On January 14, 1982, President Reagan signed National Security Decision Directive 17, authorizing the CIA to “support and conduct covert operations against the Sandinista government” in Nicaragua. The directive was the formal commitment of U.S. resources to the Contras, and it was the product of three converging pressures in the first year of the administration: Cold War ideology that read the Sandinista revolution as a Soviet–Cuban beachhead on the U.S. mainland, a hemispheric security doctrine inherited from the Rio Treaty of 1947, and domestic political calculation that abandoning the anti-Sandinista cause would cost Republican votes without gaining any Democratic ones.
The ideological reason was the simplest. The Reagan administration, dominated by veterans of the 1976 Reagan-Ford primary challenge and the Committee on the Present Danger, believed that the Sandinista revolution was a Soviet–Cuban beachhead on the U.S. mainland. The pattern was set in early 1981, when the CIA produced a series of assessments concluding that the FSLN was providing arms to the Farabundo Martí National Liberation Front (FMLN) in El Salvador and to the Guatemalan National Revolutionary Unity (URNG) insurgents. Whether or not the FSLN was actually directing the FMLN (the evidence was thin), the perception of a coordinated Soviet–Cuban–Sandinista offensive in Central America was sufficient. Reagan’s October 27, 1983 speech to the Heritage Foundation and his May 9, 1984 address to the U.S. Congress were the rhetorical cornerstones of this framing.
The strategic reason was a long-standing hemispheric security doctrine. The Rio Treaty of 1947 and the Rio Protocol of 1962 had committed the U.S. to defend the Western Hemisphere against “extra-continental” intervention. The Carter administration’s establishment of the Carter Doctrine in 1980 (in response to the Soviet brigade in Cuba) and the Reagan administration’s later construction of the Creighton Doctrine (named for the deputy assistant secretary of state James Creighton, who coordinated Central American policy) treated Central America as a region in which the U.S. would not tolerate governments aligned with the Soviet bloc. Nicaragua, in this framing, was simply the next link in a chain that ran from Cuba to Grenada to Nicaragua to El Salvador.
The domestic political reason was decisive. The Cuban-American community in Florida — a Republican-leaning constituency concentrated in Hialeah, West Miami, and Union City — was an early and reliable supporter of the Reagan administration’s Latin America policy. The Kissinger-Burns Commission of 1983–1984, the Kissinger Commission’s “Report of the National Bipartisan Commission on Central America”, provided bipartisan cover for the policy. Conservative Christian organizations (the World Anti-Communist League, the Council for Inter-American Security) and veterans of the 1980 Reagan campaign in California and Texas provided both rhetorical and financial support. The political logic was that abandoning the Contras would alienate the Republican base without gaining any Democratic votes, and would expose the administration to the charge of “losing” another country to communism.
The military logic was more complicated. The CIA’s initial estimates of the FSLN’s military capacity were inflated — the FSLN’s actual support to the FMLN was modest. The CIA’s Directorate of Operations ran the program through 1984, when the Boland Amendment restricted the CIA’s role, NSC picked it up in 1985. The decision to fund the Contras despite the legal restrictions was the direct cause of the Iran-Contra scandal.
The argument that the U.S. was right to support the Contras has been defended by Robert Kagan in A Twilight Struggle (1996) and by the Congressional Research Service report The Nicaraguan Resistance and U.S. Policy: A Historical Assessment (1990). The argument that the support was a strategic error and a moral disaster has been developed by William M. LeoGrande in Our Own Backyard (1998) and by Phyllis Bennis in From Stones to Root (1989). The standard view among Central Americanists is that the Contras did not have a realistic chance of military victory, that the war was a major cause of Nicaragua’s economic collapse, and that the diplomatic solution reached at Esquipulas II in 1986 was always the available alternative. For more on the Sandinistas and Contras article and the proxy wars overview.