Use of POW-MIA Groups in Covert Operations Alleged : Activists: Justice Dept. urged to probe Senate charges that aid was funneled to Laotian rebels.

A Senate committee has unanimously agreed to ask the Justice Department to open a criminal investigation into allegations that the Reagan White House ran a covert operation, using POW-MIA activist groups as fronts, to funnel aid to anti-Communist Laotian rebels in the mid-1980s, The Times has learned.

“What we basically want the Justice Department to do is to tell us if what we are dealing with here is the ‘Son of Ollie North,’ ” said Sen. Charles E. Grassley (R-Iowa), a member of the Senate Select Committee on POW-MIA Affairs.

The operation, presumably intended to destabilize the Communist government of Laos, was financed in part by private donors who later formed the nucleus of Lt. Col. Oliver L. North’s secret Iran-Contra fund-raising network, according to Senate investigators and documents obtained by The Times. Donors were told their contributions were for a White House-backed effort to search for servicemen listed as missing in Laos.

The funds were funneled through a POW-MIA group in California and a variety of overseas channels, including the Bank of Credit and Commerce International (BCCI) and financial institutions in Europe and the Middle East, according to banking records obtained by the Senate investigators.

Some details of the operation, which could have been a precursor to the White House-run covert Iran-Contra scandal, were contained in a long-awaited report issued Wednesday by the committee. The report, following a yearlong investigation, concluded that there is no proof that U.S. POWs were left behind in Southeast Asia at the end of the Vietnam War.

Additional details, some of which are contained in committee documents that have not yet been made public, were obtained by The Times.

The documents trace nearly $600,000 in covert assistance to Laotian resistance groups over a three-year period beginning in mid-1983. Nearly one-third of the money went through Support Our POWs-MIAs, a family group then located in Los Alamitos, Calif.

The channel through the support group was set up by John LeBoutillier, a former New York congressman turned POW activist. LeBoutillier said his purpose was to help find U.S. servicemen.

The documents contend that Ann Mills Griffiths, executive director of the National League of Families of American Prisoners and Missing in Southeast Asia, and Richard Childress, who was then a senior member of the National Security Council, were closely involved in the operation.

Grassley said Childress and Griffiths are the main subjects of the requested Justice Department investigation, which he said will probe possible perjury, obstruction of justice and violations of the Neutrality Act.

Griffiths has characterized the allegations as a “smear campaign” mounted by her detractors in the POW activist community.

Childress, in testimony before the committee and in an interview with The Times, also called the allegations linking him to the covert funding “a smear” meant to discredit the Reagan Administration.

“There never has been any, on my watch, private funding for the Lao resistance,” he said. However, suggesting that there may have been some discussion at the time of a covert project to aid the resistance, Childress added, “It’s amply in the record that I opposed it.”

Evidence of the operation was clearly the most startling conclusion in the committee report detailing the results of the yearlong investigation into the fates of the 2,226 still officially listed as missing from the Vietnam War.

The final report differed only marginally from an earlier version that concluded there was “no compelling evidence” that any of the missing were kept in Vietnam or Laos after the war ended.

Investigators said the covert fund raising and the possibility of a National Security Council connection to it raised several questions about legal improprieties.

“If it was a covert operation by the NSC to fund the Laotian resistance as we suspect, then it was clearly an off-the-shelf operation, one about which Congress was never informed,” one investigator said. In that case, it would also have been a violation of laws prohibiting solicitation of tax-deductible contributions for purposes other than those allowed by the charter of the charitable organization involved--in this case Save Our POWs-MIAs, the source added.

But because the statute of limitations may have expired on those offenses, the senators have decided to ask the Justice Department to determine if Childress or Griffiths may have perjured themselves in the sworn testimony they gave to the committee, Senate sources said.

One investigator saw a similarity to the secret funding of the Nicaraguan rebels: “In the early ‘80s, we had plenty of money available to run covert operations to look for POWs and there was no need to use private funds. But this was something different . . . an attempt to destabilize the government of Laos using anti-Communist forces and to do so without congressional authorization.”