Iran-Contra Scandal

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Iran-Contra Scandal

"Reagan Dumps 2 Top Officials Over Iran Cash Sent to Contras"

Newspaper article

By: Bob Hepburn

Date: November 26, 1986

Source: "Reagan Dumps 2 Top Officials Over Iran Cash Sent to Contras" as published by the Toronto Star.

About the Author: Hepburn is the editorial page editor of the Toronto Star.


In 1986, President Ronald Reagan (1911–2004) authorized the sale of arms to Iran in exchange for Iran's influence in obtaining the release of four American hostages held by factions in Lebanon sympathetic to Iran's Ayatollah Khomeini. (The U.S. had ended diplomatic relations with Iran after the Iran hostage crisis in 1979.) The profits from the arms sales were used to fund the contra-revolutionaries in Nicaragua, who opposed the revolutionary Sandinistas. Although Congress had barred such assistance, administration officials and the Central Intelligence Agency (CIA) circumvented the ban by also applying pressure on friendly countries to provide aid to the contras.

The Frente Sandinista de Liberación Nacional or Sandinistas was a Marxist-Leninist political party that overthrew the dictatorship of Anastasio Somoza in 1979 and attempted to create a Marxist-Leninist state in Nicaragua from 1979 to 1990. The Sandinistas, named in honor of Nicaraguan General Augusto César Sandino who had fought the U.S. Marines in the 1920s, formed in 1960. Over the years, they engaged in a number of terrorist actions including the attempted kidnapping of a U.S. ambassador in 1974.

Before they rose to power, the Sandinistas established ties with the terrorist Popular Front for the Liberation of Palestine. After they were in power, the Sandinistas became friendly with Libya and Iran, both known as state sponsors of terror. The U.S initially offered financial aid to the Sandinistas, but this assistance stopped in 1981 when it became known that the Sandinistas were supporting a communist insurgency inEl Salvador. The Soviet Union and Cuba then became the major backers of the Sandinistas, with Libya lending military aid.

In 1985, members of the National Security Council became convinced that the release of American hostages (all private citizens) held in Lebanon could be achieved if the U.S. sold arms to Iran for Iran to use in its war against Iraq. National Security Advisor Robert McFarlane considered that moderates within the Iranian government would use their political influence to free the hostages. The actual shipment of weapons to Iran was carried out by Israel with the U.S. providing replacement munitions to the Israelis. The Iranians accepted the anti-tank and anti-aircraft missiles, but arranged for the release of only three hostages. However, the deal resulted in considerable profits. These monies were sent to Nicaragua to support the contras.

In November 1986, the American public learned that the U.S. had sold arms to the Islamist regime in Iran that had sponsored terrorist activities against the U.S. for most of the 1980s. Within a month, the revelation came that money obtained from the arms sales had been used to support the Nicaraguan contras in violation of the Boland Amendments. Named after Congressman Edward Boland of Massachusetts, these amendments were passed in 1982 to block funds from being used to oust the Sandinistas.


In a stunning twist to the secret American arms deal with Iran, President Ronald Reagan has dumped two top-ranking officials after learning money that Iran paid for the weapons was given to U.S-backed rebels in Nicaragua.

Reagan accepted the resignation yesterday of his national security adviser John Poindexter, and fired U.S. Marine Lt.-Col. Oliver North, one of Poindexter's key assistants and a key figure in both the covert sale of arms to Iran and U.S. support for the Nicaraguan Contra rebels.

U.S. Attorney-General Edwin Meese said the Justice Department will investigate how the Contras received "$10 million to $30 million" that Iran paid to Israeli agents for American weapons shipped to Tehran.

North was interrogated by Meese Sunday in the attorney-general's office, a knowledgeable source who asked not to be named told Associated Press.

The dramatic announcement came as Reagan struggles to retain credibility after admitting two weeks ago he approved arms shipments to Iran in an effort to improve relations between the two countries.

Rumors of a major shuffle in his cabinet, including the possible firing of Secretary of State George Shultz, White House Chief of Staff Donald Regan and Poindexter, have circulated in Washington for days.

The disclosure shocked congressional leaders on Capitol Hill, where calls intensified for Reagan to shuffle his senior advisers and to make a full disclosure of all U.S. involvement in the Iranian arms deal.

New Senate majority leader Robert Byrd said he does not believe "one or two scapegoats are necessarily the answer to this whole matter. It is something that is eating away at the energy and time of the administration and the best thing to do would be for the president to lay it all out."

"What this says is that nobody seems to be really in charge of foreign policy. It says the White House is in a chaotic state of affairs."

Reagan, looking tense and irritated, said he was "not fully informed" about the arms agreement and will appoint a special commission to investigate U.S. conduct of the Iranian arms deal, which led to the release of three American hostages in Lebanon.

Meese said about $12 million worth of American arms to Iran were routed through Israel.

The Israeli agents dealing with Tehran then put the Iranian payments, which apparently far exceed the value of the weapons, into a Swiss bank account. Funds were then diverted to the Contras.

Meese said he needs more information to determine exactly how much money was involved, how it was transferred, and to identify who was involved in Israel, the United States and Nicaragua.

The funds were sent to the rebels during a period when Congress had passed a law banning U.S. government financial aid to the Contras.

Congress recently approved $100 million in military and other aid to the rebels, who are fighting to overthrow the leftist Sandinista government.

Meese acknowledged that Reagan was not told of a 1985 shipment of U.S. arms from Israel to Iran, saying the deal was approved by the president after it had been completed.

Anonymous White House sources said North gave Israeli officials the go-ahead for that shipment on his own authority, Associated Press reports.

Reagan refused to say he was wrong to authorize arms sales to Iran or whether he is planning a further shake-up of White House staff.

"As I have stated previously, I believe our policy goals toward Iran were well founded," he said.

Asked if the deal was a mistake, he snapped, "No, and I'm not taking any more questions."

Meese said he uncovered the Contra fund last weekend while investigating the role of the National Security Council in the Iran deal. The council, which operates in the White House basement, reports directly to Reagan on foreign and domestic policy.

The agency, rather than Secretary of State George Shultz's department, was in charge of the Iranian operation.

"The only person in the U.S. government that knew precisely about this-the only person—was Lt.-Col.North,." said Meese, who briefed reporters after Reagan's terse announcement.

Poindexter "knew that something of this nature was occurring, but did not look into it further," he added.

Meese said Shultz, Vice-President George Bush and other senior Reagan advisers did not learn of the Contra connection until Monday when Meese informed the president of his findings.

The attorney-general said it is too early to tell if the money transfer was in breach of the law.

Reagan said the fact he was not told of the Nicaraguan connection "raises serious questions of propriety. I am deeply troubled that the implementation of a policy aimed at resolving a truly tragic situation in the Middle East has resulted in such controversy."

"As I have stated previously, I believe our policy goals toward Iran were well founded. However the information brought to my attention yesterday convinced me, that in one aspect, implementation of that policy was seriously flawed."

House Majority leader Jim Wright commented, "There is something profoundly wrong with U.S. foreign policy if the president was unaware of this aspect of the Iran dealings."

Wright said Reagan is "uniquely capable of psyching himself up into a frame of mind in which he can believe whatever he wants to believe and can just utterly reject factual information that does not fit comfortably with his preconceived predilection."

"It makes it very difficult for those who have information that is unpleasant to him to get through to him and to get him to accept it—that fact is fact and truth is truth."


In nationally televised hearings, Congress explored the involvement of federal officials and a number of others in the Iran-Contra scandal. Subsequent investigations by Special Prosecutor Lawrence E. Walsh provided additional details of the illegal operations and the attempted cover-up. Several administration aides were forced out of their posts and some of these were indicted for violations of federal law. Robert C. McFarlane, the president's former national security adviser, pleaded guilty to withholding information from Congress about the Reagan administration's efforts to help the contras. John M. Poindexter, one of Reagan's closest aides and a former national security advisor, was sentenced to prison for committing five felonies, including conspiracy to deceive Congress and lying to Congress. Oliver L. North, a former Marine lieutenant colonel who served as a staff member on the National Security Council, was convicted of aiding and abetting the obstruction of Congress, destroying confidential documents, and accepting an illegal gift. In videotaped testimony at the Poindexter trial, Reagan said that he had granted authority to supervise arms sales and contra-aid efforts, but he could recall few details of the operations and insisted that he had never advised disobedience of the law.

The scandal only temporarily affected President Reagan's popularity. Public interest in Iran-Contra faded quickly, with developments in the Soviet Union and a possible reduction of Cold War tensions capturing the attention of most Americans. The Sandinistas quietly disappeared from American notice. In 1990, after the U.S. finally abandoned armed efforts to depose the Sandinistas, they held free elections and stepped down from power when the conservatives under Violetta Chamorro won.



——. The Iran-Contra Puzzle. Washington, D.C.: Congressional Quarterly, 1987.

Marshall, Jonathan, Peter Dale Scott and Jane Hunter. The Iran-Contra Connection: Secret Teams and Covert Operations in the Reagan Era. Boston: South End Press, 1987.

Trager, Oliver, ed. The Iran-Contra Arms Scandal: Foreign Policy Disaster. New York: Facts on File, 1988.

Walsh, Lawrence E. Final Report of the Independent Counsel for Iran/Contra Matters. Washington, D.C.: U.S. Court of Appeals for the D.C. Circuit, 1993.

Walsh, Lawrence E. Firewall: The Iran-Contra Conspiracy and Cover-Up. New York: Norton, 1997.