by Timothy Chilman
In Nicaragua in the 1980s, the counter-revolutionaries – contras – comprised men who were National Guardsmen under the dictator, Somoza, and peasants opposed to the agrarian reform of the government of the Sandinista Front. The Central Intelligence Agency began to feed, clothe, arm, and supervise the contras in Honduras under National Security Decision Directive 17, which President Ronald Reagan signed in December 1981. Its ostensible purpose was to prevent the flow of armaments from Nicaragua to Communist-led insurgents in El Salvador. The goal later became to “harass” the Sandinistas sufficiently that they would cease the export of Marxist revolution.
By 1984, the contras numbered perhaps as many as 14,000 compared to the 75,000 of the Nicaraguan army, including militia. They conducted occasional raids, blowing up power stations, cutting roads, and ambushing government convoys.
The contras were not successful in winning the support of the Nicaraguan population. While President Ronald Reagan wished to continue supporting the movement, opinion polls showed that the majority of the American public did not. Opponents of the Administration’s support fretted that the United States could become entangled in another Vietnam. Proponents worried that without U.S. support for the contras, the Soviets would gain a foothold in Central America. Congress prohibited aid to the contras for the purpose of unseating the Sandinista government in 1983, and limited all aid to $24 million in 1984.
On January 8, 1984, the contras announced that they were “mining all Nicaraguan ports to prevent the arrival of weapons from Cuba and the Soviet Union.” In reality, only three ports were affected. Public criticism of contra support mounted when it became apparent that the CIA was involved in the mining and had not notified Congress: it had supervised the operation from a ship off the Pacific coast of Nicaragua. Mines were laid by small, fast boats crewed by CIA-recruited and -trained teams. Members of the House Intelligence Committee contended that the contras were only a front, and the commandos were Salvadoran. Such leaks invariably arise from officials wishing to cripple a policy they believe to be incredibly wrong.
On February 25, three Nicaraguan fishing boats hits mines when entering the Atlantic port of El Bluff. The Sandinistas blamed the CIA. Then mines at the Pacific ports of Puerto Sandino and Corinto exploded, damaging Liberian, Panamanian, and Japanese freighters, a Dutch cargo ship, and then, on March 20, a Soviet tanker. Moscow accused the United States of “piracy.”
U.S. allies disapproved strongly. British Prime Minister Margaret Thatcher, perhaps Reagan’s staunchest ally, protested vigorously to U.S. Ambassador to the United Nations, Jeane Kirkpatrick. The European public was already perturbed by the placement of U.S. nuclear missiles throughout the continent. The French Foreign Minister, Claude Cheysson said of the mining, “If one accepts it in one part of the world, there is no reason not to accept it in the Strait of Hormuz as well.” France offered to sweep the waters of mines. The U.S. had feared the Iranians would do what it had itself done in the Straits of Hormuz in the Persian Gulf, and was in less of a position to complain as a result.
Representative Silvio Conte of Massachusetts , ranking GOP member of the House appropriations committee, described the mining as a “stupid, stupid thing” and said of future contra support: “They’re not going to get a nickel, not a nickel!” When disquiet became evident, the CIA and State Department both insisted privately that the idea originated with the other. Ted Kennedy proposed a non-binding resolution demanding that no U.S. government money be used in the mining of Nicaraguan waters. It passed by 84 votes to 12. One who voted for it was Paul Laxalt of Nevada, Reagan’s close friend and campaign chairman. California Democrat Alan Cranston said, “The President asked for a bipartisan foreign policy. He’s now got it.” The extremely conservative Arizona Republican Barry Goldwater said in a letter to CIA Director William Casey that he was “pissed off” at being asked to back a misguided foreign policy. He correctly described the mining as an “act of war”: it is equivalent to a blockade, which is considered an act of war.
On March 30, the Sandinistas introduced a resolution to the U.N. Security Council lambasting the United States for the mining. Britain abstained and the United States cast a veto. Nicaragua filed a case against the United States in the World Court in the Hague, which the United States announced it would not recognize because intelligence would have to be disclosed if it were to defend itself.
On April 10, 1984, a statement by Secretary of State George Shultz, Secretary of Defense Caspar Weinberger, Bill Casey, and National Security Adviser Robert McFarlane said, “The real issues are whether we in the United States want to stand by and let a Communist government in Nicaragua export violence and terrorism in this hemisphere and whether we will allow the power of the ballot box to be overcome by the power of the gun.”
It later transpired that an inter-agency committee representing the Defense and State Departments and the CIA had, by the conclusion of 1983, agreed to a package of measures which included mining. The President had approved the package with little discussion of details. One senior State Department official lamented: “There was just not enough attention paid to this.”
Congress cut off all funds for contra military operations. This, the Boland Amendment, was signed into law by the President on October 12, 1984. It could be argued that if the money were private, no law had been broken.
The Honduran government contemplated shutting contra bases in their country, so Reagan personally called President Roberto Suazo Cordova to persuade him. Military aid was given. He also spoke to King Fahd of Saudi Arabia to obtain funds. The President emoted considerably over the contras, and ordered his staff to keep the contras “body and soul together.” He reportedly said the contras were “the moral equivalent of our Founding Fathers,” although the Founding Fathers are not known to have included members of a former dictator’s military. He is said to have said the same of visiting Mujahadeen, who included Taliban. Legend has it that he once said, “I am a contra.”
Without funding from Congress, the President resorted to other means. The National Security Council placed USMC Lieutenant Colonel Oliver L. North in charge of the effort. From June 1984 to the beginning of 1986, $34 million was raised secretly from the governments of other countries and $2.7 million from private sources. The private sources had been enticed by the prospect of a photo opportunity with the President.
In the middle of this period, the unknowing Assistant Secretary of State A. Langhorne Motley assured Congress that the Administration was abiding by the Boland Amendment and not encouraging third countries to issue funds to the contras.
Initially, private contributions were sent to bank accounts controlled by the contras, however in July 1985, North assumed control of these funds. Casey’s passion for covert operations went all the way back to the Second World War. Prompted by him, North recruited Richard V. Secord, a retired Air Force major general who was experienced in special operations. Secord set up Swiss bank accounts, to which North steered donations. And so was created “the Enterprise,” a private entity engaged in covert operations on behalf of the United States.
Largely under the command of North, the Enterprise had its own pilots, five airplanes, an airfield, warehousing facilities, a ship, and secure communications equipment. For 16 months it was a secret arm of the NSC, enacting without any accountability or restriction a program Congress had prohibited.
There was no written Presidential approval, Congress was not informed, and funds were never accounted for. This evaded the most fundamental check on executive action dictated by the Constitution: the power of Congress to approve or deny funding.
When it was reported in the summer of 1985 that NSC staff were raising money for military support for the contras, the President promised his public that the law was being followed. McFarlane and his successor, Vice Admiral John M. Poindexter repeated the message to Congress.
In August 1986, Abrams met Brunei’s Deputy Minister of Defense, General Pengiran Haji Ibnu Ba’asith, to solicit a donation to the contras from the Sultan. Abrams traveled under the false name of Kenilworth. A payment of $10 million was made to a Swiss bank account, number 368430-22-1., but Abrams got the number wrong and the payment failed. The Sultan received a private tour of the USS Vinson by way of appreciation.
In a memo to Poindexter, North said, “You will recall that over the years Manuel Noriega in Panama and I have developed a fairly good relationship.” North met Noriega in a hotel in London on September 22 with the approval of Poindexter. In exchange for ending U.S. pressure on his drug smuggling operations and assisting him in cleaning up his image, Noriega suggested carrying out acts of sabotage in Nicaragua and assassinating Sandinista leaders. North made the suggestion at a meeting of the Restricted Interagency Group, and was met with resounding silence. Training camps for the contras in Panama supported by the Israelis were also discussed.
The Bank of Credit and Commerce International, once the world’s seventh largest private bank, was found to be heavily involved in money-laundering and other financial crimes. Sources close to the investigation said that the CIA and other U.S. intelligence agencies maintained accounts there.
It was somewhat embarrassing when one of Secord’s airplanes, a Fairchild C-123 Provider cargo plane, N4410F, USAF 54-679 as was, was shot down by Nicaragua on October 5. The aircraft had been flying 2,300 feet above the ground in an attempt so stay below radar, and was downed by two teenaged Nicaraguan conscripts using a Soviet-made CM-2 man-portable surface-to-air-missile. The President and several spokesmen swore on the graves of their grandmothers that there was no U.S. government involvement with the flight. Senior officials, one of whom was Assistant Secretary of State Eliot Abrams, did the promising to Congress.
American Eugene Hasenfus had parachuted from the airplane, which was crammed with weapons intended for the contras. His role was that of cargo kicker, i.e. handler, and he was an expert in free-fall parachute drops. Two American pilots and a Nicaraguan radio operator died. Hasenfus was captured by Nicaraguan forces a day later in an abandoned hut, lying in a hammock he had made from his parachute. He told all to his captors, including that the flight had CIA approval. He repeated his claims to U.S. journalists, including in an interview with CBS’ 60 Minutes.
In addition to 50,000 AK-47 rifle cartridges, 60 AK-47s, a roughly equal number of RPG-7 grenade launchers and 150 pairs of jungle boots, much documentation was obtained: address books, flight records, letters, ID cards, and more. Hasenfus’ ID card, declaring him to be an “adviser” to the “USA Group,” was signed by the head of the Salvadoran Air Force and gave him access to the most sensitive areas of the Ilopango military airfield in San Salvador. The aircraft belonged to Miami-based Southern Air Transport, which was owned by the CIA until 1973 and was known to have shipped weapons to the contras.
An enthusiastic radio announcer intoned that Hasenfus was “tall, blond and strong, just like one always imagined a pure gringo would be.” He was sentenced to 30 years of jail for violating public order, criminal association and terrorism, but pardoned and released on December 18. He made a public statement alongside Nicaraguan President Daniel Ortega. Ortega noted that Hasenfus’ release was a good present for his son’s seventh birthday. A U.S. official said that prosecution of Hasenfus for violating the Neutrality Act was being considered. Ortega was further to the right than Reagan on the subject of abortion: he later saw a law passed that prohibited abortion even to save the mother’s life.
Two months later, Eliot Abrams informed Congressional committees that he was unaware of contributions given to the contras by Saudia Arabia. He was being economical with the truth, having discussed the $32 million gift with Reagan. Abrams also neglected to disclose the $10 million that had been obtained from Brunei.
The Office for Public Diplomacy for Latin America and the Caribbean (S/LPD) was established by the NSC to spew pro-contra propaganda and arrange speeches and press conferences. A GAO report described S/LPDs activities as “covert propaganda.” Contributors were given White House briefings and photo-opportunities with the President. Donated money funded television advertisements in the home districts of Congressmen regarded as swing votes on the subject of aid for the contras. American law forbids the use of public money to influence a member of Congress. One series of ads attacked Congressman Mike Barnes, one of the principal opponents of contra aid, and one of those involved boasted of having participated in a campaign to ensure that Barnes was defeated at the polls.
The government of Israel made contact with a politically influential group of Iranians who opposed Ayatollah Khomeini. In the summer of 1985, the Israeli government suggested selling missiles to these people in exchange for the release of seven American hostages held in Lebanon and an improvement in relations with Iran. Secretary of Defense Caspar Weinberger and Secretary of State George Schultz opposed such a move: the U.S. government designated Iran a supporter of terrorism, and such a sale would also violate the Arms Export Control Act and the U.S. arms embargo upon Iran. Arms had been embargoed since U.S. embassy staff were taken hostage in Tehran on November 4, 1979 and the embargo continued to be enforced during the Iran-Iraq war. Israel was authorized to proceed with the sale. The Enterprise took control of the operation. The President did not sign a “finding” or notify Congress. A finding confirms that the President has authorized a covert operation after “finding” it to be in the national interest.
504 TOW (Tube-launched, Optically-tracked, Wire-guided) anti-tank missiles were shipped by Israel to Iran in August and September 1985. While the Iranians had promised to free most hostages in return, in practice only one, Reverend Benjamin Weir, was released. 120 HAWK (Homing-All-the-Way-Killer) anti-tank missiles were promised, but only 18 were delivered on November 24, and no hostages were forthcoming. In December, the President signed a one-paragraph finding retrospectively authorizing the transaction. It recorded that he said he could defend himself against charges of illegality, but could not answer the charge that “big strong President Reagan passed up the chance to free hostages.” Weinberger joked: “Visiting hours are Thursdays.” – the possibility of jail existed. National Security Adviser Admiral John Poindexter kept the document in his office safe for a year before destroying it to avoid embarrassing Reagan.
The Enterprise had received $1 million from the Israelis, for transportation expenses. Since only 18 missiles were shipped, there was a surplus of $800,000. North ordered the Enterprise to spend the money on the contras.
On December 7, Reagan met with his top advisers to again discuss arms sales. Weinberger and Schultz objected one more time, with Weinberger arguing that arms sales were illegal. Weinberger said the idea was “almost too absurd to comment on … It’s like asking Qaddafi to Washington for a cozy chat.” McFarlane also recommended that sales cease. Poindexter and CIA Director Casey disagreed.
The President sided with the latter two, and signed a finding on January 6, 1986, authorizing additional shipments of missiles in the hope of getting hostages in exchange. When the CIA General Counsel said that authorizing Israel to sell U.S.-manufactured arms to Iran possibly violated the Arms Export Control Act, Reagan signed another finding.
North was skeptical that arms sales would result in the release of hostages or a better relationship with Iran, but considered the generation of funds for the contras to be “an attractive incentive.” North and Poindexter pressed for the sales to continue. The Iranians baulked at the inflated prices they were asked to pay, but gave way. In February 1986, 1,000 TOWs were sold to the Iranians, who were also furnished with intelligence on Iraq. Supposedly, all hostages were to be released when Iran got hold of some TOWs. The profit margin on the missiles was over $6 million. Poindexter authorized the diversion of funds to the contras.
North claimed that Casey viewed the Enterprise as an element of a larger plan to employ the Enterprise as a “stand-alone” covert agency which could act worldwide without Congressional oversight.
In May 1986, Poindexter told Weinberger that the Iran initiative had concluded, but Reagan again agreed to exchange weapons for hostages. On this occasion, 508 TOWs and 240 HAWK missile parts would be shipped and all American hostages released. A mission led by the now ex-National Security Adviser McFarlane journeyed to Tehran with the first installment of parts. McFarlane discovered that the Iranians said they had not agreed to do anything to secure the release of hostages. The parts were delivered, and the mission returned home. The Enterprise made a handsome profit. On July 26, 1986, another hostage, Father Lawrence Jenco, was released. The remainder of the HAWK parts was delivered. More HAWK spares were delivered on August 4 and 500 TOWs on October 28.
North and Secord told the Iranians that the President agreed that Saddam Hussein, president of Iraq, had to be removed, and said that the United States would defend Iran in the face of Soviet aggression. These assurances were not cleared with the President and were contrary to U.S. policy. Private citizens, beholden to their own interests rather than those of the country, were handling delicate diplomatic negotiations.
Selling arms to Iran was a “significant anticipated intelligence activity,” which, by law, must be reported to Congress per Section 501 of the National Security Act. The Senate and House Intelligence Committees would likely have objected. Poindexter had recommended that the Iranian initiative not be reported.
On November 3, a Lebanese magazine revealed that the United States sold arms to Iran via Israel in exchange for hostages held by Hezbollah. On television, Reagan strenuously denied the allegation. A week later, he told a packed press conference at the White House that funds obtained by covert arms deals with Iran had indeed been diverted to the contras, but stressed that the arrangement was not arms for hostages. 14 percent of Americans believed him. He announced Poindexter’s resignation and North’s dismissal. Casey was invited to testify to the Intelligence Committees, but suffered a cerebral seizure in his office and was hospitalized, never returning to his job.
North assured Poindexter that all documents concerning the diversion had been destroyed, but one was missed. It was uncovered on November 22, 1986 by a Justice Department official working for the Attorney General who was investigating arms-for-hostages. The A.G. announced the existence of the diversion at a press conference on November 25. He said the President was ignorant of it. Poindexter later testified that the President was unaware of the diversion while North testified that he assumed the President had given authorization.
Supreme Court Justice Louis Brandeis said in 1928: ”Our Government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the Government becomes a lawbreaker, it breeds contempt for law, it invites every man to become a law unto himself, it invites anarchy.” Iran-Contra was bad.
The Congressional Committee Investigating Iran Contra – the Tower Commission – lasted for 40 days. Watergate took 53. It heard 29 witnesses and privately interviewed almost 500 more. 250,000 pages of documents were reviewed.
On day 18, June 8, the star turn was Fawn Hall, North’s secretary, who had immunity from prosecution. In a voice choked with emotion, she told of altering, shredding, and smuggling documents on behalf of North. When shredding an 18 inch-high stack of documents, the shredder jammed. The day North was fired by the NSC, she concealed compromising documents about her body and smuggled them to him. She said she felt “uneasiness” at her actions, but believed in North and thought he must have had valid reasons for acting as he did. “I did as I was told.” The episode became known as “Ollie’s shredding party.”
On July 13, 1987, North began his testimony in a uniform bedecked with medals, standing straight as a ramrod. He admitted to the Committee that he he had made statements to congress that were ”’misleading,” ‘false,” ”evasive,” and “wrong.” He testified that the Iran-contra operation was well-known to the press in Nicaragua, the Soviet Union, and Cuba. He and Poindexter admitted to altering or destroying key documents, in violation of the Presidential Records Act, which aimed to ensure the preservation for posterity of documents generated by the Chief Executive and his close staff.
North faced the chief counsel, long-haired Arthur Liman for the Senate and John Nields for the house. Soon, Senate Committee member Howell Heflin of Alabama received calls from irate constituents asking why he was allowing that long-haired lawyer to beat up on a great American patriot. North spoke patriotically, sometimes to the point of jingoism.
The hearings were, unprecedently, for both Houses. A two tiered dais was constructed. The 15 House members, 11 Senators, and various staffers resembled a firing squad whose guns were pointed at a man who wished only for U.S. hostages to return home and to keep communists from Miami Beach. Olliemania was born when mostly supportive letters and telegrams poured in to congressional offices in their thousands. He appeared on the cover of TIME magazine on July 20 and went on to host chat shows on radio and television.
Liman vetoed the summoning of Colin Powell, who had interacted with North frequently, saying, “We’re not about to beat up on the man who could become the first black chairman of the Joint Chiefs.”
President Reagan appeared before the commission on December 2. He said that he had authorized the arms deals. Then he said that he hadn’t. In his autobiography, An American Life, he said that he had, so we shall go with that. Senator Edmund S. Muskie (D-Me.), a member of the Commission, said the Commission had been astounded by Reagan’s loss of memory concerning important details of Iran-Contra. He questioned whether Reagan “can come to grips with the responsibilities of his office.”
It was reported that other officials who had had close contact with Reagan also commented on his memory lapses and general alertness. One high-level official who encountered Reagan frequently said, “I’m worried for him… His decision-making process is fuzzy. He doesn’t ask questions, and you leave and you don’t know whether he will take your advice. And so many duties and responsibilities are imposed on the President. It’s scary.” This source added that the colleagues Reagan had brought with him to the White House in his first term were now gone, and that “I have good reason to believe he feels lonely over there, now.”
The drop in Reagan’s popularity was the largest for any U.S. president, ever, from 67 percent to 46 percent approval. By January 1989 he was back up to 64, the highest for a departing president since Franklin Roosevelt. Teflon is great.
Reagan’s supporters say he firmly grasped the big picture but did not concern himself with the little one. The Commission’s view was that there was a chaotic environment amongst Reagan’s most senior advisers, and the President was mostly out of touch with operations. Reagan had failed to meet his constitutional obligation to “take care that the laws be faithfully executed” and that he was ultimately responsible for Iran-Contra.
Vice President George Bush denied having an operational role in Iran-Contra, but was evidently well-informed: a diary entry went “I’m one of the few people that know fully the details…” He largely escaped blame and won election but was criticized for failing to divulge the existence of his diary to investigators, and also for pardoning six figures who had been implicated in wrongdoing such as Weinberger (perjury), on Christmas Eve 1992. Five served their sentences, with the most severe being that of CIA agent Thomas G. Clines, who was sentenced to 16 months of jail and a $40,000 fine for under-reporting his earnings to the IRS. Of all the wrongdoing of Iran-Contra, the biggest sin recognized by the government was tax evasion.
Published on April 13, 1989, the report of Senator John Kerry’s Senate Subcommittee on Narcotics, Terrorism and International Operations found that the privatized Iran-Contra operation attracted drug traffickers seeking to conceal their operations. Blind eyes were turned to persistent reports of drug smuggling, and known drug smugglers such as Noriega were approached. John Lawn, head of the Drug Enforcement Administration, said that North jeopardized the lives of agents by leaking a DEA undercover operation to obtain political advantage in an upcoming Congressional vote related to aid for the contras.
North’s diary entries record repeated reports of drug smuggling by the contras. A Washington Post investigation that was published on 22 October 1994 found that he did not relay these reports to any law enforcement agency.
Emails from North detail his effort to secure leniency for José Bueso Rosa, a Honduran general who might “spill the beans” and was considered a narco-terrorist by the Justice Department. Rosa was involved in a plot to assassinate Honduran President Roberto Suazo Córdoba which was to be financed by the sales of $40 million of cocaine. He eventually received a short sentence which he heroically endured at “Club Fed,” a prison in Florida for white collar inmates. Further emails describe his meeting with Noriega.
In a notebook entry dated April 1, 1985, A memo from North’s aide Robert Owen (codename: “TC” for “The Courier”) to North (codename: “The Hammer”) described contra operations on the Southern Front. Owen reported that some high-ranking contras were possibly and sometimes definitely involved with drugs.
On July 12, 1985, North described a discussion with Secord about a warehouse the contras had in Honduras. Secord said the $14 million that paid for the arms therein came from drugs.
In the entry for August 9, 1985, North says that a Honduran DC-6 flying from New Orleans was probably running drugs.
A memo to North (now codenamed “BG” for “Blood and Guts”) from Owen, dated February 10, 1986 mentioned drug-running “indiscretions” by the contras and warned that an airplane used to carry humanitarian aid for the contras had previously been used to transport drugs. The plane belonged to a company named Vortex, which was owned by Michael Palmer, one of the most active traffickers of marijuana in the United States. Despite an extensive history of drug smuggling which eventually led to an indictment in Michigan, Palmer was given $300,000 by the Nicaraguan Aid Office, which was overseen by North, Abrams and a CIA officer for the purpose of transporting supplies to the contras.
North was prosecuted, but the case was dropped after it was decided that witnesses who testified at his trial in 1989 could not be proven to have been unaffected by his nationally televised testimony.
The Sandinistas, unpopular after the long war against the contras, were unexpectedly defeated in the election of February 1990. A former colleague of North’s from the Reagan administration said that statements North made in Nicaragua late in October 2006 may have helped Ortega win re-election.
Fawn Hall now sells paper instead of shredding it. She was sighted working at the trendy Book Soup store in West Hollywood. She was married to Danny Sugerman, once manager to The Doors, up to his death in 2005. She spent time in rehab in the mid-90s for addiction to crack. She described Penthouse’s offer of $500,000 to pose nude as “disgusting.”
The Iran-Contra affair demonstrated the usefulness of hostage taking to armed groups everywhere and massively reduced the credibility of U.S. criticism of other nations’ for making concessions to terrorists.
But never let it be said that nothing good ever came of Iran-Contra. As well as the C-123 shot down over Nicaragua, the Enterprise owned another C-123, two C-7s, and a Maule. The other C-123 was abandoned after the shootdown, and was eventually purchased for $3,000 and then transported to Manual Antonio, Costa Rica, where it opened as a hip restaurant under the name El Avión – the airplane. Folk consume well-prepared steaks and seafood ‘neath the starboard wing, the Contrabar cocktail bar is in the fuselage, and the cockpit is open for viewing. There is a great view of the sea. Service is rather slower at busy times and has been described as “unfriendly,” but meals range from $15 to $25, and servings are generous. At night, you can hear creatures feet away. Locals call it “Ollie’s Folly.”
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