Iran-Contra Affair: Arms Sales, Ethics, and Covert Policy

Historical Background of the Iran-Contra Affair

In the 1970s, dissatisfaction with a manipulative and corrupt government was escalating in Nicaragua. All socio-economic classes were affected, and by 1978 the situation had deteriorated into a short-lived civil war. Through violent opposition, the Marxist Sandinista guerrillas achieved power in 1979. By September 1980, the Sandinistas had suspended elections and taken control of the media. Leftist rebels in El Salvador received aid from Nicaragua, and as a result of these ties, the U.S. sponsored aid to the anti-Sandinista Contra guerrillas during the 1980s. El Salvador was undergoing a violent civil war at the time, with conflict between leftist rebels demanding political and military reform and the government in power.

In February 1979, the U.S. suspended all new military and economic aid to Nicaragua. In 1981, CIA Director Casey established the Central American Task Force, which was authorized to "support and conduct political and paramilitary operations in Nicaragua" (CIA). These efforts were supported by $19 million from Congress, and Contra combat action began in September 1982. The Boland Amendment, enacted in December 1982 as part of the Defense Appropriations Act of 1983, effectively prohibited the Department of Defense and the CIA from funding activities designed to support an overthrow of the Sandinista government. By July 1983, the Boland-Zablocki legislation allowed arms interdiction but continued to prohibit aid to the Contras. In December 1983, Congress included $24 million in Contra assistance in the Defense Appropriations Act but determined the aid program would end on September 30, 1984, with the prohibition continuing until December 1985.

The Arms Export Control Act (AECA) prohibited retransfer of U.S. arms to a third-party country unless certain conditions were met: (1) the U.S. could not make the transfer directly; (2) the U.S. required certificates of receipt confirming transfer; (3) reports were required to be filed with the Speaker of the House and the Senate Foreign Relations Committee regarding the retransfer agreements; and (4) notice was to be given to Congress within 30 days following a retransfer of major defense equipment in excess of $1 million. The AECA provided no criminal sanctions for violations; a violation would not be viewed as criminal unless there was a concomitant conspiracy to defraud the United States. Further, Section 501(a) of the National Security Act of 1947 required intelligence activities to be disclosed to the House and Senate intelligence committees, except for those activities deemed too sensitive by the President. Especially sensitive information could be disclosed only to the intelligence committee chair and ranking member and to the leadership of the House and Senate. Covert action is intended to be a tool of policymakers — not intelligence agencies — when it is determined that the best way to achieve a specific policy goal is through secret means. According to Section 503(e) of the National Security Act, covert action is defined as "an activity or activities of the United States Government to influence political, economic, or military conditions abroad, where it is intended that the role of the United States Government will not be apparent or acknowledged publicly" ("Ethical Problems," 2011).

From late 1984 to May 1986, the National Security Council continued fund-raising in order to channel goods and cash to the Contras. President Reagan declared an economic embargo on Nicaragua in April 1985. Through the Intelligence Authorization Act, Congress authorized the CIA to provide communications equipment and intelligence to the Contras. Lethal assistance to the Contras was formally discontinued by the Presidential Finding in January 1986. The Kerry Committee of the Senate Subcommittee on Terrorism, Narcotics, and International Operations began an investigation into alleged narcotics trafficking and gun-running during the Contra War (Ebel, 1992; Hamilton & Inouye, 1995). A violation of the Boland restrictions by the National Security Council was reported by the Miami Herald in June 1986. In December 1986, Independent Counsel Walsh was named to investigate what had become known as the Iran-Contra affair. In fiscal year 1987, Congress provided $100 million to renew both nonmilitary and military assistance to the Contras. A provision of that legislation barred aid to any group engaging in drug trafficking, effectively clearing the way for the CIA to re-enter the Contra War.

The Shah of Iran, Mohammad Reza Pahlavi, was restored to power in 1953 by a coup organized by the Eisenhower administration and supported by the CIA and the British Foreign Intelligence Service (MI6) at the U.S. Embassy. The complexities of alignments and power-brokering over oil supplies and refining, coupled with Cold War fears, led the U.S. to align with British oil interests in hopes of shutting out the Soviets. The coup was directed against the nationalist Iranian government that was attempting to unconstitutionally unseat the Shah. A campaign of religious and secular unrest directed against the Shah began to escalate in October 1977. By January 1978, resistance to the monarchy had intensified until, in the final quarter of 1978, Iran was overcome with chronic demonstrations and strikes.

When the Shah entered the U.S. for medical treatment in 1979, Iranians feared another U.S.-backed coup to reinstall him. A radical student group seized U.S. citizens as hostages from several diplomatic compounds in Tehran. The 1979 Iranian Revolution successfully replaced the unpopular pro-Western Shah with a fundamentally anti-Western Islamic Republic of Iran. As Time reporter John Snow described it, the crisis in Iran-U.S. relations — exacerbated from an American perspective by the taking of hostages — was an entanglement of "vengeance and mutual incomprehension" (Snow, 1981). The taking of hostages violated established principles of international law that grant immunity from arrest to diplomats and recognize the sovereignty of embassies. The U.S. experienced the hostage crisis as a blow to its influence in Iran and as an end to its long-standing support of the Shah. A pivotal moment in Iran-U.S. relations, the hostage situation served to enhance the power and prestige of Ayatollah Khomeini, strengthen the political will of supporters of theocracy in Iran, and erode previous efforts to normalize Iranian relations with the West. Shortly afterward, the U.S. imposed economic sanctions against Iran, further widening the growing rift between the two countries.

In response to the hostage situation, and after unsuccessful attempts to negotiate the release of the hostages, the U.S. froze approximately $12 billion in Iranian assets. Following Iraq's invasion of Iran, the sanctions against Iran were increased in 1984 to prohibit weapons sales and all U.S. assistance to Iran.

Iran became an Islamic republic in 1979 when the ruling monarchy was overthrown and Shah Mohammad Reza Pahlavi went into exile. A theocratic system of government replaced the monarchy, with governing power vested in the Supreme Leader — a conservative religious scholar accountable only to an elected body of 86 clerics known as the Assembly of Experts. In 1979, Islamic students and militants took over the U.S. Embassy in Tehran, signaling their support of the Iranian Revolution. On November 4, 1979, three U.S. citizens were taken hostage at the Iranian Foreign Ministry and 66 more were seized from the U.S. Embassy. Six Americans escaped with the aid of the Canadian government, which provided Canadian passports for the hidden hostages, and 13 were released on November 19 and 20, 1979. One more U.S. citizen was released on July 11, 1980. The remaining 52 American hostages were held for 444 days until their release on January 20, 1981.

The U.S. had been unable to negotiate a release, so a military rescue operation, Operation Eagle Claw, was attempted on April 24, 1980. The mission failed badly, destroying two aircraft and resulting in the deaths of one Iranian civilian and eight American soldiers. On January 19, 1981, the Algiers Accords were signed, securing the release of the hostages. Their release coincided with President Reagan's inaugural address immediately after he was sworn in as President, replacing Jimmy Carter. From 1980 through 1988, Iran and Iraq fought a violent and indecisive war, which led between 1987 and 1988 to clashes between the Iranian military and the U.S. Navy in the Persian Gulf.

Between 1982 and 1992, Lebanese terrorists took 96 foreigners hostage, apparently as insurance against retaliation by the U.S., Syria, and other nations believed to be responsible for bombing incidents against a Marine barracks and the embassy in Beirut. At least eight hostages were killed outright and many others perished from maltreatment. The kidnappers were associated with different factions within the Hezbollah organization, and there was speculation that the Islamic Republic of Iran and perhaps Syria were actively involved in or had instigated the kidnappings. Tight security around the locations of the hostages and their captors prevented rescue. Public pressure and pressure from families eventually eroded the American and French policy of not negotiating with and not granting concessions to terrorists. The Reagan administration ultimately violated official Congressional policy by secretly negotiating an arms-for-hostages exchange with the Iranians, who were believed to have sufficient influence over Hezbollah to secure the release of the hostages.

Boynton (1991) describes a theory of politics as conversation. While he may not have had the testimonies given at the Walsh trial of the Iran-Contra affair in mind, his theory provides a useful framework for practical application to those proceedings. Bogen and Lynch (1989), in their examination of Oliver North's testimony before a Joint Congressional committee investigating the Iran-Contra affair, describe how a narrative can be constructed by one party and simultaneously deconstructed by another. The interrogator strives to assimilate the various stories provided by North and, in doing so, to transform North's narrative from one of chronology and biography into one of history. North skillfully sidesteps this process by embedding his story in local entitlements — his role as a public official carrying out his public duties under supervisors he assumed had consulted the President about his mission.

Bok (1999), in her seminal book Lying: Moral Choice in Public and Private Life, states unequivocally that a good person does not lie. She then asks, however, why we are categorically harsh on liars when not all lies are bad — not all lies result in bad outcomes. In fact, some lies bring about good. Many lies are associated with only trivial consequences, and some are associated with substantive benefit.

Literature Review

When the means is "just a lie," one might ask whether it easily justifies the end. Clearly, this was a measure against which some members of Reagan's Cabinet evaluated their engagement in deceitful practices. It took the White House and Congress four years of discussion and debate to formulate the 1991 Intelligence Authorization Act. A Kennedy School case study on ethical problems in public careers highlights an inherent tension that has always been part of the undercurrents of the Central Intelligence Agency since its creation just after World War II: "How should clandestine operations, whose effectiveness is based in secrecy, be treated in a democracy?" (Kennedy School Case Study No. 548.0). In their article for the Belfer Center for International Affairs, Rosenbach and Peritz (2009) discuss covert action and how the Iran-Contra affair led to substantive changes in U.S. laws dealing with covert operations.

Beer and Boynton (1999) present a framework for examining Senatorial conversation, contrasting realist rhetoric with Senatorial rhetoric. Realist rhetoric, they suggest, deals with the "immutable laws of international politics," while Senatorial rhetoric is far more plastic and accommodates the actions of individual agents. Senatorial rhetoric is pragmatic: senators "want to know what is likely to work in the specific context and what is not" (Beer & Boynton, 1999). The nation-state is the focal point in realist rhetoric, while Senatorial rhetoric, according to Beer and Boynton, focuses on individual agents and political groups and factions at home. These domestic actors are weighted differently by Senatorial rhetoric as well, since "the power of actors depends heavily on local, rather than global calculations" (Beer & Boynton, 1999). In their application of this theoretical construct to the Iran-Contra affair, the authors describe how realist rhetoric projects into the "world in the instrumental terms of ends and means," while Senatorial rhetoric chooses other dimensions of individual political action. The interest of individual agents may be defined by Senatorial rhetoric "in terms of power as a motivation that drives the actors, national and sub-national. But other dimensions — memory, emotions such as hatred and fear, guilt, responsibility, morality — are important as well" (Beer & Boynton, 1999).

Rhetorical conversations are intrinsically related to the culture within which the individual agent or group exists. An examination of culture — particularly strategic culture — can facilitate analysis of how the Iran-Contra decisions were made to carry out an arms-to-hostages transaction with Iran. Cruz (2005) suggested that elites within a culture have more latitude than might be assumed, and others have argued that strategic culture can be characterized as a reality negotiated among the elites of the foreign policy arena. Cruz suggests that while leaders honor the deepest convictions embedded in their strategic culture, they are still inclined to seek a degree of legitimization "for preferred policy courses that may, or may not, conform to traditional cultural boundaries" (Cruz, 2005). In these efforts to legitimize their preferences — a talent robustly demonstrated by the Reagan administration during the Iran-Contra affair — these elite agents "recast a particular agenda as most appropriate to a given collective reality or…recast reality itself by establishing a (new) credible balance between the known and the unknown" (Cruz, 2005). Cruz's words aptly describe the policy practices of the Reagan administration and the Congressional testimony, as witness after witness sought to "redefine the limits of the possible, both descriptively and prescriptively" (Cruz, 2005).

Contemporary theory in international relations holds that the decision-making unit of analysis is the state or nation. From this perspective, the state is susceptible to "black boxing" and is considered equivalent to or approximate to a "unitary rational actor" (Hudson, 2005). Alternatively, the interactions between nations may be perceived as moving pieces in a "billiard ball model," more commonly known as actor-general theory (Hudson, 2005). Hudson further suggests that, as a subfield of international relations, foreign policy analysis (FPA) takes the next rational step toward actor-specific theory, recognizing that human decision-makers are the hub — the theoretical grounding — of international relations. As that pivotal hub, human decision-makers are not best thought of as "unitary rational actors" that stand in for, or approximate, the state.

Foreign policy analysis is characterized by Hudson (2005) as having a wholly integrative theoretical basis. It is multidisciplinary, borrowing as needed from psychology, anthropology, sociology, economics, organizational behavior, military behavior, and related fields. Hudson further notes that foreign policy analysis is multifactorial and multilevel in orientation, considering many variables from many levels of analysis. Most relevant for the purposes of this paper is that foreign policy analysis is agent-oriented and actor-specific (Hudson, 2005). In a 1993 seminal work analyzing the Cuban Missile Crisis, Alexander George (1964) was unwilling to represent the humans in the crisis as "rational utility maximizers" equivalent to their nations. George coined the term actor-specific to underscore that analysis of the Cuban Missile Crisis could not proceed without concrete, specific information about the individual decision-makers from the U.S., Cuba, and the Soviet Union (George, 1964).

Actor-specific theory permits the policy analyst to identify the determinants of state behavior — what Hudson (2005) has described as intangible "material and ideational factors" (p. 3) — at their tangible intersection: the decision-maker. In their seminal work, Snyder, Bruck, and Sapin (1962) explained that "decision makers are viewed as operating in a dual-aspect setting so that apparently unrelated internal and external factors become related in the actions of the decision-makers" (1962: 74, p. 85).

Within actor-specific theory, an important consideration — particularly when analyzing a specific policy decision rather than a policy outcome — is the construction of meaning by actor-agents and the framing of situations that scaffolds the generated meaning. In a backward-looking analysis of either policy process or policy outcomes, an "extended narrative reconstruction" may be a useful reasoning device. Boynton (1991) provides a strong example of how this meaning-making facilitates or hinders decision-making. Using official records of Congressional committee hearings, Boynton examined how members make sense of policies and current events, charting the crystallization of meaning points when interpretation took shape and how committee members attempted to convey that meaning to one another (Boynton, 1991). Using the term "interpretive triple" as a construct, Boynton sets out a framework showing how connections are made between facts and how plausibility is ascribed to those facts. An interpretive triple can turn a list of facts or a chronology into a narrative by establishing a plausible connection between two events (Paletz, 1996). Interpretive triples can also be used for predicting what might happen if certain actions are taken or not taken, and for constructing counterfactual arguments (Paletz, 1996).

Actor-Specific Theory and Foreign Policy Analysis

Although committee members weigh the plausibility of their interpretations within the context of the hearings in Boynton's study, the relation of context to plausibility extends to other decision-making environments. Paletz suggests that three important points need to be considered when exploring this model of reasoning. First, in framing decision-making with an interpretive triple, a narrative is reconstructed and projected ahead to the action that should take place, and from this a judgment is formed. Second, this reconstruction in a pair-wise fashion does not require that the explanation — the practical reasoning — be integrated. In Paletz's words, "Interpretive triples do not require synoptic reasoning: it is practical reasoning taking advantage of whatever knowledge one has that can help interpret events." Third, instances of interpretive triples are not limited to the Senate Foreign Relations Committee and can be found in many other types of committee hearings (1996, p. 106).

The field of international relations (IR) is akin to the social sciences in that inquiry is focused on "understanding how humans perceive and react to the world around them, and how humans shape and are shaped by the world around them" (Hudson, 2005, p. 1). For international relations, the unit of analysis is not nations per se, but the "human decision makers acting singly or in groups" who impact those nations and the relations between them. If one were to overlay an empirical framework, the human decision-makers would be the independent variables and the nations the dependent variables (Lane, 1992). The actions of decision-makers are dynamic, bringing about changes in the relations between nations; as such, the actors or decision-makers are central to the theoretical framework.

An agent-specific theoretical framework (George, 1964) employing extended narrative reconstruction (Boynton, 1991; Paletz, 1996) will be used to analyze the policy decision to sell arms to Iran and the motivation behind that foreign policy decision.