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RNC Ex-Chief Disputes Barbour on Loan Guarantee

By Dan Morgan and Anne Farris
Washington Post Staff Writers
Saturday, July 26, 1997; Page A08

A GOP businessman yesterday offered sharply divergent testimony from that of former Republican National Committee chairman Haley Barbour on key points involving a wealthy Hong Kong magnate's 1994 loan guarantee to a conservative policy group closely tied to the RNC.

The testimony by Richard Richards, who chaired the RNC in 1981 and 1982, came less than a day after Barbour, in a combative performance, rebutted Democratic assertions that the transaction involved questionable fund-raising practices.

But Richards's statements yesterday gave Democrats the last word as the Senate Governmental Affairs Committee investigating campaign finance abuses wound up three days of hearings focused solely on Republican fund-raising. Afterward, Sen. John Glenn (Ohio), the panel's ranking Democrat, noted "basic inconsistencies" in the Richards and Barbour testimony and Sen. Joseph I. Lieberman (D-Conn.) called attention to several "curious" contradictions in the testimony of Barbour and other witnesses.

On Thursday, Barbour scoffed at Democratic assertions that Hong Kong businessman Ambrous Tung Young had indirectly aided Republican election chances in 1994 by putting up $2.1 million in collateral for a loan to the National Policy Forum (NPF), which was set up by Barbour in 1993 and subsidized by the RNC.

The transaction enabled the forum to repay $1.6 million to the RNC, and Democrats contend the money was then routed to states where Republicans were seeking upset victories in 1994.

Barbour sharply denied this, asserting that not a "red cent" of the money repaid by the NPF had gone into the campaign, and insisted that "the RNC did not need any money from the NPF to do what it did in the 1994 campaign."

But Richards, a longtime business associate of Young's who was then a senior officer of Young's Florida-based U.S. company, related a conversation with Barbour in the summer of 1994 in which the RNC chairman made the first pitch for help. Barbour said that a loan from Young would result in "money that we can use in the [1994] campaign," Richards recalled.

Richards also stood by a statement included in a Sept. 17, 1996, letter he wrote to Barbour reminding the RNC chairman of that phone conversation. The letter quoted Barbour as saying that the money was needed to exploit an opportunity "to pick up as many as 60 seats in the House of Representatives that we did not anticipate months back . . . therefore we need to borrow money for the forum so we can free up hard dollars."

Asked by minority counsel Alan I. Baron whether that was an accurate recollection of the Barbour phone call, Richards replied: "That is as close to verbatim as I can recall."

But Richards conceded under questioning by Sen. Robert F. Bennett (R-Utah) that he had no knowledge as to the actual use of the $1.6 million that the NPF repaid the RNC after Young had put up collateral for a bank loan.

On another disputed matter, Richards contended that he had advised Barbour in 1994 that the collateral would be transferred from Hong Kong, and in that sense did not constitute U.S. funds.

Barbour testified on Thursday that he did not recall knowing until this year that the money originated in Hong Kong. When pressed about a sworn statement given to the committee by Young, in which Young recalled telling Barbour about the origin of the funds while the RNC chief was a guest on his yacht in Hong Kong in 1995, Barbour said: "Either I didn't understand what he was talking about or I just didn't hear him."

Several other Republican fund-raisers have also testified that they told Barbour that the funds were originating in Hong Kong as early as 1994. Barbour has taken the position that the source was irrelevant because the nonprofit NPF was authorized to accept foreign cash. But Democrats argue that the organization was nothing more than an arm of the RNC that should have observed the same prohibition against acceptance of foreign money as a political organization.

The Internal Revenue Service denied the NPF's request for tax-exempt status, saying it was a "partisan" organization.

Earlier in the day, the committee heard testimony about a money-laundering scheme that funneled $120,000 in illegal corporate contributions to the 1996 presidential campaign of Republican candidate Robert J. Dole.

Donald K. Stern, U.S. attorney for Massachusetts, outlined a scheme in which Boston businessman Simon Fireman used his sporting goods company to funnel foreign money to his employees who then contributed to the Dole campaign. The businessman and his assistant pleaded guilty last year to breaking federal campaign laws. Fireman was fined $1 million and sentenced to home detention, and his company was fined $5 million.

© Copyright 1997 The Washington Post Company

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