Republic of the Philippines

Mindanao State University-Iligan Institute of Technology

College of Arts and Social Sciences, School of Graduate Studies
Tibanga, Iligan City, Philippines
\

The Iran-Contra Affair: A political scandal revealed

Term Paper

Presented to:
Prof. Cecilia B. Tangian, PhD.

In Partial Fulfillment of the Requirements

for the Course of History 210: Issues on Contemporary North American History

Presented By:

Brecht A. Tampus
 Introduction

The United States policies of the eighties were a discontinuation of policies compared to the

decades preceding it. With the arrival of the fortieth President Ronald Reagan in the White

House, both internal and external affairs were rearranged to meet the perceived needs of this

period. A new conservative coalition was formed under Reagan that would result in a two-

term administration; from January 20, 1981 until January 20, 1989. By contrasting his

predecessor Jimmy Carter and with his Hollywood charm Reagan became a popular president.

With his economic revising, that took shape in the Reaganomics, he won nation-wide support

by stressing tax cuts and the restriction of government powers and redundant functions. This

was also welcomed among the middle-class portion of the American population. However,

they did not know Reagan’s plans would largely profit the wealthy and large corporations

with which he had many ties 1. His pro-business policies resulted in the fact that by 1990, ‘the

richest 1 percent of Americans controlled 40 percent of the nation’s wealth (…). Not since the

1920’s had America seen such economic inequality’. 2 The attack on tax-funded social

programs and welfare would also harm a substantial part of the lower classes of his voters that

could not see past the Hollywood-like rhetoric promising many things during the speeches

running up to his election in 1980. Together with his vice-president George H.W Bush and

their team they formed a conservative agenda that was to set a start sign for future policies,

continuing al the way up to the present.

One of the most prominent aspects of this new conservative agenda was the Reagan-doctrine.

Combining his strong anti-communist thoughts and positive hope for American power and

1
The Rockefellers, General Electric and several others. Reagan, Ronald, An American Life. The autobiography.
1990 Simon and Schuster, New York. And Norton, Mary Beth et.al., A People and A Nation. 2005 Hougthon
Mifflin, Boston pp. 893
2
(Norton et al 2005: 900)

2
influence to bring change into the world, he set out an international agenda to undermine the

Communist system. He believed, in accordance with his successor George Bush sr., that it

was in America’s hands to create a New World Order, borrowing both the Bush’s words in

many speeches over the years that followed. Could it be the world order former President and

World War Two General Dwight D. Eisenhower warned the world about, citing in his 1961

farewell address that: ‘(…) we must guard against the acquisition of unwarranted influence,

whether sought or unsought, by the military-industrial complex’ 3? In this speech he warns

repeatedly about the influence in political, economic and social spheres of the increasing

militarized American nation. Under Reagan, the United States enrolled in a military build-up

never before seen during peace. Norton et al., provide us with some mind staggering numbers;

in 1985 the military budget doubled to 294,7 billion compared to 1980.4 The Pentagon was

spending 28 million dollars per hour, leaving aside the Strategic Defense Initiative (SDI) also

known as the ‘Star Wars-project’ that also consumed tens of billions of dollars5.

With this strong military position Reagan cited ‘(…) we weren’t going to stand by and do

nothing while they sought World Domination; I also tried to send out a signal that the United

States intended to support people fighting for their freedom against Communism wherever

they were (...)’.6 This doctrine was applied to several regions in the world. The focus here is

on how and why it resulted in the supporting of the Contra ‘freedom fighters’ in Nicaragua.

This practical application of the Reagan-doctrine has led to one of the great presidential

scandals of the post-World War era; the Iran-Contra Affair.

3
Eisenhower, Dwight D. Farewell Address. Delivered 17 January 1961 Copyright 2001-2008. 
American Rhetoric. < http://www.americanrhetoric.com/speeches/dwightdeisenhowerfarewell.html>
4
(Norton et al 2005: 900)
5
Ibidem
6
Reagan, Ronald, An American Life. The autobiography. 1990 Simon and Schuster, New York. pp. 552

3
 Statement of the Problem

1. What were the historical settings the scandal took take place in?

2. Who were the main actors in the infamous Iran-Contra Affair, and what was their

common goal?

Significance of the Study

The goal of this paper is to look into the issue of Iran-Contra Affair during the Reagan

Administration as well as to gather information and understanding on how it impacted

Reagan’s administration. This paper will also seek to answer these questions by taking a look

at the history of Nicaragua and the source of its relations with the United States of America.

Methodology

These questions will be worked out by taking a preliminary look at an historical overview of

Nicaragua events that led up to the Sandinista rule, followed up by a description of what the

Iran-Contra affair (also known as Iran-gate or Contra-gate) is, and how it was investigated. A

link will be drawn to present day foreign politics and the neo-conservative agenda that has

held the world in its grip since the election of President George W. Bush. A summarizing

conclusion will be given in the end.

Findings of the Study

Nicaragua, a historical overview

Roughly five hundred years ago in the year 1502, Christopher Columbus was the first

European to have seen the shores of the Central American land that forms the present-day

Republic of Nicaragua. This is the largest Central American country, with an estimated

population of 5.6 million in 2007.7 Its name derives from the indigenous chief Nicarao, who
7
The World Bank Group, 24 september 2008 <http://devdata.worldbank.org/AAG/nic_aag.pdf >

4
lived during the period of discovery by European conquistadors. In 1821, after a long history

of colonialism and changes of ruling authority, Nicaragua became independent within the

Federal Republic of Central America; a federal cooperation that was short-lived. Even before

this federation dissolved in 1840, Nicaragua received the status of an independent republic in

1838.

During most of the ninetieth century the republic suffered from civil wars and internal

conflicts between the conservative elite of Granada and the liberal elite of León. This was a

major obstacle for the overall development of the country. But they found a common enemy

in William Walker, an American adventurer and mercenary who took the presidency in 1856.

Together with other Central American states they drove him out and he was executed in

Honduras in 1860. Conservatives held the power over thirty years until Jose Santos Zelaya led

a Liberal revolt that ended in 1893, with Zelaya in power. In the early twentieth century the

United States (U.S.) intervened from 1909 to 1933 when President Franklin Roosevelt

initiated his Good Neighbour Policy, which limited the eagerness to blatantly dominate and

defend exploitative business practices with military or political power 8. The disputes leading

to United States interventions in 1909 resulted from a conflict over a proposal for a U.S.

funded Nicaragua canal and the establishment of naval bases. 9 Zelaya tried to limit the access

to Nicaragua’s national resources by foreign powers and opposed the plans for the canal

which was to be U.S.-controlled. I think this was the main reason for the U.S. troops to be

sent in, accompanied by a warship. But American officials declared that the purpose was ‘to

protect American lives and property’10. They managed to have Zelaya resign later that year,

and the canal project came under U.S. control.

8
(Norton et al 2005: 722)
9
(Bailey 1936:3)
10
United States Department of State, Bureau of Western Hemisphere Affairs
September 2008 < http://www.state.gov/r/pa/ei/bgn/1850.htm>

5
Instability of the Nicaraguan state resulted in U.S. occupation from 1912 to1933 (excluding a

brief period in 1925-1926 during a coalition government). This occupation was requested for

by U.S.-installed President Adolfo Diaz to provide ‘security’ for the nation. The Conservative

Party led the country again until 1927 when General Augusto César Sandino, later a rebel

(and guerilla) leader, refused to meet the demands of a treaty that would disarm the

conflicting parties in the country. His party was not even mentioned in the treaty and he felt

the Liberal Party was betrayed. His following statements provide a good illustration of his

feelings: ‘The world would be an unbalanced place if it allowed the United States of America

to rule alone over our canal, because this would mean placing us at the mercy of the Colossus

of the North, forcing us into a dependent and tributary role to persons of bad faith who would

be our masters without justifying such pretensions in any way’.11 The anti-imperialistic

Sandino declared war on the United States of America, and after having met the U.S. Marines

in open battle and sustained severe losses (due to the fact his forces were armed with ninetieth

century rifles and machetes), he switched to guerrilla tactics and planned assaults on mines,

plantations and other foreign influenced enterprises.

After the U.S. forces left Nicaragua in 1932 because the Great Depression was making

foreign occupations too costly, the U.S. government created the Guardia Nacional. These

militaristic police force was a U.S.-loyal control apparatus with a small top of U.S. Marines.

These left in 1933 following the earlier mentioned Good Neighbour Policy by Roosevelt. The

U.S. installed Anastasio Somoza García to lead the country with President Juan Bautista

Sacasa and Sandino. After the Marines left, Sandino agreed to sign a treaty acknowledging

Sarcasa’s government in exchange for communal lands and a right to maintain a small force

11
Sandino, Augusto César. Manifesto. July 1, 1927. < http://latinamericanstudies.org/sandino/sandino7-1-
27.htm>

6
in this region and amnesty, but he (Sandino) was betrayed in 1934 by Somoza who had him

assassinated by the Guardia Nacional after inviting him. Sarcasa was forced to resign by

Somoza.

This event started the so-called Somoza Dynasty, a military dictatorship that lasted from 1936

to 1979. This period was characterized by crony-capitalism and political puppets. But the

economy was in stable growth until in 1972 a major earthquake devastated the capital of

Managua. The corrupt government failed to aid in the relief and refused to commit to

reconstruction efforts which led to a growing discontentment among the population. The

Frente Sandinista de Liberación Nacional (FSLN) that was founded in the early 1960’s and

engaged in small guerilla activities, grew in popularity as a result. The assassination of a

journalist who was a critic on the Somoza’s was the final incentive for widespread

opposition.12 Evidence pointed to Somoza’s son and the Guardia Nacional as the perpetrators

of this murder. President Jimmy Carter had stated that the U.S. would withdraw its support to

Somoza, but intended to implement a government similar to his. This also mobilized many

young people to join the FSLN. After many years of government oppression, the Sandinistas,

as they called themselves after Sandino, obtained power in 1979 by means of a socialist

revolution fueled by massive discontent regarding socioeconomic differences. A theory that

can be well placed into this case is Edward Azar’s Theory of Protracted Social Conflict

(PSC). This theory gradually evolved during the seventies and can be explained as ‘the

prolonged and often violent struggle by communal groups for such basic needs as security,

recognition, and acceptance, fair access to political institutions and economic participation’ 13.

As Daniel Ortega, key figure in the leadership of the FSLN states:

12
The assasinated journalist was Pedro Joaquín Chamorro Cardenal, husband to Violetta Barrios de Chamorro,
who led the victorious opposition after the 1990 elections.
13
(Ramsbotham et al 2005: 85)

7
‘The people of Nicaragua were suffering oppression. This made us develop an awareness

which eventually led us to commit ourselves to the struggle against the domination of the

capitalists of our country in collusion with the U.S. government, i.e., imperialism. ‘14

Having organized many guerilla attacks, sabotage operations and massive strikes by the

population and kidnapping several government officials, the Sandinista revolution (1974-

1979) resulted in the end of the Somoza Dynasty. However, the newly self-declared

government faced great obstacles: ‘The new government inherited a country in ruins, with a

stagnant economy and a debt of about US$1.6 billion. An estimated 50,000 Nicaraguans were

dead, 120,000 were exiles in neighbouring countries, and 600,000 were homeless. Food and

fuel supplies were exhausted, and international relief organizations were trying to deal with

disease caused by lack of health supplies.15 It is clear the country had to overcome many

challenges on the road to becoming a stable and strong state.

The Sandinistas were a socialist group of many beliefs and had many hopes and plans for

devastated country of Nicaragua, reducing the enormous socioeconomic gap between the rich

industrial elite and the poor masses, reconstructing the infrastructure and providing free and

improved education. They were striving for more gender equality and a reduction of the state

debt that was left by the Somoza’s. The new government consolidated the revolution by the

creation of new institutions, thus providing a framework and foundation for the years to come.

A Council for Reconstruction or Junta was formed, which consisted out of three listed FLSN-

members and two opposition members. This was the highest governmental council and could

pass legislation when a bill was approved by at least three members. Beneath it was the

Council of State. This council had forty-seven seats, twelve were reserved for political parties

14
Daniel Ortega, < http://www.brainyquote.com/quotes/quotes/d/danielorte212803.html>

15
Merrill, Tim. ed. 1993. < http://countrystudies.us/nicaragua/15.htm>

8
(of which nine were Sandinista-connected), the rest belonged to Sandinista organizations.

This unequal representation resulted in the resignation of the two non-FLSN Junta members.

One of the FLSN-leaders, Daniel Ortega, who was recently elected president in 2006 again,

had a Marxist ideology and connections with Fidel Castro, the Communist leader of Cuba.

After the revolution in Nicaragua, the two countries heightened the level of support to each

other on many spheres. This cooperation was realized in spite of the fact that Nicaragua

expressively distinguished its own revolution from Cuba’s. Both nations were forced to

cooperate due to the embargos the U.S. had imposed on them. Cuba provided advisors,

supported the rebuilding of industry, health care and education, whereas Nicaragua sent

shipments of foodstuffs to compensate and alleviate the U.S. embargo on Cuba (and in 1985

also on Nicaragua). The Literacy Campaign in Nicaragua was rewarded by UNESCO with the

Nadezhda K. Krupskaya-reward and six other awards in the years 1980 to 199516.

The FSLN also planned to nationalize property that was previously owned by Somoza and

their affiliates to improve living standards. The new rulers aimed for a land reform which was

to distribute land more equal to its population. This would also result in redistributing of

several territories that was owned by U.S. corporations that had ties to the Somoza family. An

estimated number of 2.000 farms representing more than 20 percent of Nicaragua's cultivable

land were included in the reform.17 As we have seen from earlier Nicaraguan history, the

limiting of domestic resources to foreign exploitations had resulted in direct U.S. intervention.

This time, these political measures the FSLN had taken would contribute to indirect

intervention. A deeper look into these indirect interventions will follow later on.

16
Unesco Literacy Prizes, List of prizes, Honourable mentions and Recognitions from 1967 to 2001,
13 September 2001. pp. 11 Nadezhda K. Krupskaya was Communist Lenin’s wife, a teacher
< http://www.unesco.org/education/prizewinners_1967_2001.pdf>
17
Merrill, Tim. ed. 1993. < http://countrystudies.us/nicaragua/15.htm>

9
Similar to the plans Hugo Chavez in Venezuela has present day, and based on Cuban models,

the Sandinista wanted civil society to have a big role in the state and communities. So-called

Comités de Defensa Sandinista (CDS) were implemented to substitute for several state

functions and services such as rallies, education, creating a community forum, providing

recreation and other day to day services. However, the CDS also was assigned to monitoring

counterrevolutionary tendencies and report crimes.

By 1980 both internal and external differences and disputes were causing tensions within the

new Nicaraguan state. The FLSN was beginning to show internal fractures and a variety of

counterrevolutionary groups and organizations, some supported by external actors such as the

U.S., were organizing to undermine the Sandinista agenda. Several of these Contras as they

were called for their counterrevolutionary goals, included former Somoza supporters and

members of the Guardia Nacional. The Fuerza Democratica Nicaraguense (FDN) was the

U.S. supported movement that launched attacks against civilian and military and economic

targets to damage the power and morale of the Sandinistas. These ‘freedom fighters’ as they

were called by President Reagan were one of the covert projects the Central Intelligence

Agency (CIA) under William ‘Bill’ J. Casey was supporting across the world in accordance

with the Reagan-doctrine18. He was Reagan’s former campaign manager and a friend who

shared the same ideas and political agenda. Other projects were the Mujahedin in

Afghanistan, the União para a independência total da Angola (UNITA) in Angola, and the

Polish and Ethiopian resistance and the military government in El Salvador. In Nicaragua, the

CIA organized, trained and supported the Contras with weapons, ammunition and other

technical services.

18
(Norton et al 2005: 902)

10
The Sandinistas announced a state of emergency in 1982, naming the Contra attacks as the

main reason. However, Envio Magazine, a magazine that specializes in Central American

analysis, notes the following: ‘Although the decision to broaden the state of emergency can

only be understood within the framework of aggression that the country has been confronting

since 1982, it is more a response to an interpretation of the internal situation than it is to the

war itself. The state of emergency was not declared in order to meet a new military challenge,

but to consolidate the recent military gains with political restraints and controls’ 19. They argue

that the Contras were not the main factor of the announcement of the state of emergency, that

was to be continued until 1988. Rather it was a welcome means to creating a more

controllable environment for the newly created system to settle. The status of emergency

brings many restrictions to civil liberties and enables the state to rearrange most aspects of

everyday life with the argument that the state is in danger due to external threat. We have seen

similar use of the status of emergency in Pakistan under President Pervez Musharraf recently.

Envio further mentions that: ‘Several hours before the state of emergency was decreed,

Deputy Defense Minister Joaquín Cuadra gave a detailed and optimistic explanation of the

current military situation. Five days earlier, the FSLN daily, Barricada, reprinted an extensive

interview with Defense Minister Humberto Ortega conducted in September by a reporter from

The Washington Post. It too was quite positive’. 20 The Contras would become stronger, they

reached a peak at 16,000 recruits, until 1984, when the Sandinistas incorporated thousands of

young willing patriotic men to service their nation 21. They were to be known as the Batallón

de Lucha Irregular (Irregular Warfare Battalions, BLI). The Sandinistas strengthened their

19
Envío team, Nicaragua: Behind the State of Emergency. Number 53, November 1985.
<http://www.envio.org.ni/articulo/3413>

20
Ibidem
21
Ibidem

11
counterinsurgency activities by deploying Soviet helicopters. The Boland Amendments also

played a key role to the weakening of the Contras. I will come back to this term later.

In 1984 an election was organized, due to both national and international pressure. The

Sandinistas had however, from the beginning of the revolution claimed to pursue a

commitment to pluralism, a mixed economy and nonaligned international policies. The latter

was not possible in the Manichaean views of the extremist Reagan administration, that

divided the world in a dualistic black and white view (Kyvig 1990: 99). There were evil

communists and there was the righteous, democratic and honourable Americans that stood for

all the good in this world. Many international observers attained to validate the process and to

ensure that no fraudulent actions were undertaken to influence the elections. An excerpt from

the BBC news on the fifth of November 1984 state that:

‘The Sandinistas have been at pains to convince the outside world, especially the US,

that the elections were free and fair. Approximately 400 independent foreign observers,

including a number of Americans, were in Nicaragua to monitor proceedings. The unofficial

British election observer, Lord Chitnis, said proceedings were not perfect but he had no doubt

the elections were fair’.22 The United Nations also concluded this. The U.S. did not share this

view and denounced the elections as fake. It had also encouraged many parties to withdraw

from the elections, in order to sabotage them and make it look like a fraudulent and invalid

election due to lack of pluralism.

The dynamic history of the twentieth century had resulted in a leftist government in

Nicaragua, in a period where East and West were lobbying for support and the spread of their

ideological ways. Although the Sandinistas were not communists like the Soviets, they were

22
BBC Achives, “1984: Sandinistas claim election victory". On This Day – 5 November. BBC News. <
http://news.bbc.co.uk/onthisday/hi/dates/stories/november/5/newsid_2538000/2538379.stm>

12
depicted as a part of the spread of the ‘evil empire’ by Reagan. Nicaragua has known a history

of interventions by the U.S. and the nation now supports anti-imperialistic tendencies. The

Sandinistas are, however, opposed by a group of counterrevolutionaries called the Contras,

which receive support by several external actors, the predominant one being the United States

of America, using the CIA to organize, train and support.

The Iran-Contra Affair

The settings for the Iran-Contra Affair have been discussed in all of the above. Now it is time

to look at the actual scandal itself. I will look into the incentives for President Ronald Reagan

and his National Security Council (NSC) to engage in the illegal activities that the scandal

encompasses, the investigation, the methods used to support the Contras in Nicaragua and the

behind-the-scene organization that led it. However, to summarize al the events, proceedings

and details in the Iran-Contra affair would be impossible and is not my goal. Too much has

been written on his subject for me to handle in this paper. Instead, I will generally describe the

main events and situations that are relevant to this study.

As the tensions in the rather stable bi-polar system between the two superpowers rose during

the eighties with the election of Ronald Reagan, the U.S. moved away from the foreign policy

based of détente. In theory the détente could prevent costly interventions in regions around the

globe from both sides. However, this policy was not practiced efficiently because of an ever-

remaining distrust between the U.S. and the Soviet Union. Both sides felt a moral and

ideological responsibility to aid rebel groups or governments that were trying to create state

systems or organizations with ideological spheres matching their own. However, by

supporting these external interests the two would blame each other for engaging in aggressive

13
expansionist interventions. An example of this comes in the form of the following statement

earlier mentioned by Reagan:

‘I wanted to remind Leonid Brezhnev that we knew what the Soviets were up to, and

that we weren’t going to stand by and do nothing while they sought World domination; I also

tried to send out a signal that the United States intended to support people fighting for their

freedom against Communism wherever they were (..)’ 23 This policy would come to be known

as the Reagan-doctrine. It was a discontinuation of the Monroe-doctrine from 1823 and

Containment Policy which were the guidelines former President Harry Truman set out. In

contrast, it resembled more the Roll-back Strategy that secretary of state John Foster Dulles

proposed in the 1950’s. This aggressive form of anti-communist foreign policy, combined

with Reagan’s hard language about the Communist ‘evil empire’ was not very fruitful, both in

diplomatic as economic terms. The U.S. spent billions of dollars supporting foreign

movements, governments and rebel groups, often with little or no result at all. Sometimes

even a CIA-term called blowback would occur. I will discuss this later on.

The Iran-Contra Affair was a political scandal that was discovered in May ,1986, by a weekly

story in a magazine in Lebanon. A secret trip to Tehran by former national security advisor

Robert C.‘Bud’ McFarlane was published. The article became known the Al-Shiraa story and

quickly found its ways to media all over the world. This event was linked to the crash of a

U.S. cargo plane carrying arms and supplies for the Contras in Nicaragua earlier. The pilot

was shot down and his captors televised his confessions. It became apparent that members of

the NSC and CIA engaged in making covert arms-for-hostage deals with Iran, through Israel.

A total of ‘2,004 TOW antitank and eighteen HAWK antiaircraft missiles, plus 240 spare

parts’ were sold24. This was more than the ‘small amounts’ Reagan mentioned. A proportion

23
(Reagan 1990: 552)
24
(Kornbluh and Byrne 1993: xviii)

14
of the financial profits from the trades was then diverted to support the Contras in their fight

in Nicaragua. Former national security advisor Bud McFarlane, national security advisor John

M. Poindexter and Lieutenant Colonel Oliver North in cooperation with CIA director Bill

Casey colluded to organize and realize these (and many other) transactions. These trades were

made with Iran, at that time considered to be a terrorist supporting state expressively rejected

by Reagan in his speeches. The government financial support to the Contras was made illegal

by the Boland Amendments the Congress had signed earlier in the eighties, I will come back

to these amendments later on. Reagan’s obsession with supporting the Nicaraguan ‘freedom

fighters’ to violently overthrow the Sandinistas was said to be one of the drives behind the

conspiracy. As I took a deeper look into this political scandal, other elusive aspects emerged

which I will handle further on.

One of the goals the U.S. pursued was to utilize Iran’s influence to help free the five

American hostages that were being kept by Iran, and by Hezbollah in Beirut (Draper 1991).

One of the hostages held was William Buckley, station chief of the CIA in Beirut (Reagan

1990: 490). This list of hostages would continue to expand. This was said to be a reaction to

the imprisonment of members from Al-Dawa (alligned with Hezbollah), that were believed to

be guilty of performing truck bomb attacks in Kuwait. Reagan tried to accomplish more

friendly relations with the Middle East, in exchange for American weapons. Egypt, Saudi

Arabia and Jordan were included in such arrangements. After being diagnosed with colon

cancer in the summer of 1985, Reagan stayed at the Bethesda Naval hospital, where he was

visited by McFarlane who told him that through Israel, moderate Iranians wanted to prepare a

path to establishing formal relations after Ayatollah Khomeini’s death (Reagan 1990: 504).

They would try to convince Hezbollah to release the hostages. When reading Reagan’s

memoirs, I could not help but feeling as if he was manipulated all the time. He frequently

15
repeats the words ‘I was told…’ many times in order to exclude himself from any guilt, and

tries to convince the reader of his goodwill and the fact that didn’t trade with the government

led by Khomeini, but rather his moderate successors. He had been warned by George Schultz,

Secretary of State and Secretary of Defense Caspar Weinberger not to engage in these

transactions, for it might look like it was an arms-for-hostage trade off.

Besides political interests, the U.S. also has a long history of economic interests that led to

interventions around the world. They have supported the United Fruit Company (UFC) in

Guatemala in 1954, with the overthrow of the Arbenz government that was trying to come up

with a more equal land reform, at the cost of UFC’s territory. Everything that did not match

their greed driven goals was labelled as ‘Communist’. They ensured energy resources in the

Middle East, where leader Mohammed Mossadegh became increasingly irritated with the

British ripping of his countries oil reserves. He lobbied for more Iranian control of its own oil

fields. This resulted his U.S.-initiated replacement with the Shah of Iran, who led a repressive

and violent regime, which was to be overthrown again by Ayatollah Khomeini. Khomeini

became one of the leaders in anti-American resentment. This effect is what the CIA calls

blowback, and can be witnessed over and over again through modern history.

There is always an economic interest for large U.S. corporations to exploit when it comes to

interventions or even modern-day state and peace building. Reagan was clearly well liked by

these motors behind the America economy, initiating his pro-business policies and the

deregulation which created new opportunities and more room to manoeuvre for big business

and industries. In the fear of a ‘Communist Lake’ in the Nicaraguan case Reagan writes:

‘(…) there were reasons of national self-interest that made the events in Central

America worth worrying about: Almost half of U.S. export and imports, including close to

16
half of our essential petroleum imports, travelled to this region. Two out of three ships

transiting the Panama Canal carried goods to or from the U.S. Central America was not only a

source of imports, but a customer for our products.’25 He also worried about the flow of illegal

immigration that would engulf the U.S. southern border, school systems and welfare agencies

if Communism prevailed in Latin America.

Investigation

The affair was investigated in several ways. Focusing on the government-related methods

there were the Tower Commission, the Congressional Committees (and televised hearings),

and criminal prosecutions by Independent Counsel Lawrence Walsh. I will discuss the first

and second methods without going into the mindboggling procedures and details.

A three-man commission was appointed by Reagan himself on the 25 th of November to

investigate the circumstances in which the Iran-Contra Affair occurred. It was composed of

former Secretary of State Edmund Muskie, Senator John Tower, and former National Security

Advisor Brent Scowcroft, and the board came to be known as the Tower Commission. The

official Tower Commission Report reads that:

‘The board divided its work into three major inquiries: the circumstances surrounding

the Iran-Contra matter, other case studies that might reveal strengths and weaknesses in the

operation of the National Security Council (NSC) system under stress, and the manner in

which that system has served eight different Presidents since its inception in 1947’.26 Later on

in the report it becomes clear the there was refusal to cooperate from several actors in the

Iran-Contra Affair: ‘Several individuals declined our request to appear before the board:

25
Ibidem: 473
26
Excerpts from the Tower Commission Report. The American Presidency Project
<http://www.presidency.ucsb.edu/PS157/assignment%20files%20public/TOWER%20EXCERPTS.htm#PartIII>

17
VADM John Poindexter; General Richard Secord, USAF Ret.; LtCol Oliver North; LtCol

Robert Earl; Mr. Albert Hakim; and Miss Fawn Hall. The board requested that the President

exercise his powers as Commander in Chief and order VADM Poindexter and LtCol North to

appear. The President declined’.27

The findings of the Tower Commission included evidence that national security advisor

Poindexter knew about his assistant North forwarding financial revenues from the weapons

transactions to the Contras. The reports central argument was to conclude that the ability of

the NSC’s staff to commit to their own agendas was a result from Reagan’s lack of

complicity. In other words, Reagan had no knowledge of what was going on in his own NSC,

but that was his responsibility. The Congressional committees concluded that the events

surrounding the Iran-Contra affair were in the end the President’s responsibility and policies.

But further investigation into these matters was not initiated in fear of another Watergate. For

Oliver North and admiral Poindexter, the Congress granted them immunity in exchange for

their appearance and confessions. This would make criminal prosecutions impossible. To

further compromise criminal convictions, Independent Counsel Lawrence Walsh received

little or no cooperation from the CIA.

The methods the Reagan-doctrine used to fulfil its goals were divers. It was based on

supporting anti-communist movements around the world using various methods. Some of

these methods went so far as to train, organize and supply rebel groups such as the Contras in

Nicaragua. The CIA took a major role in implementing this. Here the goal was to violently

overthrow the Sandinista government by ‘causing economic chaos and destabilization,

destroying infrastructure, and diverting human resources-“raising the pain level,” and making

27
Ibidem

18
Nicaragua a negative rather than a positive example of the Third World’. 28 As illustrated

earlier other operations were also undertaken in supporting the Mujahedin in Afghanistan, the

União para a independência total da Angola (UNITA) in Angola, in Grenada, the Polish and

Ethiopian resistance and the military government in El Salvador. The CIA, under the

supervision of Bill Casey took a major role in implementing this. Casey frequently took risks

and was said to be making foreign policy on his own without the State Department. This was

the reason Schultz, threatened to resign several times.

From 1982 to 1984 a group of legislations was passed through Congress, making the

government funded support of the Contras illegal. These were named the Boland

Amendements, after Edward Boland who proposed them. This was the result of several

sabotage actions in the Nicaraguan harbour the CIA undertook without Congress approval.

There were also many reports that the Contras were violating human right on a wide scale that

contributed to the passing of the amendments. The President however, could collect funding

from private sources or other countries. Bill Moyers 1987 documentary The Secret

Government: The Constitution in Crisis shows the process of investigation and questionnaires

with actors that were directly involved. Reagan and his team turned to right-wing

governments that could do favours for the U.S. in exchange for other services. Saudi Arabia

provided one million dollars a month and Sultan of Brunei donated ten million dollars that

never reached its goals due to a White House error 29. Multiple officials from the CIA, the

NSC and departments of Defense and State also lobbied for funds in Israel, South Africa,

Taiwan and South Korea.30 The Anti-Communist General John K. Singlaub was supported

with his fund raising for the Contras. He was relieved of his command due to insubordination

28
(Kyvig 1990: 100)
29
Moyers, Bill. 1987 The Secret Government: The Constitution in Crisis. A. Pelmutter Inc. and Public Affairs
Television Inc.
30
(Kornbluh and Byrne 1993: xxvii)

19
in 1977. Other funds were drawn from wealthy investors or affiliates in the right wing, who

were approached by the earlier mentioned Lieutenant Colonel Oliver North, national security

advisor Poindexter’s assistant in the NSC at that time.

What is remarkable at least and to some extent very concerning is the fact that a group of

companies called The Enterprise, headed by General Richard Secord and his partner Albert

Hakim, were also dedicated to collecting money and support the Contras in Nicaragua. They

managed this by making arms deals with the Shah of Iran and later to Ayatollah Khomeini.

The Enterprise was come to described by Senator Daniel Inouye, a member of the Congress

investigation committee, ‘as a shadowy government with its own air force its own fundraising

mechanism, and the abilities to pursue its own ideas of national interest, free from all checks

and balances, and free from the law itself’. 31 Ambiguously as this secretive group was, they

sold supplies and weapons to the Contras for high prices to make profit. Most of the money

the Enterprise made would never reach the Contras. From the 16,8 million dollars profit made

from the sales to Iran, only 3,8 million would be diverted to the Contra cause. The remaining

funds would probably find their use in other secret operations and projects.

Bill Casey, as the head of the CIA hoped the Enterprise would lead a life of its own as a ‘self-

off-the-shelf, sustaining, stand-alone entity that could perform certain activities on behalf of

the United States’ quoting Oliver North’s statement during his inquiry during the summer of

1987 in the televised Congressional hearings. He confessed to have destroyed documents and

planned the logistics of the support in Nicaragua, which some reports claim to have smuggled

narcotics back to the U.S to make more profit 32. North sacrificed himself to save the

presidency through the hearings, arguing that the preside should not be able to be held

31
Ibidem (Official Read statement)
32
CIA Report on Contras and Cocaine. NameBase index of the CIA report, Volume II, and repost of articles
regarding it from the Washington Post and the New York Times.< http://www.namebase.org/hitz.html>

20
accountable for these actions. So, he denied Reagan’s knowledge of the endeavors undertaken

by the CIA and the Enterprise. Reagan states in his autobiography ‘It was only later, when the

Tower Board and Congress completed their investigations, that I learned that some of the

NSC staff had gone further to held the Contras than I was aware off’.33

As the government-led investigations provided their conclusions, there remains a sense of

impunity. Reagan replaced his national security advisor Poindexter with Frank Carlucci, who

on his turn brought Lieutenant General Colin Powell into the White House. Bill Casey was

suffering from a brain tumour, and was fighting for his life. Reagan partly attributed the

misjudgement and behaviour of his CIA director to the brain tumour that later proved to be

fatal. Furthermore, on Christmas Eve 1992, George H.W. Bush, who followed up Reagan as

president pardoned several government officials (former secretary of defense Caspar

Weinberger and five others) that have been directly involved in the Iran-Contra Affair.

Link to present day policies

An obvious trend in the way foreign and domestic policies are formed can be seen. The Iran-

Contra affair has brought several things to the surface. President Reagan’s administration was

the first in which several aspects of a new neo-conservative agenda could so obviously be

noticed. However, the foundations for Reagan’s policies were laid earlier, especially after the

Second World War. We have seen the overthrow of Arbenz in Guatemala in 1954, and the

counterinsurgency in El Salvador and other countries across the globe. Both the Democratic

and Republican parties have experienced a shift to the right, which resulted in less opposition

to proposals, laws and policies that would have been at least controversial several years

earlier. Although the Bush-doctrine bears the name of President George W. Bush, its
33
(Reagan 1990: 485)

21
fundamentals can be summarized by an article from 1988 Susanne Jonas writes about. The

joint article, that was signed by Henry Kissinger and Cyrus Vance stated on the issues of

Central America that ‘Preventive diplomacy and preemptive reform can reduce the risks of

extremist political infection and radical contamination’.34 A direct link can be made to the

present-day views on foreign policies conducted all over the world in the ‘War on Terrorism’

that has substituted the ‘War on Communism’. The neo-conservative ideology needs an

elusive ‘enemy’ that can never be destroyed as Carl Schmitt’s theories illustrate. 35 Without it,

it would break down and deteriorate, making its existence impossible. The following quote

from Simund Freud’s 1929 essay Civilization and its Discontents also shows why the

perceived image of an enemy is so important: “it is always possible to bind together a

considerable number of people in love, as long as there are other people left over to receive

the manifestations of their aggressiveness’.36 The United States has become a security state,

investing more than ever in the defense department. This has led to the development of the

biggest and most technically advanced standing army in modern history.

Several important aspects and characteristics which are presented in the analysis of the Iran-

Contra Affair described above, have risen to characterize present day politics in the U.S. once

more. First, the role of corporatism in the interventions around the world in was clearly

noticeable in the Contra War as well as the cases of Iraq and Afghanistan during the military

interventions that are connected to the 21th century ‘War on Terrorism’, where economic

agendas of corporate elites seek to exploit energy resources, or make billions of dollars from

revenues that derive from the military-industrial complex. Second, the aggressive foreign

policy that is rooted in the neo-con ideologies seems to communicate a message of

34
Kissinger, Henry, and Cyrus Vance. Bipastisan Objectives for American Foreign Policy. Foreign Affairs,
summer 1988, in Kyvig 1990: 100
35
(McCormick 1998: 830-854)
36
Freud, Sigmund. 1929. Civilization and its Discontents. In Ignatieff 1998: 61.

22
‘democratize or we will shoot you’. This is the case in Nicaragua, where indirect interventions

by external powers (the foremost being the U.S.) attempted to violently overthrow the

Sandinista government, as well as in the cases of Iraq and Afghanistan, where the actions lead

by the U.S. resemble to some extent crusade like interventions. Finally, the role militarism

plays in both the Reagan-doctrine and the Bush-doctrine. Massive spending on defense

communicated by the perceived need for ‘national security’ characterize both presidents. The

role of the earlier mentioned military-industrial complex has experienced explosive growth,

profiting millions and billions of dollars respectively by the wars in Nicaragua (arms sales)

and the wars in the Middle East.37

Conclusion

The Iran-Contra Affair that took place during the final chapter of the Cold Ward remains

relevant to the present day. As the history of Nicaragua illustrates, there is a certain continuity

in the fact that history repeats itself, in this case regarding to the foreign exploitation that

leads to massive socioeconomic discontent which in its turn fosters leftist (revolutionary)

movements. The close historical relation between modern day state and peace building

matched the existing thoughts about the hidden agenda of intervening external actors, entering

interventions only where there is political or economic gains to make. As I proceeded my

research on the actors and goals of the Iran-Contra affair, the information supporting elusive

geo-political and economic agendas became more and more apparent.

37
Guardian Films 2006

23
One analyst has criticized the Reagan-doctrine for being ‘a closed system of belief, not

responsive either to counterargument or to contrary evidence’38. This is remarkably

comparable with recent policies undertaken by Bush jr.’s administration, regarding to the

topics like the Patriot Act and the presence of weapons of mass destruction in Iraq. This has

led to deterioration of democracy in both cases. Bill Moyers (1987) argues that the Iran-

Contra Affair has led to supra-governmental collusions that operated above the constitutional

law in the U.S., surpassing any checks and balances by the democratic system.

What seems to be the main motto in during the Cold War period is the notion that ‘the end

justifies the means. The end result of having a democratic system in Nicaragua with an

economy fully open for U.S. companies to enter, justify the bloody struggle taking the lives of

thousands of civilians. The end goal of retrieving the American hostages and maybe

establishing relations with countries in the Middle East, justify the selling of destructive

weapons used to suppress its inhabitants. The end of ensuring a stable economic and political

region in the America’s and nowadays the whole world, justify the deteriorating of democracy

and the alienation of citizens from the democratic system of checks and balances, not to

mention the immense ‘collateral damage’ to lives, social and political structures, economy,

and the list goes on. The relevance of the Iran-Contra affair could not be more clearly

described by Peter Kornbluh and Malcom Byrne, who state on the first page of the National

Security Reader which contains many declassified documents on the affair:

‘For our sons (…) So that they will better understand the meaning of Iran-Contra—That the

real danger to our democracy comes from within.’39

38
Whitehead, Lawrence. Explaining Washington’s Central America Policy. Journal of Latin America Studies.
Nov. 1983. pp.355. in Kyvig 1990: 102.
39
(Kornbluh and Byrne 1993: First page dedication)

24
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30