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Senators Hear Tale of Offer to DNC (Sept. 20)

Reno Opens Probe of Donor's Charge of Payoff for O'Leary Meeting

By Roberto Suro
Washington Post Staff Writer
Saturday, September 20, 1997; Page A09
The Washington Post

Taking a step toward the appointment of an independent counsel, Attorney General Janet Reno ordered a preliminary investigation yesterday into allegations that a prominent Democratic donor who worked on behalf of Chinese business interests was asked for a payoff in exchange for a meeting with then-Energy Secretary Hazel R. O'Leary.

Reno's decision marked the first time that the Justice Department has opened such an investigation involving any of the major figures in the widespread allegations of fund-raising abuses by the 1996 Clinton-Gore reelection campaign.

The donor, Johnny Chung, claimed in an Aug. 19 interview with NBC News that he made a $25,000 donation to O'Leary's favorite charity, Africare, at the behest of a lobbyist and an Energy Department official who were working with O'Leary and who offered to set up a meeting between O'Leary, Chung and a delegation of Chinese oil men.

O'Leary acknowledges that the meeting occurred. Chung has brandished a canceled check before television cameras to show that the contribution was made. But, O'Leary denies that she or anyone authorized to act for her solicited money from Chung in return for the meeting.

Reno opened a 30-day review of the allegations raised by Chung the day after his interview was broadcast. Under the strict procedures laid out in the Independent Counsel Act, Reno notified a special three-member panel of federal appellate judges yesterday that "due to the unavailability of witnesses and documents" the review was unable to determine whether Chung's charges are credible.

Under the statute Reno had no choice but to open a preliminary investigation of the allegations unless she could determine they were groundless. Reno now has 90 days to report back to the judges. Unless she can show that there are no reasonable grounds to investigate further, Reno will have to seek the appointment of an independent counsel. The law gives her the option of a single 60-day extension on this deadline.

The law further restricts Reno by prohibiting her from considering O'Leary's intent during the preliminary investigation. In other words, Reno cannot consider whether or not O'Leary intended for the meeting with Chinese businessmen to be a reward for Chung's contribution to Africare.

O'Leary said in a statement, "I respect the [Justice] Department's decision and I am continuing to cooperate extensively with its lawyers. . . . I look forward to a complete vindication in the near future."

Although the preliminary investigation underway is strictly limited to Chung's relationship with O'Leary, he is a key figure in the broader campaign finance scandal. Chung has boasted to reporters that he considered the White House "like a subway: You have to put in coins to open the gates." House and Senate committees are investigating alleged links between Chung's 49 visits to the Clinton White House and controversial contributions he made to the Democratic National Committee.

Chung's attorney, Brian Sun of Santa Monica, Calif., said Chung is cooperating with the Justice Department although he acknowledged that Chung has not spoken to investigators so far. "He's cooperating out of civic responsibility," Sun said, but declined to give any further details about the extent of Chung's cooperation.

Special correspondent Ann Farris contributed to this report.

© Copyright 1997 The Washington Post Company

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