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Hearings' 1st Witness Provides Little to Link China to DNC Donations

By Guy Gugliotta and Edward Walsh
Washington Post Staff Writers
Sunday, July 13, 1997; Page A10

At last week's Senate hearings on campaign finance abuses, there was much discussion of donations from Asians and Asian Americans, but scant information to tie any of them to the Chinese government.

Former Democratic National Committee financial director Richard Sullivan, the only witness, shed no light on a Chinese connection, nor did the senators, although several, most notably Sen. Robert F. Bennett (R-Utah), suggested that fund-raiser John Huang may have been China's mole in the Clinton campaign.

Other than Huang, clearly targeted by the senators in this part of their investigation, the Asian donors were a varied cast of characters whose fund-raising activities appeared to be motivated by self-interest. All their stories had been told at length in various media accounts, although committee investigators managed to add several new details.

If there was a point to retelling these accounts, it seemed to be to buttress, in a public forum, the Republicans' contention that President Clinton's fund-raising operation was a money-mad enterprise happy to take contributions from any willing source and to solicit aggressively from people of questionable backgrounds.

Sullivan's testimony tended to reinforce the picture of a campaign certainly desperate for money and at best sloppy when it came to looking at the backgrounds of some major contributors, although he denied any intentional illegality. He characterized the lax vetting of some contributions as "a small problem in the system."

In the case of Huang, he said he was aware that various high-level officials, including the president, were interested in having him hired by the DNC. Sullivan said he expressed concerns about Huang's lack of fund-raising experience and his emphasis on attracting Asian donors, which raised the prospect of illegal donations, but was unaware that any such donations were made.

By week's end, Republicans were conceding that on the Asian connection and on fund-raising operations in general, Sullivan had been a disappointing witness. Republicans several times tried to suggest his remarks strayed from testimony he gave in a deposition. But if there were differences, they appeared to be of tone, not substance.

"We took a chance and we lost," Chairman Sen. Fred D. Thompson (R-Tenn.) has said about the decision to lead with Sullivan.

In fact, much of the effect of Sullivan's testimony was to put in perspective the accomplishments of the DNC's mammoth fund-raising operation, which at its height employed 80 fund-raisers and, in Sullivan's view, did an "excellent" job. When Sen. John Glenn (D-Ohio), the ranking Democrat, noted that of 2.7 million individual contributions, only 172 were returned, Sullivan said he thought even that number was misleading.

"Senator, it's my sense that there are not very many that were returned that were deemed purely illegal," Sullivan testified Wednesday. "It's my sense that there were only two or three that were returned because they were illegal contributions. A number of those were returned because they were deemed to have insufficient information. And I truly believe that a great deal of those that were classified as ones without sufficient information was due to the fact that – was due to the negative publicity surrounding the Asian American community."

Taken together, the Asian American donors discussed last week were responsible for a substantial part of the $2.8 million worth of contributions returned by the DNC.

Among them was one from California businessman Yogesh K. Gandhi, who pressed the DNC for an opportunity to present Clinton with a bust of the late Indian leader Mohandas Gandhi. Denied access to the White House, Gandhi eventually wangled an invitation to a May 1996 fund-raiser that Clinton attended.

He presented the award in a hastily arranged ceremony, also attended by Hoken Fukunaga, a Japanese spiritual leader who wrote a book about diagnosing disease based on the shape of a person's navel. Fukunaga later used a photograph of himself with Clinton to promote his teachings.

Gandhi donated $325,000 to the DNC, which was later returned. At the hearings, Republicans said several days after the contribution, Gandhi's bank account received two wire transfer deposits of $250,000 each from a Japanese branch of a U.S. bank. The funds were wired from an account owned by Yoshio Tanaka, a Japanese business associate of Gandhi and Fukunaga.

Republicans said the $500,000 was the source of Gandhi's campaign donation. Wherever it came from, however, it appeared to have nothing to do with China. When majority counsel Michael J. Madigan was asked about this, he said the China connection "was only part" of the influx of foreign money into the 1996 campaign.

Also at issue was California entrepreneur Johnny Chung, who, with Huang's help, promised the DNC a $50,000 contribution if he could take six Chinese businessmen to one of Clinton's regular Saturday morning radio addresses. The National Security Council had called Chung, an American citizen of Taiwanese descent, a "hustler" who appeared to be trying to exploit his White House access to further private business interests.

Sullivan told the committee he turned Chung down, but somehow – Sullivan said he did not know how – Chung and his guests got into the White House and saw the address in March 1995. Later, Chung gave $50,000 to the DNC, handing a check to Maggie Williams, the first lady's chief of staff, during another White House visit. Like Fukunaga, one of the Chinese businessmen used his picture with the president in an advertisement for his Chinese beer company.

Three days before Chung wrote the $50,000 check, Sen. Arlen Specter (R-Pa.) told the committee, his bank account received a $150,000 transfer from the Bank of China, a state-owned bank that, like many other government-controlled central banks throughout the world, is widely used by business firms and private individuals.

"Now there is a solid connection between a Chinese source of money and a Democratic Party donation," Specter said, but provided no further details. No evidence was offered showing the Chinese government as the ultimate source of the funds.

Specter also questioned Sullivan about Wang Jun, chairman of a Chinese financial conglomerate and head of a leading weapons firm. His attendance at a DNC-sponsored coffee with Clinton in February 1996 was later deemed "clearly inappropriate" by the president.

According to Specter, Wang's bio was faxed to the DNC by the investment banking firm of Lehman Brothers. Wang was invited to the United States by Ernest G. Green, a managing director of the Lehman Brothers Washington office and longtime Democratic rainmaker. Green contributed $50,000 to the DNC the day after the coffee and has said it came from personal funds. Specter said later that month, Green received a $54,000 bonus from Lehman Brothers, a prominent investment bank that was competing for underwriting business in the vastly expanding Chinese market. Earlier this year, Wang told The Washington Post his U.S. trip had been set up by Lehman, which was interested in doing business with his company. Wang said that during his coffee with Clinton, he had "little to talk to him about."

Two other once obscure figures also crossed the stage during the hearing's first week. One was Charles Yah Lin Trie, a former Little Rock restaurant owner and friend of Clinton. Beginning in May 1994, Trie and his relatives gave $141,500 to Democratic candidates, but Sen. Thad Cochran (R-Miss.) produced a financial disclosure form suggesting Trie's listed income and assets would not allow such contributions. "It just doesn't make sense," Cochran said.

"Senator, you're correct, but I've never seen this document and had no knowledge of his financial condition," Sullivan replied.

Trie also received a wire transfer of almost $150,000 from a Bank of China account around the time he was making major contributions.

Finally there was Pauline Kanchanalak, a legal resident of the United States whose $253,000 in donations to the DNC were returned after she said they came from her Thai mother-in-law. In June 1996, she attended a White House coffee and brought along three senior officials of a huge Sino-Thai conglomerate and two executives of the U.S.-Thailand Business Council. The day after the coffee, Thompson said, Kanchanalak contributed $85,000 to the DNC and provided another $50,000 gift five days later.

Staff writer Lena H. Sun contributed to this report.

© Copyright 1997 The Washington Post Company

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