Washington Bulletin

Washington Bulletin

Asiagate, Day II & III

Wednesday and Thursday weren't exactly scintillating days at Fred Thompson's Asiagate hearings. On Wednesday, Thompson did succeed in establishing how far out of their way the President and his men went to get John Huang placed in the DNC fundraising operation. But the lead witness, former DNC Finance Chairman Richard Sullivan, wasn't as forthcoming as he had been in depositions to the committee a month ago, leading Democrats to gloat that the hearings are the fizzle they predicted. On Thursday, Thompson went back to try to clean up discrepancies between Sullivan's sworn testimony and sworn deposition, but didn't seem to land any particularly telling blows, as Sullivan dodged and weaved. The press seems beginning to show signs of boredom, even though there are still six long rows of nearly full press tables in the hearing room. Herewith are blow-by-blow accounts of the morning sessions on each day.

Thompson quietly walked Sullivan through how he first met Huang and how the idea of him moving from Commerce to the DNC was first broached. Joe Giroir, a Little Rock attorney who was a Lippo Group rainmaker, first suggested the idea to then-DNC Chairman Don Fowler in an August 1995 meeting. Sullivan characterized Giror's suggestion as a "soft sell," but nonetheless said Fowler "wasn't enthusiastic" about the idea, party because Giroir had "a very direct manner about him."

It would soon behoove the DNC to get enthusiastic about Huang. Clinton operator Mark Middleton, who has been alleged to have participated in shady fundraising overseas, next contacted the DNC about Huang (Thompson pointedly noted Middleton's "desire to take the Fifth amendment if called before this committee"). Then in September 1995 Fowler and Sullivan met with Giroir, James Riady, and John Huang in a private suite at the Four Seasons Hotel in Washington. (Altogether, Giroir reportedly had nine contacts with the DNC and the White House.)

Sullivan testified that the meeting was set up principally as a meeting of Riady and Fowler, who sat in chairs directly opposite each other as they "exchanged pleasantries" and Riady asked about Fowler's personal life. (Riady and Huang met with the President at the White House the same day.) After the meeting, Sullivan said he and Fowler looked at each other and asked, "What was that about?"

Soon, White House deputy chief of staff Harold Ickes got into the act, calling DNC finance chairman Marvin Rosen twice in fairly short order about Huang, according to Sullivan. Sullivan would later learn that the President himself had raised the issue of hiring Huang with Rosen. Huang, soon enough, would be duly hired.

In her questioning, Sen. Susan Collins (R., Maine) established just how strange this personnel move was. Huang was leaving a $120,000 job at the Commerce Department for a much lower-paying job at the DNC usually filled by much younger people (in his upper 40s, Huang was the oldest person in the fundraising shopówith Sullivan checking in at second at age 32). In addition, Huang had no real fundraising experience. Hmmm . . .

Under questioning from Sen. Thad Cochran, Sullivan admitted how he was made nervous by Clinton hanger-on Johnny Chung, who pressured him to get into a presidential radio address and to get on a trade mission to China. Sullivan says he refused Chung's requests. Others weren't so scrupulous: Hillary Clinton's office routinely passed Chung into the White House, and the First Lady's chief of staff Maggie Williams personally accepted a $50,000 check from him in the White House.

Sullivan came under his sharpest questioning from Pete Domenici (R., N.M.), who pressured him about those White House coffees. Domenici wanted to know if they were fundraisers or not, pointing out that specific fundraising targets were set in conjunction with them. Sullivan resorted to the truly Orwellian dodge that they weren't fundraisers per se, even though they were meant to raise money. "I expected the coffees to help raise money," Sullivan said. "That's why we had them." But they still weren't fundraisers. Get it? "You're skewing words," said Domenici.

On other interesting notes: Sen. Thad Cochran (R. Miss.) brought to the attention of the committee a March 15, 1994 letter from an Asian-American activist named Maeley Tom to (presumably) then-DNC chairman David Wilhelm that seems to raise directly the prospect of raising foreign money for the Democrats, that seems to indicate she sought an administration job in order to further the interests of the Riadys, and that provides insight into ethnic bean-counting in the Clinton Administration. (Excerpts from the letter appear at the end of this bulletin.)

Also: Sen. John Glenn continued to operate in the role of total partisan flack. His first question to Sullivan was about a letter from former RNC operative Scott Reed, prompting snickers at the press tables. Sen. Joe Lieberman deserves high marks for at least asking question that were on point, something some of his Democratic colleagues are quite reluctant to do.

Even though Sullivan wasn't as forthcoming as they would have like, at least Republican Senators seemed prepared and pursued coherent lines of questioning. The really bad news: according to the Media Research Center, on Tuesday night ABC's World News Tonight didn't even lead with the Thompson hearings, opting instead for stories about problems with a diet drug.

John Glenn opened the day with a complaint about someone faxing to news organizations copies of Sullivan's deposition, noting the differences with his public testimony before the committee during the day. As reporters rolled their eyes, Glenn explained how the damage to the committee from the leak was "considerable." Thompson responded by remarking that Tuesday's surprise letter about John Huang's immunity offer had been in the works for sometime but that he didn't find out about it until 15 minutes before the hearings opened. And the day had begun, on an appropriately sour note.

Thompson turned to repeated efforts to get Sullivan to make comments as stark as those he made in his private deposition to the committee, but Sullivan kept sliding off the hook. When Thompson pointed out a passage that seemed to suggest Sullivan was worried Huang was raising foreign money, Sullivan responded with bravado: "If I had had any inclination that John Huang would raise foreign money, I would have personally walked him to the elevator and out of the building." When Thompson went at it again, Sullivan responded with the dodge: "As Mr. Glenn so articulately outlined yesterday, federal election laws are very complex."

Thompson then pointed out that Sullivan had said that the Asian effort had made folks at the DNC nervous. Sullivan launched into a long explanation of how the DNC had all sorts of different ethnic outreach plans and Thompson had to cut him off: "Mr. Sullivan I'm on limited time here . . ." When Thompson tried to get Sullivan to admit that he was at least worried that Johnny Chung was taking Asian money, Sullivan responded irrelevantly: "It was somewhat a coincidence that Mr. Chung was Asian-American . . ." Thompson kept at the Chung angle, and finally Sullivan hesitated and then blurted out like someone on the stand in a TV thriller: "Yes! That was one of my concerns."

But Sullivan continued to weave and finally Thompson noted that he understood why he was trying to downplay his worries about Huang and company: "If it was obvious to you, it should have been obvious to a whole lot of people. We both know what's going on here." Later a frustrated Thompson said: "I'm trying to brag on you, because you did the right thing, but now there are consequences to it" (saying he did the right thing, that is). But Sullivan continued to contend: "I never had an inkling. I don't think John Huang was purposely raising foreign money. I still don't think he did." The only reason DNC officials eventually took Huang off the job of working presidential fundraisers was that having all those foreign nationals around created an "appearance" problem.

Chalk it up as a frustrating morning. Also: Sen. Susan Collins (R., Maine) revealed that the committee has evidence of a transfer of $325,000 from a Japanese bank to Yogesh Gandhi, who just happened to donate $325,000 to the DNC. . . . Sen. Sam Brownback (R., Kan.) revealed that Huang, who took about a 50 per cent pay cut to move from Commerce to the DNC, had a special arrangement for his salary to double back to Commerce levels as long as he produced. Then, Brownback put his foot in his mouth by summarizing the deal as: "No raise money, no get bonus." . . . Sen. Bob Toricelli (D., N.J.) continued to compete with Glenn as chief partisan flack with his paean to unfairly maligned Democratic donors and his suggestion that President Clinton too is a victim of this scandal. Sen. Joe Lieberman (D., Conn.), on the other hand, continued to impress.

Stop Us before We Spend Again

The Washington Post reported today that "Robust Economy Could Erase Deficit by '98." Actually, it's not just the robust economy: revenues have been higher than expected for several years now, and economic growth can't account for all the increase. What's causing the remainder isn't known; economists hide their ignorance by chalking it up to "technical factors."

The newly increased revenue estimates could damage the budget deal's prospects. The fact that the budget might balance without such a deal being struckóindeed, Phil Gramm argues persuasively that current law would yield more deficit reduction than the deal wouldódoes seem to undercut their achievement. (The Post quotes economic forecaster Kurt Karl: "I'm predicting a balanced budget by next year, but only if there's no budget deal. One more year of gridlock and we're home.") In addition, the additional revenues would tempt appropriators to spend more on their pet projects.

Much more spending could change the calculations of those conservatives who are currently lending grudging support to the deal. Indeed, the May negotiations that resulted in the deal almost collapsed at one point because revenue estimates went up during the talks.

So for now, in a textbook case of collusion between supposed competitors, the deal-supporting Republican leadership is asking that the Administration delay its midyear budget review and it appears to be agreeing. Like a bunch of recovering alcoholics afraid the liquor cabinet is full, Congress is afraid of its own addiction to spending.

Mars Attacks!

Is it just us, or is there a suspicious coincidence to the way the fourth planet in our solar system makes front-page headlines every time the Democrats seem to be threatened? During the Republican convention last year, reports that life may once have existed on Mars competed for public attention, and won. Now Sen. Thompson's hearings are being totally drowned out by the excitement over Mars. . . . Speaking of coverage of the hearings, it's interesting that PBS isn't providing any. It ran Watergate hearings day and night, and ran the Iran-Contra hearings too. We don't, of course, mean to suggest that PBS won't cover hearings that may embarrass Democrats. It will, when its own financial interests are at stake. PBS ran the Whitewater hearings until the Republican Congress appropriated its funds.

Excerpts from Maeley Tom Letter

On the letterhead of her then-boss, California state Sen. David Roberti, Maley Tom wrote to "David" (presumably then-DNC Chairman David Wilhelm), about her dealings with the Riadys and other matters. The most interesting part of the letter is as follows:

". . . The Riady family, LIPPO GROUP, were concerned about the way I was being treated with regards to my appointment with SBA. In Seattle, James Riady asked me to consider working for them on a contractual basis to put together the business leaders from East Asia with the Administration for meetings and education purposes. He felt we could do this thru the DNC and use this as a vehicle to raise dollars from a fresh source for the DNC. He also wanted me to continue my work with Vida and the DNC to put together the national conference of the Asian Pacific Americans to inaugurate the A/P DNC Caucus and the Congressional AP Caucus next year in DC. This could also be an excellent vehicle to reenergize the APA network in time for the 96 campaign and raise $$ at the same time. I will be starting with the Riady's in May after I help my boss Roberti defeat the Recall."

"Thirdly, today I will be calling Emerson to withdraw my name from the SBA appointment. This should help John who wants to use this position for Jadene Nielsen and maybe appoint additional Asians to Regional slots in California. I have been very disappointed with the appointment process and found it hard to explain to the Asian community what has happened and still save face. However, I will suggest to Emerson that in lieu of the SBA appointment that I be considered for an appointment such as the Exports Council which will help with my work with the Riady's. They too are interested that I receive a prestigious enough presidential appointment to enhance my role with the pacific rim businesses I will introducing to them. Vida and I talked about this and we agreed something like the Exports Council would be appropriate. I understand that they are considering appointments for this Council as we speak so the window of opportunity is very short. Any help you can offer to facilitate this appointment will be appreciated. I will need to advise my congressional sponsors such as Matsui, Mineta, and Fazio that I am opting for this route instead. . . ."

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

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