07/24/97 - 12:56 AM ET - Click reload often for latest version

GOP accused of accepting Hong Kong donations

WASHINGTON - Democrats on the Senate panel investigating campaign finance abuses turned the tables Wednesday, attempting to show the GOP solicited a $2.1 million loan guarantee from a Hong Kong businessman.

Democrats said the Republican National Committee sought the guarantee from billionaire Ambrous Young to help its candidates in 1994.

This was the first opportunity for Democrats to focus on possible Republican violations after two weeks of testimony that dealt exclusively with alleged illegal or improper behavior by the Democrats.

They produced a letter Young wrote RNC Chairman Haley Barbour saying it would be a "pleasure" to help the GOP win control of Congress and the White House.

Democrats argue the loan guarantee was used by the Republican Policy Forum to funnel $1.6 million to the RNC. The RPF is an RNC subsidiary set up by Barbour in 1993.

Democrats say that Young signed the guarantee with a U.S. bank, the forum got the money and then loaned $1.6 million to the RNC. They say the committee then distributed the money to state parties for congressional races.

Later, Democrats say, the RNC defaulted on the loan. Young was left holding a $700,000 debt.

Young's lawyer, Benton Becker, testified that the arrangement was not a complicated way of making a political contribution. Since he is not a U.S. citizen or legal U.S. resident, Young could not legally contribute. "It was not a contribution. It was a loan guarantee," Becker testified.

But Sen. Joseph Lieberman, D-Conn., asked: "Why does somebody who lives in Hong Kong, is not an American citizen, not doing much business in the United States, choose to put over $2 million on the line?"

Barbour may testify Thursday.

Also Wednesday:

By Judi Hasson, USA TODAY

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