All language subtitles for Fiasco S01E05 Shot Out of the Sky 1080p AMZN WEB-DL DDP5 1 H 264-FLUX (1)_track4_[eng]

[narrator]
Previously on Fiasco...

President Reagan's
national security advisor,

Robert "Bud" McFarlane,

begins negotiations with Iran

and agrees
to exchange weapons

for the release
of American hostages.

The deal generates
millions of dollars

that Oliver North
and Richard Secord

divert towards the Contra War.

[dramatic music]

But after many shipments
of weapons,

only one hostage is released,

and McFarlane loses faith
and abruptly resigns,

only to be called out
of retirement

for a top secret,
face-to-face meeting

with Iranian delegates
in Tehran.

The trip is a disaster
that leaves the Americans

frustrated, demoralized,

and desperate
for a new strategy.

♪

As you know by now, there are
plenty of twists and turns

in the story
Americans know as Iran-Contra.

- [car horn honks]
- [indistinct chatter]

There was one twist
in particular

that caught everyone
by surprise.

♪

[man speaking foreign language]

[woman]
Hello?

[laughs]

[narrator]
This is Hassan Sabra,

and he's kind of responsible

for breaking
Iran-Contra wide open.

♪

He did it in the pages
of a Lebanese magazine

called Ash-Shiraa.

♪

In the fall of 1986,

two secret operatives
came to Sabra's office

with a tip
that would change his life.

[reporter]
The article appeared

in the Lebanese weekly
Ash-Shiraa

published in Beirut.

The editor,
Hassan Sabra, explained

what he thought
the Iranians want.

[reporter 2]
The news that Ronald Reagan

secretly traded Iran military
equipment for hostages

is only the latest.

[reporter 3] Trouble is,
secrets don't keep very well.

And when they come out,

the damage to an
administration's credibility

can last a very long time.

[narrator] How would Reagan's
administration react

when a little-known
magazine editor in Beirut

stumbled upon the secrets
they had been trying to hide?

[reporter] Mr. President, is it
true that you authorized

sending military supplies
to Iran?

I've never heard
such dissemination

of misinformation

since I've been here

as has been going on
in the last several days.

[interpreter]
They wanted us also to help

with the freeing
of other hostages.

[narrator] What would happen
to those who exposed

all those secrets and upset
the carefully laid plans

of the powerful
people involved?

[sighs]

♪

[cries softly]

[suspenseful music]

I'm Leon Neyfakh.

This is Fiasco.

The story of Iran-Contra.

♪

[intriguing piano music]

♪

While members of his
administration were in Tehran

negotiating the release
of American hostages...

- [cheers and applause]
- Thank you.

Really is great to be back
on the campaign trail.

It almost feels like 1980
all over again.

...Ronald Reagan
focused on the home front.

[groovy guitar music]

[applause]

[all] We love Ron!
We love Ron!

We love Ron!

[Neyfakh] The president spent
the 1986 midterms

traveling around the country,
rallying support

for Republicans
running for Congress.

[man] Ladies and gentlemen,

the president
of the United States,

President Ronald Reagan.

[cheers and applause]

I need a congressman
who will support me

instead of someone who
opposes me 60% of the time.

[cheers and applause]

During the second midterm,

congressional election
is very, very tough.

You're really worn out by then,

and the opposing party
has a lot to say.

Write it down.

Next January
there'll be 53 Democrats

in the United States Senate

and 47 Republicans.

But, you know,

this talking about
political differences and all

reminds me of a story.

[laughter]

It was a Democratic fundraiser
at a downtown hotel.

And when they came out
of the fundraiser,

there was a kid
with some puppies,

and he was selling them.

"Buy a Democrat puppy.
Buy a Democrat puppy."

But two weeks later,

the Republicans held
a fundraiser in the same place.

When they came out,
the same kid was there--

"Buy a Republican puppy.
Buy a Republican puppy."

Kid says, "Now they got
their eyes open."

[cheers and applause]

[Neyfakh]
Reagan's team had struggled

to come up with a message
to campaign on.

They found one
in a star-studded crusade

spearheaded by
the president's wife, Nancy.

See this cute little vial here?

It's crack, rock cocaine,
the most addictive form.

You think it's the glamour drug
of the '80s?

Well, that's the point of
this friendly little reminder.

It can kill you.

Well, the...

the decision to run
that campaign was not mine.

But the decision to work
on that speech was.

[intriguing music]

I met with the Reagans
in California to hear them out

and listen to what
they wanted to say.

And it was very,
very important to her

and very,
very important to him

to get that message across.

Now you can see why drug abuse
concerns every one of us,

all the American family.

[Neyfakh]
With the crack epidemic

surging in America's cities,

Reagan's anti-drug message

struck a chord
with his base of voters

who believed in God
and family values.

[reporter] Are you afraid
when you go out on the street

- at night?
- Yes.

Why?

There's a lot of drug dealers.

They be shooting.

[Nancy Reagan]
Drugs take away the dream

from every child's heart
and replace it with a nightmare.

Each of us has
to put our principles

and consciences on the line.

There's no moral middle ground.

Indifference is not an option.

[Reagan] I can't help
but see all the young people

who are here
in the audience,

and I have a special message
to you from my roommate.

[laughter]

She said to tell you,

"When it comes to drugs,
please, for yourselves,

"for your families,
for your future,

"and for your country,

just say no."

[cheers and applause]

♪

[Kornbluh] I mean,
if the Reagan administration

had "just said no"

to Contra drug smuggling

and to cavorting
and collaborating

with drug smugglers,

they would never have been
tarred and feathered.

[dramatic acoustic music]

My name is Martha Honey.

My name is Tony Avrigan.

And we lived and reported
out of Central America,

based in Costa Rica
for the 1980s.

♪

We went down to Costa Rica

and really fell
in love with it.

[Avrigan] It seemed
like a good place

to raise our kids and...

And so we decided
to move there.

The only thing
we didn't know was

our moving there
sort of coincided

almost exactly with the CIA's
taking a look at Costa Rica

and saying, "Hmm."

[bombastic funk music]

♪

[Neyfakh] Martha Honey
and Tony Avrigan

started to notice
the Nicaraguan rebel force,

the Contras, setting up shop
in Costa Rica.

[Honey]
And I remember one night,

soon after we moved there,

driving through
a neighborhood,

and you'd look
in the front window,

and there would be
a Costa Rican family

having dinner,
and then the next one,

a Costa Rican family
sitting around the television,

and then the next one,

all these guys in kind
of partial military uniforms

standing over
a mimeograph machine,

and that was a Contra
operation going on.

There began to be reports
in the local press

that the U.S. government
was involved

in facilitating operations
out of there.

But our editors were
very skeptical and said,

"Well, that's not what the
State Department's telling us.

"They are telling us
that the U.S.

is not involved
militarily in Costa Rica."

[Neyfakh] Something wasn't
quite adding up.

[Miller] The waning days of
the last session of Congress,

we passed
the Boland Amendment.

[tense music]

[Neyfakh]
Remember the Boland Amendment?

The House Intelligence
Committee today

voted to cut off U.S. funds

for secret intelligence
activities in Nicaragua.

[reporter] The vote reflects
a growing concern in Congress

that CIA funds
are being used to overthrow

the Sandinistan government
in Nicaragua.

[Neyfakh] Since official funds
couldn't flow to the Contras,

the administration
funneled private money

to the rebel forces
fighting the war.

♪

[Honey] Oliver North's whole
secret re-supply operations,

all of it was focused
on Nicaragua,

but it was operating
out of Costa Rica.

[indistinct chatter]

[Neyfakh]
The U.S. wasn't supposed

to be helping the Contras.

But Martha and Tony
were receiving clear evidence

that they were.

[Avrigan]
We made frequent visits up

to the southern front
into Nicaragua.

It's a pleasure.

[Avrigan]
And suddenly,

they started
showing us mortars

and small
artillery pieces painted

in desert camouflage colors
in the rain forest.

[Honey] And they wore always
these huge-sized pants

and huge boots made
for 6'6" Americans.

And so they had their pants
sort of up to their chest.

And the Reagan administration
vehemently denied

anything was going on,
but as we quickly learned,

all you had to do
was open your eyes.

♪

[indistinct chatter]

[Neyfakh] And while weapons
and uniforms

were going
into Central America,

something else
may have been going out.

It was a difficult story
to really prove.

But we kept kind of running
into the drug trafficking,

and it sort of became a story
that we finally had to take on.

Drugs are menacing our society.

They are threatening our values

and undercutting
our institutions.

They're killing our children.

[Neyfakh] Even as
the Reagan administration

was telling Americans
to just say no...

[Reagan]
We can defeat this enemy.

...some of
the President's beloved

Freedom Fighters,
the Contras,

were smuggling drugs
into the United States.

[Reagan]
But we still have much to do.

Despite our best efforts,

illegal cocaine is coming
into our country

at alarming levels.

Drug smuggling is just
one of a long list

of kind of the dark, dirty side
of many paramilitary wars.

And the Contra war
was no exception.

[tense music]

When Oliver North
started to build

this secret
resupply operation,

he used pilots who had already

been convicted
of drug smuggling.

Why?

Because they were
readily available.

♪

[Honey] And we interviewed
a number of these pilots

who began talking
about their ties to the CIA

and how they would fly into,
for instance,

Homestead Air Force Base
which was outside of Miami.

[Tolliver]
As an extra added bonus,

we could freelance
on the way back.

[woman] Meaning what?

Well, I mean, we could--we
could bring back our own cargo

without ever having to worry
about interception,

arrest or anything like this.

Everything was taken care of.

They would leave the plane,
but it would not be inspected

as other planes coming in were
because it had drugs on it.

[woman] Given your experience,

who do you figure
arranged all of this?

What's your best guess?

Had to be someone
in either the top four--

three slots of the CIA
as I know their organization.

The U.S. said, "Well, of course
these pilots are going to say

they're working for the CIA
to try to protect themselves."

Had to be someone that high up.
It'd have to be.

[woman]
Why?

Because who else can you get
that's gonna know,

number one,
the inner working of everything

but who can pick up a phone
and say, "Let this happen"?

♪

[Kornbluh] I would say
the majority of people

working with Oliver North

were not involved
in drug smuggling,

but there were enough people
who were involved.

And that's wrong.
That's criminal.

And it was just among
the priorities

that the Reagan
administration set

where the health
and security against drugs

of young people
and communities of color

in this country
was inconsequential

compared to the top priority--

overthrowing
the Sandinista government.

[Neyfakh] In order to bolster
the Contra forces,

the United States created
a base of operations

in the demilitarized country
of Costa Rica.

This was not well received
by the locals.

[reporter] Last week saw
one of the biggest ever

demonstrations held
in this 35-year-old democracy.

Thirty thousand people

protesting
at American pressure

upon Costa Rica to abandon

its traditional position
of neutrality.

[Honey] We sort of felt
an obligation to,

you know, be reporting
on what was going on.

But exposing
the illegal covert activities

that the U.S.
was carrying out,

I mean, it is
a dangerous story to cover.

[Neyfakh] In 1984,

Tony Avrigan traveled
to the Nicaraguan jungle

for a press conference led
by the southern Contra leader

Eden Pastora.

[suspenseful music]

As the press conference
got under way...

[explosion]

...a bomb went off.

♪

Seven people were killed...

including three journalists.

Tony was among the injured.

It would later come out
the attack

had been carried out
by a Sandinista sympathizer.

[intriguing piano music]

As the reporting on the war

and drug trafficking
progressed,

Martha and Tony felt like

they were being watched
and threatened.

[Avrigan] We were out one day,
and we came back,

and our files
had been gone through

and were in a bit of chaos.

[Honey] We quickly learned
that someone

sent down a CIA operative
to spy on us.

Part of it was
to intimidate us.

[Honey] We would check under
our Jeep every day to see

if there was a bomb
placed under it.

The most scary incident

was when we were mailed
a packet of cocaine

and arrested
as drug traffickers.

It was the DEA and the CIA

that mailed us
a package of cocaine--

two agents from there.

♪

It came in a package

of two books
with a letter that said,

"Tony and Martha,
here's a sample

"of the latest shipment
of cocaine

"that we want
to send up to Miami,

"but we want you
to test it first to see

if the quality is good enough."

And the next day,

there were stories
with photos of us saying,

"Journalists arrested
as cocaine traffickers."

It was awful, because
as you can imagine,

you know,
all of our kids' friends,

their parents wouldn't send
them to play with our kids.

I mean, how do you prove
that you're not a trafficker?

[Avrigan] We had been
for such a long time

uncovering these things
that the rest of the world

was denying or the
State Department was denying.

[Honey] And eventually what
began to happen was for us

and a couple
of other journalists,

the U.S. officials
began calling

whenever we were reporting
and say,

"This is not correct.

"What they are reporting
is not correct.

You should not be using them.
You should fire them."

[Neyfakh] For several years,
Oliver North and his cohort

had been successful in keeping
their covert activities

out of American media.

[light beeping]

[Honey] And one day,
I, you know,

remember turning
on the television,

and this big kind
of disheveled American

being led out
by these little Nicaraguans.

I mean, this was
the smoking gun.

[reporter] Eugene Hasenfus,
an American from Wisconsin,

was walked out of the jungle
in southern Nicaragua today.

His captors,
Nicaraguan soldiers,

claim they shot down
a cargo plane

carrying the American
and three others

with a Soviet made
surface-to-air missile.

My name is Gene Hasenfus.

Marinette, Wisconsin.

I was shot out of the sky.

♪

[Neyfakh]
In October of 1986,

a story broke out of Nicaragua

that made
the Reagan administration's

military alliance
with the Contras hard to deny.

♪

[Kornbluh]
Eugene Hasenfus

really was a soldier
of fortune.

He managed to get recruited

to work on one
of these airplanes

and airdrop weapons
to the Contras.

These planes,
they were perfect

for airdropping
pallets of equipment

because they flew
relatively slowly.

The drawback, of course,

was that these planes
flew low and flew slow.

That made them easier targets
for Sandinista gunners.

[tense music]

♪

[dark, pulsing music]

♪

[indistinct chatter]

[man speaking Spanish]

[Neyfakh]
Amid the smoldering gear,

the Sandinistas found the
bodies of Hasenfus's team--

two American pilots
and their radio man,

a 17-year-old Nicaraguan boy.

The next day,
deep in the jungle,

a group of soldiers found
Hasenfus asleep in a hammock

that he had made
out of his parachute.

[McManus]
All of a sudden,

we had an American prisoner
of war in Nicaragua

in a war we weren't
even supposed to be fighting.

[Avrigan] I was staffing
the CBS office in Nicaragua.

And I remember
the Sandinista press officials

coming over to me and saying,
"What do we do with this guy?"

[indistinct chatter]

[Neyfakh] The Sandinistas
paraded their new hostage

in front of the press.

[man speaking Spanish]

And he was captured around
noon on Monday the sixth.

Thank you.

[reporter]
For the first time,

the government made public

sensitive documents found
in the crash.

Until now, the Sandinistas
have kept secret

that among the papers
in the plane

was a list of 13 Contra pilots
and their code names.

The objectives of our flights
into Nicaragua

were to resupply the Contras.

He started singing
like a robin.

Of course, that led to the--

to the whole story
coming apart.

- [camera shutters clicking]
- [indistinct chatter]

[reporter] Hasenfus says he
was working for the CIA.

[Kornbluh]
He told an amazing story,

which was that he was told
not to wear a parachute

and that everybody on the planes
was told not to wear parachutes

because they wanted them to die
if the plane was shot down

so that they wouldn't live
to be able to testify.

[indistinct shouting]

[reporter] Nearly every day,
Sandinista soldiers drill

in Managua
and throughout the country

to prepare themselves
for the American invasion

they've long been predicting,

an invasion they say is
symbolized by Eugene Hasenfus.

[tense music]

♪

I'm glad you asked.
Absolutely none.

[Neyfakh]
As Reagan's team continued

to deny their involvement
in the Contra War,

the American media had
more questions than answers.

♪

[reporter]
Who is Eugene Hasenfus?

[Clayton]
No one seems to know anything

about it
in Marinette, Wisconsin,

the town along
the Green Bay shore

where Eugene Hasenfus lives.

He grew up here, played on
the high-school football team.

He and his wife, Sally,
and their three children,

live in this lakeside house
just outside town.

[reporter] We know he is
an American citizen,

an ex-marine, a soldier
of fortune in the Vietnam War,

and we know
his transport plane

was shot down over Nicaragua.

[Clayton] Hasenfus's father
says he had no idea

Eugene was
in Central America,

but he did leave town
five months ago.

All's I know is that
he was going to Florida

to go to work,
construction work.

And that's all
I know on that part.

[Clayton]
Eugene's brother, Bill,

got a different version.

He said he got a job
with an air transport outfit

out of Miami hauling cargo.

His basing job was
a loadmaster, a crew chief.

[Clayton] The two brothers
often skydive together.

The last time Bill saw
his brother was Labor Day...

when Eugene borrowed
a parachute from him.

- [cheers and applause]
- [marching band playing]

[all] Reagan! Reagan!
Reagan! Reagan! Reagan!

[Neyfakh] The confusion seemed
to inspire the press

to uncover the truth.

With the midterms less
than a month away...

the Reagan administration
needed a cover story.

[tense music]

♪

[man] Mr. Secretary, can you
give me categorical assurance

that Hasenfus was not
under the control,

the guidance, the direction
or what have you

of anybody connected
with the American government?

Absolutely.
That would be illegal.

We are barred from doing that,
and we are not doing it.

This was not in any sense a U.S.
government operation. None.

[Neyfakh] Members of
the National Security Council

held a meeting in order
to coordinate a response.

According to notes taken

by one of the officials
present that day,

the decision was made
to ask the Contras

to assume responsibility
for the flight.

The Contras agreed.

This is a private effort,

and in no way is it
an effort of a government

or of any agency
of this government.

[dramatic piano music]

[Neyfakh]
The White House insisted

that Hasenfus was a lone pilot

working for a private company

supplying arms to the Contras,
end of story.

[reporter] Do you feel
more optimistic

than you did a few days ago
now that you've had a chance

to talk both to the defense
attorney and with your husband?

I won't feel
completely optimistic

until I get him home.

[reporter]
Last night, in prison,

Gene Hasenfus
signaled his irritation

at being continually forced
by his captors

to answer questions
in public.

What do I think
about right now?

I don't like sitting here.
I don't even want to be here.

No.

I've been bounced around
to these rooms

in front of lights and cameras
so much, you can't believe.

And it's--I'm not used to it,
and I don't care for it.

[Neyfakh]
Hasenfus, it turned out,

was the one hostage
in the story of Iran-Contra

whom Reagan didn't seem
interested in saving.

But then a news report
came out

linking the resupply operation
back to Oliver North.

[dramatic music]

[McManus] Hasenfus and the
people he was working for

had not been
especially careful

in covering their tracks.

And reporters were able to get
all of the phone records

of the safe house
that Eugene Hasenfus

had been seen at.

And that included phone calls
to Ollie North's office.

[phone ringing]

[suspenseful music]

[Harkin]
We've got some people,

perhaps in
the National Security Council

who have been watching
too many Rambo movies.

I personally believe
it's imperative that we hear

from the National
Security Council.

I think we need to hear
from Mr. Oliver North

under oath.

It felt a little bit
like Watergate,

that moment in Watergate

when all of a sudden
you realize

this is a bigger story
than we realized.

A CIA operation,
a CIA-operated plane,

CIA-paid people
were caught red-handed.

[camera shutter snapping]

[reporter]
Sorry to trouble you, sir.

Could you just tell us
what the press--

Why don't you go back home
where you belong?

[reporter] Yes.
Could you tell us, sir,

what has happened to the money?

[Secord]
All kinds of people called me--

North, McFarlane, etcetera.

And the whole thing
just started to unravel.

My front yard was filled
with reporters

faster than you
can say your name.

Why were they dealing directly
with Oliver North?

Where was this money
coming from?

Who had paid for the airplane?

Who had paid for the shipment?

♪

And the biggest question,

the overarching question,
of course, was--

how deeply was

the Reagan administration
involved in this?

[phones ringing]

[Neyfakh]
Up until this point,

Project Democracy
had yet to encounter a problem

that couldn't be fixed
with a bit of PR.

[Panetta]
When the airplane went down

that contained arms

that were intended
for the Contras,

it basically proved the case

that we had every right
to be concerned

that the administration
was doing something

violating
the Boland Amendment.

That has always been something
that the White House

says will never happen.

And yet it happened yesterday

with three Americans dying.

This city is awash with rumor,

intrigue, treachery.

Laws have been broken.

At the very center
of the White House,

there has been the most
unbelievable revelations.

[camera shutters snapping]

[Kornbluh] The number of times
that Oliver North's superiors

were called up
to the subcommittee

to testify about news reports

that they were secretly
resupplying the Contras

in violation
of congressional law.

And they just falsified
the testimony.

They lied again
and again and again.

What you realize is that

people are operating
on their own

without any kind
of supervision,

without any kind
of rule of law.

[intriguing music]

Basically,
you're dealing with,

you know, a group that feels

it's licensed to do
whatever the hell they want.

♪

[Kornbluh] The curtain had
really been pulled back

on these illegal operations,

and the scandal
literally started

to unravel right there.

And then
just a couple weeks later,

the Iran side of it escalated.

♪

[Neyfakh] Just weeks after the
Hasenfus crash in Nicaragua,

two operatives from Iran
arrived in Beirut.

They were on a secret mission

to find
a trustworthy journalist

and leak him a story.

The operatives knew
Hassan Sabra

was a supporter
of the Iranian Revolution.

[all chanting]

[intriguing music]

♪

[Sabra chuckles]

[Neyfakh] Sabra's magazine,
Ash-Shiraa,

had been reporting
on the Iran-Iraq war for years.

[reporter] Iraq's
190,000-man army

has been lavishly equipped
by the Soviet Union.

[Yazdi] For the Iraqi,
it is a conventional war.

For the Iranians,
it is nonconventional.

[all chanting]

It is guerrilla warfare.

[reporter] Responding
to the Ayatollah's call,

thousands of young Iranians

have taken up arms
against the Iraqis.

It is these amateur soldiers

who will have
the job of trying

to break through the lines
of Iraqi tanks and guns.

[Neyfakh] For years,
Iran had been holding its own

in the conflict,

but in recent months,
something had shifted.

It seemed to Sabra

that Iran had gained
a decisive advantage.

The men from Tehran
who had shown up

at Hassan Sabra's office
seemed to have an explanation.

They told him
that representatives

of the Reagan White House
had been in Iran

to negotiate
an unthinkable deal.

[Boustany] And it was
a really good story.

I mean, all kinds
of journalistic bells

started ringing in my head.

I said, "This is a scoop.

I have got
to write this story."

It was so outlandish,
you know,

the key and the cake
and the Bible

and the fact that it was
the Reagan administration.

You know, we were cut off
from what was going on

in the rest of the world.

There was no electricity,
so we didn't watch CNN a lot.

So this was really
a newsmaker for me.

This was a scoop.

[Boustany] I think
I may have called him

when I was writing the story.

I wanted to see if there was
a story behind the story.

And, actually, there was.

[Boustany] For me, working
for an American newspaper,

it was,
"Wow, you know, this puts

the administration
on the spot."

And there were all these
contradictory things, you know.

The Americans were going
around the world

telling Europe and others,
"Don't sell weapons to Iran,"

yet they were doing it.

And the fact that it was
so intimately involved

with the fate
of the hostages.

So it was this tapestry
of intrigue.

I was investigating
all of this stuff.

I was talking to people
I knew in the government.

And even they told me

they couldn't put
the pieces together.

So none of us quite got
to the nub of the matter until,

to our shame as journalists,

a Lebanese magazine
called Ash-Shiraa

got a terrific scoop.

[Boustany] I wrote
a really detailed story,

and my foreign editor,

who was friends
with Bud McFarlane,

called him up and said,

"I want you to be honest
with me.

Were you in Tehran
in September?"

And McFarlane said, "No."

It had all the other details
of the story.

But, in fact,
he had gone to Iran in May.

So they played down the story.

There have been reports
that you were carrying a cake

that was shaped like a key,
that you were carrying a Bible,

that you took
personal revolvers

for Rafsanjani as well.

Any parts
of those reports true?

Tom, you know me
better than that.

I don't do business
that way.

[Boustany]
And then Rafsanjani

gave a press conference
in Tehran

in which he detailed

the story, you know,
how they had met

and the key and the cake
and the whole enchilada.

[interpreter]
We were told that

he was carrying some pistol

for the individual authorities
in Iran

and a cake.

It was the most important
scoop that year.

The whole world
paid attention to it.

[intriguing music]

When the story broke
about our trip,

my wife and I were actually
celebrating her birthday,

and we had just finished
a wonderful dinner

when I got paged--

we still had pagers
in those days--

by the White House
Situation Room

to tell me
about the Ash-Shiraa story

that revealed
that a U.S. delegation

had come to Iran
to try to, you know,

bring about the release
of the hostages,

and we had brought a cake
in the shape of a key

and other things
that weren't quite accurate.

But enough of it was true

so that I immediately
understood

that the future was going to be
very different for my life.

[McManus]
That these were

straight
"arms for hostage" swaps

immediately set off a storm
in Washington

because that was not the policy
of the United States.

It was a policy
that Ronald Reagan

and his secretary of state,
George Shultz,

had said
they would not follow.

It would have been
illegal to do it.

So what was this about?

Could I suggest an appeal
to all of you

in regard to this,
that the speculation,

the commenting and all?

On a story that came out
of the Middle East,

it has no foundation,

that all of that is making it
more difficult for us

in our efforts to get
the other hostages freed.

[camera shutters snapping]

You could be clever
with your words and say,

"Yeah, we weren't really
negotiating with terrorists,"

but, effectively, we were.

We negotiated with Israel
to help Israel decide

to do something
that terrorists wanted,

and then the terrorists
did what they said

they were going to do
and released those hostages.

So sometimes it worked,

and violence was averted.

And sometimes it didn't.

And as far as Weinberger

and Secretary Shultz
were concerned,

we were dealing
with terrorists,

and it made them
very uncomfortable.

[tense music]

[Kuhn]
When the news broke,

we were getting
onto Air Force One,

and a correspondent
shouted to Reagan

a question about Bud McFarlane

going to Iran--

and could you comment on it?

And Reagan did not
answer the question.

♪

[Neyfakh]
November 4, 1986

was not a good day
for Ronald Reagan.

[Brokaw] Good evening.
Virtually all the polls

have closed
in all of the states now.

And what we know at this hour
is that the Democrats

have taken control
of the United States Senate,

and it may be by
a significantly larger margin

than even they had anticipated
in their wildest hopes.

[Gumbel] Well, Jane, clearly
the new numbers

mean it's going to be
a different ball game

for President Ronald Reagan

from here on through
the end of his term.

Standing by in our
Washington studios this morning

is White House Chief
of Staff Donald Regan.

- Good morning, Mr. Regan.
- Good morning, Bryant.

[Neyfakh] In spite
of his campaign blitz,

the president had failed
to inspire the nation

to keep the Senate
on his side.

For the first time
in his six years as president,

Reagan would be working
with a Congress

under Democratic control.

Wasn't this, Mr. Regan,

a personal rebuff
for the president?

I mean, we can run down
the laundry list,

and, frankly,
it looks pretty bad.

[Neyfakh] To make matters worse
for Reagan,

the press would not let up
on the Iran story.

[engine whirring loudly]

[intriguing music]

[McManus]
The White House scrambled

to get on top of the story,
but they had a problem.

Very few of them knew
exactly what had gone on.

But there were
plenty of officials

who wanted to jump in
and control the story.

And so officials
began telling stories

that conflicted
with each other.

They told stories that didn't
make sense internally.

We rather quickly
came to realize

there is something
seriously amiss.

[camera shutters snapping]

[Neyfakh]
In November of 1986,

the president once again
hosted a ceremony

in the White House Rose Garden
for a recently released hostage.

By now, this was
a familiar ritual.

Unlike the other ceremonies,

this one was occurring
amid a very public scandal

about covert arms sales
to a terrorist country.

[reporter] Mr. President,
the Iranians are saying

that if you'll release
some of those weapons,

they'll intercede to free
the rest of the hostages.

Will you?

[indistinct chatter]

[Neyfakh] The White House's

awkward public attempts
at evasion

only added
to the press's interest.

I'm not supposed
to take questions,

but I will answer
that one, Sam.

At 8:00 tonight, tune in,
and you'll hear all.

[Neyfakh] And so, on the
evening of November 13th,

Reagan delivered his first
full public statement

on the Iranian arms deal.

Good evening.

I know you've been
reading, seeing,

and hearing a lot of stories
the past several days.

A charge has been made
that the United States

has shipped weapons
to Iran as ransom payment

for the release of
American hostages in Lebanon,

that the United States
undercut its allies

and secretly violated
American policy

against trafficking
with terrorists.

Those charges
are utterly false.

[Neyfakh] Relying on the
advice of his trusted aide,

John Poindexter,
Reagan insisted

that what the White House
had done

was consistent
with their policy.

There's a saying
in Arabic that,

"They're not doing it for
the blackness of your eyes,"

you know,
or the beauty of your eyes.

There's some other interest,
some other agenda.

...those who commit
terrorist acts...

[Boustany] It signaled to me
that, in politics,

there is no idealism,
there are no ideals.

There are interests.

Sometimes they intersect.

And what is expedient
is the policy of the day.

[tense music]

[Rather]
Good evening.

This is the CBS Evening News,
Dan Rather reporting.

A new Los Angeles Times poll
just released indicates

only 14% of the American people

believe what President Reagan
has told them

about his weapons deals
with Iran.

He obviously designed
the 12 minutes

to mislead
or to sort of obfuscate.

And Ronald Reagan
doesn't come off very well

when he does that.

I still feel strongly
as a White House watcher

that the most important
thing to them was,

the heck with policy,

let's get these hostages
home before the election.

[Neyfakh]
The speech was widely regarded

as a disaster
for the president.

I certainly wasn't excited
about his performance.

I thought that it was not
a good explanation

of all that
we were trying to do.

It concerned me
because I began to realize

that the president
wasn't going to be able

to explain this well
to the American people.

[Neyfakh]
It was a watershed moment

in the Iran-Contra affair.

Reagan had now
publicly adopted

an inaccurate version
of events,

and not only did the public
think he was lying,

some members
of his own administration

were losing confidence, too.

♪

Soon, Secretary of State
George Shultz,

who had always opposed
the weapons sales to Iran,

gave an interview that
revealed the power struggle

going on within the White House.

[Shultz] I had not been
willing to go

on any of the shows
or whatever.

And then I was told
that a decision had been made

to stop all arms sales.

So I agreed to go
on Face the Nation.

And as I was getting ready
to go over to the studio

on a Sunday morning,

I was told the decision
had changed

and arms sales
were gonna continue.

But I was on the hook to go.

So Lesley,
toward the end of her show,

said...

I'll ask it again--will there
be any more arms shipments

to Iran, either directly
by the United States

or through any third parties?

Under the circumstances
of Iran's war with Iraq,

its pursuit of terrorism,

its association with those
holding our hostages,

I would certainly say,
as far as I'm concerned, no.

Do you have
the authority to speak

for the entire administration?

No.

And I went back to my office

and I told my staff,
"When I get back,

I won't be
secretary of state anymore."

[reporter]
When the secretary of state

goes public
with his lack of confidence

and his disagreements
with the president,

it is an unusual event
in Washington

and a sign something
is deeply wrong.

[disjointed piano music]

I do have the sense

that we are witnessing
the disintegration

of this administration's
foreign policy.

Your presidency is tottering.

Do you realize this?

It can be saved,
but only you can save it

and only if you will talk
with us, the Congress.

[Neyfakh] And it seemed
that Congress

now had plans of its own.

And in Congress, there
is a mixture of astonishment

and outrage
in both parties tonight.

NBC's John Dancy reports now
that there were accusations

that the White House
had broken the law.

It's like a very, very gigantic
jigsaw puzzle

that's got a puzzle
on both sides

and is three-dimensional.

So if you don't have
great structural vision,

you're gonna have--

Yeah, a Rubik's cube
is a better example.

[Honey] You know,
it was too much for the press

to try to uncover all of this.

There needed to be
independent investigations.

We needed the subpoena power

that can come through
congressional investigations.

[Neyfakh] The administration
was awash in scandal.

But the biggest
bombshell of all,

the illegal diversion
of profits from the Iran deal

to the Contras,
had yet to be discovered.

♪

Ronald Reagan,

who was used to basking
in the glow of stage lights,

suddenly found their glare
to be a little too bright.

Meanwhile,
with investigations looming,

one loyal foot soldier
was preparing himself

to take the fall.

♪