Channell Used White House as Bait for Fund Raising

Conservative fund-raiser Carl R. (Spitz) Channell preferred to avoid traditional charity dinners. Colleagues said he considered it a waste of time and money to solicit small donations.

But in the spring of 1985, when a politically important benefit dinner for refugees from Nicaragua’s Marxist government was foundering, Channell stepped in to help.

Plagued by financial problems and squabbles among the organizers, the Nicaraguan Refugee Fund banquet was such a fiasco that it raised only $3,000 for refugees, but without Channell’s intervention, some say, it would have lost money.

Clearly, among those most impressed was former White House aide Oliver L. North. On the April afternoon of the dinner, he told CIA Director William J. Casey and a group of colleagues that “Spitz is really working out well.”

Key Man in Network

Channell was doing more than bailing out refugees: He was becoming a key figure in North’s private contra aid network. Together, they had developed a powerful system for attracting private donations to the guerrillas’ cause. North and his allies would provide the White House as bait and Channell would use that to lure donors.

They even went so far as to serve up the President himself. A handshake with Reagan could be arranged, for example, in exchange for private contributions of a few thousand dollars to the Nicaraguan rebels. Or, “one quiet minute” with the President could go for more than $200,000.

Private foreign policy briefings with senior Administration aides or Cabinet members could be arranged for small groups of major contributors in the White House. It was common for Reagan to “stick his head in and shake a few hands” at these briefings. The sessions were routinely followed by luncheons or dinners featuring appeals by Channell for money to support the Nicaraguan rebels.

Tour of Berlin Wall

It was even possible, through the good offices of Channell or his associates, to request a tour of the Berlin Wall with North when the White House aide was traveling in Germany, or to pass along a request that the Administration consider giving a job to a rich supporter’s relative. No one could turn patriotic sentiment and White House connections into cold cash for the contras better than Channell.

“Ollie had a well-oiled machine to grind out money, and Spitz made sure it paid off,” said a source who attended some of the White House briefings.

Now Channell has his reward: He has the first criminal conviction among figures in the Iran-contra affair. It was on a charge that he illegally used a tax-exempt foundation to help arm the contras. One of his associates, public relations executive Richard R. Miller, also has pleaded guilty to similar charges. They both named North as a co-conspirator and focused a national spotlight on the propaganda and fund-raising network that the fired National Security Council aide had administered.

Boland Amendment

The private aid network began to take shape late in 1984 after Congress voted to ban U.S. support for the rebels in Nicaragua. Many members of the Administration--including the President--chafed under the constraints, and North complained to visitors about the effects of the law, an amendment written by Rep. Edward P. Boland (D-Mass.). He kept dozens of copies of it in a file near his desk.

“I asked what the hell the Boland Amendment was and he reached into his stack and gave me a copy,” recalled a businessman who worked with North and his associates.

One of the early recruits to the private support network was a public relations firm, International Business Communications, owned by Miller and Francis D. Gomez. Both men had worked in government public relations offices, and Miller had worked as a press aide to the Reagan-Bush campaign in 1980.

Miller “was trying to build one hell of a PR firm based on his clout with the White House,” said the businessman who was referred to IBC by North early in 1985. He said that the cramped, brownstone office of the firm was filled with autographed pictures of the President and the memorabilia of Miller’s work with Reagan.

‘Can Get Anything Done’

Miller would boast to prospective clients: “We can get anything done. As you can see, we’re well connected.”

In early 1985, IBC already was handling press relations for the contra leadership in Washington, arranging press tours, paying the office rents of contra officials and lobbying congressional and White House officials. The firm also had small contracts with a number of companies and government agencies.

“I remember they seemed pretty desperate for money in those days,” recalled the businessman, who agreed to be interviewed if his name was not used. “I got the hard sell. They wanted me to hire them for a $15,000 retainer. They seemed overly anxious.

“We went out to dinner and Miller drove us in a beat-up old Camaro. I must say, I was underwhelmed.”

The fortunes of Miller and IBC improved in subsequent months as the firm took an increasingly active role in raising contributions for the contras. Channell’s tax-exempt foundation, the National Endowment for the Preservation of Liberty, hired the firm and paid it more than $4.3 million over the next 15 months, published accounts said. And the State Department awarded IBC a secret $276,000 contract to work on Central American diplomatic issues.

White House Insider

The private fund-raising operation also got the help of another White House insider when the President’s former personal assistant, David C. Fischer, joined Channell and IBC as a $20,000-a-month consultant just after the refugee dinner. Fischer was responsible for getting major donors into the Oval Office for personal meetings and pictures with Reagan.

“My contributors were told they could meet the President for a $10,000 contribution to the contras,” one Washington fund-raiser said.

Former White House Chief of Staff Donald T. Regan criticized Fischer’s role, saying that it was “pretty nasty . . . to pick up $20,000 for arranging trips into the White House for photo ops.”

It remains unclear how much money was actually collected for the contra cause in trade for access to such sessions, but by all accounts North regarded the Channell fund-raising efforts as very successful.

Channell’s skill at obtaining significant contributions for the contras was visible from the outset of the disastrous Nicaraguan refugee dinner, which took place April 15, 1985. Although some organizers muttered that he fell far short of the millions of dollars they say he boasted he could raise, records show that Channell accounted for more than any other fund-raiser on the project.

Even among those who admire his success, however, Channell is sometimes criticized for his manner and style. His own employees have been offended by Channell’s crude private references to major donors by such derisive nicknames as “Dog Face” and “Ham Hocks.”

Alvaro Rizo, former Nicaraguan ambassador to the European Economic Community and a Channell critic who created the refugee dinner and fought with Channell over the fund raising, accuses him of “using the cause of liberty . . . and the blood of Nicaraguans” to profit.

And one liberal fund-raiser in Washington said Channell dismissed his concerns about the quality of contra leadership with the blunt retort: “Does it matter who collects your garbage?”

Liked by White House

Channell, however, was highly regarded by the White House. In a letter written a few days before the Iran arms scandal broke, Elliott Abrams, assistant secretary of state for Latin American affairs, said Channell had “set both a standard and a challenge to which we must all aspire if we are to be successful in Central America.”

And even as the controversy began to mushroom last fall, Channell was presented with the “Freedom Fighter” award by North at a formal dinner in Washington.

Channell, 41, was born in Elkins, W.Va., where he worked for nine years managing a family motel. He was introduced to the political fund-raising world when he joined the National Conservative Political Action Committee, the organization credited with helping to unseat a number of Democratic senators in 1980, when Channell was active with the group.

In the last three years he has moved from a row house office in northeast Washington to posh offices on Pennsylvania Avenue near the White House.

Miller worked as a press spokesman for the Tobacco Institute and a brewery before joining the Reagan-Bush campaign. He declined to answer questions. Channell could not be reached for comment Monday.

Staff writer Doyle McManus contributed to this story.