Beyond restricting overt US support of the Contras, the most significant effect of the Boland Amendment was the controversial Iran-Contra Affair.
The Boland Amendment, proposed by Edward Boland, was a highly limited ambiguous compromise because the Democrats did not have enough votes for a comprehensive ban. It covered only appropriated funds spent by intelligence agencies (such as the CIA). Some of Reagan's national security officials used non-appropriated money spent by the National Security Council to circumvent the Amendment. No court ever made a determination whether Boland covered the NSC, and because it was a prohibition rather than a criminal statute, no one could be indicted for violating it. Opponents alleged that the White House violated the highly ambiguous amendment. Congress later resumed aid to the Contras, totaling over $300 million. The Sandinistas were voted out of power in 1990.
The Boland Amendment prohibited the federal government from providing military support "for the purpose of overthrowing the Government of Nicaragua." The amendment was considered by many to be an unconstitutional interference with the President's ability to conduct foreign policy. It aimed to prevent CIA funding of rebels opposed to the Marxist provisional junta, the Boland Amendment sought to block Reagan administration support for the Contra rebels. The amendment was narrowly interpreted by the Reagan administration to apply to only U.S. intelligence agencies, allowing the National Security Council, not so labeled, to channel funds to the Contra rebels. In order to block this, the amendment was changed to prohibit any funds for military or paramilitary operations.
Administration officials argued that the Boland Amendment, or any act of Congress would not interfere with the president's conduction of foreign policy by restricting funds, as the president could seek funds from private entities or foreign governments. In this spirit, and despite the Boland Amendment, Vice Admiral John M. Poindexter and his deputy, Lt. Colonel Oliver North, secretly diverted to the Nicaraguan contras millions of dollars in funds received from a secret deal which some alleged had explicit presidential approval -- the sales of anti-tank and anti-aircraft missiles to Iran in spite of Reagan's public pledge not to deal with terrorists. In November, 1986, a pro-Syrian newspaper in Lebanon revealed the secret deal to the world. This came as Democrats won back control of the Senate in the 1986 elections. In public hearings of a joint House-Senate committee convened for purposes of investigating the affair, Democrats sought to prosecute LtCol. North for his role. The final report published after the hearings blamed Reagan's passive style of leadership for allowing the conduct of foreign policy without involvement of any elected official. However, a later Congress repealed the Boland Amendment and resumed funding. Elections in Nicaragua subsequently ousted the Marxists from power.
In December 1982 H.J.RES.631 became public law 97-377 making further continuing appropriations for the fiscal year 1983. The amendment S.UP.AMDT.1542 by Senator Daniel Patrick Moynihan, which aimed to prohibit the use of funds by the CIA or DOD to support military activities in Nicaragua, fell. Amendment S.UP.AMDT.1541 by Senator Christopher J. Dodd "to declare Congressional support for restrictions on certain types of operations in Central America" was tabled.
But H.R.7355 made appropriations for the Department of Defense and amendment H.AMDT.974 to it by Representative Edward P. Boland passed with a recorded vote of 411-0 to prohibit the CIA or Defense Department to use the funds of the bill for military purposes in Nicaragua.
In December 1983, for the fiscal year 1984, H.R.4185, sponsored by Representative Joseph P. Addabbo, which became public law 98-212, and H.R.2968, sponsored by Boland, which became public law 98-215 limited the amount to be spent for military purposes in Nicaragua. Amendment H.AMDT.461 by Boland to H.R. 2968 prohibited covert assistance for military operations in Nicaragua.
In December 1984, for fiscal year 1985, H.J.RES.648, became public law 98-473, and prohibited funds available to the CIA and the DOD from being used in Nicaragua for military purposes.
In December 1985, for fiscal year 1986, S.960 became public law 99-83 and also excluded military use for funds to be spent in Nicaragua.
"In 1984, controversy over U.S. assistance to the opponents of the Nicaraguan government (the anti-Sandinista guerrillas known as the “contras”) led to a prohibition on such assistance in a continuing appropriations bill. This legislative ban is summarized below.
The continuing appropriations resolution for FY1985, P.L. 98-473, 98 Stat. 1935-1937, signed October 12, 1984, provided that: “During fiscal year 1985, no funds available to the Central Intelligence Agency, the Department of Defense, or any other agency or entity of the United States involved in intelligence activities may be obligated or expended for the purpose or which would have the effect of supporting, directly or indirectly, military or paramilitary operations in Nicaragua by any nation, group, organization, movement or individual.” This legislation also provided that after February 28, 1985, if the President made a report to Congress specifying certain criteria, including the need to provide further assistance for “military or paramilitary operations” prohibited by this statute, he could expend $14 million in funds if Congress passed a joint resolution approving such action." [Congressional Research Service, Congressional Use of Funding Cutoffs Since 1970 Involving U.S. Military Forces and Overseas Deployments, January 10, 2001, pg. 6.]