Hearings follow the campaign money chase Sketchy picture emerging of a system out of control


WASHINGTON -- Sen. Joseph I. Lieberman, a member of the committee investigating campaign fund-raising abuses, had to duck out of the proceedings one day last week to splash cold water on his face.

He was at the Orioles game the night before, which may explain his fatigue. But the Connecticut Democrat conceded that sometimes the hearings are "a yawn."

Still, high drama or not, testimony over the past two weeks has provided some of the foundation for the still unfolding story of how political money has been raised in recent years. Revolving around the money chase are suspicions of espionage, evidence of money laundering, even charges that a foreign government tried to pump funds into American elections.

Only a few of the dots have been connected so far. Some may never be. But there are enough of them now to begin to get a sketchy picture of a fund-raising system that, members of the Senate Governmental Affairs Committee agree, has veered out of control.

The gravest charge leveled so far has been the assertion by committee Chairman Fred Thompson, a Republican from Tennessee, that the Chinese government tried to influence the 1996 congressional elections and "affect" the presidential election with an infusion of money.

On Tuesday, Democrats who had been reluctant to support the charges agreed with Thompson's assessment of the intelligence information as it relates to Congress, although they parted company with him over Chinese efforts to influence the presidential election.

Thompson has acknowledged that, because of national security considerations, the Senate panel may not be in a position to explore these allegations.

Given the limitations, the Republicans' best hope for tying the Democratic fund-raising operation to Chinese interests is John Huang, the former Commerce Department official and Democratic National Committee fund-raiser who has emerged as the central figure in the committee's probe.

The DNC has returned $1.6 million that Huang raised from the Asian-American community because it appeared to come from foreign sources, in violation of election laws.

The worst-case scenario regarding Huang, who previously worked for the Lippo Group -- an Indonesia-based conglomerate that has extensive business dealings with the Chinese government -- is that he was a spy.

Spun out to its fullest, the theory -- propounded by Republicans -- is that the wealthy Riady family, which owns Lippo, pushed White House officials, possibly as high up as President Clinton, to hire Huang by dangling dollar signs in front of them.

Once inside the Clinton administration at the Commerce Department, the theory continues, Huang received intelligence briefings on Asian issues and passed the classified information to his former employer, Lippo, which had paid him a handsome severance bonus. Prior to the 1996 election, the theory goes, the White House and Riadys successfully sought to have Huang moved to the DNC where he could raise large sums by laundering foreign money.

Access and opportunity

So far, there is evidence only that Huang had authorized access to classified information and the opportunity to pass it on. The committee last week showed that Huang received 37 CIA briefings while at Commerce; visited and received calls from the Chinese Embassy; used the office of a private company, with Lippo ties, across the street from his Commerce office for phone calls and faxes; and had hundreds of contacts with his former colleagues at Lippo.

"Based on the last two weeks, all we have left about John Huang are suspicions," Lieberman told reporters Friday. "There's not a piece of evidence that says he conveyed any classified information."

In fact, testimony from his CIA briefer undermined the suspicions. Huang didn't request that he receive CIA briefings -- his supervisor did, said the agent. Offered the chance to upgrade his security clearance, Huang turned it down. And Huang left Commerce to join the DNC, giving up access to information that could be valuable to foreign interests.

Huang has refused to testify unless granted partial immunity from prosecution.

But, seemingly confident that he can defend himself against allegations that he leaked secrets to foreigners, he did not ask for protection against violations pertaining to espionage.

He did seek immunity on campaign finance violations. It is unlikely the committee will grant such immunity to Huang.

Even without his cooperation, the committee has found solid evidence that Huang illegally solicited money from foreigners, and some evidence that he engaged in fund raising while at Commerce in violation of the federal Hatch Act, which prohibits such activities by government employees.

The committee started the week with the revelation that when Huang worked for Lippo in Los Angeles in 1992, he requested a wire transfer of funds from Indonesia to cover a $50,000 contribution from one of Lippo's U.S. subsidiaries to the DNC.

Thompson said Thursday that the episode shows Huang "did not raise illegal contributions in 1996 from mistake or lack of knowledge," but provides evidence of a "common scheme or plan to raise illegal campaign funds."

'Circumstantial evidence'

This past week, a lawyer for the committee's Republicans presented what he called "circumstantial evidence" that Huang solicited money from four donors while a federal employee.

In one instance, he arranged for two "get well" notes from Clinton to Soraya Wiriadinata's ailing father, a wealthy Indonesian partner of the Riadys, just before the father wired $500,000 from Indonesia to Arief and Soraya Wiriadinata's U.S. account and the family contributed $30,000 to the DNC.

The family's cumulative contribution of $450,000 was returned after it was learned the Wiriadinatas failed to pay income tax in the United States.

In the coming weeks, the panel is expected to explore Huang's arrangement of the controversial fund-raiser at a Buddhist temple in California that Vice President Al Gore attended.

A key question for the panel as it rounds out the picture: Did the practices begin and end with John Huang?

The administration's mania for money in the last election has been well documented through memos that show that everything from White House tennis time to lunch with the first lady was available to donors with deep enough pockets.

But was the campaign so avaricious that it turned a blind eye to illegal practices such as foreign contributions, or, worse yet, orchestrated such solicitations?

Senators have uncovered some evidence to show White House involvement, but again, it is circumstantial at best -- calls from White House officials to the DNC urging the hiring of Huang and records showing Huang visited the White House 39 times while at Lippo, 67 times while at Commerce and 58 times while at the DNC. He attended events that included Clinton on 15 of those occasions.

Republican Sen. Robert F. Bennett of Utah said last week that, as a deputy assistant secretary in the Nixon administration, "I surely never got into the White House 67 times. I find these numbers extremely troubling."

If the committee moves beyond numbers in the next few weeks and starts fleshing out its theories and suspicions, it's unlikely senators will need any more cold water splashes to keep them awake.

Pub Date: 7/20/97

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