CIA activities in Nicaragua were frequent in the late 20th century. The increasing influence gained by the Sandinista National Liberation Front, a left-wing and anti-imperialist political party in Nicaragua, led to a sharp decrease in Nicaragua–United States relations, particularly after the Nicaraguan Revolution. In 1981, President Ronald Reagan authorized the Central Intelligence Agency to support the Contras, a right-wing Nicaraguan political group to combat the influence held by the Sandinistas in the Nicaraguan government. Various anti-government rebels in Nicaragua were organized into the Nicaraguan Democratic Force, the first Contra group, at the behest of the CIA. The CIA also supplied the Contras with training and equipment, including materials related to torture and assassination. There have also been allegations that the CIA engaged in drug trafficking in Nicaragua.

1960 to 1980

Background information and the precipitation of the Contra conflict In 1961, the Frente Sandinista de Liberacion Nacional (FSLN) was founded. The development of the FSLN represented the merger of "Carlos Fonseca's Nicaraguan Patriotic Youth organization ... with Tomas Borge's Cuban-supported insurgent group.""Background: The California Story". Central Intelligence Agency, April 26, 2007. Web. May 11, 2017. The FSLN remained a largely unsuccessful and a marginal political movement until 1972, when an earthquake rocked the Nicaraguan capital, Managua. The Somoza government, which had assumed control of Nicaragua shortly following the withdrawal of United States military personnel in 1933, was seen to be profiteering from international relief efforts in the immediate aftermath of the earthquake. This led to a dramatic change in the influence and importance of the FSLN, as their position within the Nicaraguan public sentiment, began a rapid ascension. Between 1972 and 1978, fighting between the FSLN guerrillas and the Nicaraguan National Guard steadily increased. In 1978 "Pedro Joaquin Chamorro, editor of the opposition newspaper La Prensa" was assassinated; this caused widespread protests and an increase of support for the FSLN including "non-Marxist groups".Pedro Joaquin Chamorro, editor of the opposition newspaper La Prensa The opposition to the oppressive Somoza government was beginning to come to a head.

Ouster of Somoza In February 1979, the United States suspended all foreign aid to Nicaragua due to Somoza's unwillingness to compromise. On July 14, 1979, on behalf of President Jimmy Carter, Secretary of State Cyrus Vance sent a letter that urged Somoza to end the status quo and start the transition process following the OAS's recommendation.U.S. Department of State to U.S. Embassy Nicaragua, Telegram 183243, July 15, 1979.. Retrieved on April 28, 2019. Secretary Vance tried to convince Somoza that military action to fight the Sandinista was not possible, and the only way to go was through the transition process. The transition would permit the moderate faction to survive and to counterbalance the radical elements within the warring groups. Secretary Vance also reiterated that Somoza's departure should be carried out in due course, and the U.S. government would welcome him in the US. At the same time, on July 15, 1979, the U.S. ambassador in Costa Rica, Marvin Weissman, suggested Secretary Vance to invite moderate groups of Nicaraguans who live in the U.S. to come to the State Department's briefing on July 17 or 18. The purpose of inviting the groups was to bolster the moderates position in Nicaragua to counterbalance the radical factions of the Sandinista during the political transition.U.S. Embassy Costa Rica to Department of State, Telegram 03082, July 15, 1979.. Retrieved on April 28, 2019.

By July, Somoza had fled the country. FSLN Sandinista forces quickly assumed power in Managua, and the United States quickly moved to recognize the legitimacy of the new government and offer aid, however the FSLN chose instead to look to global communist interests including the Soviets and Cubans for support. By 1980, the Government of National Recognition (GRN) under Cuban influence had begun installing pro-Marxist, anti-U.S. doctrine into the Nicaraguan educational system. U.S. policy on Nicaragua began to favor support for anti-Sandinista "Contras", because most people involved in the U.S. intelligence operations, including Richard Nixon feared that "defeat for the rebels would probably lead to a violent Marxist guerrilla movement in Mexico and in other Central American countries.""Nicaragua Policy Endorsed by Nixon". The New York Times. April 21, 1986. Web. May 11, 2017.

In the wake of the fall of Somoza, the CIA began efforts to counter alleged Cuban-supported efforts to influence the new FSLN government. On July 19, 1979, President Carter signed a general finding on Nicaragua which directed the CIA "to assist democratic elements in Nicaragua to resist efforts of Cuban-supported and other Marxist groups to consolidate power by disseminating non-attributable propaganda worldwide and in Nicaragua in their support and in opposition to Cuban involvement." A CIA paper from August 1979 lays out an intelligence assessment of the FSLN "Junta" and its leadership. The CIA speculated leadership ties to Cuba as well as past Cuban support would result in Nicaragua joining the pro-Soviet bloc of the non-aligned movement: "in view of the heavy debt owed by the FSLN to Cuba, it is expected that Nicaragua will join Cuba as a member of the pro-Soviet bloc of the NAM." Finally, to support "the U.S. goal of a democratic and pluralistic government in Nicaragua" a number of guidelines for covert action were presented, focusing on political and economic efforts (and not covert paramilitary action): "A. Encourage moderate groups in the GNR by publicizing both in Nicaragua and in the International Community, their programs and actions. B. Expose the Marxist elements in the GNR and their links with Cuba; condemn Cuban subversive activities. C. Support continued strong involvement of other Latin American countries as a moderating influence on FSLN elements in the GNR. D. Support efforts through international organizations to guarantee human rights. E. Encourage the development and maintenance of democratic institutions in particular a free press and political parties; advocate early free elections. F. Publicize efforts by Western nations to provide aid and technical assistance to help rebuild Nicaragua; compare this with assistance provided by communist countries."

1981 On December 1, 1981, United States President Ronald Reagan signed a presidential finding which authorized covert operations in Nicaragua.The National Security Archive. The Iran-Contra Scandal: The Declassified History. Ed. Kornbluh, Byrne. 1st ed New York: The New Press, 1993. Print. This plan initially called for the U.S. government to cooperate with the Argentinian government, which was already engaged in a similar operation, to train and fund an existing terrorist group in Nicaragua known as the Contras.Woodward, Bob. Veil The Secret Wars of the CIA. 2005 ed. New York: Simon & Schuster Paperbacks, 1987. Print The Contras also contributed to drug dealing in the U.S. and brought a lot of crack cocaine. Gary Stephen Webb, a reporter for the San Jose Mercury News proved the connection between the crack epidemic and the Contras. Initially the Contras were a group of republican guard members from the old Somoza regime ousted by the Sandinistas after the revolutionary conflict. Later, through the recruitment efforts of the CIA, the group became supplemented by mercenary guerrillas and was extensively trained by the CIA. Eventually, due to the U.S. alliance with Great Britain during the Falklands War, Argentina withdrew support for these programs and the CIA had to relocate their training sites to Honduras.

The CIA carried out the Nicaraguan operation based on military intelligence indicating the Sandinista government had close ties to the Cuban and Soviet governments, which represented a strategic threat to the U.S. U.S. policy planners also feared that the success of democracy and socialism in Nicaragua would inspire revolutions across the continent, thereby challenging U.S. hegemony and the interests of Western corporations. At this time, the Sandinistas were building their military to a level that was disproportionate for the size of Nicaragua; the U.S. saw this as a Soviet-backed push for power in the region. The CIA gave $50,000 () to the training and arming of the Contras in 1981, which was eventually followed up by millions more once the CIA secured funding for the operation. The CIA executed operations of their own: in 1982, a CIA-trained team blew up two bridges in Nicaragua and mined Corinto harbor, which may have been carried out by members of the U.S. military rather than through the indigenous assets the CIA claimed it used. The mines were an attempt to disrupt the Nicaraguan economy by closing down the main shipping port. Petroleum imports and cotton exports were the main targets. The mines they eventually used were specifically designed to only cause a large noise rather than actually damage ships. The logic behind this is that once a harbor was known to be mined, it would be flagged as such and therefore avoided by most shipping companies. This eventually backfired and became somewhat of a self-fulfilling prophecy for the U.S. as this act actually drove the Sandinista government closer to the Soviet Union because it needed petroleum imports.

On April 1, 1981, President Reagan formally suspended economic assistance to the Nicaraguan government. The Reagan administration was waging war through the use of economic sanctions. This was done under section 533F of the International Security and Development Cooperation Act of 1980. It stated that the president may suspend aid if he thinks that the government receiving aid is fueling terrorist organizations. In April 1981, President Reagan felt that he had irrefutable evidence of the Nicaraguan government shipping weapons from Cuba to insurgents in El Salvador. All assistance to the private sector in Nicaragua was still being given. Search results show that RUEHOT is some kind of abbreviation or code, but I don't know what for.

The United States saw the Sandinistas as Communists, and felt the need to stop them. Congress viewed the Reagan Administration's anti-Sandinista policies with extreme skepticism, and were under the impression that the true goal of the CIA operation in Nicaragua was to overthrow the Sandinista government. Congress' efforts resulted in passage of an amendment in late 1982 introduced by Representative Edward P. Boland to the Fiscal Year 1983 Defense Appropriations bill. This is the first of a series of Boland Amendments prohibiting the CIA, principal conduit of covert American support to the Contras, from spending any money "for the purpose of overthrowing the government of Nicaragua". The CIA, however, interpreted the "purpose" stated in this phrase as the purpose of the CIA rather than the purpose of the end user. Thus, the CIA argued that since the purpose of the CIA was not to overthrow the government, that the money and military assistance went to people who had this goal did not matter. The subsequent lack of change in the Nicaragua operation significantly contributed to the eventual further restrictions imposed by Congress in the second version of the Boland amendment.

The majority report stated, "The Central Intelligence Agency was the U.S. Government agency that assisted the contras. In accordance with Presidential decisions, known as findings, and with funds appropriated by Congress, the C.I.A. armed, clothed, fed and supervised the contras. Despite this assistance, the contras failed to win widespread popular support of military victories within Nicaragua."

1982