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Probe Fails to Link Huang, China Plan

By Lena H. Sun
Washington Post Staff Writer
Sunday, July 20, 1997; Page A06

When Sen. Fred D. Thompson (R-Tenn.) gaveled open hearings earlier this month commencing his high-profile investigation into campaign fund-raising abuses, he described a plan by the Chinese government to channel illegal money into U.S. elections. In the Republican scenario, the man at the center of the alleged plot was Democratic fund-raiser John Huang.

After two weeks of contentious hearings, Thompson's Governmental Affairs Committee has produced evidence that Huang illegally funneled foreign funds into U.S. elections, as far back as 1992. But the testimony and documents produced to date fail to show that Huang's questionable fund-raising activities in last year's presidential campaign were part of a Chinese plan or that Huang was, in effect, a spy for China.

The investigation has been hobbled by procedural and logistical problems. Besides the panel's inability to compel testimony from key figures such as Huang, it does not now have complete access to highly sensitive intelligence information about the alleged Chinese plan to influence U.S. elections. That evidence, obtained through electronic intercepts, is being reviewed by a Justice Department task force that is conducting a criminal investigation into last year's fund-raising activities.

Despite those problems, Thompson has promised that information the committee has developed will show that Beijing did attempt to influence American political campaigns. Democrats, meanwhile, have complained that GOP members of his panel are using innuendo and circumstantial evidence to effectively try Huang in absentia.

Thompson has warned against drawing conclusions about the committee's investigation too early in the process, arguing that his investigation will continue through the end of the year. This week, the panel will shift its focus to allegations that the Republican Party improperly sought foreign money in last year's campaigns. After an August break, the inquiry will resume in September, when the panel will renew its focus on Huang's fund-raising activities.

The mild-mannered Huang once served as the top U.S. executive for the Lippo Group, a multibillion-dollar Indonesian conglomerate with close ties to China and longtime political ties to President Clinton. In mid-1994, Huang became a midlevel political appointee at the Commerce Department. More than a year later, he joined the Democratic National Committee as its chief fund-raiser in the Asian American community. Of the $3.4 million raised by the Glendale, Calif., banker for Clinton's reelection effort last year, nearly half has been returned because of suspicions that the funds came from illegal foreign sources or other suspect parties.

Huang "clearly had access to information that would have been, theoretically, of interest to Lippo," Thompson said Wednesday. "And to say that because we haven't proved he's a spy yet is totally missing the mark and totally an attempt to divert our attention off of serious procedural matters, substantive matters – trying to find out what happened in this last presidential campaign."

Investigators have focused on Huang's activities while at the Commerce Department, where he had access to classified information. Republicans have sought to find out how Huang got hired at the department, how he received his top-secret security clearance, what classified information he saw while there, and whether he passed sensitive information to Lippo or the wealthy Riady family that controlled the conglomerate or to some other foreign entity. Most suspicious, investigators said, were Huang's hundreds of telephone and other contacts with his former employer. Republicans say the extensive contacts suggest he was still operating on Lippo's behalf.

There has been conflicting testimony about how Huang got his federal job. One of Huang's former Commerce Department superiors, Jeffrey E. Garten, who also served in the Nixon, Ford and Carter administrations, said Huang lacked experience and was "totally unqualified" to handle the kind of sophisticated foreign trade policy issues the late Commerce Secretary Ronald H. Brown was dealing with.

Another of the committee's witnesses challenged that conclusion. Gary A. Christopherson, a former White House personnel office official, said Huang's business background in Asia, his fluency in five Chinese dialects, and his diversity qualifications made him "a very natural fit" for the position of deputy assistant secretary for East Asia and the Pacific.

Huang was given an "interim" security clearance before there was a full investigation of his background, but a Commerce Department security official said there was nothing unusual about that or about the security checks Huang underwent. Paul A. Buskirk acknowledged, however, that the lack of an overseas background check on Huang was in hindsight "a rock that was not turned over."

At the department, Huang was quickly caught up in bureaucratic squabbling over his portfolio. Sen. Joseph I. Lieberman (D-Conn) likened the turf wars to an episode of "The Keystone Kops."

Huang was a deputy to Charles Meissner, who, in turn, reported to Garten. Garten did not want Huang involved in policy decisions and ordered that he perform only administrative tasks for Meissner. Meissner disagreed. He later won Garten's approval for Huang to handle some policy work dealing with Taiwan.

Garten also ordered Huang to be "walled off" from any dealings on China because of his lack of policy experience and because Huang's work on Taiwan matters might anger archrival Beijing.

But nobody informed the department's intelligence liaison office, which arranged briefings on a range of issues for about 100 select Commerce officials. The subjects generally involved political, economic and trade issues overseas. The officers who provided the briefings included department employees as well as agents detailed from intelligence agencies such as the CIA. Huang, who had a top-secret clearance, was shown hundreds of secret reports on Asia in the course of 37 briefings he received from October 1994 to November 1995.

John H. Dickerson, the CIA officer who was assigned to brief Huang and 10 other Commerce Department executives, testified that the briefings were initiated by Meissner, not by Huang. Meissner, who died in last year's plane crash in Croatia with Commerce Secretary Brown, told Dickerson that Huang was his "Asian specialist."

In Huang's case, the kind of information he would have access to included business opportunities in Vietnam, food shortages in North Korea and the investment climate in Hong Kong.

Huang was briefed less frequently than some of his counterparts, Dickerson said. And unlike Dickerson's other "customers," Huang never requested a briefing.

Dickerson and another CIA official, William McNair, confirmed that some of the information shown to Huang was so sensitive that intelligence sources could have been killed or compromised as a result of its disclosure. But the CIA officials said they had no evidence that any intelligence sources were killed or compromised during the time Huang was given briefings.

Dickerson said he usually brought 10 to 15 raw intelligence reports for Huang to read at each briefing. After the briefings, Dickerson testified, he returned the documents to his office and destroyed them.

Huang was permitted to keep 12 completed intelligence reports, less sensitive than raw reports. But it was common for officials to hold on to such reports for reference, Dickerson said.

The finished reports were kept in one of several safes located in the suite of offices Huang shared with Meissner, his boss. Huang had possession of the documents for 14 of his 17 months at the Commerce Department, and officials there said he could have left the building with them, before returning them to the safe.

It was not until Huang's name surfaced in the campaign finance controversy in late November 1996 – 10 months after he had left the government and begun working at the DNC – that Commerce Department officials looked in the office safes for classified materials. A department official said the search showed that "everything was accounted for."

Republican committee members suggested that Huang may have passed on some of the classified information he reviewed to Lippo during regular visits to a private office across the street from the Commerce Department, where he received telephone calls, letters and faxes, and had access to a copy machine. The office belonged to Stephens Inc., an investment banking firm that owned a controlling interest with the Riady family in a Little Rock bank in the late 1970s.

Huang's attorney, Ty Cobb, has said Huang was being scrupulous to make sure he did not use government facilities to work on personal matters. For example, the Committee of 100, a Chinese American civic group, had as its contact for Huang the Stephens fax number and sent him routine notices about once a month, according to Henry Tang, the group's chairman.

The CIA officials who testified before the Thompson committee said they were not aware of Huang's extensive work for Lippo, his frequent telephone contacts with Lippo officials, or visits he made to the Chinese Embassy. But asked whether knowledge of those facts would have raised questions about leaving secret intelligence reports with Huang, Robert Gallagher, head of Commerce's office of intelligence liaison, replied, "Probably not."

Huang had a clearance, "and we operate on the fact that he has a clearance," Gallagher said. "We would assume that the security people, whoever they are, had done their jobs. This is an American citizen."

Staff writers John Mintz and Susan Schmidt contributed to this report.

© Copyright 1997 The Washington Post Company

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