Iran-Contra affair: Ronald Reagan signs the top secret National Security Decision Directive 17 (NSDD-17), giving the Central Intelligence Agency the authority to recruit and support Contra rebels in Nicaragua.
The Iran–Contra affair (Persian: ماجرای ایران-کنترا, Spanish: Caso Irán–Contra), often referred to as the Iran–Contra scandal, the McFarlane affair (in Iran), or simply Iran–Contra, was a political scandal in the United States that occurred during the second term of the Reagan Administration. Between 1981 and 1986, senior administration officials secretly facilitated the sale of arms to the Khomeini government of the Islamic Republic of Iran, which was the subject of an arms embargo. The administration hoped to use the proceeds of the arms sale to fund the Contras in Nicaragua. Under the Boland Amendment, further funding of the Contras by the government had been prohibited by Congress.
The official justification for the arms shipments was that they were part of an operation to free seven American hostages being held in Lebanon by Hezbollah, a paramilitary group with Iranian ties connected to the Islamic Revolutionary Guard Corps. The idea to exchange arms for hostages was proposed by Manucher Ghorbanifar, an expatriate Iranian arms dealer. Some within the Reagan administration hoped the sales would influence Iran to get Hezbollah to release the hostages. However, the first arms sales authorized to Iran were in 1981, prior to the American hostages having been taken in Lebanon.In late 1985, Lieutenant Colonel Oliver North of the National Security Council diverted a portion of the proceeds from the Iranian weapon sales to fund the Contras, a group of anti-Sandinista rebels, in their insurgency against the socialist government of Nicaragua. North later claimed that Manucher Ghorbanifar, an Iranian arms dealer, had given him the idea for diverting profits from TOW and HAWK missile sales to Iran to the Nicaraguan Contras. While President Ronald Reagan was a vocal supporter of the Contra cause, the evidence is disputed as to whether he personally authorized the diversion of funds to the Contras. Handwritten notes taken by Defense Secretary Caspar Weinberger on 7 December 1985 indicate that Reagan was aware of potential hostage transfers with Iran, as well as the sale of HAWK and TOW missiles to "moderate elements" within that country. Weinberger wrote that Reagan said "he could answer to charges of illegality but couldn't answer to the charge that 'big strong President Reagan passed up a chance to free the hostages.'" After the weapon sales were revealed in November 1986, Reagan appeared on national television and stated that the weapons transfers had indeed occurred, but that the United States did not trade arms for hostages. The investigation was impeded when large volumes of documents relating to the affair were destroyed or withheld from investigators by Reagan administration officials. On 4 March 1987, Reagan made a further nationally televised address, taking full responsibility for the affair and stating that "what began as a strategic opening to Iran deteriorated, in its implementation, into trading arms for hostages".The affair was investigated by the U.S. Congress and by the three-person, Reagan-appointed Tower Commission. Neither investigation found evidence that President Reagan himself knew of the extent of the multiple programs. Additionally, United States Deputy Attorney General Lawrence Walsh was appointed Independent Counsel in December 1986 to investigate possible criminal actions by officials involved in the scheme. In the end, several dozen administration officials were indicted, including then-Secretary of Defense Caspar Weinberger. Eleven convictions resulted, some of which were vacated on appeal.The rest of those indicted or convicted were all pardoned in the final days of the presidency of George H. W. Bush, who had been Vice President at the time of the affair. Former Independent Council Walsh noted that in issuing the pardons, Bush appeared to have been preempting being implicated himself by evidence that came to light during the Weinberger trial, and noted that there was a pattern of "deception and obstruction" by Bush, Weinberger and other senior Reagan administration officials. Walsh submitted his final report on August 4, 1993, and later wrote an account of his experiences as counsel, Firewall: The Iran-Contra Conspiracy and Cover-Up.