The Iran-Contra Affair involved the covert sale of arms to Iran by the Reagan administration to fund anti-communist rebels, or Contras, in Nicaragua. Independent Counsel Lawrence Walsh uncovered that funds from the arms sales to Iran were illegally diverted to support the Contras, violating Congressional restrictions. Over the course of an eight year investigation, Walsh charged 14 administration officials with crimes related to the cover up, though many convictions were later overturned. While Reagan claimed ignorance of the diversion, Walsh argued the affair demonstrated failures of executive oversight and accountability.

1. The Iran-Contra Affair “ The most critical special operations mission we have…today is to persuade the American people that the communists are out to get us…If we win the war of ideas, we will win everywhere else.” — 1983 speech attended by Oliver North

2. On December 19, 1986, Lawrence E. Walsh was brought in as independent counsel for the Iran-Contra affair. He was instructed to investigate the federal government, and inquiry spanned across involvement in Nicaragua, Iran, and the diversion of funds between. Over the next eight years, he pursued truth despite the administration’s attempts to cover-up and protect its president, Ronald Reagan. Eventually, fourteen federal officials were charged with “cover-up” crimes; eleven were convicted, although two convictions were later overturned on appeal. Two officials were pardoned before trial. One case was dismissed after the Bush administration refused to declassify necessary information. In 1992, George Bush pardoned all executives convicted or charged in the scandal.

3. Walsh looked into the following five issues concerning the Reagan administration: “  the direct or indirect sale, shipment, or transfer since in or about 1984 down to the present, of military arms, materiel, or funds to the government of Iran, officials of that government, persons, organizations or entities connected with or purporting to represent that government, or persons located in Iran 2. the direct or indirect sale, shipment, or transfer of military arms, materiel or funds to any government, entity, or person acting, or purporting to act as an intermediary in any transaction referred to above 3. the financing or funding of any direct or indirect sale, shipment or transfer referred to above 4. the diversion of proceeds from any transaction described above to or for any person, organization, foreign government, or any faction or body of insurgents in any foreign country, including, but not limited to Nicaragua 5. the provision or coordination of support for persons or entities engaged as military insurgents in armed conflict with the government of Nicaragua since 1984.”

4. In his report, Walsh writes, “The Iran and contra operations were merged when funds generated from the sale of weapons to Iran were diverted to support the contra effort in Nicaragua. Although this "diversion" may be the most dramatic aspect of Iran/contra, it is important to emphasize that both the Iran and contra operations, separately, violated United States policy and law. The ignorance of the "diversion" asserted by President Reagan and his Cabinet officers on the National Security Council in no way absolves them of responsibility for the underlying Iran and contra operations.” Thus, while it remains unclear even now the extent to which Reagan and other high-ranking officials were involved in the diversion of funds, the criminal implications of individual involvement in both Nicaragua and Iran remains. Walsh limited prosecution to “cover-up” crimes and did not prosecute Reagan for the separate events. While the executive branch consciously overstepped its legal privilege, the congressional rulings it violated did not specifically provide enforcement provisions. And although Reagan is blamed for his unspoken approval or careless negligence of the affair, there is no proof that he was aware of a connection between Iran and Nicaragua. Technically, then, the president broke no laws. Walsh, however, places blame high up in the administration and shows concern that “the governmental problems presented by Iran/contra are not those of rogue operations, but rather those of Executive Branch efforts to evade congressional oversight.” He also worries at the lack of infrastructure for self-enforcement since “the competing roles of the attorney general adviser to the President and top law-enforcement officer come into irreconcilable conflict in the case of high-level Executive Branch wrongdoing.” Under the Classified Information Procedures Act (CIPA), the attorney general, in this case Edwin Meese III, has “the power to block almost any potentially embarrassing prosecution that requires the declassification of information.” Walsh suggests revision to the law. The Iran-Contra affair, then, was not simply an individual occurrence but an event that clearly fits a Cold War trend of increasing executive power and privilege. The extent of federal interference in foreign affairs, media relations, and public deception is astounding. America witnessed a dramatic decline in world hegemony post-Vietnam, and in response it fought desperately, usually unsuccessfully, to preserve the status quo abroad and at home. As the American public became more and more disillusioned with Cold War policy, the Reagan administration stooped to unethical means in vain hopes to secure what America had already lost.

5. The Affair: Part I: Cast of Characters and Organizations Involved Part II: Chronology of Events Part III: Analysis

6. Cast of Characters Elliot Abrams —assistant secretary in the state department, chaired the Restricted Inter-Agency Group (RIG) responsible for coordinating the administration’s policies in Latin America, pleaded guilty to withholding information from Congress George Bush —Vice President, fully aware of Iran arms sales that violated congressional embargoes although it remains unknown if he was aware of fund diversion. Pardoned all principals in the scandal as president in 1992. William J. Casey —director of CIA. The Boland amendment prohibited CIA involvement, but Casey was instrumental in setting up the covert operation and pairing North and Secord to work together on supporting the contras. Casey encouraged the CIA to work closely with the NSC in both the Nicaraguan and Iranian operations. He was hospitalized with a fatal illness and died before investigation into his specific role could begin.

7. Carl R. Channell —pleaded guilty to conspiracy to defraud the United States, worked closely with North to raise money through political fundraising and to discredit democratic candidates and congressmen Albert Hakim —“Pleaded guilty November 21, 1989, to a misdemeanor of supplementing the salary of Oliver L. North. Lake Resources Inc., in which Hakim was the principal shareholder, pleaded guilty to a corporate felony of theft of government property in diverting Iran arms sales proceeds to the Nicaraguan contras and other activities.” Robert C. McFarlane —national security advisor, pleaded guilty to withholding information from Congress, encouraged Reagan to participate in Iran arms sales Attorney General Edwin Meese III — initially exposed the relationship between Iran arms sales and contra funding, conducted private interviews with officials and took no notes, allowed potential evidence to be destroyed/lost, close friend and adviser to Reagan

8. Lieutenant Colonel Oliver North —member of the National Security Council, fired after scandal exposed, “convicted of altering and destroying documents, accepting an illegal gratuity, and aiding and abetting in the obstruction of Congress. Conviction reversed on appeal.” John M. Poindexter —national security advisor, “convicted of conspiracy, false statements, destruction and removal of records, and obstruction of Congress. Conviction reversed on appeal” Walter Raymond Jr. —former member of CIA’s overseas media operations, involved in domestic “public diplomacy” program, created the S/LPD and oversaw propaganda campaigns at the NSC

9. Ronald Reagan —President, aware of Iran arms sales and involvement in Nicaragua but it remains unknown if he gave approval to fund diversion. Blamed for negligence in the Tower report. Otto Reich —director of the S/LPD and reported directly to Raymond Richard V. Secord — pleaded guilty to making false statements to Congress, worked closely with North and Hakim in the diversion and raising of funds. “Indicted on six felony charges. A second indictment was issued charging nine counts of impeding and obstructing the Select Iran/contra Committees.” “ Without blowing our own horn, it got to the point where the President of the United States, the Secretary of the State, the National Security Advisor, Cabinet officials and lots of other people relied on our information and used it verbatim. I mean, it was that good.” — Otto Reich

10. George P. Schultz —Secretary of State, aware of the Iran arms sales despite declaring otherwise in his initial testimony Anastasio Somoza Debayle — dictator of Nicaragua, overthrown by the Sandinista National Liberation Front (SNLF). Members of his National Guard became the contra rebels, whom the US backsed with military and financial aid. John G. Tower —former colleague of McFarlane, appointed by Reagan to investigate the higher levels of the executive branch in involvement in the Iran-Contra affair. Worked in the commission with Edmond Muskie and Brent Scowcroft.

11. Caspar W. Weinberger —Secretary of Defense, charged with four counts of false statements and perjury; pardoned before trial by President Bush. At the time President Bush pardoned Weinberger and Clarridge, he also pardoned George, Fiers, Abrams, and McFarlane. Lawrence E. Walsh — Independent Counsel brought in to investigate the Iran-Contra affair. The entire investigation lasted eight years. Walsh was frustrated in many of his attempts to uncover the truth because Attorney General Meese, who had strong loyal ties to the administration, had ultimate authority over incriminating documents or potential evidence.

12. Organizations Involved in the Iran-Contra Affair NSC: National Security Counsel, directed by Raymond and involved in the widespread “public diplomacy” campaign. North, an employee, was responsible for funding for the Nicaraguan campaign NEPL: National Endowment for the Preservation of Liberty  worked closely with North to discredit democratic congressmen and leaders. Often, the NSC conspired with independent organizations (institutions, universities, journalists) so that information and opinions released would seem more credible and would spring from a wider variety of sources. RIG  Restricted Interagency Group, overseen by Abrams S/LPD  State Department’s Office of Public Diplomacy for Latin America and the Caribbean, under the guidance of RIG. Directed by Reich who reported directly to Raymond at the NSC “ Reich’s staff literally policed the airwaves, monitoring major news outlets for offending items and taking action against the journalists who deviated from the Reagan line.”

13. Funding Under Oliver North Donations from foreign countries 2. Private contributions from Americans sympathetic to Reagan’s policy in Nicaragua. North collaborated with Carl Channell and Richard Miller who used political fundraising to acquire millions of dollars through an illegally tax-exempt process. Diversion of funds from Iran arms sales North was given oversight of this money, which amounted to over $47 million dollars and was processed through secret Swiss bank accounts and a complicated network in order to remove suspicion and the hint of government involvement. The Enterprise, overseen by North, Secord, and Hakim was officially responsible for the flow and diversion of funds.

14. 1979  Sandinista National Liberation Front (SNLF) overthrows the dictatorial regime of Somoza in Nicaragua. Contra rebels, comprised primarily of former members of Somoza’s National Guard, wage guerilla warfare against Sandinista government and civilians. Carter’s long-term strategy is to supply limited US aid to prevent socialist revolution and guarantee Nicaraguan repayment of Somoza’s $1.6 billion foreign debt. Eventually the sacrifice the Sandinistas would demand of citizens in order to pay off debt would undermine the stability of their government. 1981  US involvement in the brutal operations in El Salvador anger human rights advocates. To win popular support for involvement, and to manipulate public favor for the contras, Casey and the rest of the administration mislead Congress, adhering to the myth that the Sandinista government was responsible for rebellion in El Salvador. “ I was absolutely stupefied when I heard how it [the contra operation] had been described to Congress.” — Craig Johnstone, deputy assistant secretary of state for inter-American affairs

15. 1982  The Boland Amendment stops both the Pentagon and CIA from interfering in Nicaragua in order to overthrow the Sandinista government. This prohibits military aid being given to the contras or their organization, United Nicaraguan Opposition (UNO). The administration continues to support the contra rebels and is convinced that the precedence of the Reagan doctrine, that the US government would train and assist anti-Communist movements, applies to Nicaragua. Reagan calls the contras "the moral equivalent of our Founding Fathers” although Robert Owen, a federal employee and field operative, privately calls them “liars and greed and power motivated” “ If the American people could have talked with the common people of Nicaragua whose women and children are indiscriminately kidnapped, tortured and killed by terrorists financed by the American taxpayers, they would rise up in legitimate anger.” — Congressman Berkeley Bedell  Reagan officially authorizes covert CIA operations in Nicaragua  A“public diplomacy” program begins under Casey’s supervision. Since the 1947 National Security Act prohibits the CIA from involvement in domestic programs and Reagan’s executive order 12333 stops actions “intended to influence United States political processes, public opinion…or media,” the official task is “externalized” and given to the NSC creating, in effect, the first peace-time propaganda ministry.

16. “ [Terrell is] an active participant in the disinformation/active measures campaign against the Nicaraguan Democratic Resistance [contras]. Terrell has appeared on various television ‘documentaries’ alleging corruption, human rights abuses, drug running, arms smuggling and assassination attempts by the resistance and their supporters.” — North’s memo to Reagan titled “Terrorist Threat: Terrell” 1983  Amendment to Boland Amendment caps military aid to contras at $24 million.  Contras attack Nicaragua’s port, Corinto, with a CIA-supplied ship. The US then participates in destroying Nicaraguan harbors, termed an “act of war” by Senator Barry Goldwater.  US cuts off economic aid to Nicaragua and influences such international corporations as the World Bank to end aid and loans.  Reagan issues National Security Doctrine Directive 77 (“Management of Public Diplomacy Relative to National Security”), which creates a subgroup within the NSC to oversee, essentially, a coordinated propaganda campaign.  Raymond, architect of the S/LPD, officially retires from the CIA so as to leave “no question whatsoever of any contamination” and then assumes “overall responsibility for NSC staff coordination concerning public diplomacy” by heading the Central American Public Diplomacy Task Force, an interagency committee

17. “ In the specific case of Nica[ragua], concentrate on gluing black hats on the Sandinistas and white hats on UNO [the contras’ United Nicaraguan Opposition].” — NSC’s director of international communications 1984  Second Boland Amendment: “During fiscal year 1985, no funds available to the Central Intelligence Agency, the Department of Defense, or any other agency or entity of the United States involved in intelligence activities may be obligated or expended for the purpose or which would have the effect of supporting, directly or indirectly, military or paramilitary operations in Nicaragua by any nation, group, organization, movement, or individual.”  Despite congressional disapproval, Reagan tells National Security Adviser Robert McFarlane, "I want you to do whatever you have to do to help these people keep body and soul together.”  Over 1000 US military personnel are stationed in Honduras, in close proximity to Nicaragua. US aid to Honduras increases over twenty times during Reagan’s presidency.  North oversees a sting operation to discredit the Nicaraguan government and launch an anti-Sandinista/anti-drug campaign  During presidential election night news coverage, stories about Nicaragua receiving fighter planes from the USSR (the “MIGs Crisis”) circulate on national television. The crisis is entirely mythical yet the S/LPD is responsible for over thirty briefings on the issue to media personnel

18. “ Congress must believe that there continues to be an urgent need for funding.” — Oliver North “ [S/LPD is] an important cog in the Administration’s effort to manipulate public opinion and congressional action.” —Representative Jack Brooks 1985  Congress grants the Reagan administration an additional $14 million to aid contras. Prior to the vote, North plans to leak select information and launch a scheduled propaganda campaign to garner support. He is successful.  National Security Advisor Robert McFarlane asks Reagan to approve sales of arms to Iran, after the country requests assistance during its war with Iraq. Despite a US embargo and the Arms Exports Control Act, Reagan approves. McFarlane is convinced the sale will improve relations with Iran and Lebanon and increase US influence in the fractious Middle East and Reagan sees the opportunity to free the seven American hostages being held by terrorists in Lebanon. Negotiations and arms shipments, known as the HAWK shipments, violate both the congressional embargo and Reagan’s own campaign promises. Secretary of Defense, Caspar Weinberger, and Secretary of State, George Shultz, oppose involvement but are overruled by CIA director William Casey and, of course, McFarlane and Reagan. Over 1500 missiles are shipped to Iran. Three hostages are eventually released but then replaced by three more. Audio Clip: Elliot Abrams briefs the press, 1986

19. 1986  Congress approves $100 million to aid contras  North plots with Panama to frame the Sandinista government with supplying guns to Salvadoran guerillas.  October 5: Nicaraguan soldiers shoot down American plane transporting military supplies to contra rebels. Surviving crew member, Eugene Hasenfus, admits that he is employed by the CIA  November 3: US’s secret arms sales to Iran leaked by Lebanese paper, "Al-Shiraa." President Reagan denies any US involvement, only to confirm the sale a week later. He insists that the US was only interested in improving relationships and the hostage situation was irrelevant to the situation but polls show that only 14% of the American public believe him. Audio Clip: Reagan addresses nation on November 13, 1986  November 25: Attorney General Meese publicly announces the findings of the Justice Department, which show that proceeds from Iran arms sales were funneled into the covert operation in Nicaragua. Meese was suspicious when he found that only $12 million of the $30 million generated from arms sales to Iran were in the government’s treasury. Oliver North, member of the NSC, admits to diverting funds to the contra rebels under the supervision of National Security Adviser Admiral John Poindexter. North also assumed that the President was aware of the situation. He is later fired and Poindexter resigns. In further investigation, Meese proves unreliable; he fails to take steps to secure important records or potential evidence and intentionally lies to protect the President.

20. December 19: Lawrence E. Walsh appointed as independent counsel. Eventually fourteen government officials are charged with operational or “cover-up” crimes. 1987  February: Reagan appointed Tower Commission releases report blaming Reagan for his passivity in the scandal. According to the finding, his disengagement allowed the illegal events to progress.

21. Reagan hears Tower Commission Report

22. November: Congress releases a report giving Reagan “ultimate responsibility” for the Iran-Contra affair. Walsh continues investigations. 1986  May: William J. Casey, former CIA director, dies from fatal illness. His official role in the affair is never fully known as he was hospitalized before Walsh’s investigations began. Audio Clips: Excerpts from Oliver North’s hearings  May-August: Congress conducts televised hearings with federal officials 1992  December 24: President George Bush pardons all officials convicted or charged in the scandal 1994  Walsh’s final report after eight years of investigation is published. While it places blame on both Reagan and Bush for their involvement (or the “blind eye” they turned to the situation), it implies no criminal actions on the part of either president.

23. Where the Guilt Lay “ Independent Counsel has concluded that the President's most senior advisers and the Cabinet members on the National Security Council participated in the strategy to make National Security staff members McFarlane, Poindexter and North the scapegoats whose sacrifice would protect the Reagan Administration in its final two years. In an important sense, this strategy succeeded. Independent Counsel discovered much of the best evidence of the cover-up in the final year of active investigation, too late for most prosecutions.”

24. “ The American people must be the most misinformed people on earth.” — Nicaraguan peasant The Reagan administration created and maintained the first peace-time propaganda ministry and employed Cold War rhetoric, anti-communism, political tactics, sting operations, even lies in pursuit of their goals. Essentially, the American public and media were manipulated and duped not only through the hearings and evidence presented in the Iran-Contra scandal but prior to it as well. The administration was set on backing the contras in Nicaragua and it was willing to use virtually any method necessary to garner popular support. Reagan was, in essence, fighting a two front war: on the one hand, he had the foreign affairs and military aid in Nicaragua; on the other, the American people. “ The Office of Public Diplomacy was carrying out a huge psychological operation [in America], the kind the military conduct to influence the population in denied or enemy territory.” — Miami Herald The government pandered to citizens’ fears. It played upon concern over an influx of immigration, labeled Sandinistas as anti-Semitic, accused the Nicaraguan government of backing the Salvadoran insurgency (the US used this as a pretext for the contra war) when in fact the administration was responsible for slaughter in that country. “ [The propaganda campaign was an attempt to] play on the basest and most selfish instincts of humanity.” — Senator David Durenberger, Chairman of Senate Intelligence Committee

25. The administration consistently manipulated both the release of information and information itself. Once, the US credited the contras with something they had not in fact done to boost public confidence in the rebels. Officials in the NSC attacked journalists and the media and went so far as to monitor NPR and point out “flaws in information” in many sources. They used exaggerated or completely erroneous information to target both the Nicaraguan government and opponents, usually Democrats, in Congress. “ They were trying to manipulate [U.S.] public opinion…using the tools of…the CIA covert operation shop.” — NSC official The administration’s utilization of “white propaganda” was both unprecedented and unwarranted. The citizens of America became targets of a national program of disinformation, one that stemmed from the President himself and involved most of the high-ranking executive officials in the White House. “ Barnes--wants indict Ollie. Watergate babies--want to get at the Pres. through Ollie. Want another Watergate. Put Barnes out of politics. If we get ride of Barnes we get ride of the ring leader and rid of the problem.” — NEPL notes referring to Maryland Democratic Representative Michael Barnes

26. The administration was mainly successful in the early eighties in manipulating popular opinion and keeping approval ratings high. At the exposure of the Iran-Contra affair, however, ratings fell 15 to 21 percentage-points. Brody and Shapiro, in their analysis of public opinion in the aftermath of the scandal, credit the nation’s disillusionment to the participation of experts in the media coverage of the event. Not only did the event receive extensive coverage, but also, a significant portion of coverage was devoted to these experts who criticized the affair and the administration responsible. Because of this, Brody and Shapiro posit that America did not experience a “rally round the flag” moment, but rather, Americans (at least temporarily) lost faith in their government. “ We can and must go over the heads of our Marxist opponent directly to the American people. Our targets would be: within the United States, the Congress..the general public [and] the media.” — Kate Semerad, official at the Agency for International Development (AID) “ It is imperative at this time to formulate some plan of attack…against individuals who defiantly display their contempt for the U.S. government by making speeches and propagandizing their cause.”— FBI

27. Generally, in a national crisis or diplomatic error, the media is overwhelmed with information and it avoids critical reports, which seem both unpatriotic and unprofessional. After the Iran-Contra scandal broke, however, experts in the field were given the opportunity to voice dissent and thus created a dramatic decrease in public support. TV listing from the New York Times in 1986 show the amount of coverage in just one evening. All of the individuals listed below were mentioned in the Brody article as experts/critics.

30. The Iran-Contra Affair was significant as a singular event and also as as a high-water mark in American history of government deception and propaganda manipulation. While it never received the same attention as Watergate (Reagan was never directly implicated in criminal actions), and even though public approval generally remained high after the initial shock of the scandal, the affair was historically important. It marked the exposure of a long trend of covert CIA and executive operations dating back to the beginning of the Cold War. And as the events were uncovered, it gave Americans a new look at the role their government played. The Executive Branch intentionally and unashamedly overstepped its authority through its involvement in both Iran and Nicaragua. The illegal diversion of funds between them was the final straw that brought the Reagan administration into question. And even now, it remains in question the extent to which the President and his men manipulated both foreign diplomacy and domestic policy.