President Ronald Reagan signs off on a top secret document, National Security Decision Directive 17 (NSDD-17), which gives the Central Intelligence Agency the power to recruit and support a 500-man force of Nicaraguan rebels to conduct covert actions against the leftist Sandinista regime in Nicaragua. A budget of $19 million was established for that purpose. 

NSDD-17 marked the beginning of official U.S. support for the so-called Contras in their struggle against the Sandinistas. The decision came several months after President Reagan directed the CIA to develop a plan to stop what his administration believed to be a serious flow of arms from Nicaragua to rebels in neighboring El Salvador. The administration also believed that the Sandinista regime was merely a cat’s paw for the Soviet Union. 

CIA officials subsequently set about securing pledges from Honduras to provide training bases and Argentina to give training to about 1,000 rebels (these would be in addition to the 500-man force trained and supplied by the CIA). Beyond the original goal of halting the flow of arms from Nicaragua, the tasks of the rebels were expanded to include spy missions and even paramilitary actions inside Nicaragua. News of the directive leaked out to the press in March 1982, but Reagan administration officials quickly downplayed the significance of the action. 

They argued that the CIA plan was designed to support Nicaraguan “moderates” who opposed the Sandinista regime, not the disreputable former soldiers and allies of Anastasio Somoza, whom the Sandinista overthrew in 1979. Deputy Director of the CIA Admiral Bobby R. Inman argued that the $19 million allocation provided little buying power for arms and other materials, saying that “Nineteen million or $29 million isn’t going to buy you much of any kind these days, and certainly not against that kind of military force.”

In the years to come, U.S. support of the Contras became a highly charged issue among the American public. Congressional and public criticisms of the program eventually drove the Reagan administration to subvert congressional bans on aid to the Contras. These actions resulted in what came to be known as the Iran-Contra scandal of 1986.