Bringing Democracy to Nicaragua (Part 1 of 2)

Another set of text fragments from one the deep archives….

The Unmaking of a Country


The actions in Chile had helped signal the most important development at the end of the Cold War – the triumph of the transnational moderate elite over the hawkish national factions, culminating in the apex of Samuel Huntington’s “third wave of democratization” and Francis Fukuyama’s “end of history.” It would appear that old methodology of diplomacy of ‘Peace through Strength’ was fading away. The militant right would indeed lay dormant for only a short while, as humanitarianism became the moral justification for intervention. The right reemerged in the Clinton years through the neoconservative lobby, before finally returning to power in full with the administration of President George W. Bush. By this point, however, moderate viewpoints had conjoined with those of the nationalists. It was only in the foreign policy arena that the militant stance had won out, the right bringing the transnationalists under their influence.

However, this transnational ascendency through the 1980s did not occur without bumps in the road. For example, Reagan’s foreign policy often derived directly from the business nationalist power bases such as the American Security Council (and its Peace Through Strength lobbying arms) and the American Enterprise Institute. The prevalence of these entities contributed to a confused tone in the administration, something that is reflected even in the actions of the National Endowment for Democracy. It is tempting to write Reagan off as the first rumbles of the coming neoconservative storm, but this would be a lopsided analysis that ignored the legion of liberal internationalists, represented mainly through the Council on Foreign Relations and the Trilateral Commission, in his cabinet. The Reagan administration was truly a house divided, aligning itself and separating from the various blocs in accordance with each particular event.

Nothing illustrates this fact more clearly than the juxtaposition of two simultaneous occurrences: the democracy promotion efforts in Chile and Nicaragua. They play a perfect vehicle for study – both started roughly at the same point and time, and both culminated at the close of the 1980s in what appeared to be free and fair democratic elections. However, to reach this they each took an extremely different route; one was a full implementation of soft power techniques, and the other was a militarized effort that harkened back to the clandestine efforts that put Pinochet in power. There were, of course, structural differences in the two countries, as operation in Chile were concerned with removing a despised right-wing dictator, and policy in Nicaragua sought to undermine a popular, left-wing government. Soft power came only to forefront in Nicaragua after a multiyear conspiracy was unveiled, one that brought violence down upon the country’s innocent populations and offered a peak into the dark world of covert operations. The end of conspiracy, now known as the Iran-Contra scandal, established the NED as one of the primary foreign policy bodies in Latin America, following a precedent set in Chile.

The fall-out from these events generated a widespread change of attitudes in the Washington establishments, sparking historic parallels with other paradigm-shifting events. One example would be the fall-out from Watergate, which culminated in the Church Committee and the election of Jimmy Carter. Another example was the mobilization of the liberal faction in putting forth Barack Obama as a presidential contender, following a wave of discontent that stemmed from the heavy handed approaches to Middle East policy under President Bush. These events, however, were responses to overt pressure from below, whereas the post-Iran-Contra transition appears to have occurred within the Washington bureaucracy to preemptively undercut potential civic unrest. Federal investigation into Iran-Contra was conducted by liberal legislators, many of whom had ties to the very network they were prosecuting.i

The actions in Nicaragua and its ultimate integration into the world system is the end result of a greater pattern of intervention and meddling in the country’s affairs by the US, one that could trace its origin back to the years following the end of the American Civil War. In 1851 railroad magnate Cornelius Vanderbilt set up the Accessory Transit Company in Nicaragua to shuttle prospectors, enticed by the promises of gold, from the east coast to the west. The move secured US dominance over the Nicaraguan economy, displacing domestic businesses in exchange for foreign owned hotels and taverns.ii With the meddlesome elite of Nicaragua proving to be hindrance to the operation, Vanderbilt’s company financed William Walker, an American filibuster, to travel to Nicaragua with a mercenary army to secure his interests.iii


walkerWalker arrived in Nicaragua and with the backing of the nation’s Liberal factions ousted the dominant conservative elite from power. However, Walker’s intentions were ultimately duplicitous in nature – he had high hopes of “converting Nicaragua into a slave territory.” He turned on the Liberals and anointed himself as the president of the country.iv With official diplomatic recognition from Washington, he promptly reinstituted slavery as a common practice, established English as Nicaragua’s official language, and seized large land portions for US interests to move in and set up shop.v

Walker had not-only double crossed his Nicaraguan benefactors, but also Vanderbilt, who had been locked in a bitter rivalry with his former business partners in the Accessory Transit Company, Charles Morgan and Cornelius Garrison. Through a series of financial wrangling, Walker ripped control of the company from Vanderbilt’s hands and passed it over to two of the robber baron’ former business Incensed, Vanderbilt responded by purchasing arms for the opponents of Walker in the country’s elite and provided them with the funding necessary to remove the American dictator who had ridden into Nicaragua under the banner, to quote one pro-Walker Liberal, of “true democracy.”vii The effort was a success, and after a bloody battle, Walker was removed. He managed to flee the country with aid from a naval vessel personally dispatched by President James Buchanan. He arrived in New Orleans, where enthusiastic crowds gave him a hero’s welcome.viii

Nicaragua’s process of modernization was continued under the mantle of Liberal President Jose Santos Zelaya. Contrary to Washington’s preferences, however, Zelaya’s capitalism was in the more developmentalist vein that the US had implemented in its own lands during the post-Civil War reconstruction. Public education was expanded and opened to the poorer classes, and subsidizations allowed domestic infrastructure to flourish. When the government saw fit to slap tariffs on US imports, one US official sent word to President Theodore Roosevelt that “nothing effective… can be accomplished in accordance with our policy of friendly guidance of the Central American Republics as long as Zelaya remains in absolute power.” The implication of the communiqué was clear and soon the Nicaraguan conservatives, backed US businesses operating in the country, ousted Zelaya from power.ix

With Adolfo Diaz – a former employee for an American company – acting as president, a new government was quickly established. The Diaz administration amended the country’s constitution, inserting a provision that “guaranteed the legitimate rights of foreigners” over many of Nicaragua’s central institutions.x Although the new government was certainly friendly towards the US and accommodating towards their strategic and economic interests, the country quickly became a hotbed of popular discontent. Strikes and other union mobilization were hindrances to US-owned mining operations, and sporadic uprisings were increasing in frequency. Thus the US, under the guidance of Woodrow Wilson, conducted an operation in Nicaragua similar to the one that they were conducting in Haiti, dispatching marines and envoys to help maintain the domestic elite’s order.

It was against this backdrop when the Liberal-Conservative rivalry reached a boiling point and erupted into full-blown civil war. Stepping in, the US government quickly devised a peace agreement between the warring factions. The move actually favored one side over the other; the pact required the Liberals to relinquish their weapons to the US forces. Regardless, the agreement was accepted by all the Liberal generals expect for one, Augusto Cesar Sandino, who announced staunchly that he and his battalions would continue to fight until the US marines were forced out of Nicaragua. As Professor William Robinson writes,

Sandino converted what started out as just one more feud among the ruling cliques into a national rebellion against US domination, in defiance of the local elite and Washington. Sandino’s struggle inspired, and was supported by, many members of the lower classes, whose fight became a popular national movement incorporating peasants, miners, workers, and artisans. Over the following six years, Sandino waged a guerrilla resistance movement against US marines, who launched Washington’s first counterinsurgency war in the hemisphere.xi


Sandino’s insurrectionary politics were groomed from multiple sources; his upbringing having been amongst the urban poor. During a stay in Mexico he had become acquainted with the various strains of radicalism that had been surging through that country, including socialism, Marxism, anarchism, and syndicalism. He had also been attracted strongly to spirituality, adopting ideas from Mexican Freemasonry and from the Magnetic-Spiritual School, a theosophical organization that he had joined. The Magnetic-Spiritual School’s brand of theosophy was influenced by the Zoroastrian doctrine of the endless struggle between the light and the dark. It was not hard to compliment this spiritual system with radicalism, and it provided Sandino with a Manichean framework for his emergent political beliefs – there is the good versus evil, the oppressed versus the oppressor, the poor versus the rich.xii

Despite many setbacks and failures, Sandino’s six year campaign was ultimately a success. In 1933 Washington consented to withdrawing the marines from Nicaragua. Juan Bautista Sacasa had been elected president of the new civilian government, taking office the day before the foreign force’s departure. He met with Sandino, promising the rebel leader amnesty for him and his men in exchange for their support for the new government. The allegiance would be short lived – Anastasio Somoza García, a failed businessman who had been appointed as head of the National Guard by Sacasa at the behest of American officials, had Sandino and several of his close comrades assassinated.xiii

Two years later Somoza overthrew Sacasa’s government and was himself elected as president, thanks to a case of electoral fraud. Washington, then under the leadership of President Franklin D. Roosevelt, didn’t condemn the coup. Instead, they offered Somoza’s junta diplomatic recognition, and according to the dictator himself, Roosevelt had said “He’s an S.O.B., but he’s our S.O.B.”xiv This foreign policy approach, which would soon become one of the US’s primary Latin American policies in the Cold War, had been articulated several years earlier in State Department report. Listing multiple options for policy, the report had stated “[a] third alternative is a policy whereby the United States would merely guarantee stability in Nicaragua, regardless of whether this involved the maintenance of unrepresentative or dictatorial government… This policy would have the merit of simplicity – it would be the easiest for the United States to apply.”xv

In accordance with this recommendation, FDR drew Somoza closer into the US’s orbit, supplying his regime with marines to train the National Guard.xvi But this wasn’t enough to keep Somoza’s grip on the country tight. In 1944 he allowed elections to occur, though it was a matter of months before he returned to power in another coup. Popular discontent at his regime would lead to his assassination in 1956, but even this didn’t provide an opportunity for democratic reforms: his family name became a dynasty, as his son Luis Somoza Debayle would assume the office of presidency until 1967. Much like his father, the latest Somoza allowed his government to function as a client regime to the US. He provided additional support for the Cuban exiles in the Bay of Pigs fiasco, and conducted a series of moderate reforms as part of the Alliance for Progress.xvii The economy grew at an astounding rate of an annual 7% until 1967, when Luis was succeeded by his brother, Anastasio Somoza Debayle

The new President Somoza proved to be far more dictatorial than his brother – even 288x318_1373769675_140313por-nota3,photo01though Luis had enacted states of siege and violently suppressed opposition, both the Nixon and Ford administrations had begun a process of distancing the US from Somoza’s government. By the time Jimmy Carter entered office Somoza had censored the press and established clandestine torture centers, manned by the National Guard, to deal with oppositional groups. The regime’s actions quickly ran afoul of the American’s president foreign policy rhetoric about human rights. Carter publically condemned Somoza and attempted to leverage economic aid as an impetus for reforms.

When Somoza enacted a few façade-like reforms, Carter sent him a private letter applauding his “human rights initiatives.”xviii Unexpectedly, the dictator published the letter in a bid to win the support of the country’s moderate opposition. The plan, however, backfired as a great deal of centrists abandoned their positions and moved to the far left and joined forces with the radical Sandinistas.xix Named for Sandino, these rebel forces combined their commitment of ousting Somoza with a Marxian analysis of capitalism and imperialism. By 1979 they had rallied enough support to capture half of the country’s major cities. Disturbed by these events, Washington laid their cards out on the table; Zbigniew Brzezinski argued for a military intervention to both remove Somoza and prevent a “Castroite takeover of Nicaragua.”xx Wanting to avoid such a direct entanglement, the administration opted instead to support the country’s National Guard while attempting to isolate their leader.

The outcome of the plan was a failure. In July of 1979 the Sandinistas seized power and dissolved the National Guard. Cautiously, Washington extended a helping hand to the new government, providing them with approximately $216 million in a series of small loans through the World Bank and the Inter-American Development Bank.xxi At the take time Carter authorized his CIA director, Robert Gates, to allow the agency to conduct “small scale, nonlethal” covert operations in the country – though the goal of these measures is to this day unclear.xxii Before long, however, Carter received intelligence from the CIA that the Sandinstas were funding Marxist rebels in El Salvador, and he closed all funding to Nicaragua.

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The Sandinistas had established a temporary provisional government, the “Junta of National Reconstruction.” Membership in the junta was drawn from the far left, with members such a Danny Ortega and Sergio Ramírez representing the Sandinistas, and others drawing from the right-wing corporate elite, Alfonso Robelo and Violeta Chamorro. The latter, who would one day serve as Nicaragua’s president, had been married to Pedro Joaquín Chamorro, the owner of the moderate newspaper La Prensa. His assassination in 1978 had signaled the beginning of her alliance with the radical Sandinistas.xxiii

In Washington, the newly elected President Reagan observed these events with a worried eye. He continued the US’s commitment to withholding aid from the country, and released some $10 million to help assist in the creation of a paramilitary force to oppose the Sandinistas.xxiv This force came to be a loose assembly of various rebel factions, and was collectively labeled the “Contra rebels.” Around this time one of the junta’s right-wing members, Robelo, tendered his resignation and threw his weight behind one of the leaders of a Contra group, Edén Pastora. Chamorro also stepped down and began to support the new fighters.

Contra Rebels on Patrol

Undaunted by the rising right-wing insurgency, the Sandinistas continued to reform the country. The government implemented agrarian reform in 1981, allowing the seizure of land and its subsequent redistribution to the country’s poor. However, the methodology of expropriation was in itself rather moderate; the legislation’s roots were in earlier provisions put forth by Alliance for Progress that urged the taking of lands that did not “fulfill their social function because they are idle or uncultivated, or because they are not exploited in an efficient manner, or because the owner does not make use of them.”xxv They differed from their forbearers in the Alliance in a crucial way: whereas as Kennedy’s program had hoped to harmonize and help foster capitalist industry, the Sandinistas envisioned expropriation as Arbenz and Allende did – a revolutionary tool that could be used to destroy the West’s prized economic system and replace it with something far more equitable and non-exploitative. On land that was expropriated the junta established a series of state-financed farms or set up worker cooperatives. The outputs of these enterprises were subject to price controls.xxvi

The Sandinistas also mounted a campaign to eradicated illiteracy, which had plagued a country where 50% of the total population could neither read nor write. The goal was to lower illiteracy rates to at least 15%, and to meet this challenge it meant that “nearly every person who knew how to read or write had to teach those who did not.” This is precisely what happened; as Indiana University professor of education Robert Arnove observed on a trip to the country, “wherever I went – the most remote rural areas, the low-income neighborhoods surrounding the cities, the suburbs, or the inner cities themselves –people were teaching and learning.” The program also interacted with another key goal of the Sandinistas – gender equality. While the literacy project was a nation-wide campaign, women, treated as lesser citizens during the Somoza regime, became the recognized image of the effort.xxvii


In 1984 the Sandinista’s junta stepped aside and allowed free elections to take place. In the end the Sandinistas won with a majority of votes over their right-wing opposition, which had been a coalition of Social Democrats and the Constitutional Liberty Party, a pro-Somoza faction. Danny Ortega, fresh from the junta, officially entered the office of president. Immediately after the elections the Reagan administration placed a trade embargo on the country, banning Nicaraguan airlines from landing in America, ships from docking in its ports, and halting all trade between the Nicaragua and the U.S. In a speech Reagan declared “”I… find that the policies and actions of the Government of Nicaragua constitute an unusual and extraordinary threat to the national security and foreign policy of the United States and hereby declare a national emergency to deal with that threat.” He proceeded to block IMF and World Bank loans to the country.xxviii

In the midst of these events, Reagan set up a task force to deal with formulating policy recommendations for Central America. Known as the National Bipartisan Commission on Central America, the president staffed it with members with democracy promotion ties: Henry Kissinger was selected as chairman, with participants including Lane Kirkland and the AIFLD’s William Doherty. Carl Gershman, then serving as a consultant to Jeane J. Kirkpatrick, was brought along as an adviser.xxix A colonel and National Security Council (NSC) staffer by the name of Oliver North was also present when the commission made its rounds through Central American countries; when they entered Nicaragua in 1983, he made a habit of introducing himself as the “advance man for the US invasion.”xxx

images (70)Kissinger saw Nicaragua in stark terms. The Sandinistas were “as bad or worse than Nazi Germany,” and stated “we should not have to choose between peace and democracy.”xxxi His commission’s final report “brimmed with Cold War cant,” calling for “a significantly larger program of military assistance” and warning that “there are circumstances in which the use of force, by the United States or by others, could become necessary as a last resort.”xxxii It is apparent that the AFL-CIO’s president had no kirkland_lanesmall role in fomenting this hawkish approach – “I doubt we would have h eld… together without Lane’s participation,” one commissioner later recounted.xxxiii A gridlock occurred when a Democratic member insisted on including anti-Contra stipulations to the commission’s final report. After an
hour of debate, Kirkland stepped in and briskly reprimanded the commissioner. “You wouldn’t want to do a chicken-shit thing like that, would you?” he demanded. The Democrat promptly stepped down.xxxiv

And Contra aid did flow. Understandably, support for the rebel fighters proved to be rather controversial for Reagan, who had to repeatedly defend his administration’s stance on the matter.

Several attempts were taken by the liberals in Congress to prevent the Reagan administration from giving support for the Contras. In 1982 Senator Clairborne Pell (D-R.I.) had put forth an amendment to bar the US from funding the construction of airstrips in Honduras. The legislation was defeated with a margin of 65 to 29. Shortly thereafter Tom Harkin attempted to reintroduce the amendment, but it too lost, 280 to 109. Finally, Harkin moved to enter legislation into the Congressional arena that prohibited any and all arms sales to the Contras. Supporting the Contras, he argued, would merely strengthen the resolve of the Sandinistas and their constituency.xxxv

Edward Boland, a Democrat from Massachusetts, asked Harkin to back down from a stance that was seen as coming from the hard left and to instead endorse the more moderate language in his own bill, now known as the famous Boland Amendment. Harkin agreed, and Boland’s legislation became law. In the subtle language of the bill, loopholes were provided in which there would be space for continued Contra support as long as a different rhetorical tone was taken; it referred “to the purpose of the US government agencies, not the purpose and individuals receiving assistance from these agencies.”xxxvi

Members of the Contras took note of these changes. Edgar Chamorro stated that CIA agents who had visited Nicaragua “spoke openly and confidently about replacing the government in Managua,” but after the Boland Amendment passed, if a coup was discussed the CIA would simply say “that’s not the language we want you to use.”xxxvii Chamorro was explicit that nothing had changed policy-wise. “…our goal, and that of the CIA (as we were repeatedly assured in private), was to overthrow the government of Nicaragua… the public statements by the United States government officials about the arms flow, we were told by the CIA agents with whom we worked, were necessary to maintain the support of Congress and should be taken seriously by us.”xxxviii

Democratizing Nicaragua: A Multinational Enterprise

In 1984, militants from the Lebanese militant group took hostage seven individuals, one of whom was the chief of the CIA station in Beirut and veteran of covert affairs, William Buckley. Despite the policy of “not negotiating with terrorists,” the Reagan administration entered into a series of talks with the Iranian government, a known supporter of Hezbollah.xxxix A deal emerged: Iran, locked in a war with the neighboring country of Iraq, needed weapons for defense. The country agreed that if the US sold them the arms, they would use their leverage with the militant group to free the hostages. These armament shipments would be passed through Israel, who, despite their opposition to the Islamic regime, had successfully cultivated contacts within the country.

Understandably, protestation arose in some segments of the administration. George Shultz, Reagan’s Secretary of State, and Caspar Weinberger, the Secretary of Defense, saw folly in the arms-for-hostages arrangements.xl These differences, however, may not have had as much to do with idealistic altruism as they did with competition financial interests. Just a year before the kidnapping of the hostages, Shultz had dispatched Donald Rumsfeld, then serving as the Middle East peace envoy, to Iraq to meet with Saddam Hussein. While on the surface Rumsfeld’s mission was to improve relations with the country, another matter was the ultimate topic of discussion between the two future adversaries – the construction firm Bechtel – where Shultz had been president just before reentering politics – had its eyes on a proposed pipeline running from Iraq to the Jordanian port of Aqaba.xli Soon enough, the US was providing support to Iraq, sharing with them vital intelligence and allowing a CIA-linked arms dealer by the name of Sarkis Soghanalian to sell weapons to the country.xlii What this meant was that by the time that the arms-for-hostages deal was underway, the US was equipping both sides of the war with the means to attack one another.

Colonel Oliver North, the head of the National Security Council (NSC), saw suddenly an opening by which the Boland Amendment could be passed. The arms sales to Iran produced a profit of several hundred thousand dollars. In what he later described as a “neat idea,”xliii North realized that diverting these proceeds could alloow them to go to supporting the Contras in Nicaragua. He established a multinational network to achieve this end, which he dubbed the “Enterprise,”xliv and surrounded himself with a consortium of co-conspirators: the Assistant Secretary of State for Latin America Elliott Abrams; National Security Advisers John Poindexter and Robert MacFarlane; Attorney General Edwin Meese; former Air Force General Richard Secord, an academic and consultant named Michael Ledeen, and many others. In the later fall-out from the scandal, President Reagan denied knowledge of the conspiracy, despite testimony from North that the events had been authorized at the highest level.

North’s plan utilized the groundwork laid by the official arms-for-hostages deal – Israel still acted as the intermediary, but the surplus profits were channeled to offshore CaymanHC-GI295_Ghorba_20060712073636 Island banks or other places before reaching their destination with the Contras. Ledeen, who acted as the primary liaison between Enterprise and Israel, also brought into the fold Manucher Ghorbanifar, a well-known arms dealer that may or may not have had ties to the moderate factions existing inside Iran.xlv Ghorbanifar was greeted with some suspicion with many of North’s colleagues, but evidence exists in the later congressional reports on the Iran-Contra affair that he was protected by none other than CIA director William Casey.xlvi

Ghorbanifar’s allegiance with the CIA director provides a window into the murky world that the Iran-Contra nexus inhabited. Multiple times the arms dealer voiced the opinion of using some of the proceeds to support the rebel forces in Afghanistan that were fighting the Soviet invasion.xlvii US support for these fighters, the Mujahidin, had already been well underway – Brzezinski had already initiated covert funding for them during the Carter administration, and his program had been greatly expanded by Casey.xlviii But with a Congress reluctant to maintain consistent funding, the CIA director had turned to other places for help – the Saudis, the Pakistanis, and a little known yet vitally important banking complex known as the Bank for Commerce and Credit International (BCCI).xlix


The BCCI had been founded in 1980 by a prominent Pakistani philanthropist named Agha Hasan Abedi, utilizing capital from Bank of America and other sources. By the 1980 it had not only 140 branches in 46 countries and assets over $4 billion, but also deep and complicated ties to international criminal networks and intelligence agencies. Investigative journalists working for Time magazine would later paint a very dark picture of the bank:

From interviews with sources close to B.C.C.I., TIME has pieced together a portrait of a clandestine division of the bank called the “black network,” which functions as a global intelligence operation and a Mafia-like enforcement squad. Operating primarily out of the bank’s offices in Karachi, Pakistan, the 1,500-employee black network has used sophisticated spy equipment and techniques, along with bribery, extortion, kidnapping and even, by some accounts, murder. The black network – so named by its own members – stops at almost nothing to further the bank’s aims the world over. The more conventional departments of B.C.C.I. handled such services as laundering money for the drug trade and helping dictators loot their national treasuries. The black network, which is still functioning, operates a lucrative arms-trade business and transports drugs and gold. According to investigators and participants in those operations, it often works with Western and Middle Eastern intelligence agencies. The strange and still murky ties between B.C.C.I. and the intelligence agencies of several countries are so pervasive that even the White House has become entangled.l

download (13)When the journalists approached a high-ranking officer at the bank, he was reluctant to divulge information to them. “I could tell you what you want to know, but I must worry about my wife and family… they could be killed.”li Despite the blatant criminality conducted by the BCCI, it became embroiled in both Casey’s support for the Afghan mujahidin and North’s Enterprise: North, along with the British intelligence asset and arms dealer Leslie Aspin, opened accounts in several of the BCCI’s European branches to move Contra-bound Iranian arms money.lii Casey also had personal ties to the BCCI, a fact which may have helped tie together the various covert operations. He was a close friend of Bruce Rappaport, “an oilman thought to have ties to U.S. and Israeli intelligence.” Rappaport owned the New York and Geneva-based Inter Maritime Bank (IMB), which held director interlocks with both the BCCI and the BCCI-owned Banque de Commerce et de Placements (BCP).liii While it is unknown if Rappaport had knowledge of Enterprise, it was noted in by the Iran-Contra investigators that he was intimately involved with Bechtel’s Iraqi pipeline, and had sought to divert Iranian arm sales profits to fund that venture.liv

As indicated by the BCCI, North sought contacts from a myriad of countries in order assist the Enterprise in ‘democratizing’ Nicaragua. The West German equivalent of the NED, the Konrad Adenauer Foundation, funneled money to Contra organizations through the Nicaraguan Assembly of Democratic Unity (ANUDE).lv Despite the foundation’s seemingly liberal veneer, it had, in fact, been a longtime CIA front for Latin American operations. For example, it was revealed that in 1983 the Foundation had moved $350,000 of agency funding to Christian Democrat politicians in El Salvador.lvi Not surprisingly, the foundation was aligned with the European Socialist International, which had already been courted for Contra-aid by the Committee in Defense of Democracy in Nicaragua.lvii The Committee was run by Tor Halvorsen, a CIA man close to the pro-Contra Venezuelan ex-president Carlos Andres Perez, who was also a vice president in the Socialist International.lviii

Further interlinks between the Socialist International and North’s network can be found on the Israeli end of the complex; Shimon Peres, having become president of the Socialist International in 1978,lix was reported in a Senate Intelligence report to having been the initial source for the entire diversion of Iranian arm sale funds to the Contras.lx Direct Israeli support for the Contras dated back to at least 1981, when the Reagan administration bestowed Israel with satellite imagery of nuclear reactors being constructed in Osirak, Iraq. The act, which led to the bombing of the reactors by the Israeli air force, was conducted “within the framework of an appeal to Israel for help to the Contras.”lxi A year later Ariel Sharon, Israel’s minister of defense, met with Contra leaders during a trip to Honduras. Arrangements were made for Israel to supply the rebels with confiscated Eastern-Bloc arms through intermediaries in Honduras, and soon Israel was making military consultants available to the Contras and supplying them with AK rifles.lxii

Additional support was streaming in from one of Israel’s close compatriots – the apartheid regime in South Africa. In 1985 the government provided Honduras with $72 million in funds for a military-run industrial complex, a port facility, and a hospital, all apparently to be utilized as logistical support for the Contras.lxiii This Israel-South Africa axis in the Iran-Contra Enterprise can be viewed in a greater context of bilateral relations between the two countries – the two had established good diplomatic relations in the late 1970s, after the Israeli government proclaimed that “Israel and South Africa are two of the only 30 democracies in the world.”lxiv By the 1970s the two had begun to cooperate in developing nuclear technology; Peres himself may have had a hand in promoting this turn of events.lxv


While the foreign end of Enterprise was tied up with multinational players and secretive entities, the Western side was dominated by a series of organizations handled by one of North’s close compatriots, Carl R. “Spitz” Channel, an imposing figure of the far-right and an alleged racist. To help solicit and funnel money to the Contras, Channel’s network consisted of four primary interlocking non-profit foundations – the National Endowment for the Preservation of Liberty (NEPL), the Institute of North-South Issues, the Central American Freedom Program, and the American Conservative Trust (ACT). While the role of the Institute of North-South Issues is rather vague and shadowy, the ACT’s and the Central American Freedom Program’s agenda was primarily built around raising the domestic support from the US citizenry for the Contra cause. Their operations were supported by a surprisingly diverse array of organizations, ranging from free market think-tanks (Citizens for a Sound Economy), conservative patriot organizations (the Eagle Forum and the Citizen’s Coalition for the Right to Keep and Bear Arms), the military-industrial complex (the American Security Council and High Frontier), and the religious right (the Moral Majority).lxvi

The largest and most prolific of these organizations was undoubtedly the NEPL. Formed in 1984 and registered by Channel as a tax-exempt non-profit under IRS code 501c(3), Channel opened bank accounts for the foundation at the Palmer Bank in Washington D.C. – a locale known for its ties to GOP moneymen.lxvii Channel had also entered into a partnership with another North confidant by the name Robert Miller, who was the head of Washington-based public relations firm International Business Communications (IBC), which employed President Reagan’ former aide David C. Fischer.lxviii Together, Miller and Channel turned the NEPL and the IBC into a joint venture; funds flowing from the endowment were funneled to account held by IBC in the Cayman Island, where they were either transferred to Swiss banks or transformed into direct Contra aid.lxix The recipients of these clandestine cash flows were frequently the Contra rebel groups operating under the direction of Adolfo Colero.

The NEPL/IBC also acted as a funding conduit to the other organizations in Channel’s network, and sometimes incorporated outside bodies into their complex. For example, later investigators uncovered that Roy Godson, an official at the Heritage Foundation (as well as member of the national board of the League for Industrial Democracy, with close ties to the AIFLD and FTUI leadership)lxx had transferred money solicited from private donors through the conservative think-tank, before it reached its final destination at the Institute for North-South Issues.lxxi

In another instance, the NEPL/IBC granted $75,000 to the Institute for Terrorism & Subnational Conflict, which was employing North’s “personal courier to the contras,” Robert W. Owen.lxxii This Institute had its own ties to the pro-Contra network – it was operated out of the offices of the American Security Council and run by Neil Livingston, a member of the ASC’s Strategy Board and writer for World Affairs magazine. Livingston at this time was in contact with notable players in the Reagan administration; members of the World Affairs editorial board included Jeane J. Kirkpatrick and Penn Kemble. In a 1983 column for the paper Livingston had written that “the problem of human rights is genuinely bad in Guatemala and El Salvador. We should not wring our hands, however, over the problem.” He followed this statement by endorsing the use of death squads – much like the ones being financed in Nicaragua by his close colleagues – arguing that “they have helped more governments remain in power than they have harmed.” Elsewhere he had stated that effective foreign policy required “methods that involved targeting individual terrorists and their leadership for assassination.”lxxiii

14-Robert_Owen_view1Robert Owen, aside his affiliations with the Contras (he was the principle contact for Adolfo Colero)lxxiv and his presence in Livingston’s Institute, was also running the Institute for Democracy, Education, and Assistance (IDEA), yet another conduit for Enterprise. Unlike some of its more shadowy counterparts, IDEA attempted to foster the image of a humanitarian-minded foundation as opposed to right-wing cover organization for covert actions. Under this veneer, it was more likely for IDEA to be able to receive direct government contracts for “aid work” in Nicaragua, and this is precisely what happened: North had leaned on Ambassador Robert Duemling to release funding to Owen’s organization through the State Department division that he was heading up, the Nicaraguan Humanitarian Assistance Organization. This funding, an amount undisclosed by Federal investigators, never resulted in aid work, instead flowing to the UNO Contra faction.

Owen’s actions in Nicaraguan were absolutely vital for the smooth running of North’s Enterprise. At the behest of North and Abrams, he travelled to Costa Rica to set up an airstrip that would enable weaponry and other supplies to be flown to the rebels while avoiding the Sandinista government’s radarslxxv. The funding for this operation was complex and was to be traced back to Channell’s organizations – a diagram, hand drawn by North and later revealed to Senate investigators, depicted finances moving from the NEPL and ACT to the IBC, before then being transferred to “Lake Resources Inc.,” a Panamanian front company with a Swiss Bank account that was frequently utilized by Enterprise.lxxvi From there the funds travelled to yet another faux corporation in Panama, the “Udall Research Corporation,” which then financed the construction of Owen’s airstrip.lxxvii The operations of this airstrip would continue unabated until the Costa Rican government uncovered that it was being used as a base for drug trafficking.lxxviii One such known drug trafficker operating from the local was George Morales, who would testify later that in exchange for delivering weapon shipments to the Contras, he was allowed by the CIA to “smuggle thousands of kilograms of cocaine into the United States.” Some $250,000 of the proceeds went to Chamorro, the leader of the Democratic Revolutionary Alliance Contra faction.lxxixcontra4

Regardless of the criminal activities in which the Enterprise was indulging in, the efforts continued to rally the support of both the U.S. based and international far-right. A central hub of this nexus was the John Birch Society-affiliated Western Goals Foundation, of which Channel became the executive director of in 1986. This organization had been founded in 1981 by Congressman Larry McDonald (the then-president of the JBS) and the retired General John K. Singlaub, who had been busy soliciting donations on behalf of the Contras and had personally overseen the deliveries of armament shipments in Nicaragua.lxxx Both McDonald and Singlaub (who was simultaneously serving on the board of the ASC) had been the American representatives in the World Anti-Communist League (WACL), a transnational organization with quasi-fascist overtones that, incidentally was receiving support from Reverend Sun Myung Moon’s Unification Churchlxxxi and from Pinochet’s military junta.lxxxii The relationship was rather tight: Singlaub had also worked with CAUSA (an acronym for “Confederation of the Associations for the Unification of the Societies of the Americas”), an international body run by Colonel Bo Hi Pak, Reverend Moon’s second in command and a former official in the Korean Central Intelligence Agency.lxxxiii

Examining these critical linkages that were formed in the Iran-Contra days helps to unveil a characteristic duplicitous nature in US foreign policy during this time period. Moon, well regarded by the conservative establishment in Washington (Reagan had referred to the Unification Church-owned newspaper, The Washington Times, as his favorite paper,lxxxiv while the FBI had tapped the Moon network to help keep tabs on student activists opposing the administration’s Latin American policieslxxxv), had a history of supporting Latin American dictatorships, including that of Pinochet. Thus, as the Reagan administration, with the aid of the NED, was in the process of removing the Chilean dictator, they were entering into an allegiance with organizations whose agenda ran contrary to Washington’s goals. It is certainly interesting to take into consideration that Elliot Abrams, holding one of the highest positions in North’s network, was at the same time one of the most vociferous proponents of democracy promotion in Chile. As observed in the previous chapter, one of the trigger events in the change of diplomatic attitude towards Pinochet was the assassination of Orlando Letelier by one of the junta’s agents, the former CIA officer Michael Townley. Now, however, elements in the administration were having an apparent change of heart – one of the more prominent individuals in the WACL was the notorious Italian fascist and terrorist Stefano Delle Chiaie , a known associate of Townley.lxxxvi

This seemingly contradictory dichotomy can be explained by the differences in the prevailing opinions of the elite class. With the creation of the Trilateral Commission and other assorted think-tanks, domestic liberal internationalism had transformed itself into a pro-interdependence transnational network with a rather centrist approach to foreign policy and economics. The role placed by the soft power advocates in Chile was certainly indicative of this mindset; the central lynchpins of the anti-Pinochet movement were Christian Democrats, with organizations like the Club of Budapest and the Socialist International moving about on the edges. We have seen here that the Socialist International did indeed lend several supporting actors to the Iran-Contra scenario, and the actions of the NED and their transnational affiliations in Nicaragua will be discussed shortly. But by far and large the predominant circle that the Enterprise drew itself from was nationalist, right-wing, and rather reactionary in nature.


By the 1980s no organization better embodied the mindset of the business nationalists than the Council for National Policy (CNP), founded in 1981 by the evangelical Tim LaHaye (of Left Behind fame) to be a right-wing counterpart to the liberal Council on Foreign Relations. CNP’s membership roster has been a veritable who’s who of the religious right – the earliest board directors included Pat Robertson of the Christian Broadcasting Network, James Dobson of Focus on the Family, Jerry Falwell of the Moral Majority, the well-known Domionist R.J. Rushdoony, and the founder of the Family Research Council, Tony Perkins.lxxxvii Other members brought in towed the religious line, but had primary interests in business and politics instead of evangelism. These included the conservative philanthropist Jeffrey Coors, the Texas oilman Nelson Bunker Hunt, and Louisiana politician Woody Jenkins.lxxxviii The powerful consortium hoped to be able to combine their money, resources, and influences to directly affect legislative behavior in Washington; Jenkins, elected as the CNP’s first chairman, told reporters “one day before the end of this century, the Council will be so influential that no president, regardless of party or philosophy, will be able to ignore us or our concerns or shut us out of the highest levels of government.”lxxxix

Both Oliver North and John Singlaub integrated themselves into the CNP, seeing it as a hotbed of like-minded individuals and a potential field for soliciting pro-Contra donations.xc It was a wise move, for the CNP was certainly full of individuals sympathetic to the cause, many of whom had pre-existing ties to players in the Enterprise network. Three of the organizations supporting Channel’s Central American Freedom Program, Citizens for a Sound Economy, High Frontier and Eagle Forum, were run by CNP members – Jack Kemp, General Daniel O. Graham, and Phyllis Schlafly, respectively.xci Another CNP member, Senator Jesse Helms, boasted Sam Crutchfield, who helped Robert Owen initially set up IDEA, as a close aide.xcii LaHaye, on the other hand, would work with the Unification Church, with Bo Hi Pak donating money to his American Coalition for Traditional Values.xciii Likewise, Daniel Graham was serving on the board of Reverend Moon’s CAUSA at the same time as the CNP.xciv

download (14)North’s move to the CNP proved itself to be successful. Hunt, an anti-communist to the point of zealotry (decades earlier, on the ill-fated morning that John F. Kennedy had arrived in Dallas, he paid for a full-page ad in the Dallas Morning News charging the president with embracing the ‘Spirit of Moscow’),xcv quickly jumped on the Contra bandwagon after encountering North at a CNP meeting. The millionaire signed off on a series of off-the-book loans to the NEPL, totally $484,500, to help the Contras with “unpaid bills.”xcvi Hunt also provided funding to the Western Goals Foundation, while Jenkins helped to host a fundraiser in Washington D.C. for “Nicaraguan refugees” (an event that will be discussed shortly).xcvii

Perhaps the two most significant CNP members, at least for democracy promotion analysis, were J. Peter Grace and William E. Simon. Although his history of commercial interests in Latin America and political advising (not to mention his relationship with the AFL-CIO) dated back to the early days of the Alliance for Progress, the presence of Grace on the CNP is certainly interesting. A lifelong devout Roman Catholic, he had been appointed the head of the American Chapter of the Sovereign Order of the Knights of Malta (SMOM), an international lay organization with its headquarters in the Vatican. Yet through his membership in the CNP, he was consorting with individuals ran against the best interests of the Church. In 1980, the Archbishop of El Salvador, Father Óscar Romero, was assassinated while celebrating mass by men under the orders of Robert D’Aubuisson, the leader of the country’s ultra-right wing ARENA (Nationalist Republican Alliance) party. Despite this murder, the CNP’s membership constituted some of the largest D’Aubuisson supporters in the U.S. – aides working on behalf of Jesse Helms had helped the leader initially set-up his ARENA party,xcviii while John Singlaub, operating on behalf of the WACL, had personally consulted with D’Aubuisson in El Salvador.xcix D’Aubuisson would later be brought to Washington by the ASC to attended meetings of the “Tuesday Group” with Oliver North, an informal panel on Capital Hill that “focused on gaining aid for the Contras.”c

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It seems both Grace and Simon (who was himself Catholic and a member of SMOM, albeit a lower rank than his colleague) saw no contradiction in operating in these circles. In 1985 North wrote a memo to National Security Adviser Bud McFarlane stating “”The Nicaraguan Freedom Fund, Inc. , a 501(c)3 tax exempt corporation must be established… Several reliable American citizens must be contacted to serve on its board of directors.”ci Quickly, Reverend Moon’s lieutenant Bo Hi Pak pledged $100,000 to the effort, and shortly thereafter the Unification Church’s Washington Times announced the formation of the Nicaraguan Freedom Fund.cii Simon was made president of the fund, with Jeane Kirkpatrick, also a CNP member by this point,ciii serving as his vice-president. The other members included the NED’s Michael Novak, the actor Charlton Heston, Midge Dector, a neoconservative intellectual and vice president of the League for Industrial Democracy,civ (Dector at the time was also serving, alongside Kirkpatrick, on the advisory board of Radio Marti, an anti-Castro propaganda outfit that operated under the auspices of the NED-funded Cuban American National Foundationcv) and Clare Booth Luce, the wife of Time magazine owner Henry Robinson Luce and a female member of the SMOM.cvi


The Freedom Fund’s actions inside the Enterprise involved the channeling of private donations for logistical support of the Contras. Operating in this capacity, the Fund’s benefactors were mainly drawn from the CNP nexus – both Nelson Hunt and Pat Robertson’s Christian Broadcasting Network contributed to the endeavor. However, the primary thrusts of the Fund’s actions were conducted in conjunction with the AmeriCares, the self-described “humanitarian arm of Corporate America,” which received some $350,000 from the Fund in 1985.cvii AmeriCares was also receiving donations from the Fund’s backers as well, including the aforementioned Hunt and Christian Broadcasting Network.cviii While these financiers kept AmeriCares well-oiled and running smoothly, their role was eclipsed by the charity’s strongest partner, the SMOM. The link surely is pivotal – J. Peter Grace and William Simon were both on the members of AmeriCares advisory board, with Grace acting as chairman.cix When J. Peter Grace was asked why the AmeriCares and the SMOM chose to work together in Nicaragua, he stated that “The Knights have been doing this for 900 years. They have their own cross [the Maltese cross]. … They’d consider themselves way beyond the Red Cross.”cx He neglected to mention that CIA director William Casey, who was working so closely with North, was a member of the SMOM.cxi

A full circle of connections – the CNP, the SMOM, the Nicaraguan Freedom Fund – that orbited AmeriCares, formed a very crucial part of the entire Contra support apparatus. While North, Abrams, Singlaub, and others were hard at work ensuring that the rebels had the proper equipment and guns to wage war on the Sandinistas, this particular area (with the CNP helping to bridge the gap between the two) assisted the Contras with food, medical aid, and other basic living needs. In a bid to keep their image free from being seen as a political tool, the AmeriCares would go to great lengths to make their efforts seem distant from the Contras. For example, the Washington Post reported that between 1982 and 1984 AmeriCares distributed $14 million dollars of aid to El Salvador, Honduras and Guatemala, with large portions of it floating across the border to Nicaragua to the Contra-linked Meskito Indians.cxii However, other aid took a less circumvent route – in one event, supplies were taken directly to a Contra base in Honduras, and in another, money was donated to the brother of Contra leader Adolfo Calero.cxiii

Michael Barker has concluded AmeriCares’ “mission has been tightly enmeshed with that of US democracy-manipulating community,”cxiv taking note that some of their other advisory board members have included Brzezinski and Elie Weisel; both individuals can be tied this widening network through Brzezinski’s connections to the NED and Freedom House and Weisel’s membership on the board of overseers of the International Rescue Committee. Other tangential NED links can be found in the fact that Lawerence Eagleburger, who helped lay the groundwork for the creation of the NED, was also an AmeriCares advisor. This said, there appears to be no direct linkage between the actions of the philanthropy and the NED. The same cannot be said, however, about the Iran-Contra conspiracy at large.

The NED goes to Nicaragua


When the Senate investigators began to dig into North’s convoluted Enterprise, they noted that memos often referred to the complex by another name – “Project Democracy.” But even amongst his colleagues, the meaning of the name remained a mystery. Reportedly, when asked about it, he “’’just sort of grinned’ at the question.” ”He clearly didn’t want to talk about it,” said one NSC staffer.cxv The investigators had an equally hard time pinning down the nature of this illusive Project, and ultimately abandoned that avenue of inquiry. “We were unable to find any CIA connection,” explained Representative Norman Mineta. “So we dropped it.”cxvi

Despite the investigator’s protestations that Project Democracy was an ultimate dead end, reporters from The New York Times began to wonder if North’s Project Democracy had any relationship to the Reagan administration’s Project Democracy, which had produced the NED. One such reporter, Joel Brinkley, went so far to approach Carl Gershman, probing for a connection. “Carl Gershman, president of the National Endowment for Democracy, said he did not know the project [the NED] had a covert arm,” he later wrote.

The NED may not have had a covert arm per se – its operations, for the most part, were open to public scrutiny – although FOIA paperwork was often a requirement to obtaining access to their documentation. But Gershman’s statement was certainly a little bit facetious; his organization played an undeniable role in supporting the Contras. The NED’s primary interactions with the Contra rebels, at least during the time that North’s funnel was in full swing, was conducted through an intermediary organization, the Friends of the Democratic Center in Central America, or “PRODEMCA” for short. During its multiyear tenure, lasting from 1981 to 1988, PRODEMCA operated in both Nicaragua as a funding agent and in Washington as a lobbying entity. When North’s complicated scheme was finally revealed to the public, PRODEMCA’s operations were cut short and the organization’s operations were incorporated into Freedom House.

Institute-of-Religion-and-Democracy-logo2Although PRODEMCA’s agenda was quite diverse, interlocking on multiple levels with North’s enterprise, its base of operations was small. It primarily operated out of the offices of the Institute for Religion and Democracy (IRD) – another organization straddling the line between democracy promotion and the deep political strata of Iran-Contra. The IRD had been founded by 1981 by members of the Coalition for a Democratic Majority, most notably Penn Kemble and NED director Michael Novak. By the late 1980s the IRD would enter into an alliance with Lane Kirkland to break AFL-CIO support for the Mobilization for Peace, Jobs, and Justice Movement in US, which vehemently opposed the Reagan administration’s policy towards Latin America.cxvii

The IRD had also closely aligned itself with the rabidly anti-Sandinista Cardinal Miguel Obando y Bravo, whose activities with the organization were directed at purging Nicaragua of Liberation Theology.cxviii Obando’s crusade had also drawn the support of North, who had funneled money to the Cardinal through his Cayman Island-based BAC International.cxix Likewise, he had was also been receiving bibles, rosaries, and other supplies from J. Peter Grace, who had viewed Catholic grassroots organizations as “the best organized opposition to in Nicaragua to the present government’s efforts to change the country into a Marxist-Leninist society.”cxx Thus, it’s not surprisingly that we can find Grace –as well as his colleagues William Simon and John C. Duncan (the former Executive Vice President of W.R. Grace & Co.’s Latin American operations)cxxi – sitting on the directors of PRODEMCA.

PRODEMCA’s membership roster in full represents a significant cross-section from the various factions of the foreign policy sphere and elite opinion centers:


PRODEMCA Interlocking Directorships

Director Democracy Promotion Affiliations Social Democrats USA / AFL-CIO Other Affiliations
Penn Kemble Freedom House SD/USA; AFL-CIO; League for Industrial Democracy Coalition for a Democratic Majority; Institute on Religion and Democracy; United Sates Information Agency; World Affairs; Committee for the Free World
Vladimir Bukovsky Resistance International AFL-CIO
John C. Duncan W.R. Grace & Co; IBEC
J. Peter Grace AIFLD W.R. Grace & Co.; Council on Foreign Relations; Council for National Policy; AmeriCares
Reverend Theodore M. Hesburgh Rockefeller Foundation Chase Manhattan, Council on Foreign Relations
Sidney Hook SD/USA; League for Industrial Democracy
Samuel Huntington NED; Freedom House; Journal of Democracy Trilateral Commission; President Carter’s NSC; Coalition for a Democratic Majority
John T. Joyce NED; NDI; Freedom House SD/USA; FTUI; AFL-CIO (executive council)
William Doherty AIFLD
Jeane J. Kirkpatrick NED; Freedom House; Nicaraguan Freedom Fund League for Industrial Democracy Coalition for a Democratic Majority; Committee for the Present Danger; Council on Foreign Relations; American Security Council; American Enterprise Institute; Committee for the Free World; Council for National Policy
Michael Novak NED; Nicaraguan Freedom Fund American Enterprise Institute; Mont Pelerin Society; Institute on Religion and Democracy
Richard Ravitch AFL-CIO Council on Foreign Relations
Peter R. Rosenblatt Council on Foreign Relations; Coalition for a Democratic Majority; Committee on the Present Danger
Bayard Rustin Freedom House Social Democrats USA; A. Philip Randolph Institute; League for Industrial Democracy Coalition for a Democratic Majority; Committee on the Present Danger; Committee for the Free World; International Rescue Committee
John R. Silber Coalition for a Democratic Majority
William E. Simon Nicaraguan Freedom Fund AmeriCares; Council for National Policy; Council on Foreign Relations; Committee for the Free World
Ben J. Wattenberg League for Industrial Democracy American Enterprise Institute; Committee for the Free World; Coalition for a Democracy Majority
Elie Wiesel International Rescue Committee; AmeriCares

Sources: PRODEMCA masthead and various membership bios

The NED-SD/USA-AFL-CIO axis is well represented in PRODEMCA’s numbers, with Kemble, Hook, Joyce, Rustin, and others maintaining director posts. The AIFLD’s upper management is also prominent here – we can find both the then-current executive director, William Doherty, and his predecessor, Grace, in the roster. The Reagan administration’s direct influence could certainly be felt by the presence of Jeane J. Kirkpatrick, while liberal transnationalism had a voice through the Trilateral Commission’s Samuel Huntington. The CNP presence – Grace, Simon, and Kirkpatrick – was strong, as was that of the AmeriCares. Multiple members of the Coalition for a Democratic Majority, the Committee on the Present Danger, the American Enterprise Institute, and the CFR were also a mainstay of PRODEMCA.

If PRODEMCA strove to be a bipartisan entity, the dichotomy reflected in its managers also constituted a mini power bloc between the hard right nationalist sectors of the elite and the moderate liberal divisions. One clear-cut example of this is appearance of the Soviet dissident Vladimir Bukovsky on the board; in 1983 he founded the global anti-communist organization Resistance International. While the role of the movement in Iran-Contra is unknown, it did attract the attention of many of its central players – it was supported by Moon’s Unification Church,cxxii and Albert Shanker (of the NED, SD/USA, AFL-CIO, and the American Teacher’s Federation) sat on the board of its American division.cxxiii

It would be a mistake to attribute a central function of PRODEMCA in the Iran-Contra scenario, though it is certainly tempting to see it as such due to the diversity of powers represented in its board. However, for the majority of its lifetime the organization operated as a conduit for NED funds that were designated for La Prensa. PRODEMCA served in this role for a rather short time, passing some $150,000 to the publication between 1984 and 1985.cxxiv In 1986 the NED transferred its La Presna funding to its other large front, Delphi International Services.cxxv In another illustration of the closely knit tapestry-like nature of the North enterprise, the NED placed one Henry “Hank” Quintero in charge of Delphi’s Nicaraguan operations – a “longtime veteran of the intelligence community” who had also been assisting in operating Channel’s Institute of North-South Issues.cxxvi

Aside from its La Prensa funding, PRODEMCA always worked very closely with legislators in an attempt to rally support to overturn the Boland Amendment. It conducted these endeavors in several different fashions, one which was hosting tours of Contra base camps in Honduras for politicians, academics, and journalists who were perceived as potential supporters of the cause. The camp, predictably, differed greatly from the reality of the Contra’s violent lifestyle; one source told the Washington Post that the tour was a “dog and pony show for visiting congressional delegations. It’s a carefully controlled atmosphere. The people are allowed to talk to will give the party line.”cxxvii

On the domestic front the organization would host “legislative strategy sessions” in its offices at the IRD headquarters, networking together pro-Contra politicians and coordinating lobbying activities.cxxviii It is known that Robert Kagan, one of the later leading lights of neoconservatism who was then serving in the State Department under George Schultz, attended the meetings. Simultaneously, Kagan was also moonlighting at the Office of Public Diplomacy for Latin America and the Caribbean, a propaganda outfit that spun out pro-Contra journalism under the direct auspices of North’s NSC .cxxix

This time period marked a period of change for PRODEMCA from an NED outlet for Nicaraguan to propaganda and into a successful congressional pressure group. In addition to support from the NED, it also began to draw funding in from Channel’s Central American Freedom Program and NEFLP.cxxx This helped trigger a move that further centralized PRODEMCA’s role in the North enterprise, with the Central American Freedom Program officially hiring the organization as its official lobbying arm. They proceeded to work in tandem with Bruce Cameron, an “influential Democrat lobbyist”cxxxi who had broken ranks from his more liberal colleagues and had begun to espouse a pro-Contra line.cxxxii Cameron utilized the Robert Owen’s IDEA as his official agency, rechristening it as the Center for Democracy in the Americas and integrating it closely with PRODEMCA by appointing Kemble as its new president.


In retrospect, Kemble seems very much to be a key pillar in Iran-Contra. While acting as the chairman of both Cameron’s new agency and PRODEMCA, the former socialist had also become a member of a task force inside Miller’s IBC that acted as the de facto coordinating body for Channel’s Central American Freedom Program.cxxxiii Alongside him on the task force was Miller himself, Cameron, Channel, as well as the well-known philanthropist and public affairs specialist Edie Fraser. Fraser had helped host a gala in 1985 for the Nicaraguan Refugee Fund; while the expensive dinner that included President Reagan as a guest speaker only provided $1,000 for Nicaraguan refugeescxxxiv, documentation by Senate investigators included the event in a fundraiser network that the NED was intimately involved in.cxxxv Following in a similar vein, another member of the task force was Steve Cook, representing the PR firm Edelman, a company that has interlocks with Freedom House through their senior associate, Kenneth Adelman.cxxxvi

All these plays continued to unfold in a spiraling axis that stretched from Washington to Central America, and across the Atlantic to Iran, Israel, Saudi Arabia, and South Africa. Ultimately, It would not last.


ii Michel Gobat, Confronting the American Dream: Nicaragua Under US Imperial Rule Duke University Press Book, 2005 pgs. 24-25

iii William I. Robinson Promoting Polyarchy: Globalization, US Intervention, and Hegemony Oxford University Press, pg. 204

iv Thomas F. O’Brian The Century of U.S. Capitalism in Latin America University of New Mexico Press, 1999 pg. 13

v Robinson Promoting Polyarchy, pg. 204

vi O’Brian The Century of U.S. Capitalism in Central America pg. 13

vii Stephen Dando-Collins Tycoon’s War: How Cornelius Vanderbilt Invaded a Country to Overthrow America’s Most Famous Military Adventurer De Capo Press, 2008 pg. 252; Gobat, Confronting the American Dream, pg. 33

viii Manzar Foroohar The Catholic Church and Social Change in Nicaragua State University of New York Press, 1989 pg. 7

ix Robinson Promoting Polyarchy, pg. 205

x Ibid, 208

xi Ibid, pg. 208

xii Foroohar The Catholic Church and Social Change in Nicaragua pg. 19

xiii Ibid, pg. 23

xiv Jerome R. Adams Liberators, Patriots, and Leaders of Latin America: 32 Biographies MacFarland, 2010 pg. 307

xv Robinson, Promoting Polyarchy, pg. 210

xvi Adams, Liberators, Patriots, and Leaders pg. 307

xvii Clifford L. Staten The History of Nicaragua Greenwood, 2010 pg. 65

xviii Jame Petras “The Venezuelan Referendum: Beware Jimmy Carter!” Counterpunch, July 8th, 2004

xix Betty Glad An Outsider in the White House Leaders: Jimmy Carter, His Advisers, and the Making of American Foreign Policy Cornell University Press, 2009 pg. 243

xx Ibid

xxi Ibid, pg. 244

xxii Ibid

xxiii Clayton L. Thine How International Relations Effect Civil Conflict Lexington Books, 2009 pg. 107

xxiv Scott A. Hunt The Future of Peace: On the Front Lines of the World’s Great Peacemakers Harper, 2004 pg. 214

xxv Phil Ryan The Rise and Fall of the Market in Sandinista Nicaragua McGill-Queen’s University Press, 1995 pg. 129

xxvi Michael Zalkin “The Sandinista Agrarian Reform: 1979–1990?” International Journal of Political Economy, Vol. 20, No. 3, Nicaragua: Political Economy of Revolution and Defeat, Fall 1990

xxvii Robert Arnove “The Nicaraguan National Literacy Crusade of 1980” The Phi Delta Kappan, Vol. 62, No. 10, June, 1981

xxviii “US Policy: Economic Embargo: The War Goes On” Envio, Number 93, April, 1989

xxix Nathan Abrams Norman Podhoretz and Commentary Magazine: The Rise and Fall of the NeoCons Continuum, 2012 pg. 171

xxx Holly Sklar Washington’s War on Nicaragua South End Press, 1999 pg. 171

xxxi Ibid, pgs. 172, 171

xxxii Stanley Meisler When the World Calls: The Inside Story of the Peace Corps and its First Fifty Years Beacon Press, 2012 pg. 155

xxxiii Arch Puddington Lane Kirkland: Champion of Labor Wiley, 2005 pg. 200

xxxiv Ibid

xxxv Cynthia Arson Crossroads: Congress, the President, and Central America, 1976-1993 Pennsylvania State University, 1993 pg. 111

xxxvi Sklar Washington’s War on Nicaragua, pg. 131

xxxvii Ibid

xxxviii Ibid

xxxix Athan G. Theoharis, Richard H. Immerman The Central Intelligence Agency: Security Under Scrutiny Greenwood, 2005 pg. 245

xli Bob Herbert “Ultimate Insiders” The New York Times April 14th, 2003

xlii Alan Friedman Spider’s Web: The Secret History of How the White House Illegally Armed Iraq Bantam Books, 1993, pgs. 27, 36

xliii Donald Worster Rivers of Empire: Water, Aridity, and the Growth of the American West Oxford University Press, 1992 pg. 160

xlv Lawrence E. Walsh “Final Report of the Independent Counsel for Iran/Contra Matters,” Volume I: Investigations and Prosecutions, August 4, 1993, Chapter 15: William J. Casey

xlvi Ibid

xlvii Ibid

xlviii Peter Dale Scott The Road to 9/11: Wealth, Empire, and the Future of America University of California Press, 2007, pgs. 71-75, 115-117

xlix Ibid, pg. 116

l Jonathan Beaty, S. C. Gwynne “B.C.C.I.: The Dirtiest Bank of Them All” TIME, July 29th, 1991

li Ibid

lii Andrew Fight Understanding International Bank Risk John Wiley & Sons, 2004, pg. 33

liii Scott The Road to 9/11 pg. 95

liv Lawrence E. Walsh “Final Report of the Independent Counsel for Iran/Contra Matters,” Volume I: Investigations and Prosecutions, August 4, 1993, Chapter 14: Other Money Matters: Traveler’s Checks and Cash Transactions

lv Martha Honey Hostile Acts: U.S. Policy in Costa Rica in the 1980s University of Florida Press, 1994 pg. 238

lvi Joan Roelofs Foundations and Public Policy: The Mask of Pluralism State University of New York Press, 2004 pg. 163

lvii Honey Hostile Acts pg. 237

lviii Ibid

lix Michael Barker “Who Wants a One World Government?” Swans Commentary April 6th, 2009

lx Jane Haapiseva-Hunter Israeli Foreign Policy: South Africa and Central America South End Press, 1999 pg. 165

lxi Ibid, pg. 146

lxii Ibid, pgs. 147-148

lxiii Sklar Washington’s War in Nicaragua pg. 225

lxiv Noam Chomsky Fateful Triangle: The United States, Israel, and the Palestinians South End Press, 1999 pg. 21

lxv Haapiseva-Hunter Israeli Foreign Policy pg. 35

lxvi Lee H. Hamilton, Daniel K. Inouye “Report of the Congressional Committees Investigating the Iran-Contra Affair” Appendix B: Volume 4, 100th Congress, 1st Session, 1989

lxvii Joseph J. Trento Prelude to Terror: Edwin P. Wilson and the Legacy of America’s Private Intelligence Network Carroll & Graf Publishers, 2005, pg. 330

lxviii Robert Pear, Richard L. Berke “Washington Talk; New White House Link to Contra Aid Network” The New York Times, March 16th, 1987

lxix Lawrence Walsh “Final Report of the Independent Counsel for Iran/Contra Matters, Volume 1: Investigations and Prosecutions” United States Court of Appeals for the District of Columbia Circuit, August 4th, 1993

lxx Beth Sims, Workers of the World Undermined: American Labor’s Role in US Foreign Policy South End Press, 1999 pgs. 45, 50

lxxi Walsh “Final Report”

lxxii Russ Bellant Old Nazis, the New Right, and the Republican Party: Domestic Fascist Networks and their Effect on U.S. Cold War Politics South End Press, 1988, pg. 86

lxxiii Ibid.

lxxiv Joel Bainerman Crimes of a President: New Revelations of Conspiracy and Cover-up in the Bush & Reagan Administrations S.P.I. Books, 1992, pg. 42

lxxv Sklar Washington’s War on Nicaragua pg. 143

lxxvi Paul Houston, Michael Wines “Aftermath of the Tower Report: Data in North’s Safe Points to Conservatives – Fundraiser Possibly Aided Rebels” The Los Angeles Times, February 28th, 1987,

lxxvii Ibid.

lxxviii Lee H. Hamilton, Daniel K. Inouye “Report of the Congressional Committees Investigating the Iran-Contra Affair” 100th Congress, 1st Session, 1987, pg. 143

lxxix Harold Traver, Mark S. Gaylord Drugs, Law and the State, Hong Kong University Press, 1992, pg. 24

lxxx Hamilton, Inouye “Report of the Congressional Commission,” pg. 50

lxxxi Sara Diamond Spiritual Warfare: The Politics of the Christian Right South End Press, 1999 pg. 59

lxxxii Bellant, Old Nazis, the New Right, and the Republican Party, pg. 87

lxxxiii Sklar Washington’s War on Nicaragua pg. 80

lxxxiv Robert L. Snow Deadly Cults: The Crimes of True Believers Praeger, 2003 pg. 44

lxxxv Christian Smith Resisting Reagan: The U.S. Central Peace Movement University of Chicago Press, 1996 pgs. 287-288

lxxxvi Peter Dale Scott American War Machine: Deep Politics, the CIA Global Drug Connection, and the Road to Afghanistan Rowman & Littlefield Publishers, 2010, pg. 36

lxxxvii Chris Hedges American Fascists: The Christian Right and the War on America Free Press, 2008 pg. 139; D. Michael Lindsay Faith in the Halls of Power: How Evangelicals Joined the American Elite Oxford University Press, 2008 pg. 59

lxxxviii Hedges, American Fascists, pg. 139; Russ Bellant The Coors Connection: How Coors Family Philanthropy Undermines Democratic Pluralism South End Press, 1988, pgs. 45, 63

lxxxix Bellant, The Coors Connection, pg. 37

xc Ibid.

xci Frederick Stecker The Podium, the Pulpit, and the Republicans: How Presidential Candidates Use Religious Language in American Political Debate ABC-CLIO, 2011, pg. 11

xcii Bellant Old Nazis, the New Right, and the Republican Party, pg. 64

xciii Diamond Spiritual Warfare, pg. 70

xciv Scott Anderson, John Lee Anderson Inside the League: The Shocking Expose of How Terrorists, Nazis, and Latin American Death Squads Have Infiltrated the World Anti-Communist League Dodd, Mead, 1986, pg. 126

xcv Gerard Colby and Charlotte Dennett Thy Will Be Done: The Conquest of the Amazon – Nelson Rockefeller and Evangelism in the Age of Oil Harper Collins, 1995, pg. 415

xcvi Lee H. Hamilton, Daniel K. Inouye “Report of the Congressional Committees Investigating the Iran/Contra Affair” pgs. 93-94

xcvii North American Congress on Latin American report “Franchising Aggression” Vol 20, No. 4, July 1986

xcviii Rob Christensen The Paradox of Tar-Heel Politics: The Personalities, Elections, and Events that Shaped Modern North Carolina University of North Carolina Press, 2008 (2nd edition) pg. 252

xcix Bellant Old Nazis, the New Right, and the Republican Party pg. 85

c Ibid., pg 46

ci “Nicaraguan Freedom Fund” Right Web; Bo Hi Pak Messiah: My Testimony to Rev. Sun Myung Moon, Volume 2 University of America Press, 2002, pg. 67

cii “Nicaraguan Freedom Fund” Right Web

ciii Mailing list, Council for National Policy, 1984

civ Adrian Karatnycky, Alexander J. Motyl, Adolf Fox Sturmthal Worker’s Rights, East and West League for Industrial Democracy, 1980 pg. 150

cv Daniel C. Walsh An Air War With Cuba: The United States Radio Campaign Against Castro Macfarland & Company, 2012 pgs. 51, 136; Morris H. Morley, Chris McGillion Unfinished Business: American and Cuba after the Cold War, 1989-2001 Cambridge University Press, 2002 pg. 13

cvi “Nicaraguan Freedom Fund” Right Web

cvii Peter Phillips (ed.) Censored 1999: The News that Didn’t Make the News – The Year’s Top Twenty Five Censored Stories Project Censored, 1999, pg. 212

cviii Michael Barker “The Religious Right and World Vision’s “Charitable” Evangelism” Swans Commentary December 28th, 2009,; “Knights of Darkness” Covert Action Information Bulletin, D. Michael Lindsay Faith in the Halls of Power: How Evangelicals Joined the American Elite Oxford University Press, 2007, pg. 59

cix Phillips Censored 1999, pg. 212

cx “Knights of Darkness”

cxi Laurence French, Magdaleno Manzanárez NAFTA & Neocolonialism: Comparative Criminal, Human, & Social Justice University Press of America, 2004 pg. 102

cxii “Knights of Darkness”

cxiiiPhillips Censored, 1999 pg. 212

cxiv Michael Barker “Caring for Haiti” Swans Commentary February 8th, 2010

cxv Joel Brinkley “Iran Sales Linked to Wide Program of Covert Policies” The New York Times February 15th, 1987

cxvi Ibid.

cxvii Diamond Spiritual Warfare pg. 15

cxviii A. James Reichley Religion in American Public Life Brookings Institution Press, 1985, pg. 336)

cxix Don Irwin “North Tied to Church Funds in Nicaragua” Los Angeles Times June 8th, 1987

cxx Diamond Spiritual Warfare, pg. 156

cxxi Andean Airmail and Peruvian Times, Volume 25, Issue 1, 1965, pg. 16

cxxii Sabrina Petra Ramet Religious Policy in the Soviet Union Cambridge University Press, 2005, pg. 253

cxxiv William I. Robinson A Faustian Bargain: U.S. Intervention in the Nicaraguan Elections and American Foreign Policy in the Post-Cold War Era Westview Press, 1992, pg. 80

cxxv Ibid.

cxxvi Robinson, Promoting Polyarchy, pg. 187

cxxvii Sims, Workers of the World Undermined pg. 50

cxxviii Eldon Kentworthy America/Américas: Myth in the Making of U.S. policy toward Latin America Pennsylvania State University Press, 1995, pg. 109

cxxix Ibid.; Robin Henderson A Century of Media, A Century of War Peter Land Publishing, 2006, pg. 106. It should be noted that the Office’s executive director, Otto Reich, had been appointed by William Casey and had been a former administration for USAID.

cxxx Kentworthy America/Américas pg. 109; Lee Siu hen “Labor’s China Syndrome” Z Communications July, 2005,

cxxxi Human Rights Watch Conspicuous Destruction: War Famine and the Reform Process in Mozambique Yale University Press, 1990, pg. 189

cxxxii Kentworthy America/Américas, pg. 109

cxxxiii Report of the Congressional Committees Investigating the Iran-Contra Affair, Appendix B, Vol. 6, 100th Congress, 1st Session, 1989

cxxxiv “North Involved With Controversial 85 Fundraiser: Ex-NSC Aide Solicited Funds for Right-Wing Groups” The Harvard Crimson December 17th, 1986

cxxxv Report of the Congressional Committees Investigating the Iran-Contra Affair, Appendix B, Vol. 20, 100th Congress, 1st Session, 1989

cxxxvi Report of the Congressional Committees Investigating the Iran-Contra Affair, Appendix B, Vol. 6; Tony Cartalucci “Neo-Cons for Human Rights?” Land Destroyer Report, Monday, February 14th, 2011,


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4 Responses to Bringing Democracy to Nicaragua (Part 1 of 2)

  1. Pingback: Bringing Democracy to Nicaragua (Part 2 of 2) | Deterritorial Investigations Unit

  2. S.C. Hickman says:

    I like how your weaving the institutional histories the micro and macro aspects in their insidious movement and subterfuge. As usual you’ve done an excellent job of it… dam, getting to heart of things now!

  3. S.C. Hickman says:

    Reblogged this on dark ecologies and commented:
    Edmund Berger has a two part expose on the way the transnational or global power system has instigated through its insidious networks of power the slow but methodical unmaking of Nicaragua… which was but a test case in their unmaking of the planet which is still going on… read him and learn!

  4. Pingback: The Uses and Abuses of Global Civil Society | Deterritorial Investigations Unit

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