By Roberto Suro
As part of a plea agreement with federal prosecutors, Chung was charged yesterday in Los Angeles with funneling illegal contributions to the 1996 Clinton-Gore campaign by asking friends and employees of his office technology firm to make donations for which they were later reimbursed. He also is charged with engaging in a similar "straw donor" scheme to assist the 1996 reelection bid of Sen. John F. Kerry (D-Mass.).
The plea agreement is under seal until Monday, when Chung will be arraigned in federal court in Los Angeles.
The Justice Department also announced yesterday that FBI agents had arrested another controversial fund-raiser, Yogesh K. Gandhi, who allegedly made an illegal $325,000 contribution in foreign funds to the Democratic National Committee in 1996 so he could attend a campaign dinner. Gandhi took the opportunity at the dinner to present President Clinton with a bust of his distant relative, Mohandas Gandhi, the hero of Indian independence.
Yogesh Gandhi was apprehended on fraud charges not related to the campaign Wednesday night near San Francisco. Justice Department officials claimed that he was planning to leave the country.
Chung, 43, is the first major figure in the campaign finance scandal to cooperate with the investigation. He could provide information on his contacts with major figures in the DNC and its procedures for verifying the sources of campaign contributions. Two other Democratic fund-raisers -- Maria Hsia and Yah Lin "Charlie" Trie -- have been indicted in recent weeks on charges related to their campaign activities. Both have pleaded not guilty.
"Mr. Chung has reached an agreement with the government. He wishes to put the matter behind him as quickly as possible so that he and his family can get on with their lives," said attorney Brian Sun.
From 1994 to 1996, Chung made 12 personal or corporate donations to the DNC totaling $366,000. The DNC returned all of the money last year, stating that it had "insufficient information" about its origins. Richard Sullivan, the DNC's finance director during the 1996 campaign, said in congressional testimony last year that he had suspicions as early as 1995 that Chung was illegally handing over money from Chinese businessmen.
In addition, Chung is expected to be questioned about his claims that campaign cash bought him access to the inner sanctums of the Clinton administration. Chung said in a July 1997 interview with the Los Angeles Times, "I see the White House is like a subway: You have to put in coins to open gates."
Chung visited the White House at least 49 times during the two years he was an active campaign contributor, and on several occasions he also gained access for a brewery owner, a chamber of commerce official and other businessmen from the People's Republic of China.
According to a report on the campaign finance scandal released yesterday by the Senate Governmental Affairs Committee, Chung's DNC contributions helped him obtain access to the White House "that he used not only to further his interests with foreign business clients, but also to sit in the vestibule of the First Lady's office and stare at photographs of her."
A brochure produced by Chung to promote his primary business, Automated Intelligent Systems Inc., which specialized in the computer distribution of fax messages, features seven pictures of him with President Clinton, six photographs with first lady Hillary Rodham Clinton and more than a dozen other pictures with a variety of political figures, both Democrats and Republicans.
The charges against Chung were brought yesterday in the form of a criminal information, a legal procedure typically used in place of an indictment with individuals who have been allowed to plead guilty to reduced charges in exchange for their cooperation with an investigation.
The information filed in U.S. District Court in Los Angeles refers to a Clinton-Gore fund-raiser held on Sept. 21, 1995, at which he appeared with approximately 20 guests who each made the maximum $1,000 legal contribution allowed to an individual federal campaign. Chung then allegedly reimbursed them from his private bank account.
Chung allegedly used a similar scheme to funnel $8,000 to the Kerry campaign at a 1996 fund-raiser. Jim Jones, a spokesman for Kerry, said the senator's campaign returned the money as soon as suspicions were raised about it and had cooperated fully with federal investigators.
Chung was also charged with one count each of tax evasion and bank fraud not explicitly linked to his political activities.
The information makes no mention of a $50,000 donation to the DNC in March 1995 delivered by Chung to the first lady's former chief of staff, Margaret A. Williams, at a time when Chung was seeking to gain access to the White House for a group of Chinese business executives. Despite warnings from a National Security Council aide that Chung appeared to be a "hustler" and misgivings expressed by Clinton himself, Chung and his clients were granted access to a presidential radio address and obtained photographs of themselves with Clinton.
Gandhi, the fund-raiser arrested Wednesday, has been a relatively minor character in the campaign finance saga, and his sudden prominence is somewhat accidental.
He has been a target of an investigation by the House Committee on Government Reform and Oversight since last fall, and on Tuesday night the committee's chief investigator, David Bossie, received an unexpected call from a police officer from Hayward, Calif. The police officer explained that he was investigating Gandhi's alleged involvement in a fraudulent business and had learned that Gandhi was planning to return to India by the end of the week and had purchased airline tickets, according to congressional sources.
By coincidence, FBI Director Louis J. Freeh was giving committee Chairman Dan Burton (R-Ind.) a briefing the next day on allegations of Chinese influence in the campaign. Burton, according to congressional and federal sources, passed along the information about Gandhi and Freeh set the wheels in motion for his arrest.
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