The Iran-Contra scandal
Ronald Reagan did not blink at fighting communism in Grenada and in Central America. But funding of anti-Communist rebels in Nicaragua would lead to the worst scandal of his administration. The secret and rogue operation, under the direction of the National Security Council's Oliver North, used the proceeds from weapon sales to Iran to fund the anti-communist Contras in Nicaragua -- despite a congressional ban on such funding.
The president's closest aides maintain that Reagan did not fully know, and only reluctantly came to accept, the circumstances in what became known as the Iran-Contra affair.
Former U.S. Attorney General Edwin Meese:
"First of all, you had the Iranian initiative, which (was) a means of trying to communicate with moderate leaders within the Iranian government, to try to get their help to locate in Lebanon some of our hostages taken by the Hezbollah. At the same time, we had the support in Central America of the freedom fighters who were seeking to restore democratic government in Nicaragua."
While Reagan publicly called the Iran-Contra affair "a mistake," it is unclear if he understood the depth of the problem.
Former Secretary of State George Shultz:
"I know that (Reagan) could see, when he talked about (Iran-Contra) publicly the American people didn't accept what he said. He always felt that, 'I'll try to do the right thing and even if it's controversial, I can explain it. And if it's the right thing the American people will wind up supporting it.' And here came this case, and he could see that people weren't buying it. And that hurt."