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Firm Gave to DNC While Losing MoneyBy Lena H. Sun
Washington Post Staff Writer
Wednesday, July 16, 1997; Page A06
The California real estate company described in Senate testimony yesterday as having been illegally reimbursed from foreign funds for a $50,000 contribution made to the Democratic Party in 1992 was losing hundreds of thousands of dollars at the time it gave the money and had as its sole asset a vacant piece of land that includes an empty parking lot, according to documents and testimony.
The documents, released yesterday during the second week of hearings into campaign fund-raising abuses, portray Hip Hing Holdings Ltd. as a kind of all-purpose holding company that John Huang, a former executive of the Indonesia-based Lippo conglomerate, used to pay a variety of expenses. Among other things, Hip Hing paid $1,400 for flowers and contributions to the March of Dimes and the Boy Scouts of America.
The information from the documents was supplemented by testimony yesterday from a former Hip Hing bookkeeper, Juliana Utomo, who said Huang regularly requested "funds for capital injection" from Lippo headquarters in Jakarta. Those regular wire transfers kept Hip Hing afloat, she said.
Huang, a former top fund-raiser for the Democratic National Committee, is the preeminent figure in the campaign finance controversy. He formerly headed Lippo's U.S. operations and was also in charge of running Hip Hing Holdings.
Hip Hing's offices are in the same building as LippoBank and, at one point, were on the same floor as those of LippoBank executives. The real estate holding company owns an empty parking lot in Los Angeles valued at several million dollars, but it lost nearly $1 million in 1992 and 1993, when it gave a total of $67,500 to the DNC.
Huang directed Hip Hing to write a check for $50,000 of that amount to the DNC in 1992. He subsequently requested that Hip Hing be reimbursed for the contribution by funds wired from Lippo headquarters in Jakarta.
Hip Hing and two other Lippo-affiliated real estate holding companies made 31 other political contributions from 1991 to 1993. Most of the donations have not been publicly identified, but investigators who reviewed them said they went to state and local campaigns, mostly in California.
Republicans on the Senate Governmental Affairs Committee suggested that some of the donations from the three holding companies were suspect because they were operating in the red during some of the years they contributed to the DNC. Democrats disputed that, saying federal election law is not clear on whether income or net profits are the basis for generating political contributions. Except for the $50,000 check that was reimbursed with foreign funds, Democrats said, the remaining contributions were legal because the companies generated enough domestic revenue to cover the donations.
The $50,000 check from Hip Hing was signed by Utomo, but she said yesterday she was never told why the company was making the donation. It was standard procedure for Huang or another Lippo executive, Agus Setiawan, who has since returned to Indonesia, to ask her to sign checks for political contributions, Utomo said.
In addition to giving Huang more than $700,000 in severance pay and bonuses when he left Lippo, Hip Hing paid nearly $23,000 in consulting fees in 1994 to Maeley Tom, a longtime Democratic activist and friend of Huang's. Utomo said she did not know what consulting Tom did but said Tom reported directly to a Lippo executive in Jakarta.
According to a document that may be released during testimony today, Tom wrote the White House in early 1993 and urged the Clinton administration to hire Huang.
Huang, who was executive vice president of LippoBank at the time and Lippo's top U.S. executive, "is the political power that advises the Riady Family on issues and where to make contributions," Tom wrote. "They invested heavily in the Clinton campaign. John is the Riady Family's top priority for placement because he is like one of their own."
Staff researcher Jeff Glasser contributed to this report.
© Copyright 1997 The Washington Post Company