WEBVTT 00:00:00.000 --> 00:00:04.980 Picture this. A tense, high stakes hostage crisis 00:00:04.980 --> 00:00:08.560 is unfolding in the, you know, just chaotic streets 00:00:08.560 --> 00:00:12.880 of Lebanon. Right. Cut to a fierce, brutal guerrilla 00:00:12.880 --> 00:00:16.019 war raging in the dense jungles of Nicaragua. 00:00:16.199 --> 00:00:18.640 And then right in the dead center of all this 00:00:18.640 --> 00:00:21.260 heavy geopolitical drama, you have a group of 00:00:21.260 --> 00:00:23.280 American officials stepping off an airplane carrying, 00:00:23.399 --> 00:00:26.940 and I'm not making this up, a Bible and a cake 00:00:26.940 --> 00:00:30.800 baked in the shape of a key. It's honestly something 00:00:30.800 --> 00:00:33.740 else. It really is. We are unpacking the Iran 00:00:33.740 --> 00:00:37.000 -Contra affair today. And not just the old headlines 00:00:37.000 --> 00:00:39.359 you might remember from the 80s, but the actual 00:00:39.359 --> 00:00:41.500 mechanics of how a shadow government was built 00:00:41.500 --> 00:00:43.359 right in the basement of the White House. Exactly. 00:00:43.420 --> 00:00:44.920 We're going to look at the nuts and bolts of 00:00:44.920 --> 00:00:49.020 how this secret enterprise operated. And we want 00:00:49.020 --> 00:00:51.039 to show you what it reveals about the true balance 00:00:51.039 --> 00:00:53.140 of power in the US government when the stakes 00:00:53.140 --> 00:00:55.979 are framed as a matter of national security. 00:00:56.219 --> 00:00:59.009 Yeah. And it's a story that truly defies Because 00:00:59.009 --> 00:01:00.810 when you look at the Iran -Contra affair from 00:01:00.810 --> 00:01:04.170 a distance, it sounds like the set up to a surrealist 00:01:04.170 --> 00:01:07.129 joke, but the closer you look at the actual mechanics 00:01:07.129 --> 00:01:09.510 of what happened, the more you realize it was 00:01:09.510 --> 00:01:13.129 a profoundly serious constitutional crisis. One 00:01:13.129 --> 00:01:16.049 that, frankly, fundamentally altered how the 00:01:16.049 --> 00:01:18.950 executive branch operates today. OK, let's unpack 00:01:18.950 --> 00:01:22.750 this. Because to understand how we got to the 00:01:22.750 --> 00:01:24.590 key shaved cake, we really have to start with 00:01:24.590 --> 00:01:26.900 the roadblock. Right, the set up. Yeah, it's 00:01:26.900 --> 00:01:29.579 the early 1980s, and the Reagan administration 00:01:29.579 --> 00:01:32.099 has this massive geopolitical goal in Central 00:01:32.099 --> 00:01:36.239 America. They are deeply, deeply committed to 00:01:36.239 --> 00:01:38.500 toppling the left -wing Sandinista government 00:01:38.500 --> 00:01:41.120 in Nicaragua. Yes, that was a huge priority for 00:01:41.120 --> 00:01:43.900 them. And to do that, they want to fund and arm 00:01:43.900 --> 00:01:46.700 this group of rebel fighters known as the Contras. 00:01:47.620 --> 00:01:49.579 But there is a massive problem, right? Huge one. 00:01:49.840 --> 00:01:52.019 Congress wants... absolutely nothing to do with 00:01:52.019 --> 00:01:54.319 it. Right. They pass a series of laws culminating 00:01:54.319 --> 00:01:56.859 in the Bowlin Amendment in 1984, which just slams 00:01:56.859 --> 00:01:58.780 the vault shut. I mean, it strictly makes it 00:01:58.780 --> 00:02:00.840 illegal to use U .S. government funds to support 00:02:00.840 --> 00:02:02.760 the Contras. And we have to look at this clash 00:02:02.760 --> 00:02:05.439 impartially. because our source material gives 00:02:05.439 --> 00:02:07.760 us the raw constitutional arguments from both 00:02:07.760 --> 00:02:10.340 sides here. If you are like a constitutional 00:02:10.340 --> 00:02:13.259 lawyer looking at this in 1984, you are witnessing 00:02:13.259 --> 00:02:16.300 a massive collision between two branches of government. 00:02:16.360 --> 00:02:18.919 Absolutely. Because on one side, you have Congress 00:02:18.919 --> 00:02:21.379 leaning entirely on their power of the purse. 00:02:21.439 --> 00:02:24.259 Right. From their perspective, the Constitution 00:02:24.259 --> 00:02:26.879 gives them absolute control over the budget, 00:02:27.240 --> 00:02:30.219 meaning they have every right to defund a foreign 00:02:30.219 --> 00:02:33.680 policy project that they oppose. But then, The 00:02:33.680 --> 00:02:35.599 Reagan administration is looking at the exact 00:02:35.599 --> 00:02:37.659 same constitution and pointing to Article 2. 00:02:37.699 --> 00:02:40.479 Yeah, the executive power. Exactly. They are 00:02:40.479 --> 00:02:43.240 arguing that the president is the sole organ 00:02:43.240 --> 00:02:46.699 of foreign affairs. So to them, supporting the 00:02:46.699 --> 00:02:49.879 Contras isn't just some pet project. It's a presidential 00:02:49.879 --> 00:02:52.360 prerogative. Right. It's a necessary maneuver 00:02:52.360 --> 00:02:55.099 in the global Cold War. And they feel Congress 00:02:55.099 --> 00:02:58.939 has no right to use funding restrictions to dictate 00:02:58.939 --> 00:03:01.120 the president's foreign policy. Exactly. But 00:03:01.120 --> 00:03:02.960 regardless of the administration's philosophies, 00:03:02.729 --> 00:03:05.490 You know, the Boland Amendment was the law of 00:03:05.490 --> 00:03:08.729 the land. And it specifically restricted funds 00:03:08.729 --> 00:03:11.610 available to the CIA, the Department of Defense, 00:03:11.770 --> 00:03:15.909 or, and this is the key phrase, any other agency 00:03:15.909 --> 00:03:19.689 or entity of the United States involved in intelligence 00:03:19.689 --> 00:03:21.990 activities. OK, so it's like a parent taking 00:03:21.990 --> 00:03:24.789 away a teenager's credit card. But instead of 00:03:24.789 --> 00:03:27.349 stopping their spending, the teenager just sets 00:03:27.349 --> 00:03:29.789 up a shadow corporation in the Cayman Islands. 00:03:30.280 --> 00:03:32.280 That is, I mean, that's actually a pretty good 00:03:32.280 --> 00:03:34.280 way to look at it. Like how did the administration 00:03:34.280 --> 00:03:38.159 legally justify getting around this? Because 00:03:38.159 --> 00:03:39.979 they couldn't just ignore a law, right? Well, 00:03:40.120 --> 00:03:42.379 if we connect this to the bigger picture, the 00:03:42.379 --> 00:03:45.120 legal gymnastics here are just fascinating. Yeah. 00:03:45.360 --> 00:03:47.580 The administration argued that the National Security 00:03:47.580 --> 00:03:51.500 Council, the NSC, was simply an in -house advisory 00:03:51.500 --> 00:03:53.340 body to the president. Wait, so they claimed 00:03:53.340 --> 00:03:56.629 it wasn't an intelligence agency. Exactly. Because 00:03:56.629 --> 00:03:59.449 its official mandate was just to provide advice, 00:03:59.810 --> 00:04:02.189 they argued it technically wasn't covered by 00:04:02.189 --> 00:04:04.729 the Bowlin Amendment's restrictions. Wow. So 00:04:04.729 --> 00:04:06.990 it's like a corporate manager whose IT budget 00:04:06.990 --> 00:04:09.430 gets completely frozen by the board of directors. 00:04:09.889 --> 00:04:13.710 And instead of giving up, the manager uses their 00:04:13.710 --> 00:04:16.709 unrestricted entertainment budget to hire a third 00:04:16.709 --> 00:04:18.750 party consultant who then goes out and buys all 00:04:18.750 --> 00:04:20.649 the computers for them. Right. They didn't technically 00:04:20.649 --> 00:04:24.610 violate the IT freeze on paper. But they completely 00:04:24.610 --> 00:04:27.769 bypassed the board's intent. So the administration 00:04:27.769 --> 00:04:30.089 starts aggressively hunting for money from outside 00:04:30.089 --> 00:04:32.569 the U .S. government. Oh, yes, soliciting millions 00:04:32.569 --> 00:04:35.550 from private American donors and foreign governments. 00:04:35.790 --> 00:04:38.310 Right. Just so they can keep the Contras armed 00:04:38.310 --> 00:04:40.149 without leaving any congressional fingerprints. 00:04:40.310 --> 00:04:42.930 That is precisely the mechanism. And ironically, 00:04:43.250 --> 00:04:45.509 the ultimate solution to their central American 00:04:45.509 --> 00:04:48.550 cash flow problem. presents itself halfway across 00:04:48.550 --> 00:04:51.329 the world. Under incredibly bizarre circumstances. 00:04:51.589 --> 00:04:54.889 Very bizarre. Let's set the scene for July 1985. 00:04:55.810 --> 00:04:57.910 The president of the United States, Ronald Reagan, 00:04:58.389 --> 00:05:01.329 is at Walter Reed Hospital. Right. He has just 00:05:01.329 --> 00:05:04.509 undergone surgery for colon cancer. He is a 74 00:05:04.509 --> 00:05:06.529 -year -old man. He's only five days post -op, 00:05:06.529 --> 00:05:08.910 and he's admitting to his staff that he's getting 00:05:08.910 --> 00:05:11.259 very little sleep. Not to mention potentially 00:05:11.259 --> 00:05:13.500 dealing with the lingering cognitive effects 00:05:13.500 --> 00:05:17.060 of major anesthesia. Exactly. And into this hospital 00:05:17.060 --> 00:05:20.240 room walks his national security advisor, Robert 00:05:20.240 --> 00:05:24.019 McFarland. It is a striking, highly unorthodox 00:05:24.019 --> 00:05:27.279 setting for a geopolitical decision of this magnitude. 00:05:27.459 --> 00:05:29.860 And McFarland pitches an idea that seems totally 00:05:29.860 --> 00:05:32.800 out of left field. He says Israel wants to sell 00:05:32.800 --> 00:05:37.420 U .S.-made TOW anti -tank missiles to Iran. Right. 00:05:37.620 --> 00:05:39.779 Specifically, they want to sell them to an Iranian 00:05:39.779 --> 00:05:42.339 faction led by the powerful speaker of the parliament, 00:05:42.740 --> 00:05:45.660 Hashemi Rafsanjani. Mm -hmm. In exchange, this 00:05:45.660 --> 00:05:48.699 Iranian faction will use its influence to get 00:05:48.699 --> 00:05:51.720 Hezbollah, a paramilitary group in Lebanon, to 00:05:51.720 --> 00:05:53.939 release seven American hostages they are holding. 00:05:54.060 --> 00:05:56.730 Right. And then once the deal is done... the 00:05:56.730 --> 00:05:59.970 U .S. will quietly replenish Israel's stockpile 00:05:59.970 --> 00:06:01.970 of missiles. I mean, it's a literal arms for 00:06:01.970 --> 00:06:04.529 hostages trade. It is. Now, to understand why 00:06:04.529 --> 00:06:06.430 this pitch was so appealing to the administration, 00:06:06.569 --> 00:06:09.290 you have to look past just the hostages. Reagan 00:06:09.290 --> 00:06:11.310 certainly emphasized the emotional weight of 00:06:11.310 --> 00:06:13.209 getting the hostages back, but the underlying 00:06:13.209 --> 00:06:15.910 motivation was a geopolitical chess move. Because 00:06:15.910 --> 00:06:19.170 of the Cold War. Exactly. Iran is locked in a 00:06:19.170 --> 00:06:22.149 brutal, grinding war with Iraq at this time, 00:06:22.329 --> 00:06:24.790 and they desperately need spare parts for the 00:06:24.790 --> 00:06:26.670 American -made weapons they inherited from the 00:06:26.670 --> 00:06:29.829 deposed Shah. And the US was terrified that the 00:06:29.829 --> 00:06:32.129 strict American arms embargo would eventually 00:06:32.129 --> 00:06:35.050 force Iran to turn to the Soviet Union for military 00:06:35.050 --> 00:06:37.790 aid. Because sharing a massive border with the 00:06:37.790 --> 00:06:40.750 Soviet Union, Iran... falling into the Soviet 00:06:40.750 --> 00:06:43.009 sphere would be an absolute Cold War nightmare 00:06:43.009 --> 00:06:45.949 for the U .S. Precisely. So the administration 00:06:45.949 --> 00:06:48.529 believed that by selling weapons to this supposedly, 00:06:48.529 --> 00:06:51.629 you know, moderate faction under Rafsanjani, 00:06:51.970 --> 00:06:54.610 they could build a covert relationship with potential 00:06:54.610 --> 00:06:56.990 future leaders. Looking ahead to when the aging 00:06:56.990 --> 00:06:59.389 Ayatollah Khomeini inevitably died. Exactly. 00:06:59.470 --> 00:07:01.750 Hoping to keep Iran anchored away from the Soviets. 00:07:01.970 --> 00:07:03.790 But wait, I have to push back on this moderate 00:07:03.790 --> 00:07:06.660 narrative. The U .S. had just officially designated 00:07:06.660 --> 00:07:09.240 Iran a state sponsor of terrorism the year prior 00:07:09.240 --> 00:07:13.519 in 1984. Were these officials actually moderates 00:07:13.519 --> 00:07:16.620 interested in a geopolitical realignment? I mean, 00:07:16.860 --> 00:07:18.720 our source material notes that Rafsanjani was 00:07:18.720 --> 00:07:20.920 literally nicknamed the shark. Wasn't he just 00:07:20.920 --> 00:07:23.439 playing the Americans like telling them exactly 00:07:23.439 --> 00:07:26.000 what they wanted to hear just to get desperately 00:07:26.000 --> 00:07:29.220 needed anti tank missiles to destroy Iraqi armor? 00:07:29.339 --> 00:07:31.540 That is the exact question that Reagan's own. 00:07:31.709 --> 00:07:33.709 top cabinet members were asking at the time. 00:07:34.110 --> 00:07:37.529 The pushback internally was fierce. Really? Oh, 00:07:37.529 --> 00:07:40.170 yeah. Secretary of Defense Caspar Weinberger 00:07:40.170 --> 00:07:43.089 wrote on the official proposal that it was too 00:07:43.089 --> 00:07:45.550 absurd to comment on. Wow. He actually compared 00:07:45.550 --> 00:07:48.610 it to inviting Muammar Gaddafi over for a cozy 00:07:48.610 --> 00:07:51.250 fireside chat. That is quite the comparison. 00:07:51.329 --> 00:07:53.610 And Secretary of State George Shultz was equally 00:07:53.610 --> 00:07:56.949 opposed. He explicitly warned the president that 00:07:56.949 --> 00:07:58.949 they were falling into the arms for hostages 00:07:58.949 --> 00:08:01.639 business. Which violated their own stated policy 00:08:01.639 --> 00:08:04.120 of never negotiating with terrorists. Exactly. 00:08:04.279 --> 00:08:06.879 Yet despite his top diplomats and defense officials 00:08:06.879 --> 00:08:09.899 telling him this is a terrible idea, the president 00:08:09.899 --> 00:08:12.860 sitting in his hospital bed approves it. He does. 00:08:13.060 --> 00:08:16.079 And the initial deals actually go through. Israel 00:08:16.079 --> 00:08:19.480 ships the missiles to Iran and eventually one 00:08:19.480 --> 00:08:22.040 American hostage, Reverend Benjamin Weir, is 00:08:22.040 --> 00:08:24.379 released from Lebanon. Right. And this is where 00:08:24.379 --> 00:08:26.800 the two completely separate halves of our puzzle, 00:08:26.959 --> 00:08:28.839 the Middle East and Central America, finally 00:08:28.839 --> 00:08:31.959 connect. OK. Because a military aide assigned 00:08:31.959 --> 00:08:34.139 to the National Security Council named Oliver 00:08:34.139 --> 00:08:38.759 North enters the picture and he sees an opportunity. 00:08:39.179 --> 00:08:41.399 Here's where it gets really interesting. North 00:08:41.399 --> 00:08:44.519 looks at this convoluted Israel Iran hostage 00:08:44.519 --> 00:08:47.779 arrangement and says, why are we using Israel 00:08:47.779 --> 00:08:50.320 as a middleman? He's like. What if we sell the 00:08:50.320 --> 00:08:53.200 arms directly to Iran ourselves and we mark up 00:08:53.200 --> 00:08:56.220 the price? It's just so audacious. Yeah, it really 00:08:56.220 --> 00:08:59.019 is. North's plan is that the US will sell the 00:08:59.019 --> 00:09:01.960 weapons directly to the Iranians at a massive 00:09:01.960 --> 00:09:04.559 premium. Right. They will take those secret profits, 00:09:04.840 --> 00:09:07.179 drop them into untraceable Swiss bank accounts, 00:09:07.360 --> 00:09:10.440 and use that money to fund the Contras in Nicaragua. 00:09:10.500 --> 00:09:13.139 And they dubbed this shadow operation the Enterprise. 00:09:13.299 --> 00:09:15.519 The Enterprise. Yeah. And this is where we have 00:09:15.519 --> 00:09:17.720 to dig into the mechanics of how the Enterprise 00:09:17.720 --> 00:09:20.340 actually functioned, because it addresses that 00:09:20.340 --> 00:09:23.409 core concept of the NSC going operational. They 00:09:23.409 --> 00:09:26.970 didn't just route some money. They utilized private 00:09:26.970 --> 00:09:30.789 citizens, specifically retired military personnel 00:09:30.789 --> 00:09:33.929 like Major General Richard Secord and an Iranian 00:09:33.929 --> 00:09:36.529 -American businessman named Albert Hakim. To 00:09:36.529 --> 00:09:38.990 build an entirely privatized shadow logistics 00:09:38.990 --> 00:09:41.470 network. Exactly. So going operational essentially 00:09:41.470 --> 00:09:45.019 means the NSCE mutated. They stopped being an 00:09:45.019 --> 00:09:47.279 in -house think tank writing policy memos for 00:09:47.279 --> 00:09:50.139 the president and turned into a rogue intelligence 00:09:50.139 --> 00:09:52.679 agency running their own covert wars. That's 00:09:52.679 --> 00:09:54.600 a perfect way to put it. They realized that if 00:09:54.600 --> 00:09:56.759 you privatize foreign policy, you don't just 00:09:56.759 --> 00:09:59.679 avoid congressional oversight. You effectively 00:09:59.679 --> 00:10:02.759 outmaneuver the Constitution itself. They bought 00:10:02.759 --> 00:10:05.679 proprietary airlines. They managed offshore shell 00:10:05.679 --> 00:10:08.440 companies like Lake Resources to hide the money. 00:10:08.440 --> 00:10:10.720 And they handled international arms shipments 00:10:10.720 --> 00:10:13.210 with absolutely no official U .S. government 00:10:13.210 --> 00:10:16.409 fingerprints on them. And because they're running 00:10:16.409 --> 00:10:19.389 this entire global arms smuggling network out 00:10:19.389 --> 00:10:22.230 of the White House basement without any of the 00:10:22.230 --> 00:10:25.370 normal institutional guardrails, the logistics 00:10:25.370 --> 00:10:29.169 are both terrifying and deeply absurd. Let's 00:10:29.169 --> 00:10:31.490 talk about the markups. Oh, the markups are wild. 00:10:31.590 --> 00:10:33.529 You're essentially buying black market missiles. 00:10:33.549 --> 00:10:37.870 Yeah. Right. And Oliver North slaps a 15 million 00:10:37.870 --> 00:10:40.820 dollar markup on the weapons. Right. Then their 00:10:40.820 --> 00:10:43.840 primary middleman, an Iranian expatriate arms 00:10:43.840 --> 00:10:47.120 dealer named Manuchar Ghorbanifar. Who, by the 00:10:47.120 --> 00:10:50.179 way, had previously failed a CIA polygraph test. 00:10:50.519 --> 00:10:53.519 Right. This guy adds another 41 % markup just 00:10:53.519 --> 00:10:56.039 for himself. The Iranians were absolutely furious 00:10:56.039 --> 00:10:58.659 when they realized how much they were being gouged. 00:10:59.200 --> 00:11:01.679 At first, they see it perfectly illustrates the 00:11:01.679 --> 00:11:05.620 inherent danger of the enterprise. When a tiny 00:11:05.620 --> 00:11:08.940 isolated group of individuals tries to run a 00:11:08.940 --> 00:11:11.779 covert global war outside of normal democratic 00:11:11.779 --> 00:11:14.200 institutional channels, there are no checks. 00:11:14.440 --> 00:11:16.279 There are no balances. And there are absolutely 00:11:16.279 --> 00:11:19.000 no safety nets when things go wrong. And nothing 00:11:19.000 --> 00:11:21.700 went more wrong than the secret diplomatic mission 00:11:21.700 --> 00:11:25.200 to Tehran in May 1986. This is where we get the 00:11:25.200 --> 00:11:27.860 cake. Finally the cake. So Robert McFarland. 00:11:28.009 --> 00:11:30.529 Oliver North and a few others fly directly into 00:11:30.529 --> 00:11:34.409 hostile territory on an Israeli 707 cargo plane. 00:11:34.690 --> 00:11:38.190 They're carrying fake Irish passports. And as 00:11:38.190 --> 00:11:40.710 gifts to present to the Iranian leadership, they 00:11:40.710 --> 00:11:43.549 bring a Bible with a handwritten signed inscription 00:11:43.549 --> 00:11:46.870 from Ronald Reagan and a cake baked in the shape 00:11:46.870 --> 00:11:49.120 of a key. I mean, the cake was reportedly an 00:11:49.120 --> 00:11:51.700 inside joke between Oliver North and their middleman, 00:11:51.740 --> 00:11:54.240 Gore Bonifour. An inside joke. Yeah, it was supposed 00:11:54.240 --> 00:11:56.519 to symbolize opening a new relationship. But 00:11:56.519 --> 00:11:58.320 the reality of what happened on the ground in 00:11:58.320 --> 00:12:01.340 Tehran was anything but funny. No. It was a catastrophic 00:12:01.340 --> 00:12:03.879 failure of diplomacy. It honestly plays like 00:12:03.879 --> 00:12:06.960 a bad spy movie where the script supervisor just 00:12:06.960 --> 00:12:09.460 quit halfway through. Exactly. They arrive with 00:12:09.460 --> 00:12:12.860 this key shaped cake, fully expecting to sit 00:12:12.860 --> 00:12:15.100 down with the highest level decision makers in 00:12:15.100 --> 00:12:16.860 the Iranian government. Right. They think they're 00:12:16.840 --> 00:12:20.600 meeting the top brass. But instead they're stuck 00:12:20.600 --> 00:12:23.580 in a room with third and fourth level officials 00:12:23.580 --> 00:12:28.639 who have absolutely no real authority. McFarland 00:12:28.639 --> 00:12:31.480 is reportedly furious, shouting that he is an 00:12:31.480 --> 00:12:34.500 American minister and he expects to meet with 00:12:34.500 --> 00:12:37.159 actual decision makers. Yeah, the frustration 00:12:37.159 --> 00:12:39.360 must have been intense. And the negotiations 00:12:39.360 --> 00:12:42.139 completely collapse because the two sides are 00:12:42.139 --> 00:12:44.460 hopelessly deadlocked over who moves first. Right, 00:12:44.600 --> 00:12:46.960 the classic standoff. The Americans want all 00:12:46.960 --> 00:12:48.700 the hostages released before the missile parts 00:12:48.700 --> 00:12:51.559 are unloaded? But the Iranians demand the weapons 00:12:51.559 --> 00:12:53.379 before they make a move on the hostages. Which 00:12:53.379 --> 00:12:55.460 is pretty standard for this kind of untrusting 00:12:55.460 --> 00:12:57.980 relationship. Exactly. Yeah. So after four days 00:12:57.980 --> 00:13:00.179 of just staring each other down, the Americans 00:13:00.179 --> 00:13:02.259 get back on their plane and go home empty -handed. 00:13:02.559 --> 00:13:05.740 It was a humiliating reality check for the administration. 00:13:06.059 --> 00:13:08.700 I mean, they realized their middleman, Ghor Bonifar, 00:13:09.039 --> 00:13:12.539 had been wildly exaggerating his influence. And 00:13:12.539 --> 00:13:15.039 the Iranians' willingness to deal. Yes. So if 00:13:15.039 --> 00:13:16.200 you're looking at this from the outside, you 00:13:16.200 --> 00:13:18.720 have to ask a logical question. Right. If the 00:13:18.720 --> 00:13:21.679 Tehran trip was a total disaster and they realized 00:13:21.679 --> 00:13:23.720 their middleman was a liar who was just padding 00:13:23.720 --> 00:13:26.860 his own pockets. Why on earth did the administration 00:13:26.860 --> 00:13:29.500 keep selling them weapons? Yeah. Why not just 00:13:29.500 --> 00:13:32.019 stop? Exactly. Why not cut their losses? Because 00:13:32.019 --> 00:13:35.659 the momentum of covert operations is incredibly 00:13:35.659 --> 00:13:38.340 difficult to stop once it's in motion. Really? 00:13:38.519 --> 00:13:41.580 Yeah. The source material highlights that CIA 00:13:41.580 --> 00:13:44.340 Director William Casey forcefully pushed to continue 00:13:44.340 --> 00:13:48.039 the deals, regardless of the failure. Why? Casey 00:13:48.039 --> 00:13:50.399 argued that if they suddenly stopped, their new 00:13:50.399 --> 00:13:52.259 contacts within the Iranian government would 00:13:52.259 --> 00:13:55.519 lose face. They might be executed for dealing 00:13:55.519 --> 00:13:58.840 with the Americans. And most terrifyingly, the 00:13:58.840 --> 00:14:01.100 remaining American hostages in Lebanon could 00:14:01.100 --> 00:14:04.179 be killed in retaliation. Wow. So they could 00:14:04.179 --> 00:14:06.960 just trapped by their own covert policy. Exactly. 00:14:07.179 --> 00:14:10.059 So instead of stopping, they simply shifted strategies. 00:14:10.179 --> 00:14:14.019 They agreed to a sequential release plan, meaning 00:14:14.019 --> 00:14:17.080 sending smaller shipments of weapons in exchange 00:14:17.080 --> 00:14:20.320 for the piecemeal release of hostages over time. 00:14:20.440 --> 00:14:23.500 But the math of that sequential plan never even 00:14:23.500 --> 00:14:25.580 worked out. No, it didn't. They were trading 00:14:25.580 --> 00:14:28.610 top tier weaponry. for hostages. But as they 00:14:28.610 --> 00:14:31.629 got a few hostages out, the Hezbollah -linked 00:14:31.629 --> 00:14:34.769 terrorist groups in Lebanon realized how valuable 00:14:34.769 --> 00:14:37.230 Americans were. Right. So they just kidnapped 00:14:37.230 --> 00:14:39.629 three more Americans. It's a revolving door. 00:14:39.889 --> 00:14:42.370 Literally a revolving door. The kidnappers actually 00:14:42.370 --> 00:14:44.909 joked about it, calling their new captives GI 00:14:44.909 --> 00:14:48.049 Joe. It was a completely demonstrably failed 00:14:48.049 --> 00:14:50.570 policy. It was. And it was a failure that was 00:14:50.570 --> 00:14:53.450 generating immense amounts of paper, money, and 00:14:53.450 --> 00:14:56.450 international movement. And secrecy of that magnitude 00:14:56.450 --> 00:14:59.149 involving that many moving parts can only hold 00:14:59.149 --> 00:15:02.110 for so long. Which brings us to the inevitable 00:15:02.110 --> 00:15:05.009 collapse of the House of Cards in late 1986. 00:15:05.409 --> 00:15:07.889 The fallout. Yeah. And it's fascinating because 00:15:07.889 --> 00:15:10.009 two massive leaks happen almost simultaneously 00:15:10.009 --> 00:15:12.389 on opposite sides of the world. Right. First, 00:15:12.610 --> 00:15:15.490 in Nicaragua, a cargo plane dropping weapons 00:15:15.490 --> 00:15:18.429 to the Contras is shot down by Sandinista forces. 00:15:19.120 --> 00:15:22.139 A survivor of the crash, an American named Eugene 00:15:22.139 --> 00:15:24.720 Hassenfuss, is captured. And he ends up going 00:15:24.720 --> 00:15:27.360 on local Nicaraguan television. and implying 00:15:27.360 --> 00:15:29.759 that he works for the CIA. Which is a nightmare 00:15:29.759 --> 00:15:32.379 for the administration. And while they are trying 00:15:32.379 --> 00:15:34.919 to manage the fallout of an American shot down 00:15:34.919 --> 00:15:37.279 in Nicaragua, an even bigger leak happens in 00:15:37.279 --> 00:15:39.919 the Middle East. Oh, boy. A senior official in 00:15:39.919 --> 00:15:43.519 the Islamic Revolutionary Guard Corps, who opposed 00:15:43.519 --> 00:15:47.039 the secret outreach to the Americans, leaks the 00:15:47.039 --> 00:15:50.399 entire arms for hostages deal to a Syrian agent. 00:15:50.559 --> 00:15:53.220 Wow. That agent passes the story to a Lebanese 00:15:53.220 --> 00:15:55.419 magazine called Asherah, which publishes it. 00:15:55.980 --> 00:15:58.779 is out globally. The panic inside the White House 00:15:58.779 --> 00:16:01.279 is just visceral. You have administration officials 00:16:01.279 --> 00:16:02.960 scrambling to figure out what is exposed and 00:16:02.960 --> 00:16:04.620 what could be hidden. Right, damage control mode. 00:16:04.960 --> 00:16:07.700 Oliver North and his secretary, Fawn Hall, realize 00:16:07.700 --> 00:16:09.440 the Justice Department's coming, so they start 00:16:09.440 --> 00:16:11.720 shredding documents. They're feeding paper into 00:16:11.720 --> 00:16:14.500 the machine so fast, they literally jam the government 00:16:14.500 --> 00:16:16.379 shredder. They broke the shredder. Broke the 00:16:16.379 --> 00:16:19.159 shredder. Hall later testifies that the volume 00:16:19.159 --> 00:16:22.240 of paper was so overwhelming, she resorted to 00:16:22.240 --> 00:16:25.059 smuggling highly classified documents out of 00:16:25.059 --> 00:16:27.539 the old executive office building. Wait for it. 00:16:27.700 --> 00:16:29.879 By scuffing them inside her boots and down the 00:16:29.879 --> 00:16:32.289 back of her dress. Unbelievable. You know, the 00:16:32.289 --> 00:16:34.990 cover -up phase of any political scandal is often 00:16:34.990 --> 00:16:38.370 where the actors reveal what they truly believed 00:16:38.370 --> 00:16:40.970 about their own conduct. Which brings up a glaring 00:16:40.970 --> 00:16:43.350 contradiction. What's fascinating here is exactly 00:16:43.350 --> 00:16:45.570 that contradiction. Right. If the administration 00:16:45.570 --> 00:16:48.509 truly, deeply believed they were acting legally. 00:16:48.649 --> 00:16:51.379 Yeah. Like, if they thought funding the Contras 00:16:51.379 --> 00:16:54.139 and selling arms was their constitutional Article 00:16:54.139 --> 00:16:57.399 2 presidential prerogative, why the frantic cover 00:16:57.399 --> 00:16:59.639 -up? Exactly. Why are they jamming shredders 00:16:59.639 --> 00:17:02.000 and smuggling documents and boots if they thought 00:17:02.000 --> 00:17:04.480 they were just executing lawful foreign policy? 00:17:04.650 --> 00:17:07.150 That is the crux of the issue. The cover -up 00:17:07.150 --> 00:17:10.150 reveals they knew the political and likely legal 00:17:10.150 --> 00:17:13.089 indefensibility of their action. The constitutional 00:17:13.089 --> 00:17:16.269 shockwave that hit Washington wasn't just about 00:17:16.269 --> 00:17:19.309 the policy of selling arms to Iran or funding 00:17:19.309 --> 00:17:21.529 the contras in Nicaragua. It was about the process. 00:17:21.670 --> 00:17:24.990 Yes. The realization that the National Security 00:17:24.990 --> 00:17:28.329 Council had bypassed the State Department, bypassed 00:17:28.329 --> 00:17:31.569 the CIA's official channels, and completely bypassed 00:17:31.569 --> 00:17:34.569 democratic oversight by Congress. There's a shadow 00:17:34.569 --> 00:17:37.150 government operating within the White House, 00:17:37.670 --> 00:17:40.230 funding itself with off -the -books money. And 00:17:40.230 --> 00:17:44.670 the fallout is swift. By November 1986, the attorney 00:17:44.670 --> 00:17:47.710 general publicly admits that funds from the Iranian 00:17:47.710 --> 00:17:50.809 arms sales were diverted to the Contras. National 00:17:50.809 --> 00:17:53.490 Security Adviser John Poindexter resigns. All 00:17:53.490 --> 00:17:56.279 over North is fired. And President Reagan has 00:17:56.279 --> 00:17:58.319 to face a public that feels completely betrayed. 00:17:58.779 --> 00:18:00.900 To manage the crisis, President Reagan appointed 00:18:00.900 --> 00:18:03.779 the Tower Commission, a bipartisan board, to 00:18:03.779 --> 00:18:06.839 investigate the executive branch's conduct. And 00:18:06.839 --> 00:18:10.180 their final report was scathing. While they didn't 00:18:10.180 --> 00:18:12.900 find hard documentary evidence that Reagan himself 00:18:12.900 --> 00:18:15.140 knew the full extent of the financial diversion 00:18:15.140 --> 00:18:18.059 to the Contras, they placed heavy, undeniable 00:18:18.059 --> 00:18:20.759 blame on his management style. They concluded 00:18:20.759 --> 00:18:24.279 that he was disastrously detached, failed to 00:18:24.279 --> 00:18:26.940 properly supervise his own subordinates, and 00:18:26.940 --> 00:18:30.019 effectively allowed his NSC to run amok. Which 00:18:30.019 --> 00:18:32.500 leads to a defining moment of Reagan's presidency. 00:18:33.779 --> 00:18:37.220 In March 1987, he goes on national television 00:18:37.220 --> 00:18:40.160 to address the nation. Yes, the famous speech. 00:18:40.339 --> 00:18:42.700 He delivers a line that perfectly encapsulates 00:18:42.700 --> 00:18:45.380 the tension between what he wanted to believe 00:18:45.380 --> 00:18:48.700 and what the evidence proved. He says, a few 00:18:48.700 --> 00:18:50.539 months ago, I told the American people I did 00:18:50.539 --> 00:18:53.559 not trade arms for hostages. My heart and my 00:18:53.559 --> 00:18:55.759 best intentions still tell me that's true, but 00:18:55.759 --> 00:18:58.500 the facts and the evidence tell me it is not. 00:18:58.720 --> 00:19:01.480 It was an extraordinary admission of a fractured 00:19:01.480 --> 00:19:04.319 reality within the Oval Office. Yeah. Domestically, 00:19:04.519 --> 00:19:06.440 his approval ratings took the largest single 00:19:06.440 --> 00:19:09.000 drop ever recorded for a president at the time. 00:19:09.200 --> 00:19:11.539 But because he had that incredible political 00:19:11.539 --> 00:19:14.119 resilience earning the nickname the Teflon President, 00:19:14.700 --> 00:19:17.180 the damage didn't stick to him permanently. True. 00:19:17.279 --> 00:19:19.160 His ratings eventually recovered before he left 00:19:19.160 --> 00:19:22.019 office. But the legal consequences for the actual 00:19:22.019 --> 00:19:24.299 people running the enterprise, that was a much 00:19:24.299 --> 00:19:26.819 messier, more complicated story. Definitely. 00:19:27.559 --> 00:19:29.900 An independent counsel, Lawrence Walsh, was appointed 00:19:29.900 --> 00:19:33.259 to untangle the criminal liability. OK. He spent 00:19:33.259 --> 00:19:36.000 years investigating and ultimately indicted several 00:19:36.000 --> 00:19:38.799 dozen administration officials, including former 00:19:38.799 --> 00:19:41.559 Secretary of Defense Casper Weinberger and Oliver 00:19:41.559 --> 00:19:44.720 North. But if you're looking for a clean, satisfying 00:19:44.720 --> 00:19:47.059 resolution from the justice system, you aren't 00:19:47.059 --> 00:19:49.880 going to find it. No, you are not. North is convicted 00:19:49.880 --> 00:19:52.400 of several felonies, but those convictions are 00:19:52.400 --> 00:19:55.420 later overturned on a complex legal technicality 00:19:55.420 --> 00:19:57.599 involving his immunized congressional testimony. 00:19:57.720 --> 00:20:00.160 Right. And then comes the ultimate plot twist 00:20:00.160 --> 00:20:03.880 that essentially ends the entire saga. The pardons. 00:20:04.180 --> 00:20:07.500 On Christmas Eve, 1992, outgoing President George 00:20:07.500 --> 00:20:10.200 H .W. Bush, who had been vice president during 00:20:10.200 --> 00:20:12.900 the scandal issues, executive pardons for six 00:20:12.900 --> 00:20:15.779 key figures, including Weinberger. Right before 00:20:15.779 --> 00:20:18.740 Weinberger's trial set to begin. Exactly. Independent 00:20:18.740 --> 00:20:21.460 counsel Walsh was absolutely furious. He publicly 00:20:21.460 --> 00:20:23.359 noted that the pardons effectively completed 00:20:23.359 --> 00:20:29.910 the cover up. Bush preempted a trial that might 00:20:29.910 --> 00:20:32.269 have produced evidence implicating Bush himself 00:20:32.269 --> 00:20:35.690 in the decision -making process. Exactly. Bush 00:20:35.690 --> 00:20:38.250 had always publicly maintained he was out of 00:20:38.250 --> 00:20:40.849 the loop during Iran -Contra, but his own personal 00:20:40.849 --> 00:20:43.430 diaries, which were released later, severely 00:20:43.430 --> 00:20:45.809 contradicted that claim. So what does this all 00:20:45.809 --> 00:20:48.029 mean, if you're listening to this deep dive today? 00:20:48.349 --> 00:20:50.849 What is the ultimate takeaway? Yeah. Why should 00:20:50.849 --> 00:20:54.069 you care? about shredded documents, Swiss bank 00:20:54.069 --> 00:20:56.690 accounts, and key -shaped cakes from the 1980s? 00:20:56.690 --> 00:20:59.769 It's a great question. Because Iran Contra set 00:20:59.769 --> 00:21:02.990 a massive enduring precedent. It demonstrated 00:21:02.990 --> 00:21:05.470 exactly how easily the executive branch could 00:21:05.470 --> 00:21:07.329 bypass the elected representatives of the people 00:21:07.329 --> 00:21:09.890 if they really wanted to. Exactly. By utilizing 00:21:09.890 --> 00:21:12.049 third -party countries, private arms dealers, 00:21:12.349 --> 00:21:14.970 and extreme secrecy, the administration found 00:21:14.970 --> 00:21:17.930 a functional blueprint to wage a war that the 00:21:17.930 --> 00:21:20.769 public's representatives had explicitly legally 00:21:20.769 --> 00:21:24.309 defunded. Wow. It highlighted a terrifying vulnerability 00:21:24.309 --> 00:21:26.799 in the American democratic system. The immense 00:21:26.799 --> 00:21:29.259 difficulty of reining in an executive branch 00:21:29.259 --> 00:21:31.880 that decides to privatize its foreign policy 00:21:31.880 --> 00:21:34.519 to achieve its goals. It's essentially a playbook 00:21:34.519 --> 00:21:37.339 for how a shadow budget can be used to outmaneuver 00:21:37.339 --> 00:21:40.319 the Constitution itself. It really is. We want 00:21:40.319 --> 00:21:42.539 to thank you for coming along on this wild historical 00:21:42.539 --> 00:21:45.799 ride with us today. From hostage crises to jungle 00:21:45.799 --> 00:21:49.079 airstrips, jammed shredders to disastrous diplomatic 00:21:49.079 --> 00:21:52.640 trips, Iran -Contra is a deep dive into the absolute 00:21:52.640 --> 00:21:55.160 limits of government power. But before we leave 00:21:55.160 --> 00:21:58.200 you, I want to share a final, rather chilling 00:21:58.200 --> 00:22:00.359 thought introduced in our source material by 00:22:00.359 --> 00:22:03.039 the historian John Canham -Kline. Oh, right. 00:22:03.339 --> 00:22:05.579 Let's hear it. We have a strong tendency to look 00:22:05.579 --> 00:22:08.299 back at the Iran -Contra affair as an aberration. 00:22:09.140 --> 00:22:11.819 We view it as a moment when the system temporarily 00:22:11.819 --> 00:22:15.890 broke down. A scandal where a few rogue actors 00:22:15.890 --> 00:22:18.529 briefly hijacked the machinery of government. 00:22:18.829 --> 00:22:20.589 Right. It's the comforting bad apples theory 00:22:20.589 --> 00:22:22.890 of history. It lets us believe this system works 00:22:22.890 --> 00:22:25.309 normally most of the time. Exactly. But Cannon 00:22:25.309 --> 00:22:27.309 -Kline suggests something much more provocative 00:22:27.309 --> 00:22:30.009 for you to consider. What if Iran -Contra wasn't 00:22:30.009 --> 00:22:32.329 a departure from the norm at all? What if it 00:22:32.329 --> 00:22:35.490 was just business as usual for the modern national 00:22:35.490 --> 00:22:39.130 security state? Wow. We live in an era of sprawling 00:22:39.130 --> 00:22:41.829 intelligence agencies and multi -million dollar 00:22:41.829 --> 00:22:44.630 shadow budgets that operate constantly, often 00:22:44.630 --> 00:22:47.170 with minimal oversight. It's a terrifying question. 00:22:47.910 --> 00:22:51.769 Is the law seen by these massive insulated agencies 00:22:51.769 --> 00:22:55.250 as a sacred boundary they must uphold? Or is 00:22:55.250 --> 00:22:57.750 it just viewed as a logistical obstacle to be 00:22:57.750 --> 00:22:59.869 creatively surmounted? It is something for you 00:22:59.869 --> 00:23:02.779 to deeply ponder. When the stakes are framed 00:23:02.779 --> 00:23:05.140 as an existential matter of national security, 00:23:05.680 --> 00:23:08.559 how far will the system go to justify its means? 00:23:08.640 --> 00:23:11.259 And who exactly is left to stop it? And when 00:23:11.259 --> 00:23:13.079 you think about it from that perspective, that 00:23:13.079 --> 00:23:16.039 absurd, key -shaped cake they brought into Tehran 00:23:16.039 --> 00:23:18.539 was just a bizarre inside joke between arms dealers. 00:23:18.640 --> 00:23:20.960 No, not at all. It was a perfect symbol for the 00:23:20.960 --> 00:23:23.900 entire covert operation. An arrogant, clumsy 00:23:23.900 --> 00:23:26.019 attempt to unlock doors they had absolutely no 00:23:26.019 --> 00:23:27.519 legal right to open in the first place.