Fiasco

When a new hostage crisis takes hold in Lebanon,

Ronald Reagan is determined to avoid the same mistakes

made by his predecessor, Jimmy Carter.

But as the crisis deepens, Reagan becomes consumed

with bringing his countrymen home.

Then National Security Advisor Robert McFarlane

presents a risky proposal to sell weapons to Iran

in exchange for the release of hostages.

Reagan eagerly signs off.

So far, we have been following the strands

of the Iran-Contra saga separately,

tracing each one from conception to execution,

as they wove, one by one,

through the mind of Oliver North

and the universe of room 392.

- The contras. - Kidnapped in Beirut.

Ayatollah Khomeini.

But this is the moment

when the strands come together

to form the surreal plot

we have come to know as the Iran-Contra scandal.

Iran was exporting its revolution

to wage war against Western interests

and conservative Arab interests.

Father Jenco from Illinois

is the fifth American to disappear

from the streets of West Beirut in the last ten months.

We had hostages that had been taken, in Lebanon.

Our responsibility is to try to get those hostages back home.

CIA officers have directed

and funded the war against Nicaragua.

CIA employees executing the more damaging attacks.

But Congress passed an amendment

which said you can't spend any money to support the Contras.

They were gonna die on a limb.

Hell of a mess.

How did Ronald Reagan's

ambitions in Central America

become fused with his priorities in the Middle East?

How did the money, the personnel, the logistics,

and the policy all get tangled together?

There was a major screwup.

I mean, you can just imagine today,

if the White House was caught selling arms to Iran,

there would be outrage.

But then, to take the money from a Middle East operation

and give it to a group that's involved

in a civil war, it becomes diabolical.

From the beginning, there was one person

who could have predicted that Reagan would fall prey

to an out-of-control hostage crisis.

It was his national security advisor,

Robert "Bud" McFarlane.

He saw the risk clearly

during his first week in office back in 1983...

The count of American dead in today's terrorist attack

on the U.S. Marine compound in Beirut stands at 135.

...as the situation in Lebanon went from dangerous to deadly.

I didn't know what hit us.

You hear about 1,000 people, it seemed like, screaming,

"Help me. God help me."

Reagan was just shattered by it.

At the earliest opportunity,

he wanted to go to Camp Lejeune

and be consoling and whatever he could do, and he did.

If this country is to remain a force for good in the world,

we'll face times like these, times of sadness and loss.

Your fellow citizens know and appreciate

that Marines and their families are carrying a heavy burden.

I watched him,

and I became quite emotional too.

He was both embittered

and sorrowful for the survivors

and the parents who were there.

It was clear that Reagan

cared deeply about his fellow countrymen abroad.

But for Bud McFarlane,

the President's grief provoked a troubling thought.

That investment personally

of the time and effort to go and be there.

You couldn't deny this is vivid evidence

of how an enemy would see a vulnerability.

And it was in this vulnerability

that Iran, once again, saw an opportunity.

They could capitalize on it by coaxing Reagan

into risking everything

for the rescue of seven hostages.

I am Leon Neyfakh.

This is "Fiasco:

the Story of Iran-Contra."

When Reagan came into office, I was at the State Department,

and he wanted me to be his interlocutor

between the heads of state throughout the Middle East.

His secretary of state, he asked me,

"What do you think is the most important issue

that we must study hard?" And I said,

"Well, the wild card in the mix here is really Iran."

We've had a revolutionary figure emerge

as the leader of Iran.

At the geopolitical center

of the energy world on the planet,

this is a terribly important country,

and it is bound to be a target for the Soviet Union.

Iran was, in many ways, thought by Americans,

including those in the Reagan administration,

to be a new kind of face of anti-American evil.

The American Embassy in Tehran ceased operations

in November 1979

when it was taken over by militants,

and it has never opened since.

Inescapably, this story always comes back

to that year of revolution: 1979.

In early 1979, the Shah gave up,

and he left the country.

He never came back to Iran again,

and everything connected

with his regime soon completely collapsed.

The Iranian people are united, and they believe,

and all of them are behind Khomeini's leadership.

Khomeini and his forces really gain the upper hand

and begin establishing the institutions

that we see today, 40 years later,

in the Islamic Republic of Iran.

He was the one who understood and made real

how to combine Islam and politics.

Around the time the U.S. hostages taken

during the Carter administration returned home,

Ayatollah Khomeini consolidated his power over Iran

and hardened his stance towards the United States.

This was the first group of Americans

to leave the country

since the U.S. embassy said it could no longer guarantee

the safety of U.S. citizens in Iran.

Pan American Airlines brought a plane in

to take its people out

and opened the flight to a few other companies

and about 20 newsmen

who decided it was time to get out.

So how did we get

from being literally shut out of Iran

by our archenemy, Ayatollah Khomeini,

to selling his government deadly weapons

just six years later?

To understand that, we need to look next door

to the region's other reigning despot.

He likes to be called Saddam,

but some Arabs have other names for him.

The Butcher of Baghdad is one.

Remember him? Saddam Hussein.

A character from a completely different American fiasco.

Well, he plays a role here too.

Saddam Hussein al-Tikriti,

president in name for the past 14 months,

but Iraq's strongman for the past decade,

variously attired in Arab headdress

or in the uniform of a field marshal

although he was never a soldier.

But his favorite image:

the cuddly father figure.

Before he was a menace to Kuwait,

Saddam waged one of the longest and bloodiest wars

in modern Middle Eastern history.

It was against his neighbor,

the radical Muslim cleric

solidifying his power in Iran and posing a new challenge

to Saddam's aggressively secular dictatorship.

Saddam Hussein was a Sunni leader

who was running a majority Shiite country,

and he kept the Shiite community in check.

And Khomeini had a theocracy.

He had visions of having a government

based on religious power,

maybe emulated in other parts of the Arab world.

They were exact opposites.

The Arab Gulf countries were extremely nervous

about the kind of regime that emerged in Iran.

And there's this traditional rivalry

between Sunnis and Shia,

and they felt threatened.

What Saddam feared was that

the ethnicity of the Shia

and their loyalty to the Shia Imams

would trump their faith in the government of Iraq,

which was primarily Sunni

and which did very little to help the Shia majority.

So the ability of Khomeini

to threaten Saddam was quite profound.

In 1980,

in the wake of Iran's chaotic revolution,

Saddam Hussein saw an opportunity.

Saddam and his aides want to establish Iraq,

not Iran, as the major power in the area

and elevate Saddam as the leader of all Arabs.

And so Saddam did what dictators often do.

He attacked.

Basking in their nationalist identity,

Iranians flocked to the frontlines

to defend their country.

The men and boys who have responded wear headbands

that say simply, "Yes to Khomeini."