By Roberto Suro
Chung, as part of a plea bargain deal with the department, has claimed that then-DNC finance director Richard Sullivan personally asked him for a $125,000 donation in April 1995, the sources said. Sullivan took the money despite having previously voiced suspicions that Chung was acting as a conduit for illegal contributions from Chinese business executives, they added.
Sullivan's lawyer said he denies Chung's account of their dealings.
Chung's accusations come as the Justice Department's 19-month investigation of 1996 campaign fund-raising enters what law enforcement sources characterized as a new phase. Having brought charges this spring against four contributors who allegedly funneled illegal foreign funds to Democrats, the task force handling the campaign probe is now determining whether there is sufficient evidence to charge any of the DNC officials or Clinton-Gore campaign operatives who accepted the money.
"The task force is moving to another stage that is going to involve people in responsible positions in campaign fund-raising and whether those people should be charged," an official close to the investigation said.
But Chung's allegations have not persuaded investigators to designate Sullivan or any other DNC official as a target of the probe, a formal step that can be a prelude to an indictment, and the task force still hopes that other witnesses will agree to cooperate, including possibly Sullivan himself, according to sources close to the inquiry.
Justice Department officials emphasized that there is a considerable distance between a witness's allegation that an individual should have known an action was wrong and establishing criminal intent to support an indictment.
Chung, a Los Angeles businessman, became the task force's first major cooperating witness in March as part of an agreement in which he pleaded guilty to orchestrating an illegal "straw donor" scheme to give money to the 1996 Clinton-Gore reelection campaign. Chung provided the task force with its first explicit account of foreign funds coming into the 1996 campaign, telling investigators that a Chinese aerospace executive gave him $300,000 for political contributions.
"Johnny Chung is fully cooperating with the entire probe and that includes providing details of his interaction with DNC officials, including Richard Sullivan, his primary point of contact there," said Brian Sun, Chung's attorney.
Overall, the DNC took $366,000 from Chung in 1995 and 1996. All of that money was eventually returned after the election when the committee determined it had "insufficient information" about its origins.
Chung, who visited the White House at least 49 times, is perhaps best known for an incident that was the subject of extensive congressional testimony in which he offered to make a $50,000 contribution to the DNC if he could bring five Chinese businessmen to a March 11, 1995, presidential radio address. Sullivan has testified that he rejected the offer. Instead, Chung sought help from aides to Hillary Rodham Clinton in gaining access to the radio address and the DNC eventually accepted the money.
In congressional testimony last summer, Sullivan said he had grown suspicious because "Johnny had a very nervous kind of an outward, aggressive personality," and that he eventually concluded that the money Chung was offering to contribute was not his own but came from the Chinese business executives.
Sullivan's attorney, Bob Bauer, said, "Richard's testimony, which is fully corroborated, is clear that he was concerned with the way Chung operated and on that basis he would not accept Chung's offer of money as the price of admission to a presidential radio address or for any number of other initiatives that Chung was interested in."
According to Chung, however, Sullivan contacted Chung less than a month later and solicited $125,000 from him for an April 8, 1995, fund-raiser at the home of director Steven Spielberg. Sullivan has denied to investigators that he asked Chung for the donation, although he has acknowledged that he was involved in accepting the funds at the DNC, according to sources familiar with the inquiry.
Chung has also told Justice Department investigators, the sources said, that DNC and Clinton-Gore officials were aware that he was bringing foreign guests to a September 1995 Los Angeles fund-raising dinner when he arrived with an entourage of 20 people.
At the event, campaign officials rejected Chung's $20,000 check because contributions to the dinner were subject to a legal limit of $1,000 per person. The following day Chung had 20 friends and employees write individual $1,000 checks, which were accepted by the campaign. Chung later reimbursed the check-writers in what he acknowledged in his guilty plea was an illegal scheme to evade federal contribution limits.
"Chung claims it was transparent on that occasion and virtually every other that he was producing contributions on behalf of foreign nationals who could not legally give to political campaigns," said a source familiar with Chung's statements to investigators.
With the task force's chief prosecutor, Chuck LaBella, preparing to leave his post this summer, Justice Department officials expect that decisions will be made in coming weeks on whether to press charges against DNC and Clinton-Gore officials who accepted illegal foreign funds.
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