The Iran-Contra affair covered the selling of arsenal to Iran and the funding given to Nicaraguan Contra militants, a move by the US government to free its citizens held hostage by the Hezbollah forces. The support for the rebels in Nicaragua was banned by the Boland amendment. The militants received finances through the sale of arms and trafficking of drugs. The affair yielded negative repercussions. One of the repercussions was the change of plans by the US to sell arms directly to the Iranian government without passing through the Israeli government. The price at which the arms were now sold was seen as inflated and later rejected by the Iranians; therefore, the hostages could not be released by Hezbollah until the US adjusted its charges.
The private shipment of weapons to Iran through Oliver North’s decision without the approval of President Reagan did not receive legal approval from the Iranian government, caused a delay in the release of the hostages. Another negative result was the donation operation done by the Contras in which they performed fraudulent insurance activities on boats and planes. This was as a result of the funding by the US. The kidnapping of four Americans by Hezbollah when the deals collapsed so as to replace the already freed Americans.
Also, the leakage of the scandalous deals between the Iranian government and the US by the newspaper Mehdi Hashemi served as blacklisting and a drawback since it exposed the US officials who were involved in the scandal. This brought serious complications since both the US and the Iranian governments had to enact specific laws on the freedom of information to protect the affected individual’s privacy. The US president could not have a direct address to the American people following the release of the scandal. The public wanted him to explain why he had not updated them on the scandal. The scandal degraded US credibility on its earlier stated stringent principles allowing no negotiations with terrorists.