On this day in 1986, President Ronald Reagan announced that rogues in the White House had secretly diverted money from arms-for-hostages trades with Iran to the CIA’s rebel army in Nicaragua.
Investigators for Attorney General Ed Meese found the so-called “diversion memo” in the offices of National Security staff member Lt. Col. Oliver North. North had tried to destroy all evidence of the diversion, but his shredder had jammed. When he came back the next day, he found investigators in his office. After they left with the memo, he returned to shred some more.
As all devotees of the Iran-contra affair know, North had been running two secret operations out of the Reagan White House. He had sold arms to the government of Iran as part of a scheme to win the freedom of American hostages in Lebanon; and he had taken this money, along with other funds, and given it to the contras fighting the communist government in Nicaragua. Both operations broke American law, and the diversion of funds raised the specter of an executive branch violating – shredding? – the Constitution.
As details of the two operations surfaced in the press, Meese started an “investigation” of the charges. He was severely criticized for failing to secure North’s office at the outset.
The diversion of funds was considered the worst part of the Iran-contra affair. Republican lawmakers like Senator Warren Rudman of New Hampshire said they would vote to impeach and remove the president from office if it could be proved that he knew specifically of the diversion. No documentary evidence ever surfaced showing that he did. Of course, few documents had survived North’s shredding party.
As the details of the scandal came to light, Reagan’s approval rating went into free fall and Americans’ faith in their government dipped to Watergate-era levels. Skeptics found it difficult to decide which part of Iran-contra scared them the most: the government-within-a-government, the contempt for democracy, or the bald-faced hypocrisy of a tough-talking administration willing to sell arms to the ayatollah and his terrorists. For many Americans, though, the scandal had one clear message: government officials routinely lied and broke the law.