The Iran-Contra Affair
The Reagan administration’s covert arms-for-hostages deal sparked an independent counsel probe
There was no smoking gun. There were no Oval Office tapes. There was no presidential downfall. But, still, almost a dozen administration officials were convicted by an independent counsel in the biggest scandal to rock Ronald Reagan’s presidency: the Iran-Contra Affair.
In 1981, President Reagan approved an operation in which the CIA would aid Nicaraguan rebel insurgents—who were fighting the newly established socialist Sandinista government—with the goal of preventing the spread of Communism. The Democrats, led by Speaker of the House Thomas "Tip" O'Neill, were against the operation and in 1984 pushed through Congress the Boland Amendments—two laws banning such aid, whether direct or indirect.
To get around these laws, officials—including National Security Council (NSC) staffer Lieutenant Colonel Oliver North—proposed an arms-for-hostages deal in which the US would sell weapons to Iran (despite an arms embargo) through Israel and then funnel the funds to aid the Contra rebels in Nicaragua, thus bypassing congressional approval. Reagan also hoped the sale of arms might help win the release of US hostages in Lebanon who were taken by Iranian-backed Hezbollah.
Three shipments of missiles were sent to Iran in August, September, and November 1985, with no success in eliciting the hostages’ release. Retroactively, Reagan signed a document authorizing the arms-for-hostages operation, and then another in January authorizing the transfer of arms to Iran through a third party.
In May 1986, North and former National Security Advisor Robert McFarlane went to Tehran to monitor the operation. Afterward, one hostage was released, and Reagan reportedly approved more arms sales.
It wasn’t until November 1986 that the operation went public, when Lebanon-based publication Al-Shiraa broke the news of the Tehran meeting. “I hope to daylights someone has been purging the files on this episode,” McFarlane wrote North in an early form of email. North and his secretary, Fawn Hall, were already destroying documents. Hall would smuggle them inside her boots and clothing. This destruction of evidence would later be referred to as a “shredding party.”
Reagan eventually went on television to tell the American people that it was not an arms-for-hostages deal, but was instead about improving relations with moderate Iranians. Secretary of State George Shultz—who, along with Defense Secretary Caspar Weinberger, had opposed the operation—reminded the president that it was indeed an arms-for-hostage deal.
Attorney General Ed Meese began his own inquiry, but eventually Lawrence Walsh was appointed as independent counsel. The Senate and the House had also set up special committees to look into the matter—creating tension among the discrete investigating bodies.
Walsh saw the congressional investigation as a “rival operation,” because he was concerned that his prime suspects already had immunity in exchange for testifying before Congress. That meant the Office of Independent Counsel (OIC) had to build its own case.
Politics vs. the law
“Too often, the president and his aides took action first, then worried about whether it was proper later,” writes Malcolm Byrne, a historian of this scandal at the National Security Archive. Indeed, Reagan officials withheld potential evidence, destroyed government documents, made end-runs around congressional bans, and didn’t notify Congress about any of it.
There were attempts to protect the president by shredding documents and building a false narrative in which the National Security Council had gone rogue. The OIC looked at charging Reagan but, by the end, didn’t have enough evidence. Reagan was deposed in 1990, saying “I don’t recall” or “I can’t remember” 88 times. The final OIC report depicted Reagan as “a man who displayed little interest in the implementation of policy and whose directions to subordinates were often vague and general.”
Executive vs. legislative
The Iran-Contra affair is a telling illustration of how the executive branch related to Congress regarding national security. More often than not, the president reigned supreme. The Boland Amendments, the International Security and Development Cooperation Act of 1985 that prohibited arms sales to the Contras, and the Intelligence Oversight Act of 1980 were all ignored by the White House.
To build his cases, Walsh had to rely on classified documents, but intelligence agencies and the Department of Justice refused to hand over information in the name of national security. Chief of Staff Don Regan and Vice President George H.W. Bush’s notes and diaries were not available until six years into the investigation. The OIC had to drop the main conspiracy charges, because not all of the information was available.
At the end of the seven-year, $37 million probe, 11 out of 14 men were convicted, including North, who received a two-year probation and a fine, and Poindexter, who served a six-month prison sentence.
Walsh and his team charged Weinberger with six counts in 1992, the last one filed days before the George H.W. Bush vs. Bill Clinton presidential election. However, President Bush pardoned Weinberger on December 24, 1992, just before leaving office. Most of the other higher-level officials, including Bush and Reagan, never were indicted.
For an inside view of this investigation, read more from the Miller Center’s Ronald Reagan Oral History Project below.
Other Reagan administration officials look back at Iran-Contra
Annelise Anderson (associate director for economics and government with the US Office of Management and Budget; advisor to the governments of Russia, Romania, and the Republic of Georgia on economic reform): I recall [President Reagan] saying that what really made him feel down—which he seldom felt, he was a pretty cheerful, optimistic kind of person—was that the people of the United States didn’t believe that he was telling the truth. It’s not that they disagreed with him, or that he was unpopular, but that they didn’t think he was telling the truth. They questioned his integrity, they thought he was lying. I don’t think he ever was lying. I think he had a different understanding of it than was in fact true, which is what he finally admitted in his statement. But I think that’s what discouraged him, that people didn’t believe him.
Frank Carlucci (Secretary of Defense, 1987–89): My impression was of a man who was in a daze. He didn’t know what had hit him, didn’t understand it, and he couldn’t get past the Iran-Contra thing for a long time. Shortly after I became national security advisor, the Venice summit took place. I was the last person to brief him. I said, “Mr. President, you’re at an economic conference. You’ve got the world leaders here. You’re going to go on for a press conference and the first question is going to be Iran-Contra. This is your opportunity to rise above it. Say, ‘We’re here to discuss economics. I’ve answered the Iran-Contra affair. I have no more to say.’ Then put it behind you.
He went to the press conference. Sure enough, the first question was Helen Thomas, Iran-Contra, and he launched into the explanation again, which drove everybody nuts. He got right back into it. We couldn’t get him past it. Colin did marvelous work on the speech where we got Reagan to admit the mistake. I can’t remember the phraseology, “mistakes had been made,” or something like that. It took draft after draft to keep that in the speech. We had to keep sending it back. It was a very hard thing for him to get over. Once he got over it, he was fine...
Arthur Culvahouse (White House counsel, 1987–89): President Reagan basically saying in defense of Shultz that, “George told me not to do it.” In one of the President’s speeches, Weinberger just insisted this exculpatory phrase be put in saying that Weinberger and Shultz had argued against the arms sales and the President overruled them. None of us wanted that phrase in the speech, and I got assigned to talk Weinberger out of it. Weinberger was having none of it.
Miller Center: Who assigned you to talk to Weinberger?
Culvahouse: Baker, [Marlin] Fitzwater, [Colin] Powell, because everyone else had already taken a run at it. So finally I just went to the President and said, “Mr. President, this is not a good idea.” He looked at me and said, “Yes, but it’s true. George and Cap did not want me to do this.” I said, “Yes, but they’re doing you a disservice by having you say this nationwide.” He said, “Well, it’s fair.” That’s the Ronald Reagan I saw…
Miller Center: I think this is an important question for history. There’s been a lot of speculation that towards the end of the Reagan Presidency he was starting to become forgetful, and the early stages of Alzheimer’s were beginning to appear. It’s important that we get your insight on that. Did you notice any effects in your meetings with him during his last year or two?
Culvahouse: I spent a lot of time with him when Ed Meese left and we picked [Richard] Thornburgh, and he was engaged. He knew Dick, talked about how he’d like to have another Governor in the administration—he was very fond of Governors. It perhaps was reduced physical endurance more than anything else. I think he was cutting back on his schedule. But I really didn’t see any symptoms.
On the other hand, I did go out and help him prepare for the deposition in LA [Los Angeles] and it was clear—
Miller Center: He was notorious, in some reports, for not recalling names, details. Is that accurate?
Culvahouse: That was one of the frustrations in Iran-Contra. Between the passage of time and the fact that others, Regan and McFarlane and whoever, had different recollections (probably inaccurate recollections) of things, what he remembered about when and how he approved the arms sales was forever confused. He just could not retrieve his memory, even though I was sitting there looking at the diary, pretty sure (and I told him) that what he recollected was not accurate in terms of sequencing. It was legally unimportant, other than you didn’t want him to say, “I did this in November” when he really did it in August. But it was really cloudy in his mind…
Culvahouse: …If you have North and Poindexter and others assuming that if the President were told, he would have approved it, then Don Regan being out of the loop makes sense, because it was never taken in to the President. That may have been one reason they didn’t present it to the President. Would he have approved it with Don Regan in the room? I don’t think so.
Secondly, it was the arms sales that created the opportunity to divert funds to the Contras. Two reasons I think the arms sales were approved: one I’ve already talked about was his concern for the hostages, which was fueled by many meetings with the hostage families. The diary is full of that, how meeting with the hostage families tugged at his heartstrings. Casey used that horrific tape and other information about how the hostages were treated…
The President’s frustration about the Boland Amendment and not funding the Contras was palpable. But I believed then, and I believe now, that if the diversion of funds was presented to him, he would not have approved it. He was playing by the rules.…
Culvahouse: I don’t know whether he was too easily persuaded by his staff, but the Weinberger indictment was something that the Justice Department would not have done, something I think most of the other independent counsel I know would not have done, and I don’t think Walsh would have done it in ’88. So Walsh struck first.
Miller Center: Were you surprised when Weinberger was indicted?
Culvahouse: A lot.
Miller Center: The presumption was that this was a man who had opposed all of this.
Culvahouse: It seemed to be a kind of abuse of prosecutorial discretion. Weinberger had opposed all of it. The Defense Department had been quite cooperative throughout. As I understand it, there was nothing in his notes that would add anything to the mix in terms of who knew what. There was not anything material in his notes. At some point, I was asked whether I knew whether Weinberger had any notes. I certainly was asked whether I knew Vice President Bush kept a diary, by Walsh. But I was surprised by the Weinberger indictment—and more so by its timing. I was not surprised by the pardons.
Miller Center: Were they trying to turn somebody way up top? What was that about, in your view?
Culvahouse: Frustration. Judge Walsh shifted course two or three times. He had that interview with President Reagan where he wanted to come in and interview the President when everyone had told him that the President was no longer there mentally. I understand they wanted to go back and look at the diary and make sure that all the diary excerpts had been produced by us. It’s like they were really, really trying hard for something to indict after losing North and Poindexter. A lot of the mature adults—experienced prosecutors who were working for him—left, and the quality and experience level, and the nonpartisanship of his staff, changed over time. It went from well-respected former prosecutors and major law firm partners, people who did not have any identifiable political affiliation or bias and were respected members of the Bar, and became staffed by people who were either partisan or less experienced.
Max Friedersdorf (Assistant to the President and Legislative Strategy Coordinator): I think [Iran-Contra] was another case of overzealousness, would be my interpretation of it. The administration was so anxious to help the Contras and to help them regain their country and defeat the Sandinistas that we were trying to figure out ways to get around—Congress would not appropriate any money for us to give them aid; they blocked it through amendments. So somebody in the National Security Office had a brainstorm, “We can do it through Iran. We can do a third-country transfer.”
I thought it was pretty bright myself, to be honest with you. I may have a blind spot on this, but I have always thought, if that is your position to help them, and you don’t violate the law, and the President can do it administratively, why not do it. But there are different interpretations that we did violate the law. I think the President probably was not tuned in to the details on it. I think [John] Poindexter and Bud McFarland and Ollie North ran the operation and the President was just probably aware—he was very pro Contra, of course—that he was telling them get it done and spare me the details. But there was so much heat from the Hill that about anything you did to help them was going to be controversial.
James F. Kuhn (special assistant to the President): Now there are still those who will say, will prove that was absolutely the case, the President didn’t know. We know what the President did. In his way, he approved the arms sales to Iran, but in his mind that was justified because we had a way of dealing with moderates there in opening up Iran and trying to make headway in that area of the world with the Middle East. So he thought it was a step in the right direction. But at the same time he was driven by getting the hostages back. In his mind he couldn’t accept the fact that this was an arms for hostages deal. This was an opening with Iran, in dealing with a new element there and possible new leadership. If we got the hostages back because of it, then so be it. That’s the hard argument to make, because they got the arms, we got the hostages back. If it made more inroads with Iran, so be it. However, Reagan had absolutely no idea that from the arms sales, that money was being diverted to Central America, to the Contras. He had absolutely no idea. He was stunned when he found out.
Lyn Nofziger (White House advisor): Sure, he’s made mistakes. I wasn’t there at the time, but I suspect that he had a lot of self-doubt about Iran-Contra. What people don’t really understand is that by the time that came along, Reagan was dealing with people who didn’t know him, and he didn’t know them. They had come into the second administration, and they had no idea how he thought or how he worked.
Reagan tends to trust people who work for him. He says, “Okay, you work for me, obviously you have my best interests at heart.” Kind of a flaw there. Some people have their own best interests at heart. I think that’s what happened there. Had Meese been in the White House instead of over at Justice, had Bill Clark still been there—hell, had Mike Deaver and Jim Baker still been there, because Baker would have looked at this and said, “This is not in my best interest.” Deaver would have said to the President, “Mr. President, you can’t do this.”
But all those people were gone. Apparently both Cap [Caspar Weinberger] and George Shultz were saying this was wrong, but they didn’t make their case. But I think Meese and Deaver and Baker, Clark, myself—we could have all made that case.
Frederick J. Ryan (assistant to the President of the United States): The first request from independent counsel was to have Ronald Reagan come back to Washington. They wanted to do the whole thing at the courthouse. President Reagan’s counsel—who was very good—was Ted Olson. He is now Solicitor General. Ted Olson and I and others felt that that was neither the right venue nor the right scene for a former President to testify in Federal court. An arrangement was made—actually, this came up two times. Once was the Poindexter trial, and once was when independent counsel wanted to depose President Reagan. At the Poindexter trial an agreement was made. Judge [Harold] Greene would do it in the Federal courthouse in Los Angeles.
President Reagan sat down the day before with Ted Olson and talked about the facts. I don’t know if he’d ever given a deposition or testified before—maybe in his Hollywood days, but it had been a while. What we saw on the tape there was Ronald Reagan’s personality revealed. The guidance from the lawyers said, “Just answer yes or no. Don’t say anything. Don’t offer any information. You are a witness in the trial.” But he was trying to please the guy asking the questions, trying to come up with some answer that would help him. It was not a lawyer-like deposition. He wasn’t trying to define what the meaning of “is” is, or anything like that.
Unfortunately, it was taped, and the tape was played over and over again. It was hours long. They showed him photos and documents. They showed him documents that he’d never seen before and said, “Do you remember this?” And he kept trying to remember. Turned out he’d never seen them before and he couldn’t remember, but he was trying to be helpful. They asked him about a couple of people, and hours into it they asked him about someone he couldn’t remember. I don’t think that had anything to do with Alzheimer’s or anything. I think it was out of context and after asking a lot of detailed questions about Contras and things like that.
There was a second one where they wanted him to come back to Washington and the independent counsel again wanted him to come to the Federal courthouse. Ted Olson negotiated an alternative: Rather than a deposition in Washington, it would take place in President Reagan’s office out in Los Angeles. It would be an interview with a court reporter there. The funny thing was that the independent counsel came out.
Miller Center: Do you mean [E. Lawrence] Walsh?
Ryan: Walsh came out first, and they had a lot of negotiations about where it would take place and who could be in the room because of all the security issues involved. It was finally agreed that President Reagan would be there. Ted Olson, his counsel, and I would be there as a lawyer. My clearance was still in place. Then he would have some people on his side.
They sent people out to look at the room. The security people came in and did the windows so no photos could be taken in of the confidential documents, and they swept it for devices. They came in and sat down with President Reagan. Walsh picked up this stack of documents stamped “Top Secret” and showed them to the President. “Do you recognize this?” “No, I really don’t.” It turned out most of these were documents he’d never seen, let alone, you wouldn’t recall if you’d seen these things four years earlier. Walsh showed him this series of documents and he said, “I just don’t recall seeing those.” And as I said, most of them he hadn’t seen. They were from one person to another at the State Department or elsewhere.
He didn’t want to be there, but he was very cordial with Walsh.
Peter Wallison (White House counsel): My theory was that this is not something you want to cover up. You don’t ever want the allegation made that you’re covering this up, because no matter what has happened here, it’s just a policy decision. So what? Maybe you made some kind of bonehead play here. Who cares? The real problem would be if it looks as though you’re covering up—that’s going to be much worse than if you’ve made a mistake or have done some dumb thing. I still believe that. Actually, I think the American people—if Reagan had said at the time, “Boy, did I blow this one! This was really stupid. I really made a mistake”—the American people would have forgiven that. They don’t expect the President to be perfect every time. All they want is honesty. It would have been all over, and he wouldn’t have had the Iran-Contra matter hanging over his head for four months. That isn’t the way it worked out. In any event, he did waive executive privilege and we disclosed everything that we had, and ultimately it worked out well from his point of view…
Regan. He said something to me like, “We’re facing a problem here that looks much like Watergate.” He asked us to come up with some ideas as to what we ought to do, now that we had discovered that the diversion of funds had occurred. In terms of Regan, it was a progression of concern, from the time when he thought, This is just another one of the foreign policy screw-ups that happen from time to time. We’ll get through it. There’ll be a lot of Sturm und Drang; there might be a Congressional investigation. But there’s nothing here to hide, because, after all, this was what the President wanted, wasn’t it? It might not have been the best idea in the world, but it wasn’t a disaster. No one was killed, and the worst that can happen is the President is accused of making a bad foreign policy decision. I think that’s probably what went through his head at the time…
But as it turned out, there was more and more attention to it, and it looked as though, in fact, we were getting involved in the toils of a cover-up. Regan, who had some legal training and was somewhat sensitive to this kind of thing, began to realize that this could be very dangerous for the President, for him, for everyone around the President. That’s why there was rising alarm on his part.…
Miller Center: McFarlane is really, in some ways, the father of the idea—is that correct?
Wallison: Yes. McFarlane was the father of the idea.
Miller Center: Did McFarlane hire North?
Wallison: McFarlane brought North onto the National Security Council staff. North was a Marine. McFarlane was a Marine. North is an engaging guy. I think he was sort of the son that Bud McFarlane never had—that kind of thing. He was really a mentor of North. North is very charismatic. But McFarlane left and couldn’t supervise North. McFarlane had pretty good judgment—political and other kinds of judgment. If he had stayed, he probably would have stopped this thing at some point; in fact, he recommended at some point that it be stopped. I never did understand why it never was stopped, because McFarlane came back from a meeting with some of these Iranians and said, “This is going nowhere. We ought to stop this thing.” And yet it kept going. I never quite understood why it did. But he was no longer the National Security Advisor at that point, so he didn’t really have the power to stop it. He just recommended that it be stopped.… It doesn’t surprise me that Reagan would sign something like that. He would get a briefing book each day, and it would contain the President’s daily brief, which is from the CIA, and a few other things. It was given to him by [National Security Advisor John] Poindexter, so it didn’t go through the usual staffing process. In the little flyleaf inside the cover, Poindexter put the finding and handed it to the President. The President opened it, saw the finding, thought it was something for him to sign, and he signed it. It would not be in Reagan’s nature to read something over carefully that he had been given by a staff person. He thought this was just another thing that he ought to be doing. Later on when he was asked to make a finding, in January of 1986, after a lot of things had occurred that shouldn’t have occurred, Poindexter was given a briefing memo by North, which then talked in terms of all of these policies that the President was trying to articulate, trying to achieve. The 1986 finding then was consistent with that memo.… Everything came to a halt. Nothing of any significance, as far as I know, went through the White House during that period. We were frozen in place for the four or five months when that was happening. Each day when we got together—that group continued to meet—we tried to divert the discussion, to put it behind us, as they say. It was impossible. . . . There were no new initiatives. That business I was doing with capital budgeting died, never to return, and every other initiative that the White House might have had in mind that came along from the Cabinet was just pushed aside because nobody had any time to focus on it or think about it. Every focus was only on trying to get the President out of this mess.
Charles Wick (director of the United States Information Agency): … I think he admired loyalty and he had to be terribly disappointed. I don’t quite know exactly what the trigger fingers were, or whatever happened. But yes, he would be disappointed in anybody who was guilty of disloyalty. If they were disloyal to him, he didn’t feel it was disloyal to him personally, he felt it was disloyal to his country. But I think that was unfortunate. I think it had a temporary reducing of his sterling image from, say, 95 percent of those who admired him, as against—forgetting those who were detractors. I think it knocked it off say 15 or 20 percent for a while. But he had too much going for him in the way of grateful behavior and all that sort of thing where I think it didn’t last as long as—It could have put a permanent blight on his legacy.