Probe Links ‘Reagan Doctrine’ to Covert Aid to Laos Rebels

In March, 1981, two months after President Ronald Reagan had entered the White House, CIA Director William J. Casey wrote a fateful memo outlining a covert plan to roll back communism worldwide by aiding resistance forces in Afghanistan, Cuba, Grenada, Iran, Libya, Nicaragua, Cambodia and Laos.

The overt and covert dimensions of what would eventually be called the Reagan Doctrine became a matter of record in places like Afghanistan, Cambodia, Iran and Nicaragua.

Now, more than a decade later, documents and other evidence collected in a yearlong Senate investigation have uncovered what may have been another venture to provide military assistance to anti-communist rebels in Laos. This one may also have been conducted with White House knowledge or direction, investigators say, without the consent or knowledge of Congress.

Judging from the evidence unearthed, so far, the Laotian initiative was shorter-lived and much smaller in scale than the support effort for the Nicaraguan Contras, in which private donations were drummed up for the cause and later profits from secret Iranian arms sales were diverted for their benefit.

But if investigators’ suspicions prove out, long before the Iran-Contra affair came into full flower, a covert assistance program took shape, which, in some ways, could have served as a prototype for Lt. Col. Oliver L. North’s later fund-raising activities on behalf of the Contras.

The three key figures are John LeBoutillier, a former Republican congressman from New York, Ann Mills Griffiths, executive director of the National League of Families of American Prisoners and Missing in Southeast Asia, and Lt. Col. Richard Childress, a colleague of North’s who allegedly oversaw the White House’s interest in the POW issue from his position as director of Asian affairs for the National Security Council.

All three deny any wrongdoing. LeBoutillier and Griffiths say they were involved in legitimate efforts to raise money used to gather information about POWs in Laos and know nothing about any covert attempts to aid rebels. Childress says he was not involved in either LeBoutillier’s activities or any private funding for the Laos rebels.

But Senate investigators suspect otherwise. “What we are looking at here is the precursor to Iran-Contra, an illegal, off-the-shelf operation involving the NSC and private funds just like Iran-Contra,” one Senate investigator said.

“All these years,” he added, “the story of the White House connection to what was secretly going on in Laos has been a time bomb waiting to explode.”

In a letter to the Justice Department on behalf of the Senate Select Committee on POW-MIA Affairs, Sen. Charles E. Grassley (R-Iowa) called for an investigation of the Laotian fund-raising and the National Security Council’s possible involvement in it. Intelligence laws passed by Congress could have been violated, if, as investigators believe, the NSC was involved in the operation or asked friendly foreign governments to contribute to it without a formal presidential authorization known as a “finding,” which would also have had to be transmitted to Congress.

Senate aides said the committee also wants the department to investigate possible perjury by some participants.

Senate investigators came across evidence of the Laotian adventure unexpectedly while looking into possible fraud in fund-raising activities by some POW-MIA activist groups. As pieced together from documents, committee depositions and Times interviews, the Laotian adventure stretches back to a meeting at the State Department on July 28, 1981.

Notes from the meeting, which also involved senior officials from the Pentagon and the NSC, show discussion of using elements of the Laotian resistance to search for clues about servicemen missing from U.S. “black operations” conducted in Laos during the Vietnam War. The issue was sensitive because the United States also was pursuing attempts to account for MIAs through the Laotian government, with whom it had diplomatic relations.

After the meeting, Adm. Allan G. Paulson asked the Defense Intelligence Agency for an assessment of resistance groups in Laos. The analysis concluded that, while the resistance groups were too small and fragmented to pose a real threat to the Laotian government, they could move about covertly in Laos in search of U.S. “crash/gravesites” and pass along their findings to U.S. intelligence--provided they were “strongly motivated.”

On Aug. 31, Paulson forwarded the DIA assessment to the State Department, along with its recommendation that the United States secretly pursue a two-track policy pressing the Laotian government for a POW-MIA accounting, while at the same time undertaking “covert efforts through the Lao resistance forces.”

It is unclear what action the White House took in response to the DIA recommendation, although it is known that earlier that same year, Laotian tribesmen were used for a secret CIA-backed foray into Laos to photograph a prison where U.S. intelligence suspected POWs were being held.

None of the evidence so far suggests a connection existed at that point between use of the Laotian resistance for POW-related missions and the broader aim, outlined in Casey’s memo a few months earlier, of destabilizing Communist regimes in Vietnam and Laos.

That connection, which Senate investigators now believe did exist, apparently began to develop a few months later after LeBoutillier, who was also a POW activist, called Griffiths seeking help in finding a POW-MIA family organization that could accept tax-deductible contributions on his behalf. The money would then be transferred to a special account in Thailand, for use in enlisting Laotians to help in the POW search.

In return, LeBoutillier promised he would pass along whatever intelligence he collected to the U.S. government.

Griffiths said she agreed to help and called Betty Bartels, a Californian affiliated with Support Our POW-MIAs, a small family group in Los Alamitos. According to Bartels’ notes, she hesitated at first, but agreed when Griffiths assured her that the secret project had White House support.

During this same period, the summer of 1982, LeBoutillier said he discussed the project with Lt. Col. Childress.

LeBoutillier, as well as many private donors who would later give money to the project, all said Childress put the National Security Council stamp of approval on the operation for hesitant contributors. LeBoutillier declined to cooperate with the Senate committee but did agree to be interviewed by The Times.

John Fisher, chairman of the conservative American Security Council Foundation, a Washington, D.C.-based group that gave $8,500 to Support Our POW-MIAs, said the White House connection was influential. “Normally, we would not have put funds into something that was not a central thing to us, but we did it because it was the White House, Dick Childress, asking,” Fisher said.

In all, over a period of nearly three years beginning in August, 1982, almost $200,000 in private donations were sent to Support Our POW-MIAs and deposited from there into an account the organization maintained at the Palm Desert branch of Security Pacific National Bank, Senate records show.

Many of the contributions were solicited by Bert Hurlbut, a Texas oilman who would later also figure in North’s private Contra fund-raising efforts. Many of the later Contra contributors such as Bunker Hunt and Ellen St. John Garwood also sent five-figure checks.

Bank records show some of the money was subsequently transferred to an account in New York, but most--$156,000--went to a Bank of America account in Bangkok, Thailand, under the name of Mushtag Ahmed Diwan, who was said by LeBoutillier to be a friend of his chief associate in Thailand, fellow POW activist Al Shinkle.

LeBoutillier said the contributions funneled through Support Our POW-MIAs were the only money he knew of going to the Bangkok account, where Shinkle used it to outfit his Laotian search teams.

But Senate investigators, who subpoenaed the Bangkok bank’s records, reported they also found $400,000 more had been wired to the Diwan account during this period from international sources, including the Seoul branch of the now-infamous Bank of Credit and Commerce International (BCCI) and banks in the Middle East.

According to a confidential memo by John Mattes, the Senate committee’s chief fraud investigator, the money was used to arm Laotian resistance groups in a covert network run by “members of the NSC.”

The source of the international contributions has not been established. But committee sources and former intelligence operatives told The Times they believe the money came from Saudi or other friendly Middle Eastern intelligence organizations that were also contributing to other U.S.-run covert programs.

Griffiths, who worked closely with Childress in her capacity as a member of an inter-agency group that oversaw the government’s various POW-MIA accounting efforts, has admitted to helping LeBoutillier but said she believed he was “legally collecting information” about possible POWs.

Childress, interviewed by The Times, strongly denied helping LeBoutillier’s fund-raising activities. Childress said his name may have been used by the former congressman in a bid “to destroy the Reagan Administration after his operation didn’t work.” There was “never any private funding for the Lao resistance on my watch and it’s amply on the record that I opposed it,” he said.

But in sworn testimony, former Drug Enforcement Administration chief Francis Mullen said Childress was involved. Mullen said he agreed to provide DEA cover to some of LeBoutillier’s operatives in Thailand in August, 1983, after LeBoutillier said the operation had been approved by Childress’ superior, National Security Adviser William Clark.

The DEA later withdrew its cover when LeBoutillier became implicated in a scheme to smuggle guns to Thailand--a case that the Treasury Department investigated but that the Justice Department eventually declined to prosecute. The FBI also investigated LeBoutillier’s activities in the mid-1980s, but its findings remain classified.

“Justice declines to prosecute the gun-running charge, the FBI files remain classified. You have to ask yourself, ‘Why all the secrecy?’ ” said one Senate investigator. “To me, it’s now pretty clear,” he added. “This was the precursor of Iran-Contra.”