Iran-Contra Affair

The Story

On October 5, 1986, Nicaraguan government soldiers shot down an American cargo plane over their country. It was carrying military supplies to the contras, the rebels fighting Nicaragua's leftist Sandinista government. The one surviving crew member, an American named Eugene Hasenfus, was taken captive and said he was employed by the CIA.

That was a problem for Washington, because from October 1984 to October 1986, Congress had prohibited U.S. aid to the contras' military activities. The ban was known as the Boland Amendment. After the shootdown, according to Independent Counsel Lawrence Walsh's later report, senior CIA officials lied to Congress about U.S. government involvement in resupplying the contras, to, as one of them put it, "keep the spotlight off the White House."

"A few months ago I told the American people I did not trade arms for hostages. My heart and my best intentions still tell me that's true, but the facts and the evidence tell me it is not." (President Reagan, March 4, 1987)

A month after the shootdown, on November 3, a Lebanese publication reported a second secret: the United States had been selling weapons to Iran, despite an embargo on such sales. The goal was to win the release of Americans held hostage in the Middle East. On November 13, President Ronald Reagan went on television. "We did not -- repeat -- did not trade weapons or anything else for hostages, nor will we," he said.

On November 25, 1986, the two secrets turned out to be connected. Attorney General Edwin Meese announced that some of the proceeds from the Iran arms sales had been diverted to the contras. The same day, Oliver North, a Marine lieutenant colonel on the National Security Council staff, was fired. Walsh's report would describe him as the White House official most directly involved in secretly aiding the contras, selling arms to Iran and diverting the proceeds.

The money moved through what investigators called the Enterprise, formed by North, retired Air Force Maj. Gen. Richard Secord and businessman Albert Hakim. It used a network of corporations and Swiss bank accounts that Secord and Hakim put at North's disposal. Its money came from foreign countries, wealthy American donors and the Iran sales. According to Walsh, more than $47 million flowed through Enterprise accounts.

A presidential review board headed by former Senator John Tower reported in February 1987. On March 4, Reagan addressed the nation again. "A few months ago I told the American people I did not trade arms for hostages," he said. "My heart and my best intentions still tell me that's true, but the facts and the evidence tell me it is not." What began as a strategic opening to Iran, he said, had "deteriorated, in its implementation, into trading arms for hostages."

That summer, select committees of Congress held televised hearings. North and National Security Adviser John Poindexter testified under grants of immunity. According to Walsh, Poindexter told Congress that he made the decision to authorize the diversion on his own and did not tell the president, though he believed the president would have approved. North testified that he believed the president had authorized it.

Walsh's prosecutions ran into the consequences of those immunity grants. Fourteen people were charged and 11 were convicted. North was convicted in May 1989 of three charges, including destroying and falsifying documents. At his trial, his secretary testified about helping him alter, shred and remove documents. But in July 1990, an appeals court vacated North's convictions to determine whether his immunized testimony had influenced witnesses, and the case was dismissed in 1991. Poindexter's 1990 convictions were reversed in November 1991 on the same issue. One case was dismissed when the Bush administration declined to declassify information needed for trial.

On December 24, 1992, President George H.W. Bush, who had been vice president during the affair, pardoned six people, including former Defense Secretary Caspar Weinberger, whose trial had been set for January 1993. Walsh's final report, dated August 4, 1993, concluded that "high-ranking Administration officials violated laws and executive orders." It found that after the exposure, officials "deliberately deceived the Congress and the public" about what they knew. It also found that large volumes of relevant documents were "systematically and willfully withheld from investigators."

Walsh was also clear about what he could not prove. He found "no credible evidence that President Reagan violated any criminal statute" and could not prove that Reagan authorized or knew about the diversion. But Walsh wrote that Reagan "set the stage for the illegal activities of others." He also obtained no evidence that Bush knew about the diversion, though he found Bush "fully aware of the Iran arms sales."

The core of Iran-Contra is not in dispute. It is documented in a president's own televised admission and in thousands of pages of official findings.