What Was the Iran/Contra Affair?
sold arms directly to Iran at a high markup, with no guarantee of hostages being released, and the markup funding the contras in Nicaragua.
hostages, who were being held captive by the Lebanese Shia Islamist group Hezbollah. The plan eventually was broken down to a direct arms-for-hostages scheme that came to light in November of 1986 during the Reagan-Bush administration. Although November of 1986 is when the scandal came to light the origins came about seven years earlier in November of 1979 when nearly 500 Iranian students took over the American embassy taking 52 Americans hostage for 444 days. This was important because it was an earmark of one of the first major conflicts with the country of Iran. Then in early 1980 the Israeli government proposed a deal to secretly sell arms to Iran as a means to gain diplomatic ground and a way to get the 52 hostages released, however President Carter angrily declines. The Israeli government then went on with the plan by themselves secretly supplying weapons to Iran shortly after. With the change in presidency from Carter to Reagan the US geared up to begin the shipment of arms to Iran through Israel. This however was illegal due to the Arms export act, which requires written permission from the U.S. for a nation, in this case Israel to transfer U.S. made arms to a third party.
These Acts protect shareholders against uncontrolled excesses and embezzlement of funds by CEOs and other senior executives. The Acts strive to create independent boards, which are not prone to external interference. There are also SEC requirements and NASDAQ provisions as policies to combat corporate fraud.
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