    [House Hearing, 106 Congress]
    [From the U.S. Government Publishing Office]

            JOHNNY CHUNG: FOREIGN CONNECTIONS, FOREIGN CONTRIBUTIONS

    =======================================================================

                                    HEARING

                                   before the

                                  COMMITTEE ON
                               GOVERNMENT REFORM

                            HOUSE OF REPRESENTATIVES

                           ONE HUNDRED SIXTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  MAY 11, 1999

                                   __________

                               Serial No. 106-23

                                   __________

           Printed for the use of the Committee on Government Reform

         Available via the World Wide Web: http://www.house.gov/reform

                                     ______

                         U.S. GOVERNMENT PRINTING OFFICE
    58-752 CC                    WASHINGTON : 1999

                         COMMITTEE ON GOVERNMENT REFORM

                         DAN BURTON, Indiana, Chairman
    BENJAMIN A. GILMAN, New York         HENRY A. WAXMAN, California
    CONSTANCE A. MORELLA, Maryland       TOM LANTOS, California
    CHRISTOPHER SHAYS, Connecticut       ROBERT E. WISE, Jr., West Virginia
    ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
    JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
    STEPHEN HORN, California             PAUL E. KANJORSKI, Pennsylvania
    JOHN L. MICA, Florida                PATSY T. MINK, Hawaii
    THOMAS M. DAVIS, Virginia            CAROLYN B. MALONEY, New York
    DAVID M. McINTOSH, Indiana           ELEANOR HOLMES NORTON, Washington,
    MARK E. SOUDER, Indiana                  DC
    JOE SCARBOROUGH, Florida             CHAKA FATTAH, Pennsylvania
    STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
    MARSHALL ``MARK'' SANFORD, South     DENNIS J. KUCINICH, Ohio
        Carolina                         ROD R. BLAGOJEVICH, Illinois
    BOB BARR, Georgia                    DANNY K. DAVIS, Illinois
    DAN MILLER, Florida                  JOHN F. TIERNEY, Massachusetts
    ASA HUTCHINSON, Arkansas             JIM TURNER, Texas
    LEE TERRY, Nebraska                  THOMAS H. ALLEN, Maine
    JUDY BIGGERT, Illinois               HAROLD E. FORD, Jr., Tennessee
    GREG WALDEN, Oregon                  JANICE D. SCHAKOWSKY, Illinois
    DOUG OSE, California                             ------
    PAUL RYAN, Wisconsin                 BERNARD SANDERS, Vermont
    JOHN T. DOOLITTLE, California            (Independent)
    HELEN CHENOWETH, Idaho

                          Kevin Binger, Staff Director
                     Daniel R. Moll, Deputy Staff Director
               David A. Kass, Deputy Counsel and Parliamentarian
                          Carla J. Martin, Chief Clerk
                     Phil Schiliro, Minority Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on May 11, 1999.....................................     1
    Statement of:
        Chung, Johnny C.C............................................   223
    Letters, statements, etc., submitted for the record by:
        Burton, Hon. Dan, a Representative in Congress from the State
          of Indiana:
            Information concerning Mr. Chung's bank account..........   327
            Letter dated June 27, 1996...............................   202
            Letter dated May 7, 1999.................................   195
            Prepared statement of....................................   204
            Responses to interrogatories and subpeonas...............   308
            Staff report and compilation of exhibits.................     3
        Chung, Johnny C.C., prepared statement of....................   236
        Comstock, Barbara, chief counsel, Committee on Government
          Reform:
            Exhibit 1................................................   272
            Exhibit 2................................................   274
            Exhibit 3................................................   276
            Exhibit 4................................................   279
            Exhibit 5................................................   281
            Exhibit 6................................................   285
            Exhibit 7................................................   287
            Exhibit 8................................................   289
            Exhibit 9................................................   294
            Exhibit 10...............................................   296
        Gilman, Hon. Benjamin, a Representative in Congress from the
          State of New York, prepared statement of...................   218

            JOHNNY CHUNG: FOREIGN CONNECTIONS, FOREIGN CONTRIBUTIONS

                                  ----------

                             TUESDAY, MAY 11, 1999

                              House of Representatives,
                                Committee on Government Reform,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 12:15 p.m., in
    room 2154, Rayburn House Office Building, Hon. Dan Burton
    (chairman of the committee) presiding.
        Present: Representatives Burton, Gilman, McHugh, Horn,
    Mica, McIntosh, Souder, LaTourette, Sanford, Barr, Hutchinson,
    Terry, Biggert, Walden, Ryan, Chenoweth, Waxman, Lantos,
    Kanjorski, Mink, Maloney, Norton, Kucinich, Tierney, Turner,
    and Schakowsky.
        Staff present: Kevin Binger, staff dirctor; Barbara
    Comstock, chief counsel; David A. Kass, deputy counsel and
    parliamentarian; Mark Corallo, director of communications; John
    Williams, deputy communications director; Carla J. Martin,
    chief clerk; Lisa Smith-Arafune, deputy chief clerk; John
    (Timothy) Griffin and Kristi Remington, senior counsels; Kevin
    Long, professional staff member; Michelle White, counsel;
    Corinne Zaccagnini, chief information officer; Laurel Grover,
    staff assistant; Phil Schiliro, minority staff director; Phil
    Barnett, minority chief counsel; Kenneth Ballen, minority chief
    investigative counsel; Kristin Amerling, Sarah Despres,
    Christopher Lu, Michael Raphael, and David Sadkin, minority
    counsels; Ellen Rayner, minority chief clerk; Courtney Cook and
    Jean Gosa, minority staff assistants; and Barbara Wentworth,
    minority research assistant.
        Mr. Burton. Good afternoon. A quorum being present, the
    Committee on Government Reform will come to order. Before the
    distinguished ranking member and I deliver our opening
    statements, the committee must first dispose of some procedural
    issues. I ask unanimous consent that all Members' and
    witnesses' written opening statements be included in the
    record, and without objection, so ordered.
        I ask unanimous consent that all articles, exhibits, and
    extraneous or tabular material referred to be included in the
    record, and without objection----
        Mr. Waxman. I'm reserving the right to object. Is that
    referred to by Members during questioning? Otherwise there has
    been no reference.
        Mr. Burton. That is fine.
        Mr. Waxman. Any materials that Members refer to in their
    questioning can be made part of the record?
        Mr. Burton. Without objection.
        I ask unanimous consent that a staff report and compilation
    of exhibits regarding Mr. Chung's testimony and documents
    regarding Mark Middleton be included in the record, and without
    objection, so ordered.
        [The information referred to follows:]

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        Mr. Burton. I ask unanimous consent that a letter from the
    Justice Department dated May 7, 1999, authorizing Mr. Chung's
    testimony be entered into the record. And without objection, so
    ordered.
        [The letter referred to follows:]
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        Mr. Burton. I ask unanimous consent that questioning in the
    matter under consideration proceed under clause 2(j)(2) of
    House Rule 11 and committee rule 14 in which the chairman and
    ranking minority member allocate time to the committee counsel
    as they deem appropriate for extended questioning not to exceed
    60 minutes, divided equally between the majority and the
    minority, and without objection, so ordered.
        I also ask unanimous consent that questioning in this
    matter proceed under clause 2(j)(2) of House Rule 11 and
    committee rule 14 in which the chairman and ranking minority
    member allocate time to members of the committee as they deem
    appropriate for extended questioning not to exceed 60 minutes,
    equally divided between the majority and minority, and without
    objection, so ordered.
        And one other item I would like to mention before we start
    is I received a letter from the ranking minority member, Mr.
    Waxman, yesterday regarding some kind of misunderstanding
    regarding Mr. Sun and Mr. Chung as far as limitation on
    questioning. I have talked to Mr. Sun and Mr. Chung and Mr.
    Murphy, and there is no limit on questioning whatsoever, so I'm
    glad we are able to lay that to rest right here at the
    beginning so the minority will be able to ask any questions
    they feel are necessary.
        Today's hearing is going to focus a great deal on China. I
    think this is important because there is a lot going on between
    our two countries right now. We are all very upset about the
    recent bombing of the Chinese Embassy in Belgrade. It was a
    tragedy. However, we should not let that deter us from trying
    to get to the bottom of Chinese efforts to influence our
    elections or steal nuclear secrets. The Chinese Government's
    actions should not be overshadowed or forgotten because of this
    terrible mistake.
        Today we are going to hear testimony about China's attempts
    to interfere with our elections in 1996. These are very serious
    allegations. Even more serious are allegations about espionage
    by the Chinese Government at our nuclear weapons facilities.
        We are not going to hear testimony on this subject today,
    but every time I pick up a newspaper, I read new allegations
    about Chinese spying. We have some very serious national
    security issues here that we need to address. If China is
    conducting covert operations to influence our elections, and it
    appears that they are, then we have to treat this as a threat
    to our national security. If China is stealing our nuclear
    secrets, and it appears that they are, then we have a threat to
    our national security. We have to treat it like a national
    security issue, and so far we haven't.
        In my view, this isn't about politics, and it isn't about
    elections. It shouldn't matter if you are a Democrat or a
    Republican. The Chinese Government is taking actions toward us
    that are hostile, and we have to take it seriously.
        Today we have a very rare thing. We have a cooperative
    witness. Johnny Chung has reached a plea agreement with the
    Justice Department. He has cooperated with them. He received a
    sentence that makes it clear that the Justice Department
    considers him a valuable witness. Mr. Chung has agreed to
    testify today and tell us what he knows.
        Over the course of our investigation into illegal foreign
    money, we have had 121 people refuse to testify, 121. Eighty
    people have taken the fifth, and a lot of people have left the
    country or stayed overseas where we cannot reach them. We have
    immunized a handful of these people, and they have testified,
    but we still have over 100 people who have refused to testify.
        Johnny Chung has told us that the head of China's military
    intelligence agency gave him $300,000 and told him he could
    give it to the President's campaign. That's pretty astonishing,
    and this is just one witness. What would we learn if we could
    get these other 100 witnesses to testify? What would we learn
    from John Huang if we could get him to come forward and
    testify? What would we learn if we could get Charlie Trie to
    come forward and testify or Mark Middleton?
        Johnny Chung has also told us that within 2 weeks of
    receiving this money from General Ji, he gave $35,000 to the
    Democrat National Committee.
        After we finish this hearing today, some of the reporters
    sitting here are going to call the DNC and the White House, and
    I will tell you right now what their response will be. They are
    going to say, we didn't know. We had no idea where Johnny
    Chung's money was coming from. Well, if they didn't know, then
    they must have been trying really hard not to find out. Just
    ask the Federal judge at California who sentenced Mr. Chung. He
    said, ``if Mr. Fowler and Mr. Sullivan didn't know what was
    going on, they are two of the dumbest politicians I have ever
    seen.'' This was a Democrat judge.
        It is easy to understand why the judge said that. When
    Johnny Chung showed up at a Clinton-Gore fundraiser in Los
    Angeles in September 1995, he had 10 Chinese nationals with
    him. When Johnny Chung showed up at a DNC fundraiser in Los
    Angeles in July 1996, he had half a dozen Chinese nationals
    with him. When he went to the President's radio address in the
    Oval Office in March 1995, he was accompanied by six senior
    Chinese executives. And we have a letter to Mr. Chung from Don
    Fowler, the head of the Democrat National Committee, and in it
    Mr. Fowler said, ``best of luck on your trip to China. I
    enjoyed meeting your friend who is the wife of the chief of
    staff of the Chinese Army.''
        I could go on and on, but I won't. That is just as
    distressing to me as--that this administration--that this
    administration is still acting like that they don't know, and
    that is very disconcerting.
        Last year the President went to China. He met with
    President Jiang Zemin. President Jiang said they didn't have
    anything to do with the foreign money being funneled into our
    campaigns. President Clinton just took his word for it. He
    didn't even challenge him. Why? Just a month ago Prime Minister
    Zhu Rongji was here in Washington. Johnny Chung's revelations
    about his meeting with General Ji had just come out. Zhu Rongji
    said he had checked with all of his top people, and nobody in
    the Chinese Government had anything to do with trying to
    influence our elections. He said that they had no involvement
    in trying to steal our nuclear secrets, and once again, the
    President just took his word for it. Why?
        We asked the Chinese Government for visas to come to China,
    to have our investigators come to China to interview people who
    were involved in this fundraising. They would not give us
    visas. In fact, they told us if we came to China, they would
    arrest our investigators. Are these the actions of a government
    that has nothing to hide?
        We have asked the White House and the State Department time
    and time again for help, and they will not lift a finger. We
    have asked the Chinese Government for bank records that would
    show where these millions of dollars originated. We have gotten
    absolutely nothing. Are these the actions of a government that
    has nothing to hide?
        Why won't the Clinton administration push China to turn
    over this evidence? The Clinton administration hasn't been very
    aggressive in getting to the bottom of the fundraising scandal.
    The nuclear espionage scandal looks even worse. The FBI tried
    four times, four times, to get approval to tap the phones of
    the main suspect in the Los Alamos case. The Justice Department
    turned them down every time. Why?
        The Energy Department kept the main suspect Wen Ho Lee in
    his job for 3 years. He was kept on for 18 months after the FBI
    said there was no investigative reason for him to stay on. He
    had access to classified information the whole time. Why?
        The President's national security advisors were thoroughly
    briefed about China's espionage, but no action was taken for
    over 2 years to improve security at those labs, and the
    President continued to sign waivers to ship sensitive
    satellites and other information to China. Why? Just yesterday,
    the President approved a new satellite export to China. Why is
    the President approving a technology transfer like this when we
    haven't gotten any answers on these other issues from China?
        These actions are serious, and these are serious issues.
    This is why I have been saying that these are national security
    issues and not political issues.
        Now let me say a few things about our witness today. Johnny
    Chung broke the law. He has made some serious mistakes. He has
    done some things that we can't condone, and obviously he wasn't
    alone. Eighty people have taken the fifth amendment, and
    another 40 have left the country. I think Mr. Chung and his
    family have probably paid a pretty high price for his mistakes,
    but he is going to do something today that the other 100 people
    haven't done. He is going to testify. He has cooperated with
    the Justice Department, and he is cooperating with us.
        What he is doing today isn't going to be very easy. He is
    going to sit in front of this committee and all of these TV
    cameras and reporters and admit that he broke the law, and that
    takes courage.
        What has Mr. Chung told us? He has told us that General Ji
    Sheng De, the head of the military intelligence of the People's
    Liberation Army, which is the equivalent of our CIA, gave him
    $300,000. General Ji would be the equivalent, as I said, of our
    CIA. It was wired to him through Lieutenant Colonel Liu Chao
    Ying of China Aerospace, whose father was the head of the
    People's Liberation Army at one time and a member of the
    hierarchy in the Chinese Government.
        Mr. Chung has told us that the general told him the
    following: ``We really like your President. We hope he will be
    reelected. I will give you 300,000 U.S. dollars, and you can
    give it to your President and the Democrat party.'' Shortly
    after this Mr. Chung gave $35,000 to the DNC.
        Mr. Chung has told us that he was told other people were
    also giving money to ``do good things for China.'' One of the
    other people who was mentioned was Mark Middleton, a former
    high-level White House aide. He was told that Mark Middleton
    got a half a million dollars from a source that remains
    unclear. Mr. Middleton has taken the fifth with this committee.
    He has refused to talk to us.
        Johnny Chung has also told us that he was told that a
    Boeing representative from Hong Kong, a Mr. Young, was also
    working with the Chinese Government. We still haven't resolved
    who this is.
        Johnny Chung has informed us that he was told by another
    source that Charlie Trie asked the Chinese Government for $1
    million to help the President. He'll testify that he saw the
    head of the United States consulate in Beijing take cash in
    exchange for visas. This is just outrageous.
        Did Mark Middleton get half a million dollars from the
    Chinese Government? If he did, what was it for? Did Charlie
    Trie try to get $1 million from the Chinese Government, and did
    he get it? We know that he got over $1 million from a Macau
    developer with close ties to China.
        Johnny Chung isn't going to solve all of these mysteries
    for us today. Some of the things he witnessed firsthand. Others
    he witnessed secondhand. In some ways his testimony will raise
    more questions than it answers. Unfortunately when you have an
    investigation that has faced the kind of massive stonewalling
    that we have, you make progress by inches instead of feet.
        Is Johnny Chung credible? Is he telling the truth? Well,
    the Justice Department thought so. They worked with him for a
    year. When it came time for him to be sentenced, they did not
    recommend jail time. They did not recommend a stiff fine. They
    recommended probation and community service, and that says a
    lot about his credibility.
        But we did some digging on our own. We subpoenaed a lot of
    documents over the last 2 years. We went back through all of
    these documents to see if they supported Johnny Chung's story
    or not, and in most cases they do.
        We looked at his passport, when Johnny Chung says he was in
    Hong Kong meeting with Liu Chao Ying, and General Ji's passport
    shows that he was there. He told us that he had to change his
    plans and travel back to Hong Kong that day from mainland China
    for the dinner. His passport backs that up. He said that Liu
    Chao Ying told him that Mark Middleton got half a million
    dollars from a Singapore group. We checked Mark Middleton's
    bank records, and they showed that he received over $1.75
    million from Asian businesses. One of the payments he received
    was half-a-million-dollar payment from Indonesia. We don't know
    what money Liu Chao Ying was referring to. If we could go to
    Hong Kong to interview Liu
    Chao Ying, maybe we can find out, but the Chinese Government
    will not allow that.
        We have a copy of a letter from Mark Middleton to one of
    his associates in Singapore.
        [The letter referred to follows:]
        [GRAPHIC] [TIFF OMITTED]58752.194

        Mr. Burton. I think we can put that on the screen. I am not
    sure everybody can read that. It is small print. It mentions
    someone named Liu. It says, ``thank you for the update on Ms.
    Liu. I know that she must be concerned with nepotism, but I am
    not sure how that affects us.'' We don't know what Mark
    Middleton meant in this letter. He has taken the fifth, so we
    can't ask him.
        Johnny Chung told us that in the fall of 1995, the DNC
    pressured him to contribute $70,000. We found an internal DNC
    memo from that time period to Chairman Fowler of the DNC. He
    was being asked to call Mr. Chung and tell him ``that bad
    things will happen,'' if he didn't come up with the money. We
    have assembled a staff report that lists Mr. Chung's statements
    and shows that there are documents to back them up. At the end
    of my statement, I will ask unanimous consent that they be
    entered into the record.
        Let me conclude by trying to put all this into perspective.
    Why does any of this matter? Why should anyone care? As I said
    at the beginning of my statement, this is a very serious
    national security issue. The Chinese Government was making a
    concerted effort to undermine our political system. They were
    conducting aggressive espionage at our nuclear labs. These
    aren't the actions of an ally. These are the actions of an
    adversary. Yet until all of this came out in the media, I have
    seen no evidence that this administration took it seriously. On
    a couple of occasions the President said that he believed the
    Chinese Government. Why?
        Yesterday the President, as I said before, approved a new
    technology transfer to China. He signed a new waiver to export
    a sensitive satellite to China once again. In the face of all
    of China's actions, the President is plowing forward with
    negotiations to bring China into the WTO, the World Trade
    Organization. Why? Is this the right way to respond to China's
    actions?
        I think the American people need to know the facts so they
    can judge for themselves. That is why we are holding this
    hearing. I don't think that this is a partisan agenda or a
    partisan issue. Everyone ought to be concerned about China's
    actions, whether you are a Democrat or a Republican. I voted
    against MFN for China. A number of my Democrat friends also
    did. We voted no because we have very serious concerns about
    the way China has behaved.
        I would like to make one final note. Over the past 2 years,
    we have examined a lot of illegal contributions. We have seen
    over and over again people making contributions in someone
    else's name. They do this to hide their identity or exceed the
    legal limits. It is obvious that this is a very serious
    problem. The penalties on the books for making conduit
    contributions are not stopping people from doing it.
        Later today I am going to introduce the Conduit
    Contribution Prevention Act. My bill will make this a felony
    instead of a misdemeanor. It would make civil penalties tougher
    as well. We need to stop those conduit contributions. I would
    like to invite everyone on the committee, Democrat or
    Republican, to cosponsor this bill. It should be a nonpartisan
    issue.
        [The prepared statement of Hon. Dan Burton as well as a
    copy of the Conduit Contribution Prevention Act follow:]
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        Mr. Burton. I now recognize my colleague Mr. Waxman for his
    opening statement.
        Mr. Waxman. Thank you very much, Mr. Chairman. I have just
    a brief comment about the approach I am going to take at this
    hearing. I generally accord witnesses a presumption that they
    are telling us the truth in their testimony. Unfortunately, due
    to false accusations Mr. Chung has made about others and
    inconsistent statements he has made about his campaign
    contributions, I can't give him that presumption today. Equally
    as important, I don't presume he is not telling us the truth.
        I commend him for cooperating with the Justice Department
    and for appearing before this committee, and I am most
    interested in his testimony. Our committee's role is not to
    unquestionably accept information or selectively highlight
    pieces that might fit into preconceived theories. In that
    spirit, I believe our job this afternoon is to evaluate all the
    statements Mr. Chung has made and simply assess whether what he
    is telling us today is reliable and credible. I look forward to
    the testimony.
        [The prepared statement of Hon. Benjamin Gilman follows:]
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        Mr. Burton. At this point would you rise, Mr. Chung. Would
    you raise your right hand.
        [Witness sworn.]
        Mr. Burton. Good morning, Mr. Chung, Mr. Sun, Mr. Murphy,
    and Ms. Cohen. Ms. Cohen is back there in the back.
        I think right now we would appreciate it if you would go
    ahead and make your opening statement, and because you have a
    lot of ground to cover, we will not put any limitations on your
    time because you have a story to tell, and we want to hear it
    all. So, Mr. Chung, we will now hear your testimony.

                     STATEMENT OF JOHNNY C.C. CHUNG

        Mr. Chung. Thank you, Mr. Chairman. Good morning, Mr.
    Chairman and the members of the Committee on Government Reform.
    My name is Johnny Chung. I reside in Artesia, CA, with my wife
    Kathy and three children.
        I have been asked to testify before this committee on the
    matters related to certain political contributions I made from
    1994 through 1996. With your permission, Mr. Chairman, I will
    read this written statement and ask that it be made part of the
    record of these proceedings today.
        Mr. Burton. Without objection, so ordered.
        Mr. Chung. In testifying before the committee, I hope to
    clear the record once and for all regarding a number of matters
    that have touched my life so deeply. In particular, I hope to
    address and clear up a number of issues that have been raised
    concerning the motivations and circumstances surrounding my
    political contributions between 1994 and 1996, and in
    particular the many falsehoods and misleading statements made
    by the media, politicians, and others concerning my
    experiences. I therefore welcome the opportunity to tell my
    full story to you today.
        During our last meeting in November 1997, I advised you
    through my counsel that I was unable to provide you with the
    details of certain of my business relationships due to a
    pending criminal investigation by the Department of Justice.
    The Department of Justice has now agreed that I may testify
    with certain limitations, and I will make every effort to
    provide this committee with full and accurate information and
    to answer as many questions as possible that I previously was
    unable to answer. After my testimony is complete, I am looking
    forward to putting this matter behind me once and for all.
        At the outset, I must make the statement and observation
    that I believe my testimony here today will probably disappoint
    a lot of people. Contrary to what some people think, I have
    never acted as an agent for the Chinese Government. I have
    never sought to do anything that might facilitate any sinister
    attempt to undermine the interests of my country, the United
    States, which I love. Far from it. I am a first-generation
    immigrant, a U.S. citizen, who, like your forefathers, do not
    speak English as good as my children and my wife do, but I am
    as loyal to my country as any of you.
        One of my deep regret about this entire matter has been the
    terrible impact that the campaign finance scandal caused in
    part by myself has had upon Asian Americans and, in particular,
    Chinese Americans. This controversy, which has been intensified
    by partisan politics and a sometimes vicious and overreaching
    media has caused me to fear that there will be a resurgence of
    the same type of anti-Chinese hysteria as we have seen
    historically in this country before. It is my hope that my
    testimony will help put a stop to the type of inflammatory
    columns written by people like Mr. Safire in the New York Times
    and others who seem to want to blame everything on China and
    cast doubt on the loyalty of Chinese Americans such as myself.
        In this regard, I would note that Chinese Americans and
    Asian Americans have for over a century contributed to the
    growth and greatness of America. Asian Americans, like your
    ancestors, have contributed and participated in every level of
    our society. However, in my view, we have not been successful
    in being full participants in the political process. I would
    note there is not a single Asian American member of this
    committee, except for Mrs. Mink of Hawaii, and very few Asian
    Americans in Congress or at high levels of our government.
        The system is set up so that if you donate money, you can
    participate. To participate in the American political process,
    Asian Americans, like myself, sought access just like any other
    group through a system we did not create. It is about this
    system that I will tell my story and how it ultimately
    destroyed my business and my reputation.
        In telling my story to you, I must make one other
    observation and request. It seems to me that the American
    people deserve an answer from you politicians who talk a lot
    about changing and improving the system. Yet more than 2 years
    after this controversy erupted, you, the Congress, have done
    nothing to change this system. Indeed, within the last month I
    received an invitation to a fundraiser where I might have got
    yet another photo opportunity with some politician, although
    most of you would probably run away from me at this point.
        What I want to say here is that I hope my testimony doesn't
    really end up being a shouting match between you Republicans or
    Democrats. Your attacking each other or attacking others who
    have had their reputations ruined, in some instances without
    any justification, serves no useful purpose.
        If you really want to do something about this, then change
    the system that allowed me to, with a few selected donations,
    attract the interest of the head of Chinese military
    intelligence. In other words, although I certainly feel I have
    some responsibility in this matter, I also think you should
    look to yourselves and ask yourselves if you really want to do
    something about this. Adopt some laws and regulations that
    limit the need for such huge amounts of money in order to run a
    political campaign. Both sides are probably equally at fault
    for letting this need for money get out of hand. We
    unfortunately live in a system where Ambassadorships can be
    bought, and staying at the White House can cost as little as
    $50,000, or access to our President or a Presidential candidate
    can be had if you are famous in Hollywood. Again, please keep
    in mind that I didn't create this system, you did.
        I therefore ask this committee to keep in mind that I don't
    think I am alone in suggesting that you politicians have the
    opportunity to be either heroes or hypocrites. I hope my
    testimony will help you ultimately to become heroes. When the
    historians write about this chapter in our history, hopefully
    they will say that our democracy survived the challenges of
    partisan politics, and we were able to create a stronger and a
    better country. You politicians should not always kowtow to the
    media, who you allow to influence you way too much, a media
    which doesn't hesitate to destroy one's reputation without
    solid facts.
        Were it not for the support of my family and the members of
    my church, I am not sure I would have been able to have the
    strength to deal with the public and personal attacks on my
    character. I do remain hopeful that as I tell my story today,
    you will understand that this former busboy and supposed friend
    of the President and politicians has paid a very high price for
    my involvement in politics. I found myself wearing a body wire
    and along with my family at one point in protective custody. I
    simply want to go back to a normal life where I can become an
    active and contributing member of my community once again.
        I would like now, Mr. Chairman, to talk about my personal
    and business background which led me to get involved in this
    matter.
        I was born and raised in Taiwan and came to the United
    States in 1983. After working as a busboy and working in a
    Holiday Inn, I ultimately opened my own business in the late
    1980's. After having mixed success, I started a fax broadcast
    business using what was then fairly new technology. However, my
    desire to expand this business required a substantial amount of
    capital. As a consequence, I was constantly looking for
    shareholders or investors to help me ultimately take this
    business public.
        By 1992, I began to target my business toward government
    agencies, political candidates, and elected officials who I
    believed could get the most useful benefit from a fax broadcast
    capability. As my business records reflect, I was able to get
    business from a number of political candidates and ultimately
    secured a contract with the State of California from then
    Governor Pete Wilson's office.
        As a consequence of my efforts to develop business, I
    traveled extensively to many of the offices of the Governors
    throughout the country, including the then Governor of Arkansas
    Bill Clinton. It was ultimately at a national Governors'
    conference in 1994 that I first came in contact with an
    official of the Clinton administration who later invited me to
    attend my first significant fundraiser, the President's 48th
    birthday party in August 1994.
        It was after this event that I began to realize the value
    and importance that political donations could have on my
    ability to get access and to further my business contacts. I
    also found it to be exciting. I can never forget the thrill
    that me and my family and my parents had when we first met the
    with the President and the First Lady at his birthday party.
    While you elected officials may be used to that kind of thing,
    most Americans, I think, including my family, were very much
    impressed and overwhelmed by this event. You get the feeling
    when you go to these things that you are a VIP, and even though
    people treated us like VIPs only because we gave the money, it
    still felt good.
        I began to realize, however, that I could also get a little
    something back for giving money. I saw the opportunity of
    attending these events and getting pictures with the people
    like the President and the Vice President and others as an
    opportunity to promote my business, and in particular the
    possibility of access for potential shareholders, investors or
    other business clients. And as I will relate you to shortly, my
    first contacts with the Haomen Beer people in December 1994
    started me on the road toward attracting investors and
    relationships from a number of the business people based in the
    People's Republic of China. Little did I know then that these
    relationships would ultimately cause me great heartache. At the
    time I saw it as a great opportunity.
        One thing I should try to make very clear at this point.
    Beginning in 1995 through the end of 1996, my business
    relationships in China evolved from efforts to obtain fax
    business to a business consulting relationship where I
    performed many services for these Chinese business contacts. It
    is important to have people understand that much of what these
    people wanted from me went well beyond me simply just taking
    them to a fundraiser. These people wanted me to do everything
    from assisting them in getting a visa to enter this country, to
    escorting them around the country, providing interpreter
    services, paying their expenses, and making introductions to
    both business and government contacts.
        Certainly it was very important to these people to have
    pictures taken with high-level American Government officials.
    For people who do business in China, pictures are worth their
    weight in gold. Just like many American companies such as Coca-
    Cola or Pepsi will spend millions to advertise in a Superbowl
    game, these business people and their companies treasure
    photographs with important people, because in China such
    photographs project a great sense of importance and reflect the
    degree of your importance. As a consequence, they were willing
    to provide me significant sums of money to help them to get
    these photos. We in America sometimes don't realize how
    important such things are in other cultures.
        In addition, I promoted myself to these people as someone
    who could get a lot of such things done, and that if they
    provide me with consulting fees or choose to invest in my
    company, I could assist their business efforts in the United
    States. It is my opinion that much of what these people wanted
    from me had less to do with influencing any election as it was
    to gain what most Americans want from our system: influence and
    the ability to develop relationships with important people. A
    lot of the people I met in China like Americans and wanted to
    move here or send their children here for education. In fact,
    despite the recent controversy about technology and espionage,
    a lot of the Chinese I met in the People's Republic of China
    admire Americans and wanted to do business and develop
    friendships.
        Much has been written and said about me being a conduit for
    foreign source donations to the Democratic National Committee.
    I have told the FBI and I previously have maintained that
    whenever I was given money, it was generally to provide a
    number of services for my business partners, clients, or
    investors. While there is no doubt that these people had some
    understanding that when I took them to an event, I would often
    have to donate to get them in, there was never any discussion
    about how much to give or when to give. Perhaps the only
    exception was my encounter with Ji Sheng De, which I will
    discuss in a moment.
        For the most part, however, I chose when to go to an event,
    who to invite, and how much I was to give. I usually decided
    whether to attend an event depending on whether or not I was
    trying to solicit someone for business and impress them or
    demonstrate to them that I had the ability to get them to meet
    the President or some important figure and have their photo
    taken with them. For whatever reason, this ability to do this
    service, among others, suggested to many who I dealt with in
    the People's Republic that I had connections and could
    introduce them to powerful people in this country.
        I will note for the record that I received in excess of $2
    million from 1994 to 1996 as a result of my business
    relationships in China. Less than 20 percent of that sum was
    actually donated to political causes. A substantial portion of
    that money was used to either pay the expenses of my business,
    the expenses of entertaining, and providing services to these
    business groups, and to return investments back to some of my
    shareholders. Even with the incident involving Ji Sheng De and
    Liu Chao Ying, I have never intended for my business to be used
    to make illegal political contributions. I always intended that
    I would have the ability to decide what to do with the money
    after I received it.
        Before I turn to a specific discussion of the various
    events and individuals that I dealt with between 1994 and 1996,
    I would like to say that I am very disappointed in the way that
    the Democratic National Committee has treated me in this
    matter. They prejudged my case, attacked me publicly, and even
    attempted to persuade Judge Real, the judge who sentenced me
    last December, that I somehow was an evil man and deserving of
    great punishment. I think that they should be ashamed of
    themselves for attempting to jump on me and hide from the fact
    that they aggressively solicited me for money from August 1994
    until the campaign finance controversy came to light in late
    1996. I now realize that they took my money with a smile and
    made fun of me when I turned my back.
        Today I have mixed feelings about the President and the
    First Lady, but I can't help but think that they used me as
    much as I used them. I also think, however, that it was grossly
    unfair for the DNC to attack me when they were fully aware that
    I was doing a lot of business and cultivating friendships with
    people from the People's Republic of China. I felt vindicated
    when Judge Real at my sentencing said that if the DNC didn't
    know about my business relationships, they had to be the
    dumbest politicians he had ever seen.
        Most important, I thought it was vicious for them to write
    a letter to Judge Real when they did not know the true facts,
    particularly after I had secretly cooperated with the
    government, worn a body wire, put myself and my family at
    potential risk, and for some period of time lived in fear and
    uncertainty. On the other hand, the DNC certainly was not aware
    of the contacts that were made by Mr. Ji and the incident
    involving my receipt of $300,000 from Liu Chao Ying in August
    1996.
        I will now turn to my recollections of those events and
    other matters that I believe are of some interest to this
    committee.
        Liu Chao Ying. I first met Liu Chao Ying in a restaurant in
    Hong Kong in June 1996 at a dinner I attended with one of my
    business associates. There were a number of big tables full of
    people at this dinner. Apparently Liu had heard that I might be
    able to get her access to high-level people in Washington, DC,
    and Liu asked me if I would be willing to get her an invitation
    to the United States. I agreed, and eventually she became part
    of the meetings and events that I had already scheduled in July
    1996 for Mr. Yao and others.
        I was going from Los Angeles to New York with Mr. Yao, who
    at that time wanted to take his companies public. I had
    previously met Federal Reserve employee Israel Sendrovic on a
    cross-country plane trip, and Mr. Yao asked me if I could set
    up a meeting for these officials.
        I took Liu along during these meetings with officials in
    New York and Washington, DC. She seemed impressed and told me
    that she wanted to do business with me. She explained that she
    was thinking of putting a company on the New York Stock
    Exchange. She said she would give me $300,000 that I was
    supposed to use to help her set up her business, which was
    supposed to be in telecommunications and commercial fishing in
    southern China. I then set up Marswell Investments in late
    July, early August 1996 for this purpose. At that time I used
    my own money to set up the company, but I expected that these
    costs would ultimately come out of the $300,000 Liu Chao Ying
    had promised me.
        During the Washington, DC, event with Liu and Mr. Yao, I
    introduced Liu to Don Fowler as the daughter of a powerful
    general. Fowler joked that he had a low rank in World War II.
    Also during that trip, I had a discussion with Liu Chao Ying at
    the Willard Hotel. Liu Chao Ying asked me if I had a Hong Kong
    back account. I said yes and gave her my bank account number in
    Hong Kong by writing ``void'' across a blank check and giving
    the check to her. During this conversation, Liu Chao Ying also
    told me: Don't do business with Mr. Yao, just do business with
    me. I was still not sure if she would provide the $300,000. I
    did notice on this occasion and on another occasion that a
    picture of me was missing after I met with Liu Chao Ying. The
    other occasion was during one of my visits to Hong Kong.
        Also during my various discussions with Liu Chao Ying, she
    informed me that she was going to change her travel plans as a
    result of what she felt were our very productive meetings.
    Originally she had been scheduled to go back to Hong Kong after
    this trip by changing her plans so that she could go directly
    to Beijing. She later told me that the reason that she went to
    Beijing instead of Hong Kong was so that she could tell her
    father about her trip.
        August 1996 meetings with General Ji. On August 7, 1996, I
    returned to Hong Kong with my daughter and her friend. On
    August 11, we were in Zhuhai, which is across the border from
    Macau and in China, when I received a phone call from Liu Chao
    Ying, and she invited me to a dinner with someone who she said
    was a very important man from Beijing. I accepted the
    invitation.
        The dinner was on August 11, 1996. Liu Chao Ying picked me
    up in her car, and we went to a restaurant which is famous for
    its abalone. I do not remember the name of the restaurant. She
    told me that the man we were going to meet with was very
    important. Liu Chao Ying stressed that I should not be afraid
    to talk myself up, and she encouraged me to show him my
    brochure. Liu Chao Ying told me that I was a much more
    impressive prospect than Charlie Trie because I had better
    connections than Charlie Trie and that my brochure was much
    better than Trie's.
        I also would like to add one oddity that stuck out in my
    mind. At one point during our conversation, Liu Chao Ying made
    a cellular phone call from the restaurant's basement. I asked
    her how she could make a call from a basement. She said there
    was a special antenna.
        When General Ji arrived, he came through the kitchen and
    introduced himself as Mr. Xu, the Chinese equivalent of Mr.
    Smith. The general said, you can call me Mr. Xu, and it was
    clear from the way he said this that this was a bogus name. I
    and Liu Chao Ying spoke with Ji about her recent trip, talking
    up the past times I was able to get meetings with politicians
    and dignitaries. Liu Chao Ying was very deferential to Ji in a
    way that it made me think he was her boss or superior.
        The key information relayed to me at this dinner from Ji
    was the following: We really like your President. We hope he
    will be reelected, or we would like him to be reelected. I will
    give you 300,000 U.S. dollars. You can give it to or use it for
    your President and Democratic party.
        I was somehow startled by this proposal, and I wondered who
    this man really was. However, I don't want to insult him or
    insult Liu, so I remained quiet and agreeable. I said something
    like, this is fine. It would be great to do business together.
    The more business I can do, then the more money I can give to
    the President and Democrat party.
        Ji then left through the kitchen and then we left the way
    we came in. No one paid the bill.
        When I got in the car with Liu, she put her finger up to
    her lips and indicated that I should not talk while they were
    in the car with the driver. When we got out of the car, I
    asked, ``Who is he?'' And she told me the General's name and
    who he was. I did not recognize the name.
        Liu scolded me and said that I need to know my Chinese
    history better. She explained that his predecessor was the
    government official who said that the American government
    should be more worried about missiles headed to Los Angeles
    than Taiwan.
        She then told me Ji was the military intelligence director
    of the People's Liberation Army. She wrote down his name on a
    small piece of paper and gave it to me and I put the paper in
    my pocket. Since my daughter and her friend were there, I was
    not going to make a big deal about this.
        At the time, I was staying with a friend. The next day I
    told my friend who I met with, and my friend said that Ji is a
    very important person. I also showed my friend in Shuhai the
    piece of paper with the name, and he recognized the name.
        The second meeting with Liu Chao Ying and General Ji: On
    August 13, 1996, I met again with Liu Chao Ying and General Ji
    back in Hong Kong. We met at a hotel lobby in the bar. The
    hotel is next to the Shangri La Hotel. I first was with Liu and
    then General Ji came in to join us.
        Ji said to me, ``now you know who I am.'' He told me that
    his name was so sensitive that he still wanted me to call him
    by an alias, ``Mr. Xu.'' Ji spoke in Chinese to Liu, saying,
    ``I will wire $300,000 to your account and you wire it to
    him.'' Ji said he needed a ``receipt'' or ``report'' to give
    ``to the organization''.
        At this point, Mrs. Ji came into the bar and sat with us
    and the talk changed to talk about children. General Ji had a
    son who was attending UCLA. His son wanted to stay at UCLA and
    in the United States. Mrs. Ji said the son, Alex, was the
    favorite of his grandfather. It was a very informal discussion
    of mothers and fathers talking about their kids.
        Mrs. Ji also said she was going to come back to the United
    States, where she told me she had already lived for 11 years.
    Alex began to work AISI, my company, shortly after I returned
    from this trip. He worked beginning in October and November
    1996 and on and off through February 1997.
        After Ji left this meeting, I briefly expressed to Liu my
    concern about getting involved with the General's money. My
    understanding was that she was going to give me the $300,000,
    and now that was changing and I didn't want to get involved in
    this kind of arrangement. I then went back to my hotel room.
        The next morning, August 14, Liu called me early and was
    yelling at me about not having a United States dollar account
    in Hong Kong. I had previously given her my account number at a
    Hong Kong bank. Liu always talked in foul language and she said
    to me, ``Damn it''--her language was worse than this--``how
    come you don't have a U.S. dollar account?'' I told her to come
    over after she was done so I could talk to her.
        When she came over later that day, I continued to raise my
    concerns about getting the money from General Ji instead of Liu
    herself. I also pointed out that the money was supposed to be
    for the various business deals we had discussed in July.
        In response, she told me that I could use the money for
    three things: I could give it to the President and the
    Democratic party; I could use it to take care of the General's
    son, Alex; and I could use it for my own purposes/business and
    to set up my and Liu's companies. I told Liu I was concerned
    because she had promised me her money and now this was
    something different.
        In what I perceived as an effort to persuade me that it was
    OK to do it this way, she told me that Mark Middleton also
    ``got half a million'' from a Singapore group, from someone
    named Hwang, Huang, or Wong, and the purpose of the money was
    ``to do good things for China,'' or to benefit China. She also
    mentioned a Boeing representative in Hong Kong who she said
    they give a lot of business to.
        In conjunction with the Boeing representative, the name
    Young was mentioned. She also said that ``we gave him the
    business in order for him to do good things for China.'' I did
    not have a first name of this Mr. Young. My sense was that I
    was told this so I wouldn't be worried about taking this money
    from Ji and Liu Chao Ying. My impression of these other
    examples was that they were involved in developing
    relationships and access to help China.
        I had limited dealings with Mark Middleton but knew who he
    was when Liu mentioned him. I had met him through Richard
    Sullivan in 1994 and had contacted him in early 1995 to talk
    about a friend who needed some assistance with a Swiss bank
    account. The friend was Ruth Lin, a child of a rich Chinese
    family. Supposedly she was prepared to help the DNC if she
    could get help from this bank account.
        She told me that there were people who were trying to kill
    her and she wanted to get the family's bank account in
    Switzerland. I called Sullivan and asked him to have Mark
    Middleton call to help her. I also asked Middleton to call her
    too. Middleton told me that my associate, Larry Liou, was also
    pressing him to do something for her. I also saw Middleton at
    the White House when I visited in 1996.
        After these representations from Liu, I kept the money,
    which actually had already been transferred into my account
    that morning by Liu. I never had any intention to give the
    $300,000 to the Democrats, and I ended up following Liu's
    advice and used the money primarily for myself and for helping
    the General's son, although I did make some donation to the DNC
    that was from the same account into which Liu made the deposit.
        I commingled money from multiple sources into this account,
    and I did not intend for the donation to come strictly from
    Liu's funds. I also donated to John Kerry in this timeframe,
    but in my mind I had already obligated myself to contribute to
    Kerry back in July when his people arranged the meeting at the
    SEC for Liu Chao Ying and Mr. Yao. As I have said before,
    although I received money from many sources, I alone decided
    how and when to donate it, who to donate it to, and how much.
        I believe my bank account at Overseas Trust Limited shows a
    wire being received on August 14, 1996, and then it went to my
    Cal Fed bank account. I wrote a check for the President's
    birthday party from that account.
        On August 16, 1996, I transferred the money from Cal Fed to
    General Bank in order to make a contribution to the DNC. I
    would also note that on this same day, Mr. Yao wired $200,000
    into this same Overseas Trust account.
        I always considered the money in this account, including
    the money from the General, to be my money, and I was free to
    do with it what I wanted. I emphasize that except for the
    General, no one told me to give money to the Democrats. All of
    the money I received I have reported as income.
        I next saw General Ji's wife when she came back to the
    United States with her son. I set up their attendance at a
    Presidential fundraiser, the ``Back to the Future'' event, at a
    California movie studio on October 17, 1996. I took my driver
    and secretary as well as the General's wife and Alex to meet
    the President.
        There was a mix-up with the DNC, and my driver and
    secretary were given a private audience with the President,
    while me and the General's wife and son were not included.
    While my driver and secretary were very appreciative, I was
    very upset. When the President came into the main event, I
    moved my way to the front and got in contact with the President
    and introduced the General's wife and son. The President spoke
    with Alex and asked him what he was majoring in at college. A
    picture was then taken by the General's wife or Alex, but I do
    not know what happened to it.
        Ultimately, I did not donate any money to the DNC for this
    event because they made a mistake with the introduction and
    photo opportunity. Karen Sternfeld of the DNC complained to me
    that I didn't give them enough money, and I explained to her
    that this was a very important guest and they had made a
    mistake. I said Irene Wu, my employee, usually handled all of
    the details in setting up attendance at these events and she
    had called the General's wife and son to set this up. At this
    event, I tried to talk with the Democratic National Committee
    chairman, Don Fowler, and Fowler scolded me for not meeting my
    fundraising obligations.
        At some point in the fall of 1996, General Ji raised
    concerns with me that Liu Chao Ying could only get a one-entry
    visa instead of the multiple entry visa that she had received
    on a previous occasion. Before the July 1996 Eli Broad
    fundraiser, I went with Liu to get a visa in Guangzhow, China,
    and told a female consular officer that since this was a
    general's daughter and that she previously had a multiple entry
    visa, she should get a multiple entry visa again.
        After Liu deposited the money into my account, I wrote a
    letter, August 18, 1996, to get Liu Chao Ying an invitation to
    Washington, DC, and to go to the Democratic National
    Convention. At this point, Liu didn't get her visa and she
    couldn't come. Don Fowler also invited her to come to the
    convention.
        Charles Parish: In early 1995, Mr. He, the president of
    Haomen Beer, asked me to obtain a visa because his visa was
    expired. I had previously met with Mr. He when I took he and a
    delegation around Washington, DC, in December 1994 in order for
    them to promote their beer in the United States.
        I took Mr. He to the U.S. Embassy where I was introduced to
    Charles Parish. I felt at that time that Mr. Parish and I sort
    of ``hit it off'' and were going to be friends. It was not
    until later that I became aware that Mr. Parish and He of
    Haomen Beer had developed a separate relationship.
        Charles Parish helped me get visas for dozens of people who
    asked me to provide them with invitations to the United States.
    I also socialized and did many favors for Mr. Parish. I took
    him as my guest to the September 1995 DNC fundraiser at the
    Century Plaza Hotel in Los Angeles, to which he also brought
    his sister and his girlfriend.
        At the event, I took Parish to a private VIP reception with
    President Bill Clinton. Mr. Parish insisted that Mr. He and Mr.
    He's girlfriend have the opportunity to have their picture
    taken with the President. This was a request that prompted the
    DNC to ask me for an additional $70,000 contribution.
        After the Century Plaza event, I arranged a private tour of
    First Lady Hillary Clinton's office for Mr. Parish when both he
    and I were in Washington, DC. At Mr. Parish's request, I gave
    invitations to the United States to at least two women who were
    girlfriends of his.
        In Beijing, Parish would occasionally stop by my office. On
    one of these visits he asked me to hire a computer tutor to
    train his secretary at the Embassy. I spent $500 of my own
    money accommodating this request. He also asked me to pay the
    tuition for seven students who he knew that wanted to be
    educated in the United States. Although I did not know these
    students, I spent between $7,000 to $8,000 of my own money
    doing this for Mr. Parish, including sending school supplies
    like computer programs and books directly to Beijing at his
    request.
        Charles Parish did help me out on many occasions. As I
    stated previously, he approved visa applications for business
    associates that I brought to him. However, by the end of 1995 I
    decided I did not want to continue my relationship with Parish.
    Part of the reason why I no longer wanted to deal with Parish
    was because he and Mr. He had entered into a relationship that
    I was not comfortable with.
        On at least one occasion I was asked by Mr. He to give a
    shopping bag of money and visas to Parish. Several months
    later, Mr. Parish asked me to have Mr. He--I want to make a
    correction here. I was asked by Mr. He to give a shopping bag
    of money and a passport to Mr. Parish. Several months later,
    Mr. Parish asked me to have Mr. He call him. Parish said that
    he wanted to be sure that these people he provided visas for
    actually come back to China. Later, Parish told me that indeed
    they did return to China.
        I became unhappy with the way I was being treated by my
    business associates in Beijing, so I decided to close my
    office. Too many people were asking me for visas rather than
    doing business with me.
        A gentleman, Robert Luu: Early in 1996, when I was in
    Beijing, I said I was called in the middle of the night by a
    man named Cui Bao Chien, connected with the Great Wall
    International Culture Co., who woke me up and said I need to
    come over to where he was, a karaoke bar. I went there and
    walked into the room where I was directed, and it was a
    conference-sized room with men and women around a table.
        I was introduced to the people, and one of the people in
    the room was Mr. Robert Luu, who was a Chinese-American United
    States citizen who was in Beijing and had not gone back to the
    States because of some legal problem. He asked me how to handle
    his case, and I told him he should go back to the United States
    to work it out.
        I next met Luu in mid-1996. Luu came to the AISI office in
    Los Angeles where I met him for approximately 10 minutes. Luu
    discussed a business proposal.
        The next time I heard from Luu was before my plea. In
    February 1998 I received a call at my business office from Mr.
    Luu. A message was left that I had received a phone call from
    Mr. Luu from Beijing. I didn't remember who Luu was and I did
    not call him back.
        I pled guilty in March 1998 and began being debriefed by
    the FBI. Luu called me again. At that time I had been told by
    the FBI to keep a recording device to record any suspicious
    conversations, so I did so with this man.
        In late April/early May 1998, Luu called me and asked how I
    was doing. He also spoke sympathetically about me being in a
    difficult situation. Luu asked to meet me, and I obtained
    specific instructions from the FBI about how to deal with Luu.
    Again, I was instructed to record all of their conversations.
        In their first meeting, Luu started talking about a
    Commander Li who wanted to take care of me. The message was as
    follows: ``If you keep your mouth shut, you and your family
    will be safe.'' The Chinese are more polite and indirect than
    this, so the words do not precisely translate. The Chinese
    communication was much more subtle. Nevertheless, this was how
    I interpreted the meaning of the words.
        Essentially the message that I believe I was given was that
    me and my family would be safe if I didn't, and if I did talk,
    I could not be certain what would happen. At a minimum, I
    believed I was being threatened. The FBI told me that they
    suspected Luu might have criminal connections.
        Luu also suggested he was in contact with some people from
    Beijing who were also known to me. Luu also mentioned that he
    received money from Beijing. Luu said they would give me money
    to take care of my legal expenses and my family and I could
    retire.
        Luu also asked if we could meet again and gave me an
    address. I was also given a code to use. This was in early May.
    Throughout this process, the FBI was monitoring communications.
    The FBI identified Luu as a San Gabriel businessman.
        In the next meeting with Luu, I raised questions about my
    security. We met in an open area for about 10 minutes, and Luu
    wanted to know the name of my judge. Luu also gave me the
    business card of an attorney. He told me he wanted me to meet
    that attorney at a downtown location and asked me to bring my
    case file.
        Again Luu inquired about my family and he again implied
    that I should keep quiet, and that if I did so, things would be
    OK. Luu also told me that he would give me money to pay for my
    legal bills and said that he thought it possible that Chinese
    political prisoners could be released if I did not cooperate.
    At that time, I felt Luu was scripted in the same way that I
    had been scripted by the FBI.
        In the first week of May, I learned that the New York Times
    was doing a story that involved Luu Chao Ying and the $300,000.
    The FBI and I were very concerned that the news story would
    scare Mr. Luu off. My attorney and I tried to get the New York
    Times to kill the story. They refused.
        On the day before the story came out, May 15, 1998, I ended
    up going forward with a meeting with Luu and his attorney. I
    consulted with the FBI before I proceeded. The plan was to tell
    Luu and the attorney that the New York Times may come out with
    a bogus story, and I was going to say that the FBI was really
    beating up on me, and I actually gave them an FBI agent's
    business card.
        When I met with the attorney and Mr. Luu, there were FBI
    agents throughout the building. I was told the attorney was
    connected and knew the No. 3 person at the DOJ, Department of
    Justice, and that he was familiar with the judge that was
    presiding over my case. Luu and the attorney were pitching me
    to replace my lawyer, Mr. Sun. The lawyer gave me an example of
    someone who did not cooperate and how everyone round him was
    taken care of. He said that this client was sentenced to a
    country club jail.
        One of the things that the FBI encouraged me to ask Mr. Luu
    was ``Who is behind you?'' When I asked him, Luu responded by
    giving me the nickname that I had given previously to Liu Chao
    Ying; the nickname ``Gunyang'' which means ``country girl.''
    Luu said Gunyang was happy that I was protecting her. Luu also
    mentioned General Ji. Luu also suggested they could plant
    newspaper story and that I might be able to get a Presidential
    pardon.
        Separately, Mr. Luu implied that they could ensure that the
    judge would give me a light sentence. The attorney also said he
    had experience with Watergate. I asked him how he could help
    me. I was coached by the FBI to be skeptical and press for
    answers. In this meeting Mr. Luu said that they could take care
    of my attorneys' fees.
        I was very nervous during this meeting and afterwards the
    FBI concluded that I had to be moved to a safer place. At that
    time they moved me to a hotel for 21 days with my family. My
    daughter, who was graduating in this timeframe, had to go to
    graduation with an FBI escort. I also had many phone calls and
    faxes with Mr. Luu, both before and after these meetings. This
    was a period of great stress for me and my family.
        There were at least a dozen meetings and conversations
    between me and Luu during May, June and July, up through the
    President's visit to China in the summer of 1998. On Memorial
    Day weekend, Luu said he had money at his house for me to pick
    it up, but the FBI was afraid for me to be alone at his house
    and they didn't have me go through with picking it up. At
    another point, Luu was going to put money in an account for me,
    but he didn't come through with it.
        By July, Mr. Luu started making self-serving statements on
    the tapes and tried to distance himself from previous
    statements. I was instructed by the FBI to tell Mr. Luu that I
    was going to be subpoenaed by the grand jury and that I had to
    tell the truth. Mr. Luu at that point had talked about how he
    thought he was being followed or taped and he told me to tell
    the truth.
        By the end of the summer, I told Mr. Luu that I was going
    to be subpoenaed and asked what I should do. By this time, Luu
    suspected something was going on, either he was under
    surveillance or he was being taped, and he began making self-
    serving statements and exculpatory statements. Luu said if he
    was ever caught, he ``would deny'' everything, and that he
    ``doesn't know Luu Chao Ying, doesn't know anybody.''
        Luu told me at this point that I should tell the truth. Luu
    also said at this point he just wanted to get my case for the
    other lawyer. I also asked Luu if I should blame this on
    General Ji and Mr. Luu said sure, the ``Gunyang'' would like to
    do that.
        My last question to Luu was, ``What should I tell them
    about you?'' This question made Luu very uncomfortable and Luu
    said, ``I know nobody. I am nobody.'' I told him I couldn't lie
    to the grand jury. I worked with the FBI throughout this entire
    effort and was coached on what to say to Luu.
        Thank you, Mr. Chairman.
        [The prepared statement of Mr. Chung follows:]
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        Mr. Burton. Thank you, Mr. Chung. That was a very, very
    thorough statement, and we do appreciate that.
        I will now recognize the committee's chief counsel, Barbara
    Comstock, for 30 minutes for questioning.
        Ms. Comstock. Good afternoon, Mr. Chung and Mr. Sun, Mr.
    Murphy, and Ms. Cohen. I want to thank you, and I want to note
    for the record that we met approximately 2 weeks ago, majority
    counsel, myself, Mr. Wilson and Mr. Griffin, and also minority
    counsel were included in that meeting, and we appreciate your
    working with us for 2 days to informally discuss this and your
    cooperating with us in this matter. I know it has been a long
    ordeal for you, Mr. Chung, and your family, and we appreciate
    your testimony here today.
        Mr. Chung, on March 17th, 1998, you pled guilty to charges
    of making almost $30,000 in contributions to the Clinton-Gore
    1996 campaign, as well as Senator John Kerry's campaign, and
    you also pled guilty to charges involving bank fraud and tax
    evasion; is that correct?
        Mr. Chung. That is correct.
        Ms. Comstock. And in your plea agreement, you agreed to
    cooperate with the government and with all the investigations,
    correct?
        Mr. Chung. That is correct.
        Ms. Comstock. And I know when we were out at that meeting
    with you a couple of weeks ago, we met with the FBI agent. J.J.
    Smith was with us; is that correct?
        Mr. Chung. That is correct.
        Ms. Comstock. And he was the agent you worked with
    throughout your cooperation?
        Mr. Chung. Yes, that was the agent who I worked with.
        Ms. Comstock. OK. I know he had expressed your cooperation
    to us when we were there, and was that your impression
    throughout your time working with Mr. Smith?
        Mr. Chung. Yes.
        Ms. Comstock. And as a result of that cooperation, you were
    given a sentence of 5 years probation and 3,000 hours of
    community service, correct?
        Mr. Chung. That is correct.
        Ms. Comstock. From what we have been told from Justice
    Department and FBI sources familiar with your case, this is the
    type of sentence that is only provided to witnesses who the
    government feels provided both substantive information as well
    as a great deal of cooperation. Was that your understanding
    also?
        Mr. Chung. That is correct.
        Ms. Comstock. Now, I understand as a result of that
    cooperation, you and your family have also experienced what you
    were just testifying to, both you and the FBI perceived as
    possible threats against your security.
        Mr. Chung. That is correct.
        Ms. Comstock. And I think we will get to that a little
    later, but I guess it is clear that you feared for your safety,
    and even more so the safety of your family?
        Mr. Chung. Yes, that is correct.
        Ms. Comstock. Now, as you explained to us, Mr. Chung, back
    a few years ago you were very much a welcome person at the
    White House, correct?
        Mr. Chung. I guess so.
        Ms. Comstock. You were at many of the fundraisers and
    events. I believe you were at the White House almost 50 times;
    is that correct?
        Mr. Chung. That is correct.
        Ms. Comstock. And when this matter first became public in
    late 1996 and early 1997, you made the observation that you
    thought the White House was like a subway. ``You have to put
    coins in to open the gates.'' Was that your observation?
        Mr. Chung. Yes, that is correct.
        Ms. Comstock. And as a result of this access that you had
    to the White House and other high-ranking administration
    officials, that made you known in China as somebody who had a
    lot of high-ranking connections; is that correct?
        Mr. Chung. That is correct.
        Ms. Comstock. You told us about after you had the Haomen
    Beer people in the White House in December 1994, they had
    pictures taken with the President. When you went back to China
    in 1995, how were you greeted by those folks?
        Mr. Chung. After we had the pictures taken at the White
    House at the Christmas party of 1994, Haomen Beer people
    welcomed me at China with a red banner in their beer
    manufacturing company, and they welcomed me with a big party.
        Ms. Comstock. They had also used their pictures with the
    President for their beer commercials or beer advertising; is
    that correct?
        Mr. Chung. I did not know until the campaign contribution
    comes up. When I was in Beijing there ask a part of street I
    never know I should go. I would say thank you to the CNN, show
    me the pictures on the TV. That I know at that time. They used
    the pictures for their commercial purpose.
        Ms. Comstock. And as a result of the business and the
    access that you described to us in your statement, you believe
    that is how you came to the attention of Liu Chao Ying in the
    summer of 1996?
        Mr. Chung. That is correct.
        Ms. Comstock. OK. And you have told us that it was in June
    1996 that you first met her; is that correct?
        Mr. Chung. I do not understand this question.
        Ms. Comstock. I was wondering if you first met Liu Chao
    Ying in June 1996.
        Mr. Chung. That is correct.
        Ms. Comstock. I just wanted to show your passport records.
    I believe you received a copy of the exhibits also. This is
    exhibit 1, where it shows your passport records with you
    entering Hong Kong and going between Hong Kong and Macau
    throughout June 5th and June 8th.
        [The exhibit referred to follows:]
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        Mr. Chung. That is correct.
        Ms. Comstock. Is that around the time when you believe you
    first met Liu Chao Ying?
        Mr. Chung. That is correct.
        Ms. Comstock. OK. I would note for the record that there
    was also some marks in your passport where you were also in
    China or Hong Kong in late June, also.
        Mr. Sun. Just for the record, Mr. Chung has a hearing
    problem. He has a problem hearing in one of his ears. That is
    why he is having some difficulty.
        Ms. Comstock. Let me know if I need to speak up.
        As you explained, you brought Liu Chao Ying to several
    events in July 1996. I wanted to show you a record that is
    exhibit 2, that is a July 16th memo. It is a memo from your
    company, from your general manager at that time, Irene Wu. It
    indicates that you were going to take Ms. Liu to a dinner at
    Mr. Eli Broad's House, is that correct?
        [The exhibit referred to follows:]
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        Mr. Chung. That is correct.
        Ms. Comstock. Now, this document from your company shows
    that under the Broad dinner, it does say Broad dinner, but we
    understand that to be the Eli Broad dinner held in July 1996,
    you were the one who was bringing Liu Chao Ying to this event,
    correct?
        Mr. Chung. That is correct.
        Ms. Comstock. I would just note for the record that your
    name is listed first there, and then the third name is Ms. Liu
    Chao Ying, vice president, China Aerospace International
    Holding, Limited.
        Mr. Chung. That is correct.
        Ms. Comstock. That would be Ms. Liu, correct?
        Mr. Chung. That is correct, yes.
        Ms. Comstock. And your assistant, Irene Wu, who drafted
    this document, also indicated you would give the passport
    numbers for Ms. Liu and another of the foreign guests. That is
    on the bottom here. It says, ``I will give you the passport
    numbers for Mr. Yiu and Ms. Liu.'' Was that the normal practice
    you had when you brought the foreign guests to these events?
        Mr. Chung. Yes.
        Ms. Comstock. They asked to you provide the passport
    numbers?
        Mr. Chung. Yes, sometimes. Yes.
        Ms. Comstock. Now, you told us that you had also given Ms.
    Liu your Hong Kong bank account when she had requested it at
    this time on this visit in July 1996, sometime during that
    visit, is that correct?
        Mr. Chung. That is correct.
        Ms. Comstock. You also set up a company, Marswell
    Investments, with Ms. Liu Chao Ying, in anticipation of going
    into business with her?
        Mr. Chung. That is correct.
        Ms. Comstock. I wanted to show you on the screen now
    Marswell documents. This is exhibit 3. This is a certificate
    with your name on it, Johnny Chung, and then there is a second
    certificate that has Ms. Liu's name, it says Chao-Ying Liu on
    it, and it shows both of you incorporating this Marswell
    Investment Co. in California in 1996?
        [The exhibit referred to follows:]
        [GRAPHIC] [TIFF OMITTED]58752.249

        [GRAPHIC] [TIFF OMITTED]58752.250

        Mr. Chung. That is correct.
        Ms. Comstock. Now, you said when Ms. Liu left the company
    in late July, originally she was going to go back to Hong Kong
    but she ended up going to Beijing, is that correct?
        Mr. Chung. That is correct.
        Ms. Comstock. OK. Now, she told you that she had to see her
    father in Beijing, is that correct?
        Mr. Chung. I asked my former general manager, Irene Wu,
    where did she go. She said she went straight back to Beijing.
    As I know, she is going back to Hong Kong. Later on when I went
    back to Hong Kong, I asked her, and she said I went straight
    back to Beijing, talked to my father.
        Mr. Burton. Did you know at the time, Mr. Chung, that her
    father was the former head of the People's Liberation Army? Did
    you have any knowledge of that?
        Mr. Chung. When people, one gentleman introduced her to me,
    of course he said, the gentleman introduced her to me, he said
    her father is the most high ranking General, the General of the
    Army. This I know.
        Mr. Burton. So you knew when she was going back to talk to
    her father, she was going back to talk to somebody very high in
    the government who had been the head of the People's Liberation
    Army?
        Mr. Chung. I said the father and also, yes, Mr. Chairman.
        Mr. Burton. OK, thank you.
        Ms. Comstock. Now, on August 7th you traveled back to Hong
    Kong with your daughter and a friend of hers?
        Mr. Chung. Yes, ma'am.
        Ms. Comstock. I wanted to show you your passport records
    that we have as exhibit 4 show you entering Hong Kong on August
    7th.
        [The exhibit referred to follows:]
        [GRAPHIC] [TIFF OMITTED]58752.251

        Mr. Chung. Yes.
        Ms. Comstock. And then several days after you were there,
    you said you got a call on August 11th--Ms. Liu contacted you,
    and I wanted to show you exhibit 5 is your passport records of
    August 11th. These passport records indicate that you left
    China on August 11th and then entered and departed Macau in
    route to Hong Kong and then you entered Hong Kong.
        [The exhibit referred to follows:]
        [GRAPHIC] [TIFF OMITTED]58752.252

        Mr. Chung. That is correct.
        Ms. Comstock. When Ms. Liu called you, she said she had an
    important person for you to meet and you were going to have a
    dinner in Hong Kong, correct?
        Mr. Chung. Yes, ma'am.
        Ms. Comstock. Does this exhibit 5 here reflect the route
    that you had to travel with Ms. Liu in order to get to Hong
    Kong?
        Mr. Chung. Yes.
        Ms. Comstock. OK.
        Mr. Burton. As I understand it, you were staying with a
    friend when you were there at that time, is that right?
        Mr. Chung. That is correct.
        Mr. Burton. And Ms. Liu contacted you. How did she know
    where you were staying?
        Mr. Chung. I was there traveling. I take my daughter and
    her friend in Macau frequently for one date. Macau is like a
    street close to Taihe. Then I enter into China, Taihe, with my
    business friend. And his telephone rings. Mr. Chairman, this is
    what the gentleman, the name I cannot talk about it here by the
    instructions of the Department of Justice for the ongoing
    investigation.
        This gentleman's telephone was ringing, and he gave it to
    me, part of the phone, and said ``Ms. Liu Chao Ying call you.''
        Mr. Burton. The point I am trying to figure out in my mind
    is, did you tell her you were staying there?
        Mr. Chung. She know that--the day we arrived in Hong Kong,
    there are so many people who I took over here for that event,
    they all entertaining my daughters and me at the one event.
        Mr. Burton. So Liu Chao Ying knew where you were staying?
        Mr. Chung. Yes. She knew I am on my way to Macau in China.
        Mr. Burton. Thank you.
        Ms. Comstock. Did Liu Chao Ying also know the person you
    were staying with, personally?
        Mr. Chung. Yes, ma'am.
        Ms. Comstock. Now, you described the meeting that you had
    with General Ji and Liu Chao Ying, it was in the basement of a
    restaurant?
        Mr. Chung. Yes, ma'am.
        Ms. Comstock. OK. And when General Ji came in, he went
    through the kitchen instead of coming through a door the way
    you had come in?
        Mr. Chung. Yes, ma'am.
        Ms. Comstock. Could you describe General Ji to us? Were you
    able to identify him in order to tell the Justice Department
    who he was or what he looked like?
        Mr. Chung. When I fully cooperated with the FBI and the
    Department of Justice, they show me a dozen pictures. Before
    they showed me the pictures, they asked me the description of
    the General Ji, and I told them that. When they showed me the
    pictures, within 2 to 3 seconds, out of the 10 pictures I pick
    it up, 2 of them. One is the picture I know, 50-some years old;
    one is the picture of 20-30 some years old. And, yes, I know
    him.
        Ms. Comstock. OK. So you were able to pick out the pictures
    from the group of pictures that the FBI showed you?
        Mr. Chung. In 2 or 3 seconds.
        Ms. Comstock. They indicated to you that you indeed had
    picked out General Ji's picture?
        Mr. Chung. That is correct.
        Ms. Comstock. Now, you had testified--could you just tell
    us again what General Ji said to you at that dinner, at the
    conclusion, about the $300,000?
        Mr. Chung. Yes, that is correct. I am going to say it in
    English first, and I am going to use the Chinese exactly what
    he said to me, and we have the interpreter over here to
    translate it.
        At the abalone restaurant, he said to me, ``I like your
    President very much.''
        The Interpreter. We like your President very much.
        Mr. Chung. We would like to see him reelected.
        The Interpreter. We hope to see him reelected.
        Mr. Chung. I will give you $300,000 U.S. dollars.
        The Interpreter. I will give you $300,000 U.S. dollars.
        Mr. Chung. You can give it to the President and the
    Democrat party.
        The Interpreter. You can give it to your President and the
    Democratic party.
        Ms. Comstock. Now, when Ji said that to you, you did not
    make any objections about anything he said?
        Mr. Chung. Inside my heart, after that point, he said he is
    Mr. Xu. I said to myself at that moment, who the hell this guy
    is? Who do you think you are? I didn't say it. Inside my heart
    I say that.
        Ms. Comstock. Now, when you returned home that evening, the
    friend that you were staying with, you told us that you asked
    him if he knew who General Ji was, and he told you also that he
    was an important person?
        Mr. Chung. Yes. He write it down on a small piece of paper
    with a name. I show it to my friend in Xhuhai, and I asked him
    who he is. It is what she said, who he is. And my friend told
    me that, yes.
        Mr. Burton. One of the things that was of interest to me
    is, and this is an opinion that I want to get from you, you
    said I think in your statement that Liu Chao Ying showed
    deference to General Ji. Can you describe how you felt that,
    because it is very important that we understand who was making
    the $300,000 contribution and who was making the decisions on
    how it was to be spent.
        Mr. Chung. To answer your first question, Mr. Chairman, as
    a businessman in the room, you would know who is more important
    when you see who is talking and who is following the order. And
    I can see clearly he is the boss or he is the superior. And
    then he told me that, after that time, after that abalone
    restaurant. In my heart, I said to you already, I don't know
    who this guy is. ``Who the hell you are?'' I said to myself,
    and later on I found out. Up to this point, I still didn't
    receive anything yet.
        Mr. Burton. But you did get the clear impression, very
    clearly, that General Ji was in charge and that he was going to
    be the intermediary between you and General Ji?
        Mr. Chung. That is correct.
        Ms. Comstock. I just wanted to get to those bank records. I
    want to show you exhibit 6, which shows again--that is when you
    said you met with General Ji again. Again, your passport shows
    you leaving China, I believe you said you were in Xhuhai and
    again entering Hong Kong. It was at this second meeting where
    General Ji turned to Liu and told her, ``I will wire $300,000
    to your account,'' and she was to wire it to you, is that
    correct?
        [The exhibit referred to follows:]
        [GRAPHIC] [TIFF OMITTED]58752.253

        Mr. Chung. That is correct.
        Ms. Comstock. I am showing you exhibit 7 on the screen.
    This is your Overseas Trust Bank account record that was
    provided to the committee recently. You had said on this
    morning that Liu Chao Ying called you and said she was putting
    money into your account. I guess I would direct your attention
    to the third entry down where it says--it is 14 August 1996. It
    has a transaction for a deposit of approximately $2.3 million
    Hong Kong dollars?
        [The exhibit referred to follows:]
        [GRAPHIC] [TIFF OMITTED]58752.254

        Mr. Chung. That is correct.
        Ms. Comstock. And my understanding is that is the
    equivalent of $300,000 U.S. dollars; is that correct?
        Mr. Chung. That is correct.
        Ms. Comstock. And prior to receiving that deposit that Liu
    Chao Ying facilitated, your account showed only a balance of
    approximately $1,068 Hong Kong dollars, is that correct, up
    there on the second line?
        Mr. Chung. That is correct.
        Ms. Comstock. And that would be the equivalent of
    approximately $150 in U.S. dollars?
        Mr. Chung. That is correct.
        Ms. Comstock. And then again, showing you another bank
    record that you had provided to us, exhibit 8, again from your
    Overseas Trust Bank Limited account, this document is a wire
    transfer report which provides more detailed information on the
    wire and it shows the ordering customer of the wire was Liu
    Chao Ying; is that correct?
        [The exhibit referred to follows:]
        [GRAPHIC] [TIFF OMITTED]58752.255

        Mr. Chung. That is correct.
        Ms. Comstock. Now, after Ms. Liu had wired this money, you
    had asked her to come over to see you that day on August 14th?
        Mr. Chung. That is correct.
        Ms. Comstock. And it was on that----
        Mr. Chung. She ordered me in the early morning.
        Ms. Comstock. It was on that occasion that she had
    mentioned others who had been receiving money, Mr. Middleton
    and Mr. Young. You told us she made a reference to them, you
    felt to assuage you into keeping the money; is that correct?
        Mr. Chung. Yes.
        Ms. Comstock. All right. And when she said that, she seemed
    to know who Mark Middleton was? You had not raised his name,
    she raised it first?
        Mr. Chung. I can feel she know her--she know him, I am
    sorry.
        Ms. Comstock. You knew Mark Middleton to be a former senior
    White House aide with business contacts at that time in Asia?
        Mr. Chung. I know he used to work in the White House. I met
    him twice in the White House when he was employed by the
    Clinton administration.
        Ms. Comstock. OK. And when she mentioned a Mr. Young, a
    Boeing representative, she didn't give you a first name of that
    Mr. Young?
        Mr. Chung. No.
        Ms. Comstock. And you don't know who that Mr. Young is?
        Mr. Chung. No, I don't. In the way we talk about it, nobody
    in Chinese, they say Mr. Chung, Mr. Lin, Mr. Young. Very few
    times you got to the first name.
        Ms. Comstock. Now, on a separate occasion back in February
    1996, you told us a Mr. Pai, who was a business associate also
    of yours, told you something about Charlie Trie. Could you tell
    us about that car ride in February 1996?
        Mr. Chung. A gentleman of the branch manager of China
    Construction Co., the branch manager in Beijing, Mr. Pai Yung,
    Pai is the last name, at the one Chinese restaurant after we
    finished the dinner, he drove me back to my apartment in
    Beijing.
        At one point he said to me, ``Do you know Mr. Charlie
    Trie?'' In Chinese, he said. I said I do. He is one of the
    Chinese-Americans, like me. ``And do you know he is a good
    friend with your President?'' I said yes, I know. And he asked
    me, ``Do you know he asked my government for $1 million to give
    it to the President and Democrat party?'' And my eye turned to
    this way, and from that point, no more further conversation.
    Just keep driving.
        Ms. Comstock. Now, you had told us you had also seen a
    picture of Mr. Trie and Mr. Middleton in, was it the office of
    Mrs. Pai's business associate, or some connection with Mrs.
    Pai's business associate?
        Mr. Chung. When I was down there in southern China at the
    Citicorp, when I was there one of the businessmen, Mr. Hur, and
    I went to their office. I see the pictures, and I also see the
    company brochure with Mark Middleton and Charlie Trie and this
    gentleman, Mr. Hur, was on the couch, and taking pictures
    together.
        Ms. Comstock. All right. Now, also returning back to when
    you had that dinner, that first dinner with Liu Chao Ying and
    General Ji on August 11th, you said Liu Chao Ying had mentioned
    Charlie Trie in that meeting. From her talking about Charlie
    Trie and saying you had a better brochure than Charlie Trie,
    did you have the impression that Liu Chao Ying knew Charlie
    Trie?
        Mr. Chung. She know him, in my impression.
        Mr. Burton. Let me change subjects here. You said that in
    early 1996 you were in Beijing in the middle of the night. You
    got a telephone call from a Cui Bao Chien.
        I had difficulty with the names. He was connected with the
    Great Wall Manufacturing Co. He asked you to come to a karaoke
    bar that night?
        Mr. Chung. That is correct.
        Mr. Burton. When you got there, you were introduced to
    Robert Luu, the man you thought made these overt threats to
    you?
        Mr. Chung. That is correct, Mr. Chairman.
        Mr. Burton. At that time, was Liu Chao Ying ever mentioned
    or General Ji ever mentioned?
        Mr. Chung. Never.
        Mr. Burton. Never. The FBI worked with you throughout the
    entire process, is that correct, and they wired you so that
    they could pick up the conversations?
        Mr. Chung. Not only wired me, but also got a hidden camera.
        Mr. Burton. A hidden camera. OK. Another one of my
    colleagues is going to go into more detail on this subject, but
    I wanted to ask you about ties that Mr. Luu may have had to
    Chinese intelligence sources. Our investigators have been told
    that Mr. Luu failed not one but two lie detector tests, one
    administered by the government and another was administered
    independently, and the private polygraph exam indicated Mr. Luu
    showed deception when asked if he had ties to the PRC
    intelligence services.
        Do you know of any ties that Mr. Luu had to the PRC or
    General Ji or anybody else in the Chinese Government?
        Mr. Chung. According to the instruction by the FBI, I posed
    him a lot of questions. One of the questions I asked him, ``Do
    you know General Ji?'' He clearly showed to me he know him. I
    pointed out, again under instruction of the FBI, ``Do you know
    Gunyang?'' which is equal to Liu Chao Ying. He said he know
    him.
        Mr. Burton. He used a Chinese term about Liu Chao Ying
    which indicated to you that he had to know Liu Chao Ying
    because that term had been used before; is that correct?
        Mr. Chung. That is correct. I tried to, under the
    instruction of the FBI, I tried to find out who is behind him.
    I had to find it out who is behind him. That is my instruction.
    And he come out with the Gunyang, which is very important words
    to this committee. When they say ``gunyang'' in Chinese, which
    means a country girl, I think nobody dared to call Chao Ying
    country girl. I gave her that name at the Willard Hotel.
        Mr. Burton. You gave her the name?
        Mr. Chung. I gave her the name.
        Mr. Burton. When he used the term ``country girl'' in
    Chinese, you knew exactly who he was talking about?
        Mr. Chung. Bingo.
        Mr. Burton. Her connection, of course she was a subordinate
    or showed deference to General Ji, who was the head of Chinese
    military intelligence?
        Mr. Chung. Under the instruction of the FBI, I tried to
    push him. At the very end of the few meetings, I got that
    impression, he know him.
        Mr. Burton. I understand that. What I am talking about is
    when you first met them at the restaurant in Hong Kong, she
    showed deference to General Ji?
        Mr. Chung. I am sorry, yes.
        Mr. Burton. And you knew that he was superior to her and
    she knew he was the boss.
        Mr. Chung. That is correct.
        Mr. Burton. So when you heard Mr. Luu talking about her and
    also you were trying to find out about General Ji, you knew
    there was a connection there between her and the Chinese
    military intelligence?
        Mr. Chung. That is correct.
        Mr. Burton. Now, you mentioned a Commander Li. Did she ever
    or did Mr. Luu ever identify who Commander Li was?
        Mr. Chung. The whole entire undercover operation, I always
    wanted to find out who Commander Li is. He never told me who
    Commander Li is. I didn't know who Commander Li is.
        Mr. Burton. But Commander Li was associated with a veiled
    threat that you might be in trouble if you talked, right?
        Mr. Chung. In the very soft talk in Chinese, but a very
    hard reaction, I can feel as my life, my family life, is in
    great dangers if I talk.
        Mr. Burton. This is very important. The FBI concluded from
    the wiretap, the wire that you were wearing, that there was a
    definite possibility that you might be in danger?
        Mr. Chung. That is correct, Mr. Chairman.
        Mr. Burton. And they put you into a motel with your family
    for 21 days?
        Mr. Chung. On top of each other.
        Mr. Burton. On top of others. On top of each other. You
    were sleeping on top of children. They didn't even give you a
    big hotel room?
        Mr. Chung. They tried. They did treat me well. I want to
    put in the record, they treated me very well.
        Mr. Burton. But the point is, it is not just your
    imagination that Mr. Luu was telling you if you talked, you
    might be in real jeopardy, and so might your family, and you
    felt there was a strong connection back with the Chinese
    Government?
        Mr. Chung. That is correct.
        Mr. Burton. And the FBI concurred because they did put you
    in protective custody?
        Mr. Chung. That is correct.
        Mr. Burton. I think we have a couple more documents.
        Mr. Chung. Mr. Chairman, I would like to put in some more
    information here. After that time, New York Times also come out
    pretty much at the same time, New York Times came out with the
    article about Liu Chao Ying with that $300,000, and all of this
    coming up at the same time, I think that is why we conclude
    myself and my family is in great dangers, and they move us in
    the middle of the night.
        Mr. Burton. I see. OK.
        Ms. Comstock. I just wanted to cover just a few more
    documents that you had addressed regarding some of the events.
    In October 1996 you said you had brought General Ji's wife and
    son to the ``Back to the Future'' event. I want to show you
    exhibit No. 9 which shows an invite. These were provided from
    your documents. Was that the invite for that October event that
    you took Mrs. Ji and her son Alex too?
        [The exhibit referred to follows:]
        [GRAPHIC] [TIFF OMITTED]58752.256

        Mr. Chung. That is correct.
        Ms. Comstock. And then exhibit 10 was the letter that you
    had discussed, that Don Fowler wrote to Liu Chao Ying inviting
    her to the Democratic National Convention. Was that the letter,
    had you asked Don Fowler to write that letter for Liu Chao
    Ying?
        [The exhibit referred to follows:]
        [GRAPHIC] [TIFF OMITTED]58752.257

        Mr. Chung. I asked for that letter. They gave it to me. I
    gave it to Ms. Liu Chao Ying.
        Ms. Comstock. He wrote this and a number of other letters
    for you?
        Mr. Chung. Yes.
        Ms. Comstock. Thank you.
        Mr. Burton. Thank you, Mr. Chung. We now yield to Mr.
    Waxman for 30 minutes.
        Mr. Sun. Mr. Chairman, would it be possible to have Mr.
    Chung take just a short break?
        Mr. Burton. We will stand in recess for 5 minutes so Mr.
    Chung can take a break. Is that OK with you?
        Mr. Waxman. Yes.
        [Recess.]
        Mr. Burton. The committee will reconvene.
        Mr. Sun, I believe you had one little clarifying statement
    you wanted to make real quickly regarding something that was in
    the testimony.
        Mr. Sun. Yes, Mr. Chairman. Thank you, Mr. Chairman.
        Just briefly in connection with Mr. Chung's statement,
    minor clarification. When he was discussing his--how he knew
    Mark Middleton, he indicated a name we need to clarify. The
    context of the statement was where one of his associates had
    called to ask him a favor and to call Mr. Middleton to
    intervene on behalf of this issue involving a Swiss bank
    account. The person who contacted him was an individual by the
    name of Liu Shu Min, who is a Chinese Embassy official that Mr.
    Chung had been introduced previously. So it was Mr. Liu who
    called Mr. Chung and asked him to call Mr. Middleton. And then
    the name that was actually used by Mr. Chung, Larry Liou,
    spelled L-I-O-U, was one of his AISI shareholders who on a
    separate occasion had asked Mr. Chung to call Mr. Middleton for
    a favor. So we have two Lius there, and we needed to correct
    the record in that regard.
        Just another couple of quick things. One is with respect to
    the money that came from Ms. Liu in August 1996, I believe Mr.
    Chung indicated that the money came into his overseas trust
    limited account and that just to clarify the record, a portion
    of the money was sent to his Cal Fed account in August 1996,
    and then more money from that account was later brought over at
    a later time. Just to clear that up.
        And I believe Mr. Murphy has one other thing as well.
        Mr. Murphy. Mr. Chairman, apparently there was a little
    miscommunication in the discussions regarding Charles Parish.
    It wasn't Mr. Parish's girlfriend that was brought to the
    event. It was Mr. He's girlfriend. I wanted to make sure that
    was clear.
        Mr. Burton. Anything else? If not, Mr. Waxman, you are
    recognized for 30 minutes.
        Mr. Waxman. Thank you.
        Mr. Chung, welcome back to our committee. This is the first
    time you've testified in a public hearing, but it's not the
    first time you've appeared before Members of Congress. In
    August 1997 you went before members of the Senate Governmental
    Affairs Committee and talked to them, and in November--on
    November 14, 1997, you had a meeting with members of this
    committee and our staff; isn't that correct?
        Mr. Chung. That's not correct. My attorney talked to the
    Senate committee.
        Mr. Waxman. You did not talk to the Senate committee?
        Mr. Chung. I did not come to Washington, DC.
        Mr. Waxman. You did come before us?
        Mr. Chung. I did come before you.
        Mr. Waxman. And your attorney went before the Senate
    committee talking to them in hopes that you might get immunity.
    Is that your understanding?
        Mr. Chung. That's what I understand.
        Mr. Waxman. During your interview with us, you took us
    through a chronology of your interactions with political
    officials, and I want to ask you about some of them. But before
    I get to talking to you about Liu Chao Ying and General Ji, I
    want to ask you about 1995 because I was so impressed when you
    met with us and you talked about your trip to China in 1995
    where you were talking to Chinese Government officials about
    releasing Harry Wu who was a political prisoner. You spoke with
    real passion. You felt Mr. Wu was being held improperly and
    illegally. I'd like you to share your views with us and share
    with us your experiences in dealing with Mr. Harry Wu.
        Mr. Chung. In late June 1995, one gentleman called Mr.
    Charles Parish, who we know who he is, he called me from the
    Urumchi Sinkiang province of China, and he called me at my
    office. I ask him, why you go there? It's small countryside. He
    said, I'm here for a purpose. Well, I thought you had some
    friends. He indicated a friend who I did take them to the March
    1995 Presidential radio address, Mr. Sun. I asked Mr. Sun to go
    to the hotel, give him the basket of fruit and the flower.
    Ended up with Mr. Sun was followed by the Chinese policeman.
    Two days later I saw by watching the CNN Breakout, I saw Mr.
    Wu, Harry Wu's wife was cry out at Capitol Hill. I said to my
    wife, I hope I can do something about it. Would you cry out if
    I was arrested by someone overseas? She said, I would do the
    same thing.
        I feel sympathy about that. The first one I contact then
    California Democrat Chairman Bill Press, a cohost of the
    Crossfire today. I raise my issue to Mr. Bill Press. I talk to
    him. He helped me out to get through with Chairman Don Fowler,
    and I talked to Don Fowler about Harry Wu issue. Then--the
    reason why Mr. Charles Parish was in Urumchi Sinkiang, he was
    ordered by the State Department looking after Mr. Wu.
        Mr. Waxman. Mr. Chung, let me interrupt you. Rather than
    going through every detail of what you said to us, I recall
    that you talked to a man in China who was equivalent to the
    head of the President's National Security Council and made an
    appeal to him to have Harry Wu released, and you never got the
    credit, but you felt that you deserved the credit for Harry Wu
    getting out of Chinese prison. Is that accurate?
        Mr. Chung. I never asked the credit for the release of
    Harry Wu, but I did what I think is the right thing to do as
    American citizen.
        Mr. Waxman. Well, do you think you played an important role
    in getting him released?
        Mr. Chung. At that time I did ask all of those Chinese
    business connection what I can do, and I did meet with the Vice
    Minister of Foreign Affair Li Wa Chu and the gentleman Mr. Liu
    who I know from the TV Chinese news now, he's the second person
    in the Chinese Embassy right now in Washington, DC.
        Mr. Waxman. You remember calling the Democratic National
    Committee and telling them that you were responsible for
    getting Harry Wu out?
        Mr. Chung. I remember I talked to several people in the
    National Democratic Committee. I will go. I will try to release
    him. They show me the support.
        Mr. Waxman. Well, a Carol Khare was quoted in an L.A. Times
    article as saying you told her you managed to get Harry Wu out
    of jail, and you were very pleased with yourself.
        Mr. Chung. The moment I had the meeting over with the
    Minister, the Vice Minister, Li Wa Chu, the Minister of Foreign
    Affair, then I--that afternoon I came back to my hotel room. I
    make several phone calls. I told them, Carol Khare, I told the
    secretary to Bill Press. I also talked to a person back there,
    Muriel. Now I remember the name because one of the U.N.
    investigator told me, she was the volunteer working at the
    White House, the First Lady's office. I told him that at the
    end of the conversation, the Chinese told me, the Vice Minister
    told me, if you maintain, which is United States, maintain one
    China policy, and you will not give the President of Taiwan,
    give away another visa and ask me if the First Lady coming to
    woman conference in Beijing, pretty much--pretty soon we will
    release, we'll do something. And that all I know.
        I did pass on all this information to whatever I can. I did
    try to call the President's office at the White House, Betty
    Currie, and it sounds like nobody answer the phone at that
    time. Later I figured out the President was on vacation in
    Wyoming and Montana.
        Mr. Waxman. Were you trying to call the White House to tell
    them that you had arranged to get Harry Wu out of prison?
        Mr. Chung. Those few people at the First Lady's office,
    they know that.
        Mr. Waxman. Let me ask you another question. There were
    some people you called and you were pretty excited because you
    thought he was going to get out, and, in fact, 10 days later he
    did get out.
        Mr. Chung. Mr. Congressman, we are talking about two
    different phone call. One is--this is the event after the
    conversation, and the other phone call is when I was in
    Shanghai, the day Harry Wu was released.
        Mr. Waxman. Ms. Khare at the DNC claimed that you called
    and said that you were responsible for getting Harry Wu out.
        Mr. Chung. That was the second phone call. I call him up
    when I was in Shanghai, the same day Harry Wu was released.
        Mr. Waxman. When you met with us 2 years later in 1997, you
    told us explicitly--you never publicly took the credit, but you
    told us that you felt you were responsible in getting Harry Wu
    out.
        Mr. Chung. At that time I did whatever I can at my own
    expense.
        Mr. Waxman. I'm not in any way criticizing you. You tried
    to do what was a good thing. You tried to get this man out of
    prison, and I commend you for that. But when you met with us,
    you said, it's because of me that Harry Wu was out.
        Do you know this gentleman sitting to my right, Mr. Lantos?
        Mr. Chung. Yes, I do.
        Mr. Waxman. Do you remember what he said to you at that
    meeting?
        Mr. Chung. I don't take a note. I'm sorry. Would you remind
    me?
        Mr. Waxman. You don't recall what he said to you? You
    don't?
        Mr. Chung. I'm sorry, Mr. Lantos, the only thing I
    remember, you asked me speak louder.
        Mr. Waxman. He also said something else. He said to you
    that he thought it was absolutely preposterous that you would
    think that you were responsible for getting Harry Wu out of
    prison in China since so many of the Congressmen, Senators,
    human rights groups, people at the highest levels of diplomatic
    channels, were trying to get him out. He thought it was
    preposterous, but it was clear that you at that time genuinely
    believed you were responsible for Harry Wu's release.
        Now, it's interesting to me that the conversation, which I
    thought was a pretty harsh one from Mr. Lantos in 1997, you
    can't remember, but the conversations you had in 1996 you seem
    to remember in a great deal of detail.
        Let me ask you about another matter.
        Mr. Sun. There were 20 people in that meeting, Mr. Waxman.
        Mr. Waxman. There was one person, Mr. Lantos----
        Mr. Chung. May I respond to this question?
        Mr. Waxman. It seems to me you should be able to remember
    when somebody attacks you.
        Mr. Chung. So many people in the room at the first time for
    me to come to the Congress, and so many people jump up of
    questions another one, and so many people there in the room,
    and sometimes I didn't really pick it up how many questions
    asked me simultaneously.
        Mr. Waxman. So you don't recall?
        Mr. Chung. That's what I recollect to you.
        Mr. Waxman. Let me get a clarification.
        Mr. Chung. I will remember you asked me the question today
    because this is one on one.
        Mr. Waxman. Well, that was one on one, too. But in 1997,
    you said you did not meet with the Senate. But you did meet
    with the Senate staff in Los Angeles, didn't you?
        Mr. Sun. I'm sorry, you were asking him----
        Mr. Waxman. Whether he met with Senate staffers in August
    1997.
        Mr. Sun. He may have been introduced to a couple of
    staffers, but he didn't actually meet or talk with them beyond
    that.
        Mr. Waxman. That's very peculiar because I have notes from
    the Senate staffers at the meeting. Was it only with you, Mr.
    Sun?
        Mr. Sun. There was a meeting in my office, Mr. Waxman. Mr.
    Chung was present. We did an attorney proffer. Mr. Chung was
    there to sort of correct and clarify anything that the
    attorneys might have said incorrectly or that might have been,
    from his standpoint, inaccurate.
        Mr. Waxman. I consider that an interview with him. And
    there were statements made by him at that meeting; were there
    not?
        Mr. Sun. I don't think we need to get into a semantic
    discussion about it. Mr. Chung was present in my office when
    some of those discussions took place. He wasn't present for all
    of them.
        Mr. Waxman. I have these notes, and we'll go over them
    later.
        Mr. Chung, you gave a television interview to NBC News in
    August 1997. This interview made headlines across the country
    because you alleged Energy Secretary Hazel O'Leary insisted on
    a contribution before scheduling a meeting with you and some
    Chinese guests. Because of your statement, the Attorney General
    of the United States launched an investigation of Secretary
    O'Leary. This committee investigated your allegations and
    actually deposed Ms. O'Leary. In the process she had her
    reputation brought into question. She had to bear a large
    financial toll both in terms of attorney fees and opportunity
    costs.
        Do you know what both the Attorney General's investigation
    and our investigations concluded? I want to read to you what
    the Attorney General said. She said, ``there is nothing about .
    . . the substance of the meeting that suggests that there was
    anything inappropriate about the meeting. . . . The
    investigation developed no evidence that Mrs. O'Leary had
    anything to do with the solicitation of the charitable
    donation.'' In fact, Attorney General Reno further stated,
    ``[Mr. Chung's] belief that Mrs. O'Leary knew about the
    solicitation . . . amount[s] to little more than speculation.''
        Would you give that same answer that you gave to Mr. Brokaw
    if it were asked again, and that question was whether you had
    to give money as a requirement to meet with her?
        Mr. Chung. I only talked to the government what the fact
    is, and what they want to do with that fact is out of my
    control.
        Mr. Waxman. I want to ask you about another subject you
    discussed in an interview with NBC News, and this dealt with
    Maggie Williams, who is the Chief of Staff of the First Lady.
    You said there was a check for $50,000 made out to the DNC, and
    you delivered it to Ms. Williams. There's nothing illegal about
    this, but you also went on to say that she and other White
    House staff actively solicited the contribution.
        The distinction is important because if she actually
    solicited the contributions, it's illegal. If she received the
    check and then passed it on to the appropriate party, it's not
    illegal. Tom Brokaw recognizes the critical distinction, and in
    his interview he said, ``but who suggested the donation? That's
    a critical point because it's against the law for Federal
    employees to solicit donations.'' Your answer was that Maggie
    Williams and her assistant Evan Ryan solicited the
    contribution. As Tom Brokaw reported, ``Chung insists Mrs.
    Clinton's aides' Evan Ryan and Maggie Williams raised the idea
    of a donation to defray the cost of a White House Christmas
    party.'' Do you remember that exchange with Tom Brokaw?
        Mr. Chung. I told the fact to Tom Brokaw. I told the fact
    to the government investigator.
        Mr. Waxman. As a result of that allegation, both this
    committee and the Senate Governmental Affairs Committee
    investigated Ms. Williams. She was deposed by this committee
    for over 10 hours. She then testified at a public committee
    hearing for nearly 5 hours. She spent hundreds of thousands of
    dollars on attorney's fees. Neither committee found any support
    for your allegation, and when you met with us in November 1997,
    you no longer insisted that Maggie Williams solicited the money
    from you. Instead you said the discussions preceding the
    delivery of the check were with Evan Ryan, not Maggie Williams,
    and you conceded that the idea of making the contribution may
    have originated with you.
        Can you appreciate the harm you caused to both Ms. O'Leary
    and Ms. Williams through these erroneous allegations?
        Mr. Chung. I told the fact to the investigator of the
    government. What they want to do with it, if you want to ask me
    one more time, Mr. Congressman, I'd be very happy to give you
    the detail minute by minute.
        Mr. Waxman. Well, you gave your statements, but they were
    inconsistent. You said at one point that they solicited the
    contribution but then later backed away. That's a significant
    point.
        I want to return to your statements in 1997 to both the
    Senate and the House committees. When you appeared before the
    committees, did you understand that it was a Federal crime
    under 18 U.S.C. section 1001 to provide false information to
    Congress?
        Mr. Chung. I told the Congress the facts at that time at
    the advice of my attorney.
        Mr. Waxman. Did you understand it was important to tell the
    truth and that it could be a crime not to tell the truth to
    members of staff and Members of Congress?
        Mr. Chung. I told the truth at the advice of my counsel.
    Sometime, Mr. Congressman, I like to talk to you about I was--
    my attorney was under negotiation at that time.
        Mr. Waxman. I want to review some of your statements and
    ask whether you stand by those answers. After your interview
    with the Senate, your attorney reviewed the notes from the
    meeting, and he indicated in a letter that they were correct.
    Your attorney said, ``Chung could `deflate the foreign source'
    by proving that he made his donations entirely out of his own
    money.'' Do you still stand by that statement, that you made
    the contributions out of your own money?
        Mr. Chung. I do. I do.
        Mr. Waxman. Your attorney also said, ``Mr. Chung had not
    been a conduit for foreign money; The funds he donated were
    ones over which he had total control.'' Do you stand by that
    statement? And I think you said it as well in your statement.
        Mr. Chung. It is in my statement.
        Mr. Waxman. Mr. Sun, as your attorney, gave an interview,
    and he denied that the Beijing Government was trying to use you
    as an agent. Do you stand by that statement?
        Mr. Chung. At that time, yes, I do.
        Mr. Waxman. When you met with this committee in November
    1997, you told us essentially the same thing. You said you
    received no money from foreign governments. You stand by that
    statement?
        Mr. Sun. Excuse me. Congressman, when do you attribute that
    statement?
        Mr. Waxman. This is November 1997.
        Mr. Sun. This was the meeting where members of this
    committee and staff agreed that this was an off-the-record
    interview. We had taken the fifth amendment because of the
    pendency of a criminal investigation. I did about 70 percent of
    the talking, as I recall, during that meeting, but I reminded
    both members of this committee and the staff that where there
    was a pending Department of Justice criminal investigation,
    there were certain matters that we could not get into because
    of that investigation, and I want to make that clear for the
    record. And you're referring to notes, notes that I would note
    for the record that I have not seen, that as I understand it
    were provided to the Department of Justice----
        Mr. Waxman. I only have a limited amount of time. Let me
    stipulate. This was a meeting that you're referring to, and
    these were notes that I took and my staff took and they were
    all put together and all corroborated by each other. Now, the
    notes you had from the Senate meeting you did get a chance to
    review. You did not get to see these. But you, Mr. Sun, said,
    Senator Specter's suggestion that Chung's money was from
    foreign sources was not accurate. Mr. Chung, do you still hold
    that the statement that your money was from foreign sources was
    not accurate?
        Mr. Sun. In the context of the donations or money that he
    received, Congressman? That's a clarification I would seek,
    because Mr. Chung in his statement said he received a lot of
    money from foreign sources. What he disputes is the notion, I
    think, raised by Senator Specter that all these donations were
    earmarked and that Mr. Chung was a conduit for these foreign-
    sourced donations. I just want to clarify that.
        Mr. Waxman. So you stand by that statement that the sources
    may have been foreign sources, but the contributions were from
    Mr. Chung?
        Mr. Chung. That's correct.
        Mr. Waxman. A very important issue is what General Ji said
    to you, and I'm confused about this because your statement
    seems so unclear. On page 23 you say that, ``I emphasize that
    except for the General, no one told me to give money to the
    Democrats.'' This seems to imply that General Ji told you to
    give money. But I don't see from your testimony where General
    Ji told you to give money to Democrats.
        Let me go to page 17 and 18 of your testimony. There you
    describe in four sentences what General Ji told you. I want to
    go through each of these sentences. He said, one, ``we really
    like your President.'' Is this a directive for you to give
    money to the President?
        Mr. Chung. That's the way he told me; he liked your
    President.
        Mr. Waxman. That's all he meant. The first full sentence
    is, I like your President.
        Mr. Chung. We like your President.
        Mr. Waxman. The second sentence, ``We hope he will be
    reelected.'' Was that a directive for you to give money to the
    President?
        Mr. Chung. That's the way he feel. He liked.
        Mr. Waxman. He liked him?
        Mr. Chung. He like--we--they like to see him be reelect.
        Mr. Waxman. Then he said, ``I will give you 300,000 U.S.
    dollars.'' What about this statement? Was that a directive to
    you to give that money to the President?
        Mr. Sun. I think he's having trouble with the word
    ``directive.''
        Mr. Waxman. Was he ordering you? Did he simply say you can
    give the money, or did he say that you had to give that money?
        Mr. Chung. He will give me the money.
        Mr. Waxman. He will give you money, and you can give it to
    the President. Did that mean you had to give it to the
    President, or was it your money?
        Mr. Chung. It's my money. It's my money. At that
    conversation, I told you that I don't know this guy who the
    hell is. He called himself Mr. Xu.
        Mr. Waxman. Why were you so insulted about that? What
    offended you about that statement? Why were you angry about it?
        Mr. Chung. I been talked to these four sentences more than
    50, 60 times. The sentence is there.
        Mr. Waxman. He was telling you how to use the money?
        Mr. Chung. That's the impression I get from him.
        Mr. Waxman. You felt it was your money?
        Mr. Chung. I feel the promise from Liu Chao Ying. Makes no
    difference what the other businessmen would mean. You see my
    pattern all along with the 2 years.
        Mr. Waxman. Well, he's telling you you can make a
    contribution. He's not saying you shall make a contribution.
    And moreover, you have later in your testimony two other facts
    that seem to be unclear to me. First, on page 21 you say that
    Ms. Liu said you could use the money for your business. Why
    would Ms. Liu contradict an expressed directive from General
    Ji?
        Mr. Chung. Speculated.
        Mr. Waxman. You're speculating?
        Mr. Sun. I think he's trying to say, Congressman, he
    doesn't know what she was thinking in that regard.
        Mr. Waxman. She said you can use the money for our
    business, didn't she?
        Mr. Chung. That what she told me at the Willard Hotel.
        Mr. Waxman. It was after the conversation with General Ji?
        Mr. Chung. Yes.
        Mr. Waxman. General Ji said, here's $300,000. Did he say, I
    want you to use all of it for the Democrats and President
    Clinton?
        Mr. Chung. He didn't say--he only said, you can give--use
    to the President and the Democrat party. You got to translator
    over here to translate.
        Mr. Waxman. I've heard the translation. If somebody says
    you can use the money for the President's reelection, and he
    knew you were already giving a lot of money to the President
    for his reelection, and he knew that some of the foreign money
    you received you used for contributions, doesn't that simply
    acknowledge that you were going to give some of that money?
        Mr. Chung. In statement you can also see that I was
    encouraged by Liu Chao Ying when she told him how disappointed
    I am with the business relationship back there in Beijing early
    on, and later on she said--she also indicated to him about how
    loyal I am to the Democratic party, how loyal I am to the
    President of the United States, and in a sense I always talk to
    everybody I met. More money I make, more money I can give. Not
    only talk to the investors or shareholders, but I also talk to
    the DNC and White House official.
        Mr. Waxman. So, in fact, you thought of it as your money.
    You used that money to pay your taxes. You used it to pay your
    mortgage. You used it to even pay the salary of General Ji's
    son who worked for you, and you donated--now the Senate says
    $20,000 of the $300,000; you've been saying $35,000 of it to
    the Democratic Committee or President Clinton; is that right?
        Mr. Chung. The money I received, it's my money. I can use
    it whatever way I want to use it.
        Mr. Waxman. Well, you don't maintain in any way that the
    President or the Democratic party knew that money was coming
    from General Ji? You didn't tell them that, did you?
        Mr. Chung. No, I don't.
        Mr. Waxman. Well, it strikes me that one theory in all of
    this is the kind of theory that the chairman outlined, how all
    of this is part of a conspiracy. It seems to me a very strange
    conspiracy if the Chinese Government is telling you to give
    $300,000 through General Ji's comments. You get $300,000 to the
    Democratic party, but he doesn't care whether the Democratic
    party or the President knows it was his money. He doesn't seem
    to care that you only gave $20,000 of it and not $300,000 of it
    to the President. If that's the way they've run their
    conspiracy, it seems to me a very strange notion of a China
    plan to reelect the President. Do you think it's part of a
    broad conspiracy?
        Mr. Chung. In my statement I said the people who I deal
    with it.
        Mr. Waxman. If we have a conspiracy, it has to be
    constructed on three legs. The first leg is that you were a
    conduit for foreign contributions, but you told us in 1997 and
    again today you were never a conduit for foreign contributions.
    Your testimony is that you had control over the money you
    received and were not directed to give the money to the DNC, so
    that's the first leg that doesn't stick.
        Mr. Chung. I always intend whatever time, how much, and
    when to go. I make this decision by myself.
        Mr. Waxman. It's your decision because it's your money to
    decide.
        Mr. Chung. It's my money.
        Mr. Waxman. The second leg is you received the money from
    the Chinese Government as part of a plot to influence United
    States elections, but in 1997 and again today you said you
    never received the money from a foreign government. Is that
    accurate?
        Mr. Chung. I consider it money I received--you talk about
    Liu Chao Ying's money. It will be sent in Liu Chao Ying's
    money.
        Mr. Waxman. You don't know whether it came from the Chinese
    Government or from her businesses?
        Mr. Chung. The statement over here is when she--when
    General Ji said to Liu Chao Ying, my statement to you, I don't
    know the source behind it.
        Mr. Waxman. And the third leg would have to be that you're
    just one piece of a comprehensive scheme by the Chinese
    Government to funnel money into the American political system.
    Now, you made statements regarding Mr. Middleton, Mr. Young,
    Mr. Trie to demonstrate this scheme, but you have no knowledge
    about the actual facts about those three individuals. You're
    passing on something you heard about them; is that right?
        Mr. Chung. That's secondhand information, I know.
        Mr. Waxman. In fact, while we couldn't corroborate a lot of
    what you told us because it's stuff you heard and we couldn't
    check it out, we were able to check out about Mark Middleton,
    and Mark Middleton denied the statement that was attributed to
    you in the press. You said Ms. Liu told you that Mark Middleton
    received $500,000 from Mr. Huang of the Singapore Group to help
    China. We checked to see----
        Mr. Barr. Excuse me. Mr. Chairman, it's our understanding
    that Mark Middleton has taken the fifth, and he hasn't
    testified as to anything. I think this is a mischaracterization
    of testimony.
        Mr. Waxman. This is my time.
        Mr. Barr. That doesn't mean you can mischaracterize
    testimony in legal proceedings, Mr. Waxman.
        Mr. Burton. The gentleman will state his point of order.
        Mr. Barr. Point of order is I believe the gentleman from
    California has mischaracterized testimony. Would the chairman
    clarify whether or not Mark Middleton has taken the fifth and
    has, in fact, not testified as to any of this?
        Mr. Burton. Was it the----
        Mr. Waxman. Mr. Chairman, I have a letter in my hand.
        Mr. Burton. Was it Mr. Middleton's attorney or Mr.
    Middleton?
        Mr. Waxman. I have a letter from Mr. Middleton's attorney,
    and in it he says, as counsel for Mark Middleton, I'm writing
    to respond to your request--this is to Ms. Comstock--of May 6
    ``that Mr. Middleton agree to be interviewed by the Committee
    about the disgraceful and false accusations that the Committee
    has been leaking to the media over the last several days.'' It
    goes on to say that he did not receive the money. In fact, we
    were able to check through your staff that money----
        Mr. Burton. Excuse me. I'll give you additional time, but
    the fact is Mr. Middleton has still taken the fifth, and this
    letter was from his attorney; is that correct?
        Mr. Waxman. That's correct.
        Mr. Barr. I appreciate that proper characterization of the
    testimony despite the effort to mischaracterize it by the
    gentleman from California.
        Mr. Waxman. There's no effort to mischaracterize anything.
        Mr. Burton. Put 2 more minutes on the clock for the
    gentleman from California.
        Mr. Waxman. Mr. Sun has been able to speak in the name of
    Mr. Chung, his client, and Mr. Middleton's attorney is able to
    speak for him, and, in fact, the Department of Justice
    concluded that Mr. Middleton agreed to--well, this letter says
    Mr. Middleton agreed to cooperate fully with the Department of
    Justice in its investigation. He was thoroughly interviewed.
    The Justice Department concluded that the allegations that Mr.
    Middleton ever received any funds from sources in the People's
    Republic of China were without foundation.
        My point is that what we have are these statements. There
    was a statement about Ambrose Young, and then I believe Mr. Sun
    said, well, maybe it wasn't the right Mr. Young. What we're
    seeing is a lot of hearsay, a lot of statements that are made,
    a lot of speculation with reputations that can be ruined as a
    result of the speculation, just as a great deal of harm was
    done to Hazel O'Leary and Maggie Williams and Ambrose Young,
    who, by the way, is a big Republican contributor. It seems to
    me if this is part of a case, we ought to look at actual facts.
    We don't have actual facts to back up all of this.
        I think there's a lesson to be learned from all of this. I
    think a lot of it is attributed to you, Mr. Chung. You came
    here as an immigrant. You worked hard as a busboy at the
    Holiday Inn. You became an American citizen. You had 18
    computer stores. You went out and made $3 million between 1994
    and 1996. At some point you discovered that if you contribute
    money to politicians, you get pampered by them. You get access
    to them. This is not unique to the Democratic party. It's also
    part of what the Republicans do. It's part of this corrupting
    campaign finance system that we have, and in getting this
    access you took photos, and with these photos you impressed a
    lot of people that you were an insider, a player. And that
    meant more business came to you, and that money came from
    foreign businessmen who wanted to do business with you because
    they thought you were an important person in the United States.
    That seems to be what impressed Ms. Liu and General Ji. Isn't
    that a correct assumption?
        Mr. Chung. Yes.
        To answer your question for two things. Government,
    Department of Justice, and the FBI find me as a very credible
    witness. And the other issue is in my statement to you, Mr.
    Waxman, this is a system I didn't create. You guys don't like
    it, change it. Don't shout at each other. Let's change it.
        Mr. Waxman. Isn't it possible that General Ji and Liu Chao
    Ying gave you that money because they wanted to impress you
    because you were an important person in the United States? They
    wanted to go into business with you? They wanted to impress
    you? They wanted you to be helpful to them in their business
    operations?
        Mr. Chung. Yes, I do. I think so. I want to do business
    with people around you, too, because you're important, too.
        Mr. Waxman. Well, I think your experience is helpful in
    illustrating not international intrigue, but how defective our
    system is.
        Thank you, Mr. Chairman.
        Mr. Burton. Thank you, Mr. Waxman.
        Before I yield to Mr. LaTourette, yesterday Mr. Waxman and
    I received responses to interrogatories and subpoenas directed
    to Mr. Ambrose Young. We wanted to clear up whether the Hong
    Kong Boeing representative mentioned by Liu Chao Ying might
    have been Ambrose Young. I ask unanimous consent that Mr.
    Young's responses be included in the record.
        [The information referred to follows:]
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        Mr. Burton. These responses make it very clear that Mr.
    Ambrose Young could not possibly have been the individual in
    question, and I'm surprised Mr. Waxman mentioned this knowing
    he would unfairly be slandering Mr. Young because we----
        Mr. Waxman. Reserving the right to object. I only mentioned
    it for the purpose of showing how careless, reckless
    accusations can be made, as they were by Mr. Chung in the
    meeting he had with our staffs, which turned out to be
    inaccurate as it related to Mr. Chung, as have other statements
    that have been made by Mr. Chung turned out to be inaccurate.
    They are harmful, and it seems to me a pattern of
    misunderstandings and speculations that Mr. Chung is quick to
    say to the press and it turns out often later that they're
    without any factual basis.
        Mr. Burton. I understand.
        Mr. Waxman. I have no objection to the request. I think it
    ought to be in the record.
        Mr. Sun. Mr. Chairman----
        Mr. Burton. Mr. Chung never said it was Ambrose Young, No.
    1. No. 2, Mr. Ambrose Young did cooperate with our
    interrogatories, as you well know, and when you were talking
    about Mr. Middleton, he has taken the fifth and not cooperated
    with this committee.
        Did you have a comment?
        Mr. Sun. Just briefly. Mr. Chairman, we agree with Mr.
    Waxman that there have been times and instances where things
    might be taken out of context or extrapolated. I think this has
    happened to Mr. Chung on a number of occasions where he was
    attributed to having participated in events or contacts with
    people such as Secretary Dalton of the Navy or the Cosco matter
    that he had nothing to do with. So there are instances when
    that sort of thing happens where people, whether it's the media
    or whether some members of this committee or somebody wants to
    spin something out of control.
        Mr. Chung does have some language barrier issues that he's
    trying to struggle with in understanding some of the questions
    here today. We talked about that during the break. I think he
    wanted me to say that he's trying to cooperate with the members
    of this committee. He's not trying to say anything more than
    what was told him in these meetings. He's not trying to spin it
    into whether this was some nefarious scheme or not. He's just
    here to tell you what happened to him, nothing more, nothing
    less.
        Mr. Burton. Thank you.
        Mr. LaTourette.
        Mr. LaTourette. Thank you very much, Mr. Chairman.
        Mr. Chung, I want to talk to you today about a fellow who
    you mentioned in your testimony, Charles Parish from the U.S.
    Embassy in China.
        Before I do that, just three things occurred to me as a
    result of some recent exchanges. I think I for one and other
    members of the committee would love to hear from Mr. Middleton
    in the future if he wanted to chat about what it is you have
    had to say in your testimony today.
        Two, I was more than interested in the observations about
    perjury and lying under oath before Congress, because perjury
    and lying under oath have sort of received a new brushup in the
    recent months to those of us who have spent our time in law
    enforcement before coming to Congress.
        And third, your testimony reminded me that nothing good
    ever happens at a karaoke bar. I will tell you that. Charles
    Parish, who you talked about, my understanding is that Mr.
    Parish was employed in our Embassy in Beijing from 1994 to
    1996, that our Ambassador, who's recently been in the news,
    Ambassador Sasser, actually asked for him to be recalled amid
    allegations that he was engaged in a pattern of handing out
    visas, permits to visit the United States, under some
    suspicious circumstances. In fact, it's my understanding his
    office was sealed.
        In interviews at least Mr. Parish reported he came back
    home expecting the worst, that he was going to be investigated.
    A little earlier in reference to Mr. Middleton, there were
    references to completed investigations by the Department of
    Justice, and I think that Mr. Parish was expecting the same.
        Surprisingly he came back, and, again, rather than being
    investigated or given maybe the Canada desk or a desk that
    doesn't pose a security threat to the United States, it's my
    understanding he spent some time reviewing security clearances
    for individuals from Iraq and Iran who wanted to visit the
    United States, and recently he retired in 1998 in response to
    some questions that were asked relative to a fundraiser that I
    believe you and he attended in California in 1995.
        I want to talk to you, first of all, about visas. I think
    that people in this country take for granted that visas to
    other countries are pretty freely given, except apparently when
    the investigators from this committee wanted to go to China to
    ask questions about campaign finance reform. Is it your
    experience that visas granted for Chinese nationals to visit
    the United States of America are as freely given? Is that an
    easy process?
        Mr. Chung. Very difficult.
        Mr. LaTourette. And I think you mentioned during your
    written statement and also your testimony that after you became
    acquainted with Mr. Parish, you, in fact, took dozens of people
    to Mr. Parish to assist you in getting visas to the United
    States of America. Is that an accurate observation?
        Mr. Chung. That's correct.
        Mr. LaTourette. How many dozens of people would you say
    that was?
        Mr. Chung. A little bit more than 2 dozen, I believe.
        Mr. LaTourette. More than 2,000 people?
        Mr. Chung. No, 2 dozen; between 25 to 30 people.
        Mr. LaTourette. Two dozen, I'm sorry, 25 to 30 people.
        Was the purpose of obtaining the visas for most of those
    people, were they business associates that were coming hoping
    to conduct business in the United States?
        Mr. Chung. Yes. It was those people that come over here to
    visit, including the most famous March 1995 radio address.
        Mr. LaTourette. And did any of the individuals, these 25 to
    30 individuals with whom you dealt with Mr. Parish to get a
    visa to visit the United States, did they wind up attending
    political functions of either party in 1995/1996?
        Mr. Chung. Not all of them. Some of them.
        Mr. LaTourette. How many of the some of them, if you know?
    If you don't know, that's fine.
        Mr. Chung. I didn't calculate. I'm sorry, Mr. Congressman.
        Mr. Sun. We'd be happy to provide that to the committee if
    you'd like at a subsequent time.
        Mr. Chung. We're talking about 4 years ago.
        Mr. LaTourette. Did they attend those functions as your
    guests?
        Mr. Chung. Yes.
        Mr. LaTourette. Did you pay their way, or did they make
    contributions to be accepted at these political fundraisers I
    assume that's what we're talking about?
        Mr. Chung. I pay the way for them.
        Mr. LaTourette. Were the political fundraising activities
    limited to one political party or another? Was it all
    Republicans or all Democrats, fundraisers that you went to?
        Mr. Chung. They all Democrat fundraiser.
        Mr. LaTourette. Were they all associated with the
    President's re-election campaign in 1996, or were there other
    events?
        Mr. Chung. The answer to the question is the President was
    there. That's why they go.
        Mr. LaTourette. In your testimony you indicated that you
    first met Mr. Parish because the head of the Haomen Beer Co.
    had a visa problem; is that right?
        Mr. Chung. No. I think he have the visa, one entry visa
    first. He attend by himself before he meet with me here in
    Washington, DC, and he tried to get a second multiple entry
    visa. I try to help him out.
        Mr. LaTourette. Is that when you met Mr. Parish for the
    first time when you went to try and help Mr. He get a
    multientry visa?
        Mr. Chung. That's correct.
        Mr. LaTourette. How is it that you came to meet Mr. Parish?
    Did you walk into the Embassy and say, I need to see the head
    guy in charge, or were you directed to see Mr. Parish?
        Mr. Chung. I was in China first time on August 28, 1994. I
    was there, and I have the chance to meet with the commercial
    attache of the U.S. Embassy. I don't remember the gentleman's
    name who work in the commercial division. I certainly call him
    up, and I ask him is there any way he can help one of my
    business associates who I want to do business with; I indicate
    Haomen Beer, if you can help me out to get this gentleman to
    get appropriate way to get a visa. And he introduced Charles
    Parish to me at the commercial section of Embassy.
        Mr. LaTourette. After that time you and Mr. Parish at least
    had a number of conversations? You took a number of people to
    him relative to visa applications to the United States?
        Mr. Chung. That's correct.
        Mr. LaTourette. You indicated in your opening statement
    that at one point Mr. Parish approached you and asked if you
    could assist in getting a computer tutor for his secretary at
    the United States Embassy; is that right?
        Mr. Chung. Yes, that is--he's the secretary in the Embassy,
    and I have the temporary office at the Beijing, and then they
    came to my office for tutoring on the computer, yes, sir.
        Mr. LaTourette. You paid for the expense of that tutor, and
    it was about $500; is that right?
        Mr. Chung. $500 U.S. dollars, but in Chinese currency.
        Mr. LaTourette. You also indicated that Mr. Parish came to
    you and wanted you to pay some school expenses for seven
    students, and you did that to the tune of $7- or $8,000; is
    that correct?
        Mr. Chung. That's correct. I give a copy to the FBI
    already.
        Mr. LaTourette. Is there any question in your mind that Mr.
    Parish knew that you were, in fact--that there was going to be
    an expense involved with the students' training and also the
    computer tutor? Somebody had to be paying the bill; is that
    right?
        Mr. Chung. That's correct.
        Mr. LaTourette. Was that discussed between you and Mr.
    Parish? Is there any question in your mind that he knew that it
    was you that was paying the bill?
        Mr. Chung. He knew I was paying the bill.
        Mr. LaTourette. During this time while you're paying for
    student expenses for seven students that he brings to you and a
    computer tutor to train on the computer, you were still going
    to him to try and get your friends and business associates
    admitted through the visa process to the United States of
    America, and he's granting 25 or 30 of those; is that right?
        Mr. Chung. That's correct.
        Mr. LaTourette. I want to talk to you a little bit about
    Mr. He and the Haomen Beer Co. for a minute. During your
    testimony you made a correction about this grocery bag of
    money. I think your written testimony said on at least one
    occasion you witnessed this. Then you went back. Was it only
    one occasion that you saw a grocery bag of money with 10
    Chinese passports delivered by you to Mr. Parish? Was that just
    one time?
        Mr. Chung. That was a late night and the one at my
    apartment at Beijing. Mr. He and one of his associates come to
    my apartment in which I and Mr. Parish have dinner together.
    And then they was in my apartment, and somebody knock the door.
    In come is Mr. He and one associate with a shopping bag.
        Mr. LaTourette. And in the shopping bag, it is my
    understanding, is cash and also some passports of Chinese
    nationals?
        Mr. Chung. I said to the government is the Chinese money
    one bundle and a half.
        Mr. LaTourette. But still it's money in Chinese national
    passports? Is that correct?
        Mr. Chung. That's correct.
        Mr. LaTourette. Mr. He asked if you would take it to Mr.
    Parish for the purpose of obtaining visas for these individuals
    to enter the United States of America; is that right?
        Mr. Chung. He didn't say the kind of question, but
    impression is that he give it to me. I open it. I say, I don't
    want to do anything with it. I hand it over to Mr. Parish.
        Mr. LaTourette. But you gave the shopping bag full of money
    and passports to Mr. Parish?
        Mr. Chung. I say I don't want to do anything with that.
        Mr. LaTourette. Is the Haomen Beer Co. a state-owned and
    operated beer company? Is it run by the Chinese Government? Is
    it a shareholder of the Communist Chinese Government?
        Mr. Chung. Mr. Congressman, up to today I still want to
    find it out. Is it state-owned or private-owned because what I
    know they sold to the French company, and after that they have
    a picture on Christmas warehouse, an advertisement on the
    street of Beijing and make them sell to French company very
    well.
        Mr. LaTourette. Is what you're saying that the Haomen Beer
    Co. to promote beer sales was putting up a picture of Mr. He
    and the President and the First Lady of the United States
    saying, drink Haomen Beer because I'm here with the President
    and First Lady of the United States? Is that what the
    advertisement looked like?
        Mr. Chung. I didn't see it, but I see it on CNN. It's a
    picture there with the two giant bottle of beer. That's what I
    see. I didn't see it exactly.
        Mr. LaTourette. You also had the opportunity to take Mr.
    Parish to a fundraising event called the Southern California
    Presidential Gala on September 21, 1995; did you not?
        Mr. Chung. That's correct.
        Mr. LaTourette. If we have the technology, you faxed a
    letter to someone named Karen Sternfeld of Clinton-Gore 1996
    indicating that you were going to have a group of people that
    you were bringing to this function. Do you recognize this fax?
        Mr. Sun. Do you have the date of that letter?
        Mr. LaTourette. It's September 19, 1995, fax from AISI to
    Karen Sternfeld.
        Mr. Chung. I seen this one before, yes.
        Mr. LaTourette. Regardless, table 2, guest No. 8 is Mr.
    Charles Parish. You took Mr. Charles Parish, a Foreign Service
    officer, to a Clinton-Gore 1996 event on September 21, 1995?
        Mr. Chung. That's correct.
        Mr. LaTourette. You also took him on a tour of the White
    House and First Lady's office; is that right?
        Mr. Chung. That's correct.
        Mr. LaTourette. Can you explain to the committee why it is
    you took an employee of United States State Department, a
    Foreign Service officer charged with issuing visas to permit
    Chinese nationals into the United States of America, to a
    Presidential campaign event in 1995? How did that happen?
        Mr. Chung. Well, in one way it is a party. I want everybody
    to be there, and I want to say thank you to the gentleman who
    been helping my business associate to come to United States and
    to impress him, too.
        Mr. LaTourette. You eventually stopped having dealings with
    Mr. Parish after the shopping bag full of money incident when
    you determined, though, that perhaps he and Mr. He were up to
    things that you didn't want to be a part of; is that right? You
    stopped doing business with Mr. Parish in late 1995 because you
    didn't like the way the things smelled or looked; is that a
    fair observation?
        Mr. Chung. That's correct.
        Mr. LaTourette. Thank you very much, Mr. Chung.
        Thank you, Mr. Chairman.
        Mr. Burton. Thank you, Mr. LaTourette. We'll be revisiting
    the Parish issue in the future.
        Mr. Lantos.
        Mr. Lantos. Thank you very much, Mr. Chairman,.
        Mr. Chung, we've been spending over 3 years on you. I'd
    like to spend a few minutes I have on China because I think the
    subject is a bit more interesting. You have had your 15 minutes
    of fame, and it's sort of obvious that you are a very minor and
    insignificant puppet in a vast global drama orchestrated by the
    Communist regime in Beijing. This drama is played on multiple
    stages simultaneously. It's a 10-ring circus and you are just a
    tiny sideshow. So let me deal with the main issue.
        It's obvious that Communist China is using whatever
    mechanism is at its disposal to advance its interests, and your
    small part in it fits into the picture perfectly.
        Mr. Chung. I'm sorry, Mr. Lantos. I have the same problem
    with you with the ear--hearing problem, I'm sorry. Thank you
    very much.
        Mr. Lantos. I will come closer. Occasionally the Chinese
    engage in a charm offensive, and occasionally they engage in a
    fury offensive. Six years ago they were engaged in a charm
    offensive when they were trying to get the 2000 Olympics for
    Beijing. I introduced the resolution opposing that, which the
    House passed on July 26 overwhelmingly by a vote of 287 to 99.
    Imagine how bad it would be if we would now be looking at the
    prospect of holding the year 2000 Olympics in Beijing where the
    United States Embassy has been treated so abominably in the
    last few days.
        We occasionally go through a fury phase. We are in one of
    those fury phases. It, of course, to a very large extent is a
    phony fury. The Beijing leadership did not show much empathy
    for the deliberately killed hundreds of Chinese citizens at
    Tiananmen Square whom this regime killed, but the regime is
    suddenly profoundly exorcised over the accidental killing,
    which we all regret, of four Chinese citizens in Belgrade.
        So I think it's important to keep our eyes on the ball.
    This ruthless Communist dictatorship is using all the means at
    its disposal, military, economic, political, cultural,
    financial, you name it, to advance its interests. And you with
    your financial dealings were a tiny part of a very complex
    mosaic, and while some may be fascinated by the nuances of what
    you did, what you didn't, some of us are more interested in the
    broad picture.
        It seems to me you have testified that no one in the
    administration knew that any of the funds that you provided
    came from Chinese sources; is that correct?
        Mr. Chung. To put it in the record, I told the people in
    the White House, I told the people in the DNC, more money I can
    make doing business with the Chinese people, more people I can
    donate to the DNC. That's all I said. To answer your question,
    I did not tell them face to face the money from Chinese source.
        Mr. Lantos. At no time did you tell anyone that the funds
    you were providing came from the Chinese Government; is that
    correct?
        Mr. Chung. That's correct.
        Mr. Lantos. Thank you.
        Since you didn't tell them this, they clearly did not know
    that.
        Is it also true that when this thing emerged, every dime
    that you gave was returned; is that correct?
        Mr. Sun. Are you asking him a question, sir?
        Mr. Chung. Is that a statement or is that a question? I'm
    sorry.
        Mr. Lantos. I'm asking you to confirm what I'm saying. Did
    the DNC return all the funds that you gave them?
        Mr. Chung. They returned the money to me.
        Mr. Lantos. All right. So, A, they did not know what the
    source was; and, B, since there was a question mark concerning
    it, they returned it. That's all we have concerning this item.
        I tell you what I think is happening at the moment in terms
    of the Chinese fury offensive because it's not a naive
    offensive. It is just 3 weeks before the 10th anniversary of
    Tiananmen Square; Tiananmen Square, which has indelibly labeled
    this despicable Communist regime as one of the worst violators
    of human rights on the face of this planet, and what they are
    about is changing the subject. They are changing the subject,
    which they will not succeed in doing so because my
    distinguished Republican colleague Congressman Wolf and I later
    this week are introducing a resolution commemorating the
    martyrs of Tiananmen Square, the hundreds of Chinese citizens,
    students, and others who passionately believe along with all of
    us here in a free and open and democratic society. They killed
    those people, and they killed them deliberately. They killed
    them purposefully. They were not killed like the four Chinese
    citizens who were killed in Belgrade by a tragic accident. They
    were murdered by this regime, and the current fury offensive is
    designed to divert attention to what is really going to happen
    in 3 weeks. The whole world will commemorate Tiananmen Square,
    and they would like people to talk about other things.
        Now, this will be a very expensive exercise for China.
    Foreign investment in China will plummet. Travel from the West
    to China will vanish, and the Chinese people will play an
    enormous price for this Communist regime overreaching. They
    could not gracefully accept the public apology of the President
    of the United States. They could not gracefully accept the
    public apology of all the American people. We profoundly regret
    the death of the four people who were killed in Belgrade, but
    we reject, resent, and repudiate the outrageous practice of
    this government of pretending that this action, so clearly a
    mistake, was deliberate and of holding back from the Chinese
    people the knowledge, A, that this was an accident, and, B,
    that the whole campaign against Milosevic is designed to
    protect and preserve the human rights of 1,800,000 people, 90
    percent of whom have been driven out of their homes, thousands
    of whom have been massacred by Communist thugs, vast numbers of
    women mass raped by them, hundreds of communities torched to
    prevent these people from returning to Kosovo. Your role in
    this whole thing is a terribly minor little role.
        You may or may not have been used to funnel funds to
    political parties. You claim that the funds were yours, so you
    were not a conduit. People will debate this for a long time.
        But I think it is extremely important before we get fixated
    on the importance of your activities, which if in fact you feel
    that you were used as a tool were despicable, were despicable,
    they are just part and parcel of a communist regime's broad
    offensive against democratic societies. To them, the end
    justifies any means, whether it is political contributions or
    mass murder, and it is in this context, I believe, that your
    testimony needs to be understood.
        I yield back the balance of my time.
        Mr. Chung. Mr. Chairman, I want to respond to the
    distinguished Congressman.
        Mr. Burton. Mr. Chung.
        Mr. Chung. Mr. Lantos, I will remember your question to me
    for my lifetime, for sure. For the Harry Wu issue, I know there
    are so many people tried to rescue him, including him. I
    congratulated you, I applaud you.
        For me, to participate, to get Harry Wu out, as a part of
    the American citizen that is inside me, if I have to do it
    again, I will. Even he say that I will try to do the self-
    serving. No, if it happened again, I will do whatever I can.
    That is why I applaud you.
        Thank you.
        Mr. Lantos. Mr. Chairman, let me just say anybody who
    participated, however marginally, in saving this true and
    courageous man, deserves some credit, and to whatever extent
    you contributed to that, you deserve some credit.
        Mr. Chung. Thank you.
        Mr. Burton. Thank you. Mr. Barr.
        Mr. Barr. Thank you, Mr. Chairman.
        Mr. Chung, focusing for just a few moments back on some
    previous questions by Mr. Waxman with regard to your initial
    meeting with General Ji, at which time, as you have testified
    under oath, General Ji made essentially four statements to you:
    One, we really like your President; two, we hope he will be
    reelected; three, I will give you $300,000; and four, you can
    give it to your President and the Democrat party.
        It seems to me a reasonable presumption that when General
    Ji made those statements, they reflected a certain intent on
    his part; not necessarily on yours, but on his part. And it
    seems to me that a reasonable person could conclude from those
    statements and the fact that he did come through with the
    $300,000, that he had an intent that at least part of that
    money would be used to influence American politics in the
    reelection of the President. That would be reasonable
    presumption of his intent, correct?
        Mr. Chung. That is correct.
        Mr. Barr. And in fact, is it also reasonable to conclude
    that the reason that you felt that your life was endangered and
    the reason that the FBI provided protective custody for you was
    because that was General Ji's intent and he was concerned that
    you would be disclosing that to U.S. authorities as part of
    your plea agreement? Would that also be a reasonable
    conclusion?
        Mr. Chung. That is correct.
        Mr. Barr. Do you consider that your life was in danger in
    1998 because of the leaked story that appeared in the New York
    Times?
        Mr. Chung. That is correct, and I am still looking out my
    back every day.
        Mr. Barr. Did you leak that information in any way, shape
    or form to the New York Times?
        Mr. Chung. No. I don't leak that information to the New
    York Times.
        Mr. Barr. And would it also be accurate that your attorneys
    didn't leak that information to the New York Times?
        Mr. Chung. We tried to stop them.
        Mr. Barr. Exactly. Where do you think the information might
    have come from that was leaked to the New York Times?
        Mr. Chung. Mr. Congressman, if you find it out, would you
    let me know?
        Mr. Barr. Well, we would like the Department of Justice to
    find that out. It would be very interesting to find out, one,
    if they are concerned about it, because this is a very damaging
    leak that endangered a very important witness, yourself; and it
    may very well have come from the Department of Justice. So we
    would be very interested in that, as I am sure you would be.
        Mr. Chung. Mr. Congressman, that night I had to go to a
    meeting with those people. My attorney told me, don't go. Maybe
    you are in trouble, in danger. I talked to my wife, I talked to
    my attorney again, and I talked to the FBI. I want to go
    forward because I want the truth to come out.
        Mr. Barr. Thank you. During your conversations that you had
    with Mr. Luu, did he ask you about your family?
        Mr. Chung. In the Chinese way, yes.
        Mr. Barr. Was it in a way that relayed to you that he
    wasn't really concerned about your family, he was telling you
    something, that you ought to be concerned about your family?
        Mr. Chung. That is correct.
        Mr. Barr. And did he ask you about your family in the
    context of hoping that you would not disclose information?
        Mr. Chung. If you keep your mouth shut, you will be safe.
    If you are talking, the thing is out of control. That is all I
    recall.
        Mr. Barr. You also mentioned an attorney that is connected
    with Mr. Luu. Would that be Mr. Brockway, an attorney in Los
    Angeles?
        Mr. Chung. Mr. Luu gave me the business cards of Mr. David
    Brockway in Los Angeles.
        Mr. Barr. Did you have any meetings with Mr. Luu at which
    Mr. Brockway was there?
        Mr. Chung. That is the meeting, yes, with the FBI agents
    around in that private club, with a body wire.
        Mr. Barr. And did Mr. Luu also suggest to you that you
    should use Mr. Brockway as your attorney?
        Mr. Chung. Yes. Not only that, he also said my attorney,
    Mr. Sun, is also the earphone for the President, so don't hire
    him. Get rid of him. Personally, I don't think so.
        Mr. Barr. And did Mr. Luu also say if you hired Mr.
    Brockway, the attorney's fees would be taken care of?
        Mr. Chung. That is one of the questions I asked. He said,
    well, it has been taken care of. Don't worry.
        Mr. Barr. And did Mr. Luu also tell you that he received
    money from Beijing?
        Mr. Chung. In the conversation, yes.
        Mr. Barr. In your discussion with Mr. Brockway, the
    attorney from Los Angeles, did Mr. Luu tell you that Mr.
    Brockway had contacts at the Department of Justice?
        Mr. Chung. That Mr. Brockway told me, he had the contact
    with the Department of Justice.
        Mr. Barr. OK. Mr. Brockway told you he had contacts high up
    at the Department of Justice?
        Mr. Chung. No. 3 at the Department of Justice.
        Mr. Barr. The third senior position?
        Mr. Chung. That is all I can recall, yes.
        Mr. Barr. And did Mr. Brockway also tell you that he knew
    the judge who would be sentencing you?
        Mr. Chung. That is correct.
        Mr. Barr. Was there also----
        Mr. Chung. Mr. Congressman, which I don't believe.
        Mr. Barr. But he made those representations to you.
        Mr. Chung. Yes, that is correct.
        Mr. Barr. Did he also mention to you, either Mr. Brockway
    or Mr. Luu, a pardon, a possible pardon?
        Mr. Chung. A Presidential pardon, if I keep my mouth shut.
        Mr. Barr. And did Mr. Luu also mention the name of General
    Ji, who was behind him?
        Mr. Chung. It was under meetings, video and also the
    wiretap, he mentioned that.
        Mr. Barr. Did this Mr. Brockway also talk about having been
    an attorney with the Watergate case or cases?
        Mr. Chung. He mentioned to me he was an attorney for the
    Watergate.
        Mr. Barr. Did he mention anything more specifically than
    that?
        Mr. Chung. No. But maybe he think I don't know too much
    about Watergate.
        Mr. Barr. Excuse me just a moment, Mr. Chung.
        During your meetings after the entry of your plea in early
    1998, during those meetings that you had with Mr. Luu and with
    Mr. Brockway, the FBI was aware of what was going on; is that
    correct?
        Mr. Chung. Yes, that is correct. Every move, every word I
    said was under the instruction of the FBI.
        Mr. Barr. So when you testified that Mr. Luu mentioned that
    he was receiving money from Beijing and that General Ji was
    behind him, the FBI knew that those conversations had taken
    place, correct?
        Mr. Chung. Yes. That is all on the videotape or audiotape.
        Mr. Barr. So if somebody characterized to you the position
    that the Department of Justice did not know that there was
    evidence that money was coming from Beijing, that would be
    incorrect, would it not?
        Mr. Chung. Can you reframe your question a little bit more?
        Mr. Sun. He is having a little trouble, Congressman.
        Mr. Barr. If somebody said to you, ``Mr. Chung, the
    Department of Justice didn't have any idea money was coming
    from Beijing, did they?'' that would be an inaccurate
    characterization. That wouldn't be true, would it? Because
    they, through the FBI at least here, they knew there was
    evidence money was coming from Beijing?
        Mr. Chung. I did not know there was money coming from
    Beijing for this issue or not, because I was under protection
    at that time. If somebody told me it did come, the money go to
    Mr. Luu, then the Department of Justice, they should know.
        Mr. Sun. Were you asking about the money that Liu Chao Ying
    gave to him? I think he is confusing the money that Mr. Luu
    suggested to him that he could receive if he kept his mouth
    shut, so there is a little confusion in his mind. During the
    course of the conversations with Mr. Luu, that subject came up,
    he could get some money if he kept his mouth quiet.
        Mr. Barr. We do know, there is no confusion at least here
    today in our discussion, that there was $300,000 that came from
    overseas. We know that; is that correct?
        Mr. Chung. Yes. Yes.
        Mr. Barr. And we also know through your sworn testimony
    that Mr. Luu told you that he was getting money from Beijing in
    his discussions with you about providing an attorney, for
    example?
        Mr. Chung. That is correct.
        Mr. Barr. So the fact of the matter is that since all of
    this information has been relayed to the FBI, the Department of
    Justice did know that money was probably coming from China?
        Mr. Chung. That is correct.
        Mr. Barr. I think so. Thank you very much, Mr. Chung.
        Mr. Burton. The gentleman yields back the balance of his
    time?
        Mr. Barr. The chairman is correct.
        Mr. Burton. Mr. Waxman, you have 10 minutes.
        Mr. Waxman. I yield to Mrs. Mink.
        Mrs. Mink. Thank you very much, Mr. Chairman.
        As an Asian-American, I appreciate very much your
    forthright statements today, and understand the difficulty of
    having all of these questions fired at you, sometimes with
    double negatives and so forth, it is very difficult to respond.
        I wanted to start off my portion of the questioning by
    underscoring what you said in your original testimony, and that
    is, with the furor that arose out of the contributions that
    were made to the Democratic National Committee following the
    1996 elections, indeed Chinese Americans throughout the country
    suffered gravely from false accusations, false intimidations,
    false assumptions that their motives in participating in
    political campaigns were somehow colored or connected to
    devious arrangements, and the actions by the political parties
    in giving weight to such inferences I found very, very
    disconcerting.
        For instance, their immediate reaction was to not accept
    any contributions from any person that had an Asian sounding
    name. Many people called my office very indignant about the
    inferences that were being left by the people who were calling
    them. So I can understand your great concern about what all
    this scandal has meant for Asian Americans throughout this
    country.
        That carried forward during the debate of the campaign
    reform measure which I strongly supported. But in the last
    hours of our deliberations on the floor, they added a provision
    in the House which said that the burden fell upon the candidate
    to assure that there were no contributions being made by legal
    residents. People who were legally admitted to the United
    States were being forbidden to make campaign contributions.
    That is how far the hysteria went.
        So I can fully understand your concern about what all of
    this has meant to all Chinese Americans, all Asian Americans,
    throughout the United States. I wanted to concur very
    vehemently with your views in that regard.
        The personal difficulties that you and your family have
    endured is also something which I think we have to share. The
    reason for my making this statement is that I am confused with
    all that has been said about your involvement in the 1996
    period. What was it that the government finally, after all of
    the investigations, all of the inquiries that were made with
    regard to your participation, what was it that they finally
    asked you to plead to, charge you with and find you convicted
    and guilty of? Could you explain that to this committee?
    Because I think that is important for the record.
        Mr. Chung. There is two counts of campaign finance
    violation. To use misdemeanor, to use my employee to give the
    money to the DNC. I reimbursed them.
        The other issue is the tax issue of 1995. I still try to
    figure it out. I am not good in the money account. I still try
    to figure out the tax violation.
        And the other one is the bank fraud, for the mortgage, and
    I tried to protect my family. And there is one Chinese Mafia
    come after me for the money, after this all come out. And he
    asked me to give that $200,000 to him. The gentleman is named
    Peter K-H-E-N. If I don't give it to him, he will give my
    family and will kill me, even put out a threat to my employee.
        I made a mistake, because my name is too big on the news,
    so I asked my wife. My wife is under my instruction to get a
    loan. The house is already--get a loan, the house is already
    paid off, and try to get the money as soon as I can to give to
    this gentleman who tried to kill my whole family. That is all I
    plead.
        Mrs. Mink. Any of those charges that you were asked to
    plead to, do they have anything to do with serving as a conduit
    for foreign contributions to the Democratic National Committee
    or any Democratic candidate?
        Mr. Chung. No.
        Mrs. Mink. Was there any allegation in any of these charges
    to which you pleaded that had anything to do with any foreign
    contribution coming from these officials that you met with in
    Beijing, Hong Kong, wherever?
        Mr. Chung. No.
        Mrs. Mink. None of the allegations that you have finally
    now been convicted of, and serving a probation, have anything
    to do with all this that has been out in the press about your
    connections with high-placed military people who gave you money
    to give to the Democratic party and to the Democratic
    candidates?
        Mr. Chung. No.
        Mrs. Mink. Was there, in any of the testimony that you have
    given, to this committee or any other committee or the
    Department of Justice, does it conflict in any way with the
    testimony that you have given to us today that as far as you
    were concerned, the $300,000 that you received was your money,
    that you could do whatever you wished with it?
        Mr. Chung. Yes.
        Mrs. Mink. So you took that $300,000 and considered it a
    business investment, is that correct?
        Mr. Chung. That is correct.
        Mrs. Mink. That was what the conversation----
        Mr. Chung. Yes.
        Mrs. Mink. That is what the conversation was between you
    and Liu Chao Ying?
        Mr. Chung. That is correct.
        Mrs. Mink. So when the money was deposited in your bank,
    you considered it a contribution from Liu Chao Ying or from
    General Ji?
        Mr. Chung. She told me that at the hotel. She is going to
    invest in my company for the amount of $300,000.
        Mrs. Mink. So your testimony is----
        Mr. Chung. She wired to me, from her account to my account.
    I consider that her money to me.
        Mrs. Mink. There is proof and evidence that the funds that
    were deposited in your account came from her.
        Mr. Chung. That is correct.
        Mrs. Mink. Now, the Senate committee report indicates that
    based upon their review of contributions that you made--now, I
    understand that this deposit was made in August 1996; is that
    correct?
        Mr. Chung. Ma'am, at that time I commingle a lot of money.
    At that time I have two major--two big sums of money coming to
    my account almost simultaneously, at the same time.
        Mrs. Mink. It is about August 1996, is that correct?
        Mr. Chung. That is correct.
        Mrs. Mink. From the evidence that seems to be available,
    there was no contribution that you made, that could be
    attributed to you, to the DNC after August 1996 in the sum of
    $300,000; is that correct?
        Mr. Sun. Are you asking Mr. Chung about the amount after
    August?
        Mrs. Mink. Yes.
        Mr. Sun. I think in his statement we have told the members
    of both the majority and the minority there was $35,000 given
    to the DNC on two separate occasions following the receipt of
    the money from Liu Chao Ying. I think the bank records reflect
    Mr. Chung received money from other business consulting clients
    right in and around that same timeframe. So it is all sort of
    mixed together. Although the money that was used for the two
    events I just referred to, I think could be traced back to the
    Liu Chao Ying money in Hong Kong. And then there was, I
    believe, the John Kerry event in September 1996 as well. But
    that was not to the DNC, that was Senator Kerry's reelection.
        Mrs. Mink. The Senate report, which I have a page
    reference, says that the FBI can only trace $20,000 of the
    $300,000 to the Democratic National Committee. Do you say that
    that statement in the report is incorrect?
        Mr. Sun. Traced back to Liu Chao Ying's money?
        Mrs. Mink. No, traced back to Mr. Chung as a contribution
    after August 1996. We have already been told in this committee
    that as far as he was concerned, the $300,000 was his to spend
    in any way that he wished.
        The report now indicates that only $20,000 of that money,
    if any, went to the Democratic National Committee. In other
    words, he did take $280,000 for the business investment
    purposes which he understood that money was for. I am trying to
    find out if that is accurate or not.
        Mr. Sun. I am sorry to interject for Mr. Chung, because he
    is not as familiar with the records. I believe we can clarify
    that.
        Following his receipt of money from Ms. Liu, Mr. Chung
    attended the President's 50th birthday party in New York. I
    believe on that occasion the records would reflect he donated
    about $20,000, I believe. Then later on that month he attended
    some events at the Democratic National Convention where I
    believe there were two checks for $10,000 and $5,000
    respectively.
        It is during that same timeframe that Mr. Chung received
    about a total of I think about $300,000 from other business
    consulting clients, between August 14th and August 28th. So it
    is in that timeframe that he makes these $35,000 and subsequent
    donations. But I believe the records reflect it is $35,000 in
    three separate checks.
        Mrs. Mink. I think that what the report is trying to link
    up is that specific $300,000 which he received from Liu Chao
    Ying, and their assumption is they can only trace $20,000 of
    that. What you have said is that there were other moneys coming
    in to his account, some up to $300,000, out of which other
    kinds of contributions could have been made.
        I am simply trying to find some corroborative evidence,
    since there has been some question as to the differing
    testimonies that appear for Mr. Chung, trying to find
    corroborative evidence somewhere to emphasize that none of the
    contributions from Liu Chao Ying specifically went to the
    Democratic National Committee because of instructions that he
    had received in China.
        Mr. Chung. That is correct.
        Mrs. Mink. So your answer to my question is that none of it
    went directly to the DNC because you felt you had been
    instructed to do so?
        Mr. Sun. I think I understand the question. I will try to
    explain it to Mr. Chung.
        [Discussion off the record.]
        Mrs. Mink. I didn't think, Mr. Chairman, I asked such a
    difficult question. I might have to withdraw it.
        Mr. Sun. Congresswoman, actually it is a good question
    because the bank records, which we only recently were able to
    get ahold of, sort of answer your question. I was trying to
    remind Mr. Chung, who is not as familiar with these records,
    the lawyers and the investigators and the staffers are
    intimately familiar with them, we sort of try to articulate it.
        Mrs. Mink. If the Chair would allow the attorney to respond
    to my question, if that is all right?
        Mr. Burton. You are out of time. I think it is important we
    clarify this. We have a chart that I think we can put up on the
    screen that might help you with your question. Would you put
    this chart up on the screen for Mrs. Mink?
        If you look at the chart, I will let him answer this
    question, it shows the $300,000 going, and then the money was
    given to Mr. Chung on August 14th. On August 15th he wired
    $80,000 to his account in California Federal Bank, account in
    Los Angeles, and then on the 19th there was--19th and 27th
    there was $30,000 transferred to another account. On the 18th,
    28th and 29th there were three separate contributions totaling
    $30,000. If you like, I can give you a copy of this so you can
    get a close look at it.
        [The information referred to follows:]
        [GRAPHIC] [TIFF OMITTED]58752.262

        Mrs. Mink. I would like to have my question answered. The
    chart doesn't really refer to the essence of the question that
    I felt should be answered.
        Mr. Chung. I would like to answer your question. I also
    took Mr. Li and Mr. He and the other people, at that time I
    received some money from them. I took those two different
    people, go to the New York Radio City President's 50 years old
    birthday. I donate the money, which is I donate Ms. Liu Chao
    Ying's money for different people, and I also received money
    from them. I also took those people to the DNC Convention,
    which I donate Liu Chao Ying's money to that event, which I
    also received from a lot of people.
        It is very confused for me at that time. I was really
    commingling all of the money together. I am not taking Liu Chao
    Ying's money to go to an event, I am taking Liu Chao Ying's, I
    am using Liu Chao Ying's money with other people. But I also
    receive a consulting fee from those people. That is what I
    tried to explain to you. It was really commingled together.
        Mrs. Mink. I guess my time is up.
        Mr. Burton. If you like, we can go back. I think your side
    has another 10 minutes in just a minute. Maybe Mr. Waxman can
    yield to you.
        Mr. Hutchinson.
        Mr. Hutchinson. I thank the Chair, and I am grateful for
    you holding these hearings. I believe this is certainly an
    important issue, and I appreciate Mr. Chung's testimony today.
        Also, I want to comment that I thought Mr. Waxman's
    comments at the very outset were certainly appropriate, that
    any time we have a witness that is making serious statements,
    accusations, after pleading guilty to an offense, credibility
    should always be an issue. I think we should listen very openly
    to the testimony. I think the most important thing is not
    pointing fingers as to who is right or who is wrong, but as to
    what we can do from a legislative standpoint to correct any
    abuses in the system.
        For that reason, I am very grateful to the chairman for
    sponsoring the Conduit Contribution Prevention Act, addressing
    a serious loophole allowing foreign contributions into our
    political system. I am delighted to express my appreciation to
    the chairman for that effort.
        I think that the testimony that I have heard today raises a
    number of concerns. Certainly the first one is whether our
    national security has been compromised in any way by covert
    efforts of a foreign government or groups to influence our
    political process. I think there is a legitimate question as to
    whether the flow of soft money into parties affects national
    policy, particularly critical decisions by the Commerce
    Department that approves the transfer of technology. That is a
    serious question that we need to address as the Congress.
        Then I think we have to look at it from a legislative
    standpoint as to whether there are additional areas that need
    to be plugged, improvements in the law, to make sure that the
    system works appropriately. I noticed that Mr. Chung, you
    indicated in your testimony that the system is set up so that
    if you donate money, you can participate.
        I understand that you as an Asian-American have seen that
    part of the system, which is not very pretty. But I want you to
    know also there is another system in America that works, and if
    you go to my State, you will see Asian-Americans there coming
    to political functions, knocking on doors for candidates, that
    are participating, perhaps not the level that you sought to
    participate, but there is active, open participation at the
    grassroots level.
        The problem we are seeing is not at the grassroots of
    American politics, but the problem is at the high dollar level
    of American politics. You have certainly shed some light on
    that. But there is another way you can enter politics. Perhaps
    it might be a little bit more rewarding to you.
        Now, I wanted to ask the first question. Mr. Chung, has the
    Department of Justice discouraged you in any way from
    testifying today?
        Mr. Chung. No.
        Mr. Hutchinson. Have they put any restrictions on your
    testimony that would affect your ability to tell the truth
    completely?
        Mr. Chung. The only very minor limitation of a few people,
    the name cannot come out, or an ongoing investigation.
        Mr. Hutchinson. Certain names you have to be careful not to
    say that might be classified?
        Mr. Chung. That is correct.
        Mr. Hutchinson. Other than that, you have all the
    incentives to tell the truth today?
        Mr. Chung. That is correct.
        Mr. Hutchinson. Now----
        Mr. Chung. I intend to do that.
        Mr. Hutchinson [continuing]. During the timeframe that you
    are engaged in high-level politics, contributing hundreds of
    thousands of dollars, did anyone ever mention to you the
    difference between hard money contributions and soft money
    contributions?
        Mr. Chung. No. The very last day after the campaign finance
    scandal broke out, I learned it from the newspaper.
        Mr. Hutchinson. So were you aware that there were
    contribution limits as to how much you could give a Federal
    candidate?
        Mr. Chung. I did not really read those at all. As the
    chairman of my company, I don't open the mail. I only know what
    the meetings I go, where should I go.
        Mr. Hutchinson. So if someone asked you for $50,000, you
    assumed it was all right?
        Mr. Chung. That is correct.
        Mr. Hutchinson. Now, you painted a picture that you were
    receiving this money from your foreign business contacts, and
    some of them were interested in your assistance in getting a
    visa; is that correct?
        Mr. Chung. If they want to come over here to the United
    States, they need a visa, yes.
        Mr. Hutchinson. They were asking your assistance in getting
    a visa?
        Mr. Chung. That is correct.
        Mr. Hutchinson. They would give you money with the
    understanding that you would contribute to politics in America,
    with the hope that that would be of some assistance in them
    getting a visa?
        Mr. Chung. Not only to help them to obtain the visa, but
    also to provide them--let me make it an easy way, a tour guide.
    Transportation, expense in the United States, translator
    service, and set up business with them. More important to
    attract me to do business with them here in the United States.
    That all my goal.
        Mr. Hutchinson. So the visa was a small part of that?
        Mr. Chung. Part of it.
        Mr. Hutchinson. So whatever you had to do to get that
    influence, were you having to use any improper influence, to
    pay any money to get that visa?
        Mr. Chung. I did give my testimony here, talked to Mr.
    Parish. I stay with that statement I said to you.
        Mr. Hutchinson. That was part of the money you were getting
    from your business contacts. Some of it was flowing to Mr.
    Parish?
        Mr. Chung. That is correct.
        Mr. Hutchinson. Did you have to utilize any other political
    contacts in order to assist your business clients in getting
    visas, other than Mr. Parish?
        Mr. Chung. I used to ask Mr. Richard Sullivan of DNC to try
    to help me with this. He said he will, but he never did.
        Mr. Hutchinson. That was with Mr. Sullivan?
        Mr. Chung. Of the DNC, but he never did. I did mention to
    him, but he never did anything for me.
        Mr. Hutchinson. As you brought these people over, many
    times they were interested in an issue, for example, developing
    business or a trade issue, is that true?
        Mr. Chung. That is correct.
        Mr. Hutchinson. Whenever you would bring them to a high-
    level contact in government, would you all discuss an issue?
        Mr. Chung. The only issue I remember, everyone, they also
    ask the President of the United States, come to visit China.
    That is all I know.
        Mr. Hutchinson. Now, give me a flavor as to some agencies.
    Did you meet with any agencies?
        Mr. Chung. What agency you talk about?
        Mr. Hutchinson. Pardon?
        Mr. Chung. What agency you talk about?
        Mr. Hutchinson. You said the only issue you talked about
    was inviting people to come back to China. You never had any
    specific issues or help that you needed from the U.S.
    Government?
        Mr. Chung. No.
        Mr. Burton. Would the gentleman yield? I think he indicated
    that he took somebody to the Security and Exchange Commission.
        Mr. Chung. Yes.
        Mr. Burton. What was the other one? And the Energy
    Department?
        Mr. Chung. Yes.
        Mr. Hutchinson. Thank you, Mr. Chairman.
        The Securities and Exchange Commission, you took someone
    there?
        Mr. Chung. Yes.
        Mr. Hutchinson. What was the issue to be discussed there?
        Mr. Chung. There is an issue of Mr. Yao would like to have
    the Chinese company to be listed on the New York Stock
    Exchange, and then he would like to know the regulations, and
    we had been talking about the regulation inside. We did that
    with two government officers.
        Mr. Hutchinson. Is this the meeting that Mr. Kerry or
    someone, Senator Kerry's staff helped set up?
        Mr. Chung. That is correct.
        Mr. Hutchinson. Your testimony was in reference to this,
    about the John Kerry contribution, that you had already
    obligated yourself to contribute to Mr. Kerry back in July when
    his people arranged a meeting at the SEC for Liu Chao Ying?
        Mr. Chung. That is correct.
        Mr. Hutchinson. Why did you believe you were obligated to
    contribute?
        Mr. Chung. In my Chinese cultural background, somebody did
    something good for you and you had to do something back to
    them. I think it is the American way too. That is why I told to
    Senator John Kerry's staff, back at the DNC Convention center
    in Chicago, I said I will try to hold a fundraiser party for
    him.
        Mr. Hutchinson. So it was nothing said by Senator Kerry or
    his staff that gave you that feeling, it was just your own
    sense that you ought to contribute?
        Mr. Chung. Yes.
        Mr. Hutchinson. Now, you indicated that you tried to talk
    with the DNC chairman, Don Fowler, at one particular point, and
    you testified that Mr. Fowler scolded you for not meeting your
    fundraising obligations. Do you recall that?
        Mr. Chung. I will. It was the October 1996, on the ``Back
    to the Future'' event in Los Angeles at Hollywood, and we--I
    gave my testimony here already. They took my driver and my
    secretary to meet with the President. That was the event. We
    was in the parking lot, and ``Mr. Chairman,'' I said, ``Well,
    Mr. Chairman, can I take a picture with you?'' He said, ``I
    don't want to take a picture with you. You didn't give what you
    said to me. I don't want to be your friend. I don't want to
    take a picture with you.''
        Mr. Hutchinson. That was a picture. Did you ever talk to
    Mr. Fowler about any issues?
        Mr. Chung. I tried to rescue Harry Wu. That was one of the
    issues.
        Mr. Hutchinson. You talked to him about that?
        Mr. Chung. He also wrote a letter to me raising about that
    issue.
        Mr. Hutchinson. Did you feel like any of your contributions
    related in any way to any assistance he might give in reference
    to Mr. Wu?
        Mr. Chung. I don't understand.
        [Discussion off the record.]
        Mr. Chung. I don't think so.
        Mr. Hutchinson. Do you recall during this 2 or 3 year
    period ever having any discussions about issues, and when I say
    issue, do you know what I am talking about? Whether it is a
    meeting with the Securities and Exchange Commission or a
    meeting with the Energy Department, was there ever any matter
    that was raised by you or your business clients in which the
    response was closely tied to any contribution that you would
    make?
        Mr. Chung. Not with the people, no----
        Mr. Sun. Excuse me 1 second.
        [Discussion off the record.]
        Mr. Chung. At one incident on March 9, 1995, regarding a
    Presidential radio address, I did mention to Mr. Don Fowler and
    Mr. Richard Sullivan about I want to bring these important
    people to go to the radio address, and I show them my wish
    list. And I did mention to them I would like to donate $50,000
    if I can get all of this issue, which is my wish list, to be
    granted. I did mention to them at the DNC. Except this one.
        Mr. Hutchinson. Mr. Chairman, I have not finished, but my
    time is up.
        Mr. Burton. We will give everybody some more time after we
    finish this round.
        Mr. Waxman, you have 10 minutes.
        Mr. Waxman. I yield to Ms. Schakowsky.
        Ms. Schakowsky. Thank you very much. If I could just begin
    by saying that I have more Asian-Americans in my Illinois
    district than any other district in the State, and they have
    acutely felt that the path to their rightful political
    empowerment has been impeded as fallout from this situation.
    They feel unfairly targeted as perpetrators somehow of campaign
    finance abuses.
        I deeply regret this and believe that Chinese-Americans and
    Asian-Americans should be encouraged to participate fully, even
    in a system that is as deeply flawed as ours and that cries out
    for reform, but not because it is uniquely abused by Chinese-
    Americans or the Chinese Government, but because it fosters the
    analogy that you raised that somehow access to power is like
    paying for a ride in the subway.
        Let me just tell you what I see. I see a prominent U.S.
    businessman that has established himself, is very well
    connected, so connected that he even is often with the
    President of the United States, that you have been able to
    barter that for more business, to help other businesses like a
    beer company, that you have established yourself as a go-to
    guy, someone who can get things done.
        So it would seem logical to me that Ms. Liu, General Ji, or
    anyone else might see that giving money to you, not giving
    money through you to someone but giving money to you, would be
    advantageous for them, and that that is essentially the nature
    of a contribution to you. Do you see it that way?
        Mr. Chung. Yes. Yes, ma'am.
        Ms. Schakowsky. So it would seem to me, then, at the time
    you got that money, this is money that is being given to you,
    that you felt, and this has been asked many times, but when you
    gave $20,000 and not $300,000 to the DNC, were you worried
    about that? Were you worried that you had broken some sort of
    commitment? Were you in fear for your life? Or did you feel
    that this was money that you could spend and that you were
    spending it as you thought?
        Mr. Chung. This is my money. I spend it the way I want to
    spend it.
        Ms. Schakowsky. So at that point there was no fear of
    retribution, that somehow you had violated an order or even an
    understanding?
        Mr. Chung. No.
        Ms. Schakowsky. I wanted to ask you about these fears for
    your life. In your written testimony you said you thought your
    family was threatened by Robert Luu. But in your answers to
    questions about your bank fraud that Representative Mink had
    asked, you said that you thought that your life and your
    family's life was threatened by Peter Khen. I wanted to just
    clarify that this was a completely separate death threat; is
    that correct?
        Mr. Chung. That is correct. That depends on what the FBI
    has been told.
        Ms. Schakowsky. How many times has your life or your
    family's life been threatened, in your view?
        Mr. Chung. Incidents, these two.
        Ms. Schakowsky. Well, I thank you. I have no further
    questions. I would yield back my time.
        Mr. Waxman. I will take the time.
        Ms. Schakowsky. I am sorry. I would yield back my time to
    Mr. Waxman.
        Mr. Chung. Mr. Waxman, can I just say a little bit more
    statement? I feel so sorry for my family. My wife, I love
    deeply. My 17 year old daughter, who is a top student in the
    high school, the top 10 graduate, she almost request not attend
    the graduation. The last 2 weeks of high school she have to go
    back to school with an FBI escort. I feel so sorry for my 2-
    year-old daughter and 5-year-old son. They have to, under the
    government protection for 24 hours a day, and they cannot do
    whatever they want to do.
        I love my family so much. I want to say I am so sorry, I am
    so sorry to my family. They should not deserve this. But they
    are all behind me to come out and tell the truth, because my
    daughter told me that--she is a college student now--she said,
    ``Dad, no matter whether you like it or not, this is part of
    American history. What do you want to do with it?'' I said to
    her I want to set the record straight.
        Mr. Waxman. Mr. Chung, I appreciate what you have to say.
    It is clearly coming from your heart. You had a threat to your
    life by somebody that had to do with a mortgage. That has
    nothing to do with the Chinese Government? Or is this something
    else?
        Mr. Chung. That----
        Mr. Waxman. Is that organized crime you are fearful of, or
    has that something to do----
        Mr. Chung. Peter Khen, what he said to me, he is organized
    crime and he was asked to come ask me for that $200,000. If I
    don't give it to him, he will kill my family.
        Mr. Waxman. That is the mortgage money.
        Mr. Chung. That is the mortgage. I tried to get it out.
        Mr. Waxman. Is it related in any way to General Ji or
    anybody else in China that you have been dealing with on the
    political contributions issue?
        Mr. Chung. Well, as I told you, I got the money from, the
    money I put into my account, a portion of them I pay for
    mortgage. And then the house is already paid off, and then this
    gentleman come out to ask for the money. So I take a mortgage
    and pay for it.
        Mr. Waxman. Mr. Sun----
        Mr. Sun. I think I can help a little bit, Congressman. The
    reason why it is a complicated answer is because I believe
    there is some information suggesting that Mr. Khen knows some
    of the other people that Mr. Chung dealt with in China. So you
    could draw all kinds of circles and links to each other. I
    don't know if he should speculate beyond that, but there is
    some information suggesting that Mr. Khen knows some of the
    people that Mr. Chung dealt with in China.
        Mr. Waxman. Basically it sounds like you owed some money
    and they were after you to get some money back, and were
    threatening him. Is that the situation?
        Mr. Chung. Basically they want to get their investment
    back.
        Mr. Sun. It was in connection with the $200,000 investment
    by the Great Wall Cultural Association and some of those
    individuals, one of whom introduced Mr. Chung to Robert Luu.
        Mr. Waxman. You have been here for hours and you have been
    asked these questions over and over again, and you have given
    your testimony, I think in a forthright way. You might be
    surprised to know that on one of the media outlets there is a
    report that says Johnny Chung testified today that he was
    directed by the Chinese Government and gave that $300,000 at
    their direction to the Democratic party.
        Is that an accurate statement for a reporter to make of
    what your testimony is all about?
        Mr. Chung. I tell the whole truth to the government. No.
        Mr. Waxman. You've been telling the truth here today, is
    that right?
        Mr. Chung. Yes, I am.
        Mr. Waxman. The truth of the matter was that you received
    money from a woman who was going into business with you, and
    you considered it your money. You didn't give contributions to
    the Democratic party from money from the Chinese Government. As
    far as you know, the money was from her to you as part of an
    investment, and then you used part of that money for
    contributions and most of it for your own personal business?
        Mr. Chung. I give the money clearly thinking that is my own
    money. I donate it.
        Mr. Waxman. Well, you have answered it at so many different
    times. It just amazes me how the press can keep on repeating
    wrong information.
        Mr. Chairman, I am going to yield back the balance of our
    time on this 10 minute round.
        Mr. Burton. Thank you, Mr. Waxman. Mr. Horn.
        Mr. Horn. Thank you, Mr. Chairman.
        Just a few questions, sir to clarify the testimony. Did
    anybody within the Department of Justice or the administration
    tell you what you could or could not tell in committee? Did you
    have any people that sought to instruct you?
        Mr. Chung. I am sorry, I can't hear. I have a hearing
    problem.
        Mr. Horn. Did any people in Justice or the administration
    tell you what you could say or could not say to this committee?
    Did anyone give you any advice?
        Mr. Chung. No.
        Mr. Horn. OK. So this is all from you, with perhaps your
    lawyers cautioning you one way or another, I take it. In August
    1996, you note that you had a lot of money commingled in your
    accounts and you regarded this basically as your money. Do you
    know of any money that came to you a year before the November
    1996 election, that might have had its origin in China and
    simply in the Chinese Government, and simply put it in your
    accounts because you are the one connected with the Democratic
    National Committee and other political parties?
        [Discussion off the record.]
        Mr. Sun. I think he is having trouble understanding the
    question, Congressman. Is the question----
        Mr. Horn. The question is, you had a number, you had really
    several million dollars, didn't you, in those accounts made up
    of different investments, in quotes, and the question is this:
    If you had that money, did any of it come in your mind from the
    Chinese Government or agents of the Chinese Government?
        Mr. Chung. No.
        Mr. Horn. OK. So all of that other money was simply to give
    it to you to invest, even though all of the people probably
    knew that you were very active in fundraising for the
    Democratic party and the Presidential campaign?
        Mr. Chung. Basically I know they are all businessmen who I
    deal with, except I already give my testimony, at the abalone
    restaurant in Hong Kong I deal with General Ji, what I know
    that information. Besides that one, I know all of them. They
    are businessmen.
        Mr. Horn. You cite a judge on page 12. Is that Judge Real,
    Federal District Judge?
        Mr. Chung. That is correct.
        Mr. Horn. Having known Judge Real, I must say if we had him
    in Washington, DC, this investigation would have been over 2
    years ago and a lot of people would be confessing, not enjoying
    the sunshine hither and yon with the 121 that are somewhere
    else, that we can't get our hands on. He is one tough judge,
    like Judge Sirica was in the Nixon Watergate thing. But,
    unfortunately, he is 3,000 miles away, so we don't have the
    benefit of his services here in the judicial group in the
    District of Columbia.
        Now, I am curious on the Boeing representative that you
    mention. Was he Chinese or was he an American, to your
    knowledge, the Boeing representative that you had in Hong Kong,
    that you talked to in Hong Kong?
        Mr. Chung. Liu Chao Ying tried to ask me to get in touch
    with the Boeing Co. for the reason of buying commercial parts,
    Boeing commercial parts. I give my order to my former general
    manager, Irene Wu, I said write some letters to Boeing Co. and
    see what we can find, who we can talk. But she didn't make it,
    the trip. That was there, nothing else.
        Mr. Horn. Now, you note here you had limited dealings with
    Mark Middleton. Could you sum up that----
        Mr. Chung. And to answer your question, Mr. Yao----
        [Discussion off the record.]
        Mr. Chung. I do not know Mr. Yung is a Chinese-American or
    what.
        Mr. Horn. You noted you had limited dealings with Mark
    Middleton. Could you sum up for the committee exactly what
    those dealings were and what you know about Mark Middleton?
        Mr. Chung. I know him 1994 on Christmas party when I
    brought Haomen Beer people there. I stand out because I am the
    only one with host Haomen Beer people without tuxedo. He was
    one without tuxedo. Later on I went to try to get a fax
    broadcasting service to be used for the White House, and I have
    a chance to talk to his staff at his office.
        As my statement here today says, I was also talking about
    later, about Ruth Lin, about Swiss bank. I talked to Mark
    Middleton about this.
        Back there when Liu Chao Ying tried to talk to me, I raised
    my little bit concern about it, and she give me the example,
    and she said Mark Middleton through the Singapore group, Mr. W-
    I-N, we give Mark Middleton half a million dollars. That is all
    I know.
        Mr. Horn. Was that overseas Chinese or was that the Chinese
    Government coming in through Singapore?
        Mr. Chung. I do not know that.
        Mr. Horn. Did Mr. Fowler, or anyone with whom you had a
    close relationship and were giving thousands of dollars, did
    any of them have any knowledge in any conversation they had
    with you that it came from the Chinese Government?
        Mr. Chung. No.
        Mr. Horn. So you didn't see anybody in those you
    contributed to that had the slightest idea that any of that
    money would come from the Chinese Government?
        Mr. Chung. No.
        Mr. Horn. OK, just one more----
        Mr. Chung. Mr. Congressman, I want to make it truly for the
    official records. I did talk to you last time. I know you come
    from Long Beach, which you are my neighbor. I told you that the
    only official in Long Beach is you I know. I do not know the
    mayor, I do not know the Long Beach harbor commissioner. The
    only reason I went to Long Beach, I take my children for
    fishing.
        Mr. Horn. Well, you picked the right town. You could take
    them to the aquarium now.
        Mr. Chung. I want to clear the record, I have nothing to do
    with Cosco. Difficult talk to you last time.
        Mr. Horn. Thank you Mr. Chairman.
        Thank you for coming here and having 4 hours of this
    interrogation. We appreciate it.
        Mr. Chung. Thank you for your encouragement.
        Mr. Burton. Mrs. Biggert.
        Mrs. Biggert. Thank you, Mr. Chairman. I know, Mr. Chung,
    that this has been a long hearing, so I won't ask too many
    questions. You talked about how you started your business, how
    you needed to expand capital, and from there you went to
    targeting government agencies to increase your business.
        How then did you get so involved in the political process
    as far as supporting candidates? Because most people, I know
    you stated that you had been with your family, and you went to
    meet the President and the First Lady at his birthday party.
    There are not too many Americans who really do have the
    opportunity to do that. But from the startup of a company, then
    to being so involved with so many events like that, how did
    that translate from doing business to hobnobbing with a lot of
    the politicians?
        Mr. Chung. I was doing my fax broadcasting business, tried
    to market my fax broadcasting service, State after State. And
    then I came to Washington, DC, for the National Governors
    Association meeting. That would be the easiest way you can meet
    all the Governors' staffs at the same time.
        You know, we are a great country. It is a big country. If
    you want to travel State after State, it will take a lot of
    time. And that is the only time I can meet all of them
    together.
        At that time I got a lady named Ms. Rita Lewis. She is a
    special assistant to the President, political affairs, at the
    White House. She invited me to go to the White House, and what
    my motivator is, is I am going to do business with my fax
    broadcasting.
        Later on, because as you know, I am also a Taiwanese-
    American, and the Taiwanese-American Association here in the
    United States, we are talking about all American citizens here,
    they raise about the issue of American passports. We are
    talking about American passport, and that the birthplace, they
    also write down China. They would like to change it to Taiwan,
    which they really were born in Taiwan.
        I tried to help them up and tried to set up the meeting.
    Finally the meeting was set up by Ms. Rita Lewis and also we
    was invited to go to 48 U.S.--the birthday for President
    Clinton. Let me repeat, we are all American citizens, we all
    agreed to go to that one. Then I begin to realize if you
    donate, you got access.
        Mrs. Biggert. Well, was there ever anybody that told you,
    or did you ask anyone about our Federal election laws when you
    make a donation? Did you ask anybody how you do that, how much
    money you can donate, or did anybody suggest to you----
        Mr. Chung. I never asked. Nobody told me.
        Mrs. Biggert. So there was no conversation about, well, how
    much I am expected to give?
        Mr. Chung. I don't know the law. I never asked, and they
    never told me.
        Mrs. Biggert. OK. Regardless of whether it was a Governor
    or whether it was Federal?
        Mr. Chung. I learn all of this after the campaign finance
    scandal broke out. Believe me, I got 2\1/2\ years, a lot of
    time alone. I read a lot and I begin to realize. Before that I
    don't understand. Big, big thank you. Thank you, Mr. Chairman.
        Mr. Burton. Mr. Souder.
        Mr. Souder. First off let me state for the record that it's
    been stated several times that the Justice Department didn't
    find any case of laundering money in this situation. I'm just--
    I'm shocked. I'm just astounded that our Justice Department
    didn't find any laundering of money; that's sarcastic.
        Let me ask a couple of questions. Did you view the
    contributions you personally made to the Democratic party as
    business investments, as part of your doing business?
        Mr. Chung. Yes.
        Mr. Souder. And when you got the $300,000, would you not
    have viewed some of that as a business investment to impress
    people by giving it to different political parties?
        Mr. Chung. As I said in my statement today, I always said
    that, those people who give me the money as an investment or
    consulting fee, they all know that part of it, it's going to
    give it to the political donation for the access. And, again, I
    always say that that's my money and I give it to. If I didn't
    give the money, I don't think get access.
        Mr. Souder. In fact, it's impossible to separate the money
    because you've said that part of the reason you were drawn to
    their attention was the pictures. You've talked about the radio
    address. You've talked about the birthday party. And if that's
    kind of your business investments, aren't the politics of this
    inseparable from your business investments? Aren't they the
    same thing roughly; not all of your money, but a big portion of
    it was getting pictures, radio addresses and different things,
    so those are business investments; what you're calling business
    investments, other people may call political contributions?
        Mr. Chung. Business investment.
        Mr. Souder. Because you've got very upset----
        Mr. Chung. I'm a businessman, I call it business
    investment.
        Mr. Souder. In fact, in your testimony you said you got
    very upset. It was a funny story about your secretary and your
    driver. When, in fact, the general's wife and son didn't get
    their picture, presumably, wouldn't that have been because some
    of the general's money had helped buy the tickets?
        Mr. Chung. If they did take pictures, the general's wife
    and the general's son, I will give $25,000 to the DNC.
        Mr. Souder. And the general----
        Mr. Chung. And that money, whatever I had in my account, I
    will give it to.
        Mr. Souder. Wouldn't the general have been pretty upset if
    his wife had called him and his son and said, I gave $300,000
    to Mr. Chung?
        Mr. Chung. I don't know that. But--well, did you remember I
    said it's--I charter all the way to the--I mean I am in a group
    of people there, and I introduced them with the President, and
    they did indeed take the pictures.
        Mr. Souder. He probably would have been pretty upset if his
    son and wife were there, and he would have not thought much he
    was a businessman, if anything else?
        Mr. Chung. He never told me. I never asked him.
        Mr. Souder. You said you were uncomfortable when you
    first--even before you knew who he was, you were told in the
    car or after that first dinner that you were uncomfortable
    about the relationship, when it was changing from what Liu had
    told you. Why were you uncomfortable? Did you view this as
    changing from a business investment to a political operation?
    Were you afraid that there were some other implications here,
    because you saw his power relationship; you didn't know at that
    point that he was director of intelligence?
        Mr. Chung. I think any American businessman who gets a
    chance to encounter with the equal to CIA Director, everybody
    feel uncomfortable with them. I do feel----
        Mr. Souder. You didn't know that, I thought.
        Mr. Chung. I'm sorry.
        Mr. Souder. When you first were at the dinner, you didn't
    know----
        Mr. Chung. He didn't tell me, he said he was Mr. Xu. He
    used a different name.
        Mr. Souder. When you found out in the car that he was, in
    effect, the director of the CIA, why didn't you break it off
    then?
        Mr. Chung. I did bring the issue to the general's daughter.
    But remember, Congressman, I have two teenagers back there in
    China with me on this vacation, and now I know this gentleman
    who is the military director. I want to make sure my two
    teenagers are brought over there back.
        Mr. Souder. So when he said----
        Mr. Chung. I do raise the issue--I want to tell you that I
    do raise the issue uncomfortable. But I have to keep quiet and
    go back over there and bring them back over.
        Mr. Burton. So when he said, I would like you to hire my
    son, or they said he would like you to hire him, you didn't
    feel like you had much choice?
        Mr. Chung. That was a second meeting back there at the
    hotel by the bar. When Mrs. Ji come down to join us, the whole
    entire conversation turned out to be a mama's and papa's--that
    is exactly my statement, mama's and papa's talk. And she didn't
    say it, but I have to take it this one as the--excuse me, the
    way a Chinese, very polite to say it, but my son is going to be
    still in over there at UCLA. My son is going to live outside
    the campus. What do you think about it? I said, let go. I also
    got a teenager. You've got to let go. Someday you have to face
    an empty nest, and why he talked to me a lot about this,
    obviously, he want me to take care of the son. That's the only
    interpretation I can take.
        Mr. Souder. Did his son do a lot of work for you?
        Mr. Chung. Some. Some, not a lot.
        Mr. Souder. Do you know what his son was doing? Did he seem
    to be just a student? Did General Ji suggest any other
    employees to you?
        Mr. Chung. No, only the son. He didn't even suggest son,
    but Ms. Liu Chao Ying suggested taking care of the son.
        Mr. Souder. While his son was on the payroll, do you know
    if he made any calls back and forth?
        Mr. Chung. I'm sorry, I didn't get it.
        Mr. Souder. Do you know if his son made any calls back and
    forth to his father while he was on your payroll? Did he ever
    use your business phone for that, or----
        Mr. Chung. I do not know, because I have so many employees
    in my office, I don't trace their phone call. But I do--in one
    encounter he said he was going back for Christmas party,
    Christmastime, going back to China to be with the father.
    That's all I know.
        Mr. Souder. Could they have been using your office as a
    conduit at any point since you said you weren't tracing it, and
    they clearly had $300,000 invested in your office?
        Mr. Chung. I'm sorry, I don't get the last question.
        Mr. Souder. In other words, you had the CIA Director's son
    on your payroll working out of your office, and what you just
    said is that you didn't know what he was necessarily doing
    there, and I'm wondering whether he could have been any sort of
    a conduit in your office since you didn't know what he was
    doing, and yet he was a son of the CIA Director. Many Americans
    may get investments----
        Mr. Chung. I don't know, but I also want to point out Alex,
    as I know, what he said to me, he came to the United States
    when he was 11 year old, so he had been here for more than--
    he's more like an American boy, speak much more better English
    like my daughters, OK? He's been here for 11 years. And then
    he's working in my office, what I tried to ask him to, doing a
    lot of research on one of the projects we are going to with the
    fax broadcasting, and then he was working with one of my
    secretaries, OK?
        A lot of times is spent at the laboratory--I mean, at the
    laboratory to try to find those fax broadcasting information.
    That's all I tried to give him instruction to do. That's all I
    know.
        Mr. Souder. Thank you.
        Mr. Burton. Thank you, Mr. Souder.
        I guess now we will wrap up----
        Mr. Chung. Mr. Chairman, can I have----
        Mr. Burton [continuing]. With Mr. Waxman first. Then I will
    surmise. Then if you have some comments, we will let you
    comment.
        Did you have something you want to say right this minute?
        Mr. Chung. Can I have 5-minute break for restroom.
        Mr. Burton. Sure. We will recess for 5 minutes, and then we
    will wrap up.
        [Recess.]
        Mr. Burton. The committee will be recalled to order, and we
    will now yield to Mr. Waxman for wrap-up.
        Mr. Waxman. I thank you, Mr. Chairman.
        Mr. Chung, I'm just trying to get one little piece that is
    still not clear in my mind. The time that General Ji told you
    that he wanted $300,000 to go to the President because he
    wanted him to be reelected, or at least that's the impression
    we get that he wanted that money to go to the President's
    reelection, you didn't know who he was; you didn't know he was
    the head of intelligence at that point, is that right?
        Mr. Chung. I don't.
        Mr. Waxman. So what did you think, that here's some fellow
    trying to renegotiate the deal that you had already worked out
    with Liu?
        Mr. Chung. I told this committee, I said, who the hell this
    guy is, Xu.
        Mr. Waxman. He was trying to tell you what to do with the
    money that you were expecting already for business purposes?
        Mr. Chung. That's correct.
        Mr. Waxman. And then later you found out he was the head of
    intelligence, and that made you uncomfortable because you
    thought he was trying to----
        Mr. Chung. I rest the--I answered that question over and
    over. It is, as with American businessman, anyone with the CIA
    type, it was uncomfortable, yes.
        Mr. Waxman. So you went to Liu and you said, I don't feel
    comfortable with this, and then she told you, well, go ahead
    and use the money for contributions, for taking care of the
    business, for everything that you had originally agreed to with
    her?
        Mr. Chung. Yes, sir.
        Mr. Waxman. General Ji at one time said that he was going
    to wire the money to her, but you don't know, in fact, whether
    he did wire the money to her?
        Mr. Chung. I don't. But I heard what he said. I don't.
        Mr. Waxman. You just heard what he said?
        Mr. Chung. Yeah.
        Mr. Waxman. As far as you know, you got the money from her?
        Mr. Chung. From her.
        Mr. Waxman. Well, I have to tell you, we've been here all
    this time for almost 5 hours, and we started the hearing with
    statements about this huge Chinese plot tying everything in
    together, people in Los Alamos, and national security being
    jeopardized. It may well be jeopardized, we don't know, but it
    seems to me that to tie that into the story you have to say to
    us is a big reach.
        What I've heard from you and what I know about you is that
    you found a system where if you put in money, you got access,
    and if you got access, it helped you get business, and you used
    that system, and it's a shame that we have a system like that,
    but that was the system.
        Mr. Chung. Can I call American way, that's American way.
        Mr. Waxman. It was the American way. And you impressed a
    lot of people, including Liu and General Ji and others, with
    the fact that you were a person who had influence and could get
    things done?
        Mr. Chung. That's correct.
        Mr. Waxman. And they wanted to have influence with you,
    they wanted to do business with you; isn't that right?
        Mr. Chung. Maybe they thought I'm important.
        Mr. Waxman. I think they did. And one theory could be they
    were just using you to give money to President Clinton, but
    that seems hard to accept when it turned out you only gave
    maybe $35,000, maybe $20,000, but, you know, less than 10
    percent, or around 10 percent of the total amount of money to
    the Democrats. It doesn't----
        Mr. Chung. Mr. Congressman, I always told you that the
    money always commingled together.
        Mr. Waxman. That's right. But if they were trying to get
    $300,000 to the President, if that's what General Ji was trying
    to do, he didn't succeed, did he?
        Mr. Chung. He didn't. It's my money, I'm to let it, to
    commingle all of the money together, is my business money.
        Mr. Waxman. Well, I think that what you're saying is an
    accurate statement. I think if others want to make a deal out
    of this that the Chinese were directing a scheme and a
    conspiracy, it seems to me that's a pretty far reach from your
    testimony and what we've heard today. They may be right, but
    that's a conclusion that is fully speculative without enough
    factual basis.
        All we know is that you received money from foreign
    business people, including Liu and Ji; you had many connections
    with this general who suggested to you he would like you to
    help, but really said you can give money to your President.
    When somebody says you can do this, it doesn't make you have to
    do, it means you can do it.
        Mr. Chung. You can do it. You can do it.
        Mr. Waxman. Well, I'm amazed at the press, because the
    press, I think, has continued to report this hearing as a
    hearing where it was clear that the Chinese Government gave
    money to you, and you, in turn, gave that $300,000 in money
    that you received to the President, and this showed that the
    Chinese Government was trying to reelect the President, for
    whatever reasons. And it just seems to be a conclusion that is
    it's hard to come to----
        Mr. Chung. Mr. Waxman----
        Mr. Waxman [continuing]. From this testimony.
        Mr. Chung [continuing]. The press also destroyed my
    reputation, my business, also destroyed everything I own. I'm
    broke. I'm worse than broke.
        Mr. Waxman. It was a pretty sad commentary, because as a
    result of all of this, you've been hurt, Maggie Williams has
    been hurt, Secretary O'Leary's reputation was hurt. All of
    these people had to incur legal fees in the hundreds of
    thousands of dollars over, as I'm sure you have, and when all
    is said and done, nothing that is substantial in establishing
    any kind of criminal actions is proved. I just think it has
    been a huge waste of taxpayers' money, and a lot of harm has
    been done to a lot of individuals including you.
        Mr. Chung. I want to use this as a good time to make my own
    statement here is I'm broke. No matter who want to try to
    harass me, I am broke. Don't come to me. Go to someone richer.
        Mr. Waxman. You've said it. I yield back the balance of my
    time because you can't say anything more than that.
        Mr. Burton. Do you want me to yield to you, Mr. Barr?
        Mr. Barr. Thank you, Mr. Chairman.
        Mr. Chairman, apparently there's more of a gulf between the
    Seventh District of Georgia and Mr. Waxman's district in
    California than just geography. In the Seventh District of
    Georgia, when you go to meet somebody at a restaurant, if it's
    an up-and-up transaction, you don't go down to the basement,
    you don't have somebody sneak in through a kitchen door, you
    don't have them give you a pseudonym, you don't have a
    discussion that talks about funneling foreign money into this
    country, you don't have a discussion about $300,000 possibly
    being used to influence the U.S. election and then have these
    people leave the same way they came in.
        And in the Seventh District, you don't then get into a car
    and be advised by your companion who set up the meeting not to
    discuss the transaction or the discussion in the presence of a
    third party. And then you don't then have a continuing
    discussion about this person. You then don't find out and do
    nothing about it that this person, by all appearances, is the
    head of a foreign military intelligence service, and so on and
    so forth.
        Now, this may be the way that the gentleman from California
    meets people in restaurants and has dinners and has
    discussions, but it isn't in Georgia. And these sorts of things
    raise very reasonable questions in the mind of many Americans.
        Thankfully the gentleman from California is not a U.S.
    attorney. If he were, then very, very few cases would ever be
    prosecuted for the benefit of the people of the United States,
    because frequently U.S. attorneys are called upon to look at
    accounts in which funds have been commingled, look at the
    intent of the parties to the transactions, look at their words,
    draw reasonable inferences therefrom. And the reasonable
    inference that I think Mr. Chung and myself and others have
    drawn from this, but the subtleties of which escape the
    gentleman from California, clearly indicate that there was, at
    least with regard to this--one can characterize it as the
    gentleman from--the other gentleman from California Mr. Lantos
    did, is one very small part of a much larger scheme, or one can
    say that this was very important in and of its own right.
        But I think a reasonable inference clearly for purposes of
    pursuing this matter further, if one is indeed concerned
    about--which some may not be--about the integrity of our
    electoral system, and business as usual may be in California to
    take money from foreign sources, it is not business as usual in
    the Seventh District of Georgia. And when we see in the Seventh
    District of Georgia or when we see as former U.S. attorneys
    that people meet under these circumstances, talk about
    funneling $300,000 and possibly using it for the reelection of
    the President very likely coming from a foreign source, then
    further efforts made to obstruct justice, to intimidate
    witnesses, these things set off red lights. One hopes that,
    unlike the gentleman from California, these red lights have
    registered at our Department of Justice and that these matters
    will be followed up on.
        Mr. Chairman, I appreciate that you understand the
    subtleties of these matters much better than others do, that
    you are concerned about the integrity of our electoral system,
    that you see this as very strong evidence of foreign money
    coming in, that you focus on the intent of people like General
    Ji, and that you draw reasonable inferences from the
    circumstances and the language that was used, as well as the
    evidence of foreign money coming in from different accounts,
    than others do.
        I think this has been a very important hearing. I
    appreciate Mr. Chung being here, and I also appreciate his
    frankness and indicating to us, very truthfully, when certain
    things were apparent to him. And he's drawn a very clear line
    between his intentions and what he viewed as something--as
    opposed to reasonable inferences about the intentions of
    others, such as General Ji. And I think this has been a very
    important hearing for the American people, and I appreciate the
    chairman holding it. I hope that the Department of Justice pays
    a little bit more attention than some on the other side seem to
    be willing to indicate.
        Mr. Waxman. Will the gentleman yield? Will the gentleman
    yield to me?
        Mr. Burton. Evidently the gentleman doesn't yield.
        Mr. Waxman. Will the chairman allow me to make a statement
    since the gentleman referred to me?
        Mr. Burton. I was going to make my final statement. Go
    ahead, we will let you.
        Mr. Waxman. I thank you.
        Certainly what we've had described is pretty suspicious
    circumstances, when, as Mr. Chung related, someone would enter
    through the kitchen and talk about how he should use the money
    and all of that. But when you look at the facts, I don't think
    that anybody is able to establish that any of those nefarious
    plots ever actually took place. And we don't know what people
    intended, but I certainly wouldn't give General Ji the benefit
    of the doubt, because all we know is what Mr. Chung has told
    us, and what he has told us is pretty damning.
        But what he's also told us is that the reality was that he
    doesn't know that he got the money from any foreign government.
    He can't establish that. He got the money as part of a business
    transaction. He gave a small part of it in donations as he saw
    fit, and there's nothing illegal about that. Thank you.
        Mr. Burton. Let me just end up by saying that I share the
    gentleman from Georgia's conclusions. But I would like to just
    add a little bit to that, and I understand the position that
    Mr. Chung is in. I mean, I think that anybody who has followed
    these hearings today understands the whole situation and how
    there has to be some concern about how he addresses some of
    these questions.
        General Ji did come in through the kitchen; General Ji did
    use an alternative name; General Ji did suggest that $300,000
    be given to the President. The inference was definitely there.
    But even more than that, Mr. Liu used the name that Mr. Chung
    gave to Liu Chao Ying, the country girl. How did he know that?
    He only knew it because somebody in the Chinese Government let
    him know that name. And so Mr. Liu conveyed that name, the
    country girl, to Mr. Chung to let him know that he better keep
    his mouth shut.
        That is pretty important. I'm not a lawyer, but it's pretty
    important, because it says very clearly, that, yeah, the head
    of the military intelligence met with you, and, yeah, they
    wired $300,000 through Liu Chao Ying to you, and the country
    girl, a term he gave to that woman, said, you know, you better
    keep your mouth shut, and the FBI thought it was severe enough
    that they put him, on a number of occasions, into a secure
    environment.
        And so I think that anybody who has followed this hearing
    has to come to the conclusion that the intent, not of Mr. Chung
    necessarily, but the intent of the Chinese Government, was
    through Liu Chao Ying from the head of the Chinese military
    intelligence to some way influence American policy.
        Now, we don't know where the end is, but we do know that
    espionage is taking place at Livermore, at Los Alamos, and that
    we've had some severe problems; that the man who was involved
    in the espionage has been kept on over there for 3 years; that
    four times there was wire taps denied, and all of these
    questions need to be answered for the American people.
        And, Mr. Chung, although it has been said here today by Mr.
    Lantos that you are a very small person in this overall mosaic,
    the fact of the matter is I think you are pretty significant in
    figuring out what the Chinese were trying to do. We haven't
    come to any conclusions yet. That's why I'm a little
    disappointed that Justice hasn't taken more of an interest in
    this. Hopefully they will after this hearing.
        We're going to continue to look into these things. And I
    want to thank you, and I want to thank Mr. Sun, and I want to
    thank Mr. Murphy and the young lady back there, Ms. Cohen. And,
    Mr. Yan, we absolutely didn't need you as much as we thought we
    would today, but we do appreciate your patience in being with
    us. And with that, thank you once again.
        I want to ask unanimous consent that Members be allowed to
    submit written questions to Mr. Chung, hopefully you will
    answer those for us, and that both questions and Mr. Chung's
    answers will be included in the record. And without objection,
    so ordered.
        And with that, we stand adjourned. Thank you.
        [Whereupon, at 5 p.m., the committee was adjourned.]

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