Unpublished draft chapter of the congressional Iran-Contra

Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Fri Jun 02, 2017 3:23 am

B. North's Maiden Presentation

After the Ramsey solicitation, Channell drew on his experience with NCPAC "briefings" and the NRF dinner, and worked with Miller to sponsor a White House "event" for prior and potential NEPL contributors. This event was intended to educate contributors about the situation in Nicaragua and to solicit funds for the Contras. Through North, Miller and other IBC associates were successful in arranging a White House briefing for a group invited by NEPL. [Channell Dep., 9/1/87, at 76-78].

The briefing was held on June 27, 1985, in the Old Executive Office Building with North as the principal speaker. According to Channell, North delivered what became his standard speech about Nicaragua and the Contras. North showed slides during his presentation, some of which had been provided by IBC. [Channell Dep., 9/2/87, at 171].

North's speech was an impassioned plea. He discussed the Communist threat posed to Nicaragua's neighbors by the Soviet and Libyan military build-up in Nicaragua; political and religious repression in Nicaragua; the humanitarian and military needs of the Contras; and the importance of United States support for the Contras. North also emphasized that the United States would be flooded with millions of refugees if Nicaragua continued under its existing regime and policies. [8]

This briefing was the initial substantive encounter between Channell and North. [9] In a pre-deposition interview, Channell described North as a "natural fundraiser," even though he did not expressly ask for contributions. That particular task was left to Channell, Miller and their associates. [Channell Dep., 9/1/87, at 87-88; 9/2/87, at 168-171. See also 5/21/87, at 20-2 (O'Boyle)].

After the briefing, the potential donor group was taken across the street for a reception and dinner at the Hay Adams Hotel. As was to become customary, NEPL arranged and paid for food and lodging at the Hay Adams for persons attending this special White House briefing. At the dinner, Channell presented Calero with a check for $50,000, which represented all Contra-related contributions received to date by NEPL. At Miller's instruction, the check was made payable to Alpha Services, Inc., a Calero account. [Channell Dep., 9/1/87, at 78-80].

Channell testified that his understanding was that the contributed funds would be used for humanitarian supplies. This understanding was based on Channell's assertion that Calero's specific appeal was for medicine and food. [Channell Dep., 9/1/87, at 79-80].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Fri Jun 02, 2017 3:35 am

C. The Establishment of I.C., Inc.

Meanwhile, in March or April 1985, North was contacted by Kevin Kattke -- whom North described to Miller as an "intelligence community gadfly" -- about an alleged Saud Prince who proposed donating to the Contras $14 million of profits derived from the sale of Saudi oil. North referred the Prince -- who used a variety of pseudonyms, the most common of which was Ebrahim al-Masoudi -- to Miller, who was engaged to market the Prince's oil. Miller and the Prince met several times over the course of the next several months. Miller's interest was twofold: he and North wanted to raise money for the Contras, and he was to receive $1 million of the profit that would be derived from the sale of the oil. [R. Miller Dep., 8/21/87, at 382-389].

Miller kept North fully apprised of his dealings with the Prince, which eventually also included a prospective gold transaction and assistance in freeing the hostages held in Lebanon. [R. Miller Dep., 8/21/87, at 389-390]. Indeed, Miller believed that he "was an agent working on [North's] behalf" in connection with these and other activities undertaken at North's request. [R. Miller Dep., 8/20/87, at 98-99]. [10]

On April 26, 1985, Miller and Gomez incorporated a Cayman Islands corporation known as I.C., Inc. [RM 1136-44]. This entity originally was intended to receive the profits from the transactions conducted with the Prince. The Cayman Islands was chosen by Miller on the recommendation of a "political friend." Miller wished to keep "off-shore" any money that he derived from his transactions with the Prince, because: (1) he did not want to incur federal income tax on these proceeds; and (2) he and North "took precautions all the time … not to have organizations be readily available for public view." Miller was told that it was cheaper to maintain bank accounts in the Cayman Islands than in Switzerland. He also received advice from an attorney that such an off-shore "collection point" was a lawful arrangement. [R. Miller Dep., 8/20/87, at 96-100, 102-104].

Although no proceeds were derived from the venture with the Prince, [11], I.C., Inc. became an integral part of the Channell/Miller fundraising network for the Contras. It served as a conduit, protected by Cayman Islands bank secrecy laws, through which the funds contributed to the tax exempt NEPL could be transferred to the Contras or to the Enterprise.

Miller advised North in late April or early May 1985 of the actual formation of I.C., Inc. [R. Miller Dep., 6/23/87, at 29]. Indeed, North testified that he directed Miller to establish this Cayman Islands Corporation to be used for Contra funding efforts. [7/13/87, at 77]. In May 1986, Miller changed the name of I.C., Inc., to "Intel Co-Operation, Inc.," and amended the corporate charter to specify that the company was engaged, among other things, in providing grants to "political and benevolent" organizations. [RM 1541-42]. At that time, Miller told North about this name change and charter amendment, which Miller asserts was not aimed at providing increased cover for the operation. [R. Miller, 8/20/87, at 124].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Fri Jun 02, 2017 3:49 am

D. The Creation of the Network

Soon after the June 1985 briefing, Channell asked Miller to arrange a meeting with North. Certain contributors to NEPL were concerned about press reports suggesting that contributions for the Contras were being skimmed or spent on unnecessary or obsolete items. [Miller Dep., 6/23/87, at 28]. In addition, Channell wished to express his appreciation to North for the June 27 briefing. [Channell Dep., 9/1/87, at 91].

Miller ultimately arranged a meeting on July 9 for himself, North, Channell and Conrad at the Grill Room in the Hay Adams Hotel. At the meeting, Channell asked North how best to ensure that funds contributed to NEPL for the benefit of the Contras actually were used for that purpose. North told Channell that henceforth "continued" contributions to NEPL for the Contras should be passed to IBC for proper dispersal. From shortly after this meeting through the fall of 1986, NEPL made all Contra assistance payments to IBC or to I.D., Inc. [R. Miller Dep., 6/23/87, at 28-30].

Miller heard, in the diplomatic community, about a possible public relations effort for another resistance movement -- Afghanistan. Sometime in 1985, probably May or early June, he went to see North in his office about obtaining work for IBC in this area. He called Bob Earl into the room and asked him to bring in a piece of paper that was on a yellow pad like a lined legal pad. Miller recalls that the chart on the piece of paper was similar to but not as complicated as a chart found in North's safe and reproduced in the Tower Commission Report at C-17. Miller also recalls that the chart at least showed NEPL, IBC and I.C., Inc. as parts of a Contra funding network. While the chart may not have been a complete depiction of the actual workings of the network, North used it with Miller to explain "how a covert operation is set up." [R. Miller Dep., 8/20/87, at 110-113].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Fri Jun 02, 2017 3:55 am

III. The Channell/Miller Network -- The Operation

A. White House Briefings and Hay Adams Gatherings


The North briefing in June 1985 served as the blueprint for other similar briefings during the next year for NEPL contributors or potential contributors. These group briefings occurred on October 17, 1985; November 21, 1985; January 30, 1986; and March 27, 1986.

The White House briefings were meticulously planned by NEPL, IBC, North and White House personnel. Internal White House memoranda obtained by the Committees show that North was the switching point for arranging and coordinating the briefings with White House liaison, White House Counsel, and White House security.

NEPL prepared and sent invitations to persons selected by Channell and his associates. A typical invitation to a briefing stated in pertinent part:

"You are one of a small group of dedicated Americans who has stood by President Reagan … in support of his agenda … It will be a pleasure to meet you in Washington on [date] when you attend our special security briefing followed by a working dinner … Please be reminded that your accommodations at the Hay Adams Hotel are taken care of and there is no expense to you."


[CH 03541].

For those who attended, NEPL met them at the airport with a limousine and escorted them to the Hay Adams Hotel, where all expenses were paid by NEPL.

The group typically was taken from the Hay Adams to a reception room in the Old Executive Office Building, where they were introduced to North and other White House personnel. Other than North, among those who participated in these briefings were Patrick Buchanan, White House Communications Director; Mitch Daniels, Political Assistant to the President; Linas Kojelis, Special Assistant to the President for Public Liaison; Linda Chavez, Deputy Assistant to the President and Director of the Office of Public Liaison; and Elliott Abrams, Assistant Secretary of State for Inter-American Affairs. For the January 30 briefing, David Fischer -- a former Special Assistant to the President who became a highly paid consultant to NEPL and IBC -- even arranged for a Presidential "drop by."

North always delivered the principal speech and slide presentation along the lines of the June 1985 briefing. While he was a spellbinding speaker, North generally was careful not to ask for money, often telling the audience that he could not solicit funds because he was a federal employee. He did, however, suggest that persons interested in contributing funds for the Contras should speak with Channell. At least one attendee at these briefings recalled North stating that there were certain matters he could not discuss with them "on this side of Pennsylvania Avenue" but that Channell would raise later "on the other side of the street," a reference to the Hay Adams Hotel. [McLaughlin Dep. At 50-52].

An account of North's presentation was provided at the public hearings by an eventual contributor in attendance at the March 1986 briefing, William O'Boyle:
"[North] described the military and political situation in Nicaragua. He had photographs of an airport in Nicaragua that had been recently built; the purpose of the airport was ostensibly commercial, but it was in fact a disguised military airport. One of the uses for which the airport was intended was to recover the Russian Backfire bombers after they made a nuclear attack on the United States.

"Another possible use of this airport was to fly a certain kind of mission that was currently being flown out of Cuba, up and down the east coast of the United States. Apparently every day a Russian plane leaves Cuba, as I recall, and goes right up to the 12-mile limit, has some kind of large device on the outside of the plane … This Nicaraguan air base would allow the Russians to fly the same kind of mission up the west coast to the United States …

"He described the refugee problem … and we could look forward in the next few years to millions of refugees flooding across our borders as this happened.

"He indicated how our security services had intercepted the text of a speech which was delivered to the UN by the Nicaraguan representative to the UN, which was complaining about the United States in one respect or another, the point being it is really the Russians managing the diplomacy of the Nicaraguans before the United States.

"He showed photographs which indicated that the Nicaraguan government officials were indicted in smuggling dope … He also told an anecdote about some Nicaraguan agents that were recently caught with dope and money and so forth and disguised as American agents."


[5/21/87, at 20-22].

After the briefings, Channell, Miller and their associates hosted a cocktail party and dinner at the Hay Adams, often attended by Contra leaders and some U.S. government officials. During the reception and dinner, NEPL and IBC employees attempted to determine which attendees were the most likely contributors. The enticement of purchasing lethal supplies for the Contras was often used with potential contributors. Those persons who expressed a serious interest in contributing money for the Contras were offered the opportunity to meet one-on-one with North, and, if they gave enough, a meeting with the President. [5/21/87, at 26-27].

Large contributors to NEPL uniformly received thank you letters from North (and often from the President) for their support of the President's policies in Central America, although without specific reference to any contribution. [R. Miller Dep., 9/15/87, at 511-515].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Fri Jun 02, 2017 4:13 am

B. North's Involvement in Solicitations Intended for the Purchase of Lethal Supplies

In his public testimony, North testified emphatically that "I do not recall ever asking a single, solitary American citizen for money. [7/7/87, at 234]. He readily admitted, however, that "I showed a lot of munitions lists" to Contra contributors or potential contributors "in response to questions about the cost of lethal items." [7/7/87, at 237.]
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Fri Jun 02, 2017 4:43 am

1. "Big Ticket Items" and "Ollie's New Purchase" Lists

In the late fall or early winter of 1985, Channell asked Miller to have North prepare and provide a list of "big ticket items" to be used in soliciting contributions for the Contras. At Miller's request, North recited a list that included heavy lifting of cargo by aircraft (approximately $675,000 worth); training and outfitting of an "urban tactics unit"; the resupply of a Contra fighting unit known as the "Larry McDonald Brigade" (a contra unit); and probably missiles of some kind. [R. Miller Dep., 6/23/87, at 32-33].

Miller typed the list onto his computer, printed a single copy, gave that copy to Channell and deleted the computer entry. Channell used this list, which totaled approximately $1.2 million, to solicit contributions. [Miller Dep., 6/23/87, at 32-34]. An apparently different "big ticket items" list was prepared by North and used by him and Channell in a solicitation off Nelson Bunker Hunt.

Handwritten notes produced by Miller indicate other conversations with North about fundraising for lethal supplies. A note dated September 18, 1985 contains entries reading "$415,000-Weapons, C4, M79" and "520,000 MAUL." [RM 971]. "C4" refers to an explosive, "M79" likely refers to a grenade launcher and $520,000 MAUL" refers to the cost of eight Maule airplanes. Miller testified that North provided this information to him with the understanding that it would be used for fundraising. [R. Miller Dep., 7/3/87, at 75-76; 8/20/87, at 252-256].

Another handwritten note of Miller's contains the entry "Ollie's new purchase list." The note is dated February 5, 1986, [RM 859]. Miller does not recall the derivation of this entry. [R. Miller Dep., 8/20/87, at 266-267].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Fri Jun 02, 2017 4:51 am

2. North's Special Appeals

As North testified publicly, he met with scores of potential contributors to convey the plight and needs of the Contras. Insofar as North's actual role, the more revealing of these meetings are those that were conducted in private. As the descriptions below indicate, North prepared potential large contributors for what Conrad terms "the call to the altar." [Conrad Dep., 6/10/87, at 147-148].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Fri Jun 02, 2017 4:52 am

a. Nelson Bunker Hunt

In September 1985, Channell arranged a meeting in Dallas between North and Nelson Bunker Hunt, a wealthy Texas businessman who had contributed $10,000 to NEPL the previous July. Channell rented a private airplane for $8,000 to $9,000 to transport North to and from Dallas. [12] [Channell Dep., 9/1/87, at 123]. The trip was worth the cost.

In Dallas, there was a private dinner at the Petroleum Club attended by Hunt, Conrad, Channell and North. North gave his standard briefing, without slides, and showed Hunt a list of various Contra needs. The list was divided about evenly between lethal and non-lethal items, and included Maule aircraft and a grenade launcher possibly described as an "M-79." The total price was about $5 million. According to Channell, after discussing the items on the list and their prices, North "made the statement that he could not ask for funds himself, but contributions could be made to NEPL, or words … to that effect." North then left the room, a maneuver that had been "pre-arranged." [Channell Dep., 9/1/87, at 113-120; 9/2/87, at 171-172].

Channell explained that the list was his idea because he wanted a "fundraising objective" to take to Hunt. He therefore had asked North to prepare a list totaling about $5 million for use in the solicitation of Hunt. [Channell Dep., 9/1/87, at 110-111].

Despite this evidence, Hunt has told the Committees that Channell never spoke to him about the Contras' need for weapons. According to Hunt, Channell told him that the Contras had "unpaid bills" for "[f]ood and shelter, medicine [and] general expenses …" [Hunt Dep. At 32-33]. Hunt testified that he does not recall any conversation he had with North at the dinner. [Hunt Dep. At 21].

Nonetheless, as a result of this dinner, Hunt made two payments to NEPL of $237,500 each. [Hunt Dep. At 32, 48]. One of them was a contribution and one was a loan. The loan was evidenced by an unsigned promissory note because Channell would not agree to the loan (especially after he was unable to find a contributor to guarantee the loan on NEPL's behalf). Nevertheless, he held the $237,500 principal for four months, repaying it in January 1986 without interest. [Channell Dep., 9/1/87, at 124-125]. Hunt subsequently paid $237,000 to NEPL in March 1986 as a contribution, making his total contributions to NEPL $484,500. [Hunt Dep. At 52].

In the case of Hunt's initial $10,000 contribution in 1985, he sent NEPL a personal check drawn pursuant to a "check request" and marked "contribution." He also itemized the $10,000 contribution on his 1985 tax returns. By contrast, each step in the later transaction was conducted with Hunt's law firm -- Shank, Irwin and Conant (SI&C) of Dallas, Texas -- acting as an intermediary, and issuing its own checks, backed by Hunt's funds. [Hunt Dep. At 46-55, 79-80, 82-83].

Hunt testified that he handled these transactions in this manner in an effort to avoid publicity in the "liberal media" over the contributions. He acknowledged that the NEPL gifts were the only ones he had ever made indirectly. Moreover, none of the check requests or check stubs for the three large checks has any entry in the section designated for "purpose." Documentation for other checks produced by Hunt consistently included this entry. Hunt indicated that he must have overlooked this omission on the three checks in question. [Hunt Dep. At 34, 56, 80-85].

Finally, Hunt did not itemize the $237,500 contribution on his 1985 tax return or the $237,000 contribution on his 1986 return. He explained that, because of large losses each year, he did not need the deductions. Nonetheless, numerous other contributions apparently were itemized by Hunt on those tax returns. [Hunt Dep. At 67, 82-83].

In short, it seems that Hunt took great pains to keep his large contributions to NEPL "off the books." As indicated above, a note made by Miller one day after Hunt issued the checks for the contribution and loan to NEPL contains the entries "$415,000 -- Weapons C4, M79" and $520,000 MAUL," referring to munitions and airplanes. [RM 971]. This same note refers expressly to Hunt in a different context. [R. Miller Dep., 6/23/87, at 76-76; 8/20/87, at 254-255].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Fri Jun 02, 2017 5:08 am

b. Barbara Newington

Barbara Newington, a wealthy widow from Connecticut, had been a large contributor to Channell organizations (and at least one predecessor organization) for a few years. In 1985 and 1986, Newington contributed a total of $2,866,025 to NEPL. On June 25 or 26, 1985, she met privately with North because she was unable to attend the Channell group meeting arranged for the next day. She also met privately with President Reagan on two occasions. [Newington Dep. At 16-17, 36, 56-58].

In early November 1985, North, Miller and Channell participated in a solicitation of significant contributions from Newington. Miller's handwritten notes leading up to the meeting indicate that Channell prepared a proposed "pitch" for "Green" -- the code name for North used by NEPL and IBC -- to use with Newington. This "pitch" included statements such as "[you are] the most secure person we know in the U.S." and "[w]e are asking you to take on a project that requires your kind of person." [RM 1042]. Although Miller does not specifically recall, he might have relayed a somewhat softened version of this solicitation to North. [R. Miller Dep., 8/20/87, at 248-250].

In further preparation for the solicitation, Miller created a file folder that contained an unclassified photograph of a Soviet HIND helicopter on one side of the folder and a picture of a shoulder-held surface-to-air missile on the other side. He also included an article from The New York Times on the capabilities of the HIND helicopter. [R. Miller Dep., 6/23/87, at 34-35].

The critical meeting took place in Newington's suite at the Hay Adams Hotel where Channell, Miller and Newington were joined by North. At the meeting, North referred to the file folder prepared by Miller, placed The New York Times article in front of Newington, and described the capability of the pictured surface-to-air missile to counteract HIND helicopters. In response to a question from Newington, North indicated that he knew where to obtain such missiles, although Miller cannot recall whether North quoted any prices. North left the room shortly thereafter. According to Miller, North's absence was not specifically pre-arranged, "but it was his practice not to be in the presence of the donor when they were asked for money." [R. Miller Dep., 6/23/87, at 34-36].

Channell then solicited Newington for a substantial amount of money. Over the course of the next four to six weeks, Newington made stock contributions to NEPL worth approximately $1.1 million. [R. Miller Dep., 6/23/87, at 36-37]. Like Hunt, Newington has denied that she ever made a contribution intended for the purchase of lethal supplies. [13] [Newington Dep. At 33, 45, 86-87, 90-93].

At some point in the spring of 1986, Channell and Newington decided to invite North and his family to Newington's house for a weekend of recreation and relaxation. Miller, North and North's family traveled to Connecticut in a private plane charted by Channell. It is unclear whether there was any discussion of Contra assistance that weekend. [Channell Dep., 9/1/87, at 148].
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Re: Unpublished draft chapter of the congressional Iran-Cont

Postby admin » Sat Jun 03, 2017 1:42 am

c. William O'Boyle

William O'Boyle testified that he received several fundraising calls from NEPL in early 1986. O'Boyle, an independently wealthy businessman from New York City, had been referred to NEPL by a friend from Texas. [5/21/87, at 17-18].

In late March, he was invited by mailgram to a private White House briefing on Nicaragua. He flew to Washington on March 27, was met at the airport by a limousine arranged by NEPL, and delivered to the Hay Adams Hotel, where he met Channell, Miller and others. Channell escorted the group to a meeting room in the Old Executive Office Building, where North presented the briefing described above [5/21/87, at 18-20].

After the briefing, the participants returned to the Hay Adams for a cocktail reception and dinner attended by Channell, Miller and other NEPL and IBC personnel. During the reception, O'Boyle indicated to a NEPL employee, either Cliff Smith or Krishna Littledale, that he was interested in making a contribution to purchase weapons for the Contras. He wanted to know what weapons were needed and how much they cost. The NEPL employee with whom O'Boyle spoke told him later that a Blowpipe anti-aircraft missile could be purchased for $20,000. [5/21/87, at 23-24].

After dinner, Channell told O'Boyle that there was a small select group of persons in the United States who contributed money for lethal supplies to carry out the President's policy in support of the Contras. Channell asked O'Boyle if he would meet with North at breakfast the next morning. O'Boyle agreed. [5/21/87, at 25].

Breakfast took place in the main dining room of the hotel. Before North arrived, the conversation between O'Boyle and Channell continued in the same vein as the evening before. Channell told O'Boyle that they had him "checked out" overnight to ensure that he (O'Boyle) was reputable enough to join the select group of Americans Channell had mentioned. [5/21/87, at 26-27].

When North arrived, Channell told him that O'Boyle was willing to contribute funds for the purchase of weapons. North immediately began to describe from a notebook the Contras' needs, including several million rounds of "NATO" ammunition, Eastern bloc ammunition, Blowpipe and Stinger anti-aircraft missiles, and Maule aircraft. North explained that Blowpipe missiles cost $20,000 each, but that they had to be purchased in packs of ten. He also mentioned that the cost of Maule airplanes was $65,000 each. According to O'Boyle, North stated that "he could not ask for money himself as a government employee." [5/21/87, at 27-31; O'Boyle Dep. At 42-44].

Either at this breakfast or the evening before, Channell informed O'Boyle that if he contributed $300,000 or more, a 15-minute "off-the-record" meeting would be arranged between O'Boyle and President Reagan. Channell indicated that other people who had contributed that amount of money had met with the President. O'Boyle understood that these meetings with the President were "off-the-record" because the subject matter was so secret and sensitive. [5/21/87, at 26-27; O'Boyle Dep. At 46-47].

O'Boyle told Channell that he wanted time to consider whether to make a contribution. After returning to his home in New York for a few days, O'Boyle decided to contribute $130,000 to NEPL for the purchase of two Maule airplanes. [14] He flew to Washington to deliver his check to NEPL headquarters and was taken to the Hay Adams Hotel by a NEPL employee. Channell met O'Boyle at the hotel. O'Boyle then gave his check to Channell, who telephoned North to join them at the hotel. [5/21/87, at 31-33; O'Boyle Dep. At 54-55].

When North arrived, Channell showed him O'Boyle's check, which North acknowledged. North spoke to O'Boyle again of the Contras' military needs and corresponding costs, but indicated that Blowpipe missiles no longer were available. In North's presence, Channell again told O'Boyle that a larger contribution would warrant a meeting with the President and asked for more money. [5/21/87, at 32-33].

Despite a visit in New York from Channell and Conrad and another meeting with North in Washington in which North disclosed a purported "secret" plan as to how the Contras would prevail in Nicarague, O'Boyle informed Channell that he did not wish to make further contributions to NEPL. [15] In any event, in response to a subsequent mailing from NEPL, O'Boyle made one more contribution for $30,000. [5/21/87, at 353-39].
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