision-makers. Otherwise, you can work with my staff.”


From beginning to end, the trip was a debacle. In addition to keeping the Americans waiting, the Iranians increased their demands, insisting that the Israelis abandon the Golan Heights and arguing that spare parts for Hawk missiles must be shipped before any additional hostages were released. Disgusted, the group departed after four days. McFarlane advised President Reagan to discontinue his outreach to the duplicitous Iranians.


The administration ultimately rejected McFarlane’s advice. Although Reagan understood that the Iranians did not always act in good faith, his administration had invested much time and energy in the project. He directed his men to continue their efforts. In the meantime, at North’s suggestion, the administration modified its previous policy, which had called for all the hostages to be released simultaneously. Under North’s new plan, shipments would be sequential, with an arms sale following a hostage release.


As the scheme changed, the American team expressed frustration with Manucher Ghorbanifar, the Iranian arms broker. Aside from the difficulty they experienced negotiating with the Iranians, administration officials came to see Ghorbanifar as a dishonest intermediary. He was supposed to assuage the concerns of both sides, but he appeared to be far more interested in misrepresenting everyone’s position to seek an advantage for himself. To disentangle themselves from Ghorbanifar, the Americans, acting on Richard Secord’s recommendation, developed a second, and presumably more reliable, intermediary, Ali Hashemi Bahramani, Rafsanjani’s nephew. North was pleased with the change. He invited Bahramani to Washington, D.C., and provided him with a guided tour of the White House late at night.


Much to the Americans’ dismay, Bahramani eventually brought in many more Iranians to the arms negotiations. This greater number of participants meant that the Americans were negotiating with hardliners as well as moderates within the Iranian government. Moreover, with the increased number of participants, the possibility of public disclosure increased.


The scheme encountered difficulties when it came to funding the Contras as well. Secord later testified that his group spent approximately $3.5 million financing the Nicaraguan rebels. Among other things, Secord’s men used the money to purchase airplanes to deliver supplies to the Contras. The airdrops commenced in April 1986 and continued until the Nicaraguan army shot down a transport plane on October 5, 1986. Everyone on board died except for a loading specialist, Eugene Hasenfus, an American civilian captured by the Nicaraguans. At a press conference held shortly after his capture, Hasenfus revealed that he had flown supplies to several CIA hotspots around the world, including Nicaragua. His statements greatly embarrassed the Reagan administration. Worse was yet to come.


On November 3, 1986, a pro-Syrian Lebanese magazine, Ash-Shiraa, reported on the arms-for-hostages plan, including details about timing and shipments. The story even revealed McFarlane’s and North’s secret Teheran visit. Although the article did not reveal the source of the information, the Americans believed that the disgruntled Ghorbanifar probably leaked the material. Mehdi Hashemi, a high-ranking member of the Islamic Revolutionary Guard Corps, was another possible source.


The Reagan administration initially denied the stories of an arms-for-hostages plan, but with the Hasenfus press conference and the Ash-Shiraa story coming so close together, it was impossible to conceal American involvement. In the meantime, angry members of Congress demanded answers. Faced with few good options, President Reagan spoke to the American people on the subject.


In a televised address from the Oval Office on November 13, 1986, Reagan explained that for “eighteen months now, we have had underway a secret diplomatic initiative to Iran. That initiative was undertaken for the simplest and best of reasons: to renew a relationship with the nation of Iran, to bring an honorable end to the bloody six-year war between Iran and Iraq, to eliminate state-sponsored terrorism and subversion, and to effect the safe return of all hostages.”


As for a linkage between the arms sales and hostage negotiations, Reagan empathically denied the existence of a causal relationship. “The charge has been made that the United States has shipped weapons to Iran as ransom payment for the release of American hostages in Lebanon, that the United States undercut its allies and secretly violated American policy against trafficking with terrorists,” he said. “Those charges are utterly false. The United States has not made concessions to those who hold our people captive in Lebanon. And we will not. The United States has not swapped boatloads or planeloads of American weapons for the return of American hostages. And we will not.” Later in the speech, he reiterated that his administration was above-board. “To summarize: Our government has a firm policy not to capitulate to terrorist demands. That no concessions policy remains in force, in spite of the wildly speculative and false stories about arms for hostages and alleged ransom payments. We did not—repeat—did not trade weapons or anything else for hostages, nor will we.”


Whether Reagan knew on November 13 that his statements were not the truth, the whole truth, and nothing but the truth remains a point of contention. In any case, he did not mention a linkage between hostages in Lebanon, Iranian arms sales, and funding for the Nicaraguan Contras. The linkage would become public soon enough. In the meantime, if the president hoped that his speech would end the questions about the country’s secret deals with Iran, he was mistaken. It did not.


Six days later, Reagan held a press conference to address the issue again. In his opening statement, he insisted again that the administration’s policy was sound, and that it had not violated long-standing American policy against negotiating with terrorists. He conceded on one point. He said that “to eliminate the widespread but mistaken perception that we have been exchanging arms for hostages, I have directed that no further sales of arms of any kind be sent to Iran. I have further directed that all information relating to our initiative be provided to the appropriate Members of Congress.” Following the press conference, the White House—forced to clean up one point, namely Reagan’s assertion that the negotiations had involved no third parties—released a statement noting that the president had misspoken. A third party was involved, and it was soon clear that Israel was that party.


Members of Congress, reporters, and the public reacted with outrage. With a potential scandal in the making, Attorney General Edwin Meese, a long-time Reagan confidant, conducted an internal investigation. It was an informal inquiry, and Meese did not provide a written report. The only document of substance he located was a memorandum that Oliver North wrote in April 1986 suggesting that money from the arms sales be diverted to finance the Contras’ activities. North told the attorney general that he had written the memo, but he asked that it remain secret. Meese later claimed that he, Meese, told President Reagan about the memo on November 24, 1986.


Meese’s hasty, self-serving internal investigation satisfied no one. It was clear that the scandal would grow, and the entire scheme would become public knowledge. Consequently, between Reagan’s November 19th press conference and the November 25th public disclosure of the administration’s plan to divert funds from the Iranian arms sales to finance the Nicaraguan Contras, Oliver North and his secretary, Fawn Hall, removed NSC documents from the White House and shredded them. North later explained that he was trying to protect the lives of individuals involved in the plot who might be killed because of their assistance to the Americans. North also said that he personally witnessed National Security Adviser Poindexter destroy the signed version of a presidential action directive authorizing the CIA to ship a Hawk missile to Iran.


On November 25, 1986, President Reagan appeared before the White House press corps to read a prepared statement about a “seriously flawed” policy. Admiral Poindexter had resigned, he said, and a White House review board was investigating the matter. After Reagan hastily departed, Attorney General Meese revealed the connection between Iranian arms sales and funding for the Contras.


The public reaction was immediate, and devastating. The Reagan administration had violated the policy against dealing with terrorists in Iran, and it had circumvented the Boland Amendment by secretly funding the anti-Communist rebels in Nicaragua. The lead story characterized the Reagan administration as lawless, and the NSC and CIA as rogue, out-of-control elements within a rudderless administration. Following the Church Committee hearings in the 1970s, when the CIA was found to have engaged in extralegal activities in numerous countries, Congress had instituted changes to ensure that the executive branch, especially the CIA, would not overreach in the future. It appeared that the institutional controls had failed.


The administration needed scapegoats, and it needed them immediately. Admiral Poindexter resigned as national security adviser, and Reagan fired Lt. Col. Oliver North. That same day—November 25—Reagan announced the creation of a special review board to investigate the affair. Three well-respected leaders—former United Senator John Tower of Texas, former Secretary of State Edmund Muskie, and former National Security Adviser Brent Scowcroft—agreed to serve.


The Tower Commission, as it was called, convened on December 1, 1986, and published its report relatively quickly, on February 26, 1987. The commission was tasked with examining “the proper role of the National Security Council staff in national security operations, including the arms transfers to Iran,” but the commission was not asked “to assess individual culpability or be the final arbiter of the facts. These tasks have been properly left to others.” Owing to this limited mandate as well as a short time frame, the commission was not empowered to subpoena documents, compel testimony, or grant immunity from prosecution.


During its brief tenure, the Tower Commission heard testimony from 86 witnesses and examined numerous NSC documents. In its final report, commission members criticized President Reagan’s relaxed managerial style and aloofness from policy detail. Although he probably did not know about the diversion of funds for the Contras, Reagan should have known. He was too disengaged from the scheme to oversee his underlings effectively, the report concluded. The authors singled out Oliver North, Admiral Poindexter, and Defense Secretary Weinberger for withering criticism of their roles in the scandal.


Often heralded as the Teflon President—because negative stories did not stick to him—and a great communicator, Reagan was accustomed to receiving mostly positive press coverage. The criticism stung him deeply. He introduced the Tower Commission report at a press conference but refused to answer questions.


The report had criticized his chief of staff, Donald T. Regan, for allowing chaos to overtake the White House decision-making process. To demonstrate his willingness to correct deficiencies in his administration, Reagan fired Regan and replaced him with a well-respected former United States senator from Tennessee, Howard Baker. Baker promised to reform the White House and hold administration officials accountable for their actions. It was a classic example of a reform that was too little, too late.


In any event, Baker commissioned another internal investigation to determine whether the president had any criminal exposure. To his immense relief, the results suggested that Reagan could not be implicated in criminal wrongdoing. Facing calls for additional external investigations, Baker became the voice of moderation, promising to cooperate with all inquiries.


Reagan understood that the Tower Commission investigation would not satisfy public concern. Bowing to political pressure, he agreed to the appointment of an independent counsel. On December 19, 1986, a two-judge panel appointed a retired federal judge, Lawrence Walsh, to determine whether anyone involved in Iran-Contra should be prosecuted. That same month, the House of Representatives and the Senate select committees on intelligence conducted closed-door hearings.


On January 6, 1987, the Senate formed an eleven-member Select Committee on Secret Military Assistance to Iran and the Nicaraguan Opposition, chaired by Daniel Inouye, a Democrat from Hawaii. The next day, the House created a fifteen-member House Select Committee to Investigate Covert Arms Transactions with Iran. Lee Hamilton, a Democrat from Indiana, and Dick Cheney, a Republican from Wyoming, co-chaired the committee. Concern about the proliferation of committees eventually led the House and Senate to combine the two committees under Senator Inouye’s chairmanship.


The independent counsel was concerned that the congressional committees would interfere in his investigation and thereby jeopardize the possibility of securing criminal indictments. To accommodate Walsh’s investigation, at least partially, the joint congressional committee limited its agenda and agreed not to drag out the hearings. In the end, the committee allowed for 12 weeks of testimony from 32 witnesses. Several witnesses received limited grants of immunity. Some testimony was offered on television, and some was delivered behind closed doors. Most importantly for the administration, Admiral Poindexter testified that he had never told Reagan about the scheme to funnel money from Iranian arms sales to the Contras. More than anything else, this testimony likely prevented the House from instituting impeachment hearings against the president.


A heretofore obscure character in public, Lt. Col. Oliver North emerged as a media darling when he testified before Congress in July 1987. Wearing a uniform decorated with medals, the ramrod straight, buttoned-down Marine appeared on television and defiantly defended his actions. He admitted that he had misled Congress, but he explained that he had a noble purpose in mind when he did so. It was necessary to aid the Contras in the global fight against Communism. According to North, the Contras were “freedom fighters” valiantly resisting the dangerous Sandinista regime. As a loyal, patriotic American, he could not allow the freedom fighters to perish because America lacked the will to oppose the insidious forces of godless Communism. It was dramatic testimony that fed directly into right-wing myths of good versus evil on a global stage.



North had shredded documents, he said, but he was acting on orders from CIA Director William Casey. It was a convenient admission. Casey had died two months earlier, on May 6, 1987. North also claimed that Bud McFarlane had instructed him to alter official records so that any mention of funds diverted to the Contras was deleted. In short, Lt. Col. North was a good soldier who had followed orders in service of a just, patriotic cause. For many conservative Republicans, a hero was born when Oliver North appeared before the cameras. He had violated the law, but he had done so in the service of a greater good.


In the meantime, President Reagan knew that he must explain his actions in the wake of the Tower Commission report as well as the appointment of the independent counsel and the commencement of the congressional inquiries. Even before North testified, Reagan took to the airwaves to explain his administration’s role in the affair. He had always been able to use his savvy public relations skills to good effect, and he resolved to do so now.


“A few months ago, I told the American people I did not trade arms for hostages,” he said in a televised address on March 4, 1987. “My heart and my best intentions still tell me that’s true, but the facts and the evidence tell me it is not. As the Tower board reported, what began as a strategic opening to Iran deteriorated, in its implementation, into trading arms for hostages. This runs counter to my own beliefs, to administration policy, and to the original strategy we had in mind. There are reasons why it happened, but no excuses. It was a mistake.”


He had to walk a fine line. On one hand, he did not want to implicate himself in criminal mischief by confessing to his centrality in the plot. On the other hand, Reagan had often been criticized for being a doddering old man, disconnected from public policy, and he did not want to reinforce the stereotype that he was not a decisive president firmly in charge of his administration. “I didn't know about any diversion of funds to the contras,” he said. “But as President, I cannot escape responsibility.”


As for his management style, Reagan defended his hands-off approach. “The way I work is to identify the problem, find the right individuals to do the job, and then let them go to it. I’ve found this invariably brings out the best in people. They seem to rise to their full capability, and in the long run you get more done. When it came to managing the NSC staff, let’s face it, my style didn’t match its previous track record. I’ve already begun correcting this.”


Reagan never fully acknowledged his leadership failures in the Iran-Contra affair. He repeatedly said that he accepted responsibility for his administration’s policies and actions, but he defended his own role as a minor failing owing to his excessive concern for the lives of the hostages. He seemed to believe that his only shortcoming was in being too good hearted and suffering from an excess of empathy. Even after the joint congressional committee concluded that Reagan had not adequately supervised the NSC and had allowed staffers to bypass standard operating procedures designed to ensure accountability, the president did not admit that he was a poor leader. Moreover, his promise to reform the national security apparatus was perfunctory at best.


Reagan might have faced impeachment proceedings. It was clear that his administration was out of control and lawless. Yet even Democrats never seriously considered preparing articles of impeachment in the House of Representatives. The reasons were never entirely clear. He was a popular president, but he was not so popular that he could survive a serious impeachment inquiry. Perhaps members of Congress worried that impeachment was too extreme for the transgressions in question. Inattentive mismanagement by a disinterested, ill-informed president did not rise to the level of a high crime and misdemeanor required by the United States Constitution. In addition, the facts were murky and convoluted. Without clear evidence of malfeasance, an impeachment inquiry would not serve anyone’s interests.


Long after Congress issued its reports, the independent counsel, Lawrence Walsh, submitted his final report. The date was August 1993, and the report followed a seven-year investigation. It was released to the public the following year. Walsh concluded that the Iran-Contra scheme was implemented with the approval of President Reagan and Vice President George H. W. Bush as well as Secretary of State Schultz, Secretary of Defense Weinberger, CIA Director Casey, and the two national security advisers, Bud McFarlane and John Poindexter.


Reagan did not technically violate any laws, Walsh declared, but he knew of the arms-for-hostages plan beforehand. Despite repeated warnings by various officials, Reagan approved the plan, agreeing that his administration could mislead Congress to keep the arms sales and money transfers secret. The president of the United States swears an oath to ensure that the laws are faithfully executed, and Reagan failed to honor his oath.


Unlike President Reagan, other participants faced indictments. A grand jury indicted Secretary Weinberger on five felony counts, which included one count of obstructing a congressional investigation, two counts of perjury, and two counts of making false statements. President George H. W. Bush eventually pardoned him. Bush also pardoned Bud McFarlane after the former national security adviser accepted a plea bargain in exchange for two years of probation.


Admiral Poindexter was convicted of five felonies and was sentenced to serve six months in prison. He appealed. In November 1991, a federal appellate court overturned his convictions. Poindexter later started a software company.


No one in the Iran Contra affair received his or her comeuppance. Arms dealer Richard Secord entered a guilty plea for making false statements to Congress and received two years’ probation. Fawn Hall, Oliver North’s secretary, received immunity from prosecution for destroying documents. In exchange, she testified truthfully about her role in Iran-Contra. She later married Danny Sugerman, the former manager for the rock music group the Doors.


Despite his riveting testimony and significant sympathy from right-wing administration supporters, Lt. Col. Oliver North could not escape the legal consequences of his actions. He was indicted on 16 felony counts in March 1988. His trial commenced in February 1989, and on May 4, 1989, he was convicted on four charges. Sentenced to serve a three-year suspended prison term and two years of probation and required to pay $150,000 in fines and complete 1,200 hours of community service, he served part of the community service before an appellate court overturned his sentence. North later ran unsuccessfully for a United States Senate seat and served briefly as president of the National Rifle Association. He also became a frequent television commentator and right-wing hero.


The Iran-Contra affair demonstrated the perils of an out-of-control government overseen by a disengaged (and perhaps slyly manipulative) chief executive. When a presidential administration found that Congress, exercising its constitutional role as a check on executive power, refused to fund support for the Nicaraguan Contras, Reagan and his men did not accept this result. Rather than explore potential policy options, administration officials resolved to circumvent the will of Congress in service of what they saw as a noble purpose. The ends justify the means, they concluded.


A relatively junior NSC aide, Lt. Col. Oliver North, was vested with enormous discretionary authority to run an illegal operation out of the White House based on no principles save expediency. At the top of the hierarchy was a president that allowed his men to run amok. Was Reagan an ill-informed simpleton in over his head, or did he knowingly contravene the law to achieve his policy goals? The answer to that question remains a mystery.

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