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Channell Used White House as Bait for Fund Raising

May 12, 1987|WILLIAM C. REMPEL | Times Staff Writer

WASHINGTON — Conservative fund-raiser Carl R. (Spitz) Channell preferred to avoid traditional charity dinners. Colleagues said he considered it a waste of time and money to solicit small donations.

But in the spring of 1985, when a politically important benefit dinner for refugees from Nicaragua's Marxist government was foundering, Channell stepped in to help.

Plagued by financial problems and squabbles among the organizers, the Nicaraguan Refugee Fund banquet was such a fiasco that it raised only $3,000 for refugees, but without Channell's intervention, some say, it would have lost money.

Clearly, among those most impressed was former White House aide Oliver L. North. On the April afternoon of the dinner, he told CIA Director William J. Casey and a group of colleagues that "Spitz is really working out well."

Key Man in Network

Channell was doing more than bailing out refugees: He was becoming a key figure in North's private contra aid network. Together, they had developed a powerful system for attracting private donations to the guerrillas' cause. North and his allies would provide the White House as bait and Channell would use that to lure donors.

They even went so far as to serve up the President himself. A handshake with Reagan could be arranged, for example, in exchange for private contributions of a few thousand dollars to the Nicaraguan rebels. Or, "one quiet minute" with the President could go for more than $200,000.

Private foreign policy briefings with senior Administration aides or Cabinet members could be arranged for small groups of major contributors in the White House. It was common for Reagan to "stick his head in and shake a few hands" at these briefings. The sessions were routinely followed by luncheons or dinners featuring appeals by Channell for money to support the Nicaraguan rebels.

Tour of Berlin Wall

It was even possible, through the good offices of Channell or his associates, to request a tour of the Berlin Wall with North when the White House aide was traveling in Germany, or to pass along a request that the Administration consider giving a job to a rich supporter's relative. No one could turn patriotic sentiment and White House connections into cold cash for the contras better than Channell.

"Ollie had a well-oiled machine to grind out money, and Spitz made sure it paid off," said a source who attended some of the White House briefings.

Now Channell has his reward: He has the first criminal conviction among figures in the Iran-contra affair. It was on a charge that he illegally used a tax-exempt foundation to help arm the contras. One of his associates, public relations executive Richard R. Miller, also has pleaded guilty to similar charges. They both named North as a co-conspirator and focused a national spotlight on the propaganda and fund-raising network that the fired National Security Council aide had administered.

Boland Amendment

The private aid network began to take shape late in 1984 after Congress voted to ban U.S. support for the rebels in Nicaragua. Many members of the Administration--including the President--chafed under the constraints, and North complained to visitors about the effects of the law, an amendment written by Rep. Edward P. Boland (D-Mass.). He kept dozens of copies of it in a file near his desk.

"I asked what the hell the Boland Amendment was and he reached into his stack and gave me a copy," recalled a businessman who worked with North and his associates.

One of the early recruits to the private support network was a public relations firm, International Business Communications, owned by Miller and Francis D. Gomez. Both men had worked in government public relations offices, and Miller had worked as a press aide to the Reagan-Bush campaign in 1980.

Miller "was trying to build one hell of a PR firm based on his clout with the White House," said the businessman who was referred to IBC by North early in 1985. He said that the cramped, brownstone office of the firm was filled with autographed pictures of the President and the memorabilia of Miller's work with Reagan.

'Can Get Anything Done'

Miller would boast to prospective clients: "We can get anything done. As you can see, we're well connected."

In early 1985, IBC already was handling press relations for the contra leadership in Washington, arranging press tours, paying the office rents of contra officials and lobbying congressional and White House officials. The firm also had small contracts with a number of companies and government agencies.

"I remember they seemed pretty desperate for money in those days," recalled the businessman, who agreed to be interviewed if his name was not used. "I got the hard sell. They wanted me to hire them for a $15,000 retainer. They seemed overly anxious.

"We went out to dinner and Miller drove us in a beat-up old Camaro. I must say, I was underwhelmed."

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