Summary: Several members of the National Security Council (NSC) working under U.S. President Ronald Reagan orchestrated a series of covert arms dealings with Iran, selling them weapons in exchange for negotiating the release of American hostages held in Beirut - a trade which was never truly realized on the Iranian government's behalf. The selling of arms to an enemy country was the first offense, but illegalities ran rampant when profits from the arms deals were eventually diverted to aid the Nicaraguan Contras, a band of guerillas fighting off Nicaragua's left-wing Sandinista regime. Aiding the Contras had been expressly prohibited by the U.S. Congress, but later testimony suggests that both President Reagan and Vice-President George Bush knew about the agreements between the NSC and the Contras, as well as the arms sales to Iran. When the story finally came out, first in Lebanese newspapers and later in full force in the United States, NSC members Oliver North and John Poindexter, among others, were tried before Congress. Those who were found guilty were eventually pardoned, or had their convictions overturned on appeal. While physical evidence was never found to prove the involvement of Reagan and Bush, they almost certainly played a part in the scandal now known as the Iran-Contra Affair.

Details: In the beginning, the events that fall under the umbrella term "Iran-Contra Affair" weren't illegal. The U.S. was involved in the early 1980s with aiding the Contras, revolutionary Nicaraguans who were trying to overthrow Nicaragua's Communist Sandinista regime. In 1983, however, Congress passed the Boland Amendment, and subsequently the Boland Amendment II in 1984, making it illegal to aid the Contras or to provoke war between Nicaragua and Honduras. The overseeing of Contra aid originally fell within the domain of the Central Intelligence Agency (CIA), but some time before the Boland Amendments were passed, responsibility was passed to the National Security Council and into the hands of the deputy director for political-military affairs, Oliver North.

The Reagan administration had worries about American hostages being held in Lebanon by pro-Iranian terrorists, and some members of the National Security Council apparently wished to continue to aid the Contras--even if doing so meant acting illegally. Iran made an offer to negotiate the release of some of the American hostages in exchange for the opportunity to buy arms from the U.S., and Israel agreed to be the go-between for the transaction. Reagan agreed, and arms sales, which were against U.S. foreign policy, commenced. Under the direction of Oliver North, over two thousand missiles and other arms were sold to Iran from 1985 into 1986. By unofficially increasing the prices of the arms that North was selling to Iran, he could skim off the difference and use it for his other interest, supporting the Contras. In 1986, when North's NSC supervisor Robert McFarlane resigned, Reagan gave instructions to McFarlane's replacement, John Poindexter, to keep the arms sales secret from Congress.

The beginnings of the arms sales agreement may go back as far as 1980, when the Reagan/Bush ticket was running for election against incumbent-hopeful President Jimmy Carter. A theory--dubbed "October Surprise"--has developed, supposedly from witness testimonies but not verified or accepted by Congress. This theory holds that Reagan and Bush made a deal with Iran to ignore Carter's attempts to get American hostages released, waiting instead until Reagan and Bush were elected into office, when they would sweeten the deal with Iran for the release of the hostages, making Reagan and Bush look the heroes.

The glitch in the operation's covert--and highly illegal--nature came when a U.S. cargo plane was downed in Nicaragua. The Sandinistas took the lone survivor, Eugene Hasenfus, hostage, thereby presenting an interesting problem for Reagan, North, and company: The pilot told his captors what he thought was the truth, that he was part of a legitimate CIA operation. In reality, the unsuspecting Hasenfus was making an illegal delivery as part of an illegal mission on the part of the NSC. Knowing this, and realizing what was happening, a CIA operative in Costa Rica sent a message to Vice-President Bush pushing for damage control--again, a government-sanctioned cover-up. To make matters worse, a Lebanese newspaper found out about the arms sales, and published an article that sparked an investigation by Congress. On November 25, 1986, North and the NSC began a paper-shredding and document-falsifying marathon, while Reagan chose his own path, going public with the goings-on, denying knowledge or involvement--and blaming it on North. Within the day North was fired and Poindexter was forced to resign.

Investigations were underway by several authorities, including a joint investigative committee of Congress, whose televised hearings showed over 250 hours of witness testimony. Eleven were convicted, initially with charges such as perjury and fraud, but eventually those were brought down to lesser charges, and some of the convicted were even pardoned by Bush when he was elected to office. McFarlane was convicted of withholding information and received two years' probation, 200 hours of community service, and a twenty thousand-dollar fine--but was eventually pardoned by Bush. North was convicted of altering and destroying documents, aiding and abetting in the obstruction of Congress, and accepting an illegal gratuity (a security fence that was a gift from a businessman dealing with North's arms sales). Poindexter was convicted of conspiracy, obstruction of Congress, and false statements--but both his and North's convictions were overturned on appeal. Several others were indicted for their involvement as late as 1992, including Secretary of Defense Caspar Weinburger, but Bush also pardoned many of them. Because of tedious presidential negotiations with what was then the Soviet Union, and because no evidence was found linking to them directly, Reagan and Bush were largely overlooked, despite proof that both men had knowledge and participation in the Iran-Contra activities. North, throughout the hearings, maintained that his actions were in the right, with the interest of American principles and people in mind.