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Next Phase of Hearings To Probe Barbour's Role

By Dan Morgan and Lena H. Sun
Washington Post Staff Writers
Monday, July 21, 1997; Page A01

Not many people spend four years in a high position in Washington and leave with a halo, but a smooth-talking Mississippian by the name of Haley Barbour pulled off that feat last winter.

When he relinquished the chairmanship of the Republican National Committee and resumed his career as a lobbyist and lawyer, Barbour was widely hailed for restoring the GOP to financial health and helping to mastermind its stunning comeback after an electoral humiliation in 1992.

This week, in a hearing room on Capitol Hill, Senate Democrats hope to knock off Barbour's shiny halo by showing that he financed the Republican congressional victories in 1994 and 1996 in part with illegally gotten foreign cash.

Barbour has denied any wrongdoing, and a Republican senator who asked not to be named said the former RNC leader will present a vigorous defense.

The hearings follow two weeks of GOP efforts to highlight Democratic campaign fund-raising abuses. Because key figures such as former Democratic fund-raiser John Huang have refused to testify without a grant of immunity, Republicans have had to rely mainly on lesser-known witnesses and somewhat ambiguous testimony. The Democratic case, by contrast, will feature a prominent, colorful key witness – Barbour – and a straightforward theme that was summed up by the Governmental Affairs Committee's ranking Democrat, John Glenn (Ohio), on the first day of hearings:

"As far as I know, [this] is the only [case] where the head of a national political party knowingly and successfully solicited foreign money, infused it into the election process, and intentionally tried to cover it up."

Glenn and his team of Senate investigators will attempt to document the charge by showing that Barbour solicited hundreds of thousands of dollars from Hong Kong businessman Ambrous Tung Young to subsidize the National Policy Forum, a GOP think tank founded by Barbour and subsidized by the RNC.

Shortly before the 1994 election, Young put up certificates of deposit to guarantee a commercial bank loan to the NPF, enabling the NPF to pay back $1.6 million to the RNC on Oct. 20, 1994, several weeks before the 1994 election.

Over the next several weeks, the RNC shifted a comparable amount of money to Republican Party organizations in 15 states where Republican candidates were believed to have a chance to defeat Democrats in races for governor, the Senate or the House.

On the same day that the NPF money was shifted to the RNC, for example, the RNC transferred $25,000 to the Idaho Republican State Central Committee. The committee got another $10,000 from the RNC on Oct. 28, and another $10,000 on Nov. 2.

Rep. Larry LaRocco, the Democratic incumbent in Idaho's 1st District, said he believes the RNC funds played a role in his defeat. His seat was one of those targeted by the GOP, which was running conservative Republican Helen Chenoweth against him.

Under Idaho's "motor voter" rules, some 32,000 voters registered on the day of the election, including 20,000 in the 1st District, due in part to a well-financed Republican get-out-the-vote campaign. LaRocco said his analysis indicated that most voted for Chenoweth, who won easily.

Republicans have a defense ready. They note that loan guarantees to the NPF came through a U.S. company that they believed – mistakenly, as it turned out – was using U.S. funds. And they contend that the National Policy Forum, which held conferences and published a book and a magazine, was separate from the RNC and, unlike political parties, legally could accept foreign contributions.

But Republican documents provide ammunition for the Democratic charge that the RNC and the NPF, both of which Barbour chaired, were virtually one and the same.

One document describes the NPF as a "subsidiary" of the RNC, in which members of Team 100, the GOP's elite club for big contributors, would be "actively involved." More than a year after the NPF was founded, NPF president Michael E. Baroody wrote Barbour that it was difficult to "maintain the fiction of separation" from the RNC.

Barbour has insisted that he never raised money abroad from foreign sources for the Republican Party. According to his handwritten notes, he was aware in 1994 that the Taiwan-raised Young, who had once been a U.S. citizen, had given up his American citizenship when he moved to Hong Kong. But the loan guarantees came through Young's Coral Gables, Fla., company whose incorporation papers list as officers two well-known Republicans, former RNC chairman Richard Richards and President Gerald R. Ford's former counsel, Benton Becker.

In August 1994, Barbour wrote Becker assuring him that if Young's Florida company guaranteed a bank loan to the NPF, "I am committed to making sure NPF raises sufficient funds to cover its operations and pay off any and all its debts."

A year later, however, Barbour had second thoughts. He began pressing Young to allow the bank to use the certificates of deposit to cover NPF obligations coming due, but Young refused. Finally, in 1996, the NPF defaulted on its payments, and the bank unilaterally exercised its right to tap the certificates.

As they attempt to unravel what happened between the NPF and Young, Democrats probably will delve into Barbour's foreign travels in 1995 and 1996.

In August 1995, while on a trip to Seoul for a meeting of the International Democratic Union, a group representing right-of-center political parties, Barbour, who served as vice chairman of the organization, stopped off in Hong Kong and was a guest on Young's yacht, Ambrousia.

Young and Richards were in tow when Barbour visited Beijing in February 1996. A Sept. 17, 1996, letter from Richards suggests that Barbour offered Young help in getting business in return for his agreeing to let the bank use the certificates of deposit.

"Forgiveness [of Young's loan] was always contingent upon Mr. Young getting something in return for this kind of generous gift," Richards wrote Barbour. Barbour has strongly denied through a spokesman that he made any commitments to Young.

Barbour, who declined to be interviewed for this story, has denied that he raised any foreign money abroad for the GOP, but he does not deny that he may have tried to collect legitimate funds.

On the 1995 visit to Hong Kong he attended a "private fund-raising event" with officials of Republicans Abroad chapters from various countries, according to a newsletter published by the organization, which includes GOP members who live overseas.

He attended a similar event in Japan several days later and met with top Japanese business leaders and Foreign Minister Yohei Kono, in Kono's capacity as president of the Liberal Democratic Party.

In meetings with LDP officials, Barbour talked about the difficulty of raising enough money to challenge an incumbent president from the opposing party, according to an LDP spokesman. But he said Barbour never asked LDP lawmakers for money and none was given.

Barbour was accompanied in his travels by GOP fund-raiser and oil investor Jack Copeland. "There was no solicitation or hint of solicitation," Copeland said.

© Copyright 1997 The Washington Post Company

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