Unpublished draft chapter of the congressional Iran-Contra

Unpublished draft chapter of the congressional Iran-Contra

Postby admin » Tue May 30, 2017 5:55 am

[An unpublished draft chapter of the congressional Iran-Contra investigation, that was suppressed as part of the deal to get three moderate Republican senators to sign on to the final report and give the inquiry a patina of bipartisanship. -- Robert Parry]




I. The Background

A. Richard R. Miller and IBC

B. Carl R. "Spitz" Channell

C. Daniel L. Conrad

D. The NRF Dinner

E. NEPL and IBC Meet

II. Miller/Channell Network -- The Beginnings

A. The Initial Solicitations

B. North's Maiden Presentation

C. The Establishment of I.C., Inc.

D. The Creation of the Network

III. Miller/Channell Network -- The Operation

A. White House Briefings and Hay Adams Gatherings

B. North's Involvement in Solicitations Intended for the Purchase of Lethal Supplies

1. "Big Ticket Items" and "Ollie's Purchase" Lists

2. North's Direct Fundraising Efforts

a. Nelson Bunker Hunt

b. Barbara Newington

c. William O'Boyle

d. Elen Clayton Garwood

C. The Role of the President

D. The Roles of David Fischer and Martin Artiano

E. Roy Godson and the Heritage Foundation

F. What Happened to the Money

G. Political Advertising for the Contras

H. The Barnes Campaign

IV. Miller/Channell Network -- The End

A. The Beginning of the End

B. The Lowell Sun Allegations

C. NEPL Activities in December 1986

D. Dan Kuykendall

E. February 1987 Report from IBC to NEPL

F. Guilty Pleas of Channell and Miller




CRS Report
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Tue May 30, 2017 5:56 am


In January 1983, President Reagan issued a directive (NSDD-77) establishing a new mechanism to "strengthen the organization, planning and coordination of the various aspects of public diplomacy … relative to national security.

In a memorandum from National Security Advisor William B. Clark, Jr., dated January 13, 1983, Clark said:

"Our intention is to supplement our commitment of public funds with private funds as well. Some of the public funds would be allocated to private U.S. organizations which could conduct certain programs overseas more easily than the USG. We will develop a scenario for obtaining private funding. Charlie Wick has offered to take the lead."

Building on the scenario laid out in the Clark memorandum, government officials and private organizations began to coordinate their activities on behalf of the Contra cause. An elaborate system of inter-agency committees was eventuallk formed and charged with the task of working closely with private groups and individuals involved in fundraising, lobbying campaigns and propagandistic activities aimed at influencing public opinion and governmental action.

One of the key governmental mechanisms that played a central role in the creation and management of the private network involved in the Iran/Contra affair was the Office of Public Diplomacy for Latin America and the Caribbean (S/LPD) in the Department of State. The office was established in the State Department through the efforts of the NSC staff, despite resistance from Secretary of State George P. Schultz. (Schultz testimony, Exhibit 67; Memorandum to William Clark from Walt Raymond, 5/18/83; Schultz testimony, Exhibit 69A, Memorandum from Schultz to President, 5/25/83].

Working out of the NSC, the former Director of the Covert Action Staff at the CIA and a specialist in propaganda and disinformation, helped to set up an elaborate system of inter-agency committees, including a working group on Central American Public Diplomacy. The NSC staff also succeeded in having Otto Reich named as the Director of the new Office of Public Diplomacy, which reported directly to the NSC. Richard R. Miller, former head of public affairs at AID, and Francis D. Gomez, former public affairs specialist at the State Department and USIA, were hired by S/LPD through sole-source, no-bid contracts to carry out a variety of activities on behalf of the Reagan Administration policies in Central America.

Supported by the State Department and White House, Miller and Gomez became the outside managers of Spitz Channell's fundraising and lobbying activities. They also served as the managers of Central American political figures, defectors, Nicaraguan opposition leaders and Sandinista atrocity victims who were made available to the press, the Congress and private groups, to tell the story of the Contra cause. They facilitated the transfer of funds raised by Channell and others to Swiss and off-shore bank accounts at the direction of Oliver North. They became the key link between the State Department and the Reagan White House with the private groups and individuals engaged in a myriad of endeavors aimed at influencing the Congress, the media and public opinion. They also became the main funnel for private U.S. money going to the Democratic resistance in Nicaragua.
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Tue May 30, 2017 5:56 am


A senior career CIA official, serving as Director of the Covert Action Staff at the CIA from 1978 to 1982, was approached by Donald Gregg, Chief of the Intelligence Directorate at the NSC, and informed that Gregg was recommending to CIA Director Casey and NSC Advisor William Clark that he be assigned to the NSC as Gregg's successor when Gregg departed to join the staff of Vice-President George Bush. The CIA official discussed the transfer with Casey and Clark and received approval for his involvement in setting up the public diplomacy program along with his intelligence responsibilities. Accordingly, he was transferred from CIA headquarters to the NSC in June of 1982. [Classified Dep. 9/3/87, at 3-9; 9/23/87, at 4-15].

In the early part of 1983, documents obtained by the Select Committees indicate that the Director of the Intelligence Staff of the NSC successfully recommended the establishment of an inter-governmental network to promote and manage a public diplomacy plan designed to create support for Reagan Administration policies at home and abroad. Their initial efforts were directed toward involving private groups and individuals in a campaign to influence American and European public opinion on Intermediate Nuclear Force (INF) deployment in Europe. (Memorandum N39016 from W. Scott Thompson to the Director, 1/25/83; Memorandum N30899 to William Clark, 3/3/83].

In the Spring of 1983, the network began to turn its attention toward beefing up the Administration's capacity to promote American support for the Democratic resistance in Nicaragua and the fledgling democracy in El Salvador. This effort resulted in the creation of the Office of Public Diplomacy for Latin America and the Caribbean in the Department of State (S/LPD), headed by Otto Reich.

On May 25, 1983, Secretary of State George P. Schultz, in an effort to head off the creation of S/LPD, wrote a memorandum to the President asking for the establishment of "simple and straight-forward management procedures." [Schultz testimony, Exhibit 69a supra]. The memorandum to the President followed a discussion between the President and Schultz earlier in the day. In the memo Schultz said:

"… Therefore, what we discussed was that you will look to me to carry out your policies. If those policies change, you will tell me. If I am not carrying them out effectively, you will hold me accountable. But we will set up a structure so that I can be your sole delegate with regard to carrying out your policies.

"… What this means is that there will be an Assistant Secretary acceptable to you (and you and I have agreed on Tony Motley) who will report to me and through me to you. We will use Dick Stone as our negotiator, who, in conjunction with Tony, will also report solely to me and through me to you. Similarly,, there will be an inter-agency committee, but it will be a tool of management and not a decision-making body. I shall resolve any issues and report to you."

The President responded with a memorandum, which stated in part:

"Success in Central America will require the cooperative effort of several Departments and agencies. No single agency can do it alone nor should it. Still, it is sensible to look to you, as I do, as the lead Cabinet officer, charged with moving aggressively to develop the options in coordination with Cap, Bill Casey and others and coming to me for decisions. I believe in Cabinet government. It works when the Cabinet officers work together. I look to you and Bill Clark to assure that that happens." [Schultz Testimony, Exhibit 69B].

Attached to the memo was a chart placing the NSC between the Secretary of State and the President for the management of Central American strategy. Schultz had not only lost the battle to prevent the establishment of the office, he also accepted the NSC-sponsored candidate to run the office, and accepted the fact that Reich would report directly to the NSC and not through the Assistant Secretary of State for Inter-American Affairs.

Almost simultaneously with the creation of S/LPD, Walter Raymond, Jr. was named to a new position as Special Assistant to the President and Director of International Communications at the NSC. From that time forward, S/LPD reported to Raymond and his working group on Central American Public Diplomacy at the NSC. The group was composed of representatives of USIA, the CIA and DOD, as well as various NSC staffers, including Oliver North. At least for several months after he assumed this position, Raymond also worked on intelligence matters at the NSC, including drafting a Presidential Finding for Covert Action in Nicaragua in mid-September. [Memorandum from Walt Raymond to William Clark, 9/12/83; Classified Dep. 9/3/87, 9/23/87, supra].

Reich relied heavily on Raymond to secure personnel transfers from other government agencies to beef up the limited resources made available to S/LPD by the Department of State. The NSC also intervened on behalf of S/LPD with top management officials in the State Department to expand Reich's resources within the Department.

Personnel made available to the new office included intelligence specialists from the U.S. Air Force and the U.S. Army. On one occasion, five intelligence experts from the Army's 4th Psychological Operations Group at Fort Bragg, North Carolina, were assigned to work with Reich's fast-growing operation. [8/1/84 Memo from Reich to Roosevelt; 1/3/86 Memo from Jacobowitz to Reich with attachments; 8/1/86 Memo from Lester to Raymond].

White House documents also indicate that CIA Director Casey had more than a passing interest in the Central American public diplomacy campaign. In an August 9, 1983 Memorandum entitled "Private Sector Support for Central American Program," Raymond told Clark:

"A group of public relations specialists met with Bill Casey a few days ago. Faith also met them. The group included Bill Greener, the public affairs head at Philip Morris, and two or three others. They 'stated' what needed to be done to generate a nationwide campaign. Several elements were identified. The first, a fundraising effort under the direction of someone like Walter Wriston. Secondly, an effective communications system inside the Government. The overall purpose would be to sell a 'new product' -- Central America -- by generating interest across-the-spectrum."

In an August 29, 1983 memorandum from Raymond to Poindexter, Casey's continuing interest in the effort to influence public opinion was shown by the following reference:

"Bill Casey called on August 26 and would like to follow-up on his idea to have a meeting with five or six key public relations specialists. This is referred to in my earlier memorandum. I put him off until after Labor Day.

"… When I philosophized a bit with Bill Casey (in an effort to get him out of the loop), he was negative about turning the ball over to State, but very positive about someone like Gil Robinson working on the problem from within State."

Casey was obviously concerned that the establishment of S/LPD in the State Department might put it beyond NSC control.

[The Castle]

[Buttercup roams the castle, saddened. Prince Humperdinck and Count Rugen are planning, and notice Buttercup.]

Humperdinck: She's been like that ever since the fire swamp. It's my father's failing health that's upsetting her.

Count Rugen: Of course.

-- The Princess Bride, directed by Rob Reiner

Casey's involvement in the public diplomacy effort apparently continued throughout the period under investigation by the Committees.

On March 20, 1985, Oliver North sent a memorandum to National Security Advisor Robert McFarlane on the subject, "Timing and the Nicaraguan Resistance Vote." Attached to the memo was a chronological event checklist which outlined efforts "aimed at securing Congressional approval for renewed support to the Nicaraguan Resistance Forces." Responsibility for the various efforts was tasked to a number of individuals in the NSC and Department of State as well as private supporters including former Congressman Dan Kuykendall and State Department contract consultant Frank Gomez. In the cover memo seeking a decision from Don Regan that would trigger some of the private group efforts, North wrote:

"You should also be aware that Director Casey has sent a personal note to Don Regan on the timing matter. We are attempting to obtain a copy for your use."

As late as August of 1986, Walt Raymond prepared a memorandum for Poindexter's signature to Bill Casey on the subject of Central American Public Diplomacy. The memo reported on a new structure in the State Department which moved LPD from the Secretary's Office to the Bureau of Inter-American Affairs. In the cover memo to Poindexter, Raymond indicated his desire to have Peter Dailey, who had been U.S. Ambassador to Ireland and had managed the public diplomacy initiative on INF deployment in Europe, "work closely with Bob Kagan, the Interagency Central American Public Diplomacy coordinator, and to help coordinate private sector activities such as funding that currently cannot be done by either CIA or State." [Memorandum to John Poindexter from Walt Raymond, 8/7/66, with attachments].

On August 22, 1986, Casey responded to the Poindexter memo indicating that he (Casey) had just:

"… brought Peter Dailey on board as Counselor to the Director of Central Intelligence. As a CIA employee, naturally, Pete is subject to the legal prohibitions on us relating to activities intending to influence U.S. public opinion or policy. Any advisory role that he plays on the public diplomacy front must, of course, be in accordance with these legal restrictions.

"Similarly, now that Pete has joined us, he obviously can have no role in any private fundraising effort on behalf of the Nicaraguan Resistance."

Curiously, the letter to Poindexter was apparently not sent to Poindexter but to Walt Raymond because, on August 29, 1986, Raymond forwarded the letter to Poindexter with a cover memo which said:

"Bill Casey has sent a brief note to you which puts some caveats around the activities Peter Dailey can undertake. Peter has talked to me, and I do not believe that this will cause him any difficulties in helping us along the lines of our previous exchanges via the PROFS system."

On August 26, 1986, Raymond sent a PROF note to Poindexter on the subject of "Central America Public Diplomacy." The PROF note said, in part:

"As a follow-up, Peter Dailey invited me to breakfast. I thought the memo was excellent but he did not feel that it totally filled the bill. What he thought was missing was the immediacy of the problem from the American domestic perspective. He believes that we are operating with a relatively narrow window in which to turn around American perceptions re Contras -- and particularly Nic -- or we will be chewed up by Congress. We discussed the obvious, which is part of our strategy, including such things as: the need to convince people of the key importance of Contras to our national security; the need to glue white hats on our team, etc. The themes are those we have pressed although he believes we could change the dialogue away from Contras to democrats; emphasize the need for a free and open vote, etc. Nothing really new here. The key difference is that he thinks we should run it more like a political/presidential campaign. We need to strengthen our ability to reach out. Names like Rollins, Nofziger and co. were thrown around as the kinds of resources one needs to tap.

"Later, in talking to Ollie and Bob Kagan, we focused on what is missing and that is a well-funded, independent outside group -- remember the Committee for the Present Danger -- that could mobilize people. Peter suggested 10 or 12 very prominent bipartisan Americans. Added to this would need to be a key action officer and a 501-c-3 tax-exempt structure. It is totally understanding that such a structure is needed and also totally understanding why, for discreet political reasons, it was not included in the memo to Bill Casey. I told Pete he was right but we need 'a horse" and money!"

As late as November 10, 1986, Raymond sent another PROF note to Poindexter on the subject of "Cent Am Private Sector Initiative," which stated:

"There have been several meetings following up on the effort to get a major, bipartisan group formed to help promote an 'educational' program in the U.S. which would help provide understanding (and support) for our Centam policy, particularly vis-à-vis Nicaragua.

"Although Pete Dailey, Bill Casey and Cliff White have all been involved in general discussion of what needs to be done, we are going to have to be sure that Pete and Bill are not involved. Pete is getting very nervous on this item. Hence, Clif is now taking the lead. The current focus is to get a bipartisan co-chairmanship, a six man (roughly) EXCOM, a staff director and a large bipartisan advisory council. Current names being tossed around for the co-chair include Jack Gavin, Bill Rogers, Dean Rusk and Mark White. Pete (and Ollie) favor going with Gavin. Clif is also talking to several key democratic activist types for their recommendations. Jim Woolsey's name has come up in that context. Clif has the list of several effective operators who have just finished the fall campaign (plus some soon-to-be ex-staffers on the Hill) who might be a good EXDIR. Dave Miller has also been helpful, particularly in terms of getting the 501-c-3 status and access to fresh faces in the political consultant field. Clif has (or will) be seeking names from Mitch Daniels too.

"The problem with all of this is that to make it work it really has to be one step removed from our office and, as a result, we have to rely on others to get the job done. Will keep you posted."

From early 1983 until November of 1986, the NSC staff, with the backing of Bill Casey and support from National Security Advisors Bill Clark, Bud McFarlane and John Poindexter, and with continuing help from Oliver North, created an inter-governmental structure the purposes and activities of which were masked from Congress and public view. The NSC and S/LPD, operating under the cover of the State Department, hired outside consultants and gave encouragement, support and direction to groups of private citizens outside the government. These groups raised money for Contra weapons, lobbied the Congress, ran sophisticated media campaigns in targeted Congressional districts, and worked with S/LPD to influence American public opinion through manipulation of the American press. [1] In the latter half of 1986, Raymond was attempting to set up a private group with more prestige and greater clout than the Rich Miller/Spitz Channell network that had been quickly assembled and utilized to work on the 1986 Contra aid vote in the Congress. [Prof note dated 11/10/86 from Raymond to Poindexter re: CentAm Private Sector Initiative].

While donations from other countries and profits from the Iran arms sales provided most of the money for lethal assistance to the Contras after the Boland Amendment, a network of private foundations and organizations, including those associated with Carl. R. "Spitz" Channell and Richard R. Miller, also played an essential role. Channell's principal organization, the tax-exempt National Endowment for the Preservation of Liberty (NEPL), used White House briefings and private meetings with the President to raise more than $10,000,000 from private contributors, almost all for the Contra cause. Over half of this total came from two elderly widows -- Barbara Newington and Ellen Garwood -- who made the bulk of their contributions after receiving private and emotional presentations by Oliver North on the Contras' cause and military needs. One dozen contributors accounted for ninety percent of NEPL's funds in 1985 and 1986. [Channell Financial Documents].

Richard Miller's principal organization, International Business Communication (IBC), was a partnership between Miller and Frank Gomez, which began to work on behalf of the Contras under a State Department contract that began in early 1984. From early 1984 until the summer of 1985, IBC's principal source of income was derived from a series of State Department sole-source, no-bid contracts pushed through the bureaucracy by the principal officials of S/LPD. [IBC Cash Analyses; GAO Report, B229069, 9/30/87; State I.G. Report No. 7PP-008, 7/87; Frank Gomez Dep. 9/11/87, at 177-178].

The first State Department contract for IBC began in February 1984, shortly after S/LPD had begun its work. Miller and Gomez were introduced to Oliver North in mid-1984 by State Department officials from S/LPD. From that period forward, Miller and Gomez worked closely with North as well as the Office of Public Diplomacy in carrying out a variety of assignments related to the promotion of the Contra cause.

In the Spring of 1985, White House Deputy Political Director John Roberts sent Spitz Channell and his Deputy, Dan Conrad, to meet with Miller and Gomez, who, Roberts believed, could best advise them how to utilize their fundraising services on behalf of the Contra cause. [House Select Committee Interview of John Roberts, 7/14/87]. Miller and Gomez assisted Channell in his fundraising efforts and advised Channell on the disbursement of the proceeds for various projects including lobbying, television ads, newspaper ads and grassroots activities designed to influence Congressional votes on aid to the Contras.

Of the $10,000,000 that was raised, nearly two million dollars was spent for public relations, political advertising and lobbying. Much of the rest was retained by Miller and Channell for salaries, fees and expenses incurred by their organizations. The NEPL money that was spent for direct and indirect assistance to the Contras was disbursed, primarily by Miller, at the direction of North. Approximately $1.7 million was "washed" by Channell through Miller's domestic and Cayman Island entities -- International Business Communications (IBC) and I.C., Inc. -- to the Enterprise, where it was co-mingled with funds from their country contributions and the Iranian arms sale. Another one million dollars was passed at the direction of North through Miller's entities to accounts controlled by Adolfo Calero. Approximately $500,000 was distributed at North's request to other persons and entities engaged in activities relating to the Contras, including Rob Owen, Dan Kuykendall, Thomas Dowling, the Washington UNO Office and some unidentified entities. [Canceled travelers checks, originally purchased by Calero, contain the signatures of Owen, Kuykendall and Dowling; also Robert Owen Testimony, 9/14/87, at 337-343; I.C., Inc. Accounts].

Channell and Miller made elaborate efforts to conceal the nature of their fundraising activities and North's role. Certain funds received by NEPL for Contra assistance were allocated on Channell's books to a project denominated "Toys," a euphemism for weapons. NEPL and IBC employees were instructed to refer to North by a code name, "Green." Funds were transferred to the Contras, not directly -- which would be traceable -- but through Miller's anonymous off-shore entity, I.C., Inc.

North misrepresented to several White House officials the nature of the network's fundraising activities. For instance, the President apparently was led to believe that the funds were being raised for political advertising; the President's Chief of Staff, Donald Regan, was deliberately kept in the dark by North and Poindexter; and North misrepresented to Congress and White House personnel the nature of his involvement in the activities of NEPL and IBC. As a result, the Miller/Channell network was able to operate successfully until the latter part of 1986, when increased government aid to the Contras and public disclosure of both the Iranian arms sales and the Contra resupply network made further assistance efforts unnecessary and unwise.

By using a tax-exempt organization to funnel money to the Contras -- for arms and other purposes -- Channell and Miller provided tax deductions to donors. As a result, the United States Government effectively subsidized a portion of contributions intended for lethal aid to the Contras. In the spring of 1986, Channell and Miller pled guilty to criminal tax charges of conspiring to defraud "the United States Treasury of revenues to which it was entitled by subverting and corrupting the lawful purpose of NEPL by using NEPL … to solicit contributions to purchase military and other non-humanitarian aid for the Contras." At his plea hearing, Channell identified Miller and North as his co-conspirators.
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Wed May 31, 2017 2:24 am

I. The Background

A. Richard R. Miller and IBC

From February 1981 to February, 1982, Richard Miller was chief of news and media relations for the Agency for International Development (AID). He was then promoted to public affairs director at AID, where he remained until February, 1983. [R. Miller Dep., 6/23/87, at 19-20; 3/3/87 memo to HFAC from AID].

Upon leaving AID, Miller established IBC as a sole proprietorship to engage in media relations, strategic planning for public affairs, political analysis, and executive branch liaison. In 1984, he began to work with Francis Gomez who had just retired from the United States Information Agency. Miller had first met Gomez in February 1982, when he was serving as Deputy Assistant Secretary of State for Public Affairs. [R. Miller Dep., 6/23/87, at 19-21; 8/20/87, at 93-95].

Immediately upon leaving the U.S. Information Agency in February 1984, Frank Gomez received a contract from the State Department to assist its newly-formed Office of Public Diplomacy for Latin America and the Caribbean with public relations advice and support. The original purchase order for the contract specified that Gomez was to write talking point papers on Central America; prepare speaker kits; identify and refute distortions and false allegations regarding U.S. policy; draft sample speeches; prepare Op/Ed pieces and feature articles; assist Central American refugees and exiles visiting Washington; arrange media events for them; and make them available for Congressional interviews. [Audit Report No. 7PP-008, Office of the Inspector General, Department of State (July 1987)].

Although the first State Department contracts were with Gomez, Gomez testified that he was acting as an agent for Richard Miller from the very beginning of their relationship with the State Department and the office of Latin American Public Diplomacy. [F. Gomez Dep., 9/11/87, at 103, 129-130] This contract was renewed with Gomez in May 1984 and then assumed by IBC in August or September 1984. By mid-1984, with the assumption of the State Department contract, IBC was functioning as an informal partnership between Miller and Gomez, even though Gomez was technically a subcontractor to IBC. At a later time, Miller and Gomez would each establish personal corporations -- Miller Communications, Inc., and Gomez International, Inc. -- and, effective January 1, 1986, would restructure IBC into a partnership of those two entities. There is not, however, any written partnership agreement. [2] [R. Miller Dep., 8/20/87, at 93-95, supra]. Before it terminated in September 1986 after several renewals, Gomez and IBC received contracts totaling $441,084 from the State Department. [3] [Audit Report, supra].

The State Department contracts brought Miller and Gomez into contact with the leaders of the Contra movement, including Adolfo Calero, Alfonso Robelo and Arturo Cruz. [4] In their efforts to promote the Contra cause in the United States, Miller and Gomez served as liaison with a variety of private organizations on behalf of S/LPD. Their responsibilities under the State Department contract brought them into contact with organizations such as PRODEMCA, the Gulf and Caribbean Foundation, Freedom House and the Institute for Religion and Democracy. [R. Miller Dep., 9/15/87, at 583-587; 8/21/87, at 306].

While under contract to the Office of Public Diplomacy, Miller and Gomez participated in activities designed to influence the media and the public to support the President's Latin American policies. In addition, Johnathan Miller, Ambassador Reich's Deputy at S/LPD, described Gomez as a "cut-out" who made a clandestine trip in Central America and promoted media interviews and background briefings with representatives of the Democratic Resistance in Nicaragua on behalf of S/LPD, without acknowledgement of the State Department role. [Johnathan Miller Dep., 9/30/87, at 128-132; GAO Report B-229069, 9/30/87].

In the course of assisting the Contras with their public relations, Miller was introduced to North, probably by Johnathan Miller (no relation) or Otto Reich, who were IBC's primary contacts at the State Department [R. Miller Dep., 8/20/87, at 125-126]. In late 1984 and early 1985, NSC officials Walt Raymond and Oliver North assisted public relations specialist Edie Fraser in the planning of a fundraising dinner for the Nicaraguan Refugee Fund. Raymond and North engineered a White House briefing for potential donors and fundraisers who could help make the dinner a success. The White House briefing, which was designed to demonstrate the dire need of the Nicaraguan refugees in Honduras was to be followed by a reception at the Hay Adams Hotel where a pitch to help raise funds was made. [Memorandum N14857 from Walt Raymond and Oliver North to Robert McFarlane, Nicaragua Refugees, 1/8/85]. White House Counsel, Fred Fielding, initially objected to White House involvement in the events but later reluctantly revised his opinion after pressure was generated by Walt Raymond. [Memorandum N39625 from Fred Fielding to Robert Kimmit, 1/11/85; Memorandum N39622 from Walt Raymond to Robert Kimmit, 1/16/85; Memorandum N39617 from Fred Fielding to Kimmit, 1/18/85]. Channell was invited to the briefing and reception and subsequently became deeply involved in the dinner effort. The format used in raising money for the Nicaraguan Refugee Fund -- a White House briefing followed by a function at the Hay Adams Hotel -- was adopted by Channell for his future fundraising activities.
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Wed May 31, 2017 4:28 am

B. Carl R. "Spitz" Channell

In 1976, Spitz Channell began to work for Terry Dolan, the founder of the National Conservative Political Action Committee (NCPAC). His initial responsibility was assisting in Congressional campaigns. After the 1978 elections, Dolan asked Channell to shift to fundraising. To Channell's own surprise, he was an instant success, and was named by Dolan as NCPAC's first national finance chairman. In that position, Channell concentrated on NCPAC's "high dollar donor program," and set up a number of briefings in Washington for potentially large contributors. [Channell Dep., 9/1/87, at 6-10, 14-16, 21; 9/2/87, at 163]. This fundraising method was to become the standard operating procedure for the Channell network.

In 1982, Channell left NCPAC and formed his own political consulting organization, the Channell Corporation, to offer fundraising advice to campaigns and candidates. By 1984, he began to establish a network of other politically-oriented foundations. First, he founded the American Conservative Trust (ACT) as a Political Action Committee (PAC). At approximately the same time, he incorporated NEPL and sought IRS recognition of NEPL as a tax-exempt foundation under Section 501(c)(3) of the Internal Revenue Code. [Channell Dep., 9/1/87, at 30-34].

In its application for tax-exempt status, NEPL asserted that it was formed "to educate members of the general public on American political systems and societal institutions." The application further stated that this education was to be accomplished through the study of the development of American political systems and the influence of such systems on societal institutions in the United States. NEPL indicated to the IRS that it would collect information on these topics, make that information available to the general public, and eventually conduct seminars. [CH 4477-80].

On December 12, 1984, the IRS issued a determination letter stating that, based on the information contained in NEPL's application, and assuming that its operations would be consistent with the program outlined in the application, NEPL qualified as an exempt organization under Section 501©(3). [5] [CH 4437].

According to Channell, when he formed NEPL in late 1984, most "Washington insiders" doubted that anyone could raise money to advance foreign policy initiatives. Channell, however, believed that he could succeed because his major donors were committed to President Reagan and his philosophy toward foreign affairs. [Channell Dep., 9/2/87, at 163-164].

At first NEPL concentrated on raising funds to publicize "European issues," e.g. SALT, summits and nuclear freeze proposals. In January 1985, after NEPL ran a large newspaper advertisement congratulating President Reagan on his inauguration, Channell received a call from Edie Fraser, of the public relations firm of Miner and Fraser. According to Channell, Fraser indicated that she admired the ad and asked for NEPL's assistance in organizing and promoting a fundraising dinner for the Nicaraguan Refugee Fund (NRF). This was Channell's introduction to the Contras' cause. [Channell Dep., 9/1/87, at 40-41; 9/2/87, at 165].

To assist him in this effort, Channell recruited Daniel Conrad, a fundraising consultant from San Francisco, with whom Channell had dealt on earlier occasions. Conrad came to Washington, and together he and Channell initiated NEPL's involvement in the Nicaraguan issue. [Channell dep., 9/1/87, at 49-50].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Thu Jun 01, 2017 11:03 pm

C. Daniel L. Conrad

In the late 1960's, after short stints as a management trainee at Ford Motor Company and then as a fundraiser for Northwestern, Daniel L. Conrad, who later became Spitz Channell's key deputy, joined Harvey Fundraising Management of Milwaukee, Wisconsin, as a field director for campaigns. [Conrad Dep. At 6-8].

In the late 1970's, Conrad incorporated his business as Public Management Institute (PMI), which evolved from a training and consulting services firm to one primarily engaged in the publishing of periodicals and reference materials on financial grants and capital campaigns. Conrad himself continued, however, to consult on fundraising matters. [Conrad Dep., at 12-16].

Conrad first met Channell in 1978 or 1979 at a seminar on fundraising being taught by Conrad in Alexandria, Virginia. After their initial meeting, Channell called Conrad periodically for informal advice on fundraising. In 1983 or 1984, Channell hired Conrad as a consultant to advise him on how to build a political consulting business, an assignment that lasted approximately one weak. [Conrad Dep. At 20-22, 25-27].

Given Channell's history of looking to Conrad for advice, it was natural for Channell to ask Conrad to assist him in fundraising for the Contras -- even though Conrad had never been involved in political fundraising and had no interest in the Nicaraguan issue. [Conrad Dep. At 24, 557, 559-560]. Their financial arrangement was never formalized. According to Conrad, Channell just gave him money periodically. For his efforts on the NRF dinner, for example, Conrad recalls receiving $10,000 or $15,000 from Channell, $10,000 from the NRF, and $1,500 from Miner and Fraser. After that time, Conrad's compensation kept changing, with Channell deciding at various intervals how much to pay him. According to Conrad, he signed on with Channell's organizations more as a matter of friendship than as a matter of business. [Conrad Dep. At 28-38].

Although Conrad had no formal position or title, he served essentially as the number two person in each of Channell's organizations. Channell eventually gave him the title of "Executive Director." [Conrad Dep. At 38-39].

When Conrad joined Channell the common offices for Channell's various entities were located in a small townhouse at 305 4th Street, N.E., in Washington, D.C. Later, in August 1986, as money from Contra donors rolled in, they moved to luxurious and spacious new quarters in National Place, 1331 Pennsylvania Avenue, N.W., in Washington, D.C., and hired additional staff and fundraisers.

Lines of authority in Channell's organization were informal. Fundraisers reported either to Conrad or Channell, who shared responsibility for training them. Channell, however, was generally in charge of preparing the script to be used for soliciting prospective donors. [Conrad Dep. At 41].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Thu Jun 01, 2017 11:17 pm

D. The NRF Dinner

According to Channell, the NRF dinner and [had] to be postponed several times, and was an organizational disaster. When it finally took place on April 15, 1985, President Reagan attended and delivered the keynote address. The NRF dinner convinced Channell that large and expensive functions were not efficient methods of raising money for the Contras. However, the President's commitment to the Contra cause convinced Channell [to] believe that the Nicaraguan issue was a fertile one for private fundraising. [Channell Dep., 9/2/87, at 165-167.

Thereafter, Channell and Conrad, with the assistance of Miller and Gomez, concentrated on private meetings with potential large donors, who would be given an audience with North and, in some cases, a photo opportunity with the President.

The idea of focusing on potential big givers to the Contras was not new. Edie Fraser, one of the principal organizers of the NRF dinner, testified that at the suggestion of the State Department she met with North and Walt Raymond on December 11, 1984, to seek White House "participation" in the dinner. Fraser mentioned the Sultan of Brunei to North as a possible contributor to the NRF. Fraser explained that the Sultan had come to her attention because he was a contributor to a prior program sponsored by Mrs. Reagan. On December 28, 1984, Fraser sent further biographical information on the Sultan to North, but does not know if North ever followed this lead. [Fraser Dep. At 28, 31-39; N6298].

On March 4, 1985, Fraser sent additional information to North on the planner dinner. At the bottom of the cover letter she added a handwritten note: "Ollie, Very Imp., Two people want to give major contribs i.e. 300,000 and up if they might had one 'quiet' minute with the President." [Fraser Dep., Exhibit 3].

According to Fraser, she added his note to the letter because of her conversations with Channell and Conrad, who suggested that some of their contributors might make large donations to the NRF dinner if they could meet alone with President Reagan. As far as Fraser can recall, she added the number of donors (two) and the possible amount of money (300,000) to her note to give the offer some definition. She cannot be sure that either Channell or Conrad were that specific in their conversations with her. [Fraser Dep. At 41-60]. Neither Channell nor Conrad recall discussing such an offer with Fraser. [Channell Dep., 9/2/87, at 75-77]; Conrad Dep., at 580-581].

Fraser received no response from North regarding the offer. In fact, according to Fraser she never heard from or spoke to North again after their initial meeting on December 11, 1984. Her letters were not answered by North, and someone else at the White House ultimately assumed responsibility for liaison with the group planning the dinner. [Fraser Dep. At 28-30, 48-49].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Thu Jun 01, 2017 11:30 pm

E. NEPL and IBC Meet

In early 1985, prior to the NRF dinner, Channell called the office of Edward Rollins, then White House Political Affairs Director, to ask how NEPL could help support "the President's agenda in Central America." Rollins' office referred the call to John Roberts, then a White House aide, who agreed to have lunch with Channell and Conrad. [Channell Dept., 9/1/87, at 52-53].

At that lunch, according to Channell, Roberts responded to their interest in the Nicaraguan issue by stating that they should talk to Miller and Gomez, the principals of IBC. Roberts told Channell and Conrad that IBC was "the White House outside the White House" on this issue. Shortly thereafter, Channell and Conrad set up a meeting with Miller. [6] [Channell Dep., 9/1/87, at 52-52].

Roberts had called Miller prior to that meeting and alerted him to the referral, suggesting that Channell and Conrad wanted to "help the President" on Nicaragua. In particular, Roberts told Miller that Channell and Conrad wanted to do a media campaign. Roberts did not mention any possibility of direct financial assistance to the Contras. [R. Miller Dep., 8/20/87, at 135-137].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Thu Jun 01, 2017 11:35 pm

II. The Miller/Channell Network -- The Beginnings

In late March or early April 1985, Channell, Conrad, Miller and Gomez -- with support from Oliver North -- embarked on an effort to assist the cause of the Contras. Their joint efforts continued until North was fired in November of 1986.

According to Miller, Channell initially offered to IBC a retainer of $15,000 per month, which IBC accepted. In exchange for this retainer, IBC was to handle media relations, political analysis, research, advertising copy, film production, and other public relations functions. There was never any written agreement, however, reflecting the arrangement between NEPL and IBC. [R. Miller Dep., 8/20/87, at 137-139].

At first IBC lent support to ACT and NEPL in their efforts to educate the public on the Nicaraguan issue. In their efforts to understand the Nicaraguan issue and to assist in the Administration's efforts to win a Congressional vote on Contra aid, Miller brought Channell and Conrad together with Robert Goodman of the Goodman Agency, a Baltimore political public relations firm who specialized in television ads for political campaigns. Channell paid the Goodman Agency $85,000 to produce and run television ads just prior to the Congressional vote on aid to the Contras in 1985. Miller and Gomez worked with the Goodman Agency to develop material used in the ads and to select the media markets in which they were to be run. [A. Goodman Dep. 7/9/87, at 26-28; Goodman Ex. 17].

According to financial records obtained by the Committee, IBC received its first payment from Channell on April 22, 1985 in the amount of $1,320,00. Two days later, on April 24, the first series of television ads aimed at influencing the vote in the Congress were run in selected media markets by one of Channell's organizations. In May of 1985, IBC received its first retainer payment from Channell in the amount of $10,000. Prior to that time, Miller and Gomez had been almost entirely dependent on the money they received from the Department of State. [IBC Financial Analyses].

Because of their prior contact with the Contras' organization and leaders, Miller and Gomez believed that they could be of assistance in efforts to raise money for the Contras. One of Channell's first steps, with IBC's help, was to secure a letter from Adolfo Calero authorizing NEPL to solicit contributions on behalf of his organizations. [R. Miller Dep., 8/20/87, at 148-149]. This letter, dated April 10, 1985, opened "Ear Spitz," and read in part:

"Please help us to achieve our dream, a free and democratic Nicaragua, not tied to a hostile Soviet threat but to a peaceful democratic American tradition.

"All resources you can raise will be appreciated. We can put all of them to good purposes.

"Richard Miller and Frank Gomez can keep you informed of our progress and serve as our contact point in the United States."

[CH 32022].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Thu Jun 01, 2017 11:47 pm

A. The Initial Solicitations

In early April 1985, Channell spoke with one of his prior contributors, John Ramsey of Wichita Falls, Texas, who Channell felt might be interested in contributing to support the Contras. Ramsey seemed receptive to the idea, but wanted to meet Calero in person to ensure that any money he contributed would, in fact, be used to support the Contras. [Channell Dep., 9/1/87, at 80-82; R. Miller Dep. 8/20/87, at 141-142].

Of the $10,000,000 that was raised, nearly two million dollars was spent for public relations, political advertising and lobbying. Much of the rest was retained by Miller and Channell for salaries, fees and expenses incurred by their organizations.

Channell scheduled a dinner for himself, Conrad, Miller, Gomez, Ramsey and Calero in Washington, D.C., on April 10, 1985. At the last minute, however, Calero was unable to attend and the dinner went forward without him. Going into the dinner, Channell had told Miller and Gomez that Ramsey was a "tough cookie" who probably would be most interested in the Contras' need for arms and other lethal supplies. [Channell Dep., 9/1/87, at 80-83; R. Miller Dep., 8/20/87, at 142].

At the dinner, in a private room at the Hay Adams Hotel, Miller and Gomez spoke at length about the Contras' need for supplies, both lethal and non-lethal. Gomez showed Ramsey a book of pictures taken during a recent trip Gomez had made to various Contra bases in Central America. This collection included pictures of Contra fighters, mortars and machine guns. [CH 36920-35; R. Miller Dep., Exhibit 10].

Conrad openly tape-recorded the conversation during dinner, supposedly because he was learning new information about the Contras and wanted to preserve it. [Conrad Dep., 6/10/87, at 75-76; Gomez Dep. At 32-33]. The transcript of the tape, as further interpreted by Channell, Miller and Gomez discussed the Contras military and non-military needs at length, often in response to questions from Ramsey. At one point, Miller deflected a suggestion by Ramsey that people be solicited to send used shotguns to the Contras:

RAMSEY: "The best I can tell, a shotgun is the best thing to use in Jungle warfare."

GOMEZ(?): "Or a very rapid fire machine gun. That's why the AK-47s and the M16s are the best weapons."

MILLER: "The M16 fires a 22.5 caliber bullet."

RAMSEY: "I bet I could get 10,000 people to give their old shotguns to this."

MILLER: "Only one problem. You can't export guns without a license."

[CH 36923; R. Miller Dep., Exhibit 10].

Shortly after this exchange, the subject turned to methods of counteracting Soviet-supplied HIND helicopters:

GOMEZ OR MILLER: "Calero has said publicly, so that the Sandinistas could hear on secret radio communications in the field, saying we have red eyes [missiles]. It's a big lie."

UNKNOWN: "They're playing a psychological war against the Sandinistas."

MILLER (?): "The more sophisticated of the shoulder-held missiles, the red eyes. There's 2 different kinds. One that's a little less expensive and there's one that's $8,000. It can take it out."

[CH 36924; R. Miller Dep., Exhibit 10].

Later, Channell itemized some of Calero's needs:

CHANNELL: "Calero wants those red eye missiles. He wants boots. He wants back packs. He wants AK 47 rounds which you can get on the international market. He wants communications equipment."

[CH 36928; R. Miller Dep., Exhibit 10].

Ramsey, however, returned again to his suggestion to provide the Contras with donated arms, which is not what Channell and Miller had in mind:

RAMSEY: "We're going to call it the Shotgun Drive. And we're going to get Remington to put up the amo [sic]. Dupont owns Remington."

"We're going to start on CBs. We're not even going to invoke the electronic media until we get support or we have about three semis going north on Tobacco Road out of North Carolina full.

"And they keep calling on another semi.

"'We got an empty semi out there? Somebody got an 18-wheeler empty can come down and help liberate Central America?'"

[CH 36931; R. Miller Dep., Exhibit 10].

Near the end of the transcript, the Channell/Miller group succeeded in turning the discussion back to missiles and money:

UNKNOWN: "Between now and May 1 the red eye missiles could be the entire key.

"Because of they succeed at this point in launching an offensive including tanks and M124 helicopters into that region and go for the cans … [sic]

"There's two different kinds of red eye missiles. There's one that's very unsophisticated which is just a direct shot missile. And then there's one that's able to take on the Hind [sic] because the Hind has major decoy devices, has heavy armament, and it has these flares on the fack of the exhaust from the jets -- the expulsion from the engine -- that mask the head.

"So you have to have the $8,000 red eye to make it work."

[CH 36935; R. Miller Dep., Exhibit 10]

The transcript concludes with an observation, attributed to Miller, which sums up well the philosophy with which Channell, Conrad and Miller approached their solicitations:

MILLER: "If you provide money for ammunition, the money they've set aside for ammunition can go to boots.

"On the other hand, if you provide money for boots, what they've set aside for boots can go to ammunition."

[CH 36935; R. Miller Dep., Exhibit 10].

The solicitation was a success. The next morning Ramsey had breakfast with Calero and, at that time or shortly thereafter, donated $20,000 directly to the Nicaraguan Development Council. NDC has previously retained IBC as a public relations consultant. [7]

Later, in early June 1985, Miller received a telephone call from North, who asked him to try to raise $30,000 for an undisclosed purpose related to the Contras. North also gave Miller the name and number of a Miami account for "Commercial Tulin" -- a Robelo-controlled account, although Miller did not know that -- into which any contribution could be deposited. [R. Miller Dep., 6/23/87, at 24-25].

At Channell's suggestion, Miller contacted Ramsey, who sent $10,000 directly to the Robelo-controlled account. [Ramsey Dep. At 55; R. Miller Dep., 6/23/87, at 27]. North later confirmed to Miller that the contribution had been received. [R. Miller Dep., 6/23/87, at 27].

Channell then asked Miller to have North send telegrams of appreciation to both Ramsey and Channell. Miller got North's approval for these telegraphs and sent them over North's name. [R. Miller Dep., 6/23/87, at 27]. In those telegrams, dated June 6, 1985, North thanked Ramsey and Channell for their support. [RM 3577; RM 3578].

The Ramsey solicitation was not, however, to become the model. It did not produce enough money for the effort, and the donation was sent directly to Robelo so that the Channell/Miller group was not compensated. A new approach was in order.
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