Conservative fund-raiser Carl Channell pleaded guilty Wednesday to the...

By LORI SANTOS  |  April 29, 1987
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WASHINGTON -- Conservative fund-raiser Carl Channell pleaded guilty Wednesday to the first criminal charges in the Iran-Contra scandal and named Lt. Col. Oliver North as his co-conspirator in defrauding the government with a scheme to arm Nicaraguan rebels.

The guilty plea was part of an agreement reached Tuesday with special prosecutor Lawrence Walsh in exchange for Channell's testimony against North, the former National Security Council aide fired for his role in the secret arms sales to Iran and diversion of profits to the Contras.

Channell's plea marked the first conviction in the scandal and in the history of the special prosecutor's law.

Channell, 41, appearing before U.S. District Judge Stanley Harris, pleaded guilty to the one count of conspiracy, acknowledging he falsely claimed tax-exempt status for his fund-raising group's efforts to raise more than $2 million to provide the Nicaraguan Contras with military and other non-humanitarian aid.

The diminutive, well-dressed fund-raiser, whose efforts on behalf of conservative causes have been supported personally by President Reagan, named as his co-conspirators: North, and Richard Miller, the president of International Business Communications, a public relationsfirm that has been linked to the private aid network for the rebels.

Asked why North was not indicted, Walsh associate counsel David Zornow said after the hearing, 'Our investigation is continuing. And as you learned today, Mr. Channell is cooperating with that investigation.'

North's attorney was not available for comment.

Miller, in a statement released by his attorney, denied he conspired with Channell in any illegality.

'No charges have been yet brought against me and no details of Mr. Channell's allegations have yet been made public,' Miller said. 'I categorically deny that I conspired with Mr. Channell or anyone else for that purpose or any illegal purpose.'

The development came as congressional leaders announced that another key figure in the scandal, retired Air Force Maj. Gen. Richard Secord, will be the first witness at public hearings that begin next Tuesday.

Secord, considered a key middleman in both the arms transactions and Contra aid network, will testify without immunity and will be followed by former national security adviser Robert McFarlane on Capitol Hill.

Congressional investigators, seemingly surprised by Walsh's move Wednesday, said it was uncertain whether Channell would testify before the joint committee hearings.

At the White House, a spokesman declined to comment on any personal contacts Reagan may have had with Channell, but noted the president had requested a full investigation of the scandal.

'The president said, 'Let the chips fall where they may,' the spokesman reiterated.

Later, in an interview with CBS News, the chairman of the Senate select committee, Daniel Inouye, said there was no proof Reagan knew of the diversion, but the president's personal notes and other evidence shows, 'He was very much knowledgeable about the events occurring around him.

'He was not just a peripheral player,' Inouye said. 'He knew what was happening.'

Walsh associate Zornow said the plea agreement with Channell included a guarantee of cooperation from three other unidentified employees of Channell's company, the National Endowment for the Preservation of Liberty. Zornow declined to identify the three, who he said will not be prosecuted.

Sources told United Press International the three employees were Dan Conrad, Channell's right-hand man who according to internal company memos received regular fees from the endowment; F. Clifton Smith, listed as an officer on company records, and Chris Littledale, an employee of the firm. An attorney for one of the three declined to comment.

Details of the agreement were not made public.

A spokesman for Channell, who built a multimillion-dollar fund-raising network partly with the help of North, said he was drawn into the scandal by his support for the rebels.

'This has been a difficult time for Mr. Channell and his staff,' the spokesman said. 'He is cooperating fully with the independent counsel and hopes that his cooperation will relieve the burdens that have been placed on him and others who, like himself, were drawn into these issues by the belief in the need for freedom and democracy in Central America.'

After the hearing, Zornow declined to comment on a number of questions on the investigation, including whether Reagan was under investigation.

The Washington Post reported last month that documents showed that more than $1.7 million was channeled from Miller's and Channell's companies to Lake Resources Inc., the Swiss bank account used by North to handle the financing of the arms sales to Iran as well as aid to the Nicaraguan rebels.

IBC, founded by Miller in 1983 after he left a job with the Agency for International Development, also had a secret $276,186 State Department contract in October 1985 to serve as a liaison with Central American groups in the United States. Miller worked for the Reagan-Bush campaign in 1980 and 1984.

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