Iran-Contra Scandal

ON OCTOBER 5, 1986, a U.S. cargo plane was shot down over Nicaragua. Surviving crew member, Eugene Hasenfus, was captured by the Sandinistas, the pro-socialist government forces. Hasenfus's capture began the cover-up that would culminate in one of the most important scandals in American history. The Central Intelligence Agency (CIA),[Page 446] working with Colonel Oliver North of the National Security Council (NSC), had setup a network of arms dealers, former military officers, foreign businessmen, retired CIA and Defense Department personnel, mercenaries, terrorists, and foreign saboteurs to sell missiles to Iran. These sales were designed to win release of U.S. hostages being held in Lebanon and divert the profits of the arms sales to Nicaraguan Contras, the anti-government forces supported by the Ronald Reagan administration. The Reagan administration diverted these funds because Congress had cut off all aid to the Contras by passing the Boland Amendment in 1982. The amendment was passed following the CIA's mining of Nicaraguan harbors.

The Boland Amendment made it illegal for the CIA to aid the Contras and, in 1984, Boland Amendment II forbade all sectors of the U.S. government from aiding the Contras. By then, the Contras' campaign was run by North, the NSC deputy-director for political-military affairs. North quickly established a top-secret military supply system. Moreover, knowledge, and in some cases direct approval, of the Contra-aid program came from Reagan's White House.

Unfortunately, North was no match for the Iranian negotiators, who were allegedly helping with the release of the American hostages in Lebanon. Each time an American hostage was released, another was captured. Meanwhile, the plan was working: the artificially inflated the prices of the arms sold to the Iranians allowed some of the profits to be diverted to the Contras. The arms sales took place between August 20, 1985 and October 28, 1988, and involved a total of more than 2,000 missiles and spare parts. Of the $16.1 million in profits, $3.8 million reached the Contras.

When Hasenfus informed his captors the he was part of a CIA operation, and identified two additional operatives by their codenames, the entire Iran-Contra affair slowly became public knowledge. North and other NSC officials began shredding incriminating documents and falsifying others, attempting to cover-up the scandal. Reagan and Attorney General Edwin Meese went on national television, on November 25, 1986, to reveal the “discovery” of the inter-related Iran-Contra efforts, and to lay as much of the blame on North as possible. An hour later, North was fired and his boss, NSC adviser Admiral John Poindexter resigned. In order to obtain the testimony of North and Poindexter and others involved, Congress granted them immunity, undermining the ability of independent counsel Lawrence Walsh to prosecute them.

From May 5, 1987 until August 6, 1987, a joint congressional committee heard over 250 hours of testimony from 32 witnesses. No testimony ever linked Reagan directly to the scandal. North's secretary, Fawn Hall, testified to shredding classified documents and smuggling others out of the NSC building. Other Reagan personnel provided details of an endless number of lower-level bureaucrats and shady arms dealers involved in the scandal.

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