Private donors to contras `misled' on `overhead' costs
Wealthy citizens were offered private meetings with President Reagan in return for generous contributions to the Nicaraguan contras. Some were given secret briefings next door to the White House, briefings apparently based on classified intelligence data and intended to dramatize the threat emanating from Nicaragua. The donors were not told, however, that fund-raisers would be skimming up to 30 percent from the contributions for ``overhead'' and ``expenses,'' or that the money would not go directly to the contras, but would instead be handed over to weapons dealers who were profiting from generous markups on the transactions.
(Doubts about contras' future, Page 3.)
Testimony in the congressional hearings on the Iran-contra affair, from which the above picture is drawn, suggests that the Reagan administration threw its weight behind private fund-raising efforts to aid the contras, even though the funds were put to some questionable uses.
William B. O'Boyle, a New York oil executive, testified that conservative fund-raiser Carl (Spitz) Channell offered to arrange a meeting with President Reagan if Mr. O'Boyle would contribute $300,000 to the contras.
O'Boyle said he did contribute $130,000 through an organization that Mr. Channell controlled, the National Endowment for the Preservation of Liberty. Channell has pleaded guilty to conspiracy to commit tax fraud by diverting funds from the endowment.
A wealthy Texas widow, Ellen Garwood, testified that she did get to see President Reagan after contributing money to buy items for the contras from a list provided by a former National Security Council aide, Lt. Col. Oliver North. Among the items on the list: bullets, rifles, and hand grenades.
And Colorado brewery executive Joseph Coors testified that Colonel North provided him with the number of a Swiss bank account where he could transfer money to purchase a small airplane to help in ferrying humanitarian assistance to the contras. The account was controlled by an arms dealer, retired Air Force Maj. Gen. Richard Secord.
General Secord did purchase aircraft with money from the account, but he claimed they belonged to him, not the contras.
Both Channell and Secord were close associates of North. Testimony earlier this week indicated North may have used money that was raised for the contras for such items as women's hosiery and snow tires.
Taken together, the testimony suggests that conservatives eager to help the contras were dunned for money that ended up benefiting Secord, North, and Channell.
Mrs. Garwood, O'Boyle, and Mr. Coors testified, however, that they gave the money because the contra aid effort seemed to have the full support of President Reagan. O'Boyle and Garwood said they knew the money they gave was going to be used for weapons.
The three wealthy individuals testified about a pattern of conduct in which North - acting in his official capacity as a White House aide - would sketch the desperate needs of the contras and the threat that the Sandinista government in Nicaragua posed to the United States.
North would conduct briefings, during which he may have revealed secret intelligence data, suggesting that Nicaragua would act as a beachhead for communist revolution throughout Latin America and might be used to as a base for a nuclear strike against the US.
After the briefings, Channell would approach the conservatives with a suggestion that they contribute to the Nicaraguan ``freedom fighters'' who were trying to overthrow the Sandinista regime.
``He always specified the amount,'' recalled Garwood, who eventually gave more than $1.5 million to Channell for the contras. Only later, when Channell solicited more funds for North's legal defense, did she learn that some 30 percent of the donation was being retained by Channell.
Each of the three - O'Boyle, Coors, and Garwood - testified that North would detail the needs of the contras, and even specify the weapons they needed, but would refrain from directly soliciting funds.
Garwood, however, said, ``They didn't need to solicit. I was more than eager to give.''
And Coors stressed that giving aid to the contras was his own idea, brought up in a conversation with former central intelligence director William J. Casey. Mr. Casey, he testified, arranged a meeting with North.
Coors pronounced himself ``surprised and shocked'' that the money went to Secord, and not the contras. ``I didn't give this money to General Secord,'' he said yesterday. ``I gave it to the Nicaraguan freedom fighters.''
Private donors have conservative credentials
Joseph Coors is vice-chairman and chief operating officer of the Adolph Coors brewery in Golden, Colo. He is one of a small number of wealthy businessmen who sometimes are referred to as President Reagan's ``kitchen cabinet.'' A longtime conservative activist, Mr. Coors has been a major contributor to a large number of conservative organizations.
In 1973 he provided $250,000 to help start the Heritage Foundation in Washington, D.C., and he serves on the foundation's board of trustees.
He also helped found the Committee for the Survival of a Free Congress (now the Free Congress Foundation), headed by New Right activist Paul Weyrich. Coors donated $5,000 to Sen. Paul Laxalt (R) of Nevada in support of the senator's libel suit against the Sacramento Bee.
Coors played a leading role in bringing former Interior Secretary James Watt and former Environmental Protection Agency Administrator Ann Gorsuch into the Reagan administration.
Coors's wife, Holly, also is influential in Republican and conservative affairs.
Ellen Garwood, of Austin, Texas, credits her father, the late William L. Clayton, with her interest in world affairs and her strong anticommunist views. Mr. Clayton, who was undersecretary of state under President Truman, is said to have come up with the idea for the Marshall Plan. Mrs. Garwood wrote a biography of her father and also has written a book about an early Latin American ``freedom fighter.''
Garwood's late husband, W. St. John Garwood, was a justice on the Texas Supreme Court, and her son, Judge Will Garwood, is a member of the US 5th Circuit Court of Appeals in New Orleans.
William O'Boyle is an executive with the William B. O'Boyle Co., an oil and gas company in New York City. The heir to a Texas oil fortune, who has a $40 million trust fund, gave $130,000 to Carl Channell's contra fund-raising organization after meeting with Oliver North and Mr. Channell in March 1986.
In March 1987 O'Boyle pleaded not guilty to charges that he defrauded an insurance company out of more than $1.8 million by falsely claiming that 37 pre-Columbian statues stolen in a burglary were worth $1.8 million. Ten gold Krugerrands in $2,000 in cash also were taken in the theft. In fact the statues were worth an estimated $200,000. The statues were recovered by the insurance firm, but O'Boyle refused to accept them and kept the money instead, according to the prosecutor in the case. O'Boyle faces up to 7 years in prison if convicted of insurance fraud.