Iran-Contra affair (1985-92), a rare non-venal political scandal in which high officials of the Reagan administration were discovered to have used funds raised by covert arms sales through Israel to Iran in order to finance the activities of the ‘Contra’ revolutionaries against the Sandinista regime in Nicaragua, every step of which violated declared government policy, domestic law, or international law—or all three. Ramifications included fund-raising from friendly Arab states and the employment of British mercenaries for commando raids.

Before ‘mission creep’ asserted itself, it was a modest operation conducted by Reagan's National Security Adviser McFarlane, assisted by Casey, the director of the hamstrung CIA, to prolong the war between Iran and Iraq in order to exhaust both, with the (unfulfilled) hope of obtaining the release of hostages held by pro-Iranian terrorists in Lebanon. But the large amounts of untraceable money this left in Swiss bank accounts proved too tempting to an administration wedded to realpolitik and frustrated by a hostile and highly partisan Congress. The key actors and/or scapegoats were Lt Col North and McFarlane's successor Poindexter. A special investigator obtained convictions against them and six other top officials, all either overturned on appeal or pardoned by Pres Bush.

— Hugh Bicheno

The Oxford Companion to Military History. Copyright © 2001, 2004 by Oxford University Press. All rights reserved.