Channell Associate Pleads Guilty in Iran-Contra Case

Richard R. Miller, who worked as a State Department contractor on Central American programs, pleaded guilty Wednesday to conspiring with conservative fund-raiser Carl R. (Spitz) Channell to defraud the government of taxes in raising $3.12 million for Nicaragua’s contra s.

In the second criminal conviction obtained in the Iran-contra investigation, Miller joined Channell in identifying Lt. Col. Oliver L. North, a staff member of the White House National Security Council until he was fired last November, as a participant in the scheme. That buttressed the possibility that the government will bring charges against North.

At the request of prosecutors for independent counsel Lawrence E. Walsh, U.S. District Judge Stanley S. Harris delayed sentencing Miller until Walsh’s team completes questioning him.

A similar arrangement had been approved for Channell, who pleaded guilty to the same charge last week. Prosecutors indicated that information they received subsequently from Channell led to the guilty plea by Miller, who had said after Channell named him last week as a co-conspirator that he had done no wrong.

Miller, 34, and Channell, 42, each could be sentenced to a maximum of five years in prison and a $250,000 fine.

Walsh is investigating a wide array of government and private figures involved in selling U.S. arms to Iran and helping the contras when U.S. government assistance was illegal.

Donations to Endowment

Miller, like Channell, was charged with defrauding the Internal Revenue Service in the course of raising funds through the National Endowment for the Preservation of Liberty, a tax-exempt organization headed by Channell. Prosecutors said Miller falsely represented to the IRS that donations to the endowment were tax-deductible even though some were used to buy military supplies for the contras.

Miller, a Reagan-Bush campaign aide in 1980, ran a public relations company called International Business Communications from an office cluttered with autographed pictures of President Reagan, framed invitations to inaugural balls and several dark blue “White House Staff” coffee mugs.

Associates said he boasted to prospective clients: “We can get anything done; as you can see, we’re well connected.”

But for Miller, those connections have now paid off in calamitous fashion. “He was trying to build one helluva PR firm based on his clout with the White House, but I guess it backfired,” said a businessman who was referred to Miller in 1985 after meeting with North.

‘Two Guys I Had to Meet’

The businessman, who asked not to be named, said he had met with North to discuss ways to support the contras. “Ollie said there were two guys I had to meet,” the businessman recalled--Miller and his partner, Francis D. Gomez, a retired State Department public relations veteran.

Miller and Gomez operated International Business Communications out of a cramped brownstone they once shared with former White House political director Lyn Nofziger less than a block from the Nicaraguan Embassy. The company has lobbied on behalf of contra leaders, handled their public relations tours and paid their bills.

The company has also represented various corporations and some international agencies, including the U.S. Agency for International Development, where Miller had worked as chief of news and media relations before forming his own company in 1983.

Discussion With North

Michael R. Bromwich, an associate independent counsel, said Miller had acknowledged that in the fall of 1985 he had discussed with North a “piece of military hardware” for the Nicaraguan rebels and had solicited the funds from an unnamed contributor to Channell’s National Endowment.

Although the contributor was identified only by the letter “B” in the criminal information that Walsh filed instead of a grand jury indictment, details of the charge indicated that the contribution was $1 million in stock certificates in November or December of 1985 from Barbara Newington of Greenwich, Conn.

Miller, after a brief court hearing, brushed by reporters attempting to ask him about the military hardware. Outside the federal courthouse, Earl C. Dudley, Miller’s lawyer, said Miller “deeply and sincerely regrets mistakes which have tainted his efforts” in support of President Reagan’s Central American policies.

Won’t Answer Questions

“He profoundly hopes that his mistakes and the mistakes of others will not prove to be the instruments by which the aims of that policy are frustrated,” Dudley said, refusing to answer any questions about the case.

The prosecutors refused to comment on when they might lodge similar charges against North or others.

“Our investigation is accelerating and expanding,” said associate independent counsel David M. Zornow.

At the time Miller was conspiring with Channell, prosecutors said his public relations firm was also working on a secret $276,186 State Department contract on “public diplomacy efforts” related to Central America. The contract, which has drawn a critical review by the House Foreign Affairs Committee, was not mentioned in the criminal charge against Miller.

Times staff writer William C. Rempel contributed to this story.