REPORT ON THE IRAN-CONTRA AFFAIR (13 November 1987)

In 1985, high-ranking officials in the Ronald Reagan administration began selling arms clandestinely to Iran for its war with America-supported Iraq. The money from these arms sales was laundered in Israel and diverted to the Contras, rebels fighting the elected communist government in Nicaragua. The U.S. officials concealed knowledge of the arms sales and, when questioned, shredded and destroyed key evidence. The scandal marred the Reagan and George H. W. Bush administrations.

The Report on the Iran-Contra Affair, the result of Congressional hearings, is emphatic in its denunciation of these activities, claiming the "common ingredients of the Iran and Contra policies were secrecy, deception, and disdain for the law." The report strongly states that it is unconstitutional for foreign policy decisions to be made by the President alone. Only "policies formed through consultation and the democratic process," will eventually succeed.

Leah R.Shafer,
Cornell University

See also Contra Aid ; Diplomacy, Secret ; Hostage Crises ; Iran-Contra Affair ; National Security Council .

By Executive Order and National Security Decision Directive issued by President Reagan, all covert operations must be approved by the President personally and in writing. By statute, Congress must be notified about each covert action. The funds used for such actions, like all government funds, must be strictly accounted for.

The covert action directed by [Lt. Col. Oliver] North, however, was not approved by the President in writing. Congress was not notified about it. And the funds to support it were never accounted for. In short, the operation functioned without any of the accountability required of Government activities. It was an evasion of the Constitution's most basic check on Executive action—the power of the Congress to grant or deny funding for Government programs.…

… [Robert] McFarlane [National Security Advisor] told Congressional Committees that he had no knowledge of contributions made by a foreign country, Country 2, to the Contras, when in fact McFarlane and the President had discussed and welcomed $32 million in contributions from that country. In addition, [Elliot] Abrams initially concealed from Congress—in testimony given to several Committees—that he had successfully solicited a contribution of $10 million from Brunei.

North conceded at the Committees' public hearings that he had participated in making statements to Congress that were "false," "misleading," "evasive and wrong," …

The Coverup

The sale of arms to Iran was a "significant anticipated intelligence activity." By law, such an activity must be reported to Congress "in a timely fashion" pursuant to Section 501 of the National Security Act. If the proposal to sell arms to Iran had been reported, the Senate and House Intelligence Committees would likely have joined Secretaries Shultz and Weinberger in objecting to this initiative. But [John] Poindexter [new National Security Advisor] recommended—and the President decided—not to report the Iran initiative to Congress.

Indeed, the Administration went to considerable lengths to avoid notifying Congress.…

After the disclosure of the Iran arms sales on November 3, 1986, the American public was still not told the facts. The President sought to avoid any comment on the ground that it might jeopardize the chance of securing the remaining hostages' release. But it was impossible to remain silent, and inaccurate statements followed.

In his first public statement on the subject on November 6, 1986, the President said that the reports concerning the arms sales had "no foundation." A week later, on November 13, the President conceded that the United States had sold arms, but branded as "utterly false" allegations that the sales were in return for the release of the hostages. The President also maintained that there had been no violations of Federal law.…

The common ingredients of the Iran and Contra policies were secrecy, deception, and disdain for the law. A small group of senior officials believed that they alone knew what was right. They viewed knowledge of their actions by others in the Government as a threat to their objectives. They told neither the Secretary of State, the Congress, nor the American people of their actions. When exposure was threatened, they destroyed official documents and lied to Cabinet officials, to the public, and to elected representatives in Congress. They testified that they even withheld key facts from the President.

The United States Constitution specifies the process by which laws and policy are to be made and executed. Constitutional process is the essence of our democracy, and our democratic form of Government is the basis of our strength. Time and again we have learned that a flawed process leads to bad results, and that a lawless process leads to worse.

Policy Contradictions and Failures

The Administration's departure from democratic processes created the conditions for policy failure and led to contradictions which undermined the credibility of the United States.

The United States simultaneously pursued two contradictory foreign policies—a public one and a secret one:

• The public policy was not to make any concessions for the release of hostages lest such concessions encourage more hostage-taking. At the same time, the United States was secretly trading weapons to get the hostages back.
• The public policy was to ban arms shipments to Iran and to exhort other Governments to observe this embargo. At the same time, the United States was secretly selling sophisticated missiles to Iran and promising more.
• The public policy was to improve relations with Iraq. At the same time, the United States secretly shared military intelligence on Iraq with Iran, and North told the Iranians, in contradiction to United States policy, that the United States would help promote the overthrow of the Iraqi head of government.…
• The public policy was to observe the "letter and spirit" of the Boland Amendment's proscriptions against military or paramilitary assistance to the Contras. At the same time, the NSC staff was secretly assuming direction and funding of the Contras' military effort.
• The public policy, embodied in agreements signed by [C.I.A.] Director [William] Casey, was for the Administration to consult with the Congressional oversight committees about covert activities in a "new spirit of frankness and cooperation." At the same time, the CIA and the White House were secretly withholding from those Committees all information concerning the Iran initiative and the Contra support network.
• The public policy, embodied in Executive Order 12333, was to conduct covert operations solely through the CIA or other organs of the intelligence community specifically authorized by the President. At the same time, although the NSC was not so authorized, the NSC staff secretly became operational and used private, non-accountable agents to engage in covert activities.…

Confusion

There was confusion and disarray at the highest levels of Government.…

• One National Security Adviser understood that the Boland Amendment applied to the NSC; another thought it did not. Neither sought a legal opinion on the question.
• The President incorrectly assured the American people that the NSC staff was adhering to the law and that the Government was not connected to the Hasenfus airplane. His staff was in fact conducting a "full service" covert operation to support the Contras which they believed he had authorized.…

Dishonesty and Secrecy

The Iran-Contra Affair was characterized by pervasive dishonesty and inordinate secrecy.

North admitted that he and other officials lied repeatedly to Congress and to the American people about the Contra covert action and Iran arms sales, and that he altered and destroyed official documents. North's testimony demonstrates that he also lied to members of the Executive branch, including the Attorney General and officials of the State Department, CIA and NSC.

Secrecy became an obsession. Congress was never informed of the Iran or the Contra covert actions, notwithstanding the requirement in the law that Congress be notified of all covert actions in a "timely fashion."

Poindexter said that Donald Regan, the President's Chief of Staff, was not told of the NSC staff's fundraising activities because he might reveal it to the press. Secretary Shultz objected to third-country solicitation in 1984 shortly before the Boland Amendment was adopted; accordingly, he was not told that, in the same time period, the National Security Adviser had accepted an $8 million contribution from Country 2—even though the State Department had prime responsibility for dealings with that country. Nor was the Secretary of State told by the President in February 1985 that the same country had pledged another $24 million—even though the President briefed the Secretary of State on his meeting with the head of state at which the pledge was made. Poindexter asked North to keep secrets from Casey; Casey, North, and Poindexter agreed to keep secrets from Schultz.

Poindexter and North cited fear of leaks as a justification for these practices. But the need to prevent public disclosure cannot justify the deception practiced upon Members of Congress and Executive branch officials by those who knew of the arms sales to Iran and to the Contra support network.…

… North ordered the intelligence agencies not to disseminate intelligence on the Iran initiative to the Secretaries of State and Defense. Poindexter told the Secretary of State in May 1986 that the Iran initiative was over, at the very time the McFarlane mission to Tehran was being launched. Poindexter also concealed from Cabinet officials the remarkable nine-point agreement negotiated by Hakim with the Second Channel. North assured the FBI liaison to the NSC as late as November 1986 that the United States was not bargaining for the release of hostages but seizing terrorists to exchange for hostages—a complete fabrication. The lies, omissions, shredding, attempts to rewrite history—all continued, even after the President authorized the Attorney General to find out the facts.

It was not operational security that motivated such conduct—not when our own Government was the victim. Rather, the NSC staff feared, correctly, that any disclosure to Congress or the Cabinet of the arms-for-hostages and arms-for-profit activities would produce a storm of outrage.

As with Iran, Congress was misled about the NSC staff's support for the Contras during the period of the Boland Amendment, although the role of the NSC staff was not secret to others. North testified that his operation was well known to the press in the Soviet Union, Cuba, and Nicaragua. It was not a secret from Nicaragua's neighbors, with whom the NSC staff communicated throughout the period. It was not a secret from the third countries—including a totalitarian state—from whom the NSC staff sought arms or funds. It was not a secret from the private resupply network which North recruited and supervised.…

Privatization

The NSC staff turned to private parties and third countries to do the Government's business. Funds denied by Congress were obtained by the Administration from third countries and private citizens. Activities normally conducted by the professional intelligence services—which are accountable to Congress—were turned over to [Retired Air Force Major General Richard] Secord and [Albert] Hakim [involved in Iranian arms negotiations, with Secord].

The solicitation of foreign funds by an Administration to pursue foreign policy goals rejected by Congress is dangerous and improper. Such solicitations, when done secretly and without Congressional authorization, create a risk that the foreign country will expect and demand something in return. McFarlane testified that "any responsible official has an obligation to acknowledge that every country in the world will see benefit to itself by ingratiating itself to the United States." North, in fact, proposed rewarding a Central American country with foreign assistance funds for facilitating arms shipments to the Contras. And Secord, who had once been in charge of the U.S. Air Force's foreign military sales, said "where there is a quid, there is a quo."

Moreover, under the Constitution only Congress can provide funds for the Executive branch. The Framers intended Congress's "power of the purse" to be one of the principal checks on Executive action. It was designed, among other things, to prevent the Executive from involving this country unilaterally in a foreign conflict. The Constitutional plan does not prohibit a President from asking a foreign state, or anyone else, to contribute funds to a third party. But it does prohibit such solicitation where the United States exercises control over their receipt and expenditure. By circumventing Congress's power of the purse through third-country and private contributions to the Contras, the Administration under-mined a cardinal principle of the Constitution.

Further, by turning to private citizens, the NSC staff jeopardized its own objectives. Sensitive negotiations were conducted by parties with little experience in diplomacy, and with financial interests of their own. The diplomatic aspect of the mission failed—the United States today has no long-term relationship with Iran and no fewer hostages in captivity.…

Covert operations of this Government should only be directed and conducted by the trained professional services that are accountable to the President and Congress. Such operations should never be delegated, as they were here, to private citizens in order to evade Governmental restrictions.

Lack of Accountability

The confusion, deception, and privatization which marked the lran-Contra Affair were the inevitable products of an attempt to avoid accountability. Congress, the Cabinet, and the Joint Chiefs of Staff were denied information and excluded from the decision-making process. Democratic procedures were disregarded.

Officials who make public policy must be accountable to the public. But the public cannot hold officials accountable for policies of which the public is unaware.…

Congress was told almost nothing—and what it was told was false.

Deniability replaced accountability. Thus, Poindexter justified his decision not to inform the President of the diversion on the ground that he wanted to give the President "deniability." Poindexter said he wanted to shield the President from political embarrassment if the diversion became public.

This kind of thinking is inconsistent with democratic governance. "Plausible denial," an accepted concept in intelligence activities, means structuring an authorized covert operation so that, if discovered by the party against whom it is directed, United States involvement may plausibly be denied. That is a legitimate feature of authorized covert operations. In no circumstance, however, does "plausible denial" mean structuring an operation so that it may be concealed from—or denied to—the highest elected officials of the United States Government itself.

The very premise of democracy is that "we the people" are entitled to make our own choices on fundamental policies. But freedom of choice is illusory if policies are kept, not only from the public, but from its elected representatives. …In the Iran-Contra Affair, secrecy was used to justify lies to Congress, the Attorney General, other Cabinet officers, and the CIA. It was used not as a shield against our adversaries, but as a weapon against our own democratic institutions.…

The NSC was created to provide can did and comprehensive advice to the President. It is the judgment of these Committees that the NSC staff should never again engage in covert operations.

Disdain for Law

In the Iran-Contra Affair, officials viewed the law not as setting boundaries for their actions, but raising impediments to their goals. When the goals and the law collided, the law gave way:

• The covert program of support for the Contras evaded the Constitution's most significant check on Executive power: the President can spend funds on a program only if he can convince Congress to appropriate the money.
• When Congress enacted the Boland Amendment, cutting off funds for the war in Nicaragua, Administration officials raised funds for the Contras from other sources—foreign Governments, the Iran arms sales, and private individuals; and the NSC staff controlled the expenditures of these funds through power over the Enterprise. Conducting the covert program in Nicaragua with funding from the sale of U.S. Government property and contributions raised by Government officials was a flagrant violation of the Appropriations Clause of the Constitution.
• In addition, the covert program of support for the Contras was an evasion of the letter and spirit of the Boland Amendment. The President made it clear that while he opposed restrictions on military or paramilitary assistance to the Contras, he recognized that compliance with the law was not optional. "[W]hat I might personally wish or what our Government might wish still would not justify us violating the law of the land," he said in 1983.

A year later, members of the NSC staff were devising ways to continue support and direction of Contra activities during the period of the Boland Amendment. What was previously done by the CIA—and now prohibited by the Boland Amendment—would be done instead by the NSC staff.

The President set the stage by welcoming a huge donation for the Contras from a foreign Government—a contribution clearly intended to keep the Contras in the field while U.S. aid was barred. The NSC staff thereafter solicited other foreign Governments for military aid, facilitated the efforts of U.S. fundraisers to provide lethal assistance to the Contras, and ultimately developed and directed a private network that conducted, in North's words, a "full-service covert operation" in support of the Contras.

This could not have been more contrary to the intent of the Boland legislation.…

Numerous other laws were disregarded:

• North's full-service covert operation was a "significant anticipated intelligence activity" required to be disclosed to the Intelligence Committees of Congress under Section 501 of the National Security Act. No such disclosure was made.
• By Executive order, a covert operation requires a personal determination by the President before it can be conducted by an agency other than the CIA. It requires a written Finding before any agency can carry it out. In the case of North's full-service covert operation in support of the Contras, there was no such personal determination and no such Finding. In fact, the President disclaims any knowledge of this covert action.
• False statements to Congress are felonies if made with knowledge and intent. Several Administration officials gave statements denying NSC staff activities in support of the Contras which North later described in his testimony as "false," and "misleading, evasive, and wrong."
• The application of proceeds from U.S. arms sales for the benefit of the Contra war effort violated the Boland Amendment's ban on U.S. military aid to the Contras and constituted a misappropriation of Government funds derived from the transfer of U.S. property.…

Congress and the President

The Constitution of the United States gives important powers to both the President and the Congress in the making of foreign policy.…

Yet, in the Iran-Contra Affair, Administration officials holding no elected office repeatedly evidenced disrespect for Congress's efforts to perform its Constitutional oversight role in foreign policy:

• Poindexter testified, referring to his efforts to keep the covert action in support of the Contras from Congress: "I simply did not want any outside interference."
• North testified: "I didn't want to tell Congress anything" about this covert action.
• [Elliot] Abrams [Assistant Secretary of State] acknowledged in his testimony that, unless Members of Congressional Committees asked "exactly the right question, using exactly the right words, they weren't going to get the right answers," regarding solicitation of third-countries for Contra support.
• And numerous other officials made false statements to, and misled, the Congress.

Several witnesses at the hearings stated or implied that foreign policy should be left solely to the President to do as he chooses, arguing that shared powers have no place in a dangerous world. But the theory of our Constitution is the opposite: policies formed through consultation and the democratic process are better and wiser than those formed without it. Circumvention of Congress is self-defeating, for no foreign policy can succeed without the bipartisan support of Congress.…

… Democratic government is not possible without trust between the branches of government and between the government and the people. Sometimes that trust is misplaced and the system falters. But for officials to work outside the system because it does not produce the results they seek is a prescription for failure.

Who Was Responsible?

Who was responsible for the Iran-Contra Affair?…

At the operational level, the central figure in the Iran-Contra Affair was Lt. Col. North, who coordinated all of the activities and was involved in all aspects of the secret operations. North, however, did not act alone.

North's conduct had the express approval of Admiral John Poindexter, first as Deputy National Security Adviser and then as National Security Adviser. North also had at least the tacit support of Robert McFarlane, who served as National Security Adviser until December 1985.

In addition, for reasons cited earlier, we believe that the late Director of Central Intelligence, William Casey, encouraged North, gave him direction, and promoted the concept of an extra-legal covert organization.…

The Attorney General [Edwin Meese] recognized on November 21, 1986, the need for an inquiry. His staff was responsible for finding the diversion memorandum, which the Attorney General promptly made public. But as described earlier, his fact-finding inquiry departed from standard investigative techniques. The Attorney General saw Director Casey hours after the Attorney General learned of the diversion memorandum, yet he testified that he never asked Casey about the diversion. He waited two days to speak to Poindexter, North's superior, and then did not ask him what the President knew. He waited too long to seal North's offices. These lapses placed a cloud over the Attorney General's investigation. …

Nevertheless, the ultimate responsibility for the events in the Iran-Contra Affair must rest with the President. If the President did not know what his National Security Advisers were doing, he should have. It is his responsibility to communicate unambiguously to his subordinates that they must keep him advised of important actions they take for the Administration. The Constitution requires the President to "take care that the laws be faithfully executed." This charge encompasses a responsibility to leave the members of his Administration in no doubt that the rule of law governs.…

Several of the President's advisers pursued a covert action to support the Contras in disregard of the Boland Amendment and of several statutes and Executive orders requiring Congressional notification. Several of these same advisers lied, shredded documents, and covered up their actions. These facts have been on the public record for months. The actions of those individuals do not comport with the notion of a country guided by the rule of law. But the President has yet to condemn their conduct.

The President himself told the public that the U.S. Government had no connection to the Hasenfus airplane. [Eugene Hasenfus, an American mercenary, had been captured when his plane, part of a C.I.A.-supported supply network, had been shot down.] He told the public that early reports of arms sales for hostages had "no foundation." He told the public that the United States had not traded arms for hostages. He told the public that the United States had not condoned the arms sales by Israel to Iran, when in fact he had approved them and signed a Finding, later destroyed by Poindexter, recording his approval. All of these statements by the President were wrong.

Thus, the question whether the President knew of the diversion is not conclusive on the issue of his responsibility. The President created or at least tolerated an environment where those who did know of the diversion believed with certainty that they were carrying out the President's policies.

This same environment enabled a secretary [Fawn Hall] who shredded, smuggled, and altered documents to tell the Committees that "sometimes you have to go above the written law," and it enabled Admiral Poindexter to testify that "frankly, we were willing to take some risks with the law." It was in such an environment that former officials of the NSC staff and their private agents could lecture the Committees that a "rightful cause" justifies any means, that lying to Congress and other officials in the executive branch itself is acceptable when the ends are just, and that Congress is to blame for passing laws that run counter to Administration policy. What may aptly be called the "cabal of the zealots" was in charge.

In a Constitutional democracy, it is not true, as one official maintained, that "when you take the King's shilling, you do the King's bidding." The idea of monarchy was rejected here 200 years ago, and since then, the law—not any official or ideology—has been paramount. For not instilling this precept in his staff, for failing to take care that the law reigned supreme, the President bears the responsibility.

Fifty years ago Supreme Court Justice Louis Brandeis observed: "Our Government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the Government becomes a law-breaker, it breeds contempt for law, it invites every man to become a law unto himself, it invites anarchy."

The Iran-Contra Affair resulted from a failure to heed this message.