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Key Player: Pauline Kanchanalak

Gore Friend Charged With Violating Law on Contributions (Washington Post, July 10, 1998)

Fund-Raiser Hsia Faces Federal Tax Charges (Washington Post, July 8, 1998)

Thai Women Indicted In Fund-Raising Probe

By Bill Miller and Michael Grunwald
Washington Post Staff Writers
Tuesday, July 14, 1998; Page A05

Thai businesswoman Pauline Kanchanalak and her sister-in-law were indicted yesterday for allegedly steering $679,000 in foreign campaign contributions to Democrats, the latest of several cases brought against well-connected party fund-raisers.

According to the 24-count indictment announced by the Justice Department, Kanchanalak and her sister-in-law, Duangnet "Georgie" Kronenberg, used the illegal contributions "to gain access to President Clinton and members of his administration," then obstructed justice by erasing their computer hard drive and hiding records. The duo is best known for delivering sizable checks to the Democratic National Committee the same day Kanchanalak brought several foreign business associates to a 1996 White House coffee with Clinton.

The Justice Department this year has brought charges against four key Democratic fund-raisers in its probe of campaign abuses -- Johnny Chung, Yah Lin "Charlie" Trie, Maria Hsia and Kanchanalak -- as well as six lesser-known figures. Now, the department's campaign finance task force must decide whether it has enough evidence to charge any Democratic officials on the receiving end of the contributions.

As with the earlier cases, yesterday's indictment of Kanchanalak does not say whether anyone who accepted the contributions knew of their source. The DNC ultimately returned $253,000 raised by Kanchanalak and has repeatedly denied that it knowingly accepted any illegal funds.

Justice officials had hoped that Kanchanalak could provide crucial information about John Huang, a former Commerce Department official and DNC fund-raiser who has been at the center of the campaign finance probe, but yesterday's indictment indicates that she has refused.

Still, the department heralded the indictment as proof that its long-running investigation is moving forward. Attorney General Janet Reno, who has been criticized by Republicans for refusing to name an independent counsel on campaign finance, noted that her department has brought charges against four defendants in six days. "This is our largest criminal investigation," she said in a statement.

Kanchanalak's lawyers said she was not guilty and accused the Justice Department of overreaching. Kronenberg's attorney, James Hamilton, declined to comment.

"Ms. Kanchanalak has been caught up in a political controversy relating to DNC fund-raising practices," defense attorney Erik L. Kitchen said in a statement. "The filing of a 24-count indictment against her continues a pattern of the government inflating alleged FEC violations into massive felony charges. Ms. Kanchanalak believes that she ultimately will be vindicated in this matter."

The indictment accuses Kanchanalak, 47, a business consultant and lobbyist who helped found the United States-Thailand Business Council, and Kronenberg, 41, with conspiring to impede the Federal Election Commission, making false statements to the FEC, obstruction of justice and other campaign-related charges. Kanchanalak's husband, Jeb, and her mother-in-law, Praitun, were named as unindicted co-conspirators.

Prosecutors obtained an arrest warrant for Kanchanalak, who is believed to be in Thailand. Kronenberg, a McLean resident, is expected to be arraigned Friday in U.S. District Court here, officials said.

The indictment chronicles dozens of contributions dating back to 1992, providing the most detailed look at Kanchanalak's exhaustive fund-raising activities. They include $328,500 in contributions to the DNC, as well as $295,000 to 11 state Democratic Party organizations. The rest went to the 1996 Clinton-Gore reelection effort and Democratic candidates including Sens. John Glenn (Ohio) and Edward M. Kennedy (Mass.) and House Minority Leader Richard Gephardt (Mo.).

According to prosecutors, Kanchanalak channeled money from relatives, foreign companies and other unnamed "foreign nationals" through her mother-in-law and Kronenberg, who are legal permanent residents. Federal law prohibits anyone who is not a legal permanent resident from making donations, and Kanchanalak does not have a green card.

But she does have connections. At the DNC, she served as co-chair of the Women's Leadership Forum and advanced to the level of "managing trustee," reserved for fund-raisers who bring in $200,000. She was invited to the White House more than two dozen times and attended Clinton's 50th birthday celebration.

In June 1996, Kanchanalak brought three officials from C.P. Group, a Thai corporation, to a White House coffee with Clinton, Huang and then-DNC co-chairman Donald L. Fowler. In the days before and after the coffee, according to the indictment, she and Kronenberg steered more than $450,000 in illegal donations to the DNC and state parties.

Senate Republican investigators reported several instances where Kanchanalak sought to capitalize on her Democratic ties by lobbying Huang and others on behalf of the U.S.-Thai council and corporate clients. The Senate report said she and Huang allegedly persuaded an Export-Import Bank director to support an "unusual $6.5 million financing deal" for a Thai conglomerate.

© Copyright 1998 The Washington Post Company

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