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What Was the Arms-for-Hostages Iran-Contra Affair?

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Others took the fall, but the arms-for-hostages scandal known as the Iran-Contra affair was the result of ideological conceits Ronald Reagan and George H.W. Bush ardently supported.

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Question: What Was the Arms-for-Hostages Iran-Contra Affair?
Answer: The Iran-Contra affair was a constitutional crisis that embroiled the Reagan administration in its last two years (1986-88), raised the prospect of Ronald Reagan’s impeachment, clouded the presidency or George H.W. Bush and contributed to keeping it from extending to a second term.

The scandal entailed illegal funding and arming of Nicaragua’s right-wing contras fighting the leftist Sandinista regime as well as illegally trading arms with Iran in exchange for the release of seven American hostages held by Iranian-sponsored militants in Lebanon. Profits from arms sales to Iran were to be used to buy weapons for the contras.

How the Reagan Administration Systematically Broke the Law

Congress had forbidden the Reagan administration from supporting the Nicaraguan Contras, and the administration’s public stance was never to negotiate with hostage-takers, terrorists or Iran. In every case, the administration secretly broke policy and countered congressional directives by launching what was essentially a privatized foreign policy operation. The operation’s point men were the National Security Council’s Robert McFarlane (1983–85) and John Poindexter (1985–86) and NSC staffer Marine Lt. Col. Oliver North.

The scandal eventually implicated numerous and senior members of the Reagan administration, including President Reagan himself, Vice President George Bush, Secretary of State George P. Shultz, Secretary of Defense Caspar W. Weinberger, Director of Central Intelligence William J. Casey, and national security advisers McFarlane and Poindexter. While Weinberger and Shultz dissented from the policy decision, Weinberger eventually gave in by ordering the Department of Defense to provide the necessary arms to Iran and the Contras.

What a Life Was Worth

“The market price was set: One American citizen is worth 300 TOW antitank missiles, or 50 Hawks and 200 TOWs,” wrote Terry Anderson in Den of Lions, the account of his seven-year captivity in Lebanon. (Hawks are surface-to-air missiles; TOW is the acronym for "TOW" stands for "Tube-launched, Optically-tracked, Wire-guided" missiles). Anderson was referring to a Dec. 5, 1985 memo by North outlining the package of weaponry to be shipped to Iran by way of Israel. On Feb. 17, 1986, 500 TOW missiles were shipped from Israel to Bandar Abbas in Southwest Iran, according to Anderson (who had been the Associated Press’ bureau chief in Beirut before his captivity). A second shipment of 500 TOWs followed the same route on Feb. 27.

“No hostages were released,” Anderson wrote. “However, North got something else out of the deal. The Americans had heavily overcharged Iran for the missiles they had sent,” so even after all involved took their cut, “millions of dollars were left over, and ‘off the books’—that is, with no need to account for it, since officially it didn’t exist. That money, it occurred to North very quickly, could be used for another project dear to both his and Reagan’s hearts: the Nicaraguan Contras.”

The Scandal Breaks

Hints of an illegal operation first appeared on Oct. 5, 1986, when Nicaraguan government soldiers shot down a CIA cargo plane carrying weapons to the Contras, including 50,000 rounds of ammunition for Soviet-built AK-47 automatic rifles, rifles, grenades and boots. The Reagan administration immediately denied involvement, claiming the plane had been operated privately. But the one surviving crewmember, Eugene Hasenfus, five days later publicly implicated the CIA.

The scandal broke in earnest on Nov. 3, 1986, when the Lebanese weekly, Al-Shiraa, published an account of McFarlane’s visit to Tehran (the magazine got some details wrong: McFarlane was in Tehran in May 1986, not in September) and revealed the secret dealings between Reagan administration officials and Iran over weapons, hostages and Iran’s promise to stop supporting “liberation movements in the world.”

A Mostly Successful Cover-Up

“When these operations ended,” Independent Prosecutor Lawrence Walsh concluded in his report in August 1993, “the exposure of the Iran/contra affair generated a new round of illegality. Beginning with the testimony of Elliott Abrams and others in October 1986 and continuing through the public testimony of Caspar W. Weinberger on the last day of the congressional hearings in the summer of 1987, senior Reagan Administration officials engaged in a concerted effort to deceive Congress and the public about their knowledge of and support for the operations. 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.”

See a list of prosecutions, convictions and pardons following the Iran-Contra scandal.

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