Iran-Contra Affair — Arms for Hostages Linking Iran, Nicaragua, and the White House

In November 1986, a Lebanese magazine revealed that the Reagan administration had been secretly selling arms to Iran — officially an enemy state under arms embargo — and diverting the proceeds to fund the Nicaraguan Contras, in direct violation of the Boland Amendment that had prohibited such aid. The scheme had been devised by National Security Council staffer Lieutenant Colonel Oliver North and approved at some level by National Security Advisor John Poindexter and almost certainly by Reagan himself, though Reagan claimed ignorance of the diversion. The revelation produced the most serious constitutional crisis of the Reagan presidency. The Iran-Contra affair illustrated the contradictions of Cold War executive power: an administration so committed to defeating communism in Nicaragua that it was willing to arm an adversarial theocracy, circumvent Congress, and operate a secret government within the government. North shredded documents, senior officials lied to Congress, and CIA Director William Casey died before he could testify. Independent Counsel Lawrence Walsh's years-long investigation resulted in convictions of several officials, most of which were subsequently pardoned by President George H.W. Bush. The scandal damaged Reagan's credibility but did not destroy his presidency; he remained popular despite the revelations.

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