2 Brothers Charged With Conspiring to Make Explosives : Investigation: They are not implicated in the Oklahoma City bombing, but with alleged incidents in Michigan. Death toll at blast site reaches 96.

In a day of swiftly unfolding developments, the federal government Tuesday accused two brothers, Terry Lynn Nichols and James Douglas Nichols, of taking part in a conspiracy to build bombs but stopped short of charging them in connection with the Oklahoma City explosion a week ago.

The charges link the two brothers to Timothy J. McVeigh, who has been accused in the bombing. The brothers had been held since the weekend as material witnesses in the case.

The charges against them relate to alleged incidents in Michigan between 1992 and 1994. But a government source said that the charges could help build a case tied to last week’s explosion and make it possible to hold the two men in custody longer while the investigation proceeds.

The FBI affidavit accompanying the charges said that James Nichols said he had seen “McVeigh and Terry Nichols making and exploding ‘bottle bombs.’ ” It also said that James Nichols “had . . . made comments (to a neighbor) that judges and President Clinton should be killed.”

The investigation of the bombing, the worst terrorist attack in the United States, is moving on two primary fronts. The FBI and other investigators are seeking a suspect, identified as John Doe No. 2, and they are trying to build their case against McVeigh.

As the inquiry continued Tuesday, searchers at the nine-story Alfred P. Murrah Federal Building, the site of the explosion in Oklahoma City, retrieved more bodies from the rubble, bringing the confirmed death toll to 96. It is expected to climb to at least 200 as searchers find bodies from the day-care center and Social Security office, where a large number of victims are thought to have died.

In the aching communities around Oklahoma City, meanwhile, funeral services were conducted for victims who were among the first pulled out of the shattered building.

Pressing their effort to locate John Doe No. 2, who investigators believe rented the 1993 Ford truck in which the explosives were carried to the office building, investigators released a second sketch of the suspect. It depicts a square-jawed white man with thick lips and a slight arch in his right eyebrow. He is wearing a baseball cap. New reports connected him to McVeigh.

Authorities are uncertain whether Doe No. 2 escaped the blast or was perhaps its first victim when at least 1,000 pounds of ammonium nitrate and fuel oil were set off at 9:04 a.m. last Wednesday.

Other Developments

In other developments:

* Sherry Jones, 33, a waitress in the northwest Kansas town of St. Francis, told The Times that McVeigh, another man, and a man resembling John Doe No. 2 visited the Dusty Farmer restaurant where she works, around noon on a Saturday three or four weeks ago.

* The operator of a private mailbox facility in Kingman, Ariz., offered new details of a man described as having picked up McVeigh’s mail there as recently as last month. She said that he resembled the initial composite sketch of John Doe No. 2.

* New details emerged in the investigation of the theft of blasting caps last year in the central Kansas area near Herington, where Terry Nichols lived. Marion County Sheriff Ed Davies said that the FBI and agents of the Bureau of Alcohol, Tobacco and Firearms were investigating the disappearance last September of 580 blasting caps and 299 sticks of dynamite from Martin Marietta Aggregates, a limestone quarry. Blasting caps, or some other small explosive device, were needed to set off the large quantity of explosive material in the Oklahoma City bomb.

* The U.S. attorney’s office in Oklahoma City began discussing the case with an existing federal grand jury. But a special grand jury to hear the initial evidence is expected to be empaneled later, a government source said.

The Department of Justice, it was learned, plans to assemble a team of federal attorneys from around the country to help prosecute the case in Oklahoma City, and sources said that prosecutors will be seeking authorization to obtain subpoenas and other investigative tools to widen their investigation of the bombing and alleged conspiracy.

The Nichols Brothers

The accusations against Terry Nichols, 40, and James Nichols, 41, were contained in a criminal complaint made public at a court hearing in Milan by U.S. Atty. Saul Green of Detroit.

The two are said by authorities to share McVeigh’s interest in paramilitary activities and have been tied to anti-government causes.

James Nichols, a balding man with a trim salt-and-pepper beard, appeared at a court hearing at the federal penitentiary in Milan, about 45 miles south of Detroit, where he has been in custody since last weekend.

Both James Nichols and Terry Nichols, who is in custody in Wichita, Kan., were charged with conspiracy and the manufacture of destructive devices. The conspiracy charge carries a maximum punishment of five years in prison and a $10,000 fine. The explosives charge, upon conviction, is punishable by a maximum 10-year prison term and a $10,000 fine, according to the Justice Department.

The hearing was intended to allow federal prosecutors to ask U.S. Magistrate Lynn Hooe to order James Nichols detained indefinitely until he can be brought before a grand jury in Oklahoma City to tell what he knows about McVeigh’s activities.

Nichols, who was dressed in olive drab prison garb but was not shackled or handcuffed, did not enter a plea when the criminal charges were presented nor was he asked to do so. He read the eight-page complaint and FBI affidavit, occasionally shaking his head and sometimes smiling at his attorney, federal public defender Miriam Siefer.

He said nothing during his brief appearance before Hooe in the spartan, brown-carpeted prison visitors’ room.

But the complaint and accompanying affidavit from FBI agent Patrick Wease, who led a search of Nichols’ farmhouse in Decker, Mich., over the weekend, suggested that James Nichols has been cooperating in at least a limited way.

Wease said the older Nichols brother “stated that he has observed McVeigh and Terry Nichols making and exploding ‘bottle bombs’ at his residence in 1992, using brake fluid, gasoline and diesel fuel.”

Knowledge of Bombs

The agent quoted James Nichols as telling of participating in this bomb-making “and that in 1994 he, James Nichols, has made small explosive devices using prescription vials, pyrodex, blasting caps and safety fuse.”

According to the affidavit, the older brother “believed that Timothy McVeigh had the knowledge to manufacture a bomb” and possessed books that “contained information about making bombs and information dealing with ammonium nitrate bombs.”

Wease said that the search of the 500-acre farm produced 28 50-pound bags of fertilizer containing ammonium nitrate, a 55-gallon drum containing fuel oil, and quantities of hydrogen peroxide and aluminum powder.

The FBI agent said that a neighbor of James Nichols recalled Nichols referring to his bomb-making and saying: “We’re getting better at it.”

According to the neighbor, Daniel Stomber, “James also made comments stating that judges and President Clinton should be killed and that he blamed the FBI and ATF (federal Bureau of Alcohol, Tobacco and Firearms) for killing Branch Davidians in Waco.”

Wease said that another witness, whom he did not identify, said there was “a strong odor of diesel fuel” on the farm several years ago and an unusually large amount of fertilizer.

This witness “advised that Nichols repeatedly blamed the federal government for all of the problems in the world, stating that he (Nichols) despised the United States government.”

Defense attorney Siefer ridiculed some of the charges, telling the judge that “the information regarding the 1994 bomb-making is quite stale.”

After the hearing, Nichols exchanged embraces with relatives in the visitors’ room, including his mother and stepfather. Hooe said there would be a fuller hearing Friday in Detroit.

In Wichita, federal law enforcement officials scheduled a detention hearing today for Terry Nichols, who is being held in the Sedgwick County Jail.

Chris Watney, a spokeswoman for the U.S. attorney in Wichita, said that Nichols would appear at 2 p.m. before U.S. District Judge Monti Belot.

Nichols, who is represented by federal public defender Steven Gradert, was to have appeared on Thursday, but federal officials moved up the hearing because of safety concerns for hundreds of children who are to tour the courthouse building that day as part of a Law Day celebration.

Sherry Jones, the waitress in St. Francis, a town of 1,700 near the Kansas-Colorado border, said that the man who resembled John Doe No. 2 spoke “in a foreign accent that sounded Spanish to me.”

Her account of the man matched one offered by the manager of a Best Western motel in Junction City, Kan.--where authorities say the truck was rented that carried the explosives to Oklahoma City. The motel manager told the Associated Press that a man matching the description of the suspect stayed at his inn two days before the explosion. The manager said that the man “spoke broken English” and arrived in a Ryder truck similar to one used in the bombing. The suspect said “he was from Colorado,” the manager told the news agency.

Jones, in an interview Monday, said that she had reported to federal authorities the visit by someone matching the suspect’s description, who had been in the restaurant with two other men.

She said she noted the three men because two wore surplus military camouflage pants even though “turkey hunting season was still a week off. There aren’t any (military) bases around here and we don’t usually see folks dressed like that except in hunting season.”

One of the men in camouflage, Jones said, closely resembled McVeigh, while a dark-skinned man in blue trousers and a white T-shirt looked like John Doe No. 2.

She said that the three men ate lunch at a secluded table near a fireplace in the restaurant, a large room decorated with toy tractors. Jones said she tried to make conversation with the men but they ignored her.

When they finished, Jones said, the man who resembled McVeigh paid from a “large roll” of cash. Saying nothing, they walked to a brown Ford four-wheel-drive pickup truck and drove east on Route 36, a two-lane blacktop highway, “into Kansas.”

“I forgot about them, but when I saw those pictures (composite drawings) in the papers, and then the photos, it hit me right away,” Jones said. “I know those guys.”

In Kingman, Ariz., meanwhile, Lynda Willoughby, manager of a business called The Mail Room, in a pink-stucco strip mall, told The Times that two men, one resembling John Doe No. 2, picked up McVeigh’s mail sometime in February or March.

She said that she has known McVeigh over the past two years as a polite, even friendly, customer who typically wore combat boots, fatigues and camouflage shirts.

Willoughby said that she last saw McVeigh earlier this month.

“He came in just like normal. He got his mail and said ‘Hi,’ ” she related.

Blasting Caps Stolen

Ed Davies, the Marion County sheriff, said that Terry Nichols lived on a farm 12 miles from the quarry where the theft of blasting caps occurred during the weekend of Sept. 28, 1994.

Blasting caps were among the materials used in the explosive devices cited in the FBI affidavit filed in connection with the charges against the Nichols brothers.

“They’re looking at anybody who’s possibly involved with the explosion down there” in Oklahoma City, Davies said. He said that the material was determined to be missing when workers returned to the site after the weekend.

Davies said that the explosives were used for “blasting rock out of the quarry.” The quarry is one among dozens scattered around the state’s Flint Hills region, an expanse of limestone and rock formations that stretch for miles in central Kansas.

The report of the stolen explosives languished for months until after the Oklahoma City bombing, Davies said.

“There are no solid leads or suspects yet,” he said.

Federal firearms officials said Tuesday that a solid link between the bombing and the theft would be hard to make unless they can find sections of blasting caps that survived the explosion and contain telltale identification markings.

“If you can find a piece with enough coding on it, you’re in business,” said Les Stanford, a spokesman for the Bureau of Alcohol, Tobacco and Firearms in Washington. “If all you have are scraps, it’s going to be difficult.”

Stanford would not elaborate on the state of evidence retrieved from the rubble.

Licensed munitions dealers, of whom there are 2,700 in the nation, are required by federal law to maintain records of all transactions involving blasting caps and other explosives, Stanford said. Purchasers must provide a driver’s license for identification and fill out federal forms, providing name, address, Social Security number and other information.

Stanford said that, despite the general ease in obtaining munitions, thefts are common to “eliminate the paper trail when they are used for a crime.”

The McVeigh Family

Sources said that McVeigh was visited in the federal prison at El Reno, Okla., near Oklahoma City, by his father, William McVeigh of Pendleton, N.Y., over the weekend. Such a visit would have provided an opportunity for the government to monitor the conversation between the two. McVeigh has been described as silent so far in the face of efforts by investigators to question him.

The elder McVeigh, in a telephone interview from his home, declined to discuss the visit. But he said that he has been provided a security detail for his own protection and that he feels at a loss about what to do to help his son.

“Where do you start?” he wondered.

Among those interviewed by FBI agents were Mildred Frazer, McVeigh’s 50-year-old mother, according to Mark Weinberg, a spokesman for the St. Lucie, Fla., county sheriff’s office.

Frazer, who is divorced from McVeigh’s father, expressed her sympathies for the blast’s victims and families in a handwritten note to a sheriff’s deputy stationed outside her home, and then went into seclusion Monday after meeting with the agents.

With Ft. Riley, a major U.S. Army post, playing an at least tangential role in the investigation because McVeigh and Terry Nichols served there and the truck was rented from nearby Junction City, Defense Secretary William J. Perry asked military service chiefs to remind commanders of “the need to monitor compliance” with Defense Department regulations prohibiting troops from participating in extremist or paramilitary groups.

Jackson reported from Milan, Mich., and Gerstenzang from Washington. Also contributing to this story were Times staff writers Richard A. Serrano in Oklahoma City, Stephen Braun in Junction City, Tina Daunt in Kingman, Ariz., and Ronald J. Ostrow, David Willman and Art Pine in Washington.

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Wanted: John Doe No. 2

The FBI released an enhanced sketch of the most wanted man in America, a square-jawed individual linked to the Oklahoma City bombing. It shows a man wearing a baseball cap and is otherwise very similar to the original drawing of “John Doe No. 2.” The tip line number is (800) 905-1514.

Original sketch, released Thursday.

New sketch, released Tuesday