In 1986, a scandal involving Iran threatened Ronald Reagan’s presidency, and reinforced for decades the United States’ aversion to talking to Tehran.

Though Iran-US relations had recently been shattered by the US embassy hostage crisis (1979-1981), events in the Middle East led members of both countries’ governments to make furtive contact. Groups affiliated with Iran’s Hezbollah allies in Lebanon had begun taking US citizens hostage, and Reagan grew emotionally and politically invested in their fate. Iran, meanwhile, was at war with Iraq and desperate for arms.

Although it was illegal for the US to sell Iran weapons, Reagan did so in hope of establishing ties with “moderates” in the Islamic Republic who might help to free hostages. Three hostages were eventually released as a result of secret arms deals, but Lebanese militants captured three more.

Eight thousand miles away, in Nicaragua, anti-Communist “Contras” opposing the Sandinista government enjoyed Reagan’s sympathy, but the US Congress had forbidden him to support them financially. His administration broke the law by using part of the profits from arms sales to Iran — at least $8 million out of $30.3 million in sales — to help the group. When the media exposed these dealings, they referred to them as the Iran-Contra Affair.

While the affair is too little remembered today, it continues to resonate in Iran-US relations. Many of the “moderates” the Reagan White House looked to in the 1980s — Mir Hossein Mousavi and Hassan Rouhani among them — are the same people Iranian reformists, as well as more optimistic US officials, have looked to with hope in recent years. Back then, Ayatollah Ruhollah Khomeini held aloof while his agents secretly tested the waters with the Great Satan. Today his successor Ali Khamenei also holds aloof, though no one doubts he is dealing.

Malcolm Byrne, Deputy Director of the National Security Archive  at George Washington University, is the author of a new history of the affair, Iran-Contra: Reagans Scandal and the Unchecked Abuse of Presidential Power. He spoke to IranWire about the history of the affair, and its legacy.


When Ronald Reagan became president in 1981, relations with Iran were about as bad as they could have been. What were his administrations objectives toward Iran?

When Reagan came to office, there was no coherent policy on Iran.

The Iranian hostage crisis had just been resolved after 444 days, and there was a great deal of bitterness throughout the United States, and in the Reagan administration, about what had happened. There was a desire to bring retribution against Iran.

But other thoughts were also circulating. One was that the US should keep the Iranian Revolution in check through a policy of containment, so that it didn’t spread to other countries in the Gulf.

There were also people in Reagan’s administration who were concerned that, with the US no longer an influence in Iran, the door would open to the Soviets, who had been a cause of concern in Iran since the end of the Second World War. The international communist threat was a crucial point in Reagan’s foreign policy.


Americans tied yellow ribbons around trees and flagpoles for all 444 days of the Iran hostage crisis.


How did Reagans awareness of American hostages being seized in Lebanon line up time-wise with the idea of making inroads to “moderates” in Iran?

The hostages were an issue for him almost from the start. The first hostage in this round of seizures was a man named David Dodge, who was seized in 1982. But the real string of hostage taking that precipitated this affair started in 1984. It followed the arrest of 17 radical Islamists in Kuwait, including the brother in law of the infamous Emad Mughniya of Hezbollah. Most people trace motivation for the taking of American hostages in Lebanon to Mughniyah and Hezbollah’s interest in getting the “Dawa 17” in Kuwait released. The idea was, “let’s seize our own hostages and use them as bargaining chips.”

It’s very clear that the Iran hostage crisis that started in November 1979 was one of the reasons Reagan’s predecessor, Jimmy Carter, couldn’t win a second term. The image that people who were around then remember very clearly was of yellow ribbons being tied onto trees and porches and flagpoles all over the United States for all 444 days that the hostages were being held in Tehran. Reagan was a sensitive and accomplished politician, and he understood the impact that kind of crisis could have on the political scene.


So how did the administration go about making inroads to Tehran?

It started in the summer of 1985. National Security Adviser Robert MacFarlane was one of the officials — but by no means the only official — who thought it might be a good idea, as a way to signal Iran that they did not need to rely on the Soviet Union, to make clear that they could get weapons from the United States. He was talking about symbolic amounts. But he and his fellows could not get that idea past Secretary of State George Schultz or Secretary of Defence Caspar Weinberger, who both said it was ridiculous. 

MacFarlane did not give up. Right around that time, Israeli Prime Minister Shimon Peres sent David Kimche, the director general of the Israeli foreign ministry, to Washington to sound out the White House about trying to approach Iran.

The way to begin that approach, Kimche suggested, was to provide a token number of weapons to so-called moderate elements. In return, the Iranians would hopefully respond with an offer to get the hostages in Lebanon released. After that, it was easy for MacFarlane to get Reagan’s approval. Once Reagan had approved the plan, Schultz and Weinberger went along.


How did Reagans objectives in Iran and Lebanon become entangled with his anti-Soviet agenda in Nicaragua?

That was the work of Oliver North, who is now well known in the United States as a Fox News figure. Back then, he was a marine lieutenant colonel, and had been assigned to the National Security Council staff to work on issues including Latin America and counterterrorism. In late 1985, after secret arms deals with Iran had been going on for a couple of months, MacFarlane brought him into the Iran operation. North became the chief US negotiator with Manucher Ghorbanifar, the arms dealer and intermediary between the US and Iranian officials and quasi-officials.

The story is that in the course one of their meetings in Europe, Ghorbanifar, as part of his attempt to keep the Americans interested when they were frustrated that hostages were not being released after arms transfers had taken place, went through a list of reasons why the US should continue dealing. One of the reasons he came up with was, “You could generate some profits and use them to support your beloved Contras in Nicaragua, who Congress has prohibited you from aiding.” That appears to have been the genesis of the idea, somewhere in late 1985 or early 1986.



Some familiar names from Iranian politics come up in your book, notably Mir Hossein Mousavi and Hassan Rouhani. What was their role in covert dealings with the US?

Ghorbanifar brought to the table the promise of access to several Iranian officials: Prime Minister Mir Hossein Mousavi, who is now well known as one of the heads of the Green Movement, and one or two others. Another person alleged to have been involved was Hassan Karroubi, who is the brother of the other Green Movement leader, Mehdi Karroubi.

People like Rouhani and Rafsanjani and Mousavi either had representatives in the meetings, or were simply watching from the background. We know about this from Rafsanjani’s memoirs, and from American documents that name these people. Many if not all of the leadership were aware of parts of what was going on, even if not actively involved in monitoring and approving what was happening.

Be that as it may, the Iranian involvement is a subject of some sharp disagreement also. The question is whether the Iranians were only interested in getting weapons to fight the Iraqis, or whether there really was interest from some of them in improving relations with the United States, which was the strategic umbrella under which this developed. You’ll find well-informed people on both sides of the issue. George Cave, for example, the retired CIA Iran expert who was brought into this operation by CIA director William Casey, was convinced that there were people there who were interested in trying to develop a longer-term relationship after the war was over. There are others who thought this was purely a weapons-driven activity from Iran’s point of view, and they had no interest in better ties.


You also mention the Revolutionary Guards seizing American arms shipments at the airport in Tehran. How were they involved?

This gets into an area of expertise about how the Iranian system works. The basic point is that there was some kind of rivalry between the military and the Revolutionary Guards, and that seems to have played out in some of the transactions. The Revolutionary Guards apparently took control, unexpectedly, of the first arms shipment in August 1985. At least this was the story Ghorbanifar put forward to explain to the Americans why that shipment didn’t result in hostages being released. It caused the Americans to change their plans and to send the weapons to a different location where they hoped they could guarantee that the right elements within the state would receive them.


US TOW missile in action.


How much did US arms shipments help Iran on the battlefield?

Some Iranians who were both in the war and studied the war afterwards believe that there was some effect. Two kinds of missiles were involved. The first were TOW anti-tank missiles, and the second were HAWK anti-aircraft missiles.

TOW missiles were needed because the Iraqis had begun receiving sophisticated, heavily armored tanks from the Soviet Union, which were better able to resist the rocket propelled grenades the Iranians had been using against them.

I don’t believe the HAWK missiles had a real effect. The story is that when the Iranians received the first shipment, they either test-fired one or tried to reverse-engineer it, and they believed that they had not received the sophisticated version of the HAWK that they thought they were getting, so they rejected them.


How did Iran handle the revelation that it had dealt secretly with the United States and even Israel?

That was a tremendously sensitive issue.

The story came out through a Lebanese Shiite publication called Ash-Shiraa. The information was leaked to the editor of the paper by elements inside Iran who had discovered the deals and opposed them bitterly. It’s clear that Akbar Hashemi Rafsanjani, who was then speaker of the parliament, was extremely concerned about the fallout. A day after the story came out, he gave a Friday sermon and mentioned in some detail what had happened. He put his own spin on it, which was to say that Iran was in control the whole time, they were playing with the Americans, and there was nothing to be excited about.

He hoped to dampen any outrage that might come out of this. And there was quite a bit. The parliament was about to conduct a vote to censure Rafsanjani, but at a key moment, Khomeini himself intervened, and excoriated all sides for engaging in disruptive political rhetoric and tearing the country apart. He ordered that an end be put to it, and that was it. There was no more public discussion about the affair, which indicates that Khomeini must have known about what was going on, and had decided it was a worthwhile undertaking.


Oliver North testifies before a congressional investigation of arms for hostages deals with Iran.


How did the fact of a scandal involving Iran — a political trauma in the United States — affect Americas future policies toward Iran?

It had some significant and immediate effects. There was a tremendous effort to calm the situation. Envoys were sent immediately to Saudi Arabia and other Gulf states, to Jordan, and even to Iraq, where we were still cozying up to Saddam Hussein and helping him in the war against Iran. American diplomats had to reassure our allies that we still supported them and we didn’t support the Iranian regime.

There is a more speculative answer to that question that includes the possibility that, in this attempt to assure our Arab allies, the US found an impetus to get involved in the protection and re-flagging Kuwaiti oil tankers in the Gulf starting in 1987. During that time, a couple of US ships were hit by Iranian mines, and there were direct firefights between Iranian and American naval forces. In that heated environment, we saw the tragic shooting down of the Iranian Airbus by the USS Vincennes in July 1988. So it’s possible that there were very serious consequences to all of this.


How did the legacy of the scandal affect policy makers seeking inroads to Iran later?

Specific decisions have since been made about limiting who can undertake these kinds of activities. The National Security Council staff had a great deal of power in the Reagan years, and that was cut back in substantial ways. There were to be no more intermediaries, no more Ghorbanifars. In later approaches, for example under Bill Clinton, the most that would happen would be that American officials would have the Saudis or the Omanis pass messages to Iran. But there was great concern not to be duped again. It became a lot harder to propose dealing with Iran in the wake of this incredibly damaging political scandal.



For more on the Iran-Contra affair and its legacy in Iran, read “Khamenei’s Brother vs. Rafsanjani: Revenge, Betrayal and Haunting Memories”


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