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Acting and Speaking with Power:

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Oliver North and the Iran–Contra Deal—the Good, the Bad, and the Ugly

From the command-and-control environment that Lieutenant Colonel Oliver North had worked within
the United States Marine Corps to the covert operations he ran through the National Security Council in the
mid-1980s, North would withhold information, create his own airline delivery service, set up operations with a
shell company to exchange money, arrange for missiles to be delivered to Iran, and provide money to rebels

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known as Contras fighting their government in Nicaragua—all against the explicit laws of Congress, but with
his boss’s knowledge. When the whole affair unraveled, North was to appear in front of a joint congressional
hearing in July 1987 to answer questions and reveal details about his role in what had become a public and
international affair. While preparing for the hearing, North had several decisions to make about how he would
present himself during the hearing. One thing was a certainty: he would be sure to show up looking sharp in
his Marine Corps uniform.
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The Contras

For the United States, the Iran–Contra affair started with the July 19, 1979, revolutionary overthrow of the
Nicaraguan government by the socialist Sandinistan National Liberation Front (Sandinistas). Prior to the
revolution, President Jimmy Carter’s government had cut off aid to the Nicaraguan government over human
rights issues. When they took over the country, the Sandinistas nationalized several institutions and businesses
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and created Civil Defense Committees made up of peasants and workers. They ended elections. Dissent was
forbidden and those who were vocal were arrested. In the beginning of the Sandinista rule, President Carter’s
approach was to provide monetary aid ($99 million) in an attempt to encourage pro-US sentiments.1 Instead,
the Sandinistas embraced Fidel Castro’s Cuban government and aligned with the Soviet Bloc. By the early
1980s, many Nicaraguan peasants and farmers were disillusioned with Sandinista rule. They organized and
generated resistance to the Sandinistas. Some groups pulled together into the Nicaraguan Democratic
Movement (MDN) and the Nicaraguan Democratic Force (FDN) and became known as the Contras (eventually,
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this group ran its operations out of Honduras). By this time, the Carter administration had asked the CIA to
find a way to support Contra resistance without using arms.2 At the same time, the Sandinistas reached out to
revolutionaries in El Salvador to try to overthrow its government.

1 Ross Cheit, Sara Chimene-Weiss, Sol Eppel, Jeremy Feigenbaum, Seth Motel, Ingrid Pangandoyon, and Michael D’Ortenzio, “Nicaragua and Iran

Timeline,” Understanding the Iran–Contra Affairs, Brown University,

https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/timeline-n-i.php (accessed Aug. 18, 2020).
2 https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/timeline-n-i.php.
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This public-sourced case was prepared by Peter Belmi, Assistant Professor of Business Administration, and Gerry Yemen, Senior Researcher. It was
written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Oliver North’s thoughts
herein are either supported by public sources or were created for pedagogical purposes. Copyright  2020 by the University of Virginia Darden School
Foundation, Charlottesville, VA. All rights reserved. To order copies, send an email to [email protected]. No part of this publication may be
reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without
the permission of the Darden School Foundation. Our goal is to publish materials of the highest quality, so please submit any errata to
[email protected].

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When the new US president, Ronald Reagan, took over in 1981, he cut off all aid to the Nicaraguan
government. By the end of the year, President Reagan signed a secret document allowing the Central
Intelligence Agency (CIA) to support the Contras monetarily and militarily (with weapons).3 The order also was
an attempt to stop the running of arms into El Salvador (without using US military force) and halt what
President Reagan saw as the spreading of threats to US national security.4 Six months later, this operation

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became publicly known as part of “the Reagan Doctrine” to combat the Soviet Union’s influence in the world
and to spread democracy.5

Not all Americans or members of Congress were pleased with the United States deepening its involvement
in Nicaragua’s domestic affairs.6 Perhaps a catalyst for withdrawing support to Nicaragua was Congress
discovering that the CIA had planted magnetic mines in some of Nicaragua’s harbors.7 If another nation’s ship
had been destroyed by a US-planted mine, it would have created international difficulty. So a bill forbidding
federal money from flowing to Nicaragua to overthrow its government was introduced in Congress. It was

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passed into law on December 21, 1982, and was called the Boland Amendment.8

The bill forbade covert CIA activities, but provided little about the National Security Council’s (NSC)
involvement in Nicaragua. President Reagan was unwilling to give up on the Contras and asked his National
Security Advisor (NSA), Robert McFarlane, to find ways to help them.9 McFarlane suggested that Israel might
be willing to give some of the money the United States provided it to fund the Contras. Working as one of
McFarlane’s staffers was Lieutenant Colonel Oliver North who McFarlane directed to find ways to support the
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Contras. North had a relationship with retired Army General John Singlaub. Eager to help, Singlaub made
several efforts to get money from countries in Asia to fund the Contras.10 Although Israel declined to shift its
money, North and Singlaub managed to get $1 million per month for the Contras from Saudi Arabia.11

In addition to Singlaub, North reached out to retired United States Air Force Major General Richard Secord
and asked him to help supply the Contras.12 Secord had served in several commands and operations, including
an aborted plan to rescue Americans being held hostage in Iran. In retirement, he became president of a “shell”
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company referred to as Enterprise, which sold arms.13 He was also eager to help the Contras.

While North was gathering support for the Contras, on August 1, 1984, Congress passed a second Boland
Amendment to close the first one’s loopholes. This time, the executive branch was forbidden from using any
government agency to support the Contras, and the amendment banned any government representative from
seeking money from private donors or third-party countries to fund them as well.
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3 “Reagan Gives CIA Authority to Establish the Contras,” History, November 13, 2009, https://www.history.com/this-day-in-history/reagan-gives-

cia-authority-to-establish-the-contras (accessed Aug. 18, 2020).

4 https://www.history.com/this-day-in-history/reagan-gives-cia-authority-to-establish-the-contras.
5 US Department of State, “Regan Doctrine, 1985, https://2001-2009.state.gov/r/pa/ho/time/rd/17741.htm (accessed Aug. 18, 2020).
6 “Unclassified: The Boland Amendment,” Understanding the Iran–Contra Affairs, Brown University,
https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/documents/d-nic-7.pdf (accessed Aug.18, 2020).
7 Fred Hiatt, Joanne Omang, Michael Getler, and Don Oberdorfer, “CIA Helped to Mine Ports in Nicaragua,” Washington Post, April 7, 1984,

https://www.washingtonpost.com/archive/politics/1984/04/07/cia-helped-to-mine-ports-in-nicaragua/762f775f-6733-4dd4-b692-8f03c8a0aef8/
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(accessed Aug. 18, 2020).

8 https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/documents/d-nic-7.pdf.
9 Lawrence E. Walsh, “United States v. Robert C. McFarlane,” in Final Report of the Independent Counsel for Iran/Contra Matters, August 4, 1993,

https://fas.org/irp/offdocs/walsh/chap_01.htm (accessed Aug. 18, 2020).

10 https://fas.org/irp/offdocs/walsh/chap_01.htm.
11 https://fas.org/irp/offdocs/walsh/chap_01.htm.
12 Lawrence E. Walsh, “The Flow of Funds: The Prosecution of the Private Operatives,” in Final Report of the Independent Counsel for Iran/Contra Matters,

August 4, 1993, https://fas.org/irp/offdocs/walsh/part_v.htm (accessed Aug. 18, 2020).

13 https://fas.org/irp/offdocs/walsh/part_v.htm.

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Iran

In 1979, a revolution declared Iran an Islamic Republic under the rule of the Ayatollah Ruhollah Khomeini.
Iran cut all ties to the United States and Israel. The revolution introduced “a new and unfamiliar political
movement”14 to the United States. Later that year, a group of Iranian students and activists took over the US

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embassy in Tehran and captured hostages. And within a few more months, Iran and Iraq went to war. Although
President Carter and his administration had worked to have the hostages released, 55 of the hostages were
finally set free on the day of Reagan’s inauguration in 1981. They had been held for 444 days.

During the Iran–Iraq war, a businessman from Saudi Arabia, Adnan Khashoggi, met with McFarlane about
the arms embargo that had been instituted on Iran after the revolution.15 Following their meeting, McFarlane
made a formal appeal to the NSC to explore Iran’s situation. Things got increasingly dangerous for Americans
in Iran and other Middle Eastern countries. William F. Buckley, the CIA chief in Beirut, was kidnapped by the

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fundamentalist group called Islamic Holy War.16 This pattern of Islamic fundamentalists kidnapping US citizens
increased (i.e., Reverend Benjamin Weir, Peter Kilburn, Reverend Lawrence Jenco, Jerry Levin, Alann Steen,
Edward Tracey, Frank Reed, Terry Anderson, Terry Waite, David Dodge, and Thomas Sutherland were all
taken). The unfamiliar political movement in Iran was becoming more familiar. President Reagan publicly stated
that he refused to negotiate with terrorists but wanted the kidnapping stopped.

On the covert side, however, planning and meetings continued. This time, a discussion between Khashoggi
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and an Iranian arms dealer, Manucher Ghorbanifar, produced a plan to trade arms for American hostages.17
An Israeli diplomat, David Kimche, shared the plan with McFarlane—a deal that, it was believed, would thaw
bad relations between the United States and Iran.18 Israel had long believed Iraq was a more troubling adversary
than Iran, and that gaining favor in Iran would be desirable.

By the summer of 1985, McFarlane had met with President Reagan to discuss the idea of selling arms to
Iran through Israel with the goal to have hostages released and relationships improved between Iran and the
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United States. The arms would flow from Israel, and Israel would pay the United States to resupply the arms.
A month later, President Reagan approved the covert operation.19 North was brought in to deal with the
logistics, and on August 20, 1985, the first part of the trade began with Israel sending 96 TOW20 missiles to
Iran.21 Khashoggi would cover financing with $1 million of his own money until Iran came up with payment.22
Within less than a month, 408 more TOWs were delivered and the first US hostage,23 Weir, was released.

In November, a second load of missiles were sold and delivered. To deliver the arms, North had made
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arrangements to use a CIA plane that, when not in use, operated as a commercial airline. That same month,
North had made arrangements with Secord’s business to divert some of the money from the missile sales to
fund the Nicaraguan Contra struggle ($850,000 to the Contras and $150,000 to pay for the weapons). To hide

14 “Profiles in Leadership: Directors of the Central Intelligence Agency & Its Predecessors,” Central Intelligence Agency, September 2013,

https://www.cia.gov/library/publications/resources/profiles-in-leadership/Profiles_in_Leadership.pdf (accessed Aug. 18, 2020).

15 Barbara Walters, “Khashoggi Connection,” 20/20, ABC, December 11, 1986, https://www.cia.gov/library/readingroom/docs/CIA-RDP90-

00552R000202130002-3.pdf (accessed Aug. 18, 2020).

16 Buckley died a few months later, while in captivity. Terry Anderson and Thomas Sutherland were held captive the longest (6 years, 45 days).
17 Ross Cheit, Sara Chimene-Weiss, Sol Eppel, Jeremy Feigenbaum, Seth Motel, Ingrid Pangandoyon, and Michael D’Ortenzio, “Nicaragua and Iran
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Timeline,” “Iran: The Beginning of the Affair,” Understanding the Iran–Contra Affairs, Brown University,
https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/i-thebeginning.php (accessed Aug. 18, 2020).
18 https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/timeline-n-i.php.
19 https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/timeline-n-i.php.
20 TOW stood for “tube launched, optically tracked, wire guided.”
21 https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/timeline-n-i.php.
22 Lawrence E. Walsh, “The Enterprise and Its Finances,” in Final Report of the Independent Counsel for Iran/Contra Matters, August 4, 1993,

https://fas.org/irp/offdocs/walsh/chap_08.htm (accessed Aug. 18, 2020).

23 https://fas.org/irp/offdocs/walsh/chap_08.htm.

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the money exchange, Secord’s Enterprise company received the $1 million from Israel and doled it out to
appropriate parties.24 While McFarlane had been North’s boss up to this time, Vice Admiral John Poindexter
took over and became the new NSA in December.

Perhaps a bit late, President Reagan signed a “Presidential Finding” that allowed the sale of arms to Iran

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to gain hostage releases in January 1986.25 A third shipment of arms through Israel was sent in February 1986,
but this time, no hostages were released. In keeping with the President’s actions, North made everything official
by writing a “Diversion Memorandum” spelling out the whole plan and deal on April 4. It was kept private. By
August that year, North had worked with another group of Iranians to open a second channel to the arms-for-
hostages’ campaign. And that same month, North met with some members of Congress and denied that he
was involved in diverting money or skills to the Contras.26 Perhaps worried about the probing questions from
journalists regarding what he had been doing, North also advised Secord to shut things down. But Secord
refused, and through these new contacts, the second channel’s first shipment took place on October 28, 1986,

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and of the $3.6 million paid for the shipment, North diverted $1.2 million to the Contras and the rest to the
CIA.27

Interest in North’s activities didn’t dissipate with time. Disaster struck when one of the Contra supply
planes was shot down in Nicaragua and a crew member was captured. The Lebanese newspaper Al-Shiraa ran
a story of the Iran arms deal on November 3, 1986.28 President Reagan made a public address 10 days later and
again 6 days after that. Contradictions Reagan made between the two speeches heightened public and
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Congressional awareness of what appeared to be a scandal. On November 21, North found out the Department
of Justice had launched an inquiry into Iran and the Contra affair.29 North removed NSC documents indicating
any violation of the Boland Amendments. He made changes to the documents and directed his administrative
assistant, Fawn Hall, to amend the papers. North then handed her documents to shred, which she did. Four
days later, North’s boss, Poindexter, resigned as NSA, and North was sent back to the Marines. Both faced
criminal charges as a result of the Iran–Contra affair. (See Exhibit 1 for a timeline.)
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Summoned to the joint congressional hearing, Oliver North began preparing himself for the good, the bad,
and the ugly.30 Was he ready for duty?
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24 https://fas.org/irp/offdocs/walsh/part_v.htm.
25 John M. Poindexter, “Memorandum for the President, January 17, 1986, https://nsarchive2.gwu.edu//NSAEBB/NSAEBB210/15-
Reagan%20Finding%201-17-86%20(IC%2002181).pdf (accessed Aug. 18, 2020).
26 “An Iran-Contra Guide: What Happened and When,” New York Times, March 17, 1988, http://www.nytimes.com/1988/03/17/world/an-iran-
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contra-guide-what-happened-and-when.html (accessed Aug. 18, 2020).

27 https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/timeline-n-i.php.
28 Central Intelligence Agency, “How the Iran-Contra Story Leaked,” Studies in Intelligence, https://nsarchive.files.wordpress.com/2014/11/1989-00-

00-cia-studies-in-intel-syria-leak-to-ash-shiraa-iran-contra.pdf (accessed Aug. 18, 2020).

29 Ross Cheit, Sara Chimene-Weiss, Sol Eppel, Jeremy Feigenbaum, Seth Motel, Ingrid Pangandoyon, and Michael D’Ortenzio, “North on Shredding,”

Understanding the Iran–Contra Affairs, Brown University, https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/v-on2.php

(accessed Aug. 18, 2020).
30 “The good, the bad, and the ugly,” is a quote from Oliver North as he was sworn in to testify before a joint congressional committee on July 7,

1987.

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Exhibit 1
Acting and Speaking with Power:
Oliver North and the Iran–Contra Deal—the Good,the Bad, and the Ugly
Timeline (Nicaragua at the Top and Iran on the Bottom)

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Data source: Ross Cheit, “Nicaragua and Iran Timeline,” Understanding the Iran–Contra Affairs, Brown University,
https://www.brown.edu/Research/Understanding_the_Iran_Contra_Affair/timeline-n-i.php (accessed Aug. 18, 2020).

This document is authorized for educator review use only by DR. SUNDEEP KUMAR, Other (University not listed) until Jan 2026. Copying or posting is an infringement of copyright.
[email protected] or 617.783.7860