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$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.