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TODAY

05/21/98- Updated 10:42 PM ET

Loral CEO frequent administration guest

WASHINGTON - In the months before his company got permission to launch a satellite from China, Loral Space and Communications chief Bernard L. Schwartz attended three events inside the White House with President Clinton.

Schwartz says through a spokesman he never discussed anything about the waiver - now a subject of investigation - with anyone at the White House, including the president.

The visits, his supporters say, are just a sign of a valued friendship between Clinton and the lifelong Democratic supporter who was one of the first corporate executives to endorse the Arkansan for president.

Schwartz, 72, has contributed more than $1 million to Democratic causes since 1991. He was once described in a 1994 White House memo as "prepared to do anything he can for the administration."

When Loral was trying to expand into China in 1994, Schwartz got a personal introduction from a Clinton Cabinet member to a top official of China's Ministry of Post and Telecommunications.

"It's important that Mr. Schwartz has the opportunity to meet with you," the late Commerce Secretary Ron Brown told the Chinese official during a trip to Beijing that occurred at about the same time Schwartz made a $100,000 contribution to the Democratic Party.

Sometimes the relationship was a little too close for comfort.

When Loral was in the process of buying Unisys Corp.'s defense division in 1995, the Commerce Department's chief of staff wrote in his diary of concerns that a big donor like Schwartz might be seeking an audience with top department officials at a time when he needed to resolve a federal contract dispute involving Unisys during the deal.

"Key: not to talk to Loral (Bernard Schwartz) re this," then-Commerce chief of staff William Ginsberg wrote.

Schwartz's office says he never sought any such meetings, although Brown's calendar reflects a meeting between the secretary and Schwartz in March 1996.

Schwartz's contacts with the Clinton administration are under a microscope now as the Justice Department and Congress is investigating how his company came to get the February waiver on China.

Justice officals are looking into whether Schwartz's donations to Democrats influenced the decision. The White House and Schwartz himself deny any such connection.

Schwartz once told a reporter it would be inappropriate for him - and embarrassing to Clinton - to use his political support to gain favors.

When a reporter asked about his $100,000 donation near the time of the China trade mission in 1994, Schwartz scoffed at the idea that there was any connection.

"I can open any door I want as chairman of a $6 billion company," he said.

His supporters describe him as someone who, despite his frequent large donations, never asks for favors and rarely talks about his business when moving in Democratic circles.

"I think he's an extraordinarily upstanding and ethical guy," said Harold Ickes, former White House deputy chief of staff. "And he's a passionate Democrat."

Loral spokesman Tom Ross says Schwartz never discussed the satellite issue with the president or his aides.

Schwartz is a lifelong Democrat whose grandfather was a Tammany Hall functionary in turn-of-the-century New York. He was one of the first executives in corporate America to come out in support of Clinton.

He's an enigma: a New York liberal and an accountant in an aerospace industry dominated by conservatives and engineers. During the 1970s, he argued against continuing the Vietnam War even as his company bid for federal defense contracts.

Schwartz's company sold off its defense business two years ago to focus entirely on satellite business.

Just two years ago, Schwartz made it onto Clinton's short list of defense secretary nominees, a job he had been considered for before as well and which ultimately went to former Republican Sen. William Cohen.

At the time Clinton signed the waiver in February, Loral was under scrutiny for earlier assistance to China that U.S. officials feared improperly aided the communist country's missile program.

Two of the three White House visits Schwartz made immediately prior to the Clinton waiver occurred in December - for a holiday party and a Kennedy Center honors event, officials said. Schwartz also attended the Feb. 5 state dinner for British Prime Minister Tony Blair, just 13 days before Clinton signed the waiver.

"Mr. Schwartz did attend a number of formal dinners at the White House in the months prior to the decision in February," said Ross, Loral's spokesman. "Mr. Schwartz, at none of these gatherings, ever discussed any Loral business or the satellite industry with the president or anyone else."

"Mr. Schwartz, doubtlessly, talked to the president in greeting lines or elsewhere at the events, but he never had any one-on-ones," Ross said.

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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