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The tangled U.S. foreign-policy scandal known as the Iran-contra affair came to light in November 1986 when President Ronald REAGAN confirmed reports that the United States had secretly sold arms to Iran. He stated that the goal was to improve relations with Iran, not to obtain release of U.S. hostages held in the Middle East by terrorists (although he later acknowledged that the arrangement had in fact turned into an arms-for-hostages swap). Outcry against dealings with a hostile Iran was widespread. Later in November, Att. Gen. Edwin Meese discovered that some of the arms profits had been diverted to aid the Nicaraguan "contra" rebels--at a time when Congress had prohibited such aid. An independent special prosecutor, former federal judge Lawrence E. Walsh, was appointed to probe the activities of persons involved in the arms sale or contra aid or both, including marine Lt. Col. Oliver North of the National Security Council (NSC) staff.

Reagan appointed a review board headed by former Republican senator John Tower. The Tower Commission's report in February 1987 criticized the president's passive management style. In a nationally televised address on March 4, Reagan accepted that judgment without serious disagreement.

Select Congressional committees conducted joint televised hearings from May to August. They heard evidence that a few members of the NSC staff set Iran and Nicaragua policies and carried them out with secret private operatives, that the few officials who knew about these policies lied to CONGRESS and others, and that the contras received only a small part of the diverted money. Former national security advisor John Poindexter stated that he personally authorized the diversion of money and withheld that information from the president. William J. Casey, former director of the Central Intelligence Agency, who died in May 1987, was implicated in some testimony, but the extent of his involvement remained unclear.

Special prosecutor Walsh continued his investigation. On Mar. 11, 1988, Poindexter's predecessor as national security advisor, Robert McFarlane, pleaded guilty to criminal charges of withholding information from Congress on secret aid to the contras. A year later McFarlane was fined $20,000 and given two years' probation. On Mar. 16, 1988, a federal grand jury indicted North, Poindexter, and two other persons on a number of charges including conspiracy to defraud the U.S. government. The trials were delayed by legal maneuvering that in part involved questions of releasing secret information. In May 1989 a jury convicted North of 3 of the 12 criminal counts he was ultimately tried on; in July the court fined him $150,000 and gave him a three-year suspended sentence. On Apr. 7, 1990, Poindexter was convicted on 5 counts of deceiving Congress and sentenced to 6 months in prison. Both the North and Poindexter convictions were subsequently set aside on the grounds that their immunized congressional testimony had been unfairly used against them. In July 1991, Alan D. Fiers, Jr., chief of CIA covert operations in Central America in 1984-86, admitted that he had lied to Congress concerning CIA involvement. Shortly thereafter, his CIA superior Clair E. George was indicted for perjury. George's first trial ended in a mistrial. In 1992 former defense secretary Caspar Weinberger was indicted on 5 counts of lying to Congress. On Dec. 24, 1992, President George BUSH pardoned all the principals charged in the scandal. Walsh's eventual report, released in 1994, scored Presidents Reagan and Bush for their roles in events related to the scandal but did not charge either with criminal wrongdoing.

Robert Shogan

For Further Reading

Cohen, W. S., and Mitchell, G. J., Men of Zeal (1988)
Draper, Theodor, A Very Thin Line (1991; repr. 1992)
Koh, H. H., The National Security Constitution (1990)
Kornbluh, Peter, ed., The Iran-Contra Scandal: A National Security Documents Reader (1993)