Fiasco: Iran-Contra – Episode 5: All Out

Overview

In Episode 5 of Pushkin Industries' "Fiasco" series, titled "Iran-Contra: All Out," host Leon Neyfakh delves deep into one of the most controversial scandals of the 1980s—the Iran-Contra affair. This episode intricately unpacks the complexities of the scandal, the internal strife within the Reagan administration, and the consequential fallout that threatened to undermine Ronald Reagan's presidency. Through a blend of historical analysis, firsthand accounts, and expert insights, Neyfakh brings to light the intricate web of deceit, loyalty, and political maneuvering that defined this pivotal moment in American history.

Setting the Stage: Reagan’s Presidency Under Fire

The episode opens by highlighting the precarious position President Ronald Reagan found himself in during November 1986. Amidst a barrage of media scrutiny, Reagan's presidency was already beleaguered by two major scandals: the Hassenfuss crash in Nicaragua and the emergence of the Iran arms-for-hostages deal.

Peter Wallison emphasizes, "[...] Ronald Reagan was the Teflon president. In 1986, he was serving as White House counsel, a job that involved advising the President on what was and wasn't legal. [Reagan] was in the middle of a firestorm, caused by the ridiculous falsehoods the media has been spawning." (01:14)

The Hassenfuss incident implicated the Reagan administration in circumventing laws that banned U.S. funding to the Contra rebels in Nicaragua. Concurrently, reports surfaced alleging that the U.S. was secretly selling missiles to Iran in exchange for the release of American hostages in Lebanon, a narrative that starkly contradicted Reagan's public stance against negotiating with terrorists.

The Dual Scandal: Nicaragua and Iran

John Poindexter states, "It has all the makings of a major new uproar. The US may have violated a ban on aid to the Contras." (01:53) This revelation coupled with the Iran missile sales allegations created a perfect storm that threatened to dismantle Reagan's carefully constructed image of integrity and strength.

Peter Wallison notes, "The arms for hostages story seemed to come out of nowhere. It flatly contradicted Reagan's stated policies of not negotiating with terrorists and opposing the sale of weapons to Iran. The outcry was unlike anything the Reagan White House had ever faced." (02:59)

Reagan’s Televised Address: A Misstep

Facing unprecedented pressure, Reagan, typically adept at maintaining his composure, decided to address the nation directly.

Peter Wallison recounts, "A week after American media picked up the arms for hostages story, Reagan agreed to deliver a televised speech." (04:10)

During his address, Reagan attempted to clarify the administration's stance:

Ronald Reagan: "I wanted this time to talk with you about an extremely sensitive and profoundly important matter of foreign policy. For 18 months now we have had underway a secret diplomatic initiative to Iran [...]" (06:29)

However, his initial denial of U.S. involvement in arms shipments to Iran was met with skepticism:

Ronald Reagan: "The charge has been made that the United States has shipped weapons to Iran as ransom payment for the release of American hostages in Lebanon. Those charges are utterly false. The United States has not." (07:10)

The reception was disastrous. According to an ABC News poll cited by Peter Wallison, "56% of Americans thought the President was lying when he said there had not been an arms for hostages deal." (07:36)

Internal Crises: Shultz and the White House

In the aftermath of Reagan's failed address, internal tensions within the White House began to surface. George Shultz, Reagan's Secretary of State, emerged as a vocal critic of the arms deals, publicly distancing himself from the administration's actions.

George Shultz: "Under the circumstances of Iran's war with Iraq, its pursuit of terrorism, its association with those holding our hostages? I would certainly say, as far as I'm concerned, no." (13:48)

This bold stance was a departure from the unified front typically presented by presidential administrations and heightened the perception of chaos within the White House.

The Diversion Memo: Evidence of Collusion

A pivotal moment in the episode is the discovery of the "diversion memo." During an internal investigation led by Attorney General Ed Meese and DOJ official Charles Cooper, the memo revealed how funds from the Iran arms sales were diverted to support the Contras in Nicaragua.

Peter Wallison explains, "The document was a five-page memo titled 'Release of American Hostages in Beirut,' outlining how funds from the arms shipments to Iran could be diverted to the Contras." (27:37)

Oliver North, a key figure in the Iran-Contra affair, admitted to destroying an early version of the covert action finding that explicitly tied arms sales to ransom payments for hostages.

Oliver North: "I personally destroyed it. ... It was basically a coffee can." (25:06)

The revelation that top officials were involved in concealing the true purpose of the arms sales created a seismic shift within the administration. Ed Meese recognized the gravity of the situation and recommended that President Reagan publicly disclose the findings to prevent further damage.

The Fallout: Resignations and Public Scrutiny

As the scandal intensified, key figures like John Poindexter and Oliver North were forced to resign or were dismissed from their positions. Their departures signaled the administration's attempt to contain the scandal, but the damage had already been done.

Peter Wallison notes, "Within a month of the story becoming public, Reagan's approval rating had dropped by 21%. One poll found that 90% of the American people believed he was lying about what he knew." (40:29)

To further investigate the administration's actions, Reagan appointed the Tower Commission and an independent counsel, Lawrence Walsh, who would oversee any potential criminal proceedings related to the affair.

Media and Public Reaction

The media played a crucial role in unraveling the scandal. Reporter Jane Mayer provided insightful observations on the administration's handling of the affair:

Jane Mayer: "What becomes clear is that the aides most involved in this scandal are conspiring with each other to come up with COVID stories that will get themselves off the hook." (05:04)

Her reportage underscored the lengths to which Reagan's aides would go to protect the administration's image, even at the cost of public trust.

Conclusion: The Legacy of Iran-Contra

By the episode's end, it becomes evident that the Iran-Contra affair had profound implications for presidential accountability and the limits of executive power. The scandal not only eroded public trust in Reagan but also set precedents for how covert operations are managed and overseen within the U.S. government.

Peter Wallison reflects, "Something's happening here that looks a lot like Watergate." (09:28)

The episode concludes by emphasizing the lasting impact of Iran-Contra on American politics, highlighting the delicate balance between national security interests and adherence to constitutional principles.

Notable Quotes

• Dalia Lithwick: "The new Trump regime is taking a brick bat to norms, the Constitution and the law, seemingly saying to the US justice system, make me will the courts hold?" (00:30)

• Peter Wallison: "The Hassenfuss crash seemed to confirm that the Reagan administration was yet again evading the law that prohibited the US Government from funding the Contra rebels." (01:59)

• Jane Mayer: "Nixon was always seen as a schemer. You know, his nickname was Tricky Dick. Reagan was the opposite. He was sort of sunny." (08:13)

Key Figures

• Ronald Reagan: 40th President of the United States whose presidency was marred by the Iran-Contra scandal.
• Peter Wallison: White House staffer involved in writing Reagan's speeches.
• John Poindexter: National Security Advisor implicated in the scandal.
• Oliver North: NSC staff member who played a central role in the arms-for-hostages operation.
• George Shultz: Secretary of State who opposed the arms sales to Iran.
• Ed Meese: Attorney General who led the internal investigation.
• Charles Cooper: DOJ official assisting in the investigation.
• Jane Mayer: Reporter covering the scandal for the New Yorker and the Wall Street Journal.

Production Credits

"Fiasco" is a production of Prologue Projects and is distributed by Pushkin Industries. The episode was produced by Andrew Parsons, Madeline Kaplan, Ula Culpa, and Leon Nayfakh, with editing by Camilla Hammer and research by Francis Carr. The episode features music by Nick Silvester and was mixed by Rob Byers, Michael Rayfiel, and Johnny Vince Evans.

Conclusion

Episode 5, "All Out," of the "Fiasco" series provides a comprehensive and engaging exploration of the Iran-Contra affair, shedding light on the intricate dynamics within the Reagan administration and the broader implications for American governance and political trust. Through meticulous research and compelling storytelling, Pushkin Industries delivers a poignant reminder of the fragile nature of presidential integrity and the enduring quest for accountability in the corridors of power.