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05/19/98- Updated 10:42 AM ET

Clinton urged to delay China trip

WASHINGTON - Just weeks before President Clinton goes to China for a much-awaited summit meeting Republicans in Washington are intensifying charges that his party benefited from illegal Chinese contributions - and that the Chinese got something in return.

House Speaker Newt Gingrich said Monday that President Clinton should postpone his trip to China until the Justice Department determines whether two U.S. companies gave sensitive missile information to Beijing in 1996.

Gingrich is considering setting up a special committee to look the case and examine Clinton's decision this year to approve the export of satellite technology to China.

Amid a flurry of rhetoric from Capitol Hill, The Christian Science Monitor reported Tuesday that a state-owned Chinese aerospace company acknowledged a senior executive gave nearly $100,000 to Democratic Party fund-raiser Johnny Chung in 1996. Such an admission would mark the first time officials in Beijing have said Chinese funds, even if not directly tied to the communist government, went to Democratic coffers.

The Monitor quoted a spokeswoman for the China Aerospace Corp. as denying that the funds from Liu Chaoying, the daughter of the then-highest ranking officer in the Chinese People's Liberation Army, were part of a government conspiracy to influence the Clinton administration's foreign policy.

The donation "was done by Liu Chaoying acting as an individual," Zhang Lihui, a spokeswoman for China Aerospace, told the Monitor in Beijing. "She used her own financing rather than China Aerospace funds."

However, the spokesman quoted by the paper later denied being interviewed by the paper - she said it was her associate - and said she did not know whether Liu gave Chung any money.

Chung has told Justice Department investigators that $100,000 he gave the Democratic Party came from the Chinese army funneled to him by Liu.

Clinton is set to travel to China next month for a summit with President Jiang Zemin.

The Clinton administration has said the exports were approved under strict security provisions that protect sensitive information. Nevertheless, the waiver permitting the exports has become embroiled in a battle over foreign influence in political fund raising.

In urging Clinton to delay his visit to China, Gingrich led a parade of Republicans seizing on the reports of Chinese money going to the Democratic Party.

"I do not believe this president can go to China unless he clears up, in public, everything about Chinese illegal campaign funds and everything about national missile secrets going to China," Gingrich said in his hometown of Marietta, Ga.

Investigators must examine whether the technology transfer to China indirectly helped Pakistan, and therefore fueled the latest arms race in Asia, Senate Majority Leader Trent Lott, R-Miss., said.

Gingrich said such a special committee would be small, perhaps five Republicans and three Democrats, and would be chaired by Rep. Christopher Cox, R-Calif.

Republican congressional aides who spoke on condition of anonymity said one problem Gingrich faced was concern that the panel be headed by a member satisfactory to other lawmakers to avoid the friction caused by Rep. Dan Burton's management of the investigation into Clinton's fund raising.

House Minority Leader Dick Gephardt, D-Mo., opposes creating a special committee. "He thinks it ought to be done in the context of the (existing) committees," said spokeswoman Laura Nichols. "That what we have committees for."

Several House committees have been examining the missile issue and, despite administration pledges to cooperate, are hitting a wall as they try to uncover documents surrounding Clinton's decision to allow the export of satellite and missile technology to China.

Deputy Defense Secretary John Hamre, the Pentagon's No. 2 official, told two House committee chairmen that he was under orders of the Justice Department to withhold documents surrounding Clinton's decision because of a pending criminal investigation. Copies of letters by Hamre and Attorney General Janet Reno were obtained Monday by The Associated Press.

The Justice Department, based on a classified report from the Pentagon, is investigating whether two U.S. defense contractors working with China on commercial satellite ventures may have violated security laws by providing Beijing a detailed report on a 1996 accident in which a Chinese rocket carrying a U.S.-built satellite exploded.

The concern is that the information provided by Loral Space and Communications Ltd. and Hughes Electronics might help China improve its ballistic missile arsenal.

Loral, in a statement Monday, denied that either it or Hughes made an independent investigation to determine cause of the launch failure. It said a review by several satellite companies, requested by insurance companies, provided no secret or classified information to the Chinese and only confirmed with Chinese conclusions about the failure.

"The entire activity was carried out openly," the statement said.

In February, with the Justice Department probe still pending, Clinton granted a waiver allowing the export of a Loral-built satellite to China along with related missile technology. Critics charge that the waiver undercut the federal investigation by making legal the actions Loral and Hughes had taken in providing information to China on the rocket explosion.

Loral Chairman Bernard L. Schwartz is a major financial backer of the Democratic Party.

By The Associated Press

Copyright 1998 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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