In the Iran-Contra Affair, United States President Ronald Reagan's administration secretly sold arms to Iran, which was engaged in a bloody war with its neighbor Iraq from 1980 to 1988 (see Iran-Iraq War), and diverted the proceeds to the Contra rebels fighting to overthrow the leftist and allegedly democratically-elected Sandinista government of Nicaragua. Those sales thus had a dual goal: appeasing Iran, which had influence with militant groups that held several American hostages in Lebanon and supported bombings in Western European countries, and funding a guerrilla war aimed at aborting Nicaraguan independence from US hegemony.
Both transactions were contrary to acts of Congress, which prohibited the funding of the Contras and the sale of weapons to Iran. In addition, both activities violated UN sanctions.
The arms-for-hostages deal
The Israeli government approached the United States in August 1985 with a proposal to act as an intermediary by shipping 508 American-made TOW anti-tank missiles to Iran in exchange for the release of the Reverend Benjamin Weir, an American hostage being held by Iranian sympathizers in Lebanon, with the understanding that the United States would then ship replacement missiles to Israel. Robert McFarlane, the Assistant to the President for National Security Affairs, approached United States Secretary of Defense Caspar Weinberger and arranged the details. The transfer took place over the next two months.
In November, there was another round of negotiations, where the Israelis proposed to ship Iran 500 HAWK anti-aircraft missiles in exchange for the release of all remaining American hostages being held in Lebanon. General Colin Powell attempted to procure the missiles, but realized that the deal would require Congressional notification as its overall value exceeded $14 million. McFarlane responded that the President had decided to conduct the sale anyway. Israel sent an initial shipment of 18 missiles to Iran in late November, but the Iranians didn't approve of the missiles, and further shipments were halted. Negotiations continued with the Israelis and Iranians over the next few months.
In January of 1986, Reagan allegedly approved a plan whereby an American intermediary, rather than Israel, would sell arms to Iran in exchange for the release of the hostages, with profits funnelled to the Contras. At first, the Iranians had refused the weapons from Ghorbanifar, the Iranian intermediary, when both Oliver North and Ghorbanifar created a 370% markup (WALSH, Lawrence E. "Firewall"). Another intermediary was used to sell 500 TOW missiles. With the marked-up income of $10 million from the $3.7 million before, and the Iranians capturing new hostages when they released old ones, this was the end of the arms-for-hostages deal. In February, 1,000 TOW missiles were shipped to Iran. From May to November, there were additional shipments of miscellaneous weapons and parts.
Funding the Contras
The proceeds from the arms sales were diverted, via Colonel Oliver North, aide to the U.S. National Security Advisor John Poindexter, to provide arms for the Contras (from Spanish contrarrevolucionario, "counter-revolutionary"). The Sandinistas' eventual loss of power in the 1990 national election was seen by some as stemming from U.S. support for the Contras as well as the effects of a U.S. trade embargo initiated in May 1985.
The U.S. accused the Sandinistas of being backed by the Soviet Union and Cuba, and of supporting left-wing rebels against the U.S.-backed government in El Salvador, scene of a destructive civil war throughout the 1980s. In 1985, the Sandinista movement won a majority in elections validated by other independent observers from Western democracies as fair and free, but the Reagan administration rejected the election as fraudulent.
Many conservative commentators agreed with Reagan and rejected the findings of international observers, comparing the election to one-candidate "elections" in communist countries, although six parties ran against the Sandinistas in that election, winning 35 of 96 seats in the national legislature.
The Reagan administration, circumventing acts of Congress (specifically the 1982-1983 Boland Amendment), ferried funds and weaponry to the Contras gained by the sale of arms to Iran. The Contras received weapons and training from the U.S. Central Intelligence Agency, especially in guerrilla tactics such as destroying infrastructural elements and assassination.
Discovery and scandal
In November of 1986, the first public allegations of the weapons-for-hostages deal surfaced when on November 3 the Lebanese magazine Ash-Shiraa reported that the United States had been selling weapons to Iran in secret in order to secure the release of seven American hostages held by pro-Iranian groups in Lebanon. The clandestine operation was discovered only after an airlift of guns was downed over Nicaragua. On November 21, National Security Council member Oliver North and his secretary Fawn Hall started to shred documents implicating them and others in the scandal. US Attorney General Edwin Meese on November 25 admitted that profits from covert weapons sales to Iran were illegally diverted to the anti-communist Contra rebels in Nicaragua.
Faced with mounting pressure, Reagan on November 26 announced that as of December 1 former Senator John Tower, former Secretary of State Edmund Muskie, and former National Security Adviser Brent Scowcroft would serve as members of a Special Review Board looking into the scandal; this Presidential Commission became known as the Tower Commission. At this point, Reagan claimed he had not been informed of the operation. Despite a January 1, 1986 entry in Reagan's personal diary that stated "I agreed to sell TOWs to Iran," the Tower Commission, which implicated North, Poindexter, and Weinberger, amongst others, could not conclusively determine the degree of Reagan's involvement. Nevertheless on February 26, 1987 the Tower Commission rebuked President Reagan for not controlling his national security staff.
The U.S. Congress then on November 18, 1987 issued its final report on the affair, which stated that Reagan bore "ultimate responsibility" for wrongdoing by his aides and his administration exhibited "secrecy, deception, and disdain for the law." Oliver North and John Poindexter were indicted on multiple charges on March 16, 1988. North, indicted on nine counts, was convicted of three: lying to Congress, destroying an official document, and accepting an illegal gratuity. The charges were vacated upon appeal on the grounds that North's Fifth Amendment rights may have been violated by indirect use of his testimony to Congress which had been given under a grant of immunity. Poindexter was convicted on several felony counts of lying to Congress, obstruction of justice, conspiracy, and altering and destroying documents pertinent to the investigation. His convictions were also overturned on appeal on essentially the same grounds as North's. The Independent Counsel was not able to re-try North or Poindexter.
Some people claim that the CIA and perhaps other parts of the US government may also have been involved with drug trafficking to raise money for the Contra campaign. The 1988 report from the Senate Subcommittee on Narcotics, Terrorism and International Operations concluded that various individuals in the Contra movement were involved in drug trafficking, that other drug traffickers provided assistance to the Contras, and that "there are some serious questions as to whether or not US officials involved in Central America failed to address the drug issue for fear of jeopardizing the war effort against Nicaragua." At a minimum, Oliver North's notebooks indicate that he was informed repeatedly of Contra involvement in drug trafficking, and there is no record of his passing this information along to the DEA.
On June 27 1986, the International Court of Justice (also known as the World Court) ruled in favour of Nicaragua in the case of "Military and Paramilitary Activities in and Against Nicaragua". The U.S. refused to pay restitution and claimed that the ICJ was not competent for the case, and subsequently vetoed a United Nations Security Council Resolution calling on all states to obey international law. The United Nations General Assembly passed a resolution (http://www.un.org/documents/ga/res/41/a41r031.htm) in order to pressure the U.S. to pay the fine. Only El Salvador, which also had disputes with Nicaragua, and Israel (which receives US$4 billion a year in aid from the U.S.) voted with the U.S. In spite of this resolution, the U.S. still elected not to pay the fine.
The Sandinistas lost power in fresh elections in February 1990, following a decade of U.S. economic and military pressure.
Significance: The separation of powers
The Iran-Contra Affair is significant because it brought many questions into public view:
- Does the president have unconditional authority to conduct foreign policy? (Can the president approve selling arms to a foreign nation without congressional approval?)
- What information does the president have to provide to Congress and when should that information be supplied? (Does the president have to tell Congress about foreign policy initiatives?)
- What authority, if any, does Congress have to oversee functions of the executive branch? (Does funding for foreign policy initiatives have to be approved by Congress? Who defines the entire spending budget and who regulates it? Is the provision of the 1978 Ethics in Government Act that creates the position of independent counsel answering to the Attorney General, constitutional?)
- What role does the Supreme Court have in deciding conflicts between the legislative branch and executive branch?
- How much support is America entitled to provide to armed opposition forces seeking to replace a government it does not support with one that it does?
Most, if not all, of the constitutional and ethical questions are still unresolved. On one view, it appears that if the legislative and executive branches do not wish to work together, there are no legal remedies. These are transient issues in that the executive and legislative branches change every few years.