Lippo political contributions to Democrats raise questions Indonesian family and businesses linked to generous donations; CAMPAIGN 1996


WASHINGTON -- The good news for Bob Dole going into tonight's final debate is the fresh whiff of scandal arising from efforts by campaign contributors with foreign ties to promote President Clinton's re-election.

The bad news is that it could take all 90 minutes for the Republican presidential challenger to explain this complex tale, with a cast of characters that includes Indonesian investors, a Democratic fund-raiser and even a Whitewater figure.

But Lippo, as the affair is becoming known, is already raising questions about the extent to which overseas firms seek to influence American policy. And Clinton may need more than tonight's encounter to answer them.

The name stands for a group of companies controlled by the Riady family of Indonesia, with holdings valued at billions of dollars stretching across the Asia-Pacific basin.

Since 1992, people and businesses associated with the firm have given close to $1 million to the Democratic Party, according to the Wall Street Journal. Not clear is what, if anything, they received in return.

"Lippo is not a public charity. The question is, what did they get for their money?" says William Triplett, a Republican expert on Asia who was formerly chief counsel to the Senate Foreign Relations Committee.

Little Rock connection

The tie to Clinton dates from the late 1970s, when James Riady, son of the group's founder, owned part of a bank in Little Rock and became one of Clinton's political supporters.

The two men have met three times at the White House since Clinton became president, most recently in September. Beyond that, however, the New York Times reports that Riady "has become a player in Asian-American relations."

Another key figure is John Huang, a longtime Lippo executive who raised hundreds of thousands of dollars for the 1992 Clinton campaign, according to press reports. He left the firm in July 1994, drawing hundreds of thousands of dollars in bonuses, to take an important mid-level international trade position at the Commerce Department.

In that role, he most likely had access to confidential information about trade, petitions from U.S. businesses, and trade missions by the secretary of Commerce, ac- cording to former officials.

"One who sits in that position, if he's aggressive, would know what he wants to know about U.S. trade policy," said Thomas J. Duesterberg, a former Bush administration Commerce assistant secretary.

A Commerce spokesman described Huang's role at the department as largely administrative and Huang has said he didn't work on anything involving Lippo. The firm did get strong support from the department on one deal, however. Then-Secretary Ronald H. Brown, who later died in a plane crash, strongly promoted the bid by Lippo and a New Orleans company, Entergy, to build jointly a $1 billion power plant in China.

After 18 months at Commerce, Huang became a key Democratic National Committee fund-raiser, focusing on Asian-Americans. A DNC spokeswoman, Amy Weiss Tobe, declined to say how much he had raised but didn't dispute reports that it exceeded several million dollars.

A loophole in the law allows resident aliens, like the Riadys, to contribute to American political parties. So can American subsidiaries of foreign corporations, provided the money donated is earned in the United States.

Fund-raising zeal

In one case, Huang's fund-raising zeal led to problems. After questions were raised by the Los Angeles Times, the DNC returned a $250,000 contribution from Cheong Am America, described as the Los Angeles subsidiary of a South Korean electronics company, because the money had not been earned in the United States.

Huang also collected $425,000 from Arief Wiriadinata, the son-in-law of a Lippo partner. A landscape architect, Wiriadinata lived modestly in a Virginia townhouse before he and his wife returned to Indonesia.

Contributions by Lippo associates to Democratic coffers aren't the only actions that have raised eyebrows here.

Lippo hired Clinton friend Webster Hubbell for an undisclosed retainer after he resigned under a cloud from the Justice Department but before he went to jail for fraud.

Enough mysteries remain for the press to keep pursuing the whole Lippo matter. And with three weeks to go in the presidential campaign, Dole -- as he did yesterday -- and other Republicans can be expected to seize on every new development.

"This whole witch hunt is a desperate move by Republicans," complains DNC spokesman Tobe. "They can't talk about real issues, so Dole and the Republicans have to go after the 'character' issue. Three weeks before the election, they're throwing a Hail Mary pass."

Pub Date: 10/16/96

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