By Ruth Marcus
The draft report, a copy of which was obtained by The Washington Post, opens with the assertion that President Clinton, Gore and their top aides conducted a well-coordinated and highly successful effort before the 1996 election "to violate the letter and spirit of existing federal campaign laws."
But the pointed criticism of Gore's "lack of candor" about the Buddhist temple event is one of the few specific allegations directed at top Clinton administration officials in the 1,500-page draft report. The draft by Republicans on the Senate Governmental Affairs Committee is the product of 32 days of hearings, chaired by Sen. Fred D. Thompson (R-Tenn.), into fund-raising abuses. Although the lengthy report does not appear to break new ground in the investigation of 1996 campaign fund-raising, its conclusions -- offered in sometimes partisan language -- are certain to fuel GOP attacks on Democratic Party practices, and in particular on Gore as he prepares for the 2000 presidential race.
"While there are obvious reasons for the vice president to wish to distance himself from the temple event by claiming that he had no idea fund-raising was involved, such a claim is improbable," the GOP report states.
In support of its conclusion, the Republican report points to Gore's long knowledge of the event's organizers -- Los Angeles immigration consultant Maria Hsia and former Democratic National Committee official John Huang -- as fund-raisers, memos to Gore from then-White House deputy chief of staff Harold Ickes detailing the amount the event was expected to take in, and internal White House e-mails referring to the "fund-raiser."
Gore spokesman Christopher Lehane dismissed the report as a "partisan cut-and-paste job," saying that the Republicans ignored evidence that Gore did not know people were being asked to give in order to attend the luncheon. Lehane pointed to a letter from Hsia that appeared to contemplate two separate events -- a fund-raising lunch after which Gore would go to the temple for a rally -- and to Gore's speech, which included none of the usual thanks for donations that would take place at a fund-raiser. The GOP report questions whether the Hsia letter was actually sent.
While the GOP prepares to release its report critical of the Clinton administration, Democrats in competing draft chapters obtained by The Washington Post take aim at former Republican National Committee chairman Haley Barbour, accusing him of a "scheme" to solicit foreign money to back a loan to an affiliated nonprofit group, the National Policy Forum, and then use the loan to free up RNC funds for the 1994 congressional elections.
Barbour said he did not know the funds came from overseas, testimony the Democrats dismissed as "not credible." Committee Republicans have not yet finished their chapter on the National Policy Forum.
Barbour's spokesman, Ed Gillespie, said yesterday the Democratic chapter on Barbour was leaked in "a pathetic attempt by partisan Democrats to try to get any discussion of what does or does not constitute a sexual relationship off the front page of your paper." He said Democrats ignored witnesses who supported Barbour's version and were just "upset that Haley Barbour's effectiveness as committee chairman cost them control of the Senate."
The Governmental Affairs Committee had been slated to release its report by Jan. 31, but congressional sources said it was delayed by negotiations with the FBI and the CIA over how to characterize the alleged plot by China to influence U.S. elections, as well as by dissension among GOP senators over proposals to overhaul federal campaign finance laws. Republicans are also still debating what individuals to refer to the Justice Department for possible prosecution, something a committee source said is likely.
The Justice Department is continuing to investigate both Democratic and Republican fund-raising practices. A major figure in the probe, Democratic fund-raiser and Clinton friend Yah Lin "Charlie" Trie, last week surrendered to authorities after being indicted on charges that he illegally funneled foreign funds to the 1996 Clinton-Gore reelection effort.
The GOP's draft report suggests to the Justice Department several possible areas of additional criminal inquiry and renews the long-standing Republican request that Attorney General Janet Reno seek appointment of an independent counsel to oversee the entire campaign finance inquiry.
Justice Department officials have recommended that Reno seek appointment of an independent counsel on a more limited matter: to examine whether Interior Secretary Bruce Babbitt lied about his role in the department's rejection of a gambling casino license by three Wisconsin Indian tribes. Reno has until Wednesday to decide to seek an independent counsel or to ask for a 60-day extension of her preliminary investigation.
The casino application was opposed by several other tribes in Minnesota and Wisconsin that have their own casinos and later gave more than $350,000 to Democratic committees and candidates.
The draft Republican report raises numerous questions about the testimony of Babbitt and other Interior Department officials and says there is "strong circumstantial evidence" that the decision was politically tainted by "improper political considerations, including the promise of political contributions."
The Governmental Affairs Republicans also highlight several other areas they say the Justice Department should investigate further. In a chapter on fund-raising calls from the White House, the Republicans say information they received in late November suggested that Ickes may have "violated the criminal provisions of the Hatch Act, prohibiting a federal employee from soliciting any [political] contributions."
The report cites an Oct. 11, 1996, DNC memo naming four labor unions that were to be called for contributions and listing Ickes as the designated caller. Ickes did not return telephone calls seeking comment yesterday.
The draft GOP report also recommends that the Justice Department investigate Ickes and two top Democratic Party fund-raising officials, Richard Sullivan and Terence McAuliffe. The draft says the testimony of all three men was either misleading or inaccurate regarding their dealings with the International Brotherhood of Teamsters during the 1996 campaign.
At issue is whether the DNC, White House and Teamsters engaged in an illegal campaign contribution swap scheme in which the Democrats would solicit donations to either the Clinton-Gore campaign or other Democratic candidates in exchange for the promise of finding donors to the reelection campaign of Teamsters then-President Ron Carey.
The Republicans also challenge Reno's reasoning in deciding against the appointment of an independent counsel to investigate Gore's telephone calls from his White House office to solicit campaign contributions.
The draft GOP report says Clinton telephoned at least six potential donors. But it says these calls were made from the residential quarters of the White House and did not violate the same law. It also says that while campaign contribution call sheets were prepared for Hillary Rodham Clinton, "the committee concludes that it was unlikely that the first lady actually made any of the fund-raising calls."
"The committee hopes that all future presidents and vice presidents will refrain from making direct telephone solicitations for campaign contributions," the chapter on White House fund-raising calls concludes.
The White House is also criticized by committee Republicans for dilatory tactics in responding to committee subpoenas, with the draft report going so far as to compare the investigation with the Watergate probe that Thompson worked on as a young staff lawyer 25 years ago. The Clinton White House, the report says, appears to have "selected the Nixon White House as their model" in document production.
White House spokesman Jim Kennedy rejected that characterization and said, "They spend $3 million of taxpayers' money and all they have to show for it is partisan hearings and now a partisan report that includes no call for campaign finance reform. Welcome to the 1998 Republican campaign."
Also sharply criticized in the report is the AFL-CIO, which led the way in balking at complying with the committee's subpoenas. Other nonprofit groups, from the Sierra Club to the National Right to Life Committee, followed. The report concludes that "after the AFL-CIO thwarted the committee's investigation with impunity, the remaining nonprofit groups did not fear the committee's threats of contempt."
In another chapter, Republicans say the White House has an "essentially nonexistent" system to screen visitors, with the result that several "unsavory individuals" who were also major Democratic donors gained access to the White House. "This was a system designed to fail, and it operated precisely as designed," the report says. The draft report also criticizes the DNC's dismantling of its "vetting" systems to check the appropriateness and legality of large donations during the 1996 campaign. While staffers had checked all donations of more than $10,000 during 1992 and all contributions of more than $25,000 in 1994, that program was abandoned during the last campaign, the report says.
"In fact, it appears that the DNC made a decision to operate under a 'system' that would turn a blind eye towards questionable contributions, allowing the DNC to receive large, illegal contributions without any accountability for their receipt in the event they were detected," the report states.
On the Hsi Lai Buddhist Temple, the report alleges that Huang and Hsia participated in funneling illegal foreign funds to a number of Democratic races.
It says Hsia used the Hsi Lai Temple in an "elaborate system of donation-laundering" that brought in $65,000 in illegal donations from the Gore event alone, and a total of $116,5000 in illegal contributions to the DNC to support the Clinton-Gore 1996 reelection bid. The DNC has since returned the temple donations. The DNC acknowledged that holding a political fund-raiser at a religious institution was "inappropriate" even before it was alleged that much of the money raised at the event was illegally contributed through "straw donors."
Hsia's lawyer, Nancy Luque, denied that her client participated in any illegal reimbursements. "There is no evidence in that record to support the allegation that she was involved in any so-called reimbursement scheme," Luque said.
Gore's appearance at the Hsi Lai Temple -- and his continuing insistence that he did not know the event was a fund-raiser -- represents perhaps the biggest long-term political fallout from the fund-raising controversy. Over time, Gore has offered differing characterizations of the temple event -- first describing it as a "community outreach" event, then as "finance-related," and finally as a "donor-maintenance" event, meaning that, as Gore said, "no money was offered or collected or raised at the event."
The issue of, as the GOP report puts it, "what the vice president knew and when he knew it," has taken on far more significance than the fund-raiser itself, becoming -- along with instances such as Gore's statement about "no controlling legal authority" on making fund-raising calls from the White House -- a shorthand for questions about Gore's veracity.
"There is nothing to support the report's findings," Lehane said. "There is no news here. It is clear for all to see that this report is nothing more than a $3.5 million taxpayer-funded Republican attack ad directed by Senator Thompson and designed solely to inflict political damage on this administration."
Staff writers Charles R. Babcock, Dan Morgan, Lena H. Sun, Roberto Suro, Frank Swoboda and Edward Walsh contributed to this report.
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