Fearing being drawn into another Vietnam, many Americans opposed aligning the United States with reactionary forces not supported by the majority of Nicaraguans. Congress repeatedly instructed the president to stop aiding the Contras, but the administration continued to secretly provide them with weapons and training. It also helped wreck the Nicaraguan economy. With support for his government undermined, Nicaragua’s president, Daniel Ortega, agreed to a political settlement, and when he was defeated by a coalition of all the opposition groups, he stepped aside.

Secret aid to the Contras was part of a larger project that came to be known as the Iran-Contra scandal. It began in 1985 when officials of the National Security Council and the CIA covertly arranged to sell arms to Iran, then in the midst of an eight-year war with neighboring Iraq, even while the United States openly supplied Iraq with funds and weapons. The purpose was to get Iran to pressure Hezbollah to release American hostages being held in Lebanon. Profits from the arms sales were then channeled through Swiss bank accounts to aid the Nicaraguan Contras. Over the objections of his secretaries of state and defense, Reagan approved the arms sales to Iran, but the three subsequently denied knowing that the proceeds were diverted to the Contras.

When news of the affair surfaced in November 1986, the Reagan administration faced serious charges. The president’s aides had defied Congress’s express ban on military aid to the Contras. Investigations by an independent prosecutor led to a trial in which seven individuals pleaded guilty or were convicted of lying to Congress and destroying evidence. One felony conviction was later overturned on a technicality, and President George H. W. Bush pardoned the other six officials in December 1992. The independent prosecutor’s final report found no evidence that Reagan had broken the law, but it concluded that he had known about the diversion of funds to the Contras and had “knowingly participated or at least acquiesced” in covering up the scandal.