The collective findings from these investigations were shocking. They showed that top officials in the executive branch had circumvented the will of Congress. Reagan had authorized a plan from National Security Advisor Robert McFarlane to sell arms to Iran despite an embargo, then considered a state sponsor of terrorism that was in the middle of a brutal war with Iraq, in exchange for assistance in releasing American hostages who were being held hostage in Lebanon by Hezbollah. Although several Reagan officials, such as Secretary of Defense Caspar Weinberger, had opposed the plan, they were outflanked by McFarlane as well as CIA Director William Casey. The news contradicted the president’s insistence that he would never negotiate with terrorists. Reagan defeated President Jimmy Carter in 1980 criticizing him for being soft with the Iranians; now he had sold them weapons.

When the exchange was revealed in a Lebanese newspaper in November 1986, Reagan initially denied the report, but later admitted it was true. He justified his about face by claiming that he wanted to appeal to moderates within the Iranian government in order to undercut support for the Ayatollah Khomeini. “My purpose was ... to send a signal that the United States was prepared to replace the animosity between [the U.S. and Iran] with a new relationship.” Polls showed that not many people believed the president. The president’s advisors avoided using the term impeachment. Chief of Staff Donald Regan recalled: “It was a no-no word ... You never used the word impeachment except to yourself, because that was something no one wanted to even think about, but, as chief of staff, I felt I should at least look that beast in the eye to see, you know, were we going up here to another Watergate.”

Then the plot in what was called the “Iranian thing,” thickened. Investigators working for Attorney General Ed Meese discovered that much of the money from the sales had been diverted by Lt. Colonel Oliver North, working for the National Security Council with the approval of McFarlane’s successor, Admiral John Poindexter, to provide assistance to the Nicaraguan Contras, right-wing rebels who fought to overthrow the leftist Sandinista government under Daniel Ortega. Congress had passed legislation between 1982 and 1984, the Boland Amendments, explicitly prohibiting any kind of assistance to the Contras. As a result of the revelation, Poindexter had to resign and North was fired.

During the investigations that followed, there was never clear evidence that Reagan had known specifically about the diversion of funds to the Contras, but many people around him did. Fourteen people were indicted with different crimes related to the investigation, including North and Poindexter. McFarlane had pled guilty to four misdemeanor charges involving withholding information from Congress. There was pretty strong evidence that Vice President George H.W. Bush, who was going to run to succeed the president, had known as well.