[Congressional Record Volume 144, Number 121 (Monday, September 14, 1998)]
[House]
[Pages H7678-H7684]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     CAMPAIGN FINANCE INVESTIGATION

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 1997, the gentleman from Indiana (Mr. Souder) is recognized 
for 60 minutes as the designee of the majority leader.
  Mr. SOUDER. Mr. Speaker, let me first say at the beginning of my 
remarks tonight that one of the questions that I received all weekend, 
and that many others are, is do you guys do anything out there other 
than talk about certain pending matters that have been widely discussed 
this past weekend? And the answer is of course we do.
  We have not had the first hearing on the specifics of what everybody 
in this country seems to be talking about. At the same time, I agree 
with what the gentleman from California (Mr. Lantos) said earlier that 
it is important that we focus on numerous issues. Earlier today, I was 
down here discussing the Head Start debate and the Community Services 
block grant debate, and quite frankly, I got no media inquiries about 
revising the entire Head Start system in the United States. I got no 
media inquiries about revising the Community Services block grant and 
what innovative programs we are doing, since we do not believe 
the solution is always the Federal Government, what innovative 
solutions we are trying at the community level to develop. Quite 
frankly, I got no questions about it back home in Indiana this past 
weekend.

  Mr. Speaker, it is not that Congress is not doing other things here. 
It is that few people are asking us about anything but this subject. 
When I tried to go to pick up a newspaper at the airport when I was 
flying back last night, every newspaper in Pittsburgh was cleaned out. 
Every newspaper in Washington was cleaned out. And they probably were 
not hunting for the latest stock market reports.
  But it is important that while we focus on the many matters, and we 
daily have multiple committee hearings, multiple meetings with people 
from our districts and many things, that we also look when we feel 
there have been problems in the oversight of this country, that it is 
important that this Congress look at it.
  One of the things that I wanted to take some time to discuss tonight 
is that it is a lot more at stake here than just what everybody has 
been talking about this past weekend. Tonight I am going to go through 
some of this.
  I sit on the Committee on Government Reform and Oversight, chaired by 
the gentleman from Indiana (Chairman Burton), and I have listened to 
much of what has gone on. I want to make a couple of critical points 
tonight. And I want to illustrate right off the bat that there is a 
huge number of people that have made this investigation in campaign 
finance, in many of the other things that we have looked at in our 
committee, difficult to achieve.
  Mr. Speaker, 116 people have refused to cooperate with our committee 
at this point; 79 witnesses have taken the Fifth Amendment; 18 have 
fled the country; and, 19 have refused to be interviewed by 
investigators.
  I am going to go through some of these charts in a minute, but I want 
to illustrate a point. We can see on this chart that there are what, 
about 10 names per chart roughly. In trying to keep with the rules of 
the decorum of the House, it was deemed, and I believe correctly 
deemed, that it would not be appropriate for me to show the massive 
scale of the extent of the lack of cooperation we are getting by 
extending these across the front of this. But I am going to take a 
second here and show, if I was able to put these charts up 
simultaneously to give an idea of the scale how far these charts would 
have gone.
  In other words if we had put every name up, they would have covered 
the entire front of this Congress. They would have covered up this 
entire front. If I stacked them on top of each other, the numbers of 
people that have refused to cooperate with this investigation would go 
to the top of the ceiling.
  It is not one person, five people, 10 people, 20 people, 30 people. A 
few weeks ago I was in a parade in the town of Saint Jo in my district 
for the pickle festival. The pickle company that is based there has an 
annual pickle festival. The number of people in this cover-up are 
approximately the number of people in the town of Saint Jo.
  I graduated in a high school class of 68. The class before me had a 
little bit smaller size than that. In other words, the number of people 
refusing to cooperate are about the size of my high school class and 
the class behind it. If one was trying to find out something that we 
had done and everybody in the class and the class behind would not 
cooperate, how would they find out what is going on?
  Or to take another example, years ago there was a ``Twilight Zone'' 
episode in 1961 where adults lived in total fear of the immaturity of a 
normal little boy. Just by using his mind, this boy was able to take 
away the automobiles, the electricity, the machines because they 
displeased him and he moved an entire community back in the Dark Ages 
just by using his mind. And we note that the people in Peaksville, 
Ohio, have to smile, they have to think happy thoughts and say happy 
things, because once displeased, the monster can wish them into a corn 
field or change them into a grotesque walking horror. This particular 
monster can read minds, he knows every thought and feels every emotion. 
He is 6 years old with a cute, little-boy face and blue guileless eyes. 
But when those eyes look at someone, they must start thinking happy 
thoughts because the mind behind them is absolutely in charge. This is 
the ``Twilight Zone.''

[[Page H7679]]

  Mr. Speaker, what do we do in a government situation, and we have all 
seen movies like this on TV, whether it is the ``Twilight Zone'' or 
others, when a whole town will not talk? People say, ``Boy, it is hard 
for you guys to prove anything.'' It sure is hard for us to prove 
anything.
  Mr. Speaker, I am going to go through. Understand that 79 people have 
said, ``I invoke my rights under the Fifth Amendment and I refuse to 
testify on the grounds that it may incriminate me.'' Incriminate means 
I could go to jail. Mr. Speaker, 79 people have said they could go to 
jail. The others have fled the country or refused to have subpoenas put 
on them.
  If we go through the names, the first name we have no public 
information on him. Terri Bradley, a secretary fined for making 
political donations for her employer, a Miami Beach developer. The next 
name we do not have much information. We are trying to get some from 
them. The fourth one is the son of the Commerce Secretary, Ron Brown.
  Chen is a Taiwanese journalist who has written about illegal 
donations from Taiwanese nationals. Simon Chen is the former owner of 
the International Daily News, a Chinese language daily newspaper. Wang 
is a Buddhist nun. I am just going to skip through some of these. Chung 
pled guilty. Colon is a former head of the Commerce Department's 
Minority Business Development Agency. He was hired by Dynamic Energy in 
August 1994. He received a $3,000 check from Dynamic September 19, and 
four days later he and his wife, Cheryl, gave $3,000 for reelection of 
a given member of the other body, which has been returned.
  Then we come to Crespo, Delvalle, we have numerous down to Manlin 
Foung, who testified that Trie reimbursed her from his bank account in 
China for part of her $35,000 donation. Gandhi, which I will go more 
through, gave $325,000.
  Then go to the next chart, another 10 names that included Norlanda 
Hill, a former business partner of Ron Brown. Hill has been indicted in 
separate fraud charges. She alleges Brown told her domestic companies 
were being solicited for campaign contributions in exchange for being 
included in trade missions abroad.
  Maria Hsia, is a naturalized citizen and close associate of John 
Huang. She faces charges that she helped launder campaign contributions 
from the famous Buddhist temple incident. The next group of names are 
predominantly people who were Buddhist nuns who gave a $1,000. Then 
there is Jane Huang, John Huang's wife, who according to DC records 
raised $52,000 while her husband was still a Commerce employee. She has 
denied she raised it, contradicting the Democratic Committee records.
  John Huang is a China-born U.S. citizen raised in Taiwan, former 
executive of the Lippo Group, about which I will discuss more later. 
Webster Hubbell who, after he left prison, received $700,000 in 
consulting fees from several companies after he left the Justice 
Department, excuse me.
  Several more we are pursuing, but we do not have public information 
at this time. If we can go to the next chart, the important thing to 
understand here is the scale. This is not one person, two people, five 
people, 10 people. It is the scale. And I am not comparing this exactly 
to that, but I have worked so much with the drug issue, it is as if we 
were just busting the street guys and not looking at the pattern. And 
by not being able to get to the first level of saying, ``What do you 
about the next level?'' Being able to offer immunity, being able to 
work with these. We do not know the extent of what sort of cover-up 
that we are facing.

                              {time}  1845

  Intriago is a former Federal prosecutor and he has solicited 
donations. You have Jimenez, a Miami computer entrepreneur and donor 
who made his largest contribution, 50,000, to the DNC after a coffee at 
the White House.
  We have Kronenberg is sister-in-law of Pauline Kanchanalak, donated 
$500,000 to the DNC on the day of a White House coffee, down to Lin. If 
we can go to the next chart, Nora and Gene Lum are owners of an 
Oklahoma gas pipeline company, Dynamic Energy Resources, which last 
year pled guilty to laundering $50,000 illegal donations to campaign 
contributions. Maria Mapili is a long-time employee of Trie's trading 
corporation. The indictment towards Trie claims he ordered her to 
destroy subpoenaed documents and she is in that. Mark Middleton, former 
democratic fund-raiser and White House aid who left the administration 
in 1995 to pursue business dials with Asian businessmen.
  I am not going to go through each of the names here. I kind of 
hitting some of the highlights. Many of these are tied in clusters 
around Charlie Trie, whose name you see there, an American citizen and 
one of two suspects, Antonio Pan is the other, to be indicted in 1997 
as a result of the Justice Department's task force. And like I say, we 
will talk about him more. If you go can to the last chart that we, once 
again, have individuals who are related to other individuals, people 
who work for fax machine businesses, straw donors, Buddhist nuns.
  There is two additional charts, if you want to just put those up. Are 
there any additional? We have them all covered?
  I am not going to go through all the names on each of these, but 
maybe you can take them off slowly and show them. Once again, as we go 
through this, I want to reiterate, ``I invoke my rights under the fifth 
amendment to refuse to reply on the grounds that it may incriminate 
me.''
  That means that they believe they have information that could send 
them to jail. And what you would normally do is go and get a proffer 
and say, and what do you have and who approached you about what you 
fear going to jail about, and see if it is worthwhile to offer immunity 
to them. And then hopefully you move up and say, and who offered you 
what in order to get to this person? Our goal here, if you look at this 
list, it is extraordinary. By putting out this list, we are not trying 
to make any kind of statement because many of them are Asians. The 
question is, who abused the Asian population. Who told them that they 
had to give illegal donations, had to launder money through Buddhist 
temples in order to get decisions made in this country?
  It is not a criticism of the Asian community. It is a criticism of 
the people who used the Asian community.
  It is not a criticism of the Hispanics on this list. It is, who told 
them American democracy works this way. Who told them that laundering 
money in return for whatever, and it is not clear what exactly was 
given, is justified? That is what incriminate means.
  Chairman Burton asked a question of FBI Director Freeh, Mr. Freeh, 
over 65 people at that time, it is now 79, have invoked the fifth 
amendment or fled the country in the course of this committee's 
investigation. Have you ever experienced so many unavailable witnesses 
in any manner in which you have prosecuted on which you have been 
involved?
  Actually, I have, Director Freeh said.

       Chairman Burton: You have? Give me a run-down on that.
       Director Freeh: I spent about 16 years doing organized 
     crime cases in New York City, and many people were frequently 
     unavailable.
       Chairman Burton: Was that the only time you have 
     experienced something like that?
       Director Freeh: It went on for quite awhile.
       Chairman Burton: So the only time that you have experienced 
     anything like this is when you were investigating an 
     organized crime syndicate?

  What kind of commentary is this on our government? We have been 
talking about a lot of other things this past weekend. But think about 
this for a minute. Think about this in the context of other things you 
are hearing.
  It started in the case of our Committee on Government Reform and 
Oversight, a travel office dispute. We noted that they cleared out a 
bunch of people who, in fact, did not appear to have, they had actually 
gotten reinstated and back pay for being unfairly fired. We saw 
patterns of internal favoritism towards certain individuals, towards 
friends getting government contracts.
  We thought, why would you want, oh, it was for prestige, but it 
actually was not, it was for lots of dollars in different agencies. 
From there we move in past the travel office to, we get this massive 
thing, when we are trying, a couple of people were wandering around the 
White House without clearance. How did they get in? So you start to 
look at the clearance list. We get these massive lists. I still 
remember

[[Page H7680]]

the day looking at these lists and seeing all these little letters by 
everybody and going, what in the world is this. How are we supposed to 
sort out what is going on here? How did these people get in? There were 
dead people on it, former Senator John Tower. They were certainly 
skewed toward Republicans, but there were all kinds of codes. This 
developed into the so-called FBI question, and the files. How did they 
get these files? These files were not like when you get a traffic 
ticket. These were for when you apply for government employment, they 
do a background check. If you want a security clearance to get in, they 
do a background check on you. If you are going to handle government 
secrets, they do a background check on you. A background check means 
also there is information in your files that may not be confirmed. Did 
anybody have a rumor about you? You cannot see it. But it is in your 
file.
  We found out in our hearings interns were, I do not mean anything 
like that, I just mean interns were handling the files, which is 
inconceivable. We heard from the Reagan and Bush White Houses that they 
had high level people only handling these files, but in the Clinton 
White House apparently interns were able to do a lot of things. And 
then we got into the Craig Livingstone who probably would not have 
passed that, yet he was now in charge of White House security and they 
could not remember who hired him.
  I asked him three different times who hired him and he could not 
remember. Finally one of the White House people said, maybe it was 
Vince Foster. I mean, blame it on the dead guy. That seemed to be the 
strategy.
  We could not get any answers to fundamental questions. Then we go 
through and look at the FBI files and we find out what these codes are. 
These codes are for coffees, for Lincoln bedroom. We found out that 
this database has to do with how much money you give to this 
administration, that it looks like somebody made the decision somewhere 
in this administration, we do not know at what level or who, that it 
was going, the White House was going to be turned into a cash cow, that 
apparently it was for sale in order to maintain your power, much like 
the travel office was. Apparently, who knows what they were going to do 
with the different files and who knows what is being done with those 
files now.

  Then we move in and started to go into the Indian gaming casinos 
where a local decision relating to a poor Indian tribe was overturned, 
and we see massive, hundreds of thousands of dollars moving into the 
Democratic National Committee after a decision was reversed at the 
local level, protecting a tribe that was getting at least $390,000 per 
Indian and protecting their basic monopoly in that region.
  In addition to that, the chief of staff in the counsel to the 
Secretary of Interior then left the Secretary of Interior's office and 
went to work for the Indian tribe that is getting $395,000 per Indian. 
Not anything proven yet, but do you know what, it is starting to smell 
a little bit.
  Then you start to go through, what are these land deals where all of 
sudden there is the Escalante wilderness area, and who was the 
developer that had a stake in that? Oh, yes, it was the Riadys, the 
same Riadys that are on this list all over the place. The same Riadys 
that are laundering money through Huang and Chung and Trie, the same 
Riadys whose employees are not willing to talk and discuss.
  Once again, it has not been proven the links, but we have been 
nibbling at the little people along the way. How is this going to build 
and where is this headed and why are not, and why is not this 
administration pursuing this to a higher level?
  Let us get into some of the particulars of this. One thing that often 
we do not make clear when we discuss this, I want to make sure I make 
this point, that what would these people want? Presumably they are not 
just giving money, particularly if they are not even American citizens, 
because they are really charmed by any of the particular candidates 
involved. There is something beyond that they are trying to influence, 
somewhere in our government.
  Now, I suggested that possibly there were decisions in the Department 
of Interior. But do you know there are many things in there that need 
to be explored, and we need access and we need cooperation to be able 
to do that. For example, we know that this, the leaders of this 
government criticized the past President for favoring trade to China 
during the campaign. It happens to be that the individuals who we are 
trying to get testimony from disagreed with the challenger's at that 
time positions. And when he became President, he switched his position 
to China which agrees now with the people who put this money in.
  There are many American businesses and probably a majority of this 
Congress that favor that position. But it nevertheless was a reversal, 
and it also happens to be at least circumstantial that these people won 
a decision in that. This leadership of this government did not have a 
position on Vietnam. A number of these major donors had concerns, 
nonAmerican citizens had concerns about our China policy and our 
Vietnam policy. And those decisions were changed. It is clear that one 
of the fund-raisers where a million dollars was raised, that the 
commissioner of the INS attended and that there had been a request to 
change some immigration status. And after the fund-raiser that status 
was changed where after she had attended a fund-raiser raising this 
money, it is clear that decisions were being made and changed like what 
the individuals wanted. What is not clear yet, and which we really do 
not have the power here without some people being willing to talk along 
this chain and be able to negotiate with people moving up the chain of 
who influenced what where.
  We see the people in the national security office writing handwritten 
memos, quite frankly, I have never gotten a handwritten memo from them 
explaining why, when they, on Taiwan, when Charlie Trie and his allies 
said we do not want you putting so much pressure on the Chinese 
government vis-a-vis Taiwan, they got a handwritten response back. Not 
too many people get handwritten responses back. It helps if you have 
laundered a lot of money back.
  Mr. SOLOMON. Mr. Speaker, will the gentleman yield?
  Mr. SOUDER. I yield to the gentleman from New York.
  Mr. SOLOMON. Mr. Speaker, I commend the gentleman for the special 
order that he is taking out. There are two things that really affect 
our country, one is economic espionage, another is national security 
breaches. You are speaking to those areas. It is so terribly, terribly 
important that the American people understand this. I commend the 
gentleman. I salute him for what he is doing here today.
  Mr. SOUDER. Mr. Speaker, let me, once again, I want to reiterate, 
what I have been discussing tonight is not what the rest of the country 
has been discussing this past weekend for the most part. What I have 
been discussing is what has the earmarks at some level of an incredibly 
massive cover-up, 116 people who have either taken the fifth amendment 
that say if they talk to our congressional committee, they could 
incriminate themselves, or they fled the country or one way or another 
avoided us being able to subpoena them. That is a grave situation.
  As the FBI Director said, only in organized mob cases has he seen 
this. It has made it very difficult for us to go ahead with this 
investigation. And understand we also have, in addition to this, a 
separate investigation that the gentleman from California (Mr. Cox) is 
pursuing on the China question and the sale of technology. We have a 
separate investigation going ahead with the gentleman from Michigan 
(Mr. Hoekstra) looking at Teamsters money and how that got tied up in 
massive corruption and attempting to influence elections with illegal 
dollars, not to mention special prosecutors on Harold Ickes, pending on 
campaign finance, looking at the Vice President of the United States. 
We have many ongoing investigations.

                              {time}  1900

  What everybody in this country has been talking about is just a small 
part. It is inconceivable we are going to resolve this in the next 30 
days because this is a massive problem inside this administration. It 
is unknown at this point to what levels it goes, but, boy, is it huge.
  Mr. Speaker, I yield, if he would like to speak, to the chairman of 
the Committee on Government Reform and

[[Page H7681]]

Oversight, the gentleman from Indiana (Mr. Dan Burton).
  Mr. BURTON of Indiana. Let me say to my colleague, the gentleman from 
Indiana (Mr. Souder), that he is one of the most valued members of our 
committee and he works his tail off, and I hope everybody knows that.
  I really appreciate his taking this special order tonight, and I 
apologize for being an interloper, but the gentleman makes such 
important points that I think they need to be reinforced, and that is 
that there have been 116 people flee the country or take the fifth 
amendment. And people do not do that unless they are trying to hide 
from the truth.
  The thing that bothers me is that many people in this country, and I 
think the gentleman has alluded to this, many people in the country are 
saying, why are these investigations going on so long? Why is the 
Congress spending all this money? Well, the reason is that the White 
House has blocked us every way they can from getting information.
  Many of the people that the gentleman has mentioned here tonight used 
to work for the White House, were close associates of the President of 
the United States, and they have taken the fifth amendment against 
self-incrimination. And it looks like, to many people, that this is an 
orchestrated effort by the White House to keep facts from getting to 
the American people. And they feel like if they can run out the clock, 
and they did it on Senator Thompson, if they can run out the clock to 
the end of this session, that we will all stop and the American people 
will never get the facts.
  We have had to almost hold the President's chief counsel, Mr. Ruff, 
in contempt of Congress in order to get him to give us information. We 
have had to take the Attorney General, who has blocked us from getting 
information, and have the committee vote a contempt citation against 
her, which is still pending and that may come up before this body. And 
the reason is they are blocking for the President.
  It is okay to investigate other people, but leave this President 
alone. Leave him alone. Never mind that illegal campaign contributions 
have come in from Egypt, from Macao, from Indonesia, from China, from 
Taiwan, from South America, from all over the world. And the American 
people have a right to know, as the gentleman so eloquently stated 
tonight, the American people have a right to know if our foreign policy 
has been for sale, if our national defense has been jeopardized, 
because this President and this administration was so intent on making 
sure that they were reelected that they were willing to jeopardize 
these issues, our national security and our foreign policy.
  All I would like to say tonight is that the American people have a 
right to know. And I want to thank the gentleman very much tonight for 
coming down and taking this special order and illuminating this issue 
for the American people, because I believe once the American people get 
all these facts, they are going to say that no matter who it is, from 
the lowest person in this country to the highest office in this land, 
if they break the law, they need to be held accountable. And I thank 
the gentleman for yielding.
  Mr. SOUDER. I thank the chairman for his leadership and his 
willingness to take the slings and arrows that go his way for trying to 
stand up and search for the truth.
  Reiterating again that one chart we see here, if I had been allowed, 
which I am not under the House rules, to display these next to each 
other, the number of people that have pled the fifth, fled the country, 
or refused to cooperate would extend from that end all across the dais 
to that side, blocking this entire front. Or if I stacked them up, they 
would go up and touch the ceiling. It is not 5 or 10 or 15, it is 
massive. It is like, as I mentioned earlier, a whole city being in on a 
cooperative thing and then trying to prove something in the law when we 
have this type of thing.
  Now, among the decisions we frequently have had to make in this body 
are other issues that have faced us, and there have been all kinds of 
statements made by Members of this body about other issues facing us, 
such as, ``It should never be sullied,'' ``should never be spoiled by 
actions of any of its Members, yet today we have a stain on the U.S. 
House; we have a cloud over its existence.'' Members in this body have 
said, ``Too many ethical questions have been raised, wanting special 
counsels.'' They said, ``American people should know where this money 
came from. Did these donors get anything in return? Are there any 
conflicts of interest?'' Only they were not apparently putting these 
standards on the current leadership of our government. They were 
talking about something that was actually a relatively small case 
inside this body.
  We look at the past rhetoric that has been used on the floor of this 
House about something relating to dollars that pale in insignificance. 
Never a charge that huge decisions, like the foreign policy of the 
United States, not even a charge, let alone a provable charge. They 
were not proven in the cases of any Members that have been discussed at 
this level. But apparently we can demand here that the American people 
should know where this money came from, did these donors get anything 
in return, are there any conflicts of interest. But if it is the 
administration, we are not going to do a special prosecutor for that. 
And I think that Members of this body need to sort through what kind of 
standards we have.
  On Sunday I was with the Air Guard in Fort Wayne, who had a 
counterterrorism exercise on chemical and biological warfare, as units 
are doing all over the country, and cities, as we are concerned about 
terrorism. And I want to repeat what the gentleman from California (Mr. 
Lantos) said earlier. Ironically, we have to stand behind our 
leadership of this country now more than ever. Because when there is 
perceived weakness, as there is in this country right now, every tin 
horn dictator, every terrorist around the world is saying, I wonder if 
this is a good time to push the United States. I wonder if this is the 
time I can get away with killing somebody; dropping a bomb; doing this; 
blowing somebody up. No, it is not, because we will stand as a United 
Nation. But we will not do this indefinitely, and we have to have 
leadership that we can count on.
  But getting back to my point here, it is that we have to look at the 
totality of this. We have to ask, in our United States military, in the 
people in our Air Guard in Fort Wayne, what standards do we have for 
them? Do we have a different standard for some elements of our country 
and another standard for the soldiers or the generals? Do we have one 
standard for government employees and not for other parts of the 
government? Do we have one standard for schoolteachers and not for 
other parts of people in public service?

  I am not really talking about what everybody else has been talking 
about. I am talking about what is for sale. Have we sunk so low, are we 
so obsessed with power in this country that we will sell it to people 
who are not even American citizens and able to hold that power?
  I want to digress to one other case. I am a history buff, and as we 
go through things like this Current Abuse of Power book on Nixon with 
the tapes, which is disgusting, I mean this is the kind of book we see 
about the current leader's administration. It is a spin cycle. We have 
not proven this point yet, but we are getting a lot of this point. But 
as we go back through history, Warren Harding went down as a bad 
President, even though in the end he was not found to have the faintest 
idea of what was going on on Teapot Dome.
  And what we see in this administration and what we do not know is to 
what level of government this goes to. But we do know they corrupted 
the travel office, they misused the FBI files, they have sold favors 
throughout, they have special prosecutors on at least five Cabinet 
members; that Harold Ickes, who has a fascinating story of how he 
basically got excluded from policymaking, went into the fund-raising 
like other higher-ups like this, and then got back into the 
policymaking, because apparently the price to be at the table was you 
did the fund-raising. Which put tremendous pressure, even if it was not 
directly ordered, it put tremendous pressure. If an individual was not 
to be consulted unless they produced money, think of the pressure that 
put.

[[Page H7682]]

  I want to give, I am trying to think which is the best example, and I 
am sure we will have other chances to bring this up, but let me give my 
colleagues an example of James Riady, who is probably the biggest. 
James Riady is an Indonesian-based banker and son of Mochtar Riady, 
chairman of the Lippo Group, a $5 billion Asian empire. James Riady is 
a permanent resident of the United States. He met President Clinton in 
1977, in Arkansas, when the President was serving as that State's 
Attorney General. He was then sent by his father to Arkansas to learn 
the banking and finance business. In its report on campaign finance, 
the other body suggested the Riady family had a long-term relationship 
with the Chinese intelligence agency. James Riady is the deputy 
chairman of the family's main business, the Lippo Group. The Riady 
family, including its businesses and partners, donated more than 
$700,000 to the Democrats between 1991 and 1996. Mochtar Riady and his 
son James have told close associates that they helped get Huang his 
Commerce Department position, which is a foreign trade position, in 
return for their political support for the leader of our country. Other 
reports indicate that James Riady has claimed Huang was ``my man in the 
American government.'' James Riady visited the White House on 19 
occasions, 6 of which were to see Deputy White House Chief of Staff 
Mark Middleton. He lives in Indonesia and has refused to be interviewed 
by the committee.
  Here are some questions we would like to ask him: Did you lobby the 
President to get John Huang his job at the Commerce Department? Did the 
President ask James Riady or his father to pay a $100,000 fee to 
Webster Hubbell while Hubbell was under investigation? Did the Lippo 
Group receive any classified information from John Huang while he was 
at the Commerce Department? What were the Riadys hoping to get in 
return for the hundreds of thousands of dollars they gave to the 
Democratic Party in the 1990s?
  I could, and will at future time, go through other questions, but at 
this point I see the gentleman from Michigan (Mr. Pete Hoekstra), who 
is here and he has been investigating another part of what looks like, 
not knowing what levels, but orchestrated efforts to get around our 
laws in this country.
  I yield to the gentleman from Michigan.
  Mr. HOEKSTRA. I thank the gentleman for yielding. As we begin to talk 
about the things that have been going on, I think it is also important 
to recognize that the gentleman and I are going to be part of the first 
Congress that has gone about doing its business, whether it is 
oversight, and that is the committee that I share, an oversight 
subcommittee on the Committee on Education and the Workforce, but we 
are going to be part of an historic Congress, because for the first 
time in 29 years, in 15 or 16 days, we will have a surplus budget.
  So as the gentleman and I have been carrying out our responsibilities 
of oversight of our laws, and the Congress as a whole, and I serve on 
the Committee on the Budget as well, has been getting a lot of other 
things done as well. So there are a number of things that are going on 
here in Washington that are different and effective and positive versus 
what there is sometimes seen as the ugly part of our job, which is 
doing the oversight.
  I thank the gentleman for inviting me down here, because we have had 
the enviable task of spending the last 15, 16 months taking a look at 
the International Brotherhood of Teamsters, America's largest private 
sector trade union, who in 1989 signed a consent decree because of a 
racketeering charge that basically put them under the oversight of a 
Federal court and the Federal Government. They are under the 
supervision of the Justice Department and the courts are watching them.
  Now, why is Congress involved? And I think this is where the 
connection can be made about oversight and the impact to the American 
taxpayer and the impact to the rank-and-file people in the Teamsters. 
Let me just lay out what happened.
  In 1996, the Teamsters conducted a new election for president of the 
Teamsters. It is a process they go through every 5 years. They 
conducted their election, and 7 months later the election got 
overturned. The person who was elected, his election was invalidated, 
Mr. Carey, and it was determined there needed to be a rerun election. 
And it is like, okay, that is fine, the Teamsters will conduct their 
new election, which we are still waiting for that to happen because 
there was one problem: The 1996 election was paid for by the American 
taxpayer.
  That is why in this case we are even doing more oversight than what 
the Labor Department normally does for union activities and other 
reviews of American labor law. In this case the American taxpayer paid 
for a Teamsters election that was invalidated because of corruption. It 
was somewhere in the neighborhood of $18 to $20 million of American 
taxpayer money. We paid for the election for the Teamsters in the U.S. 
and in Canada.

                              {time}  1915

  So American taxpayer dollars were used to fund the Teamsters election 
in Canada, $18 million to $20 million.
  The gentleman was talking about the campaign fund-raising. Sometimes 
people say, well, there you go, making your accusations again. Where is 
the beef?
  The gentleman's committee has had difficulty in interviewing 
witnesses. He has had difficulty getting access to certain information. 
We have had some of the same problems, but we do have some court 
documents and these basically are what the defendants have pled guilty 
to.
  Three people have pled guilty to various money laundering schemes. 
Another person has been indicted. The number two person at the AFL-CIO 
is pleading the Fifth.
  Now, the amazing thing to me is taking the Fifth, meaning that we 
know where he is, we believe that he has been implicated, but he will 
not come and talk to us. He will not tell us about his participation in 
this.
  For the three people who have pled guilty, what did they do? Who was 
involved? We have come across some of the same players as the gentleman 
has come across, and without getting into their names, this person was 
a 41 percent owner of a political consulting firm. This November Group 
performed work for, among others, the IBT, the Carey campaign, and the 
Democratic National Committee and its 1996 coordinated campaigns with 
State democratic parties. What did they do?
  In general, the use of treasury funds in connection, and here we are 
talking about general treasury funds of the Teamsters, general treasury 
funds in connection with a Federal election was limited by Federal 
election law to nonpartisan voter education and get-out-the-vote 
efforts. Political spending by the IBT was supervised and directed by 
the IBT's director of government affairs. What did they do?
  Statutory charges: Co-conspirators were not charged as defendants 
herein. Others known and unknown unlawfully, willfully and knowingly 
did combine, conspire, confederate and agree together with each other 
to make materially false statements and representations and to falsify, 
conceal and cover up, by trick, scheme and device, material facts in a 
matter within the jurisdiction of the executive and judicial branches 
of the government in violation of Title 18.
  What does that mean?
  Sections 1341 and 1346: To embezzle, steal, abstract and convert 
funds belonging to the IBT, in violation of Title 29 of the United 
States Code.
  Basically, what happened is the leadership of this union stole money 
from its own rank and file.
  If we go on a little further, we find out, willfully and knowingly 
having devised and intending to devise a scheme and an artifice to 
defraud and for obtaining money and property by means of false and 
fraudulent pretenses, representations and promises, namely, a scheme 
and an artifice to deprive members of the IBT. These people were 
working for the President of the IBT, and what were they going to do? A 
scheme and artifice to deprive members of the IBT of, A, money, B, 
their right to the honest services of their officers and employees and, 
C, their right to have the 1996 IBT election conducted in conformity 
with the rules. They did everything they could to break the law. And 
others, blank and others, caused IBT general treasury funds to be 
applied to promote the Carey campaign in violation of Title 29, United 
States Code; illegally using and diverting IBT general treasury funds, 
including embezzling, stealing, abstracting

[[Page H7683]]

and converting such funds to make contributions to political 
organizations in order to obtain in exchange donations to the Carey 
campaign.
  This is where the DNC gets involved, but before we move and talk a 
little bit about the Democratic National Committee, the terms in here 
are embezzling, stealing, abstracting, converting, such funds to make 
contributions to political organizations in order to obtain and 
exchange donations to the Carey campaign.
  We talked about how this affected the taxpayers. We spent $20 million 
on a failed election. We are going to spend $4 million on a rerun. The 
Teamsters were very generous. They said they would contribute two. So 
their own leadership is, well, you know, we are beyond that, but they 
embezzled and stole.
  What was happening to the net worth of the Teamsters as their 
leadership was embezzling, stealing and abstracting and converting such 
funds to make contributions to political organizations? The net worth 
of the Teamsters a few years ago was $157 million. As recently as a few 
months ago, within the last half year, their net worth was $700,000, 
still a big number but when you go from $157 million to $700,000, you 
wonder what these people were thinking, but now it is not that 
surprising.
  Embezzling, stealing, abstracting and converting such funds to make 
contributions to political organizations in order to obtain in exchange 
donations to the Carey campaign. The union leadership was stealing 
their rank and file members' money and they were going to other 
organizations to find a way to scheme, to launder money through. One of 
those organizations they went to was the DNC.
  Does the gentleman have a question?
  Mr. SOUDER. Yes, I have a question. I want to see if I understand the 
scope of this and how this starts to interrelate.
  Carey was running for the leadership of the Teamsters against Jimmy 
Hoffa, Jr., and he felt he needed more money to run. So if I understand 
what the gentleman is saying, they, Carey, the forces, depleted their 
own members' funds but to complete this they, in effect, gave money to 
a third source, or second source, which is the Democratic Party, which 
then in return made sure that additional dollars got back to Carey, not 
necessarily all that had gone out but Carey got it personally, because 
if he had stolen Teamsters funds for his own campaign that would have 
looked bad. Is the gentleman saying that, did I get that correct, that 
it went to a third party and then some of that came back, matching 
contributions came back? How did some of that work?
  Mr. HOEKSTRA. Mr. Speaker, will the gentleman yield?
  Mr. SOUDER. I yield to the gentleman from Michigan.
  Mr. HOEKSTRA. Mr. Speaker, the Democratic National Committee worked, 
and we have kind of split the responsibilities on this, one of the 
things that we are going at now is this is what was alleged. We know 
that at certain times the Democratic National Committee went out 
looking for donors to make these contributions. It is unclear at this 
point in time whether they found them, but we do know that there were 
other groups that participated in this scheme very similar to what is 
alleged to have happened here with the Democratic National Committee 
where money actually did flow out.
  We know with the Teamsters it did flow out, it did flow back to the 
Democratic National Committee. We are just now trying to figure out 
exactly what the quid pro quo was. Did money actually then make its 
way from the Democratic National Committee back into the Carey 
campaign? Did they find wealthy donors who, instead of writing a check 
to the Democratic National Committee, maybe supported the Ron Carey 
campaign? We do not know.

  We looked at that early. We focused on what was going on within the 
Teamsters itself. The gentleman's committee was looking at some of 
that. We are going to, I believe, have a hearing on that later this 
month to try to get to the bottom of it. It is very, very difficult.
  What we do know is that the scheme was planned, it was agreed to. We 
do not know, at least with the Democratic National Committee, how far 
it was actually completed.
  Mr. SOUDER. Did not the gentleman say earlier that the Fifth 
Amendment, which can only be used if you could go to jail, was taken by 
the second ranking person, did you say, in the AFL-CIO?
  Mr. HOEKSTRA. That is correct.
  Mr. SOUDER. So the person who might be able to answer that larger 
question, when you asked, took the Fifth?
  Mr. HOEKSTRA. Yes. We invited the gentleman to participate at our 
hearing and he indicated that if he came to the committee, he would 
invoke his rights under the Fifth Amendment and he would refuse to 
reply; going to your chart, he would refuse to reply on the grounds 
that it might incriminate him.
  Mr. SOUDER. One of the similarities that the gentleman is starting to 
run into, because you have clearly proven from the statements that you 
have made and from the indictments, that there was corruption inside 
the Teamsters election; in fact, that election was overturned. Now we 
are trying to see where their money moved elsewhere, and the larger 
question that you are moving into, in addition to that, and it is bad 
enough, I mean, I have talked to irate truck drivers in Fort Wayne who 
cannot believe that their own leadership would do this, but then the 
larger question is, like we saw in the Interior Department, like we 
have seen in agency after agency, who is running what looks like a 
large scale, coordinated effort, to find millions of dollars for 
campaigns in all sorts of illegal behaviors?
  Mr. HOEKSTRA. Mr. Speaker, will the gentleman yield?
  Mr. SOUDER. I yield to the gentleman from Michigan.
  Mr. HOEKSTRA. Mr. Speaker, as the gentleman is well aware, the 
Justice Department, Miss Reno, has now opened a 90-day investigation 
into testimony of certain members of the President's staff regarding 
their testimony to the Senate committee, in regards to specific 
testimony on their involvement in perhaps supporting Teamster efforts 
through actions in the executive branch, which is frightening.
  It is one thing to run this through a political organization. It is 
another now to perhaps bring in executive branch agencies as part of 
this quid pro quo, if you give us money perhaps we can help you over 
here.
  The Attorney General has begun a 90-day investigation into those 
questions, and we are pursuing those as well.
  As good as they got at laundering money, because they were good, 
because almost all of this stuff was not found out until after the 
Teamsters election, which means we had to throw out the whole election.
  Mr. SOUDER. The one we paid for?
  Mr. HOEKSTRA. The one we paid for, the one where the regime, members 
of the group that were part of the ticket that won the election are 
still running the Teamsters. Think about it. They were part of the 
fraudulently elected leadership. They are still running the Teamsters.
  I have met with my rank and file Teamsters at the local level. They 
cannot believe it. They want the same thing we want. They want a fairly 
elected leadership representing them, because they know what happened 
under the last leadership.
  As good as they got at laundering money, they did get caught. The 
other thing that they have even gotten better at is making sure that we 
do not get all of the information that we need. There were documents 
that were at one law firm and we requested them, and they are at 
another law firm. It is kind of like one of these things, you have to 
ask the question exactly right, because if you have anything a little 
bit out of order, you are never going to find it and you are never 
going to get it.
  They are masters at hiding information, at slowing down the process 
and trying to turn the tables. Whether it is what is going on in the 
executive branch, whether it is what is going on at the Democratic 
National Committee, or whether it is still going on at the Teamsters, 
they have made it very difficult for almost anybody to get at this 
quickly and effectively.
  Mr. SOUDER. Reclaiming my time, this is a classic example of, oh, 
what a tangled web we weave when we attempt to deceive.
  What we are seeing and hearing from the gentleman, as chairman of the 
Subcommittee on Oversight and Investigations looking into the 
Teamsters, what

[[Page H7684]]

we heard from the gentleman from Indiana (Mr. Burton), the chairman of 
the Committee on Government Reform and Oversight, unfortunately for the 
American people it is doubtful that we are suddenly going to come to 
some conclusion and close down everything.
  What we see, not knowing at what levels it is going on in this 
government but what we have seen in agency after agency, investigation 
after investigation, are people stonewalling information, pleading the 
Fifth, running out of the country, giving us partial truths, fighting 
for every little bit of information we can, and it looks like there was 
an orchestrated effort throughout this entire administration in every 
agency, uncertain at what levels and by who orchestrated it, for cash, 
in order to maintain power.
  Mr. HOEKSTRA. Mr. Speaker, will the gentleman yield?
  Mr. SOUDER. I yield to the gentleman from Michigan.
  Mr. HOEKSTRA. Mr. Speaker, Martin Davis, one of the three people who 
pled guilty, barred from work with the Teamsters and fined $204,000; 
Jere Nash, barred from work with the Teamsters, fined $10,000; Michael 
Ensara barred from working with the Teamsters and fined $126,000. Now 
it gets to be kind of interesting.
  We talked about the Democratic National Committee. Citizen Action, 
their national office, implicated in the swap scheme. Who is Citizen 
Action? Citizen Action is a lobbying political advocacy group here in 
Washington.

                              {time}  1930

  And what do they advocate? Clean and fair elections. Clearly 
implicated through this whole process. Barred from working on Teamsters 
elections. But they are part of this swap scheme. You can sit there and 
say, they are in Washington and they are campaigning. It is kind of 
interesting what happened. Like many of these organizations, they have 
a national headquarters and they have State chapters. They are all 
trying to advocate for the same thing, which is clean and fair 
elections, at least with Citizen Action. That was one of their key 
messages. Washington sold them out. Washington was clearly implicated. 
Washington Citizen Action was clearly implicated in this. So what you 
see again is the Washington organization is corrupt, illegal 
activities, and they basically sold all of their locals, the grassroots 
kind of people, they sold them down the river. It is the same thing 
that happened with the Teamsters, the rank and file members. They are 
our neighbors. Their kids go to school with our kids. We go to church 
with them. We play tennis with them. We see them on the streets. We see 
them in the grocery store. These are our neighbors. What happens? They 
got sold out by their Washington leadership. Their Washington 
leadership stole from their own treasury. It is just too frequent of a 
story. You and I have seen it way too often in the last three, four, 
five years of good organizations, healthy organizations at the local 
level, the Teamsters advocating for worker rights and better wages and 
better working conditions and trying to do the right thing at the local 
level, in most cases doing the right thing. Their leadership in 
Washington tarnishing each and every Teamster around the country. At 
the same time that they are robbing them out of their pocketbook. It is 
unbelievable what happens to some of these national organizations. What 
I hope is that as soon as possible they can have a fairly run election, 
they can have new leadership and they can move forward and hopefully 
they can get out from under this yoke of government supervision and 
they can have their union back. Just like I hope Citizen Action, their 
Washington office is kind of shut down but the people who have worked 
hard for campaign finance reform and clean politics and all these types 
of things at the local level, they can reclaim their national 
headquarters and get some good people in there who do not participate 
in these kinds of activities.
  Mr. SOUDER. I think that as the gentleman from Michigan and I both 
would state unequivocally, one of the problems is that we have too much 
power in Washington because when you have that much power there is 
going to be a temptation to cheat. But even given that, what we have 
seen in his investigation, what we have seen in this investigation is 
not everybody does this. I hear all the time, ``Well, everybody in 
Washington is corrupt.'' They are not. There are too many decisions 
made that are influenced by money in this town. There are too many 
decisions made out of fear for the next political election. What we are 
seeing gradually unfold over the last few years is something that in 
scale we have never seen before. We have not seen the amount of illegal 
foreign dollars moving in, apparently tied to specific decisions. We 
have not seen the massive scale laundering going from multiple 
countries even in. We have not seen this many Cabinet members. I mean 
even under Harding we were talking three. Going with special 
prosecutors, and even leading up into higher and higher levels of this 
administration. We do not know where it ends. We are not likely to find 
out very soon. But we have an obligation in this Congress. While we are 
doing the other things as the gentleman from Michigan (Mr. Hoekstra) 
said in the Committee on Education and the Workforce, we have been 
moving many bills through, having conference committees, we have 
balanced the budget, we are working on tax relief, this is not the 
primary thing we do here but it is one important part. That is, to make 
sure that each American citizen when you cast a vote have that vote 
honored and that your leadership does not have a secondary agenda, 
especially, and this is what the Founding Fathers were very concerned 
about, that any of the leadership would get illegal foreign money, 
where foreign nationals or through agents in this country would attempt 
to influence decisions of the United States Government. That is the 
weighty matters that we have been pursuing. I hope it does not lead all 
the way to the top. But to find out, witnesses need to cooperate with 
the gentleman from Michigan (Mr. Hoekstra). They need to be cooperative 
with the gentleman from Indiana (Mr. Burton). We cannot have 116 
people, by the way we have three more since we have printed these 
things, that would stretch clear across the front of this, this size 
sheet if I had been allowed under House rules to put them across, would 
have covered the entire front of this podium, or clear to the ceiling. 
We have to have honesty. We have to have American citizens willing to 
come forth with the truth.

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