Embraced as a national hero by Ronald Reagan, North was convicted in May 1989 of obstructing Congress, unlawfully altering and destroying NSC documents and accepting an illegal gift–a $13,800 homesecurity system–from fellow Iran-contra defendant Richard Secord. In last week’s ruling, two of the three members of the federal panel, both Reagan appointees, threw out North’s felony conviction for destroying documents, on the ground that trial judge Gerhard Gesell gave the jury erroneous instructions last year. In a dissent, Jimmy Carter appointee Patricia Wald argued that North had received “a fair trial. " She also objected that the majority opinion was in effect “an open-ended invitation for juries to exonerate defendants who simply follow orders.”

The appeal court’s decision to order a new inquiry reopened a debate over the wisdom of conducting congressional hearings in high-visibility cases. Amid rising public concern, Congress moved quickly in the summer of 1987 to investigate the who, what and when of the Reagan administration’s Iran-contra policy. At the time, Special Prosecutor Lawrence Walsh warned Congress that granting immunity to public officials for the sake of hearings “would create serious–and perhaps insurmountable–barriers to the prosecution of the immunized witnesses.” Now Gesell must determine whether prosecutors or any witnesses made use of the testimony North gave during televised hearings in 1987–in the process violating the defendant’s Fifth Amendment rights against self-incrimination.

North’s second chance may work to the advantage of his former NSC boss, John Poindexter, who was convicted on five felony counts stemming from Iran-contra. Poindexter also received immunity in exchange for testifying–a fact that may strengthen his grounds for appeal. The reversal might prove a boon to North’s fortunes: the Pentagon could reinstate his $23,100-per-year military pension, which was taken away upon his conviction. Meanwhile, prosecutors are scrambling to figure out their next move. Lawyers familiar with the case predicted that Walsh would appeal last week’s ruling-virtually guaranteeing that the messy aftermath of Iran-contra will continue for years.