At a meeting of the presidents of Nicaragua, Honduras, Guatemala, Costa Rica, and El Salvador, the leftist Sandinista government of Nicaragua agrees to free a number of political prisoners and hold free elections within a year; in return, Honduras promises to close bases being used by anti-Sandinista rebels. Within a year, elections in Nicaragua resulted in the defeat of the Sandinistas, removing what officials during the administration of President Ronald Reagan (1981-1989) referred to as a "beachhead of communism" in the Western Hemisphere.
Nicaragua had been a Cold War battlefield ever since the Sandinista regime came to power in 1979, following the overthrow of long-time dictator Anastacio Somoza. Almost immediately, U.S. officials criticized the new government, claiming that it was leftist—possibly Marxist—in its orientation. As relations between the United States and Nicaragua worsened, and Nicaragua moved toward a closer relationship with the communist bloc, the Reagan administration took action to bring down the Sandinista government. The foundation of this effort was economic and military aid totaling nearly one billion dollars by 1988 to the so-called Contras—anti-Sandinista rebels operating from Honduras and Costa Rica. By the late 1980s, concerns about regional stability and the widening Contra war effort spurred other Central American governments to work toward a solution to the Nicaraguan conflict. The February 1989 agreement was the culmination of that work, with Nicaragua promising free elections within a year in exchange for Honduran promises to close the Contra bases within its borders.
Contra leaders were quick to criticize the agreement, but it was obvious that their days were numbered. The Sandinista government declared that the agreement symbolized the failure of the U.S. effort to bring it down through force. Officials of the new administration of President George Bush in the United States adopted a wait-and-see attitude towards events in the region. Ronald Reagan and other officials who served during his tenure, however, were quick to take credit for the outcome of the meeting—despite the fact that they had not participated in it. They claimed that the U.S. pressure during the previous eight years, particularly support of the Contras, had forced the Sandinistas to agree to elections. When the Sandinistas-who were heavily favored to win the election—went down to a shocking electoral defeat in February 1990, Reaganites claimed total victory.