Canadian Connection: Two Big-Money Players

Walter Ernest Miller and Donald Fraser, the two men alleged to make up the so-called “Canadian Connection” in the American-Iran arms scandal, are big-money players, but their ties appear closer to the routine deals of real estate development than the shadowy world of international arms sales.

According to Canadian government officials, Miller and Fraser are the subjects of an investigation by the Royal Canadian Mounted Police into allegations that Canadians helped finance the sale of American arms to Iran.

A witness before the House Foreign Affairs Committee, Roy M. Furmark, first identified the men and disclosed their involvement, congressional sources said. One External Affairs official confirmed Saturday that Furmark has said Miller and Fraser were involved.

The two men reportedly provided up to $40 million in credit between November, 1985, and April, 1986, to Adnan Khashoggi, a Saudi Arabian arms dealer who has acknowledged arranging arms shipments to Iran during that period. Both men have had extensive mining, real estate, lumber and other business dealings with Khashoggi in Canada, the United States, Hong Kong and the Caribbean.

Neither Miller, a 55-year-old Toronto-area hotel owner and land developer who likes to be called Ernie, nor Fraser is well known in Canadian financial circles, even though both are thought to be multimillionaires. For that matter, Fraser has not lived in Canada for eight years, preferring Monaco and the Cayman Islands, his son Stephen said.

Miller, whom friends describe as a “good old boy,” keeps his residence in a Toronto suburb where the homes run in the $700,000 range. But he too owns a home in the Caymans and travels to Monaco, a woman who answered the phone at his Toronto home said. She refused to give her name, saying she was the housekeeper.

The woman said Miller and his wife left Canada on Saturday but did not say where they were going or when they would return. A housekeeper at Fraser’s Cayman Island home said Saturday that she had not seen him in weeks and did not know his whereabouts.

Miller’s wealth stemmed originally from real estate development in the Toronto area. According to Al Duffy, mayor of suburban Richmond Hill, where Miller has a hotel, the Black Hawk Motor Inn, the total value of Miller’s property in the area is about $3 million.

But his holdings and involvement go far beyond the borders of southern Ontario to include Hong Kong, the Caribbean, the United States and throughout Canada.

A clue to the money he allegedly can muster in a short time was seen Saturday in a Toronto Globe and Mail story, which cited financial records and sources as saying Miller moved more than $24 million though a single bank account in Toronto’s Chinatown in the first six months of last year.

Fraser was a successful accountant in Toronto and had Miller as a client before they went into partnership in various ventures that ultimately included Khashoggi. Even while he was living in Canada, business associates said, he kept a low profile.

Miller, however, was more visible, they said. He liked to sit at his hotel bar and buy drinks for the patrons while listening to the country and Western bands he hired.

But Miller’s employees say he is seldom seen at either the businesses he operates alone or the companies in which he, Fraser and Khashoggi are involved. One of the major firms that links the three, Vertex Enterprises of Toronto, disconnected its telephones Saturday.

Whatever the connections among the three men and their alleged involvement in the U.S.-Iranian arms deals, the Canadian investigation is not likely to disclose much, Canadian government officials said.

One official, when asked if there were any indications that Canadian law had been broken, said: “No, not at all. There is no evidence.”