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Unfolding Story Swelling Like a Sponge

By Anne Farris
Special to The Washington Post
Sunday, April 6, 1997; Page A16

The story of the Democratic Party's seemingly bottomless fund-raising troubles emerged innocently enough with a September article in the Los Angeles Times about a questionable donation to President Clinton's reelection effort. Since then – through a series of White House, congressional and news media disclosures – the story has swelled steadily, with almost weekly revelations of questionable campaign donations, repeated calls for the appointment of an independent counsel and allegations that the Chinese government attempted to funnel nearly $2 million to U.S. political campaigns. Here are key elements of the campaign finance controversy:

The China Connection
In early October, national newspapers first mentioned a White House connection with Mochtar and James Riady, who head the $12 billion Indonesia-based Lippo conglomerate, and John Huang, once the top Lippo executive in the United States. The Lippo-Clinton connection began to emerge as a campaign issue following reports that company associates and Riady family members contributed nearly $1 million to the Democratic Party, some of which appeared to have come from foreign sources in violation of U.S. election laws.

At the center of the controversy was Huang. He had raised campaign money for Bill Clinton in 1992 and was appointed to a midlevel position at the Commerce Department after the election, then moved on last year to a fund-raising job at the Democratic National Committee. As the DNC's point-man for soliciting campaign funds from the Asian American community, Huang raised some $3 million, most of which has now been refunded by the DNC because it came from questionable or illegal sources. Huang has denied acting illegally or improperly in his fund-raising duties.

Clinton's friendship with Huang and the Riadys goes back to his days as governor in Arkansas, where Lippo had banking interests. In Washington, Huang and the Riadys visited the Clintons and White House staff on numerous occasions. Huang and James Riady mentioned to Clinton the need for improved U.S. relations with China.

In February, the Washington Post reported that a special Justice Department task force examining fund-raising activities during last year's campaigns is investigating whether the Chinese government succeeded in directing foreign contributions to the Democratic Party. Last year, the FBI warned six members of Congress that they had been targeted by China to receive illegal campaign contributions funneled through foreign companies. Senior Chinese government officials have categorically denied interfering in U.S. elections.

The Money Trail
Campaign finance laws forbid donations from foreign citizens or businesses unless the donors reside in the United States or the money comes from an American subsidiary. But last year, the DNC had big contributors not only with ties to Indonesia but also to Taiwan, Korea, Vietnam and China.

Among the first questionable DNC donors were Arief and Soraya Wiriadinata, an Indonesian couple living in Virginia, who gave $452,000 to the party through Huang. Their money was returned when it was discovered that they had neglected to pay income taxes in the United States. The DNC had to give back a $325,000 donation from Yogesh Gandhi, a California businessman and distant relative of Mohandas K. Gandhi, because he was unable to prove the money was his.

Other questionable donors included Yah Lin Trie, known as Charlie Trie, a former Little Rock restaurateur who had known Clinton in Arkansas and had business dealings in China. Clinton's legal defense fund refused to accept a $639,000 donation from Trie because some of the money was linked to a controversial Asian religious sect. Trie visited the White House 23 times and arranged for a Chinese arms dealer to attend a White House coffee with Clinton.

Johnny Chung, a Taiwanese-born businessman from California, proved a further embarrassment for the White House when he handed a $50,000 check to Hillary Rodham Clinton's chief of staff, Margaret A. Williams, during one of his 50 White House visits. Chung, who contributed $400,000 to the party, was described in a National Security Council memo to the White House as a "hustler."

Pauline Kanchanalak, a Thai businesswoman and major DNC donor, was the cause of still more controversy. She brought three top officials of a Sino-Thai business conglomerate to a White House coffee with Clinton the same day she contributed $85,000 to the DNC. The DNC eventually returned $253,000 in contributions to Kanchanalak after she said the money was actually given by her mother-in-law.

Another contributor was Roger Tamraz, an Egyptian-American oil financier wanted in Lebanon on embezzlement charges. He contributed $177,000 to Democrats in 1995 and 1996. Despite objections by a National Security Council staff person, he received several White House invitations and attended a coffee with Clinton.

The CIA's inspector general is investigating whether Donald L. Fowler, then the DNC chairman, improperly contacted agency officials to obtain a favorable report on Tamraz so that he could gain access to the White House. Fowler has denied contacting the intelligence agency.

White House Perks
Since 1995, the Clintons have hosted 103 coffees for donors and supporters, some who gave thousands of dollars each near the time of their attendance. During Clinton's first term, 938 guests spent the night at the White House, sometimes in the Lincoln Bedroom. Many of the guests were personal friends of the Clintons, but others were big contributors who donated $10 million to the Democratic Party.

In the fall of 1995, Clinton and his top campaign advisers began regular talks on how to raise unprecedented amounts of DNC money. Since then, newly released White House records show, Clinton and Vice President Gore were kept abreast of weekly DNC fund-raising meetings, and even suggested new strategies for raising funds. Gore also made fund-raising calls from his White House office, a practice he has since vowed to discontinue.

Staff researcher Alice Crites contributed to this report.

© Copyright 1997 The Washington Post Company

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