Carl P. (Spitz) Channell, who pleaded guilty to conspiring to defraud the government by collecting money for military aid to the Nicaraguan contras under the cover of a tax-exempt charitable foundation, has placed his public relations firm in bankruptcy.
Channell, whose indictment was the first criminal case of the Iran-contra affair, listed debts totaling $143,439.66 for his public relations firm, Channell Corp. The bankruptcy petition, filed with U.S. District Court in Washington on June 24, listed assets of $18,000 for the firm, which has offices in National Place on Pennsylvania Avenue.
Channell formed the corporation in 1983 after he resigned as chief fundraiser for the National Conservative Political Action Committee (NCPAC).
The bankruptcy petition was filed slightly less than a month after Channell pleaded guilty to conspiring with Lt. Col. Oliver L. North and others to supply "nonhumanitarian" aid to the contras with tax-deductible contributions to the National Endowment for the Preservation of Liberty, a nonprofit arm he formed to collect money for the contras. The foundation is located in the offices of his PR firm.
Independent counsel Lawrence E. Walsh said that Channell, 41, was cooperating with his investigation. Channell faces a maximum sentence of five years in jail and a $250,000 fine. Sentencing was postponed at the prosecution's request and Channell was released on his own recognizance.
According to information in the indictment and in testimony in the Iran-contra congressional hearings, Channell raised millions of dollars for the contras, partly as a result of his access to the White House.
Letters to donors to the foundation said that Channell had two meetings with President Reagan in March 1986, while White House sources reported two more meetings, in October 1985 and January 1986.
The bankruptcy petition listed five creditors: the foundation; Square 254 Partnership, the owner of National Place; Sovran Bank; Winthrop Securities of Boston, and RealCom, an IBM-affiliated supplier of office services.