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The sanctuary movement emerged in 1980 in opposition to the U.S. government's foreign policy in Central America and remained active until the early 1990s when U.S. policy began to shift from Cold War to post–Cold War strategies. The movement offered sanctuary to Salvadoran and Guatemalan refugees fleeing civil war and set up an underground railroad that stretched from Mexico to Canada. It was situated in the historical relationship of the United States to the rest of the Americas, the particular form this relationship took during the Cold War, and the specific foreign policy of the Reagan administration during the 1980s. Throughout its existence, the sanctuary movement remained church-based, was aligned with the political strategy of civil disobedience and direct action, and sustained and expanded its activities even though it inevitably suffered internal strife and endured federal efforts to stop it.

During the Cold War, U.S. foreign policy was designed to maintain Third World countries within the U.S. sphere of influence, ostensibly to prevent them from falling into the Soviet sphere of influence. This stated goal often opposed U.S. interests to the interests of Third World peoples struggling for the redistribution of the land, unionization of the workforce, the nationalization of resources, and democratic and/or socialist state formations. The U.S. government represented these popular movements as communist-inspired, and, throughout the Cold War, established and funded authoritarian governments and military dictatorships to disrupt these popular struggles. In South and Central America, this policy resulted in the proliferation of political repression, assassination, terrorist tactics, crony-capitalism, and extralegal economies throughout Central and South America, a pattern that repeated the strategy the United States had employed in Southeast Asia. By the end of the 1970s, Central America appeared to be going the way of Vietnam. Armed liberation movements had gained popular support in El Salvador, Nicaragua, and Guatemala. In 1979, the Nicaraguan Sandinista Revolution overthrew the U.S.-supported Somoza government, a defeat to U.S. interests in the region that came on the heels of another major loss to the U.S. sphere of influence, the 1978 overthrow of the Shah of Iran. Taking office in 1980, the Reagan administration responded to the Central American uprisings by funding military dictatorships in El Salvador and Guatemala, turning a blind eye to the terrorist tactics of death squads, launching border incursions into Sandinista-led Nicaragua from U.S.-sponsored bases in Honduras, and refusing to comply with the 1980 Refugee Act. This act had been passed by Congress to remedy the U.S. Immigration and Naturalization Service's Cold War practice of routinely approving political asylum applications from Soviet bloc countries while denying the applications of those fleeing regimes friendly to U.S. interests. The Immigration and Naturalization Service (INS) under the Reagan administration, however, continued to define refugees from Central America as economic, not political, refugees.

The sanctuary movement arose simultaneously with the flood of the Central American refugees into the United States in 1980 following the escalation of violence in the region and the assassination of Archbishop Oscar Romero and four North American, Catholic women workers in El Salvador. These murders attracted the attention of religious communities throughout the United States. Given their many ties to Central American missions, numerous church members had already been influenced by liberation theology, a religious philosophy developed by Catholic nuns and priests working in Central and South America. Liberation theology centers on the belief that working in a religious community means joining poor and oppressed people in their struggles against the sources of poverty and political repression. Churches influenced by these Christian principles began to offer humanitarian and legal aid to Central American immigrants and soon became well-versed in the politics of the region, having heard the refugees' stories, and strengthened contacts with religious workers abroad. In Chicago, New York, Los Angeles, Tucson, Milwaukee, and San Francisco, to name only a few, interfaith councils, committees, and task forces were quickly organized to respond to the humanitarian crisis unfolding in their areas and, before long, began offering shelter.

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