OF FIRST MONTH OF HEARINGS BY THE
COMMITTEE ON GOVERNMENTAL AFFAIRS
INTO 1996 CAMPAIGN FINANCE ABUSES
In the wake of the Republican victories in 1994, the Democrats and President Clinton
undertook a campaign to bring in unprecedented amounts of money to the Democratic
National Committee for a massive media campaign in 1995 and in preparation for the
1996 campaign
To raise money, the DNC and the White House put everything up for sale: access to key
decision-makers and perks such as sleep-overs at the White House, flights on Air Force
One, attendance at White House coffees, seats in the President's box at the Kennedy
Center, and assorted other perks were offered to large contributors
The need for huge amounts of campaign cash, led the DNC to dismantle efforts to ensure
that these contributions complied with the law
DNC Finance Director Richard Sullivan acknowledged to the Governmental Affairs
Committee that the DNC's process for vetting contributions had "atrophied," and that the
Republican Party's system for vetting contributions was "much more systematic,
complex and thorough" than the Democratic Party's system
For this reason, despite months of searching by Democrats for illegal Republican
contributions, the only case that has been found by the minority is the money-laundering
of Simon Fireman, who had already pleaded guilty and served time
No illegal foreign money was solicited by or apparently came to the Republican National
Committee in the 1996 election cycle
In contrast, because of the extraordinary need for cash, everything was put up for sale by
the Administration and the DNC, and consequently millions of dollars of foreign money
flowed into DNC coffers
Several instances of foreign contributions being laundered into the DNC were exposed:
1) Yogesh Gandhi made a $325,000 contribution to the DNC at an event at the
Sheraton-Carlton Hotel in Washington in 1996 and shortly thereafter received two
$250,000 wire transfers from a Japanese businessman named Tanaka to cover the
contribution. This was Gandhi's first US political contribution and the $325,000
represented more than half the funds raised by the DNC at that event. After Gandhi's donation, President Clinton accepted an award from Gandhi over the objection of Administration officials
2) In apparent exchange for White House access, Johnny Chung contributed $50,000 to the DNC in March 1996, at a time when he had less than $10,000 in his account. A few days after making the contribution Chung received a $50,000 wire transfer from the Bank of China. Soon after making the $50,000
contribution from these funds, Chung attended the President's weekly radio address with 5 visiting Chinese officials and guests
3) In 1992, John Huang contributed $50,000 on behalf of Hip Hing Holdings, a
Riady-owned company in Los Angeles, and sought reimbursement for the
contribution from Lippo Group in Indonesia
4) Charlie Trie contributed $220,000 in 1994-96 to the DNC, despite having negligible personal earnings, after receiving $905,000 in wire transfers from his foreign business partner, Macao businessman Ng Lap Seng, and $200,000 in other
wire transfers from the Bank of China
5) Trie and Ng Lap Seng laundered $25,000 in foreign funds to the DNC through two Chinese immigrants (Yue Chu and Xi Ping Wang) in order for Ng, also known as Mr. Wu, to attend a DNC fund-raiser with President Clinton, and laundered an additional $12,500 to the DNC through their associate Keshi Zhan
So desperate were the DNC and the White House for money that they allowed a number
of unsavory figures to gain access to the President in return for contributions:
1) Chinese arms merchant Wang Jun, son of a prominent Chinese official whose arms company has been accused of selling cruise missiles to Iran, attended an event with the President after he gave $50,000 to the DNC through a third party
2) Gregory Loutschansky, a former Soviet citizen living in Tel Aviv who is reputed to be an international gun-runner and drug-smuggler, was invited by the DNC to an October 1995 dinner with the President, but was denied a visa by the State Department to enter the US
3) Roger Tamraz, a US citizen and major DNC donor, was invited by the DNC to meet with the Vice President, but the invitation was withdrawn after the Vice President's staff objected because Tamraz had "a shady reputation." Despite the fact that Tamraz was deemed unacceptable to meet the Vice President, Tamraz went to four subsequent events with the President at the DNC's invitation
The DNC and Administration were not only selling access to the President:
1) Eric Hotung, a Hong Kong businessman married to an American, offered a $100,000 contribution to the DNC in return for a meeting with Deputy National Security Advisor Sandy Berger, which the DNC promptly helped to set up
The Clinton Administration's need for money did not stop with the DNC
After determining that the Administration was for sale through campaign contributions,
shady characters quickly found that providing money to the Presidential Legal Expense
Trust (PLET), the President's legal defense fund, also provided access to the
Administration
In addition to his contributions to the DNC, Charlie Trie brought in $789,000 to the
PLET. These funds were raised from members of the Ching Hai Buddhist sect, and a
large portion of them were sect funds illegally laundered through sect members
The PLET decided to conduct an investigation into the source of the funds Trie brought
in and raised its suspicions of Trie with senior White House and DNC officials and the
First Lady, but the DNC failed to take any action regarding Trie's suspicious
contributions and the White House rewarded Trie by appointing him to membership on a
US trade advisory panel
Trie, whose contributions to the DNC and the PLET exceeded $1 million, was appointed
by the President to a position on the US Commission on Pacific Rim Trade and
Investment Policy, despite the knowledge of senior White House officials that the PLET
was investigating his contributions
Trie sought to influence President Clinton's response to China's aggressive threat in
conducting war games in the Straits of Taiwan, and received a personal response from the
President prepared by National Security Council officials and approved by the President's
National Security Advisor
With all the evidence of wrongdoing and the sale of access revealed by the Committee,
the focus of the Committee's first month of hearings were the activities of John Huang,
who was central to the entire scandal, having raised most of the money the DNC has had
to return
John Huang had worked for Lippo Bank in Los Angeles, but the CEO of the Bank did not
know what Huang did in his office
Lippo Group, run by the Riady family, which employed Huang, had over the past few
years become a major business partner with China Resources, a trading company wholly
owned by the Government of the People's Republic of China, and which has reportedly
served as an intelligence-collection front for China
Prior to leaving Lippo to join the Administration, Huang received bonuses of over
$700,000
Huang was given a political appointment in the Commerce Department, but his boss,
Commerce Under secretary Jeffrey Garten found Huang totally unqualified for the
position and limited his activities to administrative duties
Huang was pushed on the Administration as being the political front-man for the Riadys
and Lippo Bank
Huang was "walled off" from handling China trade policy and was allowed to handle
only some matters related to Taiwan
Despite being "walled off" from China policy, Huang was given intelligence briefings on
China
While he was at the Commerce Department, Huang had a Top Secret security clearance
and received 37 intelligence briefings, at which he was shown 10 to 15 intelligence
reports, meaning that he saw between 370 and 550 pieces of intelligence
Of the hundreds of pieces of intelligence shown to Huang, he kept possession of 12
classified documents until the end of his tenure at the Commerce Department
While he served as a relatively low-level political functionary at the Commerce
Department, Huang made at least 67 visits to the White House (and possibly many more),
often meeting with senior officials on US trade policy
While he worked at the Commerce Department, Huang routinely and regularly used the
office of Stephens Inc., a Little Rock-based company with an office across the street from
the Commerce Department, to send and receive phone calls, faxes, and packages, which a
Stephens employee testified no other non-Stephens employee did
Huang had over 400 contacts with Lippo bank and Lippo group employees and associates
while he worked at the Commerce Department, was receiving classified information,
attending White House briefings, and using the Stephens Inc. office to send and receive
messages and faxes
Huang made personal calls from his Commerce Department phone, indicating that he was
not using the Stephens office to avoid using his official phone for personal matters
While he served at the Commerce Department, Huang made six visits to the Chinese
Embassy and had three other contacts with Chinese Embassy officials, even though he
had been "walled off" from anything having to do with China
While he served at the Commerce Department, Huang may have illegally solicited
several large contributions for the DNC, for which his wife Jane was listed as the solicitor
by the DNC
While working at the Commerce Department, Huang was pushed for his job at the DNC
by a foreign corporation and its head, James Riady, a close friend of President Clinton
Huang was also pushed for his fund-raising position by senior White House officials,
including Deputy Chief of Staff Harold Ickes, but he was not hired by the DNC until
President Clinton himself pushed for Huang's hiring
Many unanswered questions remain: What did John Huang want for his work? What did
James Riady want? What did Charlie Trie and Ng Lap Seng want? Were US national
interests compromised by this flow of foreign money?
These and other unanswered questions must be reviewed against the background of
China's efforts to influence US elections, a finding of the Committee based on
information derived from US intelligence and law enforcement with which all members
of the Committee agree
1997 Congressional Hearings