April 3, 1997
Campaign Finance: Developments So Far
By DAVID E. ROSENBAUM
In This Article:
White House Fund-Raising Webster Hubbell Questionable Donations The China Connection Congressioanl Inquiries
What is known about potential campaign finance abuses, and what the main issues are:
WHITE HOUSE FUND-RAISING
resident Clinton and his assistants assiduously used the perquisites of incumbency in their money-raising, wooing donors by arranging access to the White House and the President.
Over four years, 938 guests stayed overnight at the White House, many in the Lincoln Bedroom. In the year before the 1996 election, the President held scores of coffees for donors and other political supporters. Many donors who gave $50,000 to $100,000 were invited to small dinner parties with the President. Many who gave less, in the range of $10,000 to $20,000, had coffee sessions with Vice President Al Gore in his office. Mr. Gore also personally solicited money in calls from his office.
The donations were made to the Democratic Party, thus avoiding the legal limit on the size of contributions to individual candidates and the prohibition against corporate donations to them.
But the party spent most of the money on television advertisements promoting the President's policies.
The questions raised appear to involve propriety more than legality. While Federal law prohibits fund-raising in Government office buildings, it seems not to apply to donations to political parties, known as soft money.
Mr. Clinton has said no money was solicited from visitors to the White House while they were there.
The White House points out that many of the overnight guests never contributed money and that there was no price tag for admission to coffees. Nonetheless, a computer analysis found that more than $10 million had been contributed by overnight guests, and documents turned over to Congress show that many of the coffees were budgeted to generate specific sums of money. AT ISSUE Did the President overstep the bounds of propriety by brazenly using the White House to raise money? Was it proper for the President to raise money in the name of the Democratic Party when it was intended to finance his own campaign for re-election?
WEBSTER L. HUBBELL
ebster L. Hubbell, whom Mr. Clinton has often called his closest friend, was a law partner of Hillary Rodham Clinton in Arkansas. In the 1992 Presidential election campaign, he helped the Clintons piece together their account of the Whitewater affair, and handled many of their files related to it. He came to Washington with the Clintons in 1993 as Associate Attorney General.
He resigned from the Government in 1994 as an investigation was unfolding into his defrauding former law partners and clients of hundreds of thousands of dollars. Later convicted, he spent 18 months in prison.
Between the time he left the Government and the time he went to prison, Mr. Hubbell received more than $400,000, much of it from companies and organizations that were run by friends of the Clintons, donors to the Democratic Party or both. The largest payment, about $100,000, was from a Hong Kong company controlled by an Indonesian family, the Riadys, who were political patrons of Mr. Clinton. The payment was made shortly after James T. Riady, a Clinton friend who helps run the family's business empire, paid a series of visits to the President and White House assistants.
The White House has acknowledged that some of Mr. Clinton's top advisers, including Thomas F. McLarty 3d, the former chief of staff, and Erskine B. Bowles, now the chief of staff, helped Mr. Hubbell line up work.
Mr. Hubbell, who was released from a halfway house in February, has refused to say publicly what work he did for those clients to earn the $400,000.
The President has said that while he may have known in 1994 of some of the sources of Mr. Hubbell's income, he did not know the Riadys were among them until he read about it in news accounts last year.
Mr. Hubbell is viewed as an important witness by the Whitewater prosecutors. They have suggested that he has been less than cooperative and that the money he received may have been part of an effort to discourage him from cooperating. Mr. Hubbell has insisted that he has been forthcoming with the prosecutors and that the payments he received were not related to his testimony. AT ISSUE Has Mr. Hubbell withheld from prosecutors information that could be damaging to the Clintons? Did the payments to him amount to hush money, and were they an effort by the Riadys to ingratiate themselves with the Administration? Did the President himself help arrange for the payments?
he Democratic National Committee has returned or promised to return about $3 million in contributions from Asian-Americans because the true source of the money could not be verified. Donations from foreign contributors are against the law, although contributions from foreign citizens who are residents of the United States, and from American subsidiaries of foreign companies, are legal. Mr. Clinton has conceded that the sources of campaign donations were not properly scrutinized.
Much of the money that has been returned was raised by John Huang (pronounced wong). Mr. Huang was the top American executive for the Riady family interests in the United States. He took a position in the Commerce Department in 1994, and in January 1996 went to work at the Democratic National Committee as a fund-raiser.
Among the noteworthy donors were these:
Yah Lin Trie, known as Charlie Trie, who owned a Chinese restaurant in Little Rock, Ark., that Mr. Clinton frequented when he was Governor. Mr. Trie now has business dealings in China. He tried to give $639,000 to the President's legal defense fund, but, again because of questions about the true sources, the fund did not accept the money.
He was a member of the Democratic committee's national finance board and visited the White House at least 23 times. Last year he arranged for Wang Jun, head of a Chinese conglomerate that deals in arms, to attend a coffee at the White House.
Johnny Chung, a California businessman who was born in Taiwan. He was described in a National Security Council memorandum as a "hustler." Mr. Chung gave nearly $400,000 to the Democratic Party, including a $50,000 donation he handed to Mrs. Clinton's chief of staff, Margaret A. Williams, in the White House. Mr. Chung visited the White House at least 50 times, often accompanied by business associates from China and other Asian countries.
Arief and Soraya Wiriadinata, an Indonesian couple living in Virginia, who donated $452,000 to the party. Mrs. Wiriadinata's father was an executive at a company controlled by the Riady family.
Roger Tamraz, an oil financier wanted in Lebanon on a charge of embezzling $200 million. He gave $177,000 to state and national Democratic organizations in 1995 and 1996, personally and through his oil companies. He received four invitations to the White House last year, over the objections of the National Security Council.
Pauline Kanchanalak, a Thai businesswoman whose clients include large investors in China. She donated $235,000 to the party.
In addition, Vice President Al Gore attended a fund-raiser last year at a Buddhist temple in the Los Angeles area where $140,000 was raised for the Democratic Party. Some of the donors who gave their names had taken vows of poverty. After the details became public, much of the money was returned, along with $15,000 in expenses for the event.
AT ISSUE: What were the sources of the questionable donations? What were the donors' motives? How much did the President and his top assistants know about these donations?
THE CHINA CONNECTION
merican law-enforcement agencies got evidence last year that the Chinese Government planned to try to influence the 1996 elections by contributing political money in this country.
The Chinese were presumably interested in retaining favorable trading status in the United States and in competing with Taiwan's sophisticated lobbying in Washington.
It is unclear whether the donations were ever made, and, although suspicions have been raised, no direct evidence has surfaced to show that any such money was laundered by Asian-American fund-raisers. It is illegal for American politicians or political organizations to accept money from a foreign government.
Mr. Clinton has said he knew nothing of the Chinese plans. Last June, the Federal Bureau of Investigation briefed staff members of the President's National Security Council on the matter. But the staff assistants apparently did not pass the information along to their superiors, either because they were told not to by the F.B.I. agents who briefed them or because they misunderstood those agents.
The White House tried this February to learn what the F.B.I. knew about any such Chinese plans so Secretary of State Madeleine K. Albright could be informed before she went to China. But the F.B.I. Director, Louis J. Freeh, refused to provide the information. AT ISSUE Did the Chinese Government actually contribute money to American political organizations? If so, how was it done, and did the President or his political advisers know about it? Was American Government policy influenced?
he Watergate scandal in the 1970's and the Iran-contra affair in the 1980's gained public attention through televised Congressional hearings.
This year, the Senate Governmental Affairs Committee and the House Government Reform and Oversight Committee have begun investigations into campaign finance practices, and both committees plan to begin public hearings later in the spring.
The Senate voted in March to instruct its committee to examine not only fund-raising by the White House and the Democratic Party but also the practices of Congressional campaigns.
The committee chairman, Senator Fred Thompson of Tennessee, is one of the few Republicans in the Senate committed to changing the campaign finance system. The committee has a budget of $4.35 million and is supposed to complete its inquiry by the end of the year.
The chairman of the House committee, Representative Dan Burton, Republican of Indiana, has said the scope of his investigation will be limited to the Clinton Administration and the Democratic National Committee. Democrats and some Republicans want to broaden the inquiry, and this matter will be resolved when Congress returns from its spring recess. The House committee has a budget of $3.8 million for its investigation, but it may also tap its $11.7 million regular budget and a reserve fund of $7.9 million.
Although there are exceptions to the rule, Senate investigations over the years have been less partisan than House investigations and more productive in terms of developing information. The Senate committee conducting the campaign finance inquiry has 16 members; the House committee has 44, a size that may make it unwieldy. AT ISSUE Will the two investigations be coordinated or instead compete with each other? Will they be perceived by the public as examinations of a serious problem or as strictly partisan exercises? Will the White House and party officials cooperate with Congress or resist the investigators?