American hostages held in Reagans benefit.

The issue of an "October Surprise" was brought up during an investigation by a House of Representatives Subcommittee into how the 1980 Reagan Campaign obtained debate briefing materials of then-President Carter. During the investigation (a.k.a Debategate), the Subcommittee on Human Resources of the House Post Office and Civil Service Committee obtained access to Reagan Campaign documents and discovered numerous instances of documents and memorandum referencing a monitoring effort for any such October Surprise. The Subcommittee, chaired by former U.S. Rep. Donald Albosta (D–MI) issued a comprehensive report on May 17, 1984, describing each type of information that was detected and its possible source. There is a section in the report dedicated to the October Surprise issue.

Proponents of the theory, such as Barbara Honegger, a researcher and policy analyst with the 1980 Reagan/Bush campaign, allege that William Casey and other representatives of the Reagan presidential campaign made a deal during two sets of meetings (July–August) at the Ritz Hotel in Madrid, with Iranians to delay the release of Americans held hostage in Iran until after the November 1980 presidential elections. It was also alleged that Reagan personally called Khomeini on the phone during this period and requested him not to end the hostage crisis before the elections.