Hubbell got $400,000 after quitting to face probe Sources were Riady firms in China project, companies of president's donors

WASHINGTON -- In the months after Webster L. Hubbell was forced to resign to face a criminal investigation in 1994, the former associate attorney general received more than $400,000 from about a dozen enterprises, including the organizers of a multibillion-dollar development in China that received the endorsement of the Clinton administration, according to associates of Hubbell and to government records.

Some payments to Hubbell came from businesses controlled by old friends and campaign donors of President Clinton, according to the friends and witnesses interviewed by investigators.


Many of those who paid Hubbell, a former law partner of Hillary Rodham Clinton and one of the Clintons' closest friends, were regulars at the White House fund-raising coffees or overnight guests in the Lincoln Bedroom.

But the largest payments appear to have come from Hong Kong-based businesses controlled by the Riady family of Indonesia that have been dealing with the Chinese government.


These businesses are central to a $2 billion U.S.-Chinese joint project in the Fujian province of China that received crucial backing from the administration at about the same time that Hubbell was being paid, according to government records and people questioned by investigators.

Ronald H. Brown, the late secretary of commerce, had announced the U.S. endorsement of the project on a groundbreaking trade mission to Beijing in August 1994, two months after Hubbell was put on the payroll of a Riady family company.

Afterward, an Arkansas associate of the Riadys left a message with a friend in the administration saying the Riady-controlled Lippo financial group was "very happy" with the outcome of the )) trip.

A reconstruction from public records and interviews with witnesses, associates and former employers of Hubbell show that he was paid significantly more money than was previously known, far more in fact than he had earned as a lawyer in Little Rock, Ark., and from a wider variety of sources, many with close ties to Clinton.

It has been reported that Hubbell was paid about $100,000 from companies controlled by the Riady family.

But the new details show that his income was derived from businesses in Hong Kong controlled by the Riadys that have worked closely with the Chinese government on the huge nTC project in Fujian. The project includes development of a $700 million power plant, a resort complex, a port and an industrial park.

The Whitewater independent counsel is now examining Hubbell's 1994 income to determine exactly who paid him, what work he may have done in exchange and whether any of the money was intended to discourage him from helping investigators who were looking into the Clintons' finances.

That inquiry is increasingly overlapping with the newer investigations by Congress and the Justice Department into the fund-raising activities of the president and the Democratic Party.


All of the investigations share an interest in the same small circle of Democratic donors and fund-raisers, as well as in the ties of the Riady family to the Chinese government and overseas Chinese business interests. Investigators suspect these groups may have tried to funnel money into the United States for political purposes.

The reconstruction of Hubbell's income shows that he was paid by a company controlled by Bernard Rapoport, a Texas businessman and longtime donor to Clinton's political campaigns who hired Hubbell in the spring of 1994, shortly after being named to a White House advisory committee for trade policy.

Hubbell was also paid by a company controlled by Truman Arnold, a petroleum distributor in Texas who was the top fund-raiser for the Democratic National Committee in 1995. It was Arnold who suggested to Rapoport that he consider hiring Hubbell.

And the reconstruction shows that Hubbell was on the payroll of Sun America Inc., a California financial services company controlled by Eli Broad, a close Clinton friend who, like Rapoport and Arnold, stayed overnight at the White House.

The Riadys, Rapoport, Broad, Arnold and their families and companies have donated nearly $1 million to the Democratic National Committee in the past five years.

This week, Hubbell said he did not think it was appropriate to discuss the work he did for his clients in 1994 when he left the Justice Department.


"I'm not going to talk about my clients," said Hubbell, who was released from federal custody last month after serving an 18-month prison sentence for overbilling his clients at the Rose Law Firm in Little Rock, where Mrs. Clinton also was a partner.

Pub Date: 3/06/97