$Unique_ID{bob01023} $Pretitle{} $Title{Iran-Contra Affair: The Report Chapter 4D Channell-Miller Network: The End} $Subtitle{} $Author{Various} $Affiliation{} $Subject{miller north nepl told accounting arms assistance channell committees million} $Date{1987} $Log{} Title: Iran-Contra Affair: The Report Author: Various Date: 1987 Chapter 4D Channell-Miller Network: The End The Beginning of the End On October 18, 1986, the President signed legislation appropriating $100 million for the Contras ($30 million for humanitarian assistance and $70 million in unrestricted aid). The anticipation of this legislation led to a downturn in the activities of the Channell-Miller fundraising and Contra assistance network after the summer of 1986. With the disclosure in early November of the sale of arms to Iran, however, persons involved in the network became concerned that the story of the network would unravel and become public. This prescient concern led to meetings between Miller and North on November 20 and 21. The initial meeting was requested by Miller. They met in the hallway outside of North's office in the Old Executive Office Building. Miller told North that he was worried about the possible legal ramifications and the costs associated with a legal defense. North told Miller that he should use the money left in the Intel Co-Operation (or I.C., Inc.) account (approximately $200,000) for any legal fees that might arise. North called Miller the next day, November 21, to arrange a meeting later that afternoon. Miller met North in the Old Executive Office Building, and North asked him for a ride to Dupont Circle. Miller told North that money was needed from a foreign source to fund public relations and congressional activities on behalf of the United Nicaraguan Opposition (UNO). Miller suggested contacting the Sultan of Brunei or an Arab country. North's response was "I gave one to Shultz already and he [screwed it up]." North also stated that "if Shultz knew that the Ayatollah was bankrolling this whole thing he'd have a heart attack." Miller did not understand either reference. Either that day or the day before, North told Miller that the Attorney General had advised North to obtain legal counsel. [The Attorney General denied that he offered such advice to North. Meese Dep., 7/8/87, at 103.] Miller dropped North at the office building at 1800 Massachusetts Avenue, N.W., where Tom Green's law offices, among others, are located. The Lowell Sun Allegations On December 14, 1986, the Lowell (Mass.) Sun ran a story under the headline "Money from Iranian Arms Sales Was Used to Back Conservatives During 1986 Election." The story stated that "[a]bout $5 million from the almost $30 million in excess raised from arms sales to Iran was filtered to conservative political action groups" to "support candidates who backed President Reagan's pro-Contra and Star Wars policies." The only such group named in the article was NEPL. The Committees have uncovered no evidence to substantiate the allegation that NEPL or any other of Channell's political action groups received any proceeds derived from the sale of arms to Iran. In this regard, the Committees have accounted for virtually all of the funds received by Channell's organizations during the relevant period, none of which are traceable to the Iranian arms sales. Similarly, the Committees have accounted for virtually all expenditures from the Enterprise, and none of these were paid to Channell's organizations. NEPL Activities in December 1986 In December 1986, NEPL's staff received an unusually lengthy holiday vacation from December 15 to January 5, 1987. The reason given for this lengthy break was that the media were making it too difficult for the organizations to conduct their work and that the most sensible response was to close operations for a couple of weeks. Immediately prior to the extended holiday, two NEPL accounting employees were instructed by their supervisors to delete from the accounting records any and all references to the "Toys" project. As mentioned above, contributions intended for the purchase of lethal supplies generally were designated on NEPL's books for the "Toys" project. Alterations in the accounting records and related floppy discs were made to modify prior references to "Toys" to a neutral project named "CAFP TV" (presumably Central American Freedom Project - Television Advertising). In addition, NEPL's principal accountant took all NEPL accounting materials home with him during the vacation, including financial records, bank statements, check books, deposit slips, and the like. The evidence obtained by the Committees suggests that all such records were taken to perform year-end accounting tasks and were returned by the accountant without further alteration. February 1987 Report from IBC to NEPL On February 16, 1987, IBC issued a report to NEPL that reconstructed the disposition of the Contra assistance payments made by NEPL to IBC and I.C., Inc. during the period from July 1985 through the end of 1986. The report contained supporting documentation for many of the relevant transactions. In a summary at the beginning of the report, IBC acknowledged that most of the disbursements of these funds were made "at the request of Lt. Col. Oliver L. North." Moreover, the summary states that "we were assured by [North] at the time that the funds were to be applied solely for humanitarian assistance." Miller has told the Committees that he would write these statements differently if he were writing them today. [According to Miller, he told North in late 1986 that he "hoped to hell the account had been used for humanitarian assistance." North responded "Oh hell, yes." R. Miller Dep., 8/21/87, at 331.] Guilty Pleas of Channell and Miller On April 29, 1987, Channell pled guilty to a one-count criminal information filed the same day by the Independent Counsel. As noted above, the information charged that Channell, Miller, "and others known and unknown to the Independent Counsel" conspired "to defraud the IRS and deprive the Treasury of the United States of revenue to which it was entitled by subverting and corrupting the lawful purposes . . . of NEPL by using NEPL . . . to solicit contributions to purchase military and other types of non-humanitarian aid for the Contras," in violation of 18 U.S.C. Section 371. The acts identified by the information as part of the conspiracy include the Ramsey, Hunt, Newington, O'Boyle, Garwood, and Claggett solicitations. At the hearing in which Channell's guilty plea was accepted by the Federal district court, Channell named Miller and North as his co-conspirators. Miller pled guilty to a substantively identical criminal information on May 6, 1987. Both Channell and Miller are awaiting sentencing.