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Campaign money linked to China

Fund-raiser's testimony heightens suspicions in Congress

By Associated Press, 05/16/98

ASHINGTON - Key members of Congress yesterday said that former Democratic fund-raiser Johnny Chung's statements to federal prosecutors reinforce suspicions that China tried to influence the 1996 presidential election.

The chairman of the House campaign fund-raising investigation, Representative Dan Burton of Indiana, said the information provided by Chung also suggests there might have been a link between the contributions and missile technology transfers to China.

But the White House insisted that US policy toward China was not influenced by contributions. ''It's ludicrous to suggest there was an influence on the determination of US policy in this matter,'' said a White House spokesman, Eric Rubin.

Congressional sources said that Chung told Justice Department investigators he received some $300,000 from a Chinese aerospace official. Chung said the official told him the money was for political contributions, according to House and Senate sources familiar with secret briefings that the FBI gave Thursday on Capitol Hill.

Federal Election Commission records show that Chung contributed about $110,000 to the Democratic Party from June through September 1996. Chung told the investigators he used the rest for himself, according to the sources.

The New York Times, which initially reported the story, said that aerospace official Liu Chao-ying - whose company is owned by the Chinese government - also is a lieutenant colonel in the People's Liberation Army.

The sources said that Liu told Chung the funds came from Chinese intelligence. Liu's father is General Liu Huaqing, who was a member of the Communist Party leadership and the top Chinese military commander. US law forbids foreign governments from contributing to political campaigns.

Liu was photographed with President Clinton at a fund-raising event. Chung gained admission for her.

The White House said it had no knowledge about the source of Chung's funds or the background of Liu, but that in hindsight, it was not appropriate for Chung to bring her to see the president.

Senator Fred Thompson, the Tennessee Republican who led the Senate's campaign fund-raising investigation, said in an interview, ''What we have here is apparently hard evidence of the execution of the China plan.''

Thompson had earlier suggested, but could not prove, Chinese influence in the 1996 campaign.

This story ran on page A06 of the Boston Globe on 05/16/98.
© Copyright 1998 Globe Newspaper Company.

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