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 Stable URL: http://www.jstor.org/stable/2152363 . Accessed: 18/04/2013 19:45
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Exploring ContraAid Fundamentals: and the Issues the Intricacies

RICHARD SOBEL and evaluatingthe policies of As a foundationfor understanding on fundingthe contraoppositionto the Sandinista the Reagan administration clarifiesthe basicfactualbackground in Nicaragua, thisexamination government the provisionof aid to the contrasduringthe 1980s. In particular, surrounding how muchaidthe U. S. government, thearticleidentifiesfrompublicinformation to thecontras.Inaddition, privatedonors,andarmssalesprovided thirdcountries, it indicatesthe periodsduringwhich outsidefunds sustainedthe contraswhen It also explainsat whatpointsduringthoseperiods U.S. fundingwasunavailable. known fundsto the contrasmay have conflictedwith the legislativerestrictions ' as the Bolandamendments. Because the public record is often incompleteand the events are complex these answersare provisional.Since much andopen to differinginterpretations, the aid is impreciseor contradictory, on nongovernmental of the information of fundsthatreached suchas theexactamount articlecannotfullyclarifyquestions the contras from arms sales to Iran or how much aid came from additional sources.Becausethe contrasreceivedless moneythannongovernmiscellaneous as aid, each answermust distinguishbetweenhow mentalsources contributed obtained. andhow muchthecontrasapparently sourceprovided mucha particular
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 version MinorityViews),abridged Investigatingthe Iran-contraAffairs(With CongressionalCommittees (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 287

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A clearunderstanding providesthe basisfor evaluof the factualbackground atingpoliciesduringthe 1980s. The contrarebelswere createdin the early 1980s from the old Nicaraguan nationalguardand otheroppositiongroupswith U.S. governfinancialandtechnicalsupport.They soughtto dislodgethe Sandinista mentthatcameto powerin the 1979revolution overthrowing the Somozaregime. to otherdefense-related fundingfor Compared expenditures,U.S. government the contraswas modestin size. Although bothprivatecontributions fromAmericans andprofitsfromarmssales to Iranreceivedmajorpublicity,only contribuin helpingto sustainthe contrasfmantionsfromthirdcountrieswere significant Though thesecondBoland ciallywhenU.S. government funding wasunavailable. on U.S. aid to amendment (BolandII), one of a series of legislativerestrictions the contras,was in effect duringperiodswhen the contraswere receivingnonof therestrictions U. S. government to somenongovaid, theapplicability military of thecircumstances. erinent funding on interpretations Whilerelatively depends to the demise of modest, U.S. governmentfundingof the contrascontributed the Sandinistas.In terms of policy goals and legitimacy, the controversyand scandaloverextra-governmental contraaidmadesuchfundinga poorinvestment aims.2 and a dubiousmeans of attainingU.S. government
QUESTIONS ON SOURCES, AMOUNTS, AND TIMING OF FUNDING

The most straightforward questioninvolvesthe amountsand sourcesof funding andotherparties to the contras.How muchaid did the UnitedStatesgovernment provideforthecontras,andhow muchof thataiddidthecontrasactuallyreceive? thirdcountries, Theanswerdistinguishes betweenaidfromthe U. S. government, privatedonors, and arms sales to Iran. Morecomplexquestionsinvolvethe timingof the fundingandpossibleconWhendid the in the Bolandamendments. flicts with the fundamental restrictions For whatperiods contrashave fundsand when did they lack financialsupport? didthe U.S. government authorize aid?Duringwhatperiodsdid the government funds?When duringthe authorization periodsdid funds providethe authorized runout?Werenongovernmental fundsprovidedduringperiodswhenthe Boland were in effect, anddid those fundsconflictwiththe Bolandrestricamendments tions? U.S. Government Funding How muchaid did the U.S. government providefor the contras?Between 1981 a total of and 1990 (fiscal years 1982-90), the U.S. governmentappropriated
2 For an overview of the issues and politics surrounding contras,esp. see U.S. aid to the Nicaraguan and CentralAmerica,2nd ed. (UniCynthiaArnson, Crossroads:Congress,the ReaganAdministration, versityPark: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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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 19.0 29.0 24.0 27.0 13.0 100.0 7.1 8.1 17.7 27.0 49.75 321.65 Nonlethal
-

Military 19.0 29.0 24.0 70.0

27.0 13.0 30.0 7.1 8.1 17.7 27.0 49.75 179.65

_

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 As Table 1 shows, for fiscal years 1982 $179 millionfor nonmilitary purposes.3 forthecontras through1990, respectively, the U.S. government provided (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 and(FY90) $49.8 million(non(nonmilitary), (FY89) $27 million(nonmilitary), military).The (FY85-86) $27 million and (FY87) $100 million were the most receivedall prominently debatedcontraaid measures.5 The contrasapparently
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 appropriations of $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 reprogrammed from 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 which might have had militaryapplications(Serafmo, expenditurefor intelligence and communications "ContraAid," table 1. See Serafmo, "ContraAid" and 10-14 here for authorizationperiods.)

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the $322 million U.S. appropriated aid.6 Third CountryAid Howmuchassistance didthirdparties(third countries andprivate donors)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 ("Country 2")was by far the largestdonor. FromJune/July1984 throughabout March1986, SaudiArabiaprovided$32 millionin a seriesof donations.7 In late 1985andearly 1986, Taiwan("Country 3")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 Panamanian PresidentManuel 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, particularly by 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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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 thatactuallyreached thecontras,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 of the that did the contrasreceive? In the 25 November 1986 announcement thatthe residdiversions,formerU.S. AttorneyGeneralEdwinMeese estimated uals 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-contra scandal,suggestedthatthe arms sales pro'5 Inlate 1987,thejointcongresdiversion. ducedabout$19.8 millionforpotential committee thatthelastfourof six armssalesproduced sionalIran-contra estimated $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 Report, 180-185. See also ScottArmstronget al., TheChronology: Tower, TheTowerCommission 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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Becauseof the complexityof the process, a chronological reviewof the arms andpayments shipments helpsto 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, Israeldeliveredanother 408 of its TOWsto Iran.'9 Third,on 25 November 1985, a CIAproprietary companydeliveredto Iran 18 (of a planned120) Israeli HAWKantiaircraft missiles.20 Fourth,on 17 February 1986, andon 27 February 1986, respectively,the CIA proprietary companydelivered 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.22 Finally, on 30/31 October1986, the CIA proprietary delivered500 more TOWs.23 In total, the six shipmentsprovided2004 TOWs, 18 HAWKs, and 240 HAWKparts. How muchprofitdid the armssales produce,andhow muchdid the contras receive? Relying mainly on congressionalIran-contra committeefigures, but on Tower Commissionfiguresas needed,24 drawing the profitscan be estimated whatIranpaidfor the missiles with their U.S. dollarvalue. Since by comparing 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. thatIranpaid For the firsttwo TOWshipments,the TowerReportestimated $1.2 millionfor the initial (S1) 100 (actually96) TOWs, and $5 million for the The 508 (504) next (S2) 408 TOWs, for a total cost of about $6.2 million.25 (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 NoIbid., 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. 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).
27 18

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vember 1985 for the eighteenHAWKs (S3),28there was no completedsale to produceany profit, because the Iraniansreturnedseventeenof the missiles as $1 million, aftertest-firing one. However,becauseIsraeladvanced unsatisfactory of which only about$150,000 was spent on the abortivesale, and the rest was produced$850,000, some of which was used not returned,the thirdtransaction for the contras.29 (S4-S6), all in 1986, involvedplanneddiversions. The last threeshipments For the 1000 TOWs (S4) in February1986, Iran paid about $10 million for (Tower missiles worth $4.5 million, producingat least a $5.5 million profit.30 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 a $8.3 millionprofit.3'(Tower:$15 million millionworthof weapons,producing - $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 (Tower:$7 million- $2 million = $5 mllion, 448). The total millionprofit.32 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 + (Towertotal: $19.8 million, 448). Combining $8.3 million + $1.4 million).33 with the $15.2 million the $850,000 residualfromthe (S3) HAWKtransactions ($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 Table producesa total profit of about$20.3 million (Tower: $24.8 million).34 2 providesa summaryof the sales and fundsinvolved. In short, the six shipmentsof arms to Iran producedas much as $25 milbe divertedfor the contras. lion, at least $16. 1 millionof whichcouldpotentially was exposedandstoppedin late 1986, howWhenthe Iranarmssales operation of the $16. 1 millionin residualshad been spenton the ever, less thana quarter contras:35 report,the contrasonly receivedabout accordingto the congressional
28 29

Tower, The Tower CommissionReport, 442-443. Inouye and Hamilton, Report, 159, 234, 302. 30 Ibid., 302. 31 Ibid., 302-304. 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 32

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TABLE 2

Residuals GeneratedfromArmSales to Iran, 1985-1986

Shipment/Date S1 8/20/85 S2 9/14/85 S3 11/25/85 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 Quantityand Type 96 TOWs 408 TOWs 18 HAWKs 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. $2 m $0.15 m $4.5 m $6.7 m $2.2 m $13.4 m $13.5 m $15.5 m Residual (Iran-U.S.) $4.2 m $0.85 m $5.5 m $8.3 m $1.4 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-contra Committeebudget analysis that the so-called Enterprise,a fundingmechanismset up to supply arms to the contras,37 spent $7.2 million on contraarms38 duringthe 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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TABLE 3 Amounts and Periods of U.S. and Private Aid to the Contras, 1983-88
Jfmamjjasond ) =00 GOVERNMENT() ($29) L fmamjjasond framjao-

$15
No USG(5)
Boland =A Bans U.S dllrs All $24 Saudi Arabia No allocation for Taiwan (... .. $2 -.

~~($40)

4....00
)

THIRDCOUNTRIES

Brunei
PRIVATEDONORS( ARM SALES $(85

(p
--

$0-

re

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 sourcesduring million, whichthe contrasreceivedfromnon-U.S. governmental for FY85to whatCongressappropriated 1984 to 1986, was roughlyequivalent 86 in nonlethalfunding($27 million + $13 million).
TIMING AND 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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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 nonmilitary aid?42 Table 3 indicatesthe periodof authorization for 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-198643 betweenthe end of the authorizations of the FY85-86 on 31 March 1986 (the classified $13 $27 million nonmilitaryappropriation million began in December 1985) and the beginningof the FY87 $100 million on 18 October1986? The first bridge period without U.S. fundslasted 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. allocation to the contrasranout five monthsbeforethe beginningof the FY 1985 BolandII banof militaryfundsfor the contrasbeganon 12 October1984 (ending or availableduring on 30 September1985).45No U.S. funds were authorized the rest of 1984 after May and most of 1985 until the FY85-86 allocationof for 15 August 1985 through31 March1986but delayed $27 million(authorized to the end of 1985 by a series of continuingresolutions)became availableon 19 December 1985.46At the same point, the additionalclassified $13 million and trainingfor FY86 (ending (PL 99-169) was allocatedfor communications
42 Boland-like and otherpassed(or proposed) Therewere actuallyseveralBolandamendments amendandHamilton, Report, 343-44). ThefirstBoland restriction on aidfrom1982to 1986(Inouye 1983for use of fundsfromDecember 1982-October ment(passed on 12 December 1982)prohibited In 1983 those restrictions continued and the law limited overthrowing the Sandinista government. CIA supplements "Contra 1984, (Serafino, Aid,"1). In October FY84 aid to $24 millionto prevent DODandCIA"orany other II) cut off all aid by restricting the secondBolandamendment (Boland in Nicaragua" . . . military ... entity" of the U.S. Government from"supporting operations (Inouye 1985,extended lethal aid(14October 1984-30September andHamilton, Report, 414)orfromproviding of $14millionin funding to seekrelease to 19November theadministration 1985).Butthelawallowed the ban aid authorized in 15 August1985modified in February 1985. The $27 millionin nonlethal of Boland II on 19 November the ban 1985extended fromall funding to only military. Therenewal on military 1985-30 September 1986). However,it allowedState aid untillate 1986(19 November from of thirdcountry "humanitarian" aid. In short,military aidwas restricted solicitation Department fromOctober 1984to November various 1986under December 1982to September 1984,andbanned only fromOctober1984to August1985. Boland-like restrictions. Nonmilitary aid was banned 4 4

Tower, The Tower CommissionReport, 52-53.

56. et al., TheChronology, InouyeandHamilton, Report, 48; Armstrong of $27 million,therewas no "humanitarian only"(thatis, 4 Beforethe June 1985 authorization or "nonlethal") for military purposes. aidwas available solelynonmilitary aid, sinceall the previous aid in thiscontextis questionable sincehumanitarian Moreover, the use of the word"humanitarian" meansaid to noncombatants. typically I Armstrong, The Chronology, 66.

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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 nonmiliIn summary, before(June1984-September tary.48 1984), 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 nonmilitary aid. 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 firstunfunded bridgeperiod, Saudi Arabiacontributed $32 million-$8 million at $1 million a monthfrom July 1984to February1985 and$24 millionat $2 millionpermonthfromMarch 1985to aboutMarch1986.49 This helpedto sustainthe contrasmilitarily through 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 for networkorganizedin mid-1984 and connectedto the NationalEndowment the Preservation of Libertyandthe Enterprise also 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 October 1986, andthelast $40 47The first$60 millionof the $100 millionwas appropriated ended31 March 1987.Partof the$27 million,whoseauthorization in March millionwasappropriated by in thepipeline.It was supplemented sinceit was already to be spentafterMarch 1986, continued 1986, whichran out by summer in December1985until30 September the $13 millionauthorized 1986. thecontras supposedly of the$27millionforFY85spring, theexhaustion 4 InJuly1986,following thatperiodfromJuly went$2.5 millionin debt(Tower, 7he Tower CommissionReport, 341). During the contrasreceivedonly untilOctober1986, when$60 millionof the $100 millionwas disbursed, country andno third and$3.8 millionin armssalesdiversions, donations partof $2.7 millionin private donations. 49 InouyeandHamilton, Report, 52, 55. 50Ibid., 55. 51 Ibid., 88, 91, 97.

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ARmsSALES PROFITS 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 produced by the thirdtransaction (S3) in November1985 did go to the contrasslightlybeforethe $27 millionand $13 million in nonmilitary aid 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 planned diversionof armsprofits-as opposedto theunplanned $850,000 residual which pro(S3)-took place with the fourtharms sale (S4) in February1986,53 duced$5.5 millionin profits.The fiftharmssales (S5) in middleto late summer in profit(afterthe $27 millionand $13 millionran 1986produced$8.3 million54 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)nonmilitary aidvotedin summer1986 was allocated(andsupplemented by $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).Whenthecontras lackedU.S. funds,thirdcountries, private sales them. donors, and arms provided 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 apparently spenton 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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million in arm sales residualsprovidedadditionalfunds for militarypurposes ($12.5 million). purposes. U. S. fundsmayhaveservedmilitary Moreover,somehumanitarian Octhrough June 1986, withinthe October1984 FromDecember1985 through U.S. tober 1986 periodof the BolandII bans, partof $27 millionin nonmilitary the for andmay have been spentfor militarysupplies;56 fundswas unaccounted intelligence,and communication $13 million was also spentfor quasi-military, had ended, however, By July 1986, after the Saudi contributions purposes.57 only part of the $2.7 million in privatedonationsand $3.8 million from arms went$2.5 millionin debt.58 profitswerestillavailable,andthecontrassupposedly aid, arms sales profits, third-party In short, until late 1986, the third-country spentU.S.fundsprovidedsome military donations,andpossiblyinappropriately allocationsran out in spring 1984. funds afterthe U.S. government 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 By comparison,during 1986 alone, Soviet bloc governmentof El Salvador.59 to was roughly $580 million.A The $400 million in aid to the Nicaragua aid administration contraswas only aboutfive timesthe $75 millionin aidthe Carter beforetheReagan in 1980($60 millionwasprovided forthe Sandinistas approved administration cut 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

thatoccurred during Did thethirdparty(thirdcountryandprivatedonor)funding conflictwiththeBolandbans?The answerdepends periodsof Bolandrestrictions withinthe banperiodsandwhetherthe restricbothon whetherfundingoccurred to the specifictypesof funding.BolandII bannedall U.S.tionswere applicable relatedaid from 12 October 1984 to 30 September1985, and all militaryaid funding from 1 October1985 to 18 October1986. Someof the nongovernmental beforeBolandII started (for example,fromSaudiArabiain June 1984)occurred 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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aid were FY85-86 allocationsof $27 million and $13 million in nonmilitary approved(15 August 1985 and 18 December 1985, respectively)during the 1986), buttheirauthorization 30 September periodof the BolandII ban (through funding.Most of the nongovernmental modifiedthe ban to permitnonmilitary 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 of the Bolandamendments? Bolandban. But did they conflict with restrictions Beyondtiming, identifyingviolationsof the Bolandban also involves legal and wordedban was politicalquestions.The key issue is whetherthe ambiguously applicableto thirdparty funds and funds divertedfrom the arms sales.62The only restrictedfunds availableor handledby any U.S. BolandII amendment Therefore,thirdparty . . . involvedin intelligenceactivities." government "entity for the contras funds given directlyto the contrasor to a privateorganization did not per se conflict with the Boland restrictions.The money that private of $32 million raisedin 1985-1986, and the Saudi contributions organizations but went directly in 1984-1986 supposedlydid not go to the U.S. government to the contras.63 in May 1984andsomeof theprivate of Saudidonations Theinitialsolicitations donationsoccurredbefore BolandII took effect in October1984; moreover,a to BolandII specificallypermittedadministration December 1985 amendment aid,"' for which the sultan of solicitationof third countriesfor humanitarian intendedfor militarypurhave been which may Bruneicontributed million, $10 aid and inHad the Bruneisolicitationsactuallybeen for humanitarian poses.65 volved no quid pro quo, they would have been legal. orprivate solicitedthirdcountry paidby theU. S. government Whenpersonnel funds duringthe funds for militarypurposesor handledprivatelycontributed andother banperiod,however, these actionsconflictedwith Bolandrestrictions 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 personnelon the NationalSecurity by U.S. government the CIAandcoordinated Council(NSC) staff. Becausethese funds were collected and managedby the to governmentintelligenceagencies (and NSC staff and thus were "available" the NSC was involvedin intelligenceactivity), they conflictedwith the Boland
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 62

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ban. As violationsof appropriation however,theywere not criminal restrictions, actionsper se.66 Committeereports Iran-Contra The Majorityand MinorityCongressional of whetherthe Bolandban necessarily differ, however, in their interpretation prohibitedsolicitationor handlingof funds availableto the U.S. government, or laws. Themajority interpretations of theprocedures andin theirconstitutional the power accountability, held thatthe ruleof law,67 the principleof government thatany money solicitedor spentby of the purse, and specific statutesrequired by the Congress.68 U.S. governmententitiesor officials must be appropriated circumventing official In this view, governmentally-related fundingmechanisms and thus illegal.69 Since the privatefundswere proceduresare unconstitutional by and solicitedby government personnelandthe divertedfundswere controlled logic, they were restricted thusavailableto the CIA or NSC, underthe majority underBolandII. foreignrelations The minorityreport,however, claimedthatthe president's military powers permittedsuch activities, includingsolicitationof third-party Even if laws like BolandII prohibitedsuch actions, those restrictions funds.70 were unconstitutional andthus void becausethe presidenthas the constitutional withthethirdpartiesto urgethemto makemilitary contriburightto communicate tions to U.S. allies.7' The diversionsthemselves, moreover, would have been legal in this view, if they had followed properproceduresand been sanctioned underthe Hughes-RyanAct of 1974, by a presidential finding,an authorization covertactivitiesdeemedto be in the national whichpermitted properlyapproved
interest.72

Thediversions,however,didnotfollowproper Theywereapparprocedures. ently not approvedby the president,since he claimednot to have knownabout them.73 The November1985 arms sales (but not the diversionsof profits)were findingin December1985, andthe 1986 retroactively approved by presidential 1986 finding.74 Since, however, sales were prospectively approved by a January the presidentapprovedonly the armssales and not the diversions,the minority is moot.75In short,the diversionswere illegal claim of constitutional protection underBolandII even in the minoritylogic. Under the majoritylogic, the Boland II ban prohibitedany solicitationby officials and the use of arms profits divertedunderNSC guidance government
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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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-party and third-country privatefundingof 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-party contributions andarmssales diversionsdid occurduring the Boland II ban and sustainedthe contraswhen they had no U.S. funds.77 Third-country funding provideda significant amount of militaryaid ($34 million) for the contras.Privatedonations($2.7 million) and divertedarmssales profits ($3.8 million) providedlittle ($6.5 million) for militarysupplies. Thoughthe donations to thecontras third-country started beforetheBolandrestrictions began, the ban did prohibitthe solicitationof mostprivatedonations,militarycontributionsby thirdcountries,anddiversions of 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 congressionallyappropriated U.S. aid and outside funds, advanceU.S. interests? Weretheadministration's to findextragovernmental orextralegal monies attempts when U.S. governmentfunds were not availableworth the efforts? In short, were the benefits of the policy of supporting the 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. interventions have been this analysisbeginsby examiningReaganpolicies on their widely questioned,78 own termsas administration to achieve its goals. It then comparesthe attempts administration approvalto potentialalternatives.It also looks at some of the widerimplications for democratic governanceof the administration's approach. From the Reaganadministration's point of view, U.S. governmentfunding of the contrasand relatedpressurespursuedfour important to policy aims:79 of the antigovermment rebelsin El Salvador; to prespreventSandinista support
Otherlaws (for example, the Anti-Deficiency Act, Arms Export Act, NeutralityActs), including restrictionson tax-exempt donations for nonhumanitarian purposes (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, Condemned to Repetition(Princeton, NJ: Princeton University Press, 1987). See also Arnson, Crossroads. 79 Serafino, "Contra Aid," 6-7.
76

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to democratize their policies and pluralizetheir economy; sure the Sandinistas satisfactoryto the to negotiatesecurityarrangements to force the Sandinistas United States and the rest of CentralAmerica;and perhapsto overthrowthe Sandinista regime.80 The contraaid policies were relativelysuccessfulin pursuingthese goals. fundingof the rebels in El Salvador. The policies helped to cut off Sandinista power and susfrom consolidating They also helpedto preventthe Sandinistas withtheopposito negotiate andforcedthe Sandinistas tainingpopularsupport,8" tion. They also kept the Sandinistasfrom expandinginto the rest of Central Americaandnegotiating a Central American though theSandinpeaceagreement, in March1988. Ultimately, ista armydid at one pointcross over into Honduras to the Sandinista's thoughineffectivemilitarily,aid to the contrascontributed of theReaganadministration, electoraldefeatin 1990. Thus,fromtheperspective 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),82 sustained the contras the Reaganadministration for nearlya decade. A moderatelevel of third-country donations($34 million) andarmssalesprofits($6.5 million) anda smallamount of thirdpartysolicitation filled in duringthe two bridge periods in 1984-1985 and early to late 1986, supportwas not available.Despite all the respectively,when U.S. government 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, assistance,was cost-effectiveandnecessaryto maintain especiallythird-country the contra forces when U.S. funds were cut off. Yet these approacheswere of questionable wisdomeven fromtheadministration's perspective, controversial, and at least in partillegal. The diversionof a small amountof arm sales profits (about$3.8 millionof $16. 1 millionprofitsfrom$40 millionin sales)wasparticuandprovidedrelativelylittle support (about1 percentof $400 larlycontroversial 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 and some of its high officials. shameupon the Reaganadministration
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, "Contra Aid," 17.

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The contraswere a proxyforceunderthe ReaganDoctrineof helpingothers 83 Fighting fightanticommunist battlesthatalso servedU. S. government interests. warsthrough proxiesis an ancientpartof greatpowerstrugglesandoften substitutes for open warfarebetween superpowers.In general, a democracyshould fight its wars with its own soldiers,but using surrogates may be less dangerous than riskingsuperpower confrontations. Whilea superpower does not alwaysfightits own battles,it needs democracy to take direct responsibility for fundingthose fights. The privatization of both foreign policy fundingand wars"'runs contraryto fundamental principlesof democraticgovernanceand sovereignty,particularly the rule of law and the power of the purse. Extragovemmental funding, even if not illegal, corrodes democraticlegitimacy. The executive cannot decide to fmance wars without congressional approval.Moreover,the powersthe U.S. Constitution vests in the to carryout the conflict Congressto decideto fight wars, and the responsibility through the armedforcesdirectedby the president,cannotbe in executivehands only,85because the separationof powers must provide a check on potentially actions.Inorderto sustain thevalidityof thedemocratic irresponsible safeguards, the Congressmust be able to end the fightingby cuttingoff the funding,and the executivemustbe faithfullyboundby such restrictions.The use of private of foreignpolicy funds for public purposesand, particularly, the privatization of in a democracy. distort the structure authorization and funding appropriation Moreover, a countryshould not fight voluntarywars for which it cannot pay. Havingotherspay for andfight a nation's battles,even throughsurrogates, distortsbasic principlesof democraticaccountability, which requiresa nation as a nation. to decideto takeuponitselfthe required sacrificeandbeartheburden Even if most of the outside fundingwere legal, as the administration and the of supportandimplementation minorityreportpropose, suchmechanisms stray becausethey take actionsthatthe peopleand beyonddemocratic accountability, their elected representatives do not directly support.86 By soliciting others for in was potentiallyundermining its own prerogatives funds, the administration the policy-making process. Furthermore, legal or not, the proprietyof governmentofficials soliciting The thirdpartyor privatefundsis questionable andfundamentally 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. government operationsthroughthirdcountrycontributions was used duringthe Gulf War in 1991, with large contributionsfrom Saudi Arabia and Kuwait (each countrycontributed over $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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Reaganadministration was subverting its 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 of fundingalso reduces public scrutinyand the debate over Privatization policy necessaryin a democracyfor good publicpolicy. Opendiscussionitself might have scuttledthe policy, which is in part why the administration sought to hide its actions. A democracycannotgive up its principlesof accountability and full, open debateand stay democratic.88
POLICY ALTERNATIVES

the samegoal of bringingdemocCouldan alternative policy have accomplished racy to Nicaraguawithoutcreatingthe antagonisms and scandalof the contra fundingapproaches? Again, one'spartisan positionaffects the evaluation of the goals and approach of any U.S. policy thatmight have soughtto influencethe internalpolitics of Nicaragua.And the questionof whetherthe United States atall in Nicaraguan shouldhaveintervened politicsshouldnotbe lost in evaluating more peacefulways of attaining the Reaganadministration's policy goals.89 of administration not Supporters policy may arguethathad the Sandinistas 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 UnitedStateshadalreadysuccessfullyencouraged the Sandinistas to curtailsupport for the Salvadoran rebels; here their success derivedfrom the stick of the suspensionof U.S. economic assistancein 1981 with the carrotof its renewal ratherthanfrom armedforce.90 The administration its goal of democratizing Nicamighthave accomplished a proxy fightingforce. Lackingthejustificationof the raguawithoutsustaining contrasas a perceivedthreat, the Sandinistas might have had more difficulty withoutthe state on the politicalopposition.In particular, imposingrestrictions of emergencydecreedin 1985 to fight the contras,the Sandinistas might have facedinternal politicaloppositionstrongenoughto force the Nicaraguan governmentinto earlierelectionsor a politicalturnover.The UnitedStatesmighthave
87SouthernCenter for International Studies, "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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betterprovidedsupportto develop politicalchallengesto the Sandinistas than fundedarmedinsurrection. Withthe collapseof communism in EasternEurope andthe ensuingeconomicandpoliticalproblemsin the SovietUnion, moreover, the Sandinistas would have come underother externaland internalpressures, as did the nearbySalvadoran guerrillas.Withoutthe stateof emergencyor the Soviet financialand militarysupportjustifiedby the existence of the contras, the Sandinistas mightnothavelastedto 1990. Perhaps,too, suchinternal opposition mighthave helpeddemocratize andliberalizeNicaraguan politicalandeconomic policies.9'
CONCLUSION

In clarifyingthe amountsand timingof the fundingfor the contras,this article providesthe basis for a clearerunderstanding of the contraaid policy by both citizensandpolicymakersalike. In identifying theperiodsof Bolandrestrictions, andthe differingmajorityandminorityinterpretations, it explainspossibleconflicts between nongovermmental fundingmechanismsand the Bolandbans. It evaluates contraaidpolicyon 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 administration that promoted them. An alternative in Nicaraguamight have policy to assuredemocratization been more successful. A brief review of contraaid fundingcannotanswerall the factualandpolicy questions.Moreover,evidence alone cannotanswernormativequestions,such as whetherReaganadministration contrapolicy was wise. The examination of the policy approaches thatthe Reaganadministration took regarding Nicaragua and the contrasshouldcontinueto probe the implicationsand the alternatives. But a clearer understanding of the background to contra fundingapproaches informsthe debatenecessaryin a democracy to evaluatethe validityandwisdom of these controversial issues duringthe centralU.S. intervention of the 1980s.*

91 Thepeacefully resolved mutual hostagetaking betweengroups of ex-contras andex-Sandinistas inlatesummer 1993showed thatsignificant issuesstilldivideNicaraguans. SeeDouglas Farah, "Contras Free 20 Hostagesin Nicaragua," WashingtonPost, 23 August1993. The limitedAmerican aid to President VioletaChamorro's government sincehercoalition in the 1990election victory andthedelay in providing $98 millionin new aid reveals,too, thatthe U.S. role andpolicytoward Nicaragua are still problematic. See 7he Economist, 28 August1993. * I wouldlike to thank JulieCho, EricParas,ChrisRasmussen, NinaSerafino, Michael Thieme, andHilaryHerbold for theirassistance.

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