Washington Bulletin

Washington Bulletin

Asiagate, Month One: Holding Pattern
Asiagate Committee Chairman Fred Thompson ended his July hearings on a strong note last week, garnering the best network coverage since the hearings began and soliciting damning evidence of big Democratic donor Charlie Trie's money-laundering operation (see our assessment of the major players on the Thompson committee after a month). But Thompson spent the weekend beating back reports that he is in "retreat," stoked by a Friday article in the Wall Street Journal.

The Journal story reports, accurately, that four weeks into the hearings, "no evidence [had] surfaced that the government of China had anything to do with [the foreign money pouring into Democratic coffers]. In fact, the main fund-raisers under scrutiny, John Huang and Yah Lin 'Charlie' Trie, seemed just as interested in hitting up allies of China's archenemy, Taiwan." The story goes on to say Thompson, who had opened the hearings with a dramatic statement about a secret Chinese plan to influence the election, "appears to be in tactical retreat."

Thompson strongly denies it. Says one committee source: "The chairman adheres to his opening statement, which is based on evidence developed by executive branch intelligence and law enforcement agencies." Even Committee Democrats, who had at first disputed Thompson's statement, now say there was a Chinese plan, although they disagree with Thompson about the extent of it (Democrats insist it was limited to congressional candidates).

What's causing the retreat talk is the inability of the committee to prove any connection between the main figures of the scandal and any Chinese plan. Sen. Arlen Specter last week said, in this regard, the committee is up against a "blind wall," simply because it can't access records in China. But this is why GOP staff has been so careful about constantly maintaining that they aren't out to "prove" anything. Statements to this effect quoted in Friday's Journal story to substantiate the retreat idea sound an awful lot like the same disavowals committee investigators have been making from the beginning.

Which doesn't put the committee in any better position—it's just that it's never advanced to a point from which it has had to retreat. But even without a blockbuster direct connection to the Chinese government, the committee has managed to muster an impressive array of evidence regarding shady and downright illegal activities surrounding Democratic fundraising. (See the committee's talking points covering its first month of work.) Indeed, the irony of the retreat coverage is that it appears to be Democrats who were most chastened last week.

All of them went along with Thompson's subpoena of the White House without objection, a remarkable change in tone from their confrontational tactics in weeks previous. What's changed is that in the last week the network coverage had picked up some, perhaps shamed into it by the New York Times, the editorial page of which has been constantly agitating about the seriousness of the scandal. And the Democrats had their swing at Haley Barbour the week before, and missed. With the White House quite obviously playing games with the committee and the embarrassing evidence piling up, there was nothing for the Democrats to do but quiet down.

After a month, there are dozen of disturbing questions that have been raised and unanswered so far by the hearings. There is plenty of circumstantial evidence that points to John Huang and Charlie Trie not being spies (in the case of Trie, what kind of spy carries around a bagful of inflatable toys?), leading Sen. Dick Durbin (D., Ill.) to sneer: "This Little Rock spy network is quite a sight to behold." But the possibility of China at some point being behind the flow of foreign money to the DNC is, as yet, impossible to rule out:

—John Huang had some 400 contacts with Lippo after he left to work at Commerce. Lippo itself had become entangled with an outfit called China Resources, a Chinese government front sometimes used in espionage activities. Huang would make personal phone calls from his office, but mysteriously take off across the street to make phone calls from a private office, sometimes as often as two of three times week. The visits sometimes correlated with classified briefing Huang would receive regarding Asia. There doesn't seem to have been anything extraordinary about Huang's security clearance or briefings—a point emphasized by Democrats—but there was something extraordinary about the high-level attention the White House gave his transfer from Commerce to the DNC. (See our reports regarding Huang-related testimony during the second week of hearings.)

—Charlie Trie seems to have run some sort of weird Asian Western Union operation: huge wire transfers from a Macua-based real estate tycoon named "Mr. Wu" would replenish his coffers just before he made contributions to the Democrats. Trie had set up a variety of shell corporations among which he would rapidly transfer his funds. Trie seems an unlikely spy, but Mr. Wu sat on a Chinese government board and was a shady operator (according to Newsweek his firm was busted by Macua authorities for re-labeling Chinese-manufactured clothing to hide their origin). Why in the world would a Macua businessman have such an interest in funneling nearly a $1 million into the U.S.?

When the hearings resume in September, it will take some extraordinary break on the China front or the testimony of one of the high-profile figures really to capture the public's imagination. Otherwise, it will be a steady drip of information that is damaging to the administration, but ultimately plays into the story-line of campaign-finance reform (which is the New York Times' interest in the scandal). That will suit Fred Thompson just fine, who at this point stands to benefit politically from the hearings one way or the other. Campaign finance reform just may be John Huang and Charlie Trie's final revenge on the American political process.

To view all of our Asiagate updates,

click here.

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Updated By:
Rich Lowry - National Political Reporter
Ramesh Ponnuru - National Reporter

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