Eugene Hasenfus is captured by troops of the Sandinista regime in Nicaragua after the plane in which he is flying is shot down; two others on the plane die in the crash. Under questioning, Hasenfus confessed that he was shipping military supplies into Nicaragua for use by the Contras, an anti-Sandinista force that had been created and funded by the United States. Most dramatically, he claimed that operation was really run by the U.S. Central Intelligence Agency (CIA).
The news of Hasenfus's revelations caused quite a stir in the United States. Congress, reacting to complaints about corruption and brutality against the Contras, had passed the Boland Amendment in 1984, specifically forbidding the CIA or any other U.S. agency from supporting the Contras. President Ronald Reagan, who saw the Sandinista government in Nicaragua as a puppet of the Soviet Union, had secured U.S. funding for the Contras in 1981 and signed off on the Boland Amendment reluctantly. If Hasenfus's story was true, then the CIA and Reagan administration had broken the law.
Despite denials from the president, Vice President George Bush, and other Reagan officials that the CIA had nothing to do with the flight, persistent investigations by journalists and Congress began to unravel the so-called Iran-Contra scandal. The scandal involved the secret sale of U.S. weapons to Iran (which was supposed to help in the release of U.S. hostages in the Middle East). Some of the proceeds from these sales were used to covertly fund the Contra war in Nicaragua. A Congressional investigation, begun in December 1986, revealed the scheme to the public. Many figures from the Reagan administration were called to testify. These included Marine Lieutenant Colonel Oliver North, who was the action officer in charge of coordinating both the arms sales and funneling of money to the Contras. His testimony, in particular, demonstrated the cavalier attitude taken by the Reagan administration toward the flaunting of congressional resolutions and acts.
The resulting scandal rocked the Reagan administration and shook the public's confidence in the U.S. government; 11 members of the President's administration eventually were convicted of a variety of charges related to the scandal. Hasenfus was tried and sentenced to 30 years imprisonment by a Nicaraguan court, but was released just a few weeks later.