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February 8, 1998

Draft of G.O.P. Report Assails Democratic Fund-Raising Practices


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    By JILL ABRAMSON and DON VAN NATTA Jr.

    WASHINGTON -- A draft report for the Republican senators investigating campaign financing describes widespread improper Democratic fund-raising in 1996 but has yet to substantiate the explosive accusation that China had a plan to meddle in that year's elections.

    The 1,500-page draft, prepared by the Republican staff of the Senate Governmental Affairs Committee, paints a vivid portrait of a bottomless thirst for campaign contributions.

    The draft exhaustively details the roles of top Democratic fund-raisers and connects some of them to Chinese interests. But it does not include a separate chapter on a reputed plan by the Chinese Government to influence American elections because that section includes material that has yet to be declassified. Nor does it include an executive summary of conclusions.

    The draft describes the lack of proper vetting that led the Democratic National Committee to accept illegal foreign donations and to offer donors with questionable backgrounds access to President Clinton and Vice President Al Gore.

    A copy of the draft report, which is circulating among the Republican members of the committee, was obtained by The New York Times. The Federal Bureau of Investigation and the Central Intelligence Agency have expressed concern over sensitive information included in the yet-unreleased China chapter because it has material that has not been declassified.

    That chapter is expected to clarify the ties between China and some of the figures at the center of the campaign finance imbroglio. That material will be included when the report is released in the coming days.

    Although the report is presented, chapter by chapter, as a chronicle of frenzied fund-raising by the Democratic Party to re-elect Mr. Clinton, it also is a highly partisan document. It includes sharp criticisms of the President's fund-raising activities and the White House's lack of cooperation with Senate investigators, which the Republicans termed Nixonian. But it is Vice President Gore who draws some of the most scathing attacks, including a claim that he has demonstrated a "lack of candor" regarding his role in a controversial fund-raiser at a Buddhist temple.

    The draft is also missing chapters on accusations of improper fund-raising by a Republican policy group and nonprofit organizations that helped both parties' candidates.

    Jim Kennedy, a spokesman for the White House counsel's office, described the report as "the Republican Party's first press release of the 1998 campaign" and denied the contention that the White House tried to thwart the investigation through obfuscation and delay.

    Christopher S. Lehane, a spokesman for Mr. Gore, said, "If this is the report the Republicans are coming out with, it is obvious that Senator Thompson and his fellow Republicans fell well short of the fair bipartisan committee hearings they promised America."

    Much of the material contained in the draft report, written after a $3.5 million investigation, was aired during the sometimes contentious public hearings that ran from July to October 1997 and were led by Senator Fred Thompson of Tennessee. But the draft includes more detailed narratives, containing some new information, on the activities of Democratic fund-raisers, including John Huang, Maria Hsia, Johnny Chung, Ted Sioeng and Yah Lin Trie.

    Late last month, Mr. Trie, who is known to his associates as Charlie, became the first figure in the campaign finance scandal to be indicted. Appearing in Federal District Court here on Thursday, he pleaded not guilty to charges of making illegal campaign donations.

    It is the ties between these fund-raisers and China, the Democratic Party and the White House that are the focus of much of the report.

    One of the longest chapters deals with the relationship between Mr. Gore and Ms. Hsia, a Democratic Party fund-raiser who helped arrange the Vice President's highly embarrassing appearance in April 1996 at the Hsi Lai Temple, a Buddhist house of worship in California, where contributions for the Democratic National Committee were improperly collected from straw donors who were temple adherents.

    Mr. Gore has previously said that he was not aware at the time that the event was a fund-raiser, but the report says that he knew that the event was meant to raise money. The Democratic National Committee subsequently returned the money collected at the event.

    The report establishes that Mr. Gore built a fund-raising relationship with Ms. Hsia and Mr. Huang as early as 1988. The report says the two Democratic fund-raisers were involved in the illegal laundering of campaign donations in 1993 and that they focused on helping Mr. Gore.

    That year, according to the report, Ms. Hsia and Mr. Huang helped arrange two meetings between the Vice President and the head of a company that may have links with the intelligence apparatus of the People's Republic of China.

    According to the report, in September 1993, Mr. Huang laundered three $15,000 contributions to the D.N.C. through overseas bank accounts controlled by the Lippo Group, an Indonesian conglomerate. Mr. Huang once worked for Lippo's United States affiliate. Also in September 1993, Ms. Hsia arranged a $5,000 contribution from three Buddhist nuns, who were later reimbursed because it is illegal to make campaign contributions on behalf of someone else.

    The report contends that these donations were linked to two meetings the Democratic fund-raisers helped arrange between Mr. Gore and a Chinese businessman, Shen Jueren, the same month. Mr. Shen was head of China Resources, which, the report says, citing unclassified sources, is linked to the "P.R.C.'s intelligence apparatus."

    The report raises unsubstantiated concerns about whether Mr. Huang and Ms. Hsia were agents of China, citing reports detailing their reputed links to the Chinese Government.

    If these reports are accurate, the draft concludes, "it would cast into an entirely different light the longstanding efforts by Huang and Hsia to develop close ties to U.S. politicians and cultivate influence in the U.S. political system."

    "Such a connection to the People's Republic of China," the report continues, "would help explain the interest Huang and Hsia showed in introducing" the head of China Resources to Mr. Gore.

    Ms. Hsia's lawyer, Nancy Luque, said in a telephone interview today that there was no evidence to support the report's conclusions about her client, and she denied any wrongdoing by Ms. Hsia.

    Mr. Huang is described in the report as "one of the most central figures in the campaign finance scandal." It raises questions about whether Mr. Huang may have improperly leaked classified information he gained as an official at the Commerce Department. Mr. Huang maintained frequent contacts with his former employer, Lippo, and used an office near the Commerce Department to receive unexplained packages. Lippo, according to various news accounts and the draft report, has extensive holdings in China.

    Another figure who draws scrutiny is Mr. Sioeng. He and his family gave $400,000 to the D.N.C. during the 1996 election period. The committee found that half of these contributions were made with money wired from accounts in Hong Kong.

    "Sioeng has ties to the Government of China," the report says, "but their full extent is unknown." Mr. Sioeng and his family also contributed $50,000 through a corporate account to the Republicans' National Policy Forum.

    Ms. Hsia, Mr. Huang and Mr. Sioeng declined to cooperate with the Senate investigation. Ms. Hsia and Mr. Huang cited their Fifth Amendment privilege against self-incrimination, while Mr. Sioeng left the country. Their lawyers have strenuously denied that they had anything to do with the alleged Chinese meddling in American political affairs.

    The report is also critical of fund-raising calls made by the Vice President to Democratic Party donors. Mr. Gore's telephone solicitations were investigated last year by the Justice Department for possible violation of a statute that bars Government employees from fund-raising on Federal premises. But Attorney General Janet Reno ultimately decided not to appoint an independent counsel to pursue the matter.

    The report challenges Ms. Reno's decision and concludes that fund-raising calls made by the President and the Vice President were, at the very least, improper.

    "The committee believes that the making of these calls was inappropriate for our nation's highest elected officials," the report states. "This amounted to unsavory and unseemly activity that lessens the dignity of these offices."

    The report renews a call for an independent counsel to investigate fund-raising abuses, a move Ms. Reno has rejected.

    "The committee believes that an independent counsel should be appointed to review a whole range of possible illegalities in connection with fund-raising in the 1996 Federal election campaigns," the report says, "to determine whether high-ranking Federal officials violated Federal campaign finance laws."

    Roy Romer, the D.N.C.'s general chairman, criticized the report, saying it was "totally lacking in credibility" and "highly partisan."

    The report includes sharp criticism of the involvement of top White House aides, like Harold M. Ickes, a former deputy chief of staff, in Democratic fund-raising.

    The report, which says that the White House effectively controlled the D.N.C., also criticizes Mr. Clinton for blaming fund-raising excesses on the party, calling any distinction between the D.N.C. and his re-election campaign "disingenuous."

    The report is also deeply critical of the way large "soft money" contributions to the D.N.C. were used to pay for a lavish advertising campaign to help re-elect the President. The ads, paid for by the D.N.C., were designed by Mr. Clinton's media team. The report concludes that "the President and his aides devised a strategy to subvert the spending limits imposed by Federal law on Presidential candidates who agree to accept public financing" by using party money to pay for the advertising.

    "The D.N.C.'s issue advertising campaign was entirely legal," said Mr. Kennedy, the spokesman for the White House counsel's office. Stating that the Republican Party also organized an issue advertising campaign, Mr. Kennedy said, "It was legal and appropriate for the President and Senator Dole to be involved in reviewing and approving their party's issue ads that they knew were intended to benefit their parties and their campaigns."

    Separate chapters of the draft provide portraits of the more colorful figures in the campaign finance saga, a rogue's gallery of Democratic money men, including Mr. Trie, who, the report concludes, used money from his business partner in Macao to finance his $220,000 donation to the Democratic Party.

    The report also raises questions about whether Mr. Trie received a plum appointment to an American trade advisory panel because of his fund-raising prowess. More than $600,000 that Mr. Trie collected for Mr. Clinton's legal defense fund was turned away because it was suspected that it came from overseas, a controversy that also receives considerable attention in the report.

    A chapter titled "The Saga of Roger Tamraz" recounts how a businessman used his big donations to the D.N.C. to gain White House access in an effort to win backing from the Clinton Administration for an overseas oil pipeline project. Mr. Tamraz was one of the most candid and memorable witnesses who testified during the public hearings, and he told the committee that he wished he had been able to give even more money to the Democratic Party.

    The report urges the Justice Department to continue investigating the campaign finance imbroglio, including accusations that Democratic fund-raisers were involved in a scheme to swap donations with the campaign of Ron Carey, the dethroned teamster president.




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