Iran-Contra

A few months ago I told the American people I did not trade arms for hostages. My heart and my best intentions still tell me that's true, but the facts and the evidence tell me it is not. The Iran-Contra scandal was either when Saint Ronnie valiantly went around those red sissies in Congress or one of the most serious political scandals in United States history. Unlike Watergate which tried to coverup a break-in and entry, or the Lewinsky scandal which tried to coverup sexual harassment and a blowjob, this scandal involved selling heavy weapons (over two-thousand five-hundred missiles) to a country that hates the US/West and funds terrorism in order to fund more terrorism. This is technically High Treason, but who cares about such technicalities when we have to look at the bigger picture, like how to deal with all the terrorism? However, it all started in a small Central American nation known as Nicaragua.

Reagan was able to mostly dodge the Iran-Contra Scandal despite it being the most clear instance of aiding not just one but two terrorist regimes at once in post-Vietnam U.S. history.

Background
In 1979, a popular uprising in Iran ousted the Shah, the repressive, United States-backed secular-ish Shia monarch of the majority-Shia country. Being the most organized political presence in the country, Iran's Shiite theocrats, led by the Ayatollah, became the new government. Saddam Hussein, the repressive, Sunni dictator of neighboring majority-Shia Iraq, fearful that his own Shia subjects might take inspiration from these events and certain that post revolutionary Iran would be a pushover and thus an easy target for a quick land grab, launched a war with Iran that lasted from 1980 to 1988. This would become Vietnam II: Electric Boogaloo – a World War I reboot with the same idiotic tactics, mountains of casualties and ultimately turning into a war of attrition, only now confined to the Middle East. The United States chose to back Saddam in a classic “the enemy of my enemy is my friend” move, despite his socialist inspired Ba'ath Party not being hot stuff in the Reagan White House. Thus the US (supported by its European allies) began supplying Saddam with weapons and intelligence, getting involved with the in the Strait of Hormuz and similar naval capers (including  whoops), and by enacting an embargo against Iran.

Also in 1979, Nicaragua underwent a successful revolution led by a socialist movement known as (FSLN). This revolution deposed the brutally-repressive regime of (dictator like his brother and father before him) which was a recipient of large-scale United States military and economic aid and was known for its gruesome violations of human rights. The FSLN established a new government that promised reforms, land redistribution and an end to human rights violations, but soon found domestic opposition from other factions of the anti-Somoza alliance as well as former supporters of Somoza.

Tensions mounted when an anti-Sandinista faction called the Contras began to mobilize and conduct coordinated attacks on the infrastructure of the country in an attempt to destabilize the FSLN government. The Contras for the most part consisted of right-wing extremists, former land elites and ex-members of the feared and vicious Guardia Nacional (whose head had been a Somoza for most of the forty years prior to 1979), which was responsible for the most egregious human rights violations under the previous Somoza regime. While many observers called the Contras "death squads," the Reagan administration called them "freedom fighters" (to be fair there were war crimes committed by both sides, although the Sandinista's human rights record was immensely better than the military regimes in El Salvador and Guatemala, also being supported by Ronnie).

Since the Reagan administration opposed communism, and since the Sandinistas were commie sympathizers, the Reagan administration thought it would be a good idea to give US aid to the Contras, including money and weapons. However, Congress was uninterested in getting the United States involved in another country's civil war (again) and explicitly forbade any such actions. But Reagan really wanted to do it so they had to find a way around the law.

Scheme
Saint Reagan's national security team (led by Marine Colonel Oliver North) cooked up this idea: the US sold weapons to its Middle Eastern enemy, Iran, and used the proceeds to both pay the ransom for various hostages in the Middle East and pay for weapons for its allies, the Contras of Nicaragua.

Needless to say the transfers of this money had to be kept under the table or otherwise laundered. However, Washington is pretty bad at keeping secrets and when this one broke it naturally triggered Congressional hearings and criminal proceedings. Reagan actually managed to dodge impeachment as the American people believed that he "misspoke" on national TV about the whole thing. Whoops!

Aftermath
While Oliver North did do some time in prison (as one of the rare cases of a guilty scapegoat) Saint Ronny got off scot free and his Vice President was elected President instead of being investigated for his (possible) involvement. The war in Nicaragua on the other hand continued until Costa Rican president Oscar Arias Sanchez came up with a peace plan that more or less called for: Of course the US was furious and intended to continue the war, but in the end Sanchez won out (no small feat, considering Costa Rica has not had armed forces since 1948 .) and elections were held in 1990 that Ortega and his Sandinista party - to their great surprise - narrowly lost to center right Violeta Barrios de Chamorro, who proceeded to lead the country through six years of rebuilding. Ortega returned to power after winning the election in 2006 with 34% of the vote, less than he had had in 1990.
 * 1) An end to all hostilities.
 * 2) Disarmament of all combatants; reduction in size of the Nicaraguan military.
 * 3) No foreign intervention (neither of the US in Nicaragua nor of Nicaragua in its neighbor countries).
 * 4) Free and fair elections with all major parties participating by 1990.