 | INVESTIGATION OF ILLEGAL OR IMPROPER ACTIVITIES
IN CONNECTION WITH 1996 FEDERAL ELECTION CAMPAIGNS
FINAL REPORT
of the COMMITTEE ON GOVERNMENTAL AFFAIRS
SENATE Rept. 105-167 - 105th Congress 2d Session - March 10, 1998 |
Charlie Trie's Contributions to the Presidential Legal Expense Trust
I. INTRODUCTION
Charlie Trie's contributions to the Presidential Legal
Expense Trust (the ``Trust'') further illustrate the manner in
which Trie raised foreign money, as well as his close ties to
the White House and the President. Unlike contributions to the
Clinton/Gore campaign or the DNC, contributions to the Trust
inured directly to the personal financial benefit of President
Clinton and the First Lady. The money was used to pay their
personal legal bills. Because such contributions are even more
susceptible to abuse than ordinary campaign contributions, the
Committee looked closely at Trie's activities with respect to
the Trust and the White House's knowledge of and response to
those activities.
In March 1996, Trie personally delivered almost one half
million dollars in checks and money orders to the Trust. Trust
representatives and White House officials recognized almost
immediately that the donations were highly questionable and
appeared, at least in part, to have been coerced from members
of a controversial Buddhist sect. However, rather than simply
returning the suspect donations and publicly reporting such
returns--which had been the Trust's historical practice--the
Trust, in consultation with senior White House officials, hid
the returned donations by changing the format of the Trust's
bi-annual public disclosure form. This avoided public
disclosure of any information concerning the Trie donations
prior to the 1996 presidential election.
Moreover, when the Trust finally sent the donations back to
the Trie-related contributors, it did so with a twist. It
invited these contributors to recontribute their money,
notwithstanding the fact that they knew a substantial amount of
the money had been coerced from these very donors in the first
place. Not surprisingly, once Charlie Trie's close association
with James Riady, John Huang and the entire DNC fundraising
matter became public through press reports in October 1996, the
Trust and White House senior officials quickly determined that
the ``recontributions'' should also be returned--this time with
no strings attached. However, neither the White House nor the
Trust publicly disclosed the Trie/Trust connection or the
strange origin of the donations until after the election and
even then only because they were forced to do so by a
threatened press story.
These questionable facts alone were cause for concern by
the Committee, but the Committee also found other equally
disturbing facts concerning Trie's relation to the Trust and
the White House. For example, despite the fact that the Trust,
with White House permission, had hired a private investigative
firm to investigate the Trie donations, the one person the
investigative firm was instructed not to speak with was Charlie
Trie. This, despite the fact that Trie was obviously the
central figure, and his office and the private investigative
firm were located only blocks apart in Washington, DC, making
an interview with him a simple matter. Likewise, even though
they were well aware of the suspicious nature of his
fundraising for the Trust, no one at the White House took any
action prior to the election to inquire about Trie's
simultaneous fundraising for the DNC.\1\ This despite the fact
that (a) Trie was known to be a major DNC donor (a Managing
Trustee); (b) he had told Trust representatives in his first
visit that he was organizing a major DNC fundraiser; and (c) he
was a frequent guest at the White House. This was particularly
strange with respect to Deputy White House Chief of Staff
Harold Ickes who helped manage the DNC on a daily basis, knew
Trie was involved in raising money for the Democratic party and
was one of the first to know about Trie's involvement with the
Trust.
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\1\ The DNC ultimately returned $645,000 either contributed or
raised by Charlie Trie.
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Perhaps most alarming was the fact that the senior White
House officials who were being consulted about Trie's
involvement with the Trust claimed to know little or nothing
about Trie, while at the very same time Trie was receiving
several favors from the White House and socializing with the
President. For example, in February 1996, just weeks before
Trie collected the Trust donations from the Buddhist sect, he
was successful in gaining admission to a White House coffee
with the President for Wang Jun, a Chinese arms merchant. The
President subsequently admitted his meeting with Wang Jun was
highly improper. Likewise, during this same time frame, Trie
was being considered for a Presidential appointment to the
Commission on U.S. Pacific Trade and Investment Policy. In
fact, he was named to the Commission within four weeks after he
delivered the first batch of donations to the Trust. Finally,
on the very same day that he delivered the first batch of
donations to the Trust, a letter authored by Trie was sent by
former White House aide Mark Middleton to the President
expressing Trie's concern and advice regarding Taiwan/China
relations. The letter sparked a flurry of activity at the
National Security Council and eventually resulted in a detailed
written response signed by the President. This was particularly
curious given the fact that Middleton apparently was the person
who directed Trie to the Trust in the first place. Middleton
has asserted his Fifth Amendment rights and has refused to
cooperate with the Committee.
II. The Presidential Legal Expense Trust--Background
The Trust was established on June 28, 1994 to raise funds
to help the President and First Lady pay personal legal bills
arising from lawsuits and investigations initiated after Mr.
Clinton became President.\2\ The Trust was governed by a number
of guidelines concerning the source and types of contributions
that could be accepted. The guidelines generally followed
Federal Election Commission rules governing donations to
federal candidates. The following is a list of some of the
requirements regarding donations to the Trust as included in
the February 22, 1996 bi-annual report of the Trust:
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\2\ July 1996 Bi-annual Report of the Trust, August 13, 1996 (Ex.
1). On December 31, 1997 the Trust ceased operations as a result of a
lack of contributions sufficient to cover its expenses.
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1. Contributions are accepted only from individual
U.S. citizens, other than federal employees or
registered lobbyists. Each person must make his or her
own contribution using personal funds. Each
contribution must be made voluntarily.
2. Contributions are not accepted from corporations,
labor unions, partnerships, political committees or
other entities.
3. Individual contributions are limited to a maximum
of $1,000 per eligible individual per calendar year.
4. Anonymous contributions will not be accepted.
5. Each contributor should provide his or her name,
address and telephone number. In addition, a donor
contributing $200 or more should provide his or her
occupation and employer's name.
6. The Trust will acknowledge contributions and make
periodic public reports of the Trust contributors.\3\
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\3\ January 1996 Bi-annual Report of the Trust, February 22, 1996
(Ex. 2).
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Once the Trust was established, a distinguished group of
trustees was chosen to administer the Trust. The individuals
named as Co-Chairs of the Trust were Rev. Theodore M. Hesburgh,
President Emeritus of Notre Dame University, and former
Attorney General Nicholas deB. Katzenbach. The other Trustees
named were John Brademas, former Indiana Congressman and
President EmeritusNew York University; Barbara Jordan, former
Texas Congresswoman; Ronald L. Olson, Los Angeles lawyer; Elliot L.
Richardson, former Attorney General, Secretary of Defense and Secretary
of Health, Education and Welfare; Michael Sovern, President Emeritus of
Columbia University; and John C. Whitehead, former Deputy Secretary of
State.
Michael Cardozo was named Executive Director of the Trust
in June, 1994 after being contacted by White House counsel
Lloyd Cutler and meeting with the President to discuss the job.
Cardozo had been active in Democratic politics for many years.
He was a former Deputy White House Counsel under President
Carter, served on the Credentials Committee of the 1972
Democratic Convention, and was Vice-Chair of the Clinton-Gore
Inaugural Committee in 1993 and again in 1997. Currently he is
the managing director of G. William Miller & Co., an investment
banking firm. 4
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\4\ Deposition of Michael Cardozo, May 7, 1997, pp. 5-7.
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Cardozo's role was primarily to assist in the submission of
quarterly and bi-annual reports to the President and First
Lady, oversee the public release of the bi-annual report, keep
the Trustees informed of the activities of the Trust, act as a
liaison between the Trust and the White House, and oversee the
day-to day work of the Trust, most of which was delegated to
the Administrative Assistant, Sally Schwartz. 5
Schwartz's responsibilities primarily consisted of reviewing
contributions, maintaining a data base, sending out
acknowledgments, preparing reports both for the Trustees and
the Executive Director and also for the public briefings.
6
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\5\ Ms. Schwartz served as Administrative Assistant from August
1995 until the Trust was closed. The Administrative Assistant was the
only full time, paid employee of the Trust. Deposition of Sally
Schwartz, May 6, 1997, p. 11.
\6\ Id.
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As of the period ending December 31, 1995, the Trust had
received a total of $993,476 in donations since its inception
and had paid a total of $541,134.24 of the President's legal
expenses. As of that time $1,360,063.95 in legal expenses
remained outstanding. 7
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\7\ See Ex. 2.
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III. Charlie Trie's March 21, 1996 Visit to the Trust
Trie's first visit to the Trust on March 21, 1996 is
important in several respects. The amount of donations Trie
delivered, nearly half a million dollars, represented almost
fifty percent (50%) of the money raised by the Trust since its
inception and, thus, as Cardozo acknowledged was an
``enormous'' event in the life of the Trust. Additionally, in
the first meeting Trie represented that he was an acquaintance
of the President from Little Rock, was organizing a DNC
fundraiser expecting to raise $1 million, and was also in the
process of being appointed to a federal commission by the
President. Trie also repeatedly insisted on confidentiality
concerning his role in delivering the donations.
According to Cardozo's testimony, Trie first called Cardozo
on March 20, 1996 at his business office to set up the initial
meeting. 8 Cardozo informed Trie that he could
answer any questions about the Trust over the telephone, but
Trie insisted that they meet in person. The two met the next
day at Cardozo's office at G. William Miller & Co., which was
located across the street from the offices of the Trust. Trie
began their meeting by telling Cardozo about his personal
background and the fact that he had owned a Chinese restaurant
in Little Rock that was frequented by then-Governor Clinton.
Trie told Cardozo that he had heard about Mr. Clinton's
mounting legal bills and had set about trying to help. Trie
then retrieved a manilla envelope from beside his chair, turned
it up over the table, and according to Cardozo, ``out came a
mound of checks and money orders.'' 9 According to
Trie the total amount of the checks and money orders was
$460,000. 10
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\8\ Trie's background and connection to the DNC are discussed above
in the section on Charlie Trie's fundraising for the DNC.
\9\ Deposition of Michael Cardozo, May 7, 1997, p. 34.
\10\ Id.
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After seeing the ``mound'' of checks and money orders,
Cardozo called Ms. Schwartz at the Trust's offices and asked
her to come to the meeting so that he could have another
witness. At Cardozo's request, Ms. Schwartz brought with her a
fact sheet, a sample of the Trust's bi-annual publication of
donors and several other documents which reflected how the
Trust reported donations. 11 Cardozo wanted to show
these documents to Trie to impress upon him that the donations
would be made public. 12
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\11\ Id. at p. 35.
\12\ Id. at pp. 38-39.
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Schwartz arrived at the meeting in less than five minutes.
During the meeting, Trie told Cardozo and Schwartz that he was
helping to organize a major fund raiser for the DNC which would
raise $1 million. 13 Trie told Cardozo and Schwartz
that he had a lunch appointment at the Palm Restaurant next
door and that he would return after the lunch. Cardozo and
Schwartz used this period of time to review the checks and
money orders more closely. 14
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\13\ Id. at pp. 43-44.
\14\ Id. at p. 38.
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While Trie was at lunch, Cardozo conducted a conference
call with Mr. Katzenbach, co-chair for the Trust, and Bernard
Aidenoff, counsel to the Trust. The three decided that if the
checks appeared to be valid on their face they should be
deposited into the Trust's bank account. 15 Cardozo
and Schwartz studied the checks and money orders and determined
that approximately $70,000 were deficient. For example, some of
the checks were missing names, addresses, or were for an amount
in excess of the Trust's guidelines. 16
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\15\ Id. at p.48.
\16\ Id. at p.54-55; Deposition of Sally Schwartz, May 6, 1997,
p.40.
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Upon Trie's return from his lunch at the Palm, Cardozo and
Schwartz returned the deficient checks to him. Trie appeared
confident that he could cure the deficiencies. 17
During this discussion, Trie stated that he did not want his
name mentioned in connection with the contributions. Trie told
them that he was going to be appointed to a federal commission
and was not sure that he was eligible to make a donation.
18 Trie even balked at the idea of mailing the valid
checks and money orders to the bank because he did not want to
put his name and return address on the envelope. Accordingly,
Trie and Schwartz personally delivered the contributions to the
Trust's lock box at NationsBank. 19 After depositing
the funds in the Trust's lock box, the Trust decided to put
them into an interest bearing money market account, commingled
with other contributions. The donations were listed as
``unrestricted'' on internal Trust accounting documents, and
were deemed accepted according to the Trust's own accounting
procedures. 20
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\17\ Deposition of Michael Cardozo, May 7, 1997, pp. 54-55.
\18\ Id. at pp. 41-42.
\19\ Deposition of Sally Schwartz, May 6, 1997, pp. 41-42.
\20\ Deposition of Michael Cardozo, May 7, 1997, pp. 241-245;
Profit and Loss Statement for the Trust, June 12, 1996 (Ex. 3).
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A. The Role of Mark Middleton/White House favors for Trie
At some point during the March 21st meeting, Trie stated
that he had gotten Cardozo's name from Susan Levine and had
been directed to Levine by Mark Middleton.21 Susan
Levine is an acquaintance of Cardozo's, and has worked at both
the DNC and the White House during the Clinton
Administration.22 Middleton formerly worked at the
White House as an advisor to former White House Chief of Staff
Thomas ``Mack'' McLarty. After leaving the White House,
Middleton formed Commerce Corp., International, a company
focused on international trade with Asia. Middleton is
currently under investigation regarding his business
transactions in Asia, his fund raising for the Clinton
Birthplace Foundation and his connections to Trie. It has been
widely reported in the press that Middleton and Trie were very
close and traveled together to Taiwan.23
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\21\ Deposition of Loren Berger, June 23, 1997, pp. 44-45.
\22\ Deposition of Michael Cardozo, May 7, 1997, pp. 30-31.
\23\ ``Mark Middleton; White House Staff,'' USA Today, February 27,
1997, p. 6A.
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It is unknown whether Middleton knew--at the time he
directed Trie to the Trust--of the questionable nature of the
donations Trie would deliver. He has asserted his Fifth
Amendment rights and refused to talk with Committee
investigators. However, if he did know of the questionable
origin of the contributions, it would explain why he directed
Trie to the Trust as opposed to Clinton/Gore '96, or the DNC,
where the contributions would have received much greater
scrutiny and been subject to FEC guidelines.
In addition to steering Trie to the Trust, Middleton also
helped Trie communicate with the President concerning China/
Taiwan policy. Although Trie did not tell Cardozo or Schwartz
with whom he was having lunch at the Palm on March 21st,
National Security Council documents obtained by the Committee
indicate that his appointment was almost certainly with
Middleton.24 Trie's lunch appointment at the Palm
was at noon. Middleton's office is across the street from the
Palm. At 1:14 pm on the 21st--minutes after Trie's lunch
ended--Middleton faxed a letter from Trie addressed to the
President to Maureen Lewis at the White House who handles the
President's personal correspondence. The letter was faxed from
Middleton's office. These facts suggest that the letter was
passed from Trie to Middleton at the Palm. The cover sheet of
the fax stated in part, ``Dear Maureen: As you likely know,
Charlie is a personal friend of the president from LR. He is
also a major supporter. The president sat beside Charlie at the
big Asian function several weeks ago.'' 25
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\24\ Letter from Charlie Trie to the President with fax cover sheet
from Mark Middleton, March 21, 1996 (Ex. 4).
\25\ Id. at p. 1.
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In the letter, Trie expressed concern over U.S.
intervention in tensions arising from military exercises being
conducted by China near the coast of Taiwan. Trie told the
President in his letter that war with China was a possibility
should U.S. intervention continue,
. . . once the hard parties of the Chinese military
incline to grasp U.S. involvement as foreign
intervention, is U.S. ready to face such challenge . .
. it is highly possible for China to launch real war
based on its past behavior in Sino-Vietnam war and Zhen
Bao Tao war with Russia.26
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\26\ Id. at pp. 2-3.
The National Security Council prepared a draft response to
Trie's letter which was personally reviewed by National
Security Advisor Anthony Lake and forwarded to the President
for his signature. In his response letter, the President
explained the U.S. objectives in the area and tried to ease
Trie's concerns about the situation.27
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\27\ Letter from the President to Charlie Trie and supporting
memoranda, April 22, 1996 (Ex. 5).
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While thousands of people write the President and receive
reply letters carrying his signature, few people write letters
that receive the kind of activity and attention within the NSC
that Trie received. Without the testimony of Trie and
Middleton, however, the Committee cannot determine whether the
letter had any connection to the donations to the Trust and/or,
more importantly, whether Trie was acting at someone else's
direction when he wrote the letter to the President.
In addition to this exchange on China/Taiwan policy, Trie
also received two other favors from the White House at or about
the time of his donations to the Trust. First, as discussed in
more detail above in the section on Charlie Trie, Trie was
appointed by the President to the Commission on U.S. Pacific
Trade and Investment Policy--an act which required the
President to expand the Commission's size by signing an
executive order. Trie was appointed to the Commission despite
the fact that his qualifications did not remotely match those
of the other members named to the Commission.28
Trie's appointment was also not made official until four weeks
after his delivery of the donations to the Trust.
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\28\ List of names and occupations of members of the Commission,
November 8, 1995 (Ex. 6).
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Additionally, and as discussed more fully above, Trie was
also successful in gaining admission to a White House coffee
with the President for Chinese arms dealer Wang
Jun.29 The coffee took place on February 6, 1996,
just weeks before Trie began gathering the donations from the
Buddhist sect that he would eventually deliver to the Trust.
When it was revealed that the President had entertained Wang,
who also serves as an advisor to the Chinese government, the
President admitted that the meeting was ``clearly
inappropriate.'' 30 Without the cooperation of Trie
or Wang Jun the Committee cannot determine whether Trie's
fundraising for the Trust was connected in any way to Wang
Jun's visit.
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\29\ See previous portion of the section regarding Charlie Trie's
fundraising for the DNC.
\30\ ``Sen. Thompson to Subpoena Delayed White House Files,'' The
Washington Post, July 31, 1997.
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IV. April 4, 1996 White House Meeting with the First Lady and Harold
Ickes
Following Trie's first visit on March 21, 1996, Cardozo and
the Co-chairs of the Trust decided that the President and First
Lady should be informed of the visit in order to notify them of
the contributions as well as to see if they knew Trie.\31\
Accordingly, Cardozo scheduled a meeting on April 4 with Harold
Ickes, White House Deputy Chief of Staff and the White House
supervisor of the President's re-election effort, and Mrs.
Clinton to discuss the Trie-related contributions to the Trust.
Cardozo began the meeting by telling the First Lady that
someone from Arkansas had delivered a large number of checks to
the Trust and asked her to guess who it was. When she failed to
do so, Cardozo mentioned the name Charlie Trie. Mrs. Clinton
hesitated, then recalled him as the owner of a restaurant in
Little Rock frequented by then Governor Clinton. Cardozo
explained that the donations were primarily from Asian-
Americans and that the co-chairs had decided to deposit the
money and determine whether or not the checks and money orders
were indeed eligible. Mrs. Clinton agreed that the Trust should
be diligent in determining the eligibility of the
contributions.\32\ In this regard, Cardozo mentioned that he
had learned through his experiences during Watergate to be wary
of individuals carrying bags of money in Washington,
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\31\ Id. at p. 50.
\32\ Deposition of Michael Cardozo, May 7, 1997, p. 102.
. . . when people drop large sums of money off in
manila envelopes in Washington, D.C., you've got to be
very careful about how you handle those funds.\33\
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\33\ Id. at p. 73.
Both he and Mrs. Clinton discussed their Watergate experiences
during this April 4 meeting.\34\
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\34\ Id. at pp. 73, 75.
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Cardozo testified that he probably took a copy of the
Trust's bi-annual report to the meeting.\35\ He concluded this,
in part, because Harold Ickes' notes of the April 4th meeting
include the notation ``Total contributions Less ineligible.''
\36\ The bi-annual report which the Trust released to the press
every six months contained the following reporting line:
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\35\ Id. at p. 78.
\36\ Handwritten notes of Harold Ickes, April 4, 1996 (Ex. 7).
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Statement of Receipts and Expenditures
July 1, 1995-December 31, 1995
Receipts:
Total Contributions................................... $107,739
Less Ineligible Receipts.............................. (2,202)
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____________________________________________________
Net Receipts...................................... 105,537
This entry noted the total contributions received in the six
month reporting period as well as the contributions which were
ineligible and, thus, returned. The existence of that
particular language in the Ickes' notes is important because it
likely indicates that at the April 4 meeting Ickes, Cardozo and
Mrs. Clinton discussed the fact that even if the Trie-related
contributions were returned, their existence would be easy to
ascertain from the bi-annual report scheduled to be released in
July 1996. Cardozo admitted that the returned contributions, if
publicly disclosed, would have been a major press story.\37\ As
discussed more fully below, the Trust, with White House
knowledge, subsequently changed its reporting format to omit
any disclosure of returned contributions.
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\37\ Deposition of Michael Cardozo, May 7, 1997, pp. 141-142.
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Cardozo could offer few other details about the April 4
White House meeting. He testified that he did not tell Ickes or
the First Lady about Trie's Presidential appointment to the
federal commission or his involvement in organizing the DNC
fundraiser because he did not think they were important.\38\
Significantly, at the meeting Ickes apparently did not indicate
any knowledge of Trie despite the fact that by most accounts
Ickes ran the DNC from the White House and Trie was a DNC
Managing Trustee.\39\
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\38\ Testimony of Cardozo, July 30, 1997, p. 28.
\39\ Meaning that he raised or contributed at least $100,000; see
section of the report regarding White House control of the DNC.
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V. The Trust Investigates the Trie Donations
In the weeks following Trie's initial visit and Cardozo's
April 4 meeting at the White House, Sally Schwartz reviewed the
checks and money orders more closely to determine whether they
met the Trust's guidelines. She found that some of the money
orders were sequentially numbered (meaning they had been
purchased at one location), but were filled out by people from
different parts of the country. In addition, a number of the
checks had the same misspelling of the word ``presidential,''--
spelled instead ``presidencial.'' She also found that some of
the checks were written by one person on behalf of another in
violation of the Trust's guidelines.\40\
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\40\ Deposition of Sally Schwartz, May 6, 1997, pp. 66-67.
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Schwartz telephoned some of the donors directly to
determine whether they had in fact given their own money. She
was told about large meetings at which the contributions were
gathered. Eventually she learned about a Buddhist organization,
Ching Hai, which had hosted the meetings, and she became
concerned that some of the donors may have been coerced into
making donations.\41\ The more Schwartz looked into the Trie-
related donations, the more it became apparent that the Trust
needed outside help to investigate the matter.
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\41\ Id. at p. 137.
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A. The Trust Hires Investigative Group Inc.
As a result of Schwartz's internal investigation, Cardozo
determined that the Trust should hire the Investigative
Group,Inc. (IGI), a private investigative firm, to investigate the
donations. On April 22, 1996, Cardozo held a conference call with the
Trustees to gain their consent to hire IGI. The Trustees consented, but
also raised a number of concerns. Elliott Richardson, former U.S.
Attorney General, observed that,
from a political point of view that we have a
relatively desultory fund with only a trickle of money
coming in and suddenly a big wave of Asian-American
money comes in, in the wake of a number of fairly
visible administration actions involving Asia in
general and Taiwan in particular.\42\
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\42\ Transcript of Trustees' conference call, April 22, 1996, p. 2
(Ex. 8).
Similarly, John Brademus, former Congressman from Indiana,
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raised the following concern:
One question . . . I would raise, but I hope Terry
Lenzner [of IGI] could look into is . . . do [the
donors] have a common position or can we find if there
is some leader of a group . . . that has views on let's
say continuation of MFN [Most Favored Nation status] or
termination of MFN . . . some political agenda behind
what they are doing? \43\
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\43\ Id. at p. 4. Mr. Cardozo responded, ``Well I think we can ask
the Investigative Group to do that and I think at some point we can ask
Mr. Trie to come to a meeting and share with him some of our concerns .
. .'' Id.
Ronald Olson, an attorney from Los Angeles, suggested that
``someone in the California Asian community and I would think
the Taiwanese would be very, very prominent in this . . . I
think I would try to get beyond Mr. Trie.'' \44\ Yet, despite
the fact that these legitimate questions and concerns were
raised by the Trustees, IGI was never requested to look into
any of these matters.
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\44\ Id. at p. 1.
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Following the April 22 Trustee conference call, Cardozo and
Darryl Libow, counsel for the Trust, met with Terry Lenzner and
Garrick Tsui of IGI. Cardozo explained the events that had
transpired at the Trust and asked IGI to investigate the Trie-
related contributions.\45\ However, the one person Cardozo
specifically instructed IGI not to talk to was Charlie
Trie.\46\ Cardozo explained that one reason for this
instruction was that the Trust was limited to a $5,000
investigation budget.\47\ However, he acknowledged that Trie's
office in Washington, D.C. was only blocks from IGI and, thus,
a visit by an IGI investigator would have cost very little,
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\45\ Deposition of Terry F. Lenzner, June 23, 1997, pp. 13-14.
\46\ Id. at p. 14.
\47\ Deposition of Michael Cardozo, May 7, 1997, pp. 98, 104.
Mr. Tipps: And on the matter of cost--by the way, Mr.
Trie's office was at the Watergate office building,
right?
Mr. Cardozo: That's what his business card said.
Mr. Tipps: Right. And IGI--I am not from Washington,
but I believe it is on Connecticut Avenue?
Mr. Cardozo: That's correct.
Mr. Tipps: And that is about a $5 cab ride?
Mr. Cardozo: That's correct.\48\
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\48\ Cardozo testimony, p. 36.
He also expressed a reluctance to talk with Trie because he was
a friend of the Clintons.\49\ Whatever the reason, the failure
of those investigating the Trie-related donations to sit down
with Trie and ask him directly about the donations--and
specifically their origin and whether he was receiving anything
in return--is one of the more curious and troubling facts
related to this entire episode.
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\49\ Deposition of Michael Cardozo, May 7, 1997, p. 104.
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Another strange, and as-yet-unexplained fact, uncovered by
the IGI investigation was the possible role of longtime Clinton
friend and Lippo Group associate Joe Giroir in the Trust
matter. Loren Berger, an IGI investigator, interviewed Sally
Schwartz as part of the IGI investigation. Berger's notes of
the meeting indicate that at some point in the discussion about
the Trie donations the name ``Joe Giroir'' was mentioned. The
name appears in Berger's notes along with the name Mark
Middleton.\50\ However, when deposed by Committee attorneys,
neither Schwartz nor Berger could remember anything about
Giroir or even the context in which his name was mentioned.
Giroir is an attorney in Little Rock, Arkansas and a former
partner of the First Lady with the Rose Law Firm. His company,
Arkansas International Development Corp., is closely associated
with the Lippo Group and the Riady family, and Giroir was
active in trying to place John Huang at the DNC. The
Committee's complete findings regarding Giroir are included
elsewhere in this report.
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\50\ Handwritten notes from Loren Berger, undated (Ex. 9).
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B. The Rose of the Ching Hai Buddhist Sect
During its investigation, IGI conducted extensive computer
information searches, interviewed numerous donors
telephonically, and contacted several experts on cults and
religious sects. Based on these efforts, IGI determined that
Trie likely laundered some or all of the funds through members
of the Ching Hai Buddhist sect to the Trust and that many sect
members were, in fact, coerced into making the donations.
The Ching Hai Buddhist organization is headed by the
Supreme Master Suma Ching Hai. According to IGI's findings and
other published information, the Supreme Master studied
Buddhism in Taiwan, where she maintains her headquarters. Aside
from leading the sect, she also designs her own line of clothes
and conducts fashion shows.\51\ She encourages her followers to
make donations to and purchase items from Ching Hai.
Notwithstanding her teachings to her followers to focus on the
spiritual and not the material, IGI found that Suma Ching Hai
generally travels and lives in an opulent style. Indeed, IGI
reported that she is considered a fraud by many other Buddhist
groups.\52\ IGI also reported on certain unconventional
practices within the sect, such as the sale of the Supreme
Master's bathwater to her followers (which she apparently
claims has curative properties).\53\
---------------------------------------------------------------------------
\51\ Final report of IGI, stamped ``Draft,'' May 15, 1996, p. 5
(Ex. 10).
\52\ Id. at p. 4.
\53\ Id.
---------------------------------------------------------------------------
As a result of its interviews with experts who had studied
the Ching Hai sect extensively, IGI learned that its
membersoften donate sums to the organization greater than they can
afford.54 IGI concluded that it was highly likely that the
funds donated by members of Ching Hai to the Trust were not given
voluntarily.55
---------------------------------------------------------------------------
\54\ Berger deposition, p. 24.
\55\ Ex. 10.
---------------------------------------------------------------------------
IGI also discovered that the donors to the Trust were
solicited by the Supreme Master at large meetings in Los
Angeles, Houston and New York. Many of the members IGI
interviewed said they did not have check books or sufficient
funds with them at the meetings, so in some cases fellow
members wrote checks on their behalf, and in other cases money
orders were provided and people simply filled them out with
their addresses and social security numbers.56
---------------------------------------------------------------------------
\56\ Berger deposition, p. 24.
---------------------------------------------------------------------------
For obvious reasons, the Committee looked closely at
whether the Ching Hai members reimbursed the sect for the money
orders they had filled out or whether the sect simply funneled
its funds through its members to Trie and ultimately the Trust.
The organizer of the Ching Hai meeting in New York, Zhi Hua
Dong, addressed this issue when he testified before the
Committee on July 31, 1997.
C. Testimony of Zhi Hua Dong
Zhi Hua Dong is a computer systems administrator in the
physics department at Columbia University. He served as the New
York contact member for Ching Hai and was one of the organizers
of a March 16, 1996 meeting of the group in New York. Dong
testified before the Committee and explained how the donations
were gathered at that meeting. A couple of days prior to March
16, Dong was contacted by one of the Supreme Master's
assistants and told to purchase $20,000 in money orders and was
assured that he would be reimbursed for the purchase. He was
not told why the money was needed. Later the same day he
received another call from the same individual and was told to
purchase as many money orders as he could. After contacting a
few other members from the New York area, Dong was able to
purchase $70,000 in money orders.57
---------------------------------------------------------------------------
\57\ Testimony of Zhi Hua Dong, July 31, 1997, p. 151.
---------------------------------------------------------------------------
Dong testified that he and his wife met the Supreme Master
Suma Ching Hai at Kennedy International Airport along with
other sect members.58 Dong's wife, Tracy Hui, drove
Charlie Trie and the Supreme Master into Manhattan. Dong
followed in another vehicle. Upon arriving at the Ritz Carlton
Hotel in midtown, Dong went up to the Supreme Master's room
where he delivered the money orders he had been asked to
purchase. At that time the Supreme Master explained to him that
they were helping President Clinton raise funds for his
personal legal expenses. Trie, who was to be initiated into the
sect at the meeting, was also in the room and wrote down the
full name of the Trust so that people would be able to spell it
correctly on their money orders and checks. Before leaving,
Dong observed the Master removing $20,000-25,000 from the stack
of money orders for sect-related expenses.59
---------------------------------------------------------------------------
\58\ Deposition of Zhi Hua Dong, June 17, 1997, p. 49.
\59\ Dong testimony, p. 153.
---------------------------------------------------------------------------
During the meeting that night, which was held at the Inn at
57th Street, the Supreme Master addressed about 150 new
initiates, all U.S. citizens, and told them that President
Clinton was a good person and needed their help. After
requesting them to contribute to the Trust, the Master turned
to leave the room and to go downstairs to a private meeting.
When some of the new initiates tried to follow her, she turned
and in an angry tone told them to stay put and attend to
business.60 When one of the followers tried to ask a
``spiritual question,'' she angrily told him that it was not
the time for spiritual questions.61 According to
Dong, her tone made some of the members uncomfortable,
---------------------------------------------------------------------------
\60\ Dong Deposition, p. 79-80.
\61\ Dong testimony, p. 170.
The voice was very strong, very strong, you know,
from my perspective, I feel some energy coming out, and
her tone, you know, could make people uncomfortable . .
. there is one person stand up, after Master talked,
stand up, asked a spiritual question regarding the
practice. Master was very angry . . . It's a very
strong voice. That could irritate people.62
---------------------------------------------------------------------------
\62\ Dong deposition, p. 112.
Immediately following the event, Dong went back to the
Master's room at the Ritz-Carlton and helped count the funds
that had been raised. Between sixty and one hundred of the
blank money orders had been filled out by individuals who did
not pay for them.63 The Master added a number of
checks and money orders from another meeting, and, according to
Dong, the total amount finally given to Trie could have been
more than $400,000.64
---------------------------------------------------------------------------
\63\ Dong testimony, p. 158.
\64\ Id. at p. 161.
---------------------------------------------------------------------------
Dong had never met Trie prior to the New York meeting, and
he testified that from the way Trie talked, he was under the
impression that he worked directly for President
Clinton.65 This was the only time Dong was aware of
the Supreme Master ever asking for support for a political
figure.66 Four days after this New York meeting--on
March 20--Trie called Cardozo to set up their initial
meeting.67
---------------------------------------------------------------------------
\65\ Id. at p.163-164.
\66\ Dong deposition, p. 114.
\67\ Id. at p. 24.
---------------------------------------------------------------------------
Dong testified that in May, 1996, Trie called him and asked
him if they could meet at the airport while Trie was changing
planes in New York. At this meeting Trie was very upset because
the Trust was investigating the source of the contributions. He
told Dong that the Trust was being ``very cautious'' because it
was ``an election year.'' 68
---------------------------------------------------------------------------
\68\ Dong testimony, p.163.
---------------------------------------------------------------------------
Several weeks after the event, Dong contacted the Ching Hai
headquarters in Taiwan requesting that he and his fellow
membersbe reimbursed for the $70,000 in money orders that they
had purchased with their own money. Dong testified that up to this
point he had received little or no reimbursement from the individual
members. Dong and the other members who had advanced funds for the
money orders were eventually reimbursed by the sect in three wire
transfers, one for $20,000 from Taiwan, one for $30,000 from Cambodia
where the sect had a chapter, and the balance in a wire transfer from
Los Angeles chapter.69
---------------------------------------------------------------------------
\69\ Id. at p.165.
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VI. May 9, 1996 White House Meeting
After receiving the initial investigative report from IGI,
including information about the Ching Hai Buddhist group,
Cardozo scheduled another meeting at the White House for May 9,
1996 to again discuss the Trie donations.70 The
meeting was attended by Cardozo, Schwartz and Libow on behalf
of the Trust, and Harold Ickes, Jack Quinn, White House
Counsel, Bruce Lindsey, Deputy White House Counsel, Cheryl
Mills, Deputy White House Counsel, Evelyn Lieberman, Deputy
Chief of Staff, and Maggie Williams, Chief of staff to the
First Lady, on behalf of the White House. Cardozo did not know
why it was necessary to meet with so many senior members of the
White House staff, especially in light of his insistence that
the Trust operated independent of the White House.71
The White House apparently made the decision as to which staff
members would attend.
---------------------------------------------------------------------------
\70\ On April 24, 1996, Trie visited the Trust for the second time.
He met with Cardozo and Schwartz and brought a shopping bag with him.
Cardozo testified that when he saw Trie approach he thought to himself
``Oh my God, he's got a million dollars.'' In fact, Trie had an
additional $179,000 for the Trust. Because the Trust was investigating
the first batch of donations, Cardozo refused to accept the donations.
Because IGI had been specifically instructed by Cardozo not to
interview Trie, they had instead prepared a list of questions to be
asked of Trie at the April 24 meeting in order to gain a better
understanding of the source of the donations. However, neither Cardozo
nor Schwartz asked any of IGI's questions at the meeting. Deposition of
Michael Cardozo, May 7, 1997, pp. 129-130.
\71\ Id. at p. 115.
---------------------------------------------------------------------------
During the May 9 meeting, Cardozo explained the key facts
surrounding Trie's donations to the Trust, and called upon
Libow, the Trust's attorney, to provide the group with a
summary of IGI's findings regarding Ching Hai and its leader,
Suma Ching Hai. Libow described IGI's findings in great detail
including their conclusion that at least some of the donations
may have been coerced.72
---------------------------------------------------------------------------
\72\ Id. at pp. 155-156. IGI's conclusion was ultimately proven
correct when in July Cardozo received a letter from Ching Hai member
David Lawrence. Cardozo circulated the letter to all of the people who
had attended the May 9 meeting, as well as Mrs. Clinton. The Lawrence
letter confirmed that in fact many of the donors did not contribute
their own funds:
Unfortunately as you suspected, the funds were raised by
the efforts of a concerned party who was unaware of some of
the terms mentioned in your letter. In particular, none of
those in the private association involved in the fund
raising knew that the individual U.S. citizen donors were
required to use only their own funds. In my case, $500
given by money order was advanced by the association or its
leader and not reimbursed by me. We were led to believe
that reimbursement was optional. I am sure that none of the
members or leadership of the association knew otherwise. In
addition, I was not made aware of the other terms mentioned
in your letter. I was not aware that the Trust ``will make
---------------------------------------------------------------------------
periodic public reports of fund contributors.''
Letter from David Lawrence to the Trust, July 5, 1996, p. 2 (Ex. 11).
The group discussed the pros and cons of returning the
donations and the type of press coverage such a story would
generate.73 Mills raised the question of whether
returning the money would be seen as some sort of
discriminatory act against Asian-Americans, but in the end the
group supported the Trustees preliminary recommendation to
return the money.74
---------------------------------------------------------------------------
\73\ Deposition of Michael Cardozo, May 7, 1997, p. 161-163.
\74\ Id. at p. 155.
---------------------------------------------------------------------------
Significantly, Cardozo testified that soon after the
meeting started Bruce Lindsey entered the room, heard Trie's
name mentioned, and commented that he knew Trie from Little
Rock and that he knew Trie was ``involved with the Democratic
Party.'' 75 Ickes was present when the comment was
made, but said nothing in response.76 Furthermore,
despite the fact that Ickes was supervising the President's re-
election effort from the White House, he apparently failed to
make any inquiry into Trie's fundraising activities with the
DNC.
---------------------------------------------------------------------------
\75\ Id. at p. 175.
\76\ Id.
---------------------------------------------------------------------------
A. Ickes' Failure to Notify the DNC
Lindsey was correct on May 9th that Trie was ``involved''
with the Democratic Party. In fact, he was a Managing Trustee
of the DNC (meaning he contributed or raised at least
$100,000). Ickes' was also involved with the DNC. In fact,
according to some witnesses, Ickes was calling the shots on a
day to day basis at the DNC.77 Yet, despite his
leading role with the DNC, Ickes failed to notify anyone at the
DNC that a major DNC donor and fund raiser was involved in
highly questionable fund raising for the Trust. According to
DNC Chairman Don Fowler, ``If we had known about the problems
with Trie earlier, we could have done something. I wish that I
had known that.'' 78 Instead, the DNC was ultimately
forced to return $645,000 in funds contributed or raised by
Trie.79 Indeed, the first time Ickes mentioned the
issue to anyone at the DNC was during a telephone conversation
with B.J. Thornberry, Executive Director at the DNC, in
October, 1996--after the fundraising controversy had broken in
the press. Ms. Thornberry raised questions with Ickes regarding
whether John Huang had been truthful with the DNC.80
Ickes responded by telling her that if she had those concerns
she should also check out Charlie Trie and talk to Bruce
Lindsey about him.
---------------------------------------------------------------------------
\77\ Deposition of Donald Fowler, May 21, 1997 pp. 61-62. A
complete discussion of Ickes' role in the DNC can be found in the
section of this report on White House control of the DNC.
\78\ ``What Clinton Knew,'' Los Angeles Times, December 21, 1997,
Sec. A, p. 1.
\79\ Deposition of David Mercer, May 14, 1997, p. 240.
\80\ Deposition of B.J. Thornberry, May 20, 1997, p. 114.
Q: What did Mr. Ickes say to you?
A: Mr. Ickes said two things to me. He said that if I
had concerns about John Huang that I also might want to
check out contributions from Charlie Trie, and he said
also that I might want to have the same conversation
with Bruce Lindsey.81
---------------------------------------------------------------------------
\81\ Id. at p. 114.
Mr. Ickes was not alone in his failure to follow up on
Trie's actions with regard to the Trust. White House personnel,
including the President, not only failed to notify the DNC of
Trie's questionable fundraising practices with the Trust, but
continued to have contact with him. Only four days after the
May 9 White House meeting, the President sat next to Trie at
the head table of a $5,000 per person dinner in
Washington.82 In August, 1996, two months after the
Trust decided to return the Trie-related donations, the
President accepted $110,000 from Trie at an event celebrating
the President's 50th birthday.83 In addition, as
noted above, the President proceeded to appoint Trie to a
federal trade commission and had the NSC prepare a personal
response to foreign policy questions raised by Trie, both after
Cardozo informed the White House and the First Lady about the
questionable Trust donations.
---------------------------------------------------------------------------
\82\ ``What Clinton Knew,'' Los Angeles Times, December 21, 1997,
Sec. A, p. 1.
\83\ Id.
---------------------------------------------------------------------------
vii. trie's final meeting with the trust
On May 17, 1996, Trie visited the Trust for the third and
final time. Cardozo asked Schwartz to meet with Trie alone
because Cardozo no longer wished to have any dealings with
him.84 During the meeting, Trie acknowledged that he
was indeed a member of the Ching Hai sect and that he had
encouraged the Supreme Master to help him raise money for the
Trust.85 Trie also had additional donations which he
said totaled $150,000--bringing the total to $789,000--that he
wished to deliver, but Schwartz refused to accept them because
by the Trust had yet to make a determination regarding the
first delivery of funds.86
---------------------------------------------------------------------------
\84\ Deposition of Michael Cardozo, May 7, 1997, p. 190-192.
\85\ Deposition of Sally Schwartz, May 6, 1997, p. 211.
\86\ Id. at p. 210.
---------------------------------------------------------------------------
viii. the trie-related contributions are returned
The decision to return the Trie-related contributions was
finalized in June, 1996, and the Trust began mailing
contributions back to the contributors.87 However,
it did so with a twist. Notwithstanding IGI's findings about
the involvement of the Ching Hai sect and the likely coercion
exercised on sect members, the Trust sent a cover letter along
with the returned contributions instructing the donors that
they could re-submit their contributions if they met the
Trust's guidelines.88 In other words, despite the
fact that the Trust knew the donations had been, at least in
part, coerced, it was still willing to accept the same money
from the same donors.
---------------------------------------------------------------------------
\87\ Return letter from the Trust to a contributor, June 26, 1996
(Ex. 12); The White House was informed of this decision as the option
had been discussed at the May 9 White House meeting.
\88\ Id.; Deposition of Michael Cardozo, May 7, 1997, p. 212;
Exhibit no. 12.
---------------------------------------------------------------------------
Loren Berger, the IGI investigator who authored the IGI
report, testified before the Committee that she had a theory as
to why the Trust sought to have the donations recontributed in
this manner. She knew that any contributions accepted in the
first six months of 1996 would be made public in the bi-annual
report filed in July 1996, prior to the election. However, if
the donations were returned and the donors then re-submitted
their contributions during the second half of 1996, the
``recontributions'' would not be made public until the next
reporting period--January 1997, after the election. Berger
theorized that by returning the contributions and allowing them
to be re-submitted after the first reporting period of 1996 had
passed, the Trust could effectively receive the funds and avoid
making them public until after the election.89 The
only flaw in Ms. Berger's theory was that the bi-annual report
had historically disclosed not just contributions, but returned
contributions as well, which would mean the story would have
become public prior to the election anyway. However, as
discussed below, the Trust changed its public reporting method
to avoid disclosing the return of the Trie-related
contributions.
---------------------------------------------------------------------------
\89\ Berger Deposition, pp. 84-85. Cardozo denied any such plan,
although he was unable to offer any logical explanation for why the
Trust would agree to accept tainted funds from the original donors,
knowing that the donations had been coerced in the first place.
---------------------------------------------------------------------------
ix. the bi-annual report is changed to keep the trie donations secret
Work on the mid-1996 bi-annual report began in the first
week of July 1996. The purpose of the report was to record the
activities of the Trust for the first half of 1996 and to make
them public at a press conference held in August. All previous
bi-annual reports submitted by the Trust since its inception
had listed ``total contributions'' received by the Trust during
the six month period and subtracted ``ineligible
contributions'' that had been returned during that same
period.90 However, in mid-1996 the Trust changed the
format of the bi-annual report so that only ``contributions
accepted'' by the Trust were listed. The Trust eliminated the
return line and rationalized that any contributions received
and returned within the six month period were never
``accepted'' and, thus, need not be disclosed. This was a
marked departure from the way returns had been accounted for
historically.91
---------------------------------------------------------------------------
\90\ Ex. 2.
\91\ Ex. 1.
Cardozo and Schwartz both admitted that the reason for the
deletion of the return line in the mid-1996 bi-annual report
was to keep the Trie-related donations from becoming
public.92 The net effect of this accounting change
was to treat the Trie-related contributions as if they had
never occurred.93
---------------------------------------------------------------------------
\92\ Testimony of Michael Cardozo, July 31, 1997, pp. 47-48;
Deposition of Sally Schwartz, May 6, 1997, p.283.
\93\ Even though Cardozo admitted the effect of the change was to
hide the existence of the Trie-related donations, he testified that the
real reason for the change was to clarify the Trust's accounting
procedures. Schwartz, however, admitted the reason for the change was
the Trie-related contributors. Deposition of Michael Cardozo, May 7,
1997 p. 246; Deposition of Sally Schwartz, May 6, 1997, p.283.
---------------------------------------------------------------------------
On August 14, 1996, the Trust held a press conference to
release the bi-annual report. Cardozo was specifically asked by
a reporter whether there were any contributions returned
because they came from someone who was ``unsavory or anything
like that.'' Cardozo said, ``No.'' 94 Cardozo
testified that he gave this answer to protect the privacy of
the donors and the credibility of the Trust.95 In
other words, if he had answered yes, the Trie-related matter
would have become public at that time.
---------------------------------------------------------------------------
\94\ Transcript of August 14, 1996 press briefing, p. 19 (Ex. 13).
\95\ Deposition of Michael Cardozo, May 8, 1997, p. 10.
---------------------------------------------------------------------------
In addition to the accounting change in the bi-annual
report, the Trust also revised the Quarterly Report that was
routinely sent to the President and which contained the names
of the donors to the Trust for the previous three months. On
April 25,the President received a list which included the Trie-
related donors. 96 Three months later that report was
``superseded'' by a subsequent report which omitted the names of those
donors. 97 The President, therefore, was not only aware of
the original Trie-related donors, but was also aware that their
donations had been returned.
---------------------------------------------------------------------------
\96\ Original Quarterly Report sent April 25, 1996 (Ex. 14).
\97\ Supplemental Quarterly Report omitting the names of the Trie-
related donors sent June 26, 1996 (Ex. 15).
---------------------------------------------------------------------------
That the White House knew of the accounting change in the
bi-annual report is also beyond dispute. First, a simple
comparison between the mid-1996 bi-annual report and all
previous bi-annual reports would have disclosed the change.
Moreover, it is inconceivable that the matter was not discussed
at one of the White House meetings concerning the Trie
contributions. In fact, Harold Ickes' notes from both the April
4th and May 9th White House meetings suggest that the matter of
how to report the returned contributions was discussed.
98 Additionally, as addressed below, notes taken by
Cardozo the day after the Trie contributions were finally made
public suggest that White House counsel had approved of the
manner of disclosure in the mid-1996 bi-annual report, and
wanted to avoid any public disclosure of the Trie matter until
at least after the election.
---------------------------------------------------------------------------
\98\ Ex. 7.
---------------------------------------------------------------------------
X. The Resubmitted Contributions are Returned/Trie's Growing Notoriety
During the period of August through October 1996, the Trust
began receiving ``recontributions'' from the original Trie-
related donors. Cardozo and Schwartz noticed that the
occupations of many of the donors were inconsistent with the
amounts they were giving. Students, hairstylists and others
were making $1,000 donations which once again raised the
question of whether they were contributing their own funds.
99
---------------------------------------------------------------------------
\99\ Deposition of Michael Cardozo, May 7, 1997, p. 320-321.
---------------------------------------------------------------------------
On November 8, 1996, Cardozo conducted a conference call
with the Trust's Co-Chairs regarding the re-submitted
contributions. They discussed the questions raised by the
donors' occupations, the letter from David Lawrence which
confirmed that Ching Hai members had signed checks and money
orders using someone else's money, and Trie's recent notoriety
in the press in connection with John Huang and the growing DNC
fundraising controversy. The group decided to re-engage IGI to
investigate the resubmitted contributions to determine whether
they too should be returned. However, there was no discussion
of making Trie's relationship to the Trust public during the
conference call. 100
---------------------------------------------------------------------------
\100\ Deposition of Michael Cardozo, May 7, 1997, pp.320-321.
---------------------------------------------------------------------------
On November 14, 1996, Cardozo, Schwartz and Libow once
again met at the White House with senior White House aides Jack
Quinn, Cheryl Mills, Evelyn Lieberman and Bruce Lindsey.
Cardozo informed them that IGI had once again been retained to
examine the re-submitted contributions and that questions had
been raised about the donors' occupations, as well as Trie's
involvement with John Huang the DNC. Cardozo informed them that
the Trust was inclined to return these contributions as well.
101
---------------------------------------------------------------------------
\101\ Deposition of Michael Cardozo, May 8, 1997, pp.77-78.
---------------------------------------------------------------------------
While Cardozo testified that the impetus for returning the
resubmitted contributions was the information about the donors'
occupations, this does not square with the other evidence
presented to the Committee. 102 First, information
regarding the occupations of the donors who were resubmitting
contributions had surfaced as early as July. 103
Second, IGI investigator Loren Berger testified that there was
no new information about the donors that the Trust did not have
when it decided to return the first round of contributions in
June 1996. 104 The real reason the Trust returned
the ``recontributions'' appears instead to be the public
notoriety Trie was receiving in the Fall of 1996 for his
involvement in the DNC fundraising controversy and his
relationship to John Huang and the Riady family. Yet,
notwithstanding Trie's growing role in the fundraising matter,
neither the White House nor the Trust, prior to the 1996
election, publicly disclosed the White House's substantial
involvement with Trie or Trie's attempt to deliver over
$700,000 in laundered contributions to the Trust. Indeed, from
handwritten notes taken by Cardozo subsequent to the election,
it appears likely that the White House Counsel's office made a
concerted effort to prevent any public disclosure of the Trie
matter until after the election.
---------------------------------------------------------------------------
\102\ Id. at p. 30.
\103\ Id. at p. 14.
\104\ Berger Deposition, pp. 88-89.
---------------------------------------------------------------------------
XI. Cardozo's Handwritten Notes
As discussed more fully below, the Trust eventually was
forced to disclose the Trie contributions at a press conference
on December 16, 1996. On the following day, Cardozo received
several telephone calls from the press and others which were
reflected on call sheets provided to the Committee.
105 It is apparent from the call sheets and
Cardozo's testimony that the press was questioning him about
why Trie's relationship with the Trust had not been disclosed
in mid-1996 with the bi-annual report. Cardozo's handwritten
notes appear on some of the call sheets. In most instances the
notes are written in the narrative form and contain lines drawn
to a specific reporter. They look and sound like notes of a
question being posed to Cardozo during a phone conversation.
However, in one margin Cardozo wrote, ``In June never came up.
Investigation wasn't complete. WH Counsel: agreed w/
disclosure. Jack, Bruce, Cheryl--not disclose info until after
election. Opposed disclosure.'' 106
---------------------------------------------------------------------------
\105\ Cardozo's handwritten notes on his telephone log, December
17, 1996, p. 5 (Ex. 16).
\106\ Id. at p. 5.
During his testimony at deposition and before the Committee
at public hearing, Cardozo speculated that the notes must have
referred to some question posed by one of the reporters on that
page. However, when pressed on the issue, he could not confirm
this:
Q. Is it your testimony under oath, Mr. Cardozo, that this
is a question posed to you by a reporter?
A. I don't know precisely what it refers to. 107
---------------------------------------------------------------------------
\107\ Testimony of Michael Cardozo, July 31, 1997, p. 109.
* * * * *
---------------------------------------------------------------------------
Mr. Tipps: Mr. Cardozo, you and I talked about these notes
in your deposition. Do you recall that?
Mr. Cardozo: Yes, I do.
Mr. Tipps: And you said here today that this was a
reporter. Can you tell us which reporter on that exhibit asked
you this?
Mr. Cardozo. No, I cannot be certain which reporter
it was.108
---------------------------------------------------------------------------
\108\ Id. at p. 108.
While Cardozo's speculation might be accurate, it appears from
the evidence, taken as a whole, that a much more likely
interpretation is that Cardozo was simply talking with someone
from the White House and lamenting all the questions he was
being bombarded with from the press concerning the timing of
the disclosure about Trie. The White House aide, in turn, was
simply stating what he or she knew about that issue and Cardozo
wrote it down. The notes are not written as though it is a
question being posed to him from a reporter. Moreover, the
notes are not connected with any particular reporter but are,
instead, bracketed or walled off in a manner that suggests
their separateness from the list of reporters. Additionally the
notes themselves do in fact explain what was going on at the
White House in the pre-election time frame. The phrase ``In
June never came up'' likely refers to the fact that in June
1996 Trie had not become a public figure connected to the DNC
fundraising controversy. The phrase ``W.H. counsel: agreed on
disclosure'' likely refers to the fact that the White House
counsel's office (many of whom were at the May 9 White House
meeting) agreed with the method of disclosure used in the mid-
1996 bi-annual report which omitted any reference to returned
contributions. Finally, the phrase ``Jack, Bruce, Cheryl--not
disclose info until after election'' speaks for itself. Cardozo
admitted that this note referred to Jack Quinn, Bruce Lindsey
and Cheryl Mills--all White House Counsel and all attendees at
the May 9 White House meeting. Indeed, at the bottom of the
this page of notes, also in Cardozo's handwriting, are the
names Mike McCurry and Lanny Davis, both senior White House
aides who would have been privy to this information. Cardozo
admitted during public hearing that he spoke to both of
them.109
---------------------------------------------------------------------------
\109\ Id. at p. 110. Furthermore, this interpretation of Cardozo's
notes is consistent with subsequent press reports indicating that the
Trie-related contributions were kept away from key White House
personnel for fear that they might make the story public. The Los
Angeles Times has reported that Trie's relationship with the Trust was
intentionally kept from Jane Sherburne, former Special Counsel to the
President, and Mark Fabiani, former White House counsel in charge of
press inquiries about Whitewater, until at least after the election
because they were known to be advocates of disclosing negative stories
rather than trying to hide them. Jane Sherburne was interviewed by the
Committee and confirmed that she was not notified about the Trie-
related contributions until after Trie's name surfaced in the press.
Memorandum of interview of Jane Sherburne, September 19, 1997, p. 13.
---------------------------------------------------------------------------
XII. Trie's Relationship with the Trust is Made Public
The Trust and the White House kept the Trie story private
until after the election, but their hopes of keeping it out of
the public completely ended with a phone call in December from
a reporter working on a story for NBC News. Once Cardozo
realized the story was going to become public, he worked
closely with the White House to make sure that it was released
on their terms and with their spin.
A. Cardozo's Call From John Mattes
On December 2, while on a business trip to Los Angeles,
Cardozo was informed by his office that he had received a
telephone call from John Mattes. When Cardozo called him back,
Mattes informed him that he was working on a story for NBC News
regarding a large number of contributions from Asian-Americans
to the Trust which had been returned. He also told Cardozo that
the producer he was working with was a Mr. Oetgen. He was aware
of the donors' association with Ching Hai, but gave no
indication that he was aware of Charlie Trie's
involvement.110
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\110\ Deposition of Michael Cardozo, May 8, 1997, p.52.
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Cardozo told Mattes that he was in conference and would
have to contact him later. Cardozo immediately called Cheryl
Mills, Deputy White House counsel, and set up a meeting the
next day at the White House to discuss the
matter.111
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\111\ Id. at p. 49.
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B. The December White House Meetings
On December 4, and December 11, Cardozo, Schwartz and Libow
once again met at the White House with senior White House aides
Quinn, Lindsey, Mills, Lieberman and Williams. The group
discussed the telephone call from Mattes and logistically how
the Trust should go about making the story public. In the
December 4 meeting, Cardozo told the the White House employees
about his call from Mattes and expressed his concern that if
the story was to go public he wanted to make sure that the
Trust was able to tell the story from its perspective. Mills
advised Cardozo to call Oetgen to see if Mattes was ``for
real'' before making any arrangements to make the story public.
This was the first meeting at which making the story public was
discussed or even contemplated.112
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\112\ Id. at p. 57.
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Following the December 4 meeting, Cardozo called Oetgen and
found out that Mattes was indeed working on a story for NBC.
Both Cardozo and Oetgen were planning to be out of town in the
near future, so they agreed that Oetgen would call back the
next week to follow-up on the story. Oetgen, however, failed to
call the next week.113 Nonetheless, as a result of
the call from NBC, Cardozo, with help from the White House,
proceeded with plans to make the Trie story
public.114
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\113\ Id. at p. 56.
\114\ Id. at p. 57.
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Having determined that Mattes was ``for real,'' another
meeting was held at the White House on December 11 to decide
how to disclose the story publicly. The White House aides
determined that the best method was a press conference and they
suggested that Cardozo contact Mark Fabiani, a former White
House counsel who had handled press inquiries regarding
Whitewater, for help in making logistical
decisions.115
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\115\ Id. at p. 67.
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Following the meeting, Cardozo called Fabiani on two
occasions and took notes of the conversations. Included in
thenotes is a reference to NBC which reveals that the call from Mattes
was indeed the impetus behind the decision to go public--``NBC changes
everything, could come back with a lot more info.'' 116
Another portion of Cardozo's notes states, ``Trie is a big-time player,
Daschle, Congress.'' 117
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\116\ Cardozo's handwritten notes of conversation with Fabiani,
December 12, 1996, p. 1 (Ex. 17).
\117\ Cardozo's handwritten notes of conversation with Fabiani,
December 11, 1996, p. 2 (Ex. 18).
When asked what this meant, Cardozo said that Fabiani was
aware that Trie was well known on Capitol Hill and had raised
money for several Democratic members of Congress.118
Cardozo and Fabiani also discussed whether NBC should be
contacted prior to the press conference since they were
preparing a story, however NBC was not contacted.119
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\118\ Deposition of Michael Cardozo, May 8, 1997, p. 100.
\119\ Id. at p. 88; Ex. 17.
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C. The December 16, 1996 Press Conference
Cardozo scheduled the press conference for December 16,
1996, less than two weeks after first speaking with
Mattes.120 With regard to the NBC story, the
following exchange of questions and answers took place:
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\120\ Id. at pp. 66, 69-70.
A Participant. Are you aware, sir, of a story being
prepared at this moment, prior to this calling of this
conference today?
Mr. Cardozo. No.
A Participant. In other words, are you trying to head
off a story that was thought to be----
Mr. Cardozo. No.121
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\121\ Transcript of December 16, 1996 press conference (Ex. 19) p.
38.
Cardozo did not explain to the press that the impetus for the
press conference was the call from Mattes or that there had
been no discussion and no intention whatsoever of making the
donations public prior to that call. Cardozo later testified
before the Committee that at the time this question was posed
he did not think NBC was working on the story since Oetgen had
not called him back.
Although Cardozo was aware from press accounts that Trie's
fundraising activities were being investigated by the Justice
Department, he made no attempt to notify them of Trie's
activities concerning the Trust until two days prior to the
press conference.122
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\122\ Deposition of Michael Cardozo, May 8, 1997, p. 164.
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XIII. CONCLUSION
As a result of its investigation into Trie's activities
with the Trust, the Committee gained further insight into
Trie's close relationship with the White House, and how, as a
major fundraiser, Trie raised and laundered contributions for
the benefit of the President and First Lady. The evidence
uncovered by the Trust's own investigators reveals that the
donations were laundered through members of a controversial
Buddhist sect, many of whom were coerced into making the
donations. The evidence also reveals that senior members of the
White House staff were informed of this disturbing fact, yet
still acquiesced in a plan to have the donations returned to
the contributors, and then resubmitted to the Trust. This plan
soon became untenable because of Trie's sudden notoriety over
his relationship with John Huang and the growing DNC
fundraising controversy. Rather than publicly disclosing Trie's
involvement with the Trust, however, the White House sought to
keep the matter secret until after the presidential election.
Moreover, despite all of the warning signs they were given,
these same White House aides, particularly Harold Ickes and
Bruce Lindsey, made no effort whatsoever to alert the DNC that
a major DNC fundraiser was involved in money laundering with
the Trust.
The investigation also demonstrated that Trie was granted
several special favors by the White House at or about the same
time that he was raising and delivering the questionable funds
to the Trust. One question which remains unanswered is whether
these favors--the appointment of Trie to the trade commission,
Wang Jun's invitation to meet personally with the President, or
the personal reply letter from the President prepared by the
NSC explaining U.S. foreign policy--were linked in any way to
the Trust donations. These same types of questions were raised
by the Trustees in their initial meetings concerning Trie.
Inexplicably, neither the Trust nor the White House ever made
any attempt to investigate these matters. Because Trie had fled
to China during the course of the Committee's investigation and
did not return until early February 1998, and Mark Middleton
has asserted his Fifth Amendment privilege against self-
incrimination, the Committee could not conclusively answer
these questions.