Reagan Scandal Case Study

In 1980, Casey reemerged in politics and became Ronald Reagan's presidential campaign manager. Reagan's campaign lost the Iowa caucuses to the competing George Bush, and was seriously in trouble. Casey was never interested in political strategy; nevertheless, he managed a successful campaign by maintaining overall responsibility while delegating the tasks among his assistances and providing them with significant latitude on making decisions. Furthermore, Casey conducted a secretive intelligence operation monitoring any possible effort by Jimmy Carter’s administration to negotiate with Iranian officials to free U.S. embassy hostages held in Tehran. Interestingly, after Reagan won the election and a few minutes after his inaugural address, Iran’s

government announced the release of the hostages. This timing inspired a conspiracy theory so called the “October Surprise”, alleging Reagan's campaign representatives conspiring with Iranians to delay the release of the hostages until after the election in order to prevent Carter from managing an “October surprise”. However, future Congress inquiries concluded that the accusations lacked supporting evidence. Nevertheless, several individuals such as former National Security Council member Gary Sick, former Reagan and Bush campaign staffer Barbara Honegger, and former Iranian President Abulhassan Banisadr have stood by the allegation.
After successfully managing Ronald Reagan’s presidential campaign, in 1981, Casey was awarded the directorship of the CIA, a position he had desired since the 1960s. Casey served in that capacity until 1987 and became the first DCI to hold a seat at the White House table as a fully participating Cabinet member. Casey’s remarkable background and President Reagan’s confidence in him soon made Casey the most interesting member of the Cabinet. Casey’s approach to intelligence gathering rooted in his OSS experience during World War II, when the stakes were high and the issues were black and white. In comparison to previous DCIs with OSS background, Casey’s management style suggests that he had remained closest to his wartime roots. Former DCI, Stansfield Turner, who was succeeded by Casey, called his era, the “Resurrection of Wild Bill”, referring to Bill Donovan, whom Casey greatly admired, and dearly held his portrait in his office.
CIA had been under decline from the beginning of Nixon's second term to the end of Carter administration. During mid-1970s, the disclosure of CIA misconducts had significantly damaged the agency. Agency’s focus had mainly shifted to passive intelligence collection and analysis. Covert operations were highly criticized and many intelligence officers were terminated. By 1980, Reagan’s transitional team and many conservatives believed that the agency had failed to do its job and was clearly ineffective in dealing with the Soviet Union. In 1981, after Reagan took office, by selecting Casey as DCI, he pursued to rebuild the CIA’s capability to take political and military actions in foreign countries, particularly against the Soviet Union and the Eastern Bloc. Having the OSS experience during WWII, Casey had strong faith in the agency's purpose and the role it could play in support of the administrations’ policies. Casey reversed the CIA’s downfall by increasing the budget and the number of personnel; and sought to rebuild the agency’s morale. Under his leadership, the CIA expanded its support for several anticommunist insurgent organizations and significantly increased the number of covert operations in various developing countries such as Afghanistan, Angola, and several countries in Central America. This increased the agency’s need for more money; therefore, Casey asked Congress to provide the agency with more funds to support the Afghan guerrilla fighters. Due to the success of Islamic revolution in Iran overthrowing one of the most important U.S. allies in the region, Tehran’s hostage crises, and the Soviet’s invasion of Afghanistan, Americans’ mood shifted from the post-Vietnam sentiment. Therefore, Congress tripled the amount of Casey's original fund request. By channeling massive amounts of aid to the anti-Soviet insurgents in Afghanistan, CIA started the largest covert operation after the Vietnam War.
However, when Casey increased the agency’s covert operations against the Marxist Sandinista government in Nicaragua by funneling aid to the contras, the anti-Sandinista rebels, Congress became concern of the CIA involvement in Central America. Hence, in 1982 it passed Boland amendment prohibiting the agency from aiding the contras. , Casey continued to find ways to evade the amendment.
On January 7, 1984 and February 29, 1984, the CIA mined several harbors in Nicaragua. Later, during the spring of 1984, Congress found out about the agency’s mining of Nicaragua’s harbors, which created a serious backlash against aiding the contras. Consequently, on August 1, 1984, the House of Representatives passed the second Boland Amendment, which stated “During fiscal year 1985, no funds available to the Central Intelligence Agency, the Department of Defense, or any other agency or entity of the United States involved in intelligence activities may be obligated or expended for the purpose or which would have the effect of supporting directly or indirectly, military or paramilitary operations in Nicaragua by any nation, group, organization, movement or individual.” On October 12, 1984, the second Boland Amendment became law. Nevertheless, it appears that the Congress’s attempts to curb the agency’s involvement in Nicaragua did not prevent Casey to do what he knew the best, covert operations, what almost toppled the Reagan administration in the Iran-Contra scandal, which was revealed in November 1986.
After Boland II became law, two ways for the administration was identified to bypass the law. One way was to solicit third-party funds from private donors or third countries, and the second way to use the White House National Security Council (NSC) since the council was not covered under Boland II.
To this day, the exact role of President Reagan in the Iran-Contra scandal is unclear. However, it appears that in July 1985, in a strategic attempt to build relationship with some moderate elements within Iran’s regime, and to secure the release of seven American hostages held by Iranian backed Shiite extremists in Lebanon, Reagan ordered an operation to sell arms to Iran, which violated the U.S. arms sales embargo against Iran's regime. Congressional committees that later investigated the Iran–Contra affair concluded that the shredding of the documents and the death of Casey, left the record incomplete.
It appears that due to Congress’s oversight on the CIA’s covert operations, initially, the agency was not officially involved in the affair. Casey later testified to Congress that he was unaware of all the details and the agency only had a supporting role. Nevertheless, Casey was viewed as a central figure in the agency’s involvement in the affair. From August 1985 to October 1986, seven arms shipments were sent using Israeli and CIA planes. On December 6, 1985, John Poindexter, Reagan’s new national security adviser, formally informed the CIA of the operation. Initially, after a few shipments, when the deal did not yield the release of all the hostages, Reagan ordered the swaps to be halted. However, in July 1986, the Shiite militants released Father Lawrence Jenco, the former head of Catholic Relief Services in Lebanon. Consequently, Casey, asked Reagan to authorize a shipment of missile parts to Iranians to express the United States’ gratitude. Casey also was afraid that the Iranian counterpart might otherwise lose his credibility or even he and the hostages be executed. To prevent such potential events, Reagan reauthorized the shipments. Eventually, the relations between the parties deteriorated, and in October 1986, the shipments stopped. On October 5, 1986, an alleged CIA plane transferring materials to the contras was shot down in Nicaragua and the pilot, former Marine Eugene Hasenfus, alleged by Sandinista authorities to be contracted by the CIA was captured. Despite the allegations, President Reagan denied any involvement of the U.S. government with the matter and Congress did not investigate it thoroughly. This incident eventually led to the full revelation of the operation and the Iran-Contra affair. On October 28, 1986, an arms shipment that was organized through a second channel was sent to Iran. Tehran paid $3.6 million to a third party stablished enterprise, of which $2 million was consequently transferred to the CIA, who supplied the weapons, and the remaining funds was channeled to the Contras. In November 1986, an IRGC member, Mehdi Hashemi leaked the scandal to a Beirut magazine. Later In 1987, Hashemi was executed in Iran.
The result of the leak was the most embarrassing failure during Reagan’s presidency.

In addition to the arms sales being against the law, the diversion of the profits to the contras was found in violation of Boland amendment, therefore on 11 December 1986, Casey was asked to testify in Congress, but his testimony was labeled unconvincing. The detail of Casey’s involvement in the scandal remains unclear. Some believe that he have had a role independent of the agency, however it is unclear what exactly the role was. The next day after his testimony in Congress, Casey suffered multiple seizures while in his office in Langley. Thus, he was transferred to Georgetown University Hospital in DC. Three days later, the day before he was to testify to Congress, he underwent emergency brain surgery to remove a cancerous tumor from the left side of his brain. Later, a journalist claimed that Casey's bedside comments indicated that his role in the scandal was much larger than what he testified to Congress. Casey never recovered from the surgery. He resigned from the CIA on 29 January 1987 and Reagan accepted his resignation on 2 February. On 6 May 1987, less than a day after the first witness in Congressional hearings testified on his involvement in arming the contras after Congress forbade the act, Casey died of pneumonia in Glen Cove Community Hospital on Long Island at the age of 74 years old without ever testifying again.

During his five years of service as DCI, Casey revived the CIA, before the scandal damages the face of the agency again. In the mind of many CIA career officers, Casey was the best and the worst, DCI they worked for. It was unfortunate that he died during the worst scandal of his time and was not able to see the results of his work, specially his greatest victory, which was defeating the Soviet Union in Afghanistan. Casey was survived by his wife, Sophia, and his daughter,

Bernadette.
President Reagan, in a tribute to his former Director of Central Intelligence, William J. Casey, said, “His nation and all those who love freedom, honor today the name and memory of Bill Casey. In addition to crediting him with rebuilding America's intelligence capability, history will note the brilliance of his mind and strategic vision, his passionate commitment to the cause of freedom, and his unhesitating willingness to make personal sacrifices for the sake of that cause and his country.
Nancy and I have lost a long-time supporter, a wise and unselfish counselor, and a good friend. In extending our condolences to Sophia, Bernadette, and other members of the family, we pray that the knowledge of his countrymen's respect and admiration, as well as the hope inherent in his own deep religious faith, will provide them comfort and consolation. America has lost a patriot, and the cause of freedom, an able champion.”