Senate Camparign Finance Reform Hearing Summary

SUMMARY OF HIGHLIGHTS OF TESTIMONY
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