I'm writing an essay on the Iran-Contra scandal, I've seen Kill The Messenger which deals with the CIA cocaine smuggling. But I've also been researching the Iranian weapons deals in exchange for hostages, which resulted income for the Contras as well. Was the U.S taking part in both? Can someone just lay it all out flat for me, how were the Contras funded during the 1980's?
Yes, the US was taking part in both.
The Congress had cut off funding for the Contra war. The CIA and others, in the executive branch, were deeply committed to the war, but they now had no funding.
The US, as a part of the hostage release, began selling arms to Iran. We were officially allies, and supplying arms, to Iraq. The Iran Iraq war was going on at thus time. The Pentagon began funding the Contras with money from the arms sales. The money was transferred through third parties, essentially money laundering.
To me the entire scandal was a much bigger event than say, Watergate. For some reason, possibly because a President was forced to resign, Watergate will never be forgotten but Iran Contra has become just a minor footnote. Glad you're doing an essay on it.
Here is some great info on the topic.
Added to this, the release of the hostages was arranged by the backers of a presidential candidate, not the gov't.