Senate Panel Is Briefed on China Probe FigureBy Brian Duffy and Bob Woodward
Washington Post Staff Writers
Friday, September 12, 1997; Page A01
Attorney General Janet Reno and the directors of the FBI, the CIA and the National Security Agency yesterday told members of a Senate committee investigating campaign fund-raising practices they had credible intelligence information indicating a prominent Los Angeles-based businessman acted on behalf of China to influence U.S. elections with campaign contributions, government officials said.
Reno, FBI Director Louis J. Freeh, CIA Director George J. Tenet and NSA Director Kenneth A. Minihan made the disclosures concerning Ted Sioeng, 51, in a closed afternoon session with members of the Senate Governmental Affairs Committee chaired by Sen. Fred D. Thompson (R-Tenn.).
Their presentation focused in particular on $250,000 contributed to the Democratic National Committee by Sioeng's family and businesses in 1996, and $50,000 contributed in 1995 to a Republican Party-affiliated think tank.
Sioeng, an Indonesian entrepreneur who has extensive Asian and U.S. business holdings, has surfaced in news accounts repeatedly this year concerning investigations of a number of possible conduits of foreign funds into U.S. political campaigns. Investigators said they have intensified their focus on his activities, and developed evidence credible enough that the nation's most senior law enforcement and intelligence officials felt obliged to detail their progress both to the Senate panel investigating campaign finance and, in a separate briefing Wednesday, to the Senate Select Committee on Intelligence.
The specific nature of the evidence related to Sioeng's contributions discussed at the briefings could not be determined yesterday. Officials who attended yesterday's session said there was considerable debate among senators about how definitive the information was.
"The word `agent' was used [by the briefers], but it was downplayed," said a knowledgeable official. "I'm not saying he didn't give money and he didn't have some Chinese connections, but that's still being looked at. It's being worked very hard."
Officials familiar with the information given to the Thompson panel yesterday said law enforcement and intelligence agency officials had no information showing Sioeng, his family or companies received any benefit from political parties or officials as a result of their donations, although Sioeng attended several events in 1996 at which President Clinton or Vice President Gore was present.
The White House would not comment publicly on the briefings except to repeat that any foreign attempts to influence U.S. elections would be "very serious" and adding that Clinton had not received any information to warrant a change in policy toward China. Speaking on condition they not be identified, administration officials said that White House national security adviser Samuel R. "Sandy" Berger recently received a briefing that roughly tracked the briefings given to the Senate panels about Sioeng.
Sioeng was traveling outside the country yesterday and was unavailable for comment, but a spokesman denied that Sioeng or any member of his family had acted as agents of the Chinese government or in any improper way. "I want to be as unequivocal as possible," said attorney Mark J. MacDougall. "Neither Ted nor his family have ever been political agents for the Chinese government."
The information about Sioeng has been uncovered during the course of a Justice Department special investigation, code-named "Jagged Edge," into political fund-raising activities, government officials said. Late last year, FBI agents assigned to the investigation discovered evidence, including sensitive electronic intercepts, that the Chinese government had embarked on "a plan" in early 1995 to direct illegal political contributions into U.S. election campaigns in an effort to increase Beijing's political influence in Washington.
In opening the campaign finance hearings last July, Thompson said that investigators on the committee's Republican staff had found evidence of a Chinese plan "to subvert our election process." Thus far, the committee hearings have not dealt extensively with the China allegations.
FBI agents and Justice Department prosecutors have been tracking the fund-raising and contribution records of a number of people, but have still not directly connected any specific donation to money supplied by Beijing.
In a two-page statement, MacDougall said Sioeng and his daughter, Jessica Elnitiarta, have been the "victims of numerous false and unsupported claims of wrongdoing associated with political contributions." The statement said the allegations "have been part of a wave of unsubstantiated claims and innuendo directed at Asian Americans who have participated freely in the political process." MacDougall added that neither the Chinese government nor any Chinese official has "directed or funded any political contributions made by Ms. Elnitiarta, Mr. Sioeng, or any business entity they control."
Sioeng is a prominent figure in Southern California's Chinese emigre community. Like many entrepreneurs from Asia, he has long had lucrative business ties with China. According to his lawyer, Sioeng has owned and managed businesses in China and elsewhere in Asia for more than 25 years. Sioeng also has U.S. distribution rights to one of China's most popular brands of cigarettes, known as Red Pagoda Mountain.
Sioeng also is a public advocate for China. He owns a pro-Beijing Chinese-language newspaper in Monterey Park, which carried a front page photo of Sioeng and Chinese President Jiang Zemin during Jiang's visit to New York in 1995. Sioeng also frequently hosts delegations of Chinese visitors, and has close ties to officials of China's representative offices in the United States, according to a business associate.
In recent years, Sioeng has become more active in Los Angeles and Southern California politics, particularly in the Chinese American community. At a controversial Buddhist temple luncheon last year where Democrats raised money for the Clinton-Gore reelection effort, Sioeng sat next to Gore at the head table. He established a civic group, and has contributed to dozens of associations for individuals of Chinese descent. In May 1996, he attended a dinner at the Sheraton Carlton Hotel here at which Clinton was present. In July last year, Sioeng sat beside Clinton at a Los Angeles fund-raising dinner.
One senior official said that investigators were focusing intensively on Sioeng's cigarette business and whether it might have been used as a conduit for Chinese government funds to U.S. political campaigns.
Another official confirmed that investigators were examining, among other things, $250,000 in contributions Sioeng's daughter and Sioeng businesses made to the Democratic National Committee in 1996 and a $50,000 donation given in 1995 to the National Policy Forum, a now-defunct think tank affiliated with the Republican National Committee. Sioeng's daughter is a legal permanent resident of the United States and can legally contribute to political campaigns.
The National Policy Forum returned the money. The DNC has said it is examining the contributions but has received no evidence they were suspect.
MacDougall, the Sioeng family attorney, said in the statement released yesterday that all of the contributions were "lawful and properly documented."
Senior Chinese officials have denied emphatically that they made any efforts to illegally direct money into U.S. political campaigns or otherwise improperly influence elections here.
Despite what they acknowledge is the difficulty of tracing complicated international financial transfers and the possibility the FBI may never fully connect the dots, government officials said that intelligence agencies have developed evidence that the Chinese government planned to raise $3 million to attempt to buy influence with Congress and in the presidential campaigns. Officials said that 60 percent of the money was to come through Hong Kong conduits and 40 percent from overseas Chinese.
In recent months, the Justice Department's Jagged Edge investigation has been supplemented by a related inquiry by the CIA, officials said, adding that the intelligence agency played a critical role in identifying the alleged Chinese operation, bringing details about it "to the U.S. borders." The CIA is not allowed to conduct intelligence in the United States, and so it handed off its information and investigation to the FBI.
The FBI warned six members of Congress about the alleged Chinese operation in the spring of 1996. A team of three FBI special agents warned them that they had been targeted by the Chinese government for political contributions.
The Chinese government first decided to embark on the alleged operation in 1995 after both the Senate and House passed resolutions in support of Taiwanese President Lee Teng-hui's bid to obtain a visa to visit the United States, sources said. Attorney General Reno is reviewing a request from Rep. Henry J. Hyde (R-Ill.), the chairman of the House Judiciary Committee, and 19 committee members that she seek an independent counsel to investigate reports that the Chinese government attempted to buy influence with the Clinton White House.
Separately, Reno announced last week that she was seeking a Justice Department review to determine whether an independent counsel should be appointed to examine fund-raising solicitations by Gore from his White House office.
Staff writers Roberto Suro, Lena H. Sun, John Harris and researcher Jeff Glasser contributed to this report.
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