During the early years of the Reagan presidency, Cold War tensions between the Soviet Union and the United States intensified. Reagan entered office deeply suspicious of the Soviet Union. Reagan described the Soviet Union as "an evil empire" and called for a space-based missile defense system, derided by critics as "Star Wars."
Reagan and his advisers tended to view every regional conflict through a Cold War lens. Nowhere was this truer than in the Western Hemisphere, where he was determined to prevent Communist takeovers. In October 1983, Prime Minister Maurice Bishop of Grenada, a small island nation in the Caribbean, was assassinated and a more radical Marxist government took power. Afterwards, Soviet money and Cuban troops came to Grenada. When they began constructing an airfield capable of landing large military aircraft, the Reagan administration decided to remove the Communists and restore a pro-American regime. On October 25, U.S. troops invaded Grenada, killed or captured 750 Cuban soldiers, and established a new government. The invasion sent a clear message throughout the region that the Reagan administration would not tolerate communism in its hemisphere.
In his 1985 state of the union address, President Reagan pledged his support for anti-Communist revolutions in what would become known as the "Reagan Doctrine." In Afghanistan, the United States was already providing aid to anti-Soviet freedom fighters, ultimately, helping to force Soviet troops to withdraw. It was in Nicaragua, however, that the doctrine received its most controversial application.
In 1979, Nicaraguans revolted against the corrupt Somoza regime. A new junta took power dominated by young Marxists known as Sandinistas. The Sandinistas insisted that they favored free elections, non-alignment, and a mixed economy; but once in power, they postponed elections, forced opposition leaders into exile, and turned to the Soviet bloc for arms and advisers. For the Reagan administration, Nicaragua looked "like another Cuba," a Communist state that threatened the security of its Central American neighbors.
In his first months in office, President Reagan approved covert training of anti-Sandinista rebels (called "contras"). While the contras waged war on the Sandinistas from camps in Honduras, the CIA provided assistance. In 1984, Congress ordered an end to all covert aid to the contras.
The Reagan administration circumvented Congress by soliciting contributions for the contras from private individuals and from foreign governments seeking U.S. favor. The president also permitted the sale of arms to Iran, with profits diverted to the contras. The arms sale and transfer of funds to the contras were handled surreptitiously through the CIA intelligence network, apparently with the full support of CIA Director William Casey. Exposure of the Iran-Contra affair in late 1986 provoked a major congressional investigation. The scandal seriously weakened the influence of the president. The American preoccupation with Nicaragua began to subside in 1987, after President Oscar Arias Sanches of Costa Rica proposed a regional peace plan. In national elections in 1990, the Nicaraguan opposition routed the Sandinistas, bringing an end to ten turbulent years of Sandinista rule.
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