Contra Aid Fundamentals: Exploring the Intricacies and the Issues

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Contra Aid Fundamentals: Exploring the Intricacies and the IssuesAuthor(s): Richard SobelSource: Political Science Quarterly, Vol. 110, No. 2 (Summer, 1995), pp. 287-306Published by: The Academy of Political ScienceStable URL: http://www.jstor.org/stable/2152363 .

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ContraAid Fundamentals:xploringthe Intricacies nd the Issues

RICHARD SOBELAs a foundation or understandingnd evaluating he policies ofthe Reagan administrationn funding the contraopposition o the SandinistagovernmentnNicaragua,hisexamination larifies he basic factualbackgroundsurroundinghe provisionof aidto the contrasduring he 1980s. In particular,the article dentifies rompublic nformation ow muchaidtheU. S. government,third ountries,privatedonors,andarms alesprovidedo the contras. naddition,

it indicates he periodsduringwhich outsidefunds sustained he contraswhenU.S. fundingwas unavailable. t also explainsat whatpointsduring hoseperiodsfundsto the contrasmayhave conflictedwith the legislativerestrictions nownas the Bolandamendments.Because the publicrecordis often incompleteand the events are complexandopento differing nterpretations,hese answersareprovisional.Sincemuchof the informationon nongovernmental id is impreciseor contradictory,hearticle annot ullyclarifyquestions uchas theexactamount f funds hatreachedthe contrasfrom arms sales to Iranor how much aid came from additionalmiscellaneous ources.Because he contras eceived ess moneythannongovern-mentalsources contributed s aid, each answer must distinguishbetweenhowmuchaparticularourceprovidedandhowmuch he contrasapparentlybtained.

1 Whileclarifying he basic issues about unding he contras,this articlealso identifieswhenshipmentsof arms to Iran occurred,the amountsof money they generated,and the diversion of profits to thecontras.But it does notdiscuss the detailsof the contacts betweenthe U.S. and Iranor the 1986-1987Iran-contrascandal. For more details, see Daniel K. Inouye and Lee K. Hamilton, Report of theCongressionalCommitteesnvestigating he Iran-contraAffairs(WithMinorityViews),abridged ersion(New York: Times Books, 1988).RICHARD SOBEL teaches political history and is a faculty associate of the Centerof InternationalStudies 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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288 | POLITICAL SCIENCE QUARTERLY

A clearunderstandingf the factualbackground rovides hebasis for evalu-atingpoliciesduring he 1980s. The contra ebelswere created n the early 1980sfrom the old Nicaraguan ationalguardand other oppositiongroupswithU.S.financialand technicalsupport.They sought o dislodgethe Sandinista overn-ment hatcame opower nthe 1979revolution verthrowinghe Somozaregime.Comparedo otherdefense-related xpenditures,U.S. government unding orthecontraswasmodest n size. AlthoughbothprivatecontributionsromAmeri-cansandprofits romarmssalesto Iranreceivedmajorpublicity,only contribu-tions fromthirdcountrieswere significantn helping o sustain he contras man-ciallywhenU.S. governmentundingwasunavailable.Though hesecondBolandamendmentBoland I), one of a seriesof legislativerestrictions n U.S. aid tothecontras,was in effect duringperiodswhen the contraswere receivingnon-U.S. governmentmilitary id,theapplicabilityfthe restrictionso somenongov-erinent fundingdependsoninterpretationsfthecircumstances.Whilerelativelymodest,U.S. government undingof the contrascontributed o the demise ofthe Sandinistas. n terms of policy goals andlegitimacy, the controversyandscandaloverextra-governmentalontraaid madesuchfundinga poor nvestmentanda dubiousmeansof attainingU.S. governmentaims.2

QUESTIONS ON SOURCES, AMOUNTS, AND TIMING OF FUNDINGThe most straightforwarduestion nvolves the amountsand sourcesof fundingto the contras.Howmuchaid didtheUnitedStatesgovernment ndotherpartiesprovide or thecontras,andhow muchof thataid didthe contrasactually eceive?Theanswerdistinguishes etweenaid from he U.S. government,hirdcountries,privatedonors, and arms sales to Iran.Morecomplexquestions nvolvethetimingof thefundingandpossiblecon-flicts withthefundamentalestrictionsn the Bolandamendments.Whendidthecontrashavefundsand when didtheylack financial upport?Forwhatperiodsdid theU.S. government uthorize id?Duringwhatperiodsdidthegovernmentprovide he authorizedunds?When during he authorization eriodsdid fundsrunout?Were nongovernmentalundsprovidedduringperiodswhentheBolandamendmentswere in effect, anddid thosefundsconflictwith the Bolandrestric-tions?U.S. GovernmentFundingHow muchaiddid theU.S. government rovidefor thecontras?Between1981and 1990 (fiscal years 1982-90), the U.S. governmentappropriated totalof

2 For an overviewof the issues andpolitics surroundingU.S. aid to the Nicaraguan ontras,esp. seeCynthiaArnson,Crossroads:Congress, he ReaganAdministration,nd CentralAmerica,2nd ed. (Uni-versityPark:PennStateUniversityPress, 1993); and RichardSobel, ed., Public Opinion n U.S. ForeignPolicy: The ControversyOver ContraAid (Lanham,MD: Rowman & Littlefield, 1993), esp. WilliamLeoGrande,"TheControversyOver ContraAid, 1981-90: An Overview,"chap. 2 and RobertPastor,"TheWar Betweenthe Branches:ExplainingU.S. Policy TowardNicaragua,1979-89," chap. 11.



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CONTRA AID FUNDAMENTALS | 289

TABLE 1U.S. Assistance to the Anti-Sandinista GuerrillasApproved by Congress Fiscal Years 1982-1989

(in millions of US$)Fiscal Year Total Nonlethal Military1982 19.0 - 19.01983 29.0 - 29.01984 24.0 - 24.01985-86 27.0 27.0 -1986 13.0 13.0 -1987 100.0 30.0 70.01988Oct. 1-Dec. 21 7.1 7.1Dec. 22-Feb. 29 8.1 8.1Apr. 1-Sept. 30 17.7 17.71989

Oct. 1-Mar. 30 27.0 27.01989-1990Apr. 18-Feb. 28 49.75 49.75 _321.65 179.65 142.0

Source: NinaSerafino, 'ContraAid:Summaryand Chronologyof MajorCon-gressional Actions" Washington,DC:CongressionalResearch Services, 1989),17.

$322 million for contraaid. About $142 millionwas for militarypurposesand$179 millionfornonmilitary urposes.3As Table1 shows, for fiscalyears 1982through1990, respectively, heU.S. government rovidedorthecontras FY82)$19 million (military), FY83) $29 million (military), FY84) $24million(mili-tary), (FY85-86) $27 million(nonmilitary), FY86) $13 million(nonmilitary),(FY87) $100 million ($70 military, $30 nonmilitary), FY88) $32.9 million4(nonmilitary),FY89) $27million(nonmilitary), nd(FY90) $49.8million(non-military).The (FY85-86) $27 million and(FY87) $100 millionwerethe mostprominently ebatedcontraaid measures.5The contrasapparently eceived all3Nina Serafino, "ContraAid: Summaryand Chronology of MajorCongressional Actions, 1981-89" (Washington, DC: Congressional ResearchServices, 1989), table 1.4 The FY 1988 funds involved three different appropriationsof $7.1 million, $8.1 million, and$17.1 million. See Serafino, "ContraAid," table 1.S The first two allocations(FY82, $19 millionand FY83, $29 million) were classified expendituresreprogrammed rom CIA or DOD funds andnot directly voted on by the Congress for these purposes(Serafino, "ContraAid," table 1). All the other allocations were voted by the Congress, though notall were recorded votes. Prior to FY85, the contras received mainly military funds from the U.S.government. After FY85, the U.S. funds were all nonmilitary "humanitarian")xcept for $70 million

of the $100 million in FY85-86. The contrasmay have gotten more thanthe $24 million limit in CIAfunds in 1984 authorized n the 1983 legislation; see Joy Hackel and Daniel Seigel, In ContemptofCongress (Washington,DC: Institute or Policy Studies, 1987), 80-81. The $27 million humanitarianaid for 1985 could not be fully accounted for (Hackel and Seigel, In Contemptof Congress, 30-34),and partof it may have been spent for militarypurposes. The $13 million in FY86 was a classifiedexpenditure or intelligence and communicationswhich might havehad militaryapplications Serafmo,"ContraAid," table 1. See Serafmo, "ContraAid" and 10-14 here for authorizationperiods.)



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the $322 millionU.S. appropriatedid.6ThirdCountryAidHow muchassistancedidthirdparties third ountries ndprivatedonors)provideforthecontras,andhow muchof thataiddid thecontrasreceive?Intotal,thirdpartiesgave the contrasabout$54 million:thirdcountriesprovided$44 millionand private donors about$10 million. Among thirdcountries,Saudi Arabia("Country ")was by far the largestdonor. FromJune/July1984throughaboutMarch1986, SaudiArabiaprovided$32 million n a seriesof donations.7nlate1985 andearly1986, Taiwan "Country ")donated 2 million n"humanitarian"aid.8In August1986, the sultanof Bruneigave $10 millionfor "humanitarian"aid, butthatmoneydidnotreach hecontras,becausethe fundsweredepositedin the wrongSwiss bankaccount.9Thus, duringthe 1984-1986 period, thirdcountries'0gave $44 ($32, $2, $10) million for the contras,but the contrasreceived at most $34 ($32, $2, $0) million.1'

6 For details, see KaffirynRoth and RichardSobel, "Chronologyof Events and Public Opinion,"chap. 1; andWilliamLeoGrande,"TheControversyover ContraAid, 1981-90: A HistoricalNarrative,"chap. 2 in Sobel, Public Opinion in U.S. ForeignPolicy.I Inouye and Hamilton,Report, 55, 114-115.

8 Ibid., 54, 67.9 Ibid., 316. Before assistingin the 1985 armstransactions,Israel may have provided $4-5 millionin 1984. See Alfonso Chardy, "Israel, Honduras,Argentina Help Replace Aid from U.S.," MiamiHerald, 9 September 1984, after the FY83 $24 million allocation ran out in May 1984. Israel mayalso have provided several million dollars in equipmentin 1984 (Armstrong, The Chronology,54).Former PanamanianPresident Manuel Noriega mayhave provided $100,000 for the contrasandper-mitted contra trainingin Panama. Walter S. Mossberg, "While Noriega May Have Some Secrets toDisclose, His Testimony Isn'tLikely to Cause Bush Trouble,"WallStreetJournal, 17 January1990;"HousePanel ReportsFinding No CIA Link withThrift Failures," WallStreet Journal, 24 December1990; Peter Truell, "CIAGave 'Several HundredReports' about BCCI to OtherFederal Agencies,"WallStreet Journal, 28 October 1991.10FormerNational SecurityAdviser RobertMcFarlanesolicited the firstSaudiArabiancontributionof $8 million in May 1984 and the second contributionof $24 million in February 1985 (InouyeandHamilton, Report, 48, 52, 54-55). Former AssistantSecretary of State ElliottAbrams requestedbutlost the Brunei contributionof $10 million in August 1986 in a belatedly acknowledgedsolicitation(Inouye and Hamilton, Report, 76, 316). But the money was sent to the wrong Swiss bank accountand never reachedthe contras; see Elliott Abrams, UndueProcess (New York: Free Press, 1993),89-90.11Thirdcountriesalso contributed n kind,particularlyby providingarmsfor the contras. Argentinaoriginally helped develop the contras in 1980-1982 (Inouye and Hamilton, Report, 38), but U.S.supportof Britain in the spring 1982 FaLldands/Malvinas ar led to Argentina'sstoppingtheir helpfor the contras. Hondurasmay have supplied the contras from their own U.S.-provided arms. Israelprovided the first two shipments of TOW missiles to Iran in August-September 1985 and the firstshipmentof HAWKmissiles in November 1985. Ineffect, these were Israeliadvances,since theTOWshipmentswere replenishedby the United States in May 1986. See, for example, John Tower, TheTowerCommissionReport (New York: Times Books, 1987), 438-441. All but one of the HAWKSwere returned.



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Private DonorsFrom June 1985 through March 1986, private donors provided another$10million.'2Only $4.5 millionwas spenton the contras,however. And only about$2.7 millionof thatactually eached he contras,since the remaining 1.8 millionwas paidfor politicaladvertising, obbying,and otheractivitieson the contras'behalf nthe UnitedStates. 3In sum, thirdcountriesandprivatepartiesprovidedabout$54 ($32, $2, $10, $10) million,of whichthe contrasreceivedabout$36.5($32, $4.5) million.

Arms Sales DiversionsHow muchmoneydid the diversionof profits (residuals) rom U.S. armssalesto Iranduring ate 1985to late 1986 produce or the contras,and how much ofthat did the contrasreceive?In the 25 November 1986 announcement f thediversions, ormerU.S. AttorneyGeneralEdwinMeese estimated hat he resid-uals may have produced$10 to $30 million for the contras,but subsequentestimateswere lower.'4In early 1987, the reportof the Tower Commission,agroup set up by PresidentRonaldReaganto investigate he National SecurityCouncilprocessand the Iran-contracandal,suggested hatthe arms salespro-ducedabout$19.8million orpotentialdiversion.5 In ate1987,the ointcongres-sional ran-contraommittee stimatedhat he lastfourof sixarms alesproduced$16.1 in profits.'6Of the $16.1 million from the armssales, the contrasonlyreceived about $3.8 million from November 1985 to November1986.17

12 Inouye and Hamilton, Report, 93-99. The private donors were solicited by National SecurityCouncil aide Oliver North and other fundraisersfrom the NationalEndowmentfor the Preservationof Liberty NEPL), (ibid., 93ff). The $10 million included$5.37 milliondonatedbytwo elderly widowsfrom 1985 to 1987 (ibid., 97-99, 103).13 Ibid., 99-100.14 RichardJ. Meislin,"46%ApproveReagan'sWork, Down21 Points,"New YorkTimes,2 December1986.15 Tower, TheTowerCommissionReport,180-185. See also ScottArmstrong t al., The Chronology:TheDocumentedDay-By-DayAccount of the Secret MilitaryAssistanceto Iran and the Contras(NewYork: WarnerBooks, 1987), 161-162.16 Inouyeand Hamilton,Report, 297, 302. Thearmssales to Iranproduced$31.3 million in revenuesto pay for $15.2 million worth of arms and related costs (ibid., 300), producing the $16.1 millionsurplus (ibid., 307). Adding congressionalIran-contracommittee figuresfor profits ($4 million)fromthe firsttwo armssales to the Tower Commissionfigures producesan estimateof profits of $20 million.The "Enterprise" et up to supply arms to the contras received $48 million (ibid., 297), includingthe

$31.3 million from Iran-armsales, and spent $35.8 million, including$15.2 million for contraarms(ibid., 300). This left a surplusof $12.2 million (ibid., 307). (See note 40 for the distributionof the$12.2 million.) Of the $15.2 million spenton contra arms, $7.2 million was spent during theperiodof arms sales profits diversions (November 1985-November 1986). About $3.4 million of that$7.2million came fromdonationsfor the contras, so an estimated $3.8 million camefrom arms sales profit(ibid., 307, 438).17 Ibid., 307, 438.



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Becauseof the complexityof theprocess, a chronological eview of the armsshipments ndpaymentshelpsto clarify hetimingandthe sums nvolved.Therewere six different shipments o Iran (seven counting separately wo spring/summer1986 shipmentsof parts).First, on 20 August 1985, Israel deliveredninety-sixof its TOWs antitankmissiles to Iran.'8Second, on 14 September1985, Israeldeliveredanother 08 of its TOWs o Iran.'9Third,on 25 November1985, a CIA proprietary ompanydelivered o Iran 18 (of a planned120) IsraeliHAWKantiaircraftmissiles.20 ourth,on 17February 986, andon 27 February1986, respectively, he CIAproprietary ompanydelivered 1000 (500 + 500)moreTOWs (andpicked up seventeenof eighteenHAWKSrejectedby Iranasobsolete).2'Fifth, on 25 May 1986, and on 4 August 1986, the CIA delivered240 HAWKspareparts.22 inally,on 30/31 October1986, theCIAproprietarydelivered500 moreTOWs.23 n total, the six shipmentsprovided2004 TOWs,18 HAWKs, and 240 HAWK parts.How muchprofitdid the armssalesproduce,andhow muchdidthe contrasreceive? Relying mainlyon congressional ran-contra ommittee figures, butdrawingon TowerCommission iguresas needed,24heprofitscan be estimatedby comparingwhatIranpaidfor themissileswiththeirU.S. dollarvalue. Sincethepolicyof divertingresidualswas notdevelopeduntilearly 1986, any profitsfrom the first three shipmentswere notplanned o be sent to the contras,whilethosefromthe last three werepartof the program o aid the contras.For the firsttwo TOWshipments, heTowerReportestimatedhatIranpaid$1.2 millionfor the initial(S1) 100 (actually96) TOWs,and$5 million for thenext (S2) 408 TOWs, for a total cost of about $6.2 million.25The 508 (504)(S1 + S2) TOWshad a U.S. valueof about$2 million, so theprofitwas $4.2($6.2 - $2) million.26Butthatprofitwas not diverted o the contrasandwentinstead o armsmerchants.)27 lthoughIranoriginallypaid $5 million in No-

18 Ibid., 151.19 bid., 151. On 4 May 1986, the U.S. replenishedthe 504 TOWs providedby Israel in Augustand September1985. The25 May 1986 delivery, accompaniedby RobertMcFarlaneandOliverNorth,supposedly ncludeda 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, 408.24The Tower Committee providedfigures for the first two sales, whose costs were not estimatedby the congressionalIran-contrareport. (The profits apparentlywent to the arms dealers.) Becausethe congressionalreportcame out in 1988 afterthe Tower Report n 1987 and was based on extensive

public andprivatehearings, its figures are consideredmore reliable.25 Tower, The Tower CommissionReport, 174-77.26 Ibid.,52, 161-62.27 These figures suggest sales prices of about $10-$12,000 per TOW. TOWs normallycost about$6000 each, which appears (ibid., 186) to be what their U.S. dollar value was. Apparently,Northwould have accepted older ones costing $3400 for delivery to the Iranians(Inouye and Hamilton,Report, 187-88).



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CONTRAAID FUNDAMENTALS 293

vember 1985 for the eighteenHAWKs(S3),28 herewas no completedsale toproduceany profit,because the Iranians eturned eventeenof the missiles asunsatisfactoryfter est-firing ne.However,because sraeladvanced 1 million,of which only about$150,000 was spent on the abortivesale, and the rest wasnot returned, hethird ransaction roduced$850,000, some of whichwas usedfor the contras.29The last threeshipments S4-S6), all in 1986, involvedplanneddiversions.For the 1000 TOWs (S4) in February1986, Iranpaid about $10 million formissiles worth$4.5 million, producingat leasta $5.5 million profit.30Towerfigures: $10 million - $3.7 million = $6.3 million;444 445). For the 240HAWKparts(S5) in May and August 1986, Iran paid $15 million for $6.7millionworthof weapons,producing $8.3 millionprofit.3' Tower:$15million- $6.5 million = $8.5 million;446). For the last 500 TOWs(S6) in October1986, Iranpaid$3.6 millionfor $2.2 million worthof arms, producinga $1.4millionprofit.32Tower:$7 million- $2 million = $5 mllion, 448). The totalpayments or the last three shipments S4-S6) were $28.6 million($10 million+ $15 million + $3.6 million) [Tower: $32 million] for $13.4 million ($4.5million+ 6.7 million + $2.2million) Tower:$12.2]millionworthofequipment.These last three sales produceda profitof $15.2 million ($5.5 million +$8.3 million + $1.4 million).33Tower total: $19.8 million, 448). Combiningthe $850,000 residual rom the (S3) HAWK ransactionswith the $15.2 million($19.8 million)producesa total profitof about$16.1 million ($20.6 million).Adding he $4.2 millionprofit rom the firsttwosales(S1 + S2) of 504 missilesproducesa totalprofitof about $20.3 million (Tower:$24.8 million).34Table2 providesa summaryof the sales and fundsinvolved.In short,the six shipmentsof arms to Iranproducedas much as $25 mil-lion, at least$16.1 millionof whichcouldpotentiallybe diverted orthecontras.Whenthe Iranarmssalesoperationwas exposedandstopped n late 1986,how-ever, less thana quarter f the $16.1 millionin residualshadbeenspenton thecontras:35ccording o thecongressional eport, hecontrasonly receivedabout

28 Tower, The Tower CommissionReport, 442-443.29 Inouye and Hamilton,Report, 159, 234, 302.30 Ibid., 302.31 Ibid., 302-304.32 Ibid., 304.33 Ibid., 302-304.3 The congressionalreportestimatesa totalprofitof $16.1 million (InouyeandHamilton, Report,238, 304), based on $15.2 million forthe last three armssales 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 profitfrom the first two ($4 million), or mentionthe $850,000 from the abortedthirdsale.35 Whatthe contras actually spent in any year on fightingthe Sandinistas s also difficultto say. A1 April 1985 memo from Oliver North to Robert McFarlaneestimatedthat during the ten monthsbetween July 1984 and April 1985, a periodwhen there was no U.S. funding, $17.1 millionhad beenexpendedfor military suppliesand operations(Tower, The Tower CommissionReport, 458). At thatrate, the contras would have spent about $20 million for that year (see note 38).



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TABLE2Residuals Generated romArmSales to Iran, 1985-1986 Residual

Shipment/Date Quantityand Type Cost to Iran Cost to U.S. (Iran-U.S.)S1 8/20/85 96 TOWs $1.2 m $2 m $4.2 mS2 9/14/85 408 TOWs $5 mS3 11/25/85 18 HAWKs $5 m - -($1 m) $0.15 m $0.85 mS4 2/17 &2/27/86 1000 TOWs $10 m $4.5 m $5.5 mS5 5/25 &8/4/86 240 HAWKparts $15 m $6.7 m $8.3 mS6 10/30-3/1/86 500 TOWs $3.6 m $2.2 m $1.4 mTotal S4-S6 $28.6 m $13.4 m $15.2 mTotal S3-S6 $29.6 m $13.5 m $16.1 mTotal S1-S6 $35.8 m $15.5 m $20.3 m

m = millionsof U.S. dollars.Source: John Tower, The TowerCommission Report(New York:Times Books, 1987); Daniel K.Inouyeand Lee K.Hamilton,Reportof the Congressional CommitteesInvestigating he Iran-ContraAffairs(with minorityviews), abridged version (New York:Times Books, 1988).

$3.8 millionof the $16.1 million in residuals.36 hatfigure s based on congres-sional Iran-contraCommitteebudget analysisthat the so-called Enterprise,afundingmechanismset up to supplyarms to the contras,37 pent $7.2 millionon contraarms38 uring he diversionperiodof November 1985 to November1986. Private and third country donationsproduced$3.4 million of the $7.2million for the contras.39The committeeconcluded hat the other$3.8 million($7.2 - $3.4 million) came from the $16.1 million of divertedIranianarmssales profits.4036 Inouye and Hamilton,Report, 307, 438. In a 4 April 1986 memo, North estimatedthat "residualfunds"from Iran arms sales total about $12 million (ibid., xxi; Armstrong, The Chronology,327).Adolfo Calero originallyclaimed the contrasonly received $300,000-500,000 in 1986 (ibid., 595),

but later mentioned$18 million in arms (ibid., 652); Alfonso Robelo claimed the contras got $7.5million from the armssale during the congressionalban period (ibid., 625).37 Ibid., chap. 21. The Enterprise, or Project Democracy, was a nominally private organization,but in realityan armof the NationalSecurityCouncilstaff for financingandconducting overt operationsin Nicaragua (Inouye and Hamilton, Report, 63).38 It is not clear how much money the contrasneeded to operate.The total for 1984 through1986alone ($83-97 million, or roughly $28-33 million per year) received was "nearly twice what theyneeded for the war effort"(Armstrong, The Chronology, 657). In April 1985, the 10,000 plus (ibid.,42) contras needed about half a million dollarsa monthto operate (Armstrong,The Chronology,96)at theircurrent evels, or roughly $6 million a year. Even at twice that rate ($12 million), the troopsseemedamplyfunded, though equipmentcosts could easily havemade up the difference. On the other

hand, the complete exhaustion of the $24 million appropriatedn FY83 in the six months betweenNovember 1983 and May 1984 suggested a rate of about $48 million per year.39 Inouye and Hamilton,Report, 297.40Ibid., 293, 307, 436. Of the $12.3 million difference between the $16.1 million in residualsthearmssalesproducedandthe $3.8 millionreceived bythecontras, $4.4 million waspaidascommissions,$2.2 million for personaluse, and $5.6 million remainedin their bankaccount (and might have beenspenton the contras if the diversionhad not become public).



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TABLE 3Amounts and Periods of U.S. and Private Aid to the Contras, 1983-88

Jfmamjjasond L fmamjjasond framjao-($29)=00GOVERNMENT() $15 ~~($40)

No USG(5) 4....00Boland =Aans All ).S dllrsTHIRDCOUNTRIES $24Saudi Arabia No allocation for .$2Taiwan (... .. --Brunei (pPRIVATEDONORS( --ARMSALES $(85 $0- m o re a

Jfma ... =January, February,etc.B 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),andarmsales profits($16-$25 million)producedabout$70-80 millionfor the contras.But the contrasonly receivednet about$40 ($32, $4.5, $3.8) million. That$40million,whichthe contras eceived romnon-U.S. governmentalourcesduring1984 to 1986, wasroughlyequivalento whatCongressappropriatedorFY85-86 in nonlethal unding($27 million + $13 million).TIMINGAND THEBOLANDAMENDMENTS

Regarding issues of timing and legal restrictions, when did the contras receivenon-U.S. government aid, when did they lack it, and when did any of the aidoccur duringthe periods of Boland amendmentrestrictions?Specifically, did thecontras receive non-U.S. government aid in late-1984 to late-1985 to bridge thegap during the first period41after U.S. government funds were exhausted (May1984) and Boland II prohibited additional U.S. funding (14 October 1984-30

4' Ibid., 52.



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296 | POLITICAL CIENCE QUARTERLY

September1985)?Did they get any covert or lethalaid during he late 1985 to1986 period(19 November1985-30 September1986) when an extensionof thecentralBolandamendment BolandII) bannedall but nonmilitary id?42Table3 indicates he periodof authorizationor U.S. funds, the periodsof the Bolandbans,andthe periods without unding.In addition,did the contrasreceive any militaryfunds to bridge a secondgap period n mid-198643 etween he end of the authorizations f the FY85-86$27 million nonmilitaryappropriationn 31 March 1986 (the classified $13millionbeganin December 1985)and the beginningof the FY87 $100 millionon 18 October 1986?The first bridge period without U.S. funds- asted about eighteen monthsbetweenspring 1984 and fall 1985 (May 1984-December 1985). The FY84authorizationllocatednDecember1983 waslimited o $24 million,and houghscheduled o expireon 30 September1984, actuallyran outby Mayor Juneof1984;4"his was after an expeditedattempt or a supplemental 21 million forthe rest of FY84 failed in February1984. Thus, the $24 million FY84 U.S.allocation o thecontrasranoutfive monthsbeforethebeginningof theFY 1985Boland Iban of military unds or the contrasbeganon 12October1984 (endingon 30 September1985).45No U.S. fundswere authorized r availableduringthe rest of 1984 afterMay andmost of 1985 until the FY85-86 allocationof$27 million(authorizedor 15August1985 through31 March1986butdelayedto the end of 1985 by a series of continuingresolutions)became availableon19 December 1985.46At the samepoint, the additional lassified$13 million(PL 99-169) was allocated or communications ndtraining or FY86 (ending

42 Therewere actually everalBolandamendmentsnd otherpassed (or proposed)Boland-likerestrictionn aidfrom1982 o 1986 Inouye ndHamilton,Report, 43-44). The irstBoland mend-ment passed n 12 December 982)prohibitedseof funds romDecember 982-October983foroverthrowinghe Sandinista overnment.n 1983 those restrictions ontinued nd thelaw limitedFY84 aid to $24 million o preventCIAsupplementsSerafino, Contra id,"1). In October 984,thesecondBolandamendmentBolandI)cutoff all aidby restrictingDODandCIA"oranyother... entity" f the U.S. Governmentrom"supporting. . military perationsnNicaragua"InouyeandHamilton, eport, 14)orfromprovidingethal id 14October 984-30September985,extendedto 19 November 985).But he awallowed he administrationo seekrelease f $14million nfundingin February 985. The $27 million n nonlethal id authorizedn 15 August1985 modifiedhe banfromall funding o only military.The renewal f Boland I on 19November 985extendedhe banon military id until ate 1986 (19 November 985-30 September 986). However, t allowedStateDepartmentolicitationf third ountry humanitarian"id. Inshort,military id was restrictedromDecember 982 o September 984,andbannedromOctober 984 oNovember 986under ariousBoland-likeestrictions. onmilitary idwas banned nly fromOctober1984 o August1985.

4 Tower, The Tower CommissionReport, 52-53.4 InouyeandHamilton,Report, 8; Armstrongt al., TheChronology,6.4 Before heJune1985 authorizationf $27 million,therewas no "humanitariannly" that s,solely nonmilitaryr "nonlethal")id, since all the previous id was availableormilitary urposes.Moreover, he useof the word"humanitarian"n this context s questionableince humanitarianidtypicallymeansaid to noncombatants.I Armstrong, he Chronology,66.



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30 September1986, thoughperhapsextendingbeyond). Thus, for the eighteenmonthsfrom June 1984 to December 1985, the contrashad no U.S. funding,militaryor nonmilitary.From December 1985 to June 1986theyreceived onlynonmilitary $27 million + $13 million in U.S. aid).In addition, or the six monthsduring he second bridge period from June1986, when that$27 million ran out, until November1986,47when the $100millionbeganto flow, the contrasagainhad no U.S. funds, militaryor nonmili-tary.48n summary,before(June1984-September 984), during October1984-September1985), and after (October1985-November 1986) the period of theinitialBolandban (October1984 to September1985), the contraswere withoutU.S. allocatedmilitary undsfor a totalof over a yearand a halfduring he twobridgeperiods (June 1984-December 1985; June 1986-November 1986).The contras, however, were not withoutmilitary unds during he two anda half years fromMay 1984 to November1986, when U.S. funds ran out orwere restrictedby the Boland II ban to nonmilitaryaid. The contrasreceivedmilitaryfunds from third countriesand third parties during most of that firstbridge period (June 1984-November 1985). Third country supportbegan inmid-1984,half a yearbefore theFY 1985 Bolandban started n October1984.FromJuly1984to March1986, duringmostof the firstunfunded ridgeperiod,SaudiArabiacontributed 32 million-$8 millionat $1 million a monthfromJuly 1984to February1985and$24 millionat$2 millionper month romMarch1985toaboutMarch1986.49Thishelped o sustain he contrasmilitarily hroughmost of the two and a half year period (June1984-November1986) withoutU.S. military unding.50Beginning n early 1985 and continuingnto 1986, the privatecontributorsnetworkorganized n mid-1984and connected o the NationalEndowmentorthePreservation f Libertyand the Enterprise lso raisedabout$10 million forthecontras.51Ofthat$10 million,about$4.5 millionwasspent or contra-relatedactivities.Butonly about$2.7 millionwent for militaryaid, since about$1.8million was spent n the UnitedStateson lobbyingandpublicity or the contras.The solicitationof privatefunds continued nto 1986.

47The first$60millionof the$100 millionwasappropriatedn 18 October 986,and he ast $40millionwasappropriatedn March 987. Partof the$27 million,whoseauthorizationnded31 March1986, continuedo be spentafterMarch ince t was alreadynthepipeline. t was supplementedythe $13 millionauthorizedn December1985 until30 September 986,whichranout by summer1986.4 InJuly1986,following heexhaustionf the$27million or FY85spring,hecontras upposedly

went$2.5million ndebt Tower,7he Tower CommissionReport,341). During hatperiod romJulyuntil October1986, when$60 millionof the $100millionwas disbursed,he contras eceivedonlypartof $2.7 millionn private onationsnd$3.8million n arms alesdiversions, ndno third ountrydonations.49InouyeandHamilton, eport, 52, 55.50Ibid., 55.51 Ibid., 88, 91, 97.



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ARmsSALES ROFITSNDTHIRD-PARTYONATIONSURINGERIODSOFNo U.S. FUNDSThe Iranianarms sales profits also providedsome funds for the contraswhenU.S. aid was stopped. However,none of the $4 million in profit producedbythe firsttwo sales(S1 andS2) of Augustand September1985, whichfell towardthe end of the June 1984 to December 1985 period when there were no U.S.funds,went to thecontras.The$850,000 producedby the third ransactionS3)in November1985 did go to thecontras lightlybefore the $27 million and $13million in nonmilitary idbeganto flow in December1985.52Thus, from December1985 to June 1986, U.S. aid for the contrasconsistedof only those combined$40 millionnonmilitary unds; and between July andNovember 1986, again no U.S. funds were availablefor contraaid. The firstplanneddiversionof armsprofits as opposed o theunplanned 850,000 residual(S3)-took placewiththe fourtharms sale (S4) in February1986,53whichpro-duced$5.5 million n profits.The fifth armssales(S5) in middle o latesummer1986 produced$8.3 million54n profit(after he $27 millionand $13 millionranoutin summer1986). Thusat least $13.8 ($5.5 + $8.3) million of the residualsfrom the mid-1986 arms sales (S4 and S5) was available for contra militarysuppliesduring he JunethroughOctober1986 bridgeperiod,when no U.S. aid

wasavailable.On30 October1986,the first$60millionof the FY87$100millionin ($70 million)militaryand($30million)nonmilitary id voted n summer1986was allocated and supplemented y $40 million in March1987).A month ateron 25 November1986,the astshipmentS6)of 500 TOWsproduced 1.4 millionin profit, someof whichprobablywent for the contras.55In short,the thirdcountry unds, privatedonations,and arms sales profitswere neededto sustain the contrasduringthe periodsafter U.S. governmentfundsranoutinMay-June1984. Inparticular,hecontrasneededoutsidemoney,especiallyformilitarysupplies,during heperiodsof the Bolandbans (October1984-October1986).When he contras ackedU.S. funds, hird ountries,privatedonors,and armssales provided hem.In sum, duringJune 1984 to December 1985, when there were no U.S.providedfunds, there was $24 million of the $32 million Saudidonation hatproduceda significantamount or contraarms. Duringthe December 1985toOctober 1986 period, when the contrashad only nonmilitaryU.S. funds, thelast$6 million n Saudidonations, he $2.7 millionin private unding,and$3.852 Ibid., 159, 234, 302.53Though he $850,000 in November 1985 was apparently penton thecontras,the ideaof purposelydivertingarmssales profits for the contras was evidentallynot suggesteduntillate 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 contrasconstitutes less thana quarterof the potentialfunds.



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million in arm sales residualsprovidedadditional undsfor militarypurposes($12.5 million).Moreover, omehumanitarian.S. fundsmayhaveservedmilitarypurposes.FromDecember1985 through une1986, within he October1984throughOc-tober1986 periodof theBolandIIbans,partof $27 million n nonmilitaryU.S.fundswas unaccountedor and mayhave beenspent formilitarysupplies;56he$13 million was also spentfor quasi-military,ntelligence,and communicationpurposes.57By July 1986, afterthe Saudicontributions ad ended, however,only partof the $2.7 million in privatedonationsand $3.8 millionfrom armsprofitswere stillavailable,and hecontras upposedlywent$2.5 million n debt.58In short, until late 1986, the third-country id, arms sales profits, third-partydonations,andpossibly nappropriatelypentU.S.fundsprovided omemilitaryfunds afterthe U.S. government llocationsran out in spring 1984.In total, from 1981to 1990, about$400 millionin militaryandnonmilitaryfunds was allocated $322 million)or raised ($70-80 million) for the contras,of which about$360 million reachedthem. While a considerable um, it isrelativelysmall compared o the roughly$1 billion in U.S. militaryaid and$2 billion in United Stateseconomic aid during he sameperiodto the nearbygovernmentof El Salvador.59 y comparison,during1986 alone, Soviet blocaid to Nicaraguawas roughly $580 million.A The $400 million in aid to thecontraswasonlyabout ive timesthe $75million naid the Carter dministrationapprovedortheSandinistasn 1980($60millionwasprovidedbefore heReaganadministrationut it off).6' Less thanhalf a billion dollars s not much for theUnitedStates;but it is a significantamountwhen directedagainstNicaraguawith a gross domesticproductof about$2.6 billion.

DONATIONS AND DIVERSIONS DURING THE BOLAND BANDid thethirdparty third ountryandprivatedonor) undinghatoccurredduringperiodsof Boland estrictions onflictwiththeBolandbans?Theanswerdependsbothon whether undingoccurredwithin hebanperiodsandwhether he restric-tionswereapplicableo thespecifictypesof funding.Boland Ibannedall U.S.-relatedaid from 12 October1984 to 30 September1985, andall militaryaidfrom1 October1985 to 18 October1986. Someof the nongovernmentalunding(forexample,fromSaudiArabia n June1984)occurredbeforeBoland Istartedin October1984, andthuscould nothaveinitiallyconflictedwithBolandII. The

56 Hackel and Seigel, In Contemptof Congress, 30-34.57 Serafino, "ContraAid: Summaryand Chronologyof Major CongressionalActions," 18.58 Tower, The TowerCommissionReport, 341.59 National Journal,9 September1987, 232-233. The Vietnamwar cost about$29 billion ($29,000million) in 1969 alone (CongressionalQuarterly,26 April 1975, 847). One Stealthbomber used inthe Panama nvasion in 1989 cost about $500 million (Facts on File, 1989, 534).0 Inouye and Hamilton, Report,411.61 CynthiaArnson, Crossroads(New York: PantheonBooks, 1989), 46-47.



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FY85-86 allocationsof $27 million and $13 million in nonmilitary id wereapproved 15 August 1985 and 18 December 1985, respectively)duringtheperiodof the Boland I ban (through 0 September 986),but theirauthorizationmodified he ban to permitnonmilitaryunding.Mostof the nongovernmentalfunding,however, includingthird country(June 1984-March1986), privatedonor (May 1985-November1986), and armssales profits (November1985-November1986)occurredafterBolandII began n October1984andbefore tsextensionexpired n October1986.Thus, third partyfundingand arms sales occurredduringperiodsof theBolandban. Butdid theyconflictwithrestrictions f the Bolandamendments?Beyond iming,identifyingviolationsof the Bolandbanalso involveslegal andpoliticalquestions.The key issue is whether he ambiguouslywordedbanwasapplicable o thirdpartyfunds and funds divertedfromthe arms sales.62TheBolandII amendment nly restricted undsavailableor handledby any U.S.government entity . . involved nintelligenceactivities."Therefore, hirdpartyfundsgiven directlyto the contrasor to a privateorganizationor the contrasdid not per se conflict with the Boland restrictions.The money thatprivateorganizations aisedin 1985-1986, andthe Saudicontributions f $32 millionin 1984-1986 supposedlydid not go to the U.S. governmentbutwent directlyto the contras.63The nitial olicitations f Saudidonationsn May 1984andsomeoftheprivatedonationsoccurredbefore BolandII took effect in October 1984; moreover,aDecember1985 amendmento BolandII specificallypermittedadministrationsolicitationof thirdcountriesfor humanitarianid,"'for which the sultanofBruneicontributed10 million,whichmayhave beenintended ormilitarypur-poses.65HadtheBruneisolicitationsactuallybeen for humanitarianid andin-volved no quidpro quo, they would havebeen legal.Whenpersonnel aidbytheU.S. governmentolicited hird ountry rprivatefundsfor militarypurposesor handledprivatelycontributedundsduringthebanperiod,however,these actionsconflictedwith Bolandrestrictions ndotherlaws. The arms sales diversionof fundsbeginningwith the November 1985residualof $850,000 fromthe thirdshipment,moreover,occurredduring heBolandbanperiod(October1984-October1986)andwas partiallyhandledbytheCIAandcoordinated y U.S. government ersonnelonthe NationalSecurityCouncil(NSC) staff. Becausethese fundswere collectedandmanagedby theNSC staff andthus were "available"o governmentntelligenceagencies (andtheNSC was involved n intelligenceactivity),theyconflictedwiththe Boland

62 Inouyeand Hamilton,Report, 414.63 Ibid., 48-49, 54-55. On two occasions, RobertMcFarlaneexplainedto the Saudi ambassadorto the United States that the contras needed funds, for which the Saudis contributed$32 million.McFarlaneclaimedthese were not solicited but providedas gifts.64 Ibid., 315.65 Ibid., 344.



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ban.As violationsof appropriationestrictions, owever,they were not criminalactions per se.66The Majorityand MinorityCongressional ran-ContraCommitteereportsdiffer, however, in theirinterpretation f whether he Bolandban necessarilyprohibited olicitationor handlingof funds available o the U.S. government,and ntheirconstitutionalnterpretationsf the procedures r laws. The majorityheld that heruleof law,67he principleof government ccountability,hepowerof the purse, and specificstatutes equiredhatanymoney solicitedor spentbyU.S. government ntitiesor officials must be appropriatedy the Congress.68In thisview, governmentally-relatedundingmechanisms ircumventing fficialproceduresare unconstitutionalnd thus illegal.69Sincethe private unds weresolicitedby government ersonnelandthe diverted undswere controlledby andthusavailable o theCIAor NSC, under hemajorityogic, theywere restrictedunderBolandII.Theminorityreport,however, claimed hatthepresident's oreignrelationspowers permitted uch activities, includingsolicitationof third-partymilitaryfunds.70Even if laws like BolandII prohibited uch actions, those restrictionswere unconstitutionalnd thusvoidbecausethepresidenthas the constitutionalright ocommunicatewith hethirdparties ourge hem o makemilitary ontribu-tions to U.S. allies.7' The diversions hemselves,moreover,would have beenlegal in this view, if theyhadfollowedproperproceduresand been sanctionedby a presidential inding,an authorizationnder heHughes-RyanAct of 1974,whichpermitted roperlyapproved overtactivitiesdeemed o be in the nationalinterest.72Thediversions,however,didnotfollowproperprocedures.Theywereappar-entlynotapprovedby thepresident,since he claimednot to have known aboutthem.73The November1985arms sales (butnot the diversionsof profits)wereretroactively pprovedby presidential inding n December1985, andthe 1986sales wereprospectively pprovedby a January 986finding.74 ince, however,thepresidentapprovedonly the arms sales and not the diversions, heminorityclaimof constitutional rotections moot.75In short,the diversionswereillegalunderBolandII even in the minority ogic.Under the majority ogic, the BolandII banprohibitedany solicitationbygovernmentofficials and the use of armsprofitsdivertedunderNSC guidance

66Ibid., 356, 414.67 Ibid., 397.1%Ibid., 348-349.69Ibid., 350.70 Ibid., 371ff.71 Ibid.,391.72 See also Edwin Meesem, WithReagan: TheInsideStory(Washington:Regency Gateway, 1992).73Inouye and Hamilton,Report, 377-378.74Ibid., 436.75 Ibid., 383, 438.



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between October 1984 and November1985. It also prohibited olicitationsofmilitaryaid throughNovember1986, because the requestsanddiversions n-volved monies collected by governmentpersonnelor available o an entityofthe U.S. government.Under the minority ogic, however, the third-party ndthird-country rivatefundingof militaryoperationswere not per se restrictedby the Bolandban, becauseprivatecitizens candonatefundsand the presidenthad the foreign policy powers to solicit suchfunds.76Insum, third-partyontributionsnd armssalesdiversionsdid occurduringthe Boland II ban and sustained he contraswhen they had no U.S. funds.77Third-countryundingprovideda significant mount f militaryaid ($34million)forthecontras.Privatedonations $2.7 million)and divertedarms salesprofits($3.8 million) provided ittle ($6.5 million) for militarysupplies. Thoughthethird-countryonations othecontras tarted efore heBoland estrictions egan,thebandidprohibit hesolicitationof mostprivatedonations,militarycontribu-tionsbythirdcountries,anddiversionsof armssalesprofitsbecauseU.S. govern-ment personnelwere involvedin the requestsor implementation.

POLICY QUESTIONSTo this point, the analysis has clarified the details of contrafundingand theBolandbansin order to providea basis on which to evaluate he policy itself.The rest of the articleexplores the debate about U.S. policy on funding thecontrasandsuggestsprovisionalanswers.Did funding hecontras,bothby con-gressionallyappropriatedU.S. aid and outsidefunds, advanceU.S. interests?Were headministration'sttemptso findextragovernmentalrextralegalmonieswhen U.S. government unds were not availableworth the efforts?In short,were thebenefitsof thepolicy of supportinghe contrasworth the costs?The answers o thesequestionsdepend, n largepart,on whetheror notoneagreeswith the Reaganadministration'spproach o dealingwith Nicaragua.While both the Reaganpolicy and the patternof U.S. interventions ave beenwidelyquestioned,78hisanalysisbeginsby examiningReaganpolicieson theirown termsas administrationttemptso achieve its goals. It thencompares headministrationpproval o potentialalternatives. t also looks at some of thewiderimplicationsor democratic overnanceof the administration'spproach.From the Reaganadministration'sointof view, U.S. government undingof the contrasand relatedpressurespursued our importantpolicy aims:79 opreventSandinistaupportof theantigovermmentebels n El Salvador; o pres-

76 Other aws (for example, the Anti-Deficiency Act, ArmsExport Act, NeutralityActs), includingrestrictions on tax-exemptdonations for nonhumanitarian urposes (Inouye and Hamilton, Report,349-352, 381) affected the legality of the private and third country funding.77 Inouye and Hamilton,Report, 383.78 Robert Pastor, Condemned o Repetition (Princeton,NJ: PrincetonUniversity Press, 1987). Seealso Arnson, Crossroads.79 Serafino, "ContraAid," 6-7.



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sure the Sandinistaso democratize heirpolicies and pluralize heir economy;to force the Sandinistaso negotiatesecurityarrangementsatisfactory o theUnited States andthe rest of CentralAmerica; and perhaps o overthrow heSandinista egime.80The contra aid policies were relativelysuccessful in pursuing hese goals.The policies helpedto cut off Sandinistaundingof the rebelsin El Salvador.They also helpedto prevent he Sandinistasrom consolidatingpower and sus-tainingpopular upport,8"ndforced heSandinistaso negotiatewiththe opposi-tion. They also kept the Sandinistas rom expanding nto the rest of CentralAmericaandnegotiating CentralAmerican eaceagreement,hough he Sandin-istaarmydid at one pointcross over intoHondurasn March1988. Ultimately,though ineffectivemilitarily,aid to the contrascontributed o the Sandinista'selectoraldefeat n 1990. Thus,from he perspective f theReaganadministration,the contraaidpolicy attained ts goals and was wise and effective.At a relatively ow cost to the U.S. governmentof less than a third of abilliondollars($322 million),82he Reaganadministrationustained he contrasfor nearly a decade.A moderate evel of third-country onations $34 million)anda smallamount f thirdpartysolicitation ndarmssalesprofits $6.5 million)filled in during the two bridge periodsin 1984-1985 and early to late 1986,respectively,whenU.S. government upportwas not available.Despiteall thepolitical controversy, rom the administration'serspective,the governmentalfundingandthirdparty supportwere relatively nexpensiveand worththe ex-pense.

REFLECTIONSOverall, romthe Reaganpointof view, thepublicandprivateaid tothecontras,especially hird-country ssistance,was cost-effectiveandnecessary o maintainthe contraforces when U.S. funds were cut off. Yet these approacheswerecontroversial, fquestionablewisdomevenfrom headministration'serspective,andat least in part llegal. The diversionof a small amountof armsalesprofits(about$3.8 millionof $16.1 millionprofits rom$40million nsales)wasparticu-larlycontroversial ndprovided elatively ittlesupport about1percentof $400million) for the contras. Thoughthe timingof privatefundingand armssalesdiversionsmayhave been crucial o thesurvivalof thecontras, hebenefitswereprobablynot worth hepoliticalcosts to theReaganadministration,ts domesticagenda, and its place in history. The diversionsultimatelybroughtguilt andshameuponthe Reaganadministration nd some of its high officials.

80 Armstrong, The Chronology, 83; see also Theodore Draper,A VeryThinLine: TheIran-contraAffairs (New York: Hill and Wang, 1991), 18.81 Arnson, Crossroads, 73; Serafmo, "ContraAid."82 Serafino, "ContraAid," 17.



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304 | POLITICALSCIENCE QUARTERLY

The contraswere a proxy force under he ReaganDoctrineof helpingothersfightanticommunistattles hatalso servedU. S. governmentnterests.3 Fightingwarsthroughproxies s an ancientpartof greatpower strugglesandoftensubsti-tutes for open warfarebetween superpowers. n general, a democracyshouldfight its wars with its own soldiers, but using surrogatesmay be less dangerousthanrisking superpower onfrontations.While a superpower emocracydoes notalways ight ts ownbattles, tneedsto take directresponsibilityor funding hose fights. The privatization f bothforeign policy fundingand wars"'runs contrary o fundamental rinciplesofdemocraticgovernanceand sovereignty, particularly he rule of law and thepower of the purse. Extragovemmentalunding, even if not illegal, corrodesdemocratic egitimacy. The executive cannot decide to fmance wars withoutcongressional pproval.Moreover, he powers he U.S. Constitution ests in theCongress o decide to fight wars,and theresponsibilityo carryout the conflictthrough he armed orces directedby the president, annotbe in executivehandsonly,85because the separationof powers must provide a check on potentiallyirresponsiblections.Inorder o sustain hevalidityof thedemocraticafeguards,the Congressmust be able to end the fighting by cuttingoff the funding,andthe executivemust be faithfullyboundby such restrictions.The use of privatefundsfor public purposesand, particularly,he privatization f foreign policyfundingdistort he structure f authorizationndappropriationn a democracy.Moreover,a countryshouldnot fight voluntarywars for which it cannotpay. Havingotherspayfor andfighta nation'sbattles,eventhrough urrogates,distortsbasic principlesof democraticaccountability,whichrequiresa nationto decideto takeupon tself therequired acrificeandbear he burden s a nation.Even if most of the outsidefundingwere legal, as the administration ndtheminorityreportpropose, such mechanisms f supportand implementationtraybeyonddemocratic ccountability, ecause heytake actions hat hepeopleandtheir electedrepresentatives o not directly support.86 y solicitingothers forfunds,the administration as potentiallyunderminingts own prerogativesnthepolicy-making rocess.Furthermore,egal or not, the proprietyof governmentofficials solicitingthirdpartyorprivate unds s questionablendfundamentallynappropriate.he

83 Other Reagan doctrine conflicts in Afghanistan and Cambodia were less controversialin theUnited States, U.S. Houseof Representatives,Congressand Foreign Policy, 1988 (Washington,DC:GovernmentPrinting Office, 1989).84 A somewhat imilarmethodof fundingU. S. governmentoperations hrough hirdcountrycontribu-tions was used during the Gulf War in 1991, with large contributions rom Saudi Arabiaand Kuwait

(each countrycontributed ver $12 billionto the war effort). See GeraldineBrooks andTony Horowitz,"A Year After Invasion by Iran," Wall StreetJournal, 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 fundingmechanism of the Gulf War, where the U.S. providedmost ofthe manpowerand technology, and the Gulf oil states providedmost of the money and some of thelegitimacy, is also questionable.



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Reaganadministration as subverting ts own legitimacyand sovereignpowerby pursuingprivate undingof U.S. initiatives.Moreover,as formerSecretaryof State George Shultznoted about he Gulf War, it was sad to see the UnitedStates having to seek funds from other countries"withhat in hand" o pay forU.S. militaryefforts.87Privatization f fundingalso reduces public scrutinyand the debate overpolicy necessary n a democracy or good public policy. Open discussion tselfmighthave scuttled he policy, which is in part why the administrationoughtto hide its actions. A democracy annotgive up its principlesof accountabilityand full, open debateand stay democratic.88

POLICY ALTERNATIVESCouldanalternative olicyhaveaccomplishedhe samegoalof bringingdemoc-racy to Nicaraguawithoutcreating he antagonisms nd scandalof the contrafundingapproaches?Again, one's partisanpositionaffects the evaluation f thegoals andapproach f any U.S. policy that might have soughtto influence heinternalpolitics of Nicaragua.And the questionof whether he United Statesshouldhave ntervened tall inNicaraguan oliticsshouldnotbe lost inevaluatingmore peacefulways of attaining he Reaganadministration'solicy goals.89Supporters f administrationolicy may argue thathad the Sandinistas otfaced the contraswhile receiving support rom Soviet and other Easternbloccountries,the Sandinistasmight have more easily imposedtheir will on theNicaraguanpeople and supportedother insurgent orces in CentralAmerica.Moreover, the Sandinistasmight have crushedtheir oppositionearlierif thecontrashad not received outsideU.S. or privatefunding.But even supportersof the administrationolicy recognizethatbeforeinitiating he contrawar, theUnitedStateshadalready uccessfullyencouragedhe Sandinistaso curtail up-portfor the Salvadoran ebels;here their successderivedfrom the stick of thesuspensionof U.S. economic assistance n 1981 with the carrotof its renewalrather hanfromarmed orce.90Theadministration ighthaveaccomplishedtsgoalof democratizingNica-raguawithoutsustaining proxy fighting orce. Lacking hejustificationof thecontrasas a perceivedthreat,the Sandinistasmighthave had more difficultyimposingrestrictions n thepoliticalopposition. nparticular,without he stateof emergencydecreed n 1985 to fightthe contras,the Sandinistasmighthavefaced nternalpoliticalopposition trongenough o force theNicaraguan overn-ment nto earlierelectionsor a political urnover.The UnitedStatesmighthave

87SouthernCenter for InternationalStudies, "TheNinth Annual Report of the Secretariesof State"(Atlanta: Southern Center, 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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betterprovidedsupport o develop politicalchallengesto the Sandinistashanfundedarmed nsurrection.Withthe collapseof communism n EasternEuropeandtheensuingeconomicandpoliticalproblems n theSoviet Union,moreover,the Sandinistaswould have come underother externalandinternalpressures,as did the nearbySalvadoran uerrillas.Without he state of emergencyor theSoviet financialandmilitarysupport ustifiedby the existence of the contras,theSandinistasmightnot have asted o 1990.Perhaps, oo, such nternal pposi-tionmighthavehelpeddemocratize nd iberalizeNicaraguan oliticalandeco-nomicpolicies.9'

CONCLUSIONIn clarifying he amountsandtiming of the funding or the contras,thisarticleprovidesthe basis for a clearerunderstandingf the contraaid policy by bothcitizensandpolicymakersalike. Inidentifyingheperiodsof Bolandrestrictions,andthedifferingmajorityandminority nterpretations,t explainspossiblecon-flicts betweennongovermmentalundingmechanismsand the Boland bans. Itevaluates ontraaidpolicyon theReaganadministration'sermsof cost-effective-ness, but also questions he meritsof suchfunding n a democracy.Supportofthecontrasmayhave beencost-effectiveon an economicbasis,butit wascostlyin politicalterms and in lost legitimacyfor the administrationhatpromotedthem. An alternative olicy to assuredemocratizationn Nicaraguamighthavebeen more successful.A brief reviewof contraaidfunding annotanswerall the factualandpolicyquestions.Moreover,evidence alone cannotanswernormativequestions,suchas whetherReaganadministrationontrapolicy was wise. The examination fthepolicy approaches hattheReaganadministrationookregardingNicaraguaand the contrasshouldcontinue o probethe implicationsand the alternatives.But a clearerunderstandingf the backgroundo contrafunding approachesinforms he debatenecessary n a democracyo evaluate hevalidityandwisdomof these controversialssuesduring he centralU.S. intervention f the 1980s.*

91 Thepeacefully esolvedmutual ostage akingbetweengroups f ex-contrasndex-Sandinistasin atesummer 993 howed hat ignificantssues tilldivideNicaraguans.eeDouglas arah, ContrasFree20 Hostagesn Nicaragua,"WashingtonPost, 23 August1993.The limitedAmerican id toPresident ioletaChamorro'sovernmentincehercoalition ictorynthe 1990election nd hedelayin providing 98million n new aidreveals, oo, that he U.S. role andpolicytowardNicaragua restillproblematic.ee 7heEconomist, 28 August1993.* I would ike to thank ulieCho, EricParas,ChrisRasmussen,NinaSerafino,MichaelThieme,andHilaryHerbold ortheirassistance.

Documents

Contra Aid Fundamentals: Exploring the Intricacies and the Issues