Contra Aid Fundamentals: Exploring the Intricacies and the Issues
Author(s): Richard Sobel
Source: Political Science Quarterly, Vol. 110, No. 2 (Summer, 1995), pp. 287-306
Published by: The Academy of Political Science
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Exploring
ContraAid Fundamentals:
the Intricaciesand the Issues
RICHARD SOBEL
As a foundationfor understandingand evaluatingthe policies of
the Reagan administrationon fundingthe contraoppositionto the Sandinista
governmentin Nicaragua,thisexaminationclarifiesthe basicfactualbackground
surroundingthe provisionof aid to the contrasduringthe 1980s. In particular,
thearticleidentifiesfrompublicinformationhow muchaidthe U. S. government,
thirdcountries,privatedonors,andarmssalesprovidedto thecontras.Inaddition,
it indicatesthe periodsduringwhich outsidefunds sustainedthe contraswhen
U.S. fundingwasunavailable.It also explainsat whatpointsduringthoseperiods
fundsto the contrasmay have conflictedwith the legislativerestrictionsknown
as the Bolandamendments.'
Because the public record is often incompleteand the events are complex
andopen to differinginterpretations,these answersare provisional.Since much
of the informationon nongovernmentalaid is impreciseor contradictory,the
articlecannotfullyclarifyquestionssuchas theexactamountof fundsthatreached
the contras from arms sales to Iran or how much aid came from additional
miscellaneoussources.Becausethe contrasreceivedless moneythannongovernmentalsources contributedas aid, each answermust distinguishbetweenhow
mucha particularsourceprovidedandhow muchthecontrasapparentlyobtained.
1 While clarifyingthe basic issues aboutfundingthe contras,this articlealso identifieswhen shipments
of arms to Iran occurred, the amounts of money they generated, and the diversion of profits to the
contras. But it does not discuss the details of the contactsbetween the U.S. and Iran or the 1986-1987
Iran-contra scandal. For more details, see Daniel K. Inouye and Lee K. Hamilton, Report of the
CongressionalCommitteesInvestigatingthe Iran-contraAffairs(WithMinorityViews),abridgedversion
(New York: Times Books, 1988).
RICHARD SOBEL teaches political history and is a faculty associate of the Center of International
Studies at Princeton University. His most recent book is Public Opinion and U.S. Foreign Policy:
The Controversy Over Contra Aid.
Political Science Quarterly Volume 110 Number 2 1995
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287
288
| POLITICAL SCIENCE QUARTERLY
A clearunderstanding
of the factualbackgroundprovidesthe basisfor evaluatingpoliciesduringthe 1980s. The contrarebelswere createdin the early 1980s
from the old Nicaraguannationalguardand otheroppositiongroupswith U.S.
financialandtechnicalsupport.They soughtto dislodgethe Sandinistagovernmentthatcameto powerin the 1979revolutionoverthrowingthe Somozaregime.
Comparedto otherdefense-relatedexpenditures,U.S. governmentfundingfor
the contraswas modestin size. AlthoughbothprivatecontributionsfromAmericans andprofitsfromarmssales to Iranreceivedmajorpublicity,only contributionsfromthirdcountrieswere significantin helpingto sustainthe contrasfmanciallywhenU.S. governmentfundingwasunavailable.ThoughthesecondBoland
amendment(BolandII), one of a series of legislativerestrictionson U.S. aid to
the contras,was in effect duringperiodswhen the contraswere receivingnonU. S. governmentmilitaryaid, theapplicabilityof therestrictionsto somenongovof thecircumstances.Whilerelatively
erinent fundingdependson interpretations
modest, U.S. governmentfundingof the contrascontributedto the demise of
the Sandinistas.In terms of policy goals and legitimacy, the controversyand
scandaloverextra-governmental
contraaidmadesuchfundinga poorinvestment
and a dubiousmeans of attainingU.S. governmentaims.2
QUESTIONS ON SOURCES, AMOUNTS, AND TIMING OF FUNDING
The most straightforward
questioninvolvesthe amountsand sourcesof funding
to the contras.How muchaid did the UnitedStatesgovernmentandotherparties
provideforthecontras,andhow muchof thataiddidthecontrasactuallyreceive?
Theanswerdistinguishesbetweenaidfromthe U. S. government,thirdcountries,
privatedonors, and arms sales to Iran.
Morecomplexquestionsinvolvethe timingof the fundingandpossibleconflicts with the fundamentalrestrictionsin the Bolandamendments.Whendid the
contrashave fundsand when did they lack financialsupport?For whatperiods
didthe U.S. governmentauthorizeaid?Duringwhatperiodsdid the government
providethe authorizedfunds?When duringthe authorizationperiodsdid funds
runout?Werenongovernmental
fundsprovidedduringperiodswhenthe Boland
amendmentswere in effect, anddid those fundsconflictwiththe Bolandrestrictions?
U.S. GovernmentFunding
How muchaid did the U.S. governmentprovidefor the contras?Between 1981
and 1990 (fiscal years 1982-90), the U.S. governmentappropriateda total of
2 For an overview of the issues and politics surroundingU.S. aid to the Nicaraguancontras,esp. see
CynthiaArnson, Crossroads:Congress,the ReaganAdministration,and CentralAmerica,2nd ed. (UniversityPark:Penn StateUniversityPress, 1993); andRichardSobel, ed., Public Opinionin U.S. Foreign
Policy: The ControversyOver ContraAid (Lanham,MD: Rowman& Littlefield, 1993), esp. William
LeoGrande,"TheControversyOver ContraAid, 1981-90: An Overview,"chap. 2 and RobertPastor,
"TheWar Between the Branches:ExplainingU.S. Policy TowardNicaragua, 1979-89," chap. 11.
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CONTRA AID FUNDAMENTALS |
289
TABLE 1
U.S. Assistance to the Anti-Sandinista Guerrillas
Approved by Congress Fiscal Years 1982-1989
(in millions of US$)
Fiscal Year
1982
1983
1984
1985-86
1986
1987
1988
Oct. 1-Dec. 21
Dec. 22-Feb. 29
Apr. 1-Sept. 30
1989
Oct. 1-Mar. 30
1989-1990
Apr. 18-Feb. 28
Total
Nonlethal
19.0
29.0
24.0
27.0
13.0
100.0
27.0
13.0
30.0
7.1
8.1
17.7
7.1
8.1
17.7
27.0
27.0
Military
19.0
29.0
24.0
70.0
-
49.75
49.75
321.65
179.65
_
142.0
Source: Nina Serafino, 'Contra Aid:Summary and Chronologyof MajorCongressional Actions"(Washington,DC:CongressionalResearch Services, 1989), 17.
$322 million for contraaid. About $142 million was for militarypurposesand
$179 millionfor nonmilitarypurposes.3As Table 1 shows, for fiscal years 1982
through1990, respectively,the U.S. governmentprovidedforthecontras(FY82)
$19 million(military),(FY83) $29 million(military),(FY84) $24 million(military), (FY85-86) $27 million (nonmilitary),(FY86) $13 million (nonmilitary),
(FY87) $100 million ($70 military, $30 nonmilitary),(FY88) $32.9 million4
(nonmilitary),(FY89) $27 million(nonmilitary),and(FY90) $49.8 million(nonmilitary).The (FY85-86) $27 million and (FY87) $100 million were the most
prominentlydebatedcontraaid measures.5The contrasapparentlyreceivedall
3Nina Serafino, "ContraAid: Summaryand Chronology of Major CongressionalActions, 198189" (Washington, DC: Congressional Research Services, 1989), table 1.
4 The FY 1988 funds involved three different appropriationsof $7.1 million, $8.1 million, and
$17.1 million. See Serafino, "ContraAid," table 1.
S The first two allocations (FY82, $19 million and FY83, $29 million) were classified expenditures
reprogrammedfrom CIA or DOD funds and not directly voted on by the Congress for these purposes
(Serafino, "ContraAid," table 1). All the other allocations were voted by the Congress, though not
all were recorded votes. Prior to FY85, the contras received mainly military funds from the U.S.
except for $70 million
government.After FY85, the U.S. funds were all nonmilitary("humanitarian")
of the $100 million in FY85-86. The contrasmay have gotten more than the $24 million limit in CIA
funds in 1984 authorizedin the 1983 legislation; see Joy Hackel and Daniel Seigel, In Contemptof
Congress (Washington,DC: Institutefor Policy Studies, 1987), 80-81. The $27 million humanitarian
aid for 1985 could not be fully accountedfor (Hackel and Seigel, In Contemptof Congress, 30-34),
and part of it may have been spent for military purposes. The $13 million in FY86 was a classified
expenditurefor intelligence and communicationswhich might have had militaryapplications(Serafmo,
"ContraAid," table 1. See Serafmo, "ContraAid" and 10-14 here for authorizationperiods.)
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290
| POLITICAL
SCIENCE
QUARTERLY
the $322 million U.S. appropriatedaid.6
Third CountryAid
Howmuchassistancedidthirdparties(thirdcountriesandprivatedonors)provide
for the contras,andhow muchof thataid did the contrasreceive?In total, third
partiesgave the contrasabout$54 million:thirdcountriesprovided$44 million
and private donors about $10 million. Among third countries, Saudi Arabia
("Country2")was by far the largestdonor. FromJune/July1984 throughabout
March1986, SaudiArabiaprovided$32 millionin a seriesof donations.7In late
1985andearly 1986, Taiwan("Country3")donated$2 millionin "humanitarian"
aid.8In August 1986, the sultanof Bruneigave $10 million for "humanitarian"
aid, but thatmoneydid not reachthe contras,becausethe fundswere deposited
in the wrong Swiss bank account.9Thus, duringthe 1984-1986 period, third
countries'0gave $44 ($32, $2, $10) million for the contras, but the contras
received at most $34 ($32, $2, $0) million.1'
6 For details, see KaffirynRoth and Richard Sobel, "Chronologyof Events and Public Opinion,"
chap. 1; andWilliamLeoGrande,"TheControversyover ContraAid, 1981-90: A HistoricalNarrative,"
chap. 2 in Sobel, Public Opinion in U.S. Foreign Policy.
I Inouye and Hamilton, Report, 55, 114-115.
8 Ibid., 54, 67.
9 Ibid., 316. Before assisting in the 1985 arms transactions,Israel may have provided $4-5 million
in 1984. See Alfonso Chardy, "Israel, Honduras, Argentina Help Replace Aid from U.S.," Miami
Herald, 9 September 1984, after the FY83 $24 million allocation ran out in May 1984. Israel may
also have provided several million dollars in equipment in 1984 (Armstrong, The Chronology, 54).
Former PanamanianPresidentManuel Noriega may have provided $100,000 for the contrasand permitted contra training in Panama. Walter S. Mossberg, "While Noriega May Have Some Secrets to
Disclose, His Testimony Isn't Likely to Cause Bush Trouble,"Wall Street Journal, 17 January1990;
"HousePanel Reports Finding No CIA Link with Thrift Failures," WallStreetJournal, 24 December
1990; Peter Truell, "CIA Gave 'Several Hundred Reports'about BCCI to Other Federal Agencies,"
Wall Street Journal, 28 October 1991.
10FormerNationalSecurityAdviser RobertMcFarlanesolicitedthe first SaudiArabiancontribution
of $8 million in May 1984 and the second contributionof $24 million in February 1985 (Inouye and
Hamilton, Report, 48, 52, 54-55). Former Assistant Secretaryof State Elliott Abrams requestedbut
lost the Brunei contributionof $10 million in August 1986 in a belatedly acknowledged solicitation
(Inouye and Hamilton, Report, 76, 316). But the money was sent to the wrong Swiss bank account
and never reached the contras; see Elliott Abrams, Undue Process (New York: Free Press, 1993),
89-90.
11Thirdcountriesalso contributedin kind, particularlyby providingarms for the contras. Argentina
originally helped develop the contras in 1980-1982 (Inouye and Hamilton, Report, 38), but U.S.
supportof Britain in the spring 1982 FaLldands/Malvinas
war led to Argentina'sstopping their help
for the contras. Hondurasmay have supplied the contras from their own U.S.-provided arms. Israel
provided the first two shipments of TOW missiles to Iran in August-September 1985 and the first
shipmentof HAWK missiles in November 1985. In effect, these were Israeli advances, since the TOW
shipmentswere replenishedby the United States in May 1986. See, for example, John Tower, The
Tower CommissionReport (New York: Times Books, 1987), 438-441. All but one of the HAWKS
were returned.
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CONTRA AID FUNDAMENTALS |
291
Private Donors
From June 1985 throughMarch 1986, private donors providedanother$10
million.'2Only $4.5 millionwas spenton the contras,however.And only about
$2.7 millionof thatactuallyreachedthecontras,sincethe remaining$1.8 million
was paid for politicaladvertising,lobbying,and otheractivitieson the contras'
behalfin the UnitedStates.13In sum, thirdcountriesandprivatepartiesprovided
about$54 ($32, $2, $10, $10) million, of whichthe contrasreceivedabout$36.5
($32, $4.5) million.
Arms Sales Diversions
How much moneydid the diversionof profits (residuals)from U.S. arms sales
to Iranduringlate 1985 to late 1986 producefor the contras,and how muchof
that did the contrasreceive? In the 25 November 1986 announcementof the
diversions,formerU.S. AttorneyGeneralEdwinMeese estimatedthatthe residuals may have produced$10 to $30 million for the contras, but subsequent
estimateswere lower.'4In early 1987, the reportof the Tower Commission,a
group set up by PresidentRonaldReaganto investigatethe NationalSecurity
Councilprocess andthe Iran-contrascandal,suggestedthatthe arms sales producedabout$19.8 millionforpotentialdiversion.'5 Inlate 1987,thejointcongrescommitteeestimatedthatthelastfourof six armssalesproduced
sionalIran-contra
$16.1 in profits.'6Of the $16.1 million from the arms sales, the contrasonly
received about$3.8 million from November 1985 to November 1986.17
12
Inouye and Hamilton, Report, 93-99. The private donors were solicited by National Security
Council aide Oliver North and other fundraisersfrom the National Endowment for the Preservation
of Liberty(NEPL), (ibid., 93ff). The $10 million included$5.37 million donatedby two elderly widows
from 1985 to 1987 (ibid., 97-99, 103).
13 Ibid., 99-100.
14
RichardJ. Meislin, "46%ApproveReagan'sWork, Down21 Points,"New YorkTimes,2 December
1986.
15
Tower, TheTowerCommissionReport, 180-185. See also ScottArmstronget al., TheChronology:
TheDocumentedDay-By-DayAccount of the Secret MilitaryAssistance to Iran and the Contras(New
York: WarnerBooks, 1987), 161-162.
16 Inouyeand Hamilton,Report, 297, 302. The armssales to Iranproduced$31.3 million in revenues
to pay for $15.2 million worth of arms and related costs (ibid., 300), producing the $16.1 million
surplus(ibid., 307). Adding congressionalIran-contracommittee figures for profits ($4 million) from
the first two arms sales to the Tower Commissionfigures producesan estimate of profits of $20 million.
The "Enterprise"set up to supply arms to the contrasreceived $48 million (ibid., 297), including the
$31.3 million from Iran-armsales, and spent $35.8 million, including $15.2 million for contra arms
(ibid., 300). This left a surplus of $12.2 million (ibid., 307). (See note 40 for the distributionof the
$12.2 million.) Of the $15.2 million spent on contra arms, $7.2 million was spent during the period
of arms sales profits diversions (November 1985-November 1986). About $3.4 million of that $7.2
million came from donationsfor the contras, so an estimated $3.8 million came from arms sales profit
(ibid., 307, 438).
17 Ibid., 307, 438.
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POLITICAL SCIENCE QUARTERLY
Becauseof the complexityof the process, a chronologicalreviewof the arms
shipmentsandpaymentshelpsto clarifythe timingandthe sumsinvolved.There
were six different shipmentsto Iran (seven counting separatelytwo spring/
summer1986 shipmentsof parts). First, on 20 August 1985, Israel delivered
ninety-sixof its TOWs antitankmissiles to Iran.'8Second, on 14 September
1985, Israeldeliveredanother408 of its TOWsto Iran.'9Third,on 25 November
1985, a CIAproprietarycompanydeliveredto Iran 18 (of a planned120) Israeli
HAWKantiaircraftmissiles.20Fourth,on 17 February1986, andon 27 February
1986, respectively,the CIA proprietarycompanydelivered 1000 (500 + 500)
more TOWs (andpickedup seventeenof eighteenHAWKSrejectedby Iranas
obsolete).2'Fifth, on 25 May 1986, and on 4 August 1986, the CIA delivered
240 HAWKspareparts.22Finally, on 30/31 October1986, the CIA proprietary
delivered500 more TOWs.23In total, the six shipmentsprovided2004 TOWs,
18 HAWKs, and 240 HAWKparts.
How muchprofitdid the armssales produce,andhow muchdid the contras
receive? Relying mainly on congressionalIran-contracommitteefigures, but
drawingon Tower Commissionfiguresas needed,24the profitscan be estimated
by comparingwhatIranpaidfor the missiles with their U.S. dollarvalue. Since
the policy of divertingresidualswas not developeduntil early 1986, any profits
fromthe first three shipmentswere not plannedto be sent to the contras,while
those from the last three were partof the programto aid the contras.
For the firsttwo TOWshipments,the TowerReportestimatedthatIranpaid
$1.2 millionfor the initial (S1) 100 (actually96) TOWs, and $5 million for the
next (S2) 408 TOWs, for a total cost of about $6.2 million.25The 508 (504)
(S1 + S2) TOWshad a U.S. value of about$2 million, so the profitwas $4.2
($6.2 - $2) million.26(But thatprofitwas not divertedto the contrasandwent
insteadto arms merchants.)27
AlthoughIranoriginallypaid $5 million in No18
Ibid., 151.
19Ibid., 151. On 4 May 1986, the U.S. replenished the 504 TOWs provided by Israel in August
and September1985. The 25 May 1986 delivery, accompaniedby RobertMcFarlaneand Oliver North,
supposedlyincluded a cake and a Bible signed by Ronald Reagan; see Armstrong, The Chronology,
380.
20
Ibid., 164-65.
21 Ibid., 190, 192.
22 Ibid., 209, 216.
23 Tower, The Tower CommissionReport, 408.
24 The Tower Committee provided figures for the first two sales, whose costs were not estimated
by the congressional Iran-contra report. (The profits apparentlywent to the arms dealers.) Because
the congressionalreportcame out in 1988 after the Tower Reportin 1987 and was based on extensive
public and private hearings, its figures are considered more reliable.
25 Tower, The Tower CommissionReport, 174-77.
26 Ibid., 52, 161-62.
27
These figures suggest sales prices of about $10-$12,000 per TOW. TOWs normally cost about
$6000 each, which appears (ibid., 186) to be what their U.S. dollar value was. Apparently, North
would have accepted older ones costing $3400 for delivery to the Iranians (Inouye and Hamilton,
Report, 187-88).
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CONTRAAID FUNDAMENTALS|
293
vember 1985 for the eighteenHAWKs (S3),28there was no completedsale to
produceany profit, because the Iraniansreturnedseventeenof the missiles as
unsatisfactoryaftertest-firingone. However,becauseIsraeladvanced$1 million,
of which only about$150,000 was spent on the abortivesale, and the rest was
not returned,the thirdtransactionproduced$850,000, some of which was used
for the contras.29
The last threeshipments(S4-S6), all in 1986, involvedplanneddiversions.
For the 1000 TOWs (S4) in February1986, Iran paid about $10 million for
missiles worth $4.5 million, producingat least a $5.5 million profit.30(Tower
figures: $10 million - $3.7 million = $6.3 million; 444 445). For the 240
HAWK parts (S5) in May and August 1986, Iran paid $15 million for $6.7
millionworthof weapons,producinga $8.3 millionprofit.3'(Tower:$15 million
- $6.5 million = $8.5 million; 446). For the last 500 TOWs (S6) in October
1986, Iranpaid $3.6 million for $2.2 million worthof arms, producinga $1.4
millionprofit.32(Tower:$7 million- $2 million = $5 mllion, 448). The total
paymentsfor the last three shipments(S4-S6) were $28.6 million ($10 million
+ $15 million + $3.6 million) [Tower: $32 million] for $13.4 million ($4.5
million+ 6.7 million+ $2.2 million)[Tower:$12.2] millionworthof equipment.
These last three sales produceda profit of $15.2 million ($5.5 million +
$8.3 million + $1.4 million).33(Towertotal: $19.8 million, 448). Combining
the $850,000 residualfromthe (S3) HAWKtransactionswith the $15.2 million
($19.8 million) producesa total profit of about$16.1 million ($20.6 million).
Addingthe $4.2 millionprofitfromthe firsttwo sales (S1 + S2) of 504 missiles
producesa total profit of about$20.3 million (Tower: $24.8 million).34Table
2 providesa summaryof the sales and fundsinvolved.
In short, the six shipmentsof arms to Iran producedas much as $25 million, at least $16. 1 millionof whichcouldpotentiallybe divertedfor the contras.
Whenthe Iranarmssales operationwas exposedandstoppedin late 1986, however, less thana quarterof the $16. 1 millionin residualshad been spenton the
contras:35
accordingto the congressionalreport,the contrasonly receivedabout
28
Tower, The Tower CommissionReport, 442-443.
Inouye and Hamilton, Report, 159, 234, 302.
30
Ibid., 302.
31 Ibid., 302-304.
29
32
Ibid., 304.
Ibid., 302-304.
3 The congressional report estimates a total profit of $16.1 million (Inouye and Hamilton, Report,
238, 304), based on $15.2 million for the last three arms sales plus $850,000 for the third. The Tower
Reports estimates $19.8 million profit from the last three arms sales, but it does not add in the profit
from the first two ($4 million), or mention the $850,000 from the abortedthird sale.
35 What the contras actually spent in any year on fighting the Sandinistasis also difficult to say. A
1 April 1985 memo from Oliver North to Robert McFarlane estimated that during the ten months
between July 1984 and April 1985, a period when there was no U.S. funding, $17.1 million had been
expended for military supplies and operations (Tower, The Tower CommissionReport, 458). At that
rate, the contras would have spent about $20 million for that year (see note 38).
33
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POLITICAL SCIENCE QUARTERLY
TABLE 2
Residuals GeneratedfromArmSales to Iran, 1985-1986
Quantityand Type
Shipment/Date
S1 8/20/85
S2 9/14/85
S3 11/25/85
96 TOWs
408 TOWs
18 HAWKs
S4 2/17 & 2/27/86
S5 5/25 & 8/4/86
S6 10/30-3/1/86
Total S4-S6
Total S3-S6
Total S1-S6
1000 TOWs
240 HAWKparts
500 TOWs
Cost to Iran
$1.2 m
$5 m
$5 m
($1 m)
$10 m
$15 m
$3.6 m
$28.6 m
$29.6 m
$35.8 m
Cost to U.S.
Residual
(Iran-U.S.)
$2 m
$4.2 m
$0.15 m
$4.5 m
$6.7 m
$2.2 m
$0.85 m
$5.5 m
$8.3 m
$1.4 m
$13.4 m
$13.5 m
$15.5 m
$15.2 m
$16.1 m
$20.3 m
m = millions of U.S. dollars.
Source: John Tower, The TowerCommission Report(New York:Times Books, 1987); Daniel K.
Inouye and Lee K. Hamilton,Reportof the Congressional CommitteesInvestigatingthe Iran-Contra
Affairs(with minorityviews), abridged version (New York:Times Books, 1988).
Thatfigureis basedon congres$3.8 millionof the $16.1 millionin residuals.36
sional Iran-contraCommitteebudget analysis that the so-called Enterprise,a
fundingmechanismset up to supply arms to the contras,37spent $7.2 million
on contraarms38duringthe diversionperiod of November 1985 to November
1986. Privateand third countrydonationsproduced$3.4 million of the $7.2
million for the contras.39The committeeconcludedthatthe other $3.8 million
($7.2 - $3.4 million) came from the $16.1 million of divertedIranianarms
sales profits.40
36 Inouye and Hamilton, Report, 307, 438. In a 4 April 1986 memo, North estimatedthat "residual
funds"from Iran arms sales total about $12 million (ibid., xxi; Armstrong, The Chronology, 327).
Adolfo Calero originally claimed the contras only received $300,000-500,000 in 1986 (ibid., 595),
but later mentioned $18 million in arms (ibid., 652); Alfonso Robelo claimed the contras got $7.5
million from the arms sale during the congressional ban period (ibid., 625).
37 Ibid., chap. 21. The Enterprise, or Project Democracy, was a nominally private organization,
but in realityan armof the NationalSecurityCouncil stafffor financingandconductingcovert operations
in Nicaragua (Inouye and Hamilton, Report, 63).
38 It is not clear how much money the contras needed to operate. The total for 1984 through 1986
alone ($83-97 million, or roughly $28-33 million per year) received was "nearlytwice what they
needed for the war effort"(Armstrong, The Chronology, 657). In April 1985, the 10,000 plus (ibid.,
42) contras needed about half a million dollars a month to operate (Armstrong, The Chronology,96)
at their currentlevels, or roughly $6 million a year. Even at twice that rate ($12 million), the troops
seemed amply funded, though equipmentcosts could easily have made up the difference. On the other
hand, the complete exhaustion of the $24 million appropriatedin FY83 in the six months between
November 1983 and May 1984 suggested a rate of about $48 million per year.
39 Inouye and Hamilton, Report, 297.
40 Ibid., 293, 307, 436. Of the $12.3 million difference between the $16.1 million in residuals the
armssales producedandthe $3.8 million received by the contras,$4.4 million was paid as commissions,
$2.2 million for personaluse, and $5.6 million remained in their bank account (and might have been
spent on the contras if the diversion had not become public).
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CONTRA AID FUNDAMENTALS |
295
TABLE 3
Amounts and Periods of U.S. and Private Aid to the Contras, 1983-88
L
Jfmamjjasond
) =00
GOVERNMENT()
fmamjjasond framjao-
($29)
$15
4....00
No USG(5)
Boland
~~($40)
=A
Bans
)
All
U.S dllrs
THIRDCOUNTRIES
$24
Saudi Arabia No allocation for
.
(...
Taiwan
..
(p
Brunei
PRIVATEDONORS(
ARM SALES
B
$2
--
--
$0-
$(85
m
o
re
a
Jfma ... =January, February, etc.
Period of authorization.
=Period of expenditure.
$ = Aid in milliions of U.S. dollars.
?= Unclear or unknown.
0 = No allocations for the year.
In full, thirdcountries($44 million), privatedonors($10 million), and arm
sales profits ($16-$25 million) producedabout$70-80 million for the contras.
But the contrasonly receivednet about$40 ($32, $4.5, $3.8) million. That$40
million, whichthe contrasreceivedfromnon-U.S. governmentalsourcesduring
for FY851984 to 1986, was roughlyequivalentto whatCongressappropriated
86 in nonlethalfunding($27 million + $13 million).
TIMINGAND THEBOLANDAMENDMENTS
Regarding issues of timing and legal restrictions, when did the contras receive
non-U.S. government aid, when did they lack it, and when did any of the aid
occur during the periods of Boland amendment restrictions? Specifically, did the
contras receive non-U.S. government aid in late-1984 to late-1985 to bridge the
gap during the first period41after U.S. government funds were exhausted (May
1984) and Boland II prohibited additional U.S. funding (14 October 1984-30
4'
Ibid., 52.
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296 | POLITICALSCIENCE QUARTERLY
September1985)? Did they get any covert or lethalaid duringthe late 1985 to
1986 period(19 November1985-30 September1986) when an extensionof the
centralBolandamendment(BolandII) bannedall but nonmilitaryaid?42Table
3 indicatesthe periodof authorizationfor U.S. funds, the periodsof the Boland
bans, and the periodswithoutfunding.
In addition,did the contrasreceive any militaryfunds to bridge a second
gap periodin mid-198643betweenthe end of the authorizationsof the FY85-86
$27 million nonmilitaryappropriationon 31 March 1986 (the classified $13
million began in December 1985) and the beginningof the FY87 $100 million
on 18 October1986?
The first bridge period without U.S. funds-lasted about eighteen months
between spring 1984 and fall 1985 (May 1984-December 1985). The FY84
authorization
allocatedin December1983 was limitedto $24 million,andthough
scheduledto expire on 30 September1984, actuallyran out by May or Juneof
1984;4"this was after an expeditedattemptfor a supplemental$21 million for
the rest of FY84 failed in February1984. Thus, the $24 million FY84 U.S.
allocationto the contrasranout five monthsbeforethe beginningof the FY 1985
BolandII banof militaryfundsfor the contrasbeganon 12 October1984 (ending
on 30 September1985).45No U.S. funds were authorizedor availableduring
the rest of 1984 after May and most of 1985 until the FY85-86 allocationof
$27 million(authorizedfor 15 August 1985 through31 March1986but delayed
to the end of 1985 by a series of continuingresolutions)became availableon
19 December 1985.46At the same point, the additionalclassified $13 million
(PL 99-169) was allocatedfor communicationsand trainingfor FY86 (ending
42
and otherpassed(or proposed)Boland-like
Therewere actuallyseveralBolandamendments
restriction
on aidfrom1982to 1986(InouyeandHamilton,Report,343-44). ThefirstBolandamendment(passedon 12 December1982)prohibiteduse of fundsfromDecember1982-October1983for
overthrowing
the Sandinistagovernment.In 1983 those restrictionscontinuedand the law limited
(Serafino,"ContraAid,"1). In October1984,
FY84 aid to $24 millionto preventCIA supplements
the secondBolandamendment
(BolandII) cut off all aid by restrictingDODandCIA"orany other
. . . militaryoperationsin Nicaragua"
... entity"of the U.S. Government
from"supporting
(Inouye
1985,extended
lethalaid(14October1984-30September
andHamilton,
Report,414)orfromproviding
to seekreleaseof $14millionin funding
to 19November1985).Butthelawallowedtheadministration
in February1985. The $27 millionin nonlethalaid authorizedin 15 August1985modifiedthe ban
fromall fundingto only military.Therenewalof BolandII on 19 November1985extendedthe ban
on militaryaid untillate 1986(19 November1985-30 September1986). However,it allowedState
aid. In short,militaryaidwas restrictedfrom
solicitationof thirdcountry"humanitarian"
Department
December1982to September1984,andbannedfromOctober1984to November1986undervarious
Boland-likerestrictions.Nonmilitaryaid was bannedonly fromOctober1984to August1985.
4
Tower, The Tower CommissionReport, 52-53.
InouyeandHamilton,Report,48; Armstronget al., TheChronology,56.
of $27 million,therewas no "humanitarian
only"(thatis,
4 Beforethe June 1985 authorization
or "nonlethal")
solelynonmilitary
aid, sinceall the previousaidwas availablefor militarypurposes.
aid
in thiscontextis questionable
sincehumanitarian
Moreover,the use of the word"humanitarian"
typicallymeansaid to noncombatants.
I Armstrong,The Chronology, 66.
4
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CONTRAAID FUNDAMENTALS|
297
30 September1986, thoughperhapsextendingbeyond). Thus, for the eighteen
monthsfrom June 1984 to December 1985, the contrashad no U.S. funding,
militaryor nonmilitary.From December1985 to June 1986 they receivedonly
nonmilitary($27 million + $13 million in U.S. aid).
In addition,for the six monthsduringthe second bridge period from June
1986, when that $27 million ran out, until November 1986,47when the $100
millionbeganto flow, the contrasagainhadno U.S. funds, militaryor nonmilitary.48In summary,before(June1984-September1984), during(October1984September1985), and after (October1985-November 1986) the period of the
initialBolandban (October1984 to September1985), the contraswere without
U.S. allocatedmilitaryfundsfor a totalof over a year anda half duringthe two
bridgeperiods (June 1984-December1985; June 1986-November1986).
The contras,however, were not withoutmilitaryfundsduringthe two and
a half years from May 1984 to November 1986, when U.S. funds ran out or
were restrictedby the BolandII ban to nonmilitaryaid. The contrasreceived
militaryfunds from third countriesand thirdpartiesduringmost of that first
bridge period (June 1984-November 1985). Third country supportbegan in
mid-1984, half a year before the FY 1985 Bolandban startedin October1984.
FromJuly 1984 to March1986, duringmostof the firstunfundedbridgeperiod,
Saudi Arabiacontributed$32 million-$8 million at $1 million a monthfrom
July 1984to February1985 and$24 millionat $2 millionpermonthfromMarch
1985to aboutMarch1986.49This helpedto sustainthe contrasmilitarilythrough
most of the two and a half year period (June 1984-November 1986) without
U.S. militaryfunding.50
Beginningin early 1985 and continuinginto 1986, the privatecontributors
networkorganizedin mid-1984 and connectedto the NationalEndowmentfor
the Preservationof Libertyandthe Enterprisealso raisedabout$10 millionfor
the contras.51Of that$10 million, about$4.5 millionwas spentfor contra-related
activities. But only about$2.7 million went for militaryaid, since about$1.8
millionwas spentin the UnitedStateson lobbyingandpublicityfor the contras.
The solicitationof privatefundscontinuedinto 1986.
on 18 October1986, andthelast $40
47The first$60 millionof the $100 millionwas appropriated
ended31 March
in March1987.Partof the$27 million,whoseauthorization
millionwasappropriated
by
1986, continuedto be spentafterMarchsinceit was alreadyin thepipeline.It was supplemented
the $13 millionauthorizedin December1985until30 September1986, whichran out by summer
1986.
of the$27millionforFY85spring,thecontrassupposedly
4 InJuly1986,followingtheexhaustion
went$2.5 millionin debt(Tower, 7he Tower CommissionReport, 341). DuringthatperiodfromJuly
untilOctober1986, when$60 millionof the $100 millionwas disbursed,the contrasreceivedonly
partof $2.7 millionin privatedonationsand$3.8 millionin armssalesdiversions,andno thirdcountry
donations.
49 InouyeandHamilton,Report, 52, 55.
50Ibid., 55.
51 Ibid., 88, 91, 97.
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298 | POLITICALSCIENCE QUARTERLY
ARmsSALESPROFITS
ANDTHIRD-PARTY
DONATIONS
DURING
PERIODS
OF No U.S. FUNDS
The Iranianarms sales profits also providedsome funds for the contraswhen
U.S. aid was stopped.However, none of the $4 million in profit producedby
the firsttwo sales (S1 andS2) of AugustandSeptember1985, whichfell toward
the end of the June 1984 to December 1985 period when there were no U.S.
funds,went to the contras.The $850,000 producedby the thirdtransaction(S3)
in November1985 did go to the contrasslightlybeforethe $27 millionand $13
million in nonmilitaryaid began to flow in December 1985.52
Thus, fromDecember1985 to June 1986, U.S. aid for the contrasconsisted
of only those combined$40 million nonmilitaryfunds; and between July and
November 1986, again no U.S. funds were availablefor contraaid. The first
planneddiversionof armsprofits-as opposedto theunplanned$850,000 residual
(S3)-took place with the fourtharms sale (S4) in February1986,53which produced$5.5 millionin profits.The fiftharmssales (S5) in middleto late summer
1986produced$8.3 million54in profit(afterthe $27 millionand $13 millionran
out in summer1986). Thusat least $13.8 ($5.5 + $8.3) millionof the residuals
from the mid-1986 arms sales (S4 and S5) was availablefor contramilitary
suppliesduringthe JunethroughOctober1986 bridgeperiod,when no U.S. aid
was available.On30 October1986, thefirst$60 millionof theFY87 $100 million
in ($70 million)militaryand($30 million)nonmilitaryaidvotedin summer1986
was allocated(andsupplementedby $40 millionin March1987). A monthlater
on 25 November1986, thelast shipment(S6)of 500 TOWsproduced$1.4 million
in profit, some of which probablywent for the contras.55
In short, the thirdcountryfunds, privatedonations,and arms sales profits
were needed to sustainthe contrasduringthe periods after U.S. government
fundsranout in May-June1984. Inparticular,thecontrasneededoutsidemoney,
especiallyfor militarysupplies,duringthe periodsof the Bolandbans (October
1984-October1986).WhenthecontraslackedU.S. funds,thirdcountries,private
donors, and arms sales providedthem.
In sum, duringJune 1984 to December 1985, when there were no U.S.
providedfunds, there was $24 million of the $32 million Saudi donationthat
produceda significantamountfor contraarms. Duringthe December 1985 to
October 1986 period, when the contrashad only nonmilitaryU.S. funds, the
last $6 millionin Saudidonations,the $2.7 millionin privatefunding,and$3.8
52
Ibid., 159, 234, 302.
53 Thoughthe $850,000 in November 1985 was apparentlyspenton the contras,the idea of purposely
diverting arms sales profits for the contras was evidentally not suggested until late 1985 or early 1986
(Inouye and Hamilton, Report, 117-19, 124, 178, 234-35).
54 Ibid., 302-304.
55 Out of the total $16-20 million profits from S3-S6, the $3.8 million that went to the contras
constitutes less than a quarterof the potential funds.
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CONTRAAID FUNDAMENTALS|
299
million in arm sales residualsprovidedadditionalfunds for militarypurposes
($12.5 million).
U. S. fundsmayhaveservedmilitarypurposes.
Moreover,somehumanitarian
FromDecember1985 throughJune 1986, withinthe October1984 throughOctober 1986 periodof the BolandII bans, partof $27 millionin nonmilitaryU.S.
the
fundswas unaccountedfor andmay have been spentfor militarysupplies;56
$13 million was also spentfor quasi-military,intelligence,and communication
purposes.57By July 1986, after the Saudi contributionshad ended, however,
only part of the $2.7 million in privatedonationsand $3.8 million from arms
profitswerestillavailable,andthecontrassupposedlywent$2.5 millionin debt.58
In short, until late 1986, the third-countryaid, arms sales profits, third-party
spentU.S.fundsprovidedsome military
donations,andpossiblyinappropriately
funds afterthe U.S. governmentallocationsran out in spring 1984.
In total, from 1981 to 1990, about$400 million in militaryand nonmilitary
funds was allocated($322 million) or raised ($70-80 million) for the contras,
of which about $360 million reachedthem. While a considerablesum, it is
relatively small comparedto the roughly $1 billion in U.S. militaryaid and
$2 billion in United Stateseconomic aid duringthe same period to the nearby
governmentof El Salvador.59By comparison,during 1986 alone, Soviet bloc
aid to Nicaraguawas roughly $580 million.A The $400 million in aid to the
contraswas only aboutfive timesthe $75 millionin aidthe Carteradministration
approvedforthe Sandinistasin 1980($60 millionwasprovidedbeforetheReagan
administrationcut it off).6' Less than half a billion dollarsis not much for the
United States;but it is a significantamountwhen directedagainstNicaragua
with a gross domesticproductof about$2.6 billion.
DONATIONS AND DIVERSIONS DURING THE BOLAND BAN
Did thethirdparty(thirdcountryandprivatedonor)fundingthatoccurredduring
periodsof BolandrestrictionsconflictwiththeBolandbans?The answerdepends
bothon whetherfundingoccurredwithinthe banperiodsandwhetherthe restrictionswere applicableto the specifictypesof funding.BolandII bannedall U.S.relatedaid from 12 October 1984 to 30 September1985, and all militaryaid
funding
from 1 October1985 to 18 October1986. Someof the nongovernmental
(for example,fromSaudiArabiain June 1984)occurredbeforeBolandII started
in October1984, andthuscouldnot have initiallyconflictedwithBolandII. The
Hackel and Seigel, In Contemptof Congress, 30-34.
Serafino, "ContraAid: Summaryand Chronology of Major CongressionalActions," 18.
58 Tower, The Tower CommissionReport, 341.
59 National Journal, 9 September1987, 232-233. The Vietnamwar cost about $29 billion ($29,000
million) in 1969 alone (Congressional Quarterly,26 April 1975, 847). One Stealth bomber used in
the Panamainvasion in 1989 cost about $500 million (Facts on File, 1989, 534).
0 Inouye and Hamilton, Report, 411.
61
Cynthia Arnson, Crossroads (New York: PantheonBooks, 1989), 46-47.
56
57
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300 |
POLITICAL SCIENCE QUARTERLY
FY85-86 allocationsof $27 million and $13 million in nonmilitaryaid were
approved(15 August 1985 and 18 December 1985, respectively)during the
periodof the BolandII ban (through30 September1986), buttheirauthorization
modifiedthe ban to permitnonmilitaryfunding.Most of the nongovernmental
funding, however, includingthird country (June 1984-March 1986), private
donor (May 1985-November 1986), and arms sales profits (November1985November1986) occurredafterBolandII beganin October1984 andbeforeits
extensionexpiredin October1986.
Thus, thirdparty fundingand arms sales occurredduringperiods of the
Bolandban. But did they conflict with restrictionsof the Bolandamendments?
Beyondtiming, identifyingviolationsof the Bolandban also involves legal and
politicalquestions.The key issue is whetherthe ambiguouslywordedban was
applicableto thirdparty funds and funds divertedfrom the arms sales.62The
BolandII amendmentonly restrictedfunds availableor handledby any U.S.
government"entity. . . involvedin intelligenceactivities."Therefore,thirdparty
funds given directlyto the contrasor to a privateorganizationfor the contras
did not per se conflict with the Boland restrictions.The money that private
organizationsraisedin 1985-1986, and the Saudi contributionsof $32 million
in 1984-1986 supposedlydid not go to the U.S. governmentbut went directly
to the contras.63
Theinitialsolicitationsof Saudidonationsin May 1984andsomeof theprivate
donationsoccurredbefore BolandII took effect in October1984; moreover,a
December 1985 amendmentto BolandII specificallypermittedadministration
solicitationof third countriesfor humanitarianaid,"' for which the sultan of
Bruneicontributed$10 million, whichmay havebeen intendedfor militarypuraid and inposes.65Had the Bruneisolicitationsactuallybeen for humanitarian
volved no quid pro quo, they would have been legal.
Whenpersonnelpaidby theU. S. governmentsolicitedthirdcountryorprivate
funds for militarypurposesor handledprivatelycontributedfunds duringthe
banperiod,however, these actionsconflictedwith Bolandrestrictionsandother
laws. The arms sales diversionof funds beginningwith the November 1985
residualof $850,000 from the third shipment,moreover, occurredduringthe
Bolandban period (October1984-October1986) and was partiallyhandledby
the CIAandcoordinatedby U.S. governmentpersonnelon the NationalSecurity
Council(NSC) staff. Becausethese funds were collected and managedby the
NSC staff and thus were "available"to governmentintelligenceagencies (and
the NSC was involvedin intelligenceactivity), they conflictedwith the Boland
62
Inouye and Hamilton, Report, 414.
Ibid., 48-49, 54-55. On two occasions, Robert McFarlane explained to the Saudi ambassador
to the United States that the contras needed funds, for which the Saudis contributed$32 million.
McFarlaneclaimed these were not solicited but provided as gifts.
64 Ibid., 315.
65 Ibid., 344.
63
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CONTRA AID FUNDAMENTALS |
301
ban. As violationsof appropriation
restrictions,however,theywere not criminal
actionsper se.66
The Majorityand MinorityCongressionalIran-ContraCommitteereports
differ, however, in their interpretationof whetherthe Bolandban necessarily
prohibitedsolicitationor handlingof funds availableto the U.S. government,
of theproceduresor laws. Themajority
andin theirconstitutionalinterpretations
held thatthe ruleof law,67the principleof governmentaccountability,the power
of the purse, and specific statutesrequiredthatany money solicitedor spentby
U.S. governmententitiesor officials must be appropriatedby the Congress.68
In this view, governmentally-related
fundingmechanismscircumventingofficial
and thus illegal.69Since the privatefundswere
proceduresare unconstitutional
solicitedby governmentpersonnelandthe divertedfundswere controlledby and
thusavailableto the CIA or NSC, underthe majoritylogic, they were restricted
underBolandII.
The minorityreport,however, claimedthatthe president'sforeignrelations
powers permittedsuch activities, includingsolicitationof third-partymilitary
funds.70Even if laws like BolandII prohibitedsuch actions, those restrictions
were unconstitutional
andthus void becausethe presidenthas the constitutional
rightto communicatewiththethirdpartiesto urgethemto makemilitarycontributions to U.S. allies.7' The diversionsthemselves, moreover, would have been
legal in this view, if they had followed properproceduresand been sanctioned
by a presidentialfinding,an authorizationunderthe Hughes-RyanAct of 1974,
whichpermittedproperlyapprovedcovertactivitiesdeemedto be in the national
interest.72
Thediversions,however,didnotfollowproperprocedures.Theywereapparently not approvedby the president,since he claimednot to have knownabout
them.73The November1985 arms sales (but not the diversionsof profits)were
retroactivelyapprovedby presidentialfindingin December1985, andthe 1986
sales were prospectivelyapprovedby a January1986 finding.74Since, however,
the presidentapprovedonly the armssales and not the diversions,the minority
claim of constitutionalprotectionis moot.75In short,the diversionswere illegal
underBolandII even in the minoritylogic.
Under the majoritylogic, the Boland II ban prohibitedany solicitationby
governmentofficials and the use of arms profits divertedunderNSC guidance
66 Ibid., 356, 414.
67 Ibid., 397.
1%
Ibid., 348-349.
69 Ibid., 350.
70
71
72
Ibid., 371ff.
Ibid., 391.
See also Edwin Meese m, WithReagan: TheInside Story(Washington:Regency Gateway, 1992).
73 Inouye and Hamilton, Report, 377-378.
74Ibid., 436.
75
Ibid., 383, 438.
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302 |
POLITICAL SCIENCE QUARTERLY
between October1984 and November 1985. It also prohibitedsolicitationsof
militaryaid throughNovember 1986, because the requestsand diversionsinvolved monies collected by governmentpersonnelor availableto an entity of
the U.S. government.Underthe minoritylogic, however, the third-partyand
third-countryprivatefundingof militaryoperationswere not per se restricted
by the Bolandban, becauseprivatecitizens can donatefundsand the president
had the foreignpolicy powers to solicit such funds.76
In sum, third-partycontributionsandarmssales diversionsdid occurduring
the Boland II ban and sustainedthe contraswhen they had no U.S. funds.77
Third-country
fundingprovideda significantamountof militaryaid ($34 million)
for the contras.Privatedonations($2.7 million) and divertedarmssales profits
($3.8 million) providedlittle ($6.5 million) for militarysupplies. Thoughthe
donationsto thecontrasstartedbeforetheBolandrestrictionsbegan,
third-country
the ban did prohibitthe solicitationof mostprivatedonations,militarycontributionsby thirdcountries,anddiversionsof armssalesprofitsbecauseU.S. government personnelwere involved in the requestsor implementation.
POLICY QUESTIONS
To this point, the analysis has clarifiedthe details of contra fundingand the
Bolandbans in order to providea basis on which to evaluatethe policy itself.
The rest of the article explores the debate about U.S. policy on fundingthe
contrasandsuggestsprovisionalanswers.Did fundingthe contras,bothby congressionallyappropriatedU.S. aid and outside funds, advanceU.S. interests?
Weretheadministration's
orextralegalmonies
attemptsto findextragovernmental
when U.S. governmentfunds were not availableworth the efforts? In short,
were the benefits of the policy of supportingthe contrasworththe costs?
The answersto these questionsdepend,in largepart, on whetheror not one
agrees with the Reagan administration's
approachto dealing with Nicaragua.
While both the Reaganpolicy and the patternof U.S. interventionshave been
this analysisbeginsby examiningReaganpolicies on their
widely questioned,78
own termsas administration
attemptsto achieve its goals. It then comparesthe
administrationapprovalto potentialalternatives.It also looks at some of the
widerimplicationsfor democraticgovernanceof the administration's
approach.
From the Reaganadministration's
point of view, U.S. governmentfunding
of the contrasand relatedpressurespursuedfour importantpolicy aims:79to
rebelsin El Salvador;to prespreventSandinistasupportof the antigovermment
76
Otherlaws (for example, the Anti-Deficiency Act, Arms Export Act, NeutralityActs), including
restrictionson tax-exempt donations for nonhumanitarianpurposes (Inouye and Hamilton, Report,
349-352, 381) affected the legality of the private and third country funding.
77 Inouye and Hamilton, Report, 383.
78 RobertPastor, Condemnedto Repetition (Princeton, NJ: Princeton University Press, 1987). See
also Arnson, Crossroads.
79 Serafino, "ContraAid," 6-7.
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CONTRAAID FUNDAMENTALS|
303
sure the Sandinistasto democratizetheir policies and pluralizetheir economy;
to force the Sandinistasto negotiatesecurityarrangementssatisfactoryto the
United States and the rest of CentralAmerica;and perhapsto overthrowthe
Sandinistaregime.80
The contraaid policies were relativelysuccessfulin pursuingthese goals.
The policies helped to cut off Sandinistafundingof the rebels in El Salvador.
They also helpedto preventthe Sandinistasfrom consolidatingpower and susandforcedthe Sandinistasto negotiatewiththeoppositainingpopularsupport,8"
tion. They also kept the Sandinistasfrom expandinginto the rest of Central
Americaandnegotiatinga CentralAmericanpeaceagreement,thoughtheSandinista armydid at one pointcross over into Hondurasin March1988. Ultimately,
thoughineffectivemilitarily,aid to the contrascontributedto the Sandinista's
electoraldefeatin 1990. Thus,fromtheperspectiveof theReaganadministration,
the contraaid policy attainedits goals and was wise and effective.
At a relativelylow cost to the U.S. governmentof less than a third of a
billion dollars($322 million),82the Reaganadministration
sustainedthe contras
for nearlya decade. A moderatelevel of third-countrydonations($34 million)
anda smallamountof thirdpartysolicitationandarmssalesprofits($6.5 million)
filled in duringthe two bridge periods in 1984-1985 and early to late 1986,
respectively,when U.S. governmentsupportwas not available.Despite all the
perspective,the governmental
political controversy,from the administration's
fundingand thirdpartysupportwere relativelyinexpensiveand worth the expense.
REFLECTIONS
Overall,fromthe Reaganpointof view, the publicandprivateaid to the contras,
especiallythird-countryassistance,was cost-effectiveandnecessaryto maintain
the contra forces when U.S. funds were cut off. Yet these approacheswere
perspective,
controversial,of questionablewisdomeven fromtheadministration's
and at least in partillegal. The diversionof a small amountof arm sales profits
(about$3.8 millionof $16. 1 millionprofitsfrom$40 millionin sales)wasparticularlycontroversialandprovidedrelativelylittle support(about1 percentof $400
million) for the contras.Thoughthe timing of privatefundingand arms sales
diversionsmayhavebeencrucialto the survivalof the contras,the benefitswere
its domestic
probablynot worththe politicalcosts to the Reaganadministration,
agenda, and its place in history. The diversionsultimatelybroughtguilt and
shameupon the Reaganadministrationand some of its high officials.
80
Armstrong, The Chronology, 83; see also Theodore Draper,A Very ThinLine: TheIran-contra
Affairs (New York: Hill and Wang, 1991), 18.
81
Arnson, Crossroads, 73; Serafmo, "ContraAid."
82 Serafino, "ContraAid," 17.
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304 | POLITICALSCIENCE QUARTERLY
The contraswere a proxyforceunderthe ReaganDoctrineof helpingothers
83 Fighting
fightanticommunist
battlesthatalso servedU. S. governmentinterests.
warsthroughproxiesis an ancientpartof greatpowerstrugglesandoften substitutes for open warfarebetween superpowers.In general, a democracyshould
fight its wars with its own soldiers,but using surrogatesmay be less dangerous
than riskingsuperpowerconfrontations.
Whilea superpowerdemocracydoes not alwaysfightits own battles,it needs
to take direct responsibilityfor fundingthose fights. The privatizationof both
foreign policy fundingand wars"'runs contraryto fundamentalprinciplesof
democraticgovernanceand sovereignty,particularlythe rule of law and the
power of the purse. Extragovemmentalfunding, even if not illegal, corrodes
democraticlegitimacy. The executive cannot decide to fmance wars without
congressionalapproval.Moreover,the powersthe U.S. Constitutionvests in the
Congressto decideto fight wars, and the responsibilityto carryout the conflict
throughthe armedforcesdirectedby the president,cannotbe in executivehands
only,85because the separationof powers must provide a check on potentially
irresponsibleactions.Inorderto sustainthevalidityof thedemocraticsafeguards,
the Congressmust be able to end the fightingby cuttingoff the funding,and
the executivemustbe faithfullyboundby such restrictions.The use of private
funds for public purposesand, particularly,the privatizationof foreignpolicy
in a democracy.
fundingdistortthe structureof authorizationand appropriation
Moreover, a countryshould not fight voluntarywars for which it cannot
pay. Havingotherspay for andfight a nation'sbattles,even throughsurrogates,
distortsbasic principlesof democraticaccountability,which requiresa nation
to decideto takeuponitselfthe requiredsacrificeandbeartheburdenas a nation.
Even if most of the outside fundingwere legal, as the administrationand the
minorityreportpropose, suchmechanismsof supportandimplementationstray
beyonddemocraticaccountability,becausethey take actionsthatthe peopleand
their elected representativesdo not directly support.86By soliciting others for
funds, the administrationwas potentiallyunderminingits own prerogativesin
the policy-makingprocess.
Furthermore,legal or not, the proprietyof governmentofficials soliciting
The
thirdpartyor privatefundsis questionableandfundamentally
inappropriate.
83 Other Reagan doctrine conflicts in Afghanistan and Cambodia were less controversial in the
United States, U.S. House of Representatives,Congressand Foreign Policy, 1988 (Washington,DC:
GovernmentPrinting Office, 1989).
84 A somewhatsimilarmethodof fundingU. S. governmentoperationsthroughthirdcountrycontributions was used duringthe Gulf War in 1991, with large contributionsfrom Saudi Arabia and Kuwait
(each countrycontributedover $12 billion to the war effort). See GeraldineBrooks and Tony Horowitz,
"A Year After Invasion by Iran," Wall Street Journal, 1 August 1991.
85 Inouye and Hamilton, Report, 348; see also U.S. House, Congress and Foreign Policy, 1988,
7-9.
86 Under this principle, the funding mechanism of the Gulf War, where the U.S. providedmost of
the manpower and technology, and the Gulf oil states provided most of the money and some of the
legitimacy, is also questionable.
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CONTRAAID FUNDAMENTALS|
305
Reaganadministrationwas subvertingits own legitimacyand sovereignpower
by pursuingprivatefundingof U.S. initiatives.Moreover,as formerSecretary
of StateGeorge Shultznoted aboutthe Gulf War, it was sad to see the United
Stateshavingto seek funds from other countries"withhat in hand"to pay for
U.S. militaryefforts.87
Privatizationof fundingalso reduces public scrutinyand the debate over
policy necessaryin a democracyfor good publicpolicy. Opendiscussionitself
might have scuttledthe policy, which is in part why the administrationsought
to hide its actions. A democracycannotgive up its principlesof accountability
and full, open debateand stay democratic.88
POLICY ALTERNATIVES
Couldan alternativepolicy have accomplishedthe samegoal of bringingdemocracy to Nicaraguawithoutcreatingthe antagonismsand scandalof the contra
fundingapproaches?Again, one'spartisanpositionaffects the evaluationof the
goals and approachof any U.S. policy thatmight have soughtto influencethe
internalpolitics of Nicaragua.And the questionof whetherthe United States
shouldhaveintervenedatall in Nicaraguanpoliticsshouldnotbe lost in evaluating
more peacefulways of attainingthe Reaganadministration's
policy goals.89
Supportersof administration
policy may arguethathad the Sandinistasnot
faced the contraswhile receiving supportfrom Soviet and other Easternbloc
countries, the Sandinistasmight have more easily imposed their will on the
Nicaraguanpeople and supportedother insurgentforces in CentralAmerica.
Moreover, the Sandinistasmight have crushedtheir oppositionearlier if the
contrashad not received outside U.S. or privatefunding.But even supporters
of the administration
policy recognizethatbefore initiatingthe contrawar, the
UnitedStateshadalreadysuccessfullyencouragedthe Sandinistasto curtailsupport for the Salvadoranrebels; here their success derivedfrom the stick of the
suspensionof U.S. economic assistancein 1981 with the carrotof its renewal
ratherthanfrom armedforce.90
The administration
mighthave accomplishedits goal of democratizingNicaraguawithoutsustaininga proxy fightingforce. Lackingthejustificationof the
contrasas a perceivedthreat, the Sandinistasmight have had more difficulty
imposingrestrictionson the politicalopposition.In particular,withoutthe state
of emergencydecreedin 1985 to fight the contras,the Sandinistasmight have
facedinternalpoliticaloppositionstrongenoughto force the Nicaraguangovernmentinto earlierelectionsor a politicalturnover.The UnitedStatesmighthave
87SouthernCenter for InternationalStudies, "TheNinth Annual Report of the Secretariesof State"
(Atlanta: SouthernCenter, 1991), 1.
88 Inouye and Hamilton, Report, 188; see also U.S. House, Congress and Foreign Policy, 1988.
89 Arnson, Crossroads, 187, 216, 221.
90Ibid., 50, 73.
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306
| POLITICAL
SCIENCE
QUARTERLY
betterprovidedsupportto develop politicalchallengesto the Sandinistasthan
fundedarmedinsurrection.Withthe collapseof communismin EasternEurope
andthe ensuingeconomicandpoliticalproblemsin the SovietUnion, moreover,
the Sandinistaswould have come underother externaland internalpressures,
as did the nearbySalvadoranguerrillas.Withoutthe stateof emergencyor the
Soviet financialand militarysupportjustifiedby the existence of the contras,
the Sandinistasmightnothavelastedto 1990. Perhaps,too, suchinternalopposition mighthave helpeddemocratizeandliberalizeNicaraguanpoliticalandeconomic policies.9'
CONCLUSION
In clarifyingthe amountsand timingof the fundingfor the contras,this article
providesthe basis for a clearerunderstandingof the contraaid policy by both
citizensandpolicymakersalike. In identifyingtheperiodsof Bolandrestrictions,
andthe differingmajorityandminorityinterpretations,it explainspossibleconflicts between nongovermmental
fundingmechanismsand the Bolandbans. It
evaluatescontraaidpolicyon the Reaganadministration's
termsof cost-effectiveness, but also questionsthe meritsof such fundingin a democracy.Supportof
the contrasmay have been cost-effectiveon an economicbasis, but it was costly
in political terms and in lost legitimacy for the administrationthat promoted
them. An alternativepolicy to assuredemocratizationin Nicaraguamight have
been more successful.
A brief review of contraaid fundingcannotanswerall the factualandpolicy
questions.Moreover,evidence alone cannotanswernormativequestions,such
as whetherReaganadministrationcontrapolicy was wise. The examinationof
the policy approachesthatthe Reaganadministration
took regardingNicaragua
and the contrasshouldcontinueto probe the implicationsand the alternatives.
But a clearer understandingof the backgroundto contra fundingapproaches
informsthe debatenecessaryin a democracyto evaluatethe validityandwisdom
of these controversialissues duringthe centralU.S. interventionof the 1980s.*
91 Thepeacefullyresolvedmutualhostagetakingbetweengroupsof ex-contras
andex-Sandinistas
inlatesummer1993showedthatsignificant
issuesstilldivideNicaraguans.
SeeDouglasFarah,"Contras
Free 20 Hostagesin Nicaragua,"WashingtonPost, 23 August1993. The limitedAmericanaid to
PresidentVioletaChamorro's
government
sincehercoalitionvictoryin the 1990electionandthedelay
in providing$98 millionin new aid reveals,too, thatthe U.S. role andpolicytowardNicaraguaare
still problematic.See 7he Economist, 28 August1993.
* I wouldlike to thankJulieCho, EricParas,ChrisRasmussen,NinaSerafino,MichaelThieme,
andHilaryHerboldfor theirassistance.
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