Govt. Bailed Out Contra Firm

WASHINGTON--State Department officials, citing White House concern, bypassed normal procedures in 1985 to bail out a financially strapped company that was aiding the Nicaraguan Contras, a department memo shows.

The company, International Business Communications Inc., had non-competitive State Department contracts to publicize the Contra cause in the United States. During the same period, the company also was involved in funneling privately raised money to the Contras.

The State Department memo, obtained by The Associated Press, said an "emergency payment" of about $13,000 to International Business Communications was "of utmost importance, not just to the department, but to the White House and the NSC [National Security Council]."

IBC is a public relations firm that has "apparently been involved in the funneling of money to secret Swiss bank accounts" used in aiding the Contra rebels, according to Rep. Dante B. Fascell (D-Fla.), chairman of the House Foreign Affairs Committee.

The State Department memo reveals the Reagan Administration's interest in IBC at a crucial time for the Contras.

This interest flowed from two parallel developments between January and April 1985. First, U.S. government aid to the Contras had run out and "elements of the NSC staff focused their efforts on strategies for repackaging the Contra program to increase support on Capitol Hill," according to the Tower Commission.

At the same time, Lt. Col. Oliver North was working on contingency plans to continue private assistance, should the aid package fail.

The firm also was retained by Washington fund-raiser Carl "Spitz" Channell to help conduct a pro-Contra public relations campaign and funnel privately raised money to the Contras. Channell associates have said that as much as $3 million in private aid was given to IBC for humanitarian aid to the Contras.

The State Department memo was addressed to an official in the comptroller's office.

"This is to request the usual timing of 25 to 30 days be set aside to make an emergency payment of $12,858 to IBC in response to its bill dated 4-11-85," said the memo, which was dated the same day as IBC's bill.

"This action is of utmost importance, not just to the department, but to the White House, and the NSC so that IBC, which finds itself temporarily in dire financial straits, may have funds in days ahead to intensify its efforts...on behalf of the president's Easter peace proposal for Nicaragua."

Reagan's proposal was to provide the rebels with non-lethal equipment unless the Sandinista government entered into serious negotiations with the Contras on national reconciliation.

It was IBC's job to host meetings for planning a pro-Contra ad campaign and to act as an information library for those making the ads, according to a spokesman for the Robert Goodman ad agency, which produced the television spots.

IBC also reportedly was paid to arrange personal visits by Contra leaders to Washington, sources have said.