In a short-lived victory for the Nicaraguan policy of the Reagan administration, the President signs into law an act of Congress approving $100 million of military and "humanitarian" aid for the Contras. Unfortunately for Ronald Reagan and his advisors, the Iran-Contra scandal is just about to break wide open, seriously compromising their goal of overthrowing the leftist Sandinista government in Nicaragua.
Congress, and a majority of the American public, had not been supportive of the Reagan administration's efforts to topple the Sandinista government in Nicaragua. Reagan began a "secret war" to bring down the Nicaraguan government soon after taking office in 1981. Millions of dollars, training, and arms were funneled to the Contras (an armed force of Nicaraguan exiles intent on removing the leftist Nicaraguan regime) through the CIA. American involvement in the Contra movement soon became public, however, as did disturbing reports about the behavior of the Contra force. Charges were leveled in newspapers and in Congress that the Contras were little more than murderers and drug runners; rumors of corruption and payoffs were common. Congress steadily reduced U.S. assistance to the Contras, and in 1984 passed the second Boland Amendment prohibiting U.S. agencies from giving any aid to the group.
Even before this action, however, the Reagan administration had been covertly subverting any attempts to limit the Contra war through extra-legal and illegal means (one result being the Iran-Contra scandal). Even with this illegal aid the Contra effort stalled by late 1985. Reagan went on a full pressure media campaign to convince the American people and Congress that the Contras were worthy of assistance. Reagan claimed that the Sandinista government was a satellite of the Soviet Union, that Nicaragua was instigating revolution in neighboring Central American nations, and that the Contras were merely to be used as a "shield" against any possible Sandinista encroachments in the region. He was able to convince Congress to provide $100 million of aid, some of it designated as "humanitarian" assistance to the hungry and sick Contras and their supporters.
However, news sources began to break the story about the Iran-Contra scandal only a short time later. Congress began an investigation into the Reagan administration's clandestine and illegal support of the Contras during the years prior to the passage of the $100 million aid package. The investigation uncovered a scheme whereby some of the funds from illegal U.S. arms sales to Iran were funneled to the Contras. The Contra war effort staggered on, creating death and destruction in the Nicaraguan countryside and little else, until a peace plan put together by Costa Rican President Oscar Arias was finally accepted by the Sandinista government. In 1990, elections were held in Nicaragua, which resulted in the Sandinistas losing the presidency.