Iran-Contra

Iran-Contra hearing

Iran-Contra linked together two issues on opposite sides of the world that dominated President Ronald Reagan’s foreign policy. In the Middle East, he was deeply concerned about U.S. hostages, including the CIA’s Beirut station chief, William Buckley, being held in Lebanon by Hizbollah, a fundamentalist group with links to Iran.

His aim in Central America, meanwhile, was to prevent the spread of communism, particularly by supporting the Contra rebels fighting the leftist government in Nicaragua. The CIA and members of the National Security Council (NSC) staff secretly pursued these ends by effectively trading arms for hostages with Iran despite “Operation Staunch,” the administration’s arms embargo against the radical Islamic regime.

Simultaneously, they also organized private and foreign financing for the Contras as well as public relations campaigns within the United States. Ronald Reagan certainly approved much of this, but it remains unclear whether he authorized a diversion of funds from the Iranian arms sales to the Contras.


At the time of the affair, some observers (e.g., Draper) argued that it almost amounted to a coup with a small “junta” led by Ronald Reagan and including Admiral John Poindexter, the national security adviser, Lieutenant Colonel Oliver North, an NSC staffer, and William Casey, the head of the CIA, secretly running a foreign policy against the express wishes of Congress.

However, a less apocalyptic view was subsequently established, which blamed the affair on the net result of the imperial expansion of the presidency, Reagan’s poor management, and his weak knowledge of foreign affairs (Draper; Cannon).

His senior cabinet members, particularly the secretary of state, George Shultz, and the secretary of defense, Casper Weinberger, were also accused of not properly controlling policy implementation within the administration.

However, after congressional hearings ended in 1988 the affair quickly faded from the public consciousness. It was not a major issue in the 1988 presidential election, despite Vice-President George Bush’s involvement, and aside from a few storms linked to the special prosecutor’s investigation it rarely hit the news after Reagan’s term ended.

Historical Background

After the pro-U.S. Shah of Iran was overthrown in 1979, staff at the U.S. Embassy in Tehran were held hostage for over a year by the new regime of Ayatollah Khomeini. According to some commentators and historians, the crisis greatly helped Ronald Reagan beat Jimmy Carter in the 1980 presidential election, and it also made him determined to secure the release of the U.S. hostages held in Beirut as the issue threatened his reelection.

Others in his administration, including William Casey, Robert McFarlane, the national security adviser at the time, and Admiral Poindexter (then McFarlane’s deputy), also hoped to return Iran to its traditional role as a counterweight to Soviet influence in the Middle East.

Despite Iranian involvement in terrorist acts against the “Great Satan,” culminating in the 1983 bombing of a U.S. Marine base in Lebanon that resulted in 241 deaths, they believed that there were moderates within Khomeini’s regime who would be willing to help U.S. cold war realpolitik. The two issues combined in Iran-Contra as weapons sales were meant to promote moderates who would then secure the release of the Beirut hostages.

Reagan’s Central American policies were similarly affected by the cold war as Communists had taken power in both Grenada and Nicaragua in 1979. Reagan reacted in 1981 by authorizing CIA involvement against the Sandanistas in Nicaragua, and the opposition Contras were soon built up to 5,000 men from nearly nothing. In 1982, though, Congress reacted to Reagan’s strident policies by passing the Boland Amendment, prohibiting the funding of attempts to overthrow the Sandanistas.

The CIA continued to fund the Contras, however, saying it was fighting the arms flow into neighboring El Salvador, and in 1984 Reagan went further by authorizing the mining of Nicaraguan harbors. Congress angrily reacted to this clear violation of international law by passing the second Boland Amendment in June 1984, banning all direct CIA intervention.

The Contra Scandal

Following the first Boland Amendment, Oliver North began to guide secret, privately funded public relations campaigns supporting the Contras and opposing congressional opponents. Meanwhile, Casey secured financial support from the apartheid government in South Africa for the Contras before deciding to target rich private citizens.

North again took part and Reagan, who supported the plan, also met with big donors, including singer Pat Boone, Texas oilman Nelson Bunker Hunt, and brewer Joseph Coors. The campaign raised $10 to $20 million but more money came from foreign states. Saudi Arabia gave $32 million after an approach from McFarlane, while Taiwan, Brunei, and South Korea also gave support.

Aside from fund-raising, the Joint Congressional Committee looking into Iran-Contra showed that the NSC and the CIA had also continued to provide direct support for the Contras. A key figure was John Hull, an Indiana-born rancher based in Costa Rica, who later skipped bail to avoid charges of drug and arms trafficking.

He was also indicted on charges related to the bombing of a press conference, attended by U.S. journalists, which caused eight deaths. The CIA’s involvement was revealed in October 1986 when one of its planes was shot down, but North and Poindexter argued before the Congressional Committee that it didn’t break the Boland Amendments.

They differentiated between funds appropriated by Congress and unappropriated funds and said that the executive branch only needed to account to Congress for the former. This distinction represented a threat to constitutional government, however, as it cut Congress out of any role in foreign policy (Draper 1991).

The Iranian Scandal

Another source of funding for the Contras was a diversion of profits from illegal arms sales to the Iranian government. McFarlane, following an approach by the director general of the Israeli Foreign Ministry, David Kimche, had started these sales in July 1985.

Kimche said that via Manucher Ghorbanifar, an exiled Iranian merchant, he had contacted Iranian moderates who wanted to establish better relations with the United States. To show their seriousness, they would secure the release of Buckley in return for the United States authorizing a small arms sale to Iran for use in its war against Iraq.

McFarlane discussed the idea with Reagan and the chief of staff, Don Regan, on 18 July while the president was in the hospital following surgery. It clearly breached the U.S. arms embargo, but Reagan approved the plan as it offered the possibility of contacting moderates and releasing the hostages.

On 6 August, McFarlane presented a deal worked out by Ghorbanifar to Reagan, Bush, George Shultz, and Casper Weinberger. Shultz and Weinberger opposed the plan, which involved 100 TOW missiles being exchanged for a number of releases, but Reagan was noncommittal.

McFarlane later claimed that the president subsequently approved it and Reagan confirmed this to the Tower Board, which he established to investigate the affair. However, the president later told the board that he hadn’t approved it, before finally saying that he couldn’t remember. The board and Congress both eventually concluded that Reagan had approved the plan.

On 20 August, Israel shipped 96 missiles to Iran, which the United States replaced, but no hostages were released. Yet when the Iranians asked for 400 more missiles Reagan quickly agreed, so Israel shipped 408 more missiles to Iran on 14 September with the United States again replacing them. The following day a U.S. hostage, the Reverend Benjamin Weir, was released in Beirut.

However, as this didn’t meet the terms of the original deal, the Iranians’ next order was met with some skepticism. For instance, Michael Ledeen, a pro-Israeli historian who had acted as a conduit with Israel, argued that the plan should be abandoned, but McFarlane carried on and dropped Ledeen in favor of Oliver North. More Israeli missiles were soon on the way to Portugal en route to Iran, but despite lying to the State Department, North couldn’t get Portuguese approval so the flight was turned back.

Instead, a CIA front airline made a delivery, but the Iranians were subsequently refunded $8 million of their $11 million payment as the missiles they received couldn’t hit high-flying reconnaissance planes. Another $1 million was diverted by North into “The Enterprise,” a web of secret bank accounts run by ex-U.S. Air Force major general Richard Secord, which funneled funds to the Contras.

On 5 December, Reagan signed a “finding” retrospectively authorizing all that the CIA had done and ordering Casey not to brief Congress about the operation. Poindexter, the new national security adviser (McFarlane had resigned on 2 December), kept it in his office safe and destroyed it once the scandal became public, as it explicitly described the affair as an arms trade for hostages.

This would have greatly embarrassed Reagan, as he always maintained that he wasn’t dealing with the kidnappers but only with people who could influence them. This distinction was difficult to maintain, however, as the hostage-takers were clearly greatly influenced by Iran, their main sponsor, even if they were not actually under its direction.

Reagan signed two more “findings” in January 1986 authorizing direct CIA arms sales to Iran, which William Casey and North quickly acted upon. Reagan overrode Casey’s and Weinberger’s reservations and approved the transfer of 3,504 TOWs to Iran in January 1986.

Weinberger had put up some bureaucratic obstacles but Reagan’s support ensured the plan’s implementation, although only 1,500 missiles were sent before the scandal was revealed. Secord acted as the CIA liaison with the Defense Department and he creamed off millions of dollars for the Contras (as well as a commission for himself) as North was vastly overcharging the Iranians.

The new deliveries again failed to lead to hostage releases, revealing the futility of the plan. As the missiles were sent before releases, the kidnappers had no incentive for releasing hostages. Indeed, the plan really provided an incentive for kidnapping more Americans as the U.S. government was always willing to pay the “ransom.”

But, as North argued during the affair, if the United States had broken off the deal, it could have incited even more hostage-taking (or worse) from the terrorists. By the end of the affair, three Americans had been released, but another three hostages had replaced them.

The plan eventually became public when a Lebanese magazine revealed in November 1986 that McFarlane and North had visited Iran in May 1986 to discuss the arms deals. They had flown to Iran using fake passports with another NSC staffer and CIA personnel on a plane carrying Hawk missile spares. The mission was meant to speed up hostage releases, with more Hawks waiting to be flown out offered as an incentive.

However, the Iranians treated the Americans badly, keeping them waiting and only sending low-level negotiators. The two sides also failed to agree on whether the arms should be delivered before or after the hostage releases. However, a compromise was eventually reached, which meant that the United States kept up a steady supply of sales until the scheme was revealed.

The Investigations

Once the scandal became public, Reagan appointed an investigatory commission consisting of former secretary of state Edmund Muskie, Ford’s national security adviser Brett Scrowcroft, and former Republican senator John Tower, who was the chairman. The Tower Board investigated the whole affair and revealed many of the shortcomings of Reagan’s lackluster control of foreign policy. It also revealed Reagan’s inability to recall much about the affair, even when presented with clear evidence of his involvement in it.

The Tower Board carried out its investigation in private, so it was overshadowed by the public congressional hearings even though it revealed considerably more. It was a Tower Board aide who found hundreds of vital documents still recorded on computers, which North thought had all been destroyed. These records provided the key to unraveling the scandal as North and his secretary, Fawn Hall, had had a “shredding party” to get rid of as many paper documents as possible.

Yet, much of the plan was carried out without written records anyway. Poindexter had imposed an iron curtain of secrecy on the plan, discouraging North from putting anything on paper and compartmentalizing the plan so only a very few people knew everything.

He told the Congressional Committee that he had lied to Congress and implemented the plan without approaching Reagan as he knew what the president wanted to do. The president thus had “plausible deniability” against any inquiries; “the buck stops here,” Poindexter concluded.

The congressional hearings, held from 5 May to 3 August 1987, garnered much public attention, especially the appearance of Oliver North. He created a striking image dressed in his medal-covered marine uniform, which he had never worn while working in the NSC. Throughout his appearance, North argued that he had acted as a patriot, defending the United States from communism.

He won a great deal of public support, despite admitting to a series of illegal acts culminating in a plan to use the Iranian money to finance a new body similar to the CIA but outside of all constitutional restraints. He said Poindexter and Casey shared his aim, but Casey never faced the Congressional Committee as he had a cerebral hemorrhage on the morning he was due to testify. He died in a hospital a few months later, leaving many questions about the CIA’s role in the affair unanswered.

After the Hearings

Once the hearings were completed, the scandal all but died. It was not a major issue during the 1988 presidential election, for instance, which Bush won despite suspicions about his involvement. The special prosecutor, Lawrence Walsh, continued to investigate and successfully prosecuted North and Poindexter on a number of charges. However, both had their convictions overturned by the court of appeals because of the immunity they had been given for their congressional testimony.


Others, including McFarlane, Secord, Alan Fiers of the CIA, and Elliot Abrams, a former assistant secretary of state, pleaded guilty to a number of minor criminal offences, generally involving lying to Congress, but no one went to jail. Casper Weinberger was also indicted on five felony counts in June 1992, but the president pardoned him and five others six months later.

The pardons all but ended Walsh’s investigations, and Bush was thus accused of having acted to spare himself embarrassing court appearances and even prosecution. The public, though, was not really interested as the scandal seemed to be a historical nonevent.

A number of factors contributed to this view, but it was primarily because the scandal suffered from comparisons to Watergate. For instance, the Joint Congressional Committee hearings were considered to be less dramatic than the Watergate ones as there were no revelations to match those of John Dean. The consequences were also less dramatic, as Reagan did not have to resign as Nixon had.

It was never conclusively proven that he had approved the diversion, and the lack of a “smoking gun” meant he escaped impeachment. After leaving the White House, Reagan also quickly became a historical figure, as he withdrew from politics and made few public appearances.

In 1994, he also announced that he was suffering from Alzheimer’s disease, which further shielded him against public investigation. (In the same year, North unsuccessfully fought a Senate race in Virginia for the Republicans.) Bush also received little attention once he left office, as his single term was not seen as being historically noteworthy and the public’s appetite for scandal was soon being satisfied by his successor, Bill Clinton.