What happened
Congress passed the Boland Amendment specifically to prohibit US government funding of the Contras, the right-wing paramilitary group fighting Nicaragua's Sandinista government. National Security Council staff, led by Lieutenant Colonel Oliver North, circumvented this ban by secretly selling arms to Iran — an avowed US adversary then at war with Iraq and under an active American arms embargo — and funnelling the proceeds to the Contras through a network of shell companies and Swiss bank accounts.
The scheme unravelled in November 1986 after a Lebanese newspaper reported the Iran arms sales. Independent counsel Lawrence Walsh's investigation produced eleven convictions, including North and National Security Adviser John Poindexter, though several were later vacated on appeal on technical grounds related to immunised congressional testimony. Defense Secretary Caspar Weinberger was indicted on charges of perjury and obstruction but was pardoned by President George H. W. Bush on Christmas Eve 1992, before his trial — along with four other convicted or indicted officials — ending Walsh's investigation before it could establish definitively how much Reagan and Bush, then vice president, knew.
The episode combined two distinct abuses: arming a government the US had specifically embargoed, and funding a war Congress had specifically forbidden funding. Both were done covertly, specifically to evade oversight that existed for good reason.