Iran-contra Affair (1985–1986)

Scandal during the administration of President Ronald Reagan that involved the sale of military equipment to Iran in exchange for the release of American hostages. The money received from the sales of equipment to Iran was then used to illegally fund the group known in Nicaragua as the contras. After the scandal broke, the executive office, as well as Congress, launched an investigation into the affair. This investigation eventually led to the prosecution of 14 individuals implicated in the Iran-Contra affair.

The term contra was a name given to the Nicaraguan Democratic Resistance. This group, made up of Nicaraguan exiles, was supported by the U.S. Central Intelligence Agency (CIA) for the purpose of overthrowing the Sandinista government in Nicaragua. The Reagan administration's support of the contras [Page 376]was very controversial. The Sandinista government, which had come to power in Nicaragua in 1979, was perceived by the Reagan administration as being proCuban and communist in character.

As a result, it was felt that, in the interest of national security, it was imperative to support and conduct paramilitary operations against Nicaragua and the Sandinistas. The publicly stated purpose of the Reagan administration's involvement in the politics of Nicaragua was to stop Cuban weapons trafficking taking place through Nicaragua and to force the Nicaraguan government to take a position that was friendlier to the United States.

In response to the aggressive stance that the Reagan administration was taking against the Sandinista government, the U.S. Congress passed two amendments—known as the Boland amendments—in 1982 and 1984. The first amendment banned the CIA from working to overthrow the Sandinista government. The second Boland amendment restricted the administration even further by being more specific, banning all U.S. agencies from supporting the contras, even indirectly. Furthermore, in December 1983, Congress decided to place a limit on the amount of funding that the CIA would receive to support their contra operations, thus setting in motion the creative financing arrangement of the Iran-Contra affair.

Around the same time, the Reagan administration was dealing with a crisis situation in the Middle East. In December 1983, the terrorist group Hezbollah, which had ties to the fundamentalist Shiite government of Iran, began kidnapping Americans working in the region in order to obtain the release of 17 suspected terrorists who had been arrested after the bombings of the French and American embassies in Kuwait. Working with Iran was seen as the best way to secure the release of the hostages.

The United States, however, had very little leverage with the Iranian government. The U.S. government had been publicly hostile toward Iran after the 1979 hostage crisis at the U.S. embassy in Tehran. The United States also had placed a ban on arms sales to Iran. With little direct U.S. leverage over the Iranian government, the U.S. State Department launched Operation Staunch in March 1983, the purpose of which was to put pressure on other governments to halt arms sales to Iran.

However, this policy unofficially changed after the Reagan administration received signals from Tehran indicating that Iran was interested in receiving arms from the United States in exchange for the release of the hostages. Consequently, in August 1985, the first shipment of U.S. weapons was sent to Iran via Israel. The next year, the CIA conducted these sales directly. These weapons sales violated not only a U.S. embargo on weapons sales to Iran but also the Arms Export Control Act, approved by Congress in 1968. This act required arms sales to have not only the authorization of the president but also congressional awareness of the sales. It was this latter requirement that was missing in the Iranian arms sales.

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