[House Report 105-829]
[From the U.S. Government Publishing Office]
Union Calendar No. 471
105th Congress, 2d Session - - - - - - - - House Report 105-829
INVESTIGATION OF POLITICAL FUNDRAISING IMPROPRIETIES AND
POSSIBLE VIOLATIONS OF LAW INTERIM REPORT
----------
SIXTH REPORT
by the
COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
together with
ADDITIONAL AND MINORITY VIEWS
Volume 1 of 4
November 5, 1998.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
INVESTIGATION OF POLITICAL FUND-RAISING IMPROPRIETIES AND POSSIBLE
VIOLATIONS OF LAW--VOLUME 1 OF 4
Union Calendar No. 471
105th Congress, 2d Session - - - - - - - - House Report 105-829
INVESTIGATION OF POLITICAL
FUNDRAISING IMPROPRIETIES AND
POSSIBLE VIOLATIONS OF LAW
INTERIM REPORT
__________
SIXTH REPORT
by the
COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
together with
ADDITIONAL AND MINORITY VIEWS
Volume 1 of 4
November 5, 1998.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
J. DENNIS HASTERT, Illinois TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, Jr., West Virginia
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
CHRISTOPHER COX, California EDOLPHUS TOWNS, New York
ILEANA ROS-LEHTINEN, Florida PAUL E. KANJORSKI, Pennsylvania
JOHN M. McHUGH, New York GARY A. CONDIT, California
STEPHEN HORN, California CAROLYN B. MALONEY, New York
JOHN L. MICA, Florida THOMAS M. BARRETT, Wisconsin
THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington,
DAVID M. McINTOSH, Indiana DC
MARK E. SOUDER, Indiana CHAKA FATTAH, Pennsylvania
JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland
JOHN B. SHADEGG, Arizona DENNIS J. KUCINICH, Ohio
STEVEN C. LaTOURETTE, Ohio ROD R. BLAGOJEVICH, Illinois
MARSHALL ``MARK'' SANFORD, South DANNY K. DAVIS, Illinois
Carolina JOHN F. TIERNEY, Massachusetts
JOHN E. SUNUNU, New Hampshire JIM TURNER, Texas
PETE SESSIONS, Texas THOMAS H. ALLEN, Maine
MICHAEL PAPPAS, New Jersey HAROLD E. FORD, Jr., Tennessee
VINCE SNOWBARGER, Kansas ------
BOB BARR, Georgia BERNARD SANDERS, Vermont
DAN MILLER, Florida (Independent)
RON LEWIS, Kentucky
Kevin Binger, Staff Director
Barbara J. Comstock, Chief Counsel
David A. Kass, Deputy Counsel and Parliamentarian
Lisa Smith Arafune, Deputy Chief Clerk
Phil Schiliro, Minority Staff Director
-----------
MINORITY STAFF MAJORITY STAFF
Kevin Binger, Staff Director Kristin L. Amerling, Minority
Barbara Jean Comstock, Chief Counsel
Counsel Kenneth M. Ballen, Minority Chief
James C. Wilson, Chief Investigative Counsel
Investigative Counsel Philip S. Barnett, Minority Chief
David A. Kass, Deputy Counsel and Counsel
Parliamentarian Courtney A. Cook, Minority Staff
Michael Bopp, Senior Investigative Assistant
Counsel Sarah Despres, Minority Counsel
J. Timothy Griffin, Senior Jonathan M. Frenkel, Minority
Investigative Counsel Counsel
Kristi L. Remington, Senior Harold W. Gossett, Minority
Investigative Counsel Professional Staff Member
Elliot S. Berke, Investigative Christopher P. Lu, Minority
Counsel Counsel
Robert J. Dold, Investigative Michael J. Raphael, Minority
Counsel Counsel
Jason Hopfer, Investigative Counsel Ellen P. Rayner, Minority Chief
John Irving, Investigative Counsel Clerk
Rae Oliver, Investigative Counsel Jessica R. Robinson, Minority
Jim Schumann, Investigative Counsel Staff Assistant
Michelle E. White, Investigative David Sadkin, Minority Counsel
Counsel Philip M. Schiliro, Minority Staff
Dudley Hodgson, Chief Investigator Director
Milt Copulos, Investigator Andrew H. Su, Minority Research
Kevin Davis, Investigator Assistant
G. Andrew Macklin, Investigator Amy R. Wendt, Minority Staff
John T. Mastranadi, Investigator Assistant
Matt Tallmer, Investigator Barbara A. Wentworth, Minority
Thomas P. Bossert, Assistant to Research Assistant
Chief Counsel Michael T. Yang, Minority Counsel
Jason Foster, Assistant Systems Michael J. Yeager, Minority
Administrator Counsel
Laurel Grover, Staff Assistant
Kenneth Feng, GAO Detailee
Roger Stoltz, GAO Detailee
Richard D. Bennett, Special Counsel
to the Committee
LETTER OF TRANSMITTAL
----------
House of Representatives,
Washington, DC, November 5, 1998.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: By direction of the Committee on
Government Reform and Oversight, I submit herewith the
committee's sixth report to the 105th Congress.
Dan Burton,
Chairman.
C O N T E N T S
----------
Page
Preface.......................................................... 1
Chapter I: Introduction.......................................... 5
Chapter II: Unprecedented Obstacles to the Committee's
Investigation.................................................. 47
Chapter III: The Democrats' Failure to Return Illegal Campaign
Contributions.................................................. 149
Chapter IV: Unprecedented Infusion of Foreign Money Into the
American Political System...................................... 1185
Part A: The Riady Family and John Huang: Access and Influence
with the Clinton White House............................... 1185
Part B: Yah Lin ``Charlie'' Trie and His Relationship with
the Clinton Administration................................. 1347
Part C: Johnny Chung: His Unusual Access to the White House
and His Political Donations................................ 1671
Part D: The Sioeng Family's Contributions and Foreign Ties... 2131
Chapter V: The Failure of Government Agencies to Vigorously
Pursue Campaign Violations..................................... 2933
Part A: Jorge Castro's Illegal Campaign Contributions, and
Why They Were Never Prosecuted............................. 2933
Part B: FEC Enforcement Practices and the Case Against
Foreign National Thomas Kramer: Did Prominent DNC
Fundraisers Receive Special Treatment?..................... 2983
Chapter VI: The Hudson Casino Rejection.......................... 3111
Chapter VII: Procedural Background of the Campaign Finance
Investigation.................................................. 3863
VIEWS
Additional views of Hon. Dan Burton.............................. 3881
Additional views of Hon. Pete Sessions........................... 3920
Minority views of Hon. Henry A. Waxman, Hon. Tom Lantos, Hon.
Robert E. Wise, Jr., Hon. Major R. Owens, Hon. Edolphus Towns,
Hon. Paul E. Kanjorski, Hon. Gary A. Condit, Hon. Bernard
Sanders, Hon. Carolyn B. Maloney, Hon. Eleanor Holmes Norton,
Hon. Chaka Fattah, Hon. Elijah E. Cummings, Hon. Dennis J.
Kucinich, Hon. Rod R. Blagojevich, Hon. Danny K. Davis, Hon.
Thomas H. Allen, and Hon. Harold E. Ford, Jr................... 3923
Additional views of Hon. Thomas M. Barrett....................... 4878
Union Calendar No. 471
105th Congress Rept. 105-829
HOUSE OF REPRESENTATIVES
2d Session Vol. 1 of 4
_______________________________________________________________________
INVESTIGATION OF POLITICAL FUNDRAISING IMPROPRIETIES AND POSSIBLE
VIOLATIONS OF LAW
_______
November 5, 1998.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______________________________________________________________________
Mr. Burton, from the Committee on Government Reform and Oversight,
submitted the following
SIXTH REPORT
together with
ADDITIONAL AND MINORITY VIEWS
On October 8, 1998, the Committee on Government Reform and
Oversight approved and adopted a report entitled,
``Investigation of Political Fundraising Improprieties and
Possible Violations of Law.'' The chairman was directed to
transmit a copy to the Speaker of the House.
PREFACE
Interim Report of the Committee on Government Reform and Oversight
Campaign Finance Investigation and Related Matters
In the closing months of the 1996 campaign, a multitude of
campaign finance violations involving foreign money being
funneled into the political system came to light. In the
opening days of the 105th Congress, the House Committee on
Government Reform and Oversight as well as the Senate
Governmental Affairs Committee were tasked with investigating
potential campaign law violations.
By early 1997, the Democratic National Committee (``DNC'')
had returned close to $3 million in illegal contributions, much
of the funds facilitated by individuals with extensive ties to
the People's Republic of China (``PRC'')--namely, John Huang,
Charlie Trie, and Johnny Chung. In February 1997, the
Washington Post first reported a link between foreign campaign
contributions and the People's Republic of China:
A Justice Department investigation into improper
political fundraising activities has uncovered evidence
that representatives of the People's Republic of China
sought to direct contributions from foreign sources to
the Democratic National Committee before the 1996
presidential campaign.\1\
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\1\ Bob Woodward and Brian Duffy, ``Chinese Embassy Role in
Contributions Probed,'' the Washington Post, Feb. 13, 1997, p. A1.
Again in April 1997, the Washington Post reported that ``top''
Chinese officials approved plans ``to attempt to buy influence
with American politicians'' and the plans continued through
1996 to the present.
Unlike the Senate investigation, the House investigation
scope was not limited to the 1996 campaign.\2\ The Committee
was able to examine a pattern of conduct which began in the
1992 campaign cycle with such key figures as DNC Finance Vice-
Chairman John Huang as well as the Indonesian millionaire James
Riady. Both were long time friends of President Clinton.
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\2\ The House Committee's scope included investigating ``political
fund-raising improprieties and possible violations of law'' going back
to the 1992 election cycle.
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Because of the unprecedented lack of cooperation of
witnesses, including 120 relevant individuals who either
asserted Fifth Amendment privileges or fled the country, both
the House and Senate investigations were severely hampered. In
addition, the stalling tactics of the White House and the DNC,
as well as the total lack of cooperation from foreign
governments in obtaining bank records and relevant witnesses,
limited the information available to the Committee.
Nevertheless, both the House and Senate ``followed the money''
and uncovered extensive evidence of foreign money being
funneled into campaigns and learned more about key individuals
such as James Riady, John Huang, Charlie Trie, Antonio Pan,
Johnny Chung, and Ted Sioeng. These individuals all had high
level access to the Administration, including the President.
They also had established ties to the PRC. Due to the lack of
cooperation, many questions remain about their conduct and
contacts with senior White House and DNC officials.
Throughout 1997, the House worked with the Senate
investigation to the greatest extent possible. The House
investigation further developed information relating to the
political and business contacts, as well as the source of the
funds both here and abroad, of the above named individuals. In
addition, the Committee is investigating foreign money from
other fronts, including South America and funds from a German
national. The Committee identified illegal funds contributed to
the Clinton/Gore '96 campaign, as well as the DNC, undermining
the President's November 1996 contention that it was the
``other campaign'' (the DNC), not his, which had problems with
illegal money.
These investigations are still ongoing as the Committee
continues to pursue witnesses and follow the money trail. This
interim report reflects a work in progress, and numerous areas
of the Committee's investigation are not yet included because
of the ongoing nature of the investigation. The House
investigation has continued to review the contributions
solicited by John Huang and Charlie Trie and has discovered
still hundreds of thousands of dollars in illegal and suspect
funds in Democratic coffers that have not been returned.
Hundreds of thousands of dollars more in contributions from the
family of Ted Sioeng still haven't been returned by the DNC. In
investigating the background of the individuals involved with
these illegal contributions, the House Committee identified
additional, extensive ties that the key fundraisers had with
Asian sources and businesses.
In May 1998, the New York Times reported that Johnny Chung
told Federal investigators that he funneled tens of thousands
of dollars from a Chinese military officer, Liu Chao-ying, to
the Democrats during the 1996 campaign. Chung said the money
came from the People's Liberation Army through Liu Chao-ying, a
Chinese aerospace executive whose father was a senior Chinese
military officer.\3\ The Committee developed extensive
information regarding Chung's Chinese business contacts and
activities.
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\3\ Roberto Suro, ``Chung Alleges DNC Sought Illegal Funds, Justice
Dept. Probe Enters New Phase,'' the Washington Post, June 20, 1998;
Jeff Gerth, David Johnston and Don Van Natta, ``Democrat Fund-Raiser
Said to Detail China Tie,'' the Washington Post, May 15, 1998, A1.
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The Committee continues to be hampered by the refusal of
the Justice Department to provide immunity for low-level
witnesses with relevant information which would allow the
investigation to move forward or to aggressively push foreign
governments to turn over information on bank records the
Committee has traced to foreign sources. In a number of
instances the Committee has identified witnesses previously
unknown to the Justice Department.
Finally, the failure of the Attorney General to follow the
law and appoint an independent counsel for the entire campaign
finance investigation has been the subject of two sets of
Committee hearings. FBI Director Louis Freeh and the Attorney
General's hand-picked Chief Prosecutor, Charles La Bella, wrote
lengthy memos to the Attorney General advising her that she
must appoint an Independent Counsel under the mandatory section
of the Independent Counsel Statute. As part of the Committee's
oversight of the Justice Department, the Committee subpoenaed
these memos, and held the Attorney General in contempt for not
producing them or providing any legal basis for this refusal.
Until an independent counsel is appointed in this matter, the
American people cannot be assured that the same standards of
justice will be applied to the President and Vice-President as
apply to every other citizen. Nevertheless, the Committee
continues to investigate and review the numerous outstanding
matters that remain in carrying out its mandate.
=======================================================================
CHAPTER I
INTRODUCTION
=======================================================================
INTRODUCTION
INTERIM REPORT OF THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
BACKGROUND ON THE CAMPAIGN FINANCE SCANDAL
I. Introduction
Two years ago, the American people were confronted with
serious questions involving the basic integrity of our
democratic electoral process. In the closing months of the 1996
campaign, there were daily revelations about foreign money
coming into the U.S. political system.
John Huang, a former Lippo Group executive, a longtime
friend of the President and a Presidential appointee at the
Commerce Department, was placed at the Democratic National
Committee (``DNC'') in 1995 to raise money with the full
knowledge, encouragement and blessing of the President and his
senior aides. Huang was at the center of the growing scandal.
His ties with the Riadys' Lippo Group, and the President's
longtime friendship with both Huang and the Riadys were the
subject of many unanswered questions during the closing weeks
of the 1996 campaign. In October 1996, it also came to light
that the Riadys provided a $100,000 ``consulting'' fee to
Presidential friend and former Associate Attorney General
Webster Hubbell in 1994. At the time, Hubbell was under
investigation in the Whitewater matter.\1\ Charlie Trie and Ted
Sioeng, two other sources of illegal foreign campaign
contributions, also had ties with Huang. Johnny Chung, another
source of illegal DNC contributions, interacted with Huang and
Trie as well as senior White House officials.
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\1\ Susan Schmidt, ``Hubbell Got $700,000 for Little or No Work,
House Probe Shows,'' Washington Post, Apr. 24, 1998 p. A6.
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The issues regarding John Huang, Charlie Trie, the Riadys
and other possible sources of foreign money are of great
concern. It is important for the American public to understand
who is financing elections and what interests they might have.
These were precisely the type of concerns which were raised in
the closing days of the 1996 election. Yet, at the time the Los
Angeles Times observed that `` . . . Clinton and his aides
admitted almost nothing [about the campaign finance problems]
until his re-election was signed, sealed and delivered. . . .
We were clearly trying to push this onto the DNC to respond and
keep it away from the president and the campaign trail,'' Mike
McCurry candidly admitted in late 1996.\2\
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\2\ Glenn F. Bunting and Alan C. Miller, ``Money saga points to
deception; Clinton, Democrats withheld information on foreign campaign
gifts,'' Los Angeles Times, Dec. 30, 1996.
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Federal election laws are designed so that those who are
involved in the process of funding our election system are
citizens or residents with a stake in the United States' system
of democratic government. Federal laws are also designed to
provide full disclosure to the American people about who is
funding candidates for public office. U.S. election laws do not
allow for contributions from foreign sources.\3\ When the laws
governing our elections are broken, the very system designed to
govern our free elections is threatened. If money is given
illegally, that can, in and of itself, change the outcome in
any given election. That is why tracking the huge infusion of
foreign money from, among other sources, those with communist
Chinese government ties, and determining how and why this was
done, is so important.
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\3\ See 2 U.S.C. 441e(a).
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Masking donations through conduit donors is one way in
which the true source of funds can be hidden, thereby
increasing the influence of either a foreign or illegal source
of money. Using conduit contributions also allows a single
individual to make more hard dollar contributions than they
would otherwise be allowed to make. An individual can give up
to $20,000 in ``hard money'' to a party committee. When an
individual provides conduit funds to a new individual who has
not previously donated, that first $20,000 contributed by that
conduit donor will also be counted as ``hard money'' donations.
It should be noted that throughout the 1996 campaign, there was
a big push to obtain more hard money. Memos authored by White
House Deputy Chief of Staff Harold Ickes, who coordinated the
campaign, raised the issue of a shortage of ``hard money''
throughout the 1996 campaign season.\4\
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\4\ Harold Ickes Documents, DNC 3109247-49; EOP 035856-59; EOP
037358-362 (Exhibit 1).
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The Committee has tracked hundreds of thousands of dollars
in conduit contributions and learned that many illegal conduit
funds have yet to be returned by the DNC and other Democratic
entities. Now that it has been clearly established that much of
the millions of dollars in illegal contributions came from
foreign bank accounts and/or conduits, the troubling question
persists: Were foreign sources of any kind buying access to the
White House and trying to influence the 1996 elections?
To date, the President, White House officials and DNC
officials, all claim no prior knowledge of the massive amount
of illegal foreign money raised by John Huang, Charlie Trie,
Johnny Chung, their associates and others. However, senior
White House and DNC officials were all part of a reckless
fundraising scheme which involved providing extensive
opportunities for large DNC donors to gain access to the
President and senior Administration officials. White House
perks such as Lincoln Bedroom overnights, White House coffees,
Air Force One trips and Kennedy Center tickets, also were
provided to donors and their friends.\5\ A number of the
individuals who received the ``perks'' and White House VIP
treatment, were later deemed inappropriate. These included
individuals such as a drug dealer, an arms merchant and many
foreign nationals with unknown agendas.
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\5\ White House Documents, EOP 036287-88 (Exhibit 2).
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While the Committee at this time is not prepared to make
any final conclusions about the precise role or actions of
senior White House and DNC officials, including the President
and Vice-President, in the campaign finance scandal, the
Committee will continue to explore their actions. FBI Director
Louis Freeh and the Task Force Chief Prosecutor Charles La
Bella already have told the Attorney General that the actions
of those at the highest levels of the White House and DNC
necessitate the appointment of an independent counsel. Some
have suggested that there might be a larger conspiracy to
violate election laws which necessitates an independent
counsel. Nevertheless, the Attorney General has declined to
appoint an Independent Counsel for campaign finance, failing to
follow the law in this matter. It should be noted that it is
the common understanding of the recommendations of both Mr.
Freeh and Mr. LaBella that any Independent Counsel appointed to
investigate campaign finance matters would investigate any
conduct relating to Republicans as well as Democrats.
Finally, in ``following the money,'' the Committee
ultimately focused more on Democratic fundraising for one
simple reason--that is where the foreign money was directed
over the past several election cycles. However, this Committee
and the Senate Governmental Affairs Committee did not neglect
the instances where foreign money was found in Republican
coffers and examined both the matters involving Ambrous Young
\6\ and Ted Sioeng \7\ as they related to Republicans.
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\6\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 4,
4657 (1998).
\7\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 4,
5573 (1998).
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II. The Foreign Fund-Raising Story Breaks in Fall 1996: Keeping a Lid
on the Story Past the Election
A. The Initial Fundraising Stories
The foreign fundraising scandal first came to light in
September 1996 with press reports of an illegal $250,000
donation from Cheong Am America, a start-up California company,
which had no U.S. generated income at the time of the
donation.\8\ John Huang had promised the head of the company,
John H.K. Lee, that he would have the opportunity to meet with
the President after making his April 8, 1996 contribution to
the DNC.\9\ In exchange for Lee's contribution, Huang arranged
a quick photo op in a California Hotel where Mr. Lee met and
posed for pictures with the President.\10\
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\8\ Alan C. Miller, ``Democrats Return Illegal Contribution: South
Korean Subsidiary's $250,000 Donation Violated Ban on Money from
Foreign Nationals,'' Los Angeles Times, September 21, 1996 at A16.
\9\ David Willman, Alan C. Miller and Glenn F. Bunting, ``What
Clinton Knew: How a Push for New Fund-Raising Led to Foreign Access,
Bad Money and Questionable Ties,'' Los Angeles Times, Dec. 21, 1997 at
A1.
\10\ Id.
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Following the Cheong Am disclosure by the Los Angeles Times
in September 1996,\11\ and the many unanswered questions raised
about John Huang's fundraising, the press aggressively began
reporting about large, potentially illegal donations to the
Democratic National Committee. Donations focused on by the
press included the Cheong Am $250,000 donation;\12\ $450,000 in
donations from the Wiriadinatas, an Indonesian couple linked to
the Riadys;\13\ $140,000 from monks and nuns who attended a
fundraiser in April 1996 at a Buddhist temple in
California;\14\ and, a $325,000 donation from Yogesh
Gandhi.\15\ John Huang was the DNC contact for most of these
illegal contributions.
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\11\ Alan C. Miller, ``Democrats Return Illegal Contribution,'' Los
Angeles Times, Sept. 21, 1996.
\12\ Id.
\13\ Los Angeles Times, Dec. 21, 1997.
\14\ Ruth Marcus and Ira Chinoy, ``A Fund-Raising `Mistake'; DNC
Held Event in Buddhist Temple,'' the Washington Post, Oct. 17, 1996 p.
A1.
\15\ Los Angeles Times, Dec. 21, 1997.
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In the weeks before the 1996 Presidential election, top
White House, DNC and Commerce Department officials refused to
release much of the relevant information regarding John Huang,
the Riadys, Charlie Trie and other fundraisers and suspicious
characters connected with questionable DNC campaign donations.
As Brookings Institution scholar Stephen Hess observed:
I've been around this town for 30 years and I've never
seen a group raise stonewalling to such an art form. .
. . This is nothing new for the Clintons . . . but they
may ultimately pay a very heavy price for it.\16\
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\16\ Los Angeles Times, Dec. 30, 1996.
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B. White House and DNC Dodge Questions and Go On the Attack
The President was clearly among those avoiding answering
questions about these matters in October 1996. On October 15,
1996, when asked about criticism of various DNC contributions,
the President would only say: ``It's election time,'' before he
ducked into his hotel.\17\ The following Washington Post story
on October 22, 1996 was typical of the White House response:
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\17\ Edward Walsh, ``Dole Aide Suggests `Potentially Criminal
Actions' in DNC Gift'' the Washington Post, Oct. 15, 1996 at A10.
Clinton has not provided any substantive answers,
dismissing the matter by saying that his campaign has
asked the Federal Election Commission to examine
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Huang's fundraising activities. . . .
White House press secretary Michael McCurry said today
that this [Huang's not being available for questions]
is because Huang is too busy preparing for the FEC
inquiry to meet with the news media. And he said the
White House hopes that the FEC will reach its
conclusions and make a report before the presidential
election. But McCurry was smiling when he said it,
knowing that the FEC routinely takes months or years--
not weeks--to reach its conclusions on such matters.
``Extremely cynical performance, Mr. McCurry,'' one
reporter bellowed. ``I don't know about that,'' McCurry
chortled. ``I've seen worse. I've done worse.'' \18\
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\18\ John Harris, ``President Sidesteps Funds Flap,'' the
Washington Post, Oct. 22, 1996 at A1.
Senator Christopher Dodd, the Co-Chairman of the DNC,
denied that John Huang had ``done anything wrong here'' during
an appearance on Face the Nation on October 20, 1996, and said
the DNC would make Huang available for questioning.\19\ At the
time of Dodd's statement, the DNC had decided to relieve Mr.
Huang of his fundraising duties and ask the FEC to investigate
the donations Huang solicited.\20\
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\19\ Jill Abramson and Glenn R. Simpson, ``Lippo Issue Remains at
Center of Presidential Race,'' Wall Street Journal, Oct. 21, 1996 at
A24 (quoting Face the Nation (CBS television broadcast, Oct. 20,
1996)).
\20\ Id.
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C. John Huang in Hiding
During this pre-election time John Huang was in hiding, but
in contact with DNC officials. The DNC then reported back to
the White House of growing concerns about Huang's fundraising.
However, it was only when Huang was facing a nationwide manhunt
by U.S. Marshals that his attorney, John Keeney, assured U.S.
District Judge Royce Lamberth that Huang would attend a civil
deposition relating to his Commerce Department activities.\21\
Exasperated with Huang's avoidance of a subpoena, the judge
indicated that the marshals had been attempting to locate
Huang. In a particularly testy courtroom exchange, Judge
Lamberth asked:
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\21\ Andy Thibault, ``Huang's lawyer says he'll return,'' the
Washington Times, Oct. 26, 1996 at A1.
Judge Lamberth. Is he [Huang] within 100 miles?
Mr. Keeney. I don't have an atlas.
Judge Lamberth. You don't need an atlas . . . You
know exactly where he is. If he wants to flee from
service, I'm going to find out where he is.\22\
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\22\ Id.
Mr. Keeney had claimed Huang would not be available until
after the Presidential election.\23\ At that point, Judge
Lamberth ordered the DNC to require that Huang report to work
on the following Monday. Upon receiving the order, DNC Chairman
Don Fowler complied.\24\ To forestall any delaying tactics,
Judge Lamberth indicated that he was prepared to hold a hearing
on whether Huang's lawyer could legally refuse to disclose his
client's location. Keeney sent the DNC a letter saying Huang
would be available for the deposition.\25\
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\23\ Id.
\24\ Id.
\25\ Toni Locy and Serge Kovaleski, ``Huang to Return Monday to
Accept Civil Subpoena,'' the Washington Post, Oct. 26, 1996 at A13.
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Documents turned over to the Committee from the DNC show
that Huang submitted a ``DNC Expense Report'' for part of his
time in hiding in October 1996.\26\ In a submission he made in
the fall of 1996 under ``purpose of travel'' Huang wrote:
``Stayed away from D.C.; Return home for materials.'' The
timeframe was October 11-15, 1996.\27\
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\26\ DNC Document D0000053 (Exhibit 3).
\27\ Id.
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D. The DNC Stalls Past the Election on FEC Reporting
With all of the troubling information about possibly
illegal contributions surfacing in the closing days of the 1996
election, the DNC made the extraordinary decision not to submit
its financial report to the Federal Election Commission on
time, as required by law.\28\ This was the first time since the
Federal election law was enacted that a party had purposefully
decided not to file a pre-election campaign finance report.
This produced an outcry even from party loyalists such as
former Judiciary Committee Chairman and Democrat Representative
Don Edwards, who noted the report should have been filed by the
DNC: ``They've had people out of control over there who went
overboard [on fund-raising].'' \29\
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\28\ Donald Lambro, ``After election comes the deluge? Democrats
fear funds flap fallout,'' the Washington Times, Oct. 31, 1996 at A1.
\29\ Id.
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Following a public uproar, the DNC reversed itself and
released ``raw data'' of the campaign finance report.\30\
Charles Lewis, Executive Director of the Center for Public
Integrity observed at the time:
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\30\ The Washington Times, Oct. 30, 1996 at A13.
If Bill Clinton is re-elected, it could well become the
second term from Hell. . . . We're seeing something we
have not seen since Watergate, in terms of the contempt
for the American people about the amount of campaign
money being raised from dubious sources and of
questionable legality.\31\
---------------------------------------------------------------------------
\31\ The Washington Times, Oct. 31, 1996 at A1.
---------------------------------------------------------------------------
III. The Post-Election Response to the Campaign Finance Scandal
A. Problems Identified with John Huang
From the very beginning, John Huang's fundraisers included
an unusually high number of foreign nationals. This did not go
unnoticed by DNC officials in 1996. DNC Chairman Don Fowler and
DNC Finance Chairman Marvin Rosen attended the events
orchestrated by Huang and at the time of Huang's first
fundraiser in February 1996, noted that a number of foreign
nationals were at the event. By the time of a July 30, 1996,
small Presidential fundraising dinner where few of the
attendees were eligible to contribute, Marvin Rosen put out the
word that Huang could not do anymore events with the
President.\32\ However, Huang's fundraising was allowed to
continue behind the scenes.
---------------------------------------------------------------------------
\32\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 1,
1703 (1998) (``Senate Report'').
---------------------------------------------------------------------------
As became evident shortly after the 1996 election, there
were serious problems with John Huang's fundraising practices,
as well as the DNC vetting practices--or rather, the lack
thereof. There were hundreds of thousands of dollars in illegal
foreign contributions connected with Huang. In fact, problems
with John Huang's fundraising practices were first brought to
the attention of the DNC after his first fundraising event in
Washington, DC, on February 19, 1996.
Shortly after Huang's first fundraising event, a February
19, 1996 Asian-American event which Huang claimed to have
raised $1 million for the party, the DNC learned that at least
two of the contributions were clearly illegal.\33\ Two $12,500
checks solicited by Huang from a couple who run an
international trading group based in China were returned in
March 1996.\34\ DNC General Counsel Joseph Sandler claims to
have no recollection of these checks being returned by the DNC
in March 1996, even though he has testified that he extensively
reviewed John Huang's contributions from the February 19, 1996
event.\35\ It was not until July 1997 when the information
about these two returned checks was first turned over to
Congress. For almost a year, the DNC left the impression that
the first notice that they had of any problems with John Huang
was the $250,000 Cheong Am donation identified as illegal in
mid-September 1996. That impression was deliberately
misleading.
---------------------------------------------------------------------------
\33\ Senate Report, vol. 1, at 1694-1698.
\34\ Id.
\35\ Deposition of Joseph Sandler, by the Senate Committee on
Governmental Affairs, May 30, 1997, at 102-103.
---------------------------------------------------------------------------
These early warning signs about John Huang's solicitation
of illegal foreign money were clearly ignored by the DNC.
However, both DNC Finance Director Richard Sullivan and DNC
Finance Chairman Marvin Rosen claimed to have had sufficient
concerns about Huang to recommend special training by DNC
General Counsel Joseph Sandler. Sandler has denied ever being
requested to conduct such training or in fact engaging in such
training for Huang.\36\
---------------------------------------------------------------------------
\36\ Senate Report, vol. 1, at 1692-1694.
---------------------------------------------------------------------------
Perhaps most disturbing about all matters related to John
Huang is the fact that Attorney General Janet Reno's task force
appears to be making little if any progress in making a case
against John Huang.\37\ As is evidenced in the Committee's
report, there is ample reason to believe he is every bit as
involved in illegal campaign contributions as the lower level
individuals who have been indicted by the Justice Department's
Campaign Finance Task Force to date.
---------------------------------------------------------------------------
\37\ See Letter from Chairman Burton to Attorney General Janet Reno
of Oct. 2, 1998. (Exhibit 4).
---------------------------------------------------------------------------
B. Problems identified with the DNC vetting system
By mid-October 1996, DNC officials had not only realized
they had serious problems with their compliance procedures,
according to DNC General Counsel Joseph Sandler, they had begun
a process to change the vetting system.\38\ It is clear from
Sandler's testimony that a public acknowledgment of serious
shortcomings in the DNC finance system was deliberately delayed
past election day.\39\
---------------------------------------------------------------------------
\38\ Deposition of Joseph Sandler, Senate Committee on Governmental
Affairs, May 15, 1997 at 21 (hereinafter ``Sandler Senate
Deposition'').
\39\ Id. at 22-30.
---------------------------------------------------------------------------
Although DNC Chairman Don Fowler refused to make any public
statements before the election, he came forward on November 13,
1996, to acknowledge that there were ``serious'' flaws in the
party's process for reviewing contributions and donors. Fowler
claimed he had instituted new safeguards.\40\
---------------------------------------------------------------------------
\40\ Ruth Marcus, ``DNC Official Concedes `Mistakes of Process';
National Chairman Makes First Statements on Donor Controversy,'' the
Washington Post, Nov. 13, 1996 at A4.
---------------------------------------------------------------------------
Yet, even after the election, the DNC hid the true nature
of the problem. For example, the day after the election, the
DNC returned a $325,000 check to Yogesh Gandhi. However, the
DNC had arranged to return the contribution before the
election, in late October 1996.\41\ In a similar incident, at
the November 13, 1996 press conference, DNC Chairman Fowler
insisted that the $450,000 from the Indonesian couple, the
Wiriadinatas, had been ``thoroughly reviewed'' and was
legal.\42\ Yet only 10 days later, after intense public
scrutiny, the DNC announced that it was returning this $450,000
in donations from the Wiriadinatas because they had failed to
file U.S. income tax returns for 1995 and they had moved back
to Indonesia--information which was known to the DNC by mid-
October.\43\ This pattern of delaying the return of illegal or
inappropriate contributions continues today.
---------------------------------------------------------------------------
\41\ Sandler Senate Deposition, May 15, 1997 at 114-116.
\42\ The Washington Post, Nov. 13, 1996 at A4.
\43\ Alan C. Miller, ``Democrats Give Back more disputed money,''
the Los Angeles Times, Nov. 23, 1996 at A1.
---------------------------------------------------------------------------
By November 1996, the Justice Department had set up its
task force to investigate the campaign fundraising matter,
which in turn prompted the DNC to hire outside auditors,
lawyers and investigators to further examine the questionable
contributions. In February 1997, the DNC identified $1,492,051
in contributions to be returned, yet officials at the DNC
continued to deny any prior knowledge of this extensive pattern
of illegal contributions generated by John Huang, Charlie Trie,
Johnny Chung and others.
C. Problems Identified with Charlie Trie's Contributions
Problems related to DNC fundraiser, Presidential appointee,
and long-time Clinton friend, Charlie Trie, also came to public
light in the fall of 1996. Charlie Trie worked closely with
John Huang in fundraising in the 1996 cycle. Notably, Harold
Ickes flagged Charlie Trie as a potential problem in mid-
October 1996 when he spoke with DNC Executive Director B.J.
Thornberry,\44\ but his fundraising problems largely escaped
unnoticed until after the election. However, in an October 1996
conversation with Ms. Thornberry, Ickes suggested that if she
thought she had problems with Huang, ``you better look at
Trie.'' \45\ Ickes' delay in calling attention to Trie is
particularly problematic as Ickes was in charge of coordinating
the campaign and fundraising for the DNC.
---------------------------------------------------------------------------
\44\ Deposition of B.J. Thornberry, House Committee on Government
Reform and Oversight, July 22, 1997 at 71.
\45\ Id.
---------------------------------------------------------------------------
Ickes had known of fundraising problems relating to Charlie
Trie since early April 1996, when the Executive Director of the
President's Legal Expense Trust, Michael Cardozo, informed Mr.
Ickes and the First Lady, that Charlie Trie had provided over
$380,000 in suspect contributions to the Presidential Legal
Expense Trust.\46\ Mr. Cardozo informed Ickes and the First
Lady that he was going to investigate the suspect contributions
from Trie.\47\ Cardozo's testimony indicated that initially in
the meeting, the First Lady appeared not to know Charlie
Trie.\48\ Ickes also testified that he did not know who Trie
was until Cardozo brought the situation to his attention.\49\
However, Trie, an Arkansas native, had been active in DNC
fundraising circles since June 1994 when he contributed
$100,000 to the DNC specifically dedicated to the First Lady's
Health Care effort \50\ which was headed up by Harold Ickes at
the White House.
---------------------------------------------------------------------------
\46\ Deposition of Michael Cardozo, Senate Committee on
Governmental Affairs, May 7, 1997 at 68.
\47\ Id. at 71.
\48\ Id.
\49\ Deposition of Harold Ickes, Senate Committee on Governmental
Affairs, June 26, 1997 at 160, 166.
\50\ Memo to John O'Hanlon from David Mercer regarding VIP
requests, June 18, 1994. F 0045848 (Exhibit 5).
---------------------------------------------------------------------------
A document turned over from Ickes' files which features an
exclusive group of large dollar donors features Charlie Trie
along with notables such as Evelyn Lauder, Ely Callaway, and
Marvin Davis, demonstrates that Ickes certainly could have
known of Trie's role in fundraising.\51\ Despite warnings from
Cardozo regarding Trie's fundraising, a Presidential
appointment to the Commission on U.S.-Pacific Trade and
Investment Policy went forward on April 17, 1996,\52\ with
apparently no concern. The Committee has heard from a witness,
an aide to Senator Bingaman, who told the committee that he
protested repeatedly regarding Trie's placement on the
Commission, only to be told by a White House official that Trie
was a ``must appointment'' from high levels of the
Administration.\53\ Many of those who served with Trie on the
Commission found his qualifications and abilities severely
lacking.
---------------------------------------------------------------------------
\51\ Harold Ickes Documents CGRO 1623-24 (Exhibit 6).
\52\ White House Documents EOP 030404-030406 (Exhibit 7).
\53\ Staff Interview of Steve Clemons, Dec. 5, 1997.
---------------------------------------------------------------------------
In a May 9, 1996 meeting at the White House, Michael
Cardozo again met with top White House officials including
Ickes and Bruce Lindsey and other White House Counsel, to
inform them that he planned on returning the PLET contributions
gathered by Trie, because it appeared they had been funneled
through a Buddhist cult.\54\ At this May 9, 1996 meeting, Mr.
Cardozo recalled that Bruce Lindsey mentioned something about
Trie being a DNC fundraiser.\55\ Ickes does not recall any
discussion that took place during the meeting.\56\
---------------------------------------------------------------------------
\54\ Cardozo Senate Deposition, May 7, 1997 at 150-152.
\55\ Id. at 175.
\56\ Ickes Senate Deposition, June 26, 1997 at 179.
---------------------------------------------------------------------------
Despite the knowledge of the First Lady and senior White
House officials regarding Trie's suspect fundraising, just days
later on May 13, 1996, the President, sitting at a table with
two foreign nationals praised Charlie Trie:
[S]oon it will be twenty years that I had my first meal
with Charlie Trie. Almost twenty years, huh? Twenty
years in just a few months. At the time, neither of us
could afford a ticket to this dinner, it's fair to
say.\57\
---------------------------------------------------------------------------
\57\ White House Communications Agency videotape No. 6, May 13,
1996.
At the time when the President made this statement reflecting
upon Trie's apparent good fortune, his staff had already been
informed of Trie's questionable fundraising practices for PLET.
During this same month Charlie Trie borrowed $5,000 from former
White House employee Mark Middleton \58\ and faced court
charges for failing to pay his rent.\59\
---------------------------------------------------------------------------
\58\ Deposition of Holli Weymouth, by the House Committee on
Government Reform and Oversight, July 14, 1998 at 104.
\59\ Complaint for possession of real estate, P704553 (Exhibit 8).
---------------------------------------------------------------------------
In June 1996, all of Trie's gathered contributions were
returned by PLET and the White House Counsel's office was again
informed of this matter by Mr. Cardozo.\60\ Yet again on July
22, 1996, and again on August 18, 1996, Charlie Trie was a key
fundraiser for these Presidential events. In August 1996, when
the Presidential Legal Expense Trust filed its quarterly
report, it notably omitted all of the returned contributions
provided by Trie.\61\ In August 1996, senior White House
officials such as Harold Ickes, Bruce Lindsey, Maggie Williams
and Cheryl Mills were informed of a letter received by a PLET
donor connected with the funds Trie had forwarded which
indicated that the funds were indeed gathered under highly
questionable circumstances.\62\ Yet, it was not until December
1996--after the election and after reporters keyed in on the
fundraising role of Charlie Trie, that the White House
acknowledged problems with Trie's PLET donations and Trie's DNC
donations were publicly scrutinized.\63\ Even with knowledge of
Trie's large and problematic donations, he continued to attend
fundraisers and was invited to a December Christmas party at
the White House for major DNC donors.\64\ At the Christmas
party, according to Bruce Lindsey, Trie approached the
President in the receiving line and apologized for any problems
he caused the President and then left the White House.\65\
Shortly thereafter, when Trie's problems with the Trust Fund
were made public, Trie left the country and remained in Asia
throughout 1997.
---------------------------------------------------------------------------
\60\ Cardozo Senate Deposition, May 7, 1997 at 201.
\61\ Id. at 169.
\62\ Id. at 223-224.
\63\ Deposition of Michael Cardozo, by the Senate Committee on
Governmental Affairs, May 8, 1997 at 10-11.
\64\ Deposition of Bruce Lindsey, by the House Committee on
Government Reform and Oversight, Apr. 29, 1998 at 20.
\65\ Id.
---------------------------------------------------------------------------
By February 1997, it was clear that Trie was connected with
hundreds of thousands of dollars in illegal contributions. When
the DNC completed its initial review of questionable
contributions, it returned all of Trie's personal and corporate
contributions. Nevertheless, many of his conduit political
donations took months to trace. Even after both the Senate and
House identified conduit funds provided by Charlie Trie, the
DNC continued to retain the funds long after information about
their illegal source was publicly identified.
D. The Specter of Foreign Influence
Over the past 2 years, the millions of dollars in illegal
foreign money that went to the DNC and other Democratic
entities have been traced to a small number of key figures,
namely John Huang, Charlie Trie, and Johnny Chung. These
individuals were provided unique access to the White House and
senior Administration officials. They also used their access to
bring their foreign business associates to the White House and
DNC functions. Even though many of their foreign associates
were not eligible to contribute, foreign nationals such as
Charlie Trie's business associate ``Mr. Wu'' did in fact funnel
foreign money into the DNC. Trie brought ``Mr. Wu,'' who has
been linked to local government officials in the People's
Republic of China, to the White House on numerous occasions.
Huang, Trie and Chung were provided with opportunities to
bring their Chinese business associates to the White House
while these same associates provided them with funds for
illegal foreign contributions. As the Committee has continued
its investigation, more information about these questionable
business interests has come to light. Johnny Chung's confession
that tens of thousands of dollars which he contributed were
given to him from a Chinese government source was ultimately
not surprising. Indeed, some at the DNC had suspected he was
doing this.\66\
---------------------------------------------------------------------------
\66\ Deposition of Richard Sullivan, by the House Committee on
Government Reform and Oversight, Sept. 3, 1997 at 187.
---------------------------------------------------------------------------
In March 1998, Chung pled guilty to illegally funneling
$20,000 to Clinton/Gore '96.\67\ Chung also had contributed
$366,000 to the DNC \68\ in the same period in which he visited
the White House approximately 50 times,\69\ often with his
Chinese business associates. According to news reports, Chung
admitted that a large part of the nearly $100,000 he gave to
Democrats in 1996, including $80,000 to the DNC, came from the
Chinese People's Liberation Army through Chinese army
Lieutenant Colonel and China Aerospace Corporation executive
Liu Chao-ying.\70\ Chung, once labeled a ``hustler'' by a
National Security Council aide,\71\ escorted Ms. Liu to a
Presidential fundraiser in Los Angeles in 1996.\72\ A House
Select Committee continues to investigate the intelligence and
national security matters related to these issues, while this
Committee continues to investigate the money trail and the
business associations.
---------------------------------------------------------------------------
\67\ Don Terry, ``Fund-Raiser Chung Pleads Guilty,'' the Washington
Post, Mar. 17, 1998.
\68\ FEC Internet records--tray.com/fecinfo/
\69\ White House WAVE Records.
\70\ Jeff Gerth, ``Democrat Fund-Raiser said to Detail China Tie,''
New York Times, May 15, 1998.
\71\ E-mail from Robert Suettinger of the National Security Council
describing Johnny Chung as a ``hustler'' EOP 005439.
\72\ Chung guest list for Eli Broad fundraiser held on June 18,
1996, JCH 15017 (Exhibit 9).
---------------------------------------------------------------------------
The connections with foreign campaign money and foreign
business associates also is apparent with Charlie Trie and his
associate Antonio Pan; John Huang and the Riady family; Ted
Sioeng and his foreign associates, as well as others. As the
Committee continues to follow the money trail and push for
foreign cooperation and an end to the stonewalling by dozens of
key witnesses, it is very likely more foreign ties will be
discovered. For example, the Committee has traced $200,000 in
travelers checks back to Jakarta, Indonesia.\73\ These funds
were used in part for conduit contributions to the DNC. To
date, the committee and the Justice Department have been
unsuccessful in obtaining the cooperation of the Indonesian
government in turning over Indonesian bank records which would
identify the source of these funds. However, it is the
operative theory of both the Committee and the Justice
Department that the source of these funds is very likely
connected in some manner to the Riady family and/or Lippo
Group.
---------------------------------------------------------------------------
\73\ See generally, letter from Christopher M. Curran, Esq.,
Attorney for Bank Central Asia, to Committee Senior Investigative
Counsel Tim Griffin, Esq., July 20, 1998.
---------------------------------------------------------------------------
Finally, the Committee believes that the House's
investigation continues to provide additional support to the
issues as set out by the Senate Governmental Affairs majority
report on ``The China Plan.'' \74\
---------------------------------------------------------------------------
\74\ Senate Report, vol. 2, at 2499.
---------------------------------------------------------------------------
Conclusion
The Committee's interim report outlines foreign money
raised or contributed by John Huang, Charlie Trie, Johnny
Chung, and others connected with these individuals such as Ted
Sioeng and the dozens of conduits connected with them. What is
clear is that high level officials from the White House, the
Administration and the DNC made themselves available to these
individuals despite warning signs that their fundraising
practices were highly suspect. John Huang, and his patrons, the
Riadys, are friends of President Clinton, as is Charlie Trie.
They came to the fundraising table by virtue of their
relationships with the President--not through any relationship
with Don Fowler, Harold Ickes or other DNC or Administration
officials.
The illegal foreign money solicited by these individuals is
doubly suspect because of their extensive ties to the People's
Republic of China. The original--but as yet unidentified--
sources of these funds were traced to bank accounts in Hong
Kong, Macau and Indonesia. As the Senate Governmental Affairs
Committee Final Report on campaign finance noted, ``officials
at the highest levels of the Chinese government approved of
efforts to increase the PRC's involvement in the U.S. political
process. There are indications that the plan or parts of the
plan and possibly related PRC activities were implemented
covertly in this country.'' \75\ Since the Senate issued its
report in March 1998, the Committee has developed a more
extensive record on the key fundraising figures and their
foreign ties. Finally, in addition to the Asian sources of
foreign money, the Committee has also identified South American
foreign money that first came into the DNC coffers in 1992, as
well as funds from a German national which were largely ignored
by the FEC.
---------------------------------------------------------------------------
\75\ Senate Report, vol. 2, at 2510.
---------------------------------------------------------------------------
This is an interim report on the Committee's work in the
campaign finance investigation. Due to the extensive
stonewalling endured by the Committee and the lack of testimony
from 120 relevant witnesses, many fundamental questions remain
unanswered. What was the motivation behind the massive flow of
foreign money into the U.S. political system? Where did the
funds ultimately originate? Who were the foreign power brokers
and what were they hoping to get in exchange for their money?
Were any national security or policy matters compromised by
these activities?
Justice Department officials have indicated that cases such
as these take years to get to the facts. The extensive
financial transactions coupled with reluctant and non-available
witnesses makes for a difficult trail to follow. Nevertheless,
the Committee is determined to continue to get the facts to the
American people.
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
[Summary of Hearings by Witness and Topic]
------------------------------------------------------------------------
Date and Witness(es) Subject
------------------------------------------------------------------------
October 8, 1997: (None), Member's Campaign Finance
Statements. Improperties and the
Possible Violation of Law.
October 9, 1997: Manlin Foung, Joseph Conduit Payments to the
Landon, David Wang. Democratic National
Committee.
November 6, 1997: Charles F.C. Ruff, White House Compliance with
Cheryl D. Mills, Lanny Breuer, Dimitri Committee Subpoenas.
Nionakis.
November 7, 1997: Charles F.C. Ruff, White House Compliance with
Cheryl D. Mills, Lanny Breuer, Dimitri Committee Subpoenas.
Nionakis.
November 13, 1997: Margaret Williams, Johnny Chung: His Unusual
Nancy Hernreich, Kelly Crawford, Carol Access to the White House,
Khare, Ceandra Scott. His Political Donations and
Related Matters.
November 14, 1997: Brooke Darby, Robert Johnny Chung: His Unusual
Suettinger. Access to the White House,
His Political Donations and
Related Matters.
December 9, 1997: Honorable Janet Reno, Current Implementation of
Honorable Louis J. Freeh, Donald Smaltz. the Independent Counsel
Act.
December 10, 1997: Honorable Louis J. Current Implementation of
Freeh, Donald Smaltz. the Independent Counsel
Act.
January 21, 1998: Gaiashkibos, Arlyn The Department of the
Ackley, Sr., George Newago, Fred Havenick. Interior's Denial of the
Wisconsin Chippewa's Casino
Applications.
January 22, 1998: George Skibine, Michael The Department of the
Anderson, Robin Jaeger, Denise Homer, Tom Interior's Denial of the
Hartman. Wisconsin Chippewa's Casino
Applications.
January 28, 1998: Patrick O'Connor, Scott The Department of the
Dacey, Tom Collier, John Duffy. Interior's Denial of the
Wisconsin Chippewa's Casino
Applications.
January 29, 1998: Honorable Bruce Babbit.. The Department of the
Interior's Denial of the
Wisconsin Chippewa's Casino
Applications.
March 31, 1998: Scott E. Thomas, Lawrence FEC Enforcement Actions:
M. Noble, Lois Lerner, Jose Rodriguez. Foreign Campaign
Contributions and other
FECA Violations.
April 30, 1998: Jorge Castro Barredo, Venezuelan Money and the
Richard T. Preiss, Joseph J. Dawson. Presidential Election.
August 4, 1998: Honorable Louis J. Freeh, The Need for an Independent
Charles G. La Bella, James V. Desarno. Counsel in the Campaign
Finance Investigation.
August 6, 1998: (None), Member's Whether to hold The Attorney
Statements. General in Contempt Of
Congress.
------------------------------------------------------------------------
[Supporting documentation follows:]
=======================================================================
CHAPTER II
UNPRECEDENTED OBSTACLES TO THE COMMITTEE'S INVESTIGATION
=======================================================================
UNPRECEDENTED OBSTACLES TO THE COMMITTEE'S INVESTIGATION
Introduction
Since early 1997, when the Committee first began conducting
its campaign finance investigation, the Committee encountered
unprecedented obstacles, never before faced by a congressional
investigation. These obstacles resulted in limited or no access
to the most relevant witnesses and caused the Committee to have
to subpoena far more materials than it might otherwise have
done if faced with cooperating witnesses and cooperating
entities.
These obstacles include the following:
I. To date, 120 witnesses connected with the campaign
finance investigation have either fled the country or
asserted Fifth Amendment privileges. Many of these
witnesses were associates of the central campaign
fundraising figures, all of whom refused to cooperate
with the Committee. Included are: John Huang, Charlie
Trie, Johnny Chung, James Riady, Webster Hubbell, Mark
Middleton and Melinda Yee. Huang, Trie, Hubbell,
Middleton and Yee were all political appointees of
President Clinton.
II. The Committee has been faced with the White
House's consistent, 6 year pattern of dragging out
investigations by refusing to turn over relevant
documents until threatened with contempt. Furthermore,
the White House has on many occasions asserted
frivolous privileges which had already been struck down
in court. These actions were designed to delay and
minimize the effective dissemination of relevant
information.
III. The Committee has been faced with the Democratic
National Committee's (``DNC'') protracted and
disorganized document production which still has not
concluded, as well as the DNC's failure to provide any
certain date when all records will be produced to
either congressional or Justice Department
investigators.
IV. The Committee has been faced with a total lack of
cooperation from foreign governments. It has been
almost impossible to obtain relevant information and
access to witnesses. Furthermore, the Administration
has failed to press for any such cooperation which
would uncover the original source of the millions in
foreign money which flowed into the U.S. political
system over the past several years. In addition, the
People's Republic of China refused to allow visas to be
issued for Committee investigators and the
Administration did not press for cooperation in any
meaningful way.
I. The Unprecedented Number of Witnesses Who Refused To Cooperate With
the Committee's Investigation
In January 1997, the House Government Reform and Oversight
Committee, in accordance with its oversight responsibilities,
began an investigation into the allegedly illegal campaign
finance activities of the 1996 elections.\1\ Since the
Committee began its work, it has faced a level of stonewalling
and obstruction never before encountered by a congressional
Committee. During the course of the inquiry, the Committee ran
into serious roadblocks in its attempts to secure testimony and
obtain documents from the White House, the Democratic National
Committee, and various witnesses.\2\ In June 1998, 18 months
into the Committee's investigation, the number of witnesses
refusing to testify topped 100.\3\ As of the beginning of
October, the list had swelled to 120.
---------------------------------------------------------------------------
\1\ Providing Special Investigative Authorities for the Committee
on Government Reform and Oversight, H. Rept. No. 137, 105th Cong., 1st
sess. (1997).
\2\ Congressional Record, May 12, 1998, pp. H3054. Question of
Personal Privilege. Remarks made by Government Reform and Oversight
Committee Chairman Dan Burton.
\3\ Government Reform and Oversight Committee press release, 10 New
Witnesses Take the Fifth, Total now at 104, June 23, 1998.
---------------------------------------------------------------------------
The number of potential witnesses who have exercised their
Fifth Amendment right not to give testimony that would be self-
incriminating now stands at 79. An additional 18 witnesses have
left the country, and 23 witnesses live overseas and have
refused to be interviewed, bringing the total number of non-
cooperating witnesses to 120.\4\
---------------------------------------------------------------------------
\4\ See Exhibit 1. Committee Chart detailing the 120 witnesses who
have pled the fifth or fled the country to avoid cooperating with
congressional investigations into campaign finance.
---------------------------------------------------------------------------
On September 24, 1997, the Committee immunized three
witnesses on the list who made illegal conduit contributions at
the behest of Charlie Trie and Antonio Pan.\5\ On June 23,
1998, the Committee immunized four additional witnesses
relating to DNC fundraisers Johnny Chung, Gene and Nora Lum,
and Ted Sioeng.\6\ The Senate also immunized several witnesses
involved in the Hsi Lai Buddhist Temple fundraiser and other
conduit contributions.\7\ However, the bulk of the 120
witnesses have yet to be heard from.
---------------------------------------------------------------------------
\5\ House Government Reform and Oversight Committee, Business
Meeting: Immunity Vote. Sept. 24, 1997.
\6\ House Government Reform and Oversight Committee, Business
Meeting: Immunity Vote. June 23, 1998.
\7\ Final Report of the Senate Committee on Governmental Affairs,
S. Rept. No. 167, 105th Cong., 2d sess., vol. 2, at 1794-95, 2520.
---------------------------------------------------------------------------
The list of people who are no longer in the country and who
refuse to be interviewed include longtime Clinton friends and
campaign contributors James and Mochtar Riady, who control the
Lippo Group of Indonesia, Ng Lap Seng, the Macau financier who
underwrote hundreds of thousands of dollars in illegal
contributions orchestrated by Charlie Trie, and Antonio Pan,
who was indicted with Trie by the Justice Department on January
28, 1998.
The number of witnesses associated with Trie who have taken
the Fifth or refused to cooperate with the investigation totals
13.
Over 25 friends and family members of Ted Sioeng have
either exercised their Fifth Amendment rights or left the
country to avoid testifying. Sioeng and his network of business
associates gave $400,000 to the Democratic party and another
$150,000 to Republicans.\8\
---------------------------------------------------------------------------
\8\ For details, see chapter IV D.
---------------------------------------------------------------------------
There are 17 witnesses associated with John Huang who have
either taken the Fifth or left the country.
In June 1998, the Committee received notice that 12
employees of Florida businessman Mark Jimenez would exercise
their Fifth Amendment right not to testify about suspected
conduit contributions to the Clinton/Gore campaign.\9\ Jimenez
was indicted in September for orchestrating nearly $40,000 in
illegal contributions to the Clinton/Gore campaign and other
Democratic campaigns.\10\
---------------------------------------------------------------------------
\9\ See Letter to Richard D. Bennett, Chief Counsel, from John F.
Conroy, June 17, 1998; Letter to Richard D. Bennett, Chief Counsel,
from William L. Gardner June 30, 1998 (informing the Government Reform
and Oversight Committee that the following individuals will assert
their fifth amendment rights: Messrs, Jacob Devalle, William Gearhart,
Richard Esparragoza, Manuel Garcia, Reynaldo B. Crespo, Raymond Dos
Remedios, David Fried, Louis C. Leonardo, Juan L. Ruiz, Marcelino V.
Brontonel, Enrique Sanchez, and Mrs. Ruth S. Ramirez).
\10\ Department of Justice press release, Sept. 30, 1998.
---------------------------------------------------------------------------
The list of witnesses who have asserted their Fifth
Amendment right not to testify includes a number of
Presidential appointees:
Former White House Deputy Chief of Staff Mark
Middleton,
Former Associate Attorney General Webster Hubbell,
Former Deputy Assistant Commerce Secretary John
Huang, and
Longtime Presidential friend and appointee Charlie
Trie, who was appointed to the Bingaman Commission on
international trade.
During a December 1997 hearing of the Government Reform and
Oversight Committee, Chairman Burton asked FBI Director Louis
Freeh if the Director had ever seen so many witnesses in a
Federal investigation invoke the Fifth Amendment or flee the
country. Director Freeh responded by comparing the current
investigation to his years fighting organized crime in New
York:
I spent 16 years doing organized crime cases in New
York City, and many people were frequently unavailable.
. . . It went on for quite a while.\11\
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\11\ Hearing on Current Implementation of the Independent Counsel
Act Before the House Committee on Government Reform and Oversight,
105th Cong., 1st sess., 294-295 (1997).
The unwillingness of so many witnesses to provide sworn
testimony became a serious obstacle to the Committee's efforts
to conduct a thorough investigation and inform the public about
the allegations under investigation. The extraordinary number
of potential witnesses who either fled the country or invoked
their Fifth Amendment rights is a strong indication of the
unusual level of illegal activity that occurred during both the
1992 and 1996 election cycles.
Conversely, when witnesses did cooperate with the
investigation, the Committee made swift progress. For example,
upon granting immunity to three witnesses who made conduit
contributions at the request of Charlie Trie and Antonio Pan
(Manlin Foung, Joseph Landon and David Wang), the Committee
received detailed information about these conduit payments and
moved swiftly to public hearings.\12\ Months later, in June
1998, the Committee granted immunity to four additional
witnesses (Kent La, Irene Wu, Nancy Lee, and Larry Wong). Both
Nancy Lee and Irene Wu then provided the Committee with
important information relating to Johnny Chung's efforts to
funnel illegal conduit contributions to Democratic
campaigns.\13\
---------------------------------------------------------------------------
\12\ Hearing on the Conduit Payments to the Democratic National
Committee Before the House Committee on Government Reform and
Oversight, 105th Cong., 1st sess. (1997) (testimony of Manlin Foung,
Joseph Landon and David Wang).
\13\ See Depositions of Nancy Lee, Government Reform and Oversight
Committee, July 28, 1998; Deposition of Irene Wu, Government Reform and
Oversight Committee, July 28, 1998.
---------------------------------------------------------------------------
Attached as Exhibit 1 is the entire list of 120 individuals
who have invoked the Fifth Amendment, fled the country, or
refused to be interviewed in their home countries.
II. The White House
In its oversight capacity the Committee on Government
Reform and Oversight previously had the occasion to work with
the Clinton White House on document productions pursuant to
requests and subpoenas in other investigations, including the
White House Travel Office investigation and the ``Filegate''
investigation. As documented in its reports on these
investigations, the Committee was subjected to repeated delays
and obstruction throughout its prior dealings with the White
House.\14\ The Committee prepared for similar tactics during
the 105th Congress, yet hoped for greater cooperation from
President Clinton's newly appointed counsel, Charles F.C. Ruff.
Unfortunately that was not to be the case, and the White
House's actions during the document production phase served
only to hinder the progress of the Committee's investigation
for months. As the Senate Governmental Affairs Committee noted
in its report, the White House used the 1 year deadline for the
Senate investigation to drag out the process and stymie the
efforts of the Senate to get to the bottom of the campaign
finance scandal.\15\ Knowing of the penchant for this White
House to drag out the investigative process, the House
investigation did not agree to such time constraints.
---------------------------------------------------------------------------
\14\ House Committee on Government Reform and Oversight,
Investigation of the White House Travel Office Firings and Related
Matters, H. Rept. No. 461, 104th Cong., 2d sess., 3 (1996); House
Committee on Government Reform and Oversight, Investigation into the
White House and Department of Justice on Security of FBI Background
Investigation Files, H. Rept. No. 469, 104th Cong., 2d sess., 4 (1996).
\15\ Final Report of the Committee on Governmental Affairs, U.S.
Senate, ``Investigation of Illegal or Improper Activities in Connection
with 1996 Federal Election Campaigns,'' 105th Cong., 2d sess., S. Rept.
No. 105-167, vol. 1, p. 18-20.
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A. White House Responses to Committee Requests
On February 6, 1997, the Chairman met and discussed the
Committee's document production needs and expectations with Mr.
Ruff, the White House Counsel. In that meeting, Mr. Ruff
pledged the White House's cooperation and assured the Chairman
that the President was committed to providing all of the
documents necessary to the Committee's investigation and would
not claim any privileges over any relevant documents in the
campaign finance investigation.
Prior to the Ruff meeting, the Committee had already made
several document requests to Jack Quinn, who preceded Ruff as
White House Counsel. During the 104th Congress, the Committee,
under then-Chairman William F. Clinger, sent several campaign
finance related document requests to the White House.\16\
Requests for documents related to John Huang were first made as
early as October 1996. At the beginning of the 105th Congress,
Chairman Burton issued a comprehensive request to the White
House on January 15, 1997. This request was addressed to both
Counsels Quinn and Ruff for documents relating to campaign
finance matters.\17\
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\16\ Letter to President Bill Clinton from Chairman William F.
Clinger, Jr., House Government Reform and Oversight Committee, Chairman
Henry J. Hyde, House Judiciary Committee, and Chairman Bill Thomas,
Committee on House Oversight, Oct. 18, 1996 (requesting that documents
relating to John Huang's activities at the DNC be released publicly);
Letter to President Bill Clinton from Chairman William F. Clinger, Oct.
23, 1996 (requesting information on Jorge Cabrera); Letter to President
Bill Clinton from Chairman William F. Clinger, Chairman Bill Thomas,
and Chairman Henry J. Hyde, Oct. 25, 1996 (requesting information on
John Huang and requesting FEC investigation); Letter to President Bill
Clinton from Chairman William F. Clinger, Oct. 31, 1996 (requesting
that the President make all records regarding John Huang available to
Congress and the public); Letter to Terry Good, Office of Records
Management, the White House from Chairman William F. Clinger, Jr., Oct.
31, 1996 (requesting WAVES records for John Huang); Letter to John M.
Quinn, Counsel to the President, from Chairman William F. Clinger, Nov.
1, 1996 (requesting WAVES records for John Huang); Letter to John M.
Quinn, Counsel to the President, from Chairman William F. Clinger, Jr.,
Nov. 14, 1996 (requesting WAVES records for John Huang); Letter to John
M. Quinn, Counsel to the President, from Chairman William F. Clinger,
Jr., Chairwoman Jan Meyers, House Small Business Committee, Chairman
Bill Thomas, House Oversight Committee, Chairman Larry Combest,
Permanent Select Committee on Intelligence, Chairman Donald Mazullo,
House Subcommittee on Exports, Small Business Committee, Nov. 21, 1996
(relating to SBA withholding of documents at the request of the White
House).
\17\ Letter to John M. Quinn, Counsel to the President, and Charles
F.C. Ruff from Chairman Dan Burton, Jan. 15, 1997 (Exhibit 2).
---------------------------------------------------------------------------
At the time of the January 15, 1997 Committee request for
documents, the White House had already sent three directives to
White House staff, instructing them to search for responsive
documents.\18\ Each directive to search for documents requested
that documents be produced no later than November 12, 1996,
December 23, 1996 and January 17, 1997, respectively. Thus, the
Committee had every reason to believe that a responsible White
House interested in expeditiously responding to the campaign
finance investigation would promptly turn over relevant
records. However, Mr. Quinn wrote to Chairman Burton that the
White House was unable to produce documents in the 2 week time
period the Committee requested and that production would be
delayed until a meeting time could be arranged with White House
officials. One week after Quinn's letter, the White House
released a number of responsive documents to the press, without
producing them to the Committee.\19\ The documents were
delivered to the Committee 5 days after the press received
them, setting the tone for the manner in which the White House
would respond to Committee requests and subpoenas.
---------------------------------------------------------------------------
\18\ Memorandum to All Staff of the White House, the Office of
Administration, the Office of Management and Budget, and all other
units of the Executive Office of the President from Jack Quinn, Counsel
to the President, Re: Documents Relating to the Lippo Group, Indonesia
and Other Matters, Oct. 31, 1996 (Exhibit 3). Memorandum to Executive
Office of the President Staff from Jack Quinn, Counsel to the
President, Re: Document Request, Dec. 16, 1996 (Exhibit 4). Memorandum
to Executive Office of the President Staff from Jack Quinn, Counsel to
the President, Re: Follow-up to Dec. 16, 1996 Document Request, Jan. 9,
1997 (Exhibit 5).
\19\ Letter to Charles Ruff, Counsel to the President from Chairman
Dan Burton, Jan. 31, 1997.
---------------------------------------------------------------------------
Between January and March 1997, the White House refused to
comply fully with any of the Committee's document requests. As
a result, on March 4, 1997, the Committee issued a subpoena to
the White House for a variety of records relevant to the
campaign finance investigation.\20\ The subpoena called for the
production of documents on March 24, 1997. As the White House
had been collecting documents since the end of October 1996--
for almost 5 months--the Committee believed the time for
production was adequate.\21\
---------------------------------------------------------------------------
\20\ Subpoena to Executive Office of the President from Committee
on Government Reform and Oversight, U.S. House of Representatives, Mar.
4, 1998 (Exhibit 6).
\21\ Exhibits 3, 4, and 5.
---------------------------------------------------------------------------
The White House, in March 1997, refused to produce
unredacted documents to the Committee until a protocol for the
handling of documents was adopted by the Committee.\22\ The
Chairman and Committee staff assured the White House Counsel's
Office that the Committee was acting under a protocol approved
by the Chairman until the full Committee was able to approve a
document protocol. However, the White House would not provide
the Committee with unredacted, or what it considered sensitive
documents, 4 months into the investigation.\23\
---------------------------------------------------------------------------
\22\ Letter to the Chief Counsel Government Reform and Oversight
Committee from Lanny A. Breuer, Special Counsel to the President, Mar.
19, 1997.
\23\ Letter to Lanny A. Breuer, Special Counsel to the President
from Chief Counsel Government Reform and Oversight, Mar. 19, 1997
(Exhibit 7).
---------------------------------------------------------------------------
The full Committee did approve a formal document protocol
on April 10, 1997, yet the White House still would not produce
documents to the Committee. The White House claimed that the
protocol adopted by the full Committee was not sufficient to
protect its documents.\24\ At one point, the White House
Counsel's office even proposed a document protocol which would
have required armed guards to stand watch over White House
documents. The White House insisted that the Committee conform
to its ``confidentiality proposal'' or what the White House
considered appropriate procedures, including mandating the
amount of Committee staff to have access to the documents.\25\
As a coequal branch of government, the Committee could not
allow the executive branch to dictate the enforcement of or
compliance with a legislative subpoena, or effectively annul
the protocol approved by vote of the Committee.\26\ As for any
national security or classified documents, the Committee made
arrangements to have such material stored with the House
Permanent Select Committee on Intelligence. Only a limited
number of staff with proper security clearances were allowed to
review the material.
---------------------------------------------------------------------------
\24\ Letter to Chairman Dan Burton from Charles F.C. Ruff, Counsel
to the President, Apr. 21, 1997.
\25\ Letter to Chairman Dan Burton from Charles F.C. Ruff, Counsel
to the President, Apr. 25, 1997 (Exhibit 8).
\26\ Letter to Charles F.C. Ruff, Counsel to the President from
Chairman Dan Burton, Apr. 27, 1997.
---------------------------------------------------------------------------
Even while the White House refused to produce documents,
the Committee attempted to accommodate the White House and
ensure that documents would be forthcoming, by prioritizing the
March 4, 1997, subpoena through an April 18, 1997 letter.\27\
The Committee engaged in extensive, good faith discussions and
negotiations to assist the White House in producing documents.
By late April, the White House still refused to cooperate and
to produce all responsive documents. The Committee then issued
six targeted subpoenas to the White House, focused on records
relating to the Riady family, John Huang, Charlie Trie, Pauline
Kanchanalak, Mark Middleton and Webster Hubbell.\28\
---------------------------------------------------------------------------
\27\ Letter to Lanny A. Breuer, Special Counsel to the President
from Chief Counsel Government Reform and Oversight, Apr. 18, 1997
(Exhibit 9).
\28\ Subpoenas to Executive Office of the President from Committee
on Government Reform and Oversight, Apr. 23, 1997 (for records relating
to the Riady family/Lippo Group and John Huang); subpoenas to Executive
Office of the President from Committee on Government Reform and
Oversight, Apr. 24, 1997 (for records relating to Charlie Trie and
Pauline Kanchanalak); subpoenas to Executive Office of the President
from Committee on Government Reform and Oversight, Apr. 29, 1997 (for
records relating to Mark Middleton and Webster Hubbell).
---------------------------------------------------------------------------
Despite the Committee's best efforts to work with the White
House in prioritizing and streamlining requests, by the
beginning of May 1997, the White House had not supplied the
Committee with all relevant documents, had not informed the
Committee which documents were being withheld, and had not
provided the Committee with any production or privilege logs.
Moreover, many of the documents that were produced to the
Committee were redacted so heavily that they were
unintelligible.
B. White House Claims of Executive Privilege and the Committee's Threat
of Contempt
1. Claims of Executive Privilege over Documents
In a May 9, 1997, letter to White House Counsel Charles
Ruff, Chairman Burton insisted that the White House comply with
the Committee's lawful subpoena, or in the alternative claim
executive privilege over the documents being withheld and
provide the Committee with a privilege log.\29\ The only valid
claim the White House could make for withholding any documents
from the Committee in the face of a lawful subpoena would be
executive privilege.\30\ Executive privilege is a doctrine
which historically has been exerted ``only in the most
compelling circumstances, and only after careful review
demonstrates that assertion of the privilege is
necessary.''\31\
---------------------------------------------------------------------------
\29\ Letter to Charles F.C. Ruff, Counsel to the President from
Chairman Dan Burton, May 9, 1997.
\30\ The Constitution does not grant Congress the explicit
authority to investigate, neither does it grant the President the
specific privilege to withhold information. However, the Supreme Court
has held that the legislature and the executive each hold these
respective powers as they are implied in the Constitution for the
essential functioning of both branches. See, McGrain v. Daugherty, 273
U.S. 135 (1927); United States v. Nixon, 418 U.S. 683 (1974).
\31\ Memorandum for the Heads of Executive Department and Agencies
from President Ronald Reagan, Procedures Governing Responses to
Congressional Requests for Information, Nov. 4, 1982 (hereinafter
``Reagan Memorandum'').
---------------------------------------------------------------------------
In United States v. Nixon,\32\ the Supreme Court for the
first time recognized a constitutional basis for executive
privilege when it held that ``the protection of the
confidentiality of Presidential communications has . . .
constitutional underpinnings.'' \33\ However, the Court
unequivocally rejected President Nixon's claim to an absolute
privilege. Blanket claims, it held, are unacceptable without
further, discrete justification, and then only when there is a
need to protect military, national security, or foreign affairs
secrets. It is only in such cases where the President's claim
of privilege should receive deferential treatment in the face
of a legitimate claim on materials from another branch of
government. The Supreme Court set out this test in United
States v. Nixon as follows:
---------------------------------------------------------------------------
\32\ 418 U.S. 683 (1973).
\33\ 418 U.S. at 705-06.
However, neither the doctrine of separation of powers,
nor the need for confidentiality of high-level
communications, without more, can sustain an absolute,
unqualified Presidential privilege of immunity from
judicial process under all circumstances. The
President's need for complete candor and objectivity
from advisers calls for great deference from the
courts. However, when the privilege depends solely on
the broad, undifferentiated claim of public interest in
the confidentiality of such conversations, a
confrontation with other values arises. Absent a claim
of need to protect military, diplomatic, or sensitive
national security secrets, we find it difficult to
accept the argument that even the very important
interest in confidentiality of Presidential
communications is significantly diminished by
production of such material for in camera inspection
with all the protection that a district court will be
---------------------------------------------------------------------------
obliged to provide.
To read the Article II powers of the President as
providing an absolute privilege as against a subpoena
essential to enforcement of criminal statutes on no
more than a generalized claim of the public interest in
confidentiality of non-military and non-diplomatic
discussions would upset the constitutional balance of
`a workable government' and gravely impair the role of
the courts under Article III.\34\
---------------------------------------------------------------------------
\34\ 418 U.S. at 706,707.
In the matters before the Committee in this investigation,
as well as previous investigations, there has never been a
situation involving the invocation of executive privilege to
protect military, diplomatic, or national security secrets. To
the contrary, the White House very promptly has turned over all
national security information, which the Committee stored in a
classified setting and kept confidential. It has been the non-
classified and the non-national security records that the White
House has balked at providing. Thus, it is ironic; when it
comes to protecting national security, the Administration takes
far less dramatic measures to keep the information confidential
than it does when keeping potentially embarrassing or
potentially incriminating information from the Committee.\35\
Executive privilege was intended to operate in exactly the
opposite way.
---------------------------------------------------------------------------
\35\ It should be noted that despite the White House's decrying of
leaks, White House officials have been notably silent about the stream
of leaks from its own Justice Department of classified information over
the past year and a half in matters involving the ``China Plan'' and
other national security matters connected with the campaign finance
investigation. See, Bob Woodward and Brian Duffy, ``Chinese Embassy
Role in Contributions Probed,'' the Washington Post, Feb. 13, 1997, p.
A1; Bob Woodward, ``Top Chinese Linked to Plan to Buy Favor,'' the
Washington Post, Apr. 25, 1997, p. A1; Jeff Gerth, David Johnston and
Don Van Natta, ``Democrat Fund-Raiser Said to Detail China Tie,'' the
New York Times, May 15, 1998; Robert Suro, ``Chung Alleges DNC Sought
Illegal Funds: Justice Dept. Probe Enters New Phase,'' the Washington
Post, June 20, 1998.
---------------------------------------------------------------------------
The Reagan Memorandum on executive privilege, which
President Clinton's counsels have stated they follow, explains
that the doctrine should only be invoked to ``preserve the
confidentiality of national security secrets, deliberative
communications that form a part of the decision making process,
or other information important to the discharge of the
Executive Branch's constitutional responsibilities.'' \36\ More
importantly, the policy under President Reagan was that no
privileges were claimed over any matters under investigation.
During the Iran-Contra investigations, President Reagan assured
the Congress that he would not claim executive privilege over
any matters under investigation, nor did he.\37\ In contrast,
President Clinton, while telling the American people he would
fully cooperate with this and other investigations, has
repeatedly invoked frivolous privilege claims in order to
hamper congressional as well as criminal investigations.
---------------------------------------------------------------------------
\36\ Reagan Memorandum.
\37\ During Iran-Contra, President Reagan fully cooperated with
Congress and turned over 300,000 White House, State Department, Defense
Department, Justice Department and Central Intelligence Agency
documents. Congress deposed numerous executive branch officials,
including Attorney General Edwin Meese, and executive branch officials
testifying before Congress. President Reagan even turned over his
personal diaries without asserting executive privilege. Senate Select
Committee on Secret Military Assistance to Iran and the Nicaraguan
Opposition, S. Rept. No. 100-216, 100th Cong., 1st sess. (1987).
---------------------------------------------------------------------------
In a memorandum to executive departments and agencies,
Special Counsel to the President Lloyd Cutler outlined
President Clinton's policy on executive privilege, ``[i]n
circumstances involving communications relating to
investigations of personal wrongdoing by government officials,
it is our practice not to assert executive privilege, either in
judicial proceedings or in congressional investigations and
hearings.'' \38\ Despite President Clinton's stated policy, in
May 1997, his Counsel refused to provide responsive documents
which were ``subject to executive privilege.'' \39\ The
Counsel's Office letter was effectively a claim of executive
privilege.
---------------------------------------------------------------------------
\38\ Memorandum for All Executive Department and Agency General
Counsels from Lloyd N. Cutler, Special Counsel to the President,
Congressional Requests to Departments and Agencies for Documents
Protected by Executive Privilege, Sept. 28, 1994.
\39\ Letter to the Chief Counsel Government Reform and Oversight
from Lanny A. Breuer, Special Counsel to the President, May 14, 1997.
---------------------------------------------------------------------------
The Committee considered whether to hold the White House in
contempt for not responding to the subpoena, but first
requested that Mr. Ruff appear before the Committee on May 15,
1997 to explain the White House's position.\40\ It took this
threat of contempt of Congress for the White House to begin to
comply with the Committee's subpoenas. It was disappointing
that it was not until this point that Mr. Ruff said his
attention was ``focused'' on the issue of turning over the
documents. In other words, the Committee had to threaten to
hold the President's Counsel in contempt before the President
would comply both with the law and his own stated policy.
---------------------------------------------------------------------------
\40\ Id.
---------------------------------------------------------------------------
Chairman Burton met with Mr. Ruff on May 16, 1997 to
discuss White House document production. At that time, Mr. Ruff
agreed to produce a volume of outstanding documents as well as
a ``privilege log'' regarding any documents which were to be
withheld from Congress under a claim of privilege. A production
of the withheld documents followed this agreement. Some of the
withheld documents included records such as a number of memos
between and among members of the White House Counsel's office.
The memos related to statements made by Deputy Counsel Bruce
Lindsey regarding the President's meetings with James Riady and
John Huang.\41\ These memos demonstrated there had been a
dispute between White House Special Counsel Jane Sherburne and
White House Deputy Counsel Bruce Lindsey in characterizing the
President's contacts with James Riady and John Huang.
---------------------------------------------------------------------------
\41\ White House Documents, EOP 008737-41, EOP 004943-47, EOP
007378-82, EOP 004948-50, EOP 00406163, EOP 004956, EOP 008732-36, EOP
004047-48, EOP 037008-17.
---------------------------------------------------------------------------
Ms. Sherburne wrote that in October 1996, she learned from
DNC General Counsel Joe Sandler that Huang had refused to tell
him ``about one of the subjects that had been discussed in his
September 1995 meeting with the President, Bruce and Riady. I
asked Bruce if he had any idea what Huang was withholding and
Bruce told me that they had discussed Huang moving from his
post in the Commerce Department to a fundraising position at
the DNC.'' \42\ Sherburne's memo demonstrated she was concerned
that Lindsey refused to be more forthcoming about the Riady/
Huang meetings.\43\ On Lindsey's copy of Sherburne's memo
Lindsey wrote to then White House Counsel Jack Quinn: ``Jack,
This is mostly crap'' and signed his name.\44\
---------------------------------------------------------------------------
\42\ White House Documents, EOP 008732-36 at 008734.
\43\ Id.
\44\ White House Document Production, EOP 008737-41.
---------------------------------------------------------------------------
These memos provided information indicating that Huang did
not want to talk about the meetings with the President. This
was information that was certainly relevant to the Committee's
inquiry. The fact that the White House Special Counsel was
concerned about public representations made by Bruce Lindsey
also was relevant to the inquiry. These memos were in no way
``privileged'' and the fact that the White House Counsel's
office withheld them for close to 5 months from investigators
was not in keeping with the commitment for full cooperation.
This was typical of the type of battle the Committee had to
regularly engage in with the White House in order to obtain
relevant subpoenaed records.
It took another month of extensive negotiations to obtain
access to the documents on the privilege log provided to the
Committee in June 1997. Ultimately it took the Committee over 5
months after the first requests to obtain the basic White House
records.\45\ These delays in producing documents that the White
House had gathered months before are inexcusable. Although the
White House's actions impeded the House investigation, it had
an even more dramatic impact on the Senate investigation, which
had a strict time deadline.
---------------------------------------------------------------------------
\45\ Letter from Charles F.C. Ruff, Counsel to the President to
Chairman Dan Burton, May 20, 1997.
---------------------------------------------------------------------------
2. Claim of Executive Privilege over Testimony
Claiming privilege in depositions was another method of
White House stonewalling which unduly delayed proceedings. In
September 1997, the Committee deposed Deputy White House
Counsel Bruce Lindsey.\46\ During the deposition Lindsey
testified that he spoke with the President about a conversation
between James Riady and the President. When asked a follow up
question about his conversation with the President, Lindsey
declined to answer on the ground that his answer would
implicate executive privilege concerns. Indeed, Lindsey called
White House Counsel Charles Ruff on his cell phone in the
deposition and reported on their conversation in the deposition
record: ``And Mr. Ruff informs me--he says that these sorts of
conversations give rise to serious executive privilege
concerns; that at this time I should not respond, and that he
will be happy to discuss it with you after the deposition.\47\
---------------------------------------------------------------------------
\46\ Deposition of Bruce R. Lindsey, Government Reform and
Oversight Committee, Sept. 8, 1997 (hereinafter ``Lindsey
Deposition'').
\47\ Id. at 54.
---------------------------------------------------------------------------
The Committee subsequently wrote to White House Counsel
Charles Ruff regarding Lindsey's claim of privilege.\48\ The
Committee pointed out that the question posed to Lindsey
involved his discussion with the President about a personal
conversation with James Riady. Executive privilege is designed
to protect executive branch decisionmaking, not to be used as a
shield for personal matters having nothing to do with affairs
of state or presidential decisionmaking. This conversation did
not go to any core duties of the President or to national
security or other sensitive matters. The White House responded
to the Committee, noting that although Lindsey refused to
answer, his refusal was based only on the fact that the
response may be subject to privilege.\49\ Essentially, the
White House made a distinction without a difference, as Lindsey
refused to answer the question. After numerous letters and
discussions with the White House about Mr. Lindsey's
presumptive claim of privilege, Committee attorneys informed
the Counsel's office of the Committee's intent to call Mr.
Lindsey back for a deposition to answer these and other
outstanding questions. It was made clear at the time that the
Committee was prepared to proceed with contempt proceedings
again if necessary. On April 29, 1998, Lindsey continued his
deposition.\50\
---------------------------------------------------------------------------
\48\ Letter to Charles F.C. Ruff, White House Counsel from Chairman
Dan Burton, Feb. 25, 1998.
\49\ Letter to Chairman Dan Burton from Charles F.C. Ruff, White
House Counsel, Feb. 26, 1998.
\50\ Deposition of Bruce Lindsey, Committee on Government Reform
and Oversight, Apr. 29, 1998.
---------------------------------------------------------------------------
It should be noted that at the same time the Committee was
having such difficulty in obtaining Mr. Lindsey's testimony on
this matter because of his frivolous privilege claims, Mr.
Lindsey was asserting the same type of privilege claims in
Federal court before the Whitewater grand jury.\51\
---------------------------------------------------------------------------
\51\ Communication from the Office of the Independent Counsel,
Kenneth W. Starr transmitting Appendices to the Referral to the United
States House of Representatives pursuant to Title 28, United States
Code, Section 595c submitted by the Office of the Independent Counsel,
September 9, 1998, H. Doc. 105-311, 105th Cong., 2d sess., 184-200
(1998).
---------------------------------------------------------------------------
3. The History of the Clinton Administration's Abuse of Privileges
On many occasions over the past several years, the
President has inappropriately invoked executive privilege in
what many scholars and commentators have noted is a calculated
attempt to delay ongoing criminal and congressional
investigations. That this is done using government resources is
deeply troubling. The President's history of using the White
House Counsel to delay includes investigations by the House of
Representatives, Senate and various independent counsels.
For example, in November 1995, the White House invoked
executive privilege in response to the Senate Whitewater
Committee's subpoena.\52\ The privilege claim was over
responsive notes taken by former Associate White House Counsel
William Kennedy.\53\ Ultimately, after the Senate adopted a
resolution directing the Senate Legal Counsel to initiate a
civil action for an order to produce the documents, the White
House acquiesced and produced the notes.\54\ The Senate
Committee reported that the notes contained evidence that the
White House inappropriately gathered information from various
agencies investigating Whitewater, and passed such information
to private lawyers for the President and First Lady.\55\
---------------------------------------------------------------------------
\52\ Final Report of the Special Committee to Investigate
Whitewater Development Corporation and Related Matters, S. Doc. No.
280, 104th Cong., 2d sess., 237-238 (1996).
\53\ Id.
\54\ Id.
\55\ Id.
---------------------------------------------------------------------------
The Committee had a similar experience with the White House
during the Travel Office investigation. The White House claimed
privilege over more than 3,000 pages of documents and refused
to produce the documents to the Committee.\56\ After
negotiations with the White House failed, the Committee voted
on May 9, 1996 to hold then-Counsel to the President Jack Quinn
in contempt of its subpoena.\57\ On May 30, 1996, the morning
of a scheduled House floor contempt vote, the documents were
turned over to the Committee.\58\ Within the documents the
White House had claimed executive privilege over were notes
White House attorneys had taken of debriefing sessions with
witnesses' attorneys.\59\ Perhaps most shocking was a request
for former Travel Office Director Billy Dale's FBI background
investigation, months after he was fired from the White
House.\60\ This document led to the eventual discovery that
hundreds of Reagan and Bush appointees' background files were
obtained by the Clinton White House. None of these documents
were even arguably privileged.
---------------------------------------------------------------------------
\56\ House Committee on Gov't Reform and Oversight, Investigation
of the White House Travel Office Firings and Related Matters, H. Rept.
No. 461, 104th Cong., 2d sess., 8 (1996).
\57\ Id.
\58\ Id.
\59\ Id.
\60\ Id.
---------------------------------------------------------------------------
In addition, the President's frivolous legal claims have
delayed civil and criminal investigations. Over the past year,
the Clinton Administration has litigated, and lost, the
following four significant immunity/privilege cases: Clinton v.
Jones,\61\ which held there was no temporary Presidential
immunity from civil suit for unofficial acts; In re Grand Jury
Subpoena Duces Tecum,\62\ in which claims of attorney-client
and work product privilege asserted by the White House were
denied; In re Sealed Case,\63\ in which executive privilege
claims of the White House were ultimately overcome by
Independent Counsel Smaltz's sufficient demonstration of need
for the records in question; and, In re Sealed Case,\64\ in
which White House claims of attorney-client and work produce
privilege were denied.
---------------------------------------------------------------------------
\61\ 117 S. Ct. 1636 (1997).
\62\ 112 F.3d 910 (8th Cir. 1997), cert. denied 117 S. Ct. 2487
(1997).
\63\ 116 F.3d 550, reissued in unredacted form, 121 F.3d 729 (D.C.
Cir. 1997).
\64\ 124 F.3d 230 (D.C. Cir. 1997).
---------------------------------------------------------------------------
The President's frivolous privilege claims have served him
personally in delaying investigations and dragging out the
process. However, they have not served the Presidency, which
has ultimately been weakened by case after case being decided
against the executive branch. During the Committee's
investigation of the White House Travel Office matter, senior
Justice Department official Michael Shaheen testified before
the Committee that in his 20 year Justice Department career in
the Office of Professional Responsibility, ``the lack of
cooperation and candor'' from the Clinton White House was the
worst he had experienced. Nothing the Committee experienced in
the 105th Congress has changed that perception. While President
Clinton has sought short term personal gain, in the long term
it is the Presidency that has been most harmed by his frivolous
privilege claims. This legacy will long outlast any personal
matters related to Bill Clinton.
C. Records Highly Relevant to the Campaign Finance Investigation Were
Produced Months or Even a Year after White House Certification
On June 27, 1996, Counsel to the President Charles Ruff
certified that the White House produced all documents
responsive to the Committee's subpoenas, except those listed on
the White House privilege log.\65\ After Mr. Ruff's
certification to the Committee, the White House made 36
productions of documents of over 17,700 pages responsive to the
Committee's original subpoenas. The White House produced
responsive documents as late as July 28, 1998, over a year from
the date of the Committee's original subpoenas.
---------------------------------------------------------------------------
\65\ Letter to Chairman Dan Burton from Charles F.C. Ruff, Counsel
to the President, June 27, 1997 (Exhibit 10).
---------------------------------------------------------------------------
1. Documents relevant to the preliminary investigation of Vice
President Gore
The July 1998, document production included memoranda
relating to fundraising telephone calls made by Vice President
Gore from his White House office.\66\ The fundraising calls
were under investigation by the Department of Justice in late
1997. On these belatedly discovered documents were handwritten
notations of Gore Deputy Chief of Staff David Strauss.
---------------------------------------------------------------------------
\66\ White House Document Production, July 28, 1998, EOP 070968-
070973.
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The notes indicate that there may have been discussions
with the President and Vice-President about making phone calls
for ``hard money'' as well as ``soft money'' for the DNC. The
discussions occurred during a meeting, attended by both
President Clinton and Vice President Gore, about raising money
for the DNC through phone calls by the President and Vice
President.\67\ Although there were questions raised regarding
the legality of the calls, in December 1997, Attorney General
Reno decided that there were no further grounds for
investigation of Vice President Gore's fundraising calls under
the Independent Counsel Act.\68\ However, at the time neither
the Justice Department nor the Committee had knowledge of the
White House documents, ultimately produced in July 1998, which
would have been directly relevant to the initial inquiry.\69\
In fact, since obtaining the notes, the Justice Department has
initiated another preliminary inquiry into the Vice President's
phone calls.\70\ This second preliminary inquiry is to
determine whether Vice President Gore lied to investigators
when he was initially interviewed about his telephone
solicitations to donors from the White House and said he had no
knowledge of the phone call solicitations being for hard money.
---------------------------------------------------------------------------
\67\ Id.
\68\ David Johnston, Reno Rejects a Prosecutor on Clinton and Gore
Calls; Bitter, G.O.P. Vows to Fight, New York Times, Dec. 3, 1997, at
A1.
\69\ The notes show that during the meeting there was a discussion
of raising money for the DNC's media fund. Next to the budget for media
is the handwritten notation ``65% soft/35% hard'' showing the breakdown
of what type of money would be used. There is also a notation with the
definition of soft money as ``corporate or anything over $20K from an
individual.'' At issue in the original investigation was whether Gore
knew that both hard and soft money would be used in the media fund.
Gore told investigators that he believed only soft money would be used.
One of Attorney General Reno's explanations for not pursuing an
Independent Counsel in December 1997 was Gore's explanation that he
believed he was only raising soft money. The newly produced memoranda
cast doubt upon his statements. (Exhibit 11).
\70\ David Johnston, Reno Is Extending Inquiry into Gore and
Fundraising, New York Times, Aug. 27, 1998, at A1.
---------------------------------------------------------------------------
2. White House Communications Agency Videotapes
An additional example of White House delays is the
production of the White House videotapes on October 5, 1997.
The Committee's March 4, 1997 subpoena clearly includes
videotapes in its definition of records.\71\ However, the White
House claimed that the Counsel's Office had no knowledge of the
video taping performed by the White House Communications Agency
(``WHCA'').\72\ The assertion is not credible as WHCA filmed
the President daily, while he was constantly accompanied by
White House senior staff. In fact, Deputy Counsel to the
President Cheryl Mills, along with her family, was taped by
WHCA during a Saturday morning radio address.\73\
---------------------------------------------------------------------------
\71\ Paragraph one of the Committee's subpoena to the White House
states: For the purpose of this subpoena, the word ``record'' or
``records'' shall include, but shall not be limited to, any and all
originals and identical copies of any item whether written, typed,
printed, recorded, transcribed, punched, taped, filmed, graphically
portrayed, video or audio taped, however produced or reproduced, and
included, but is not limited to, any writing, reproduction,
transcription, photograph, or video or audio recording, produced or
stored in any fashion. . . . (Exhibit 6).
\72\ White House Compliance with Committee Subpoenas: Hearings
Before the House Committee on Government Reform and Oversight, 105th
Cong., 1st sess., 87-93, 487 (1997). See also, Letter to Chairman Dan
Burton and Ranking Minority Member Henry Waxman from Charles F.C. Ruff,
Counsel to the President, Oct. 6, 1997.
\73\ WHCA Videotape of Saturday Morning Radio Address, Mar. 11,
1995.
---------------------------------------------------------------------------
The White House Counsel's Office was specifically asked
about video taping at the White House in early August 1997, yet
failed to actively address the issue until late September after
numerous particularized requests from Senate investigators.\74\
The White House search for the videotapes occurred at the same
time Attorney General Janet Reno was making her decision about
the need for an independent counsel to investigate White House
fundraising practices, including the White House coffees.
---------------------------------------------------------------------------
\74\ Deposition of Michael X. Imbroscio, Committee on Government
Reform and Oversight, Oct. 16, 1997, 96-97, 149-156.
---------------------------------------------------------------------------
Charles Ruff, Counsel to the President, testified that he
was aware that Attorney General Reno was scheduled to make a
decision on an independent counsel on Friday October 3, 1997,
and he was told about the existence of the coffee videotapes
early in the day of October 2, 1997, shortly before he met with
Attorney General Reno.\75\ Despite Mr. Ruff's knowledge of
Attorney General Reno's pending decision and his knowledge of
the White House coffee videotapes which would be pertinent to
her decision, Mr. Ruff failed to tell Miss Reno of the
existence of the tapes during their meeting.\76\ When the
existence of the videotapes was made public, the Justice
Department called a number of members of the White House
Counsel's office before the grand jury to explain why these
records were withheld.
---------------------------------------------------------------------------
\75\ White House Compliance with Committee Subpoenas: Hearings
Before the House Committee on Government Reform and Oversight, 105th
Cong., 1st sess., 159 (1997) (testimony of Charles F.C. Ruff).
\76\ Id.
---------------------------------------------------------------------------
The tapes are highly relevant to the investigation because
they allow one to witness the President interacting with many
of the individuals central to the campaign finance
investigation, including many individuals who have either
invoked their Fifth Amendment right against self incrimination
or have left the country.\77\ For those who have refused to
cooperate, the videos are the only first-hand information the
Committee has on these individuals.
---------------------------------------------------------------------------
\77\ Those individuals attending the coffees and other taped DNC
events include: John Huang, James Riady, Charlie Trie and Wang Jun (a
Chinese businessman and arms dealer), Ng Lap Seng (a.ka. Mr. Wu), Mark
Middleton, Johnny Chung and six Chinese businessmen, Pauline
Kanchanalak, Ted Sioeng, Arief Wiriadinata, Mark Jimenez, and Roger
Tamraz.
---------------------------------------------------------------------------
For instance, although the Committee was unable to speak
with Arief Wiriadinata, an Indonesian landscaper, who along
with his wife contributed $450,000 to the DNC, he is seen
greeting the President during a White House coffee. As
Wiriadinata shakes the President's hand, he says, ``James Riady
sent me.'' \78\ President Clinton answers, ``yes, I'm glad to
see you.'' \79\ Even after his statements, no one at the White
House or DNC questioned the unusually large contributions. At
this time, James Riady was living abroad and he was not
eligible to contribute to any Federal or State campaigns.
---------------------------------------------------------------------------
\78\ WHCA video of White House/DNC fundraising coffee, Dec. 15,
1995.
\79\ Id.
---------------------------------------------------------------------------
In another video, President Clinton meets with Mark
Middleton and Mark Jimenez privately prior to a February 6,
1996, DNC fundraising coffee at the White House.\80\ They have
a brief conversation about Jimenez's contributions to the
Clinton Birthplace Foundation before entering the coffee. Both
Middleton and Jimenez have invoked their Fifth Amendment right
against self-incrimination in the face of a Committee subpoena,
and Jimenez was recently indicted by the Department of Justice
on campaign finance related matters.\81\ Middleton and Jimenez
arranged for Carlos Mersan, an advisor of Paraguayan President
Wasmosy, to attend the same coffee.\82\ Mr. Jimenez's wife
wrote a $50,000 check to the DNC 2 days before the coffee.\83\
At the time, the Paraguayan President himself was unable to
obtain a meeting with President Clinton. In addition, the
United States had just de-certified Paraguay because of their
record in fighting the narcotics war; de-certification would
disqualify the country from certain aid as well. Shortly after
the coffee, President Clinton issued a discretionary national
interest waiver to Paraguay.
---------------------------------------------------------------------------
\80\ Also attending the Feb. 6, 1996 DNC fundraising coffee at the
White House was Charlie Trie. Trie brought Wang Jun, head of the
Chinese company CITIC, to the White House coffee with the President. A
CITIC subsidiary, Poly Technologies, is the Chinese company responsible
for illegally smuggling thousands of Chinese AK-47 machine guns into
California. WHCA video of White House/DNC fundraising coffee, Feb. 6,
1996.
\81\ Letter to Chairman Dan Burton from Robert D. Luskin, Attorney
for Mark Middleton, Feb. 27, 1997; Letter to Richard D. Bennett, Chief
Counsel Committee on Government Reform and Oversight from Abbe D.
Lowell, Attorney for Mark Jimenez, Oct. 3, 1997.
\82\ White House Document Production [Committee Bates No.] 004409-
10 (Exhibit 12). Democratic National Committee Document Production
DNC3793399 (Feb. 5, 1996 DNC request for security information noting
that Mersan is a guest of Mark Jimenez); CommerceCorp International
Document Production CC-H-000573 (memorandum to Yusuf Khapra at the
White House from Sandy McClure for Mark Middleton requesting White
House access for Mark Jimenez and Carlos Mersan).
\83\ Although the check was signed by Carol Jimenez, it was
credited to Mark Jimenez with the FEC. Democratic National Committee
Document Production, DNC 3064956.
---------------------------------------------------------------------------
Along with the tapes of the coffees, the Committee
requested videos of other fundraising events taped by the White
House Communications Agency which were responsive to the
Committee's subpoena. One such video shows the President and
Commerce Secretary Ron Brown greeting Charlie Trie, Ng Lap Seng
(a.k.a. Mr. Wu), Richard Mays, and Ernie Green.\84\ The
President greets Trie and states, ``Hey Charlie, how are you
doing?'' \85\ The President eventually gets to Ng Lap Seng,
who, Ernie Green explains, hosted a small reception for Ron
Brown in Hong Kong. Commerce Secretary Brown appears for a
picture with the group and referring to Mr. Wu, tells the
President, ``big business, helps us everywhere.'' Brown
continues, ``This is part of the Trie Team,'' as Charlie Trie,
Ng Lap Seng, several Asian businessmen, Ernie Green and Richard
Mays, among others, line up to have their picture taken with
Commerce Secretary Brown and President Clinton.\86\ From the
setting and circumstances, one can infer that Brown was
referring to Trie's fundraising prowess. The tape also shows
the intimate relationship Trie had with high-level
administration officials. The tape on this event was
particularly important because the official records for this
event do not show these individuals as attending the event. The
videotape tells a different story than the paper record.
---------------------------------------------------------------------------
\84\ White House Communications Agency video, African-American
Luncheon Event at the Carbarn in Georgetown, Nov. 5, 1995.
\85\ Id.
\86\ Id.
---------------------------------------------------------------------------
Although these three videos represent only a small sampling
of those the Committee has reviewed, they demonstrate the type
of information which can be gleaned from them. Although many of
the individuals central to the Committee's investigation refuse
to cooperate, the videotapes provide insight into the
interaction between individuals and the familiarity some
witnesses have with high level government officials.
D. Historical Perspective
Although all congressional Committees involved in
investigating the Clinton White House have complained about
delays, specious claims of privileges, and general stonewalling
tactics, the Committee hoped that the White House would be more
cooperative under the new White House Counsel's Office headed
by Charles Ruff.\87\ Unfortunately, despite the promises, the
level of cooperation was no different under the new leadership
of Mr. Ruff.
---------------------------------------------------------------------------
\87\ Senate Special Committee to Investigate Whitewater Development
Corp. and Related Matters, S. Rept. No. 280, 104th Cong., 2d sess., 11-
17 (1996); House Committee on Government Reform and Oversight,
Investigation of the White House Travel Office Firings and Related
Matters, H. Rept. No. 461, 104th Cong., 2d sess., 3 (1996); House
Committee on Government Reform and Oversight, Investigation into the
White House and Department of Justice on Security of FBI Background
Investigation Files, H. Rept. No. 469, 104th Cong., 2d sess., 4 (1996).
---------------------------------------------------------------------------
The Committee reviewed reports from investigations of prior
administrations to determine whether the White House's conduct
was consistent with that of Republican administrations. The
Iran-Contra report stated:
Once our investigation commenced, the White House rose
above partisan considerations in cooperating with our
far-reaching requests and in ensuring the cooperation
of other agencies and departments of the Executive
Branch. . . . Consequently, in compliance with our
requests, over 250,000 documents were produced by the
White House alone. . . . \88\
---------------------------------------------------------------------------
\88\ Senate Select Committee on Secret Military Assistance to Iran
and the Nicaraguan Opposition, S. Rept. No. 216, 100th Cong., 1st
sess., 637 (1987).
During the Iran-Contra investigation, the Reagan White House
produced a total of 250,000 documents in approximately 6 months
and claimed no privileges, although many of the documents
involved matters of national security.\89\ Likewise, during the
October Surprise investigation, all Bush administration
executive agencies cooperated fully, and President Bush did not
claim any privileges.\90\ In contrast, the Clinton White House
took over 6 months to produce less than 60,000 pages of heavily
redacted documents related to fundraising, some of which the
President claimed were privileged. The White House produced
responsive documents over a year and a half into the
investigation, and noted in a letter that it continues to
search for relevant documents.\91\
---------------------------------------------------------------------------
\89\ Id.
\90\ The Joint Task Force did not request many records directly
from the White House. The majority of the information came from the
National Security Agency, Department of Defense, Department of Justice,
Federal Bureau of Investigation, and other departments and agencies. In
addition, many records came from private individuals. Task Force to
Investigate Certain Allegations Concerning the Holding of American
Hostages by Iran in 1980, H. Rept. No. 1102, 102d Cong., 2d sess., 15-
18 (1993).
\91\ Letter to Barbara Comstock, chief investigative counsel, from
Lanny A. Breuer, Special Counsel to the President, July 28, 1998.
---------------------------------------------------------------------------
During the Iran-Contra investigation, senior White House,
Justice Department and National Security officials testified at
length without claiming privileges. Even Attorney General Edwin
Meese testified about actions taken at the Justice Department
regarding Iran-Contra. This cooperation was ongoing even while
the White House and Reagan Justice Department had to respond to
a massive independent counsel investigation of Iran-Contra
matters.
III. The Democratic National Committee
The DNC's refusal to produce relevant information in a
timely manner acted as an additional restraint on the
Committee's efforts. The Democratic National Committee blamed
painfully slow document production on more urgent obligations
to other investigations and grand jury subpoenas.\92\ When
productions finally arrived, the Committee staff was often met
with the challenge of decoding illegible documents resulting
from the poor quality of photocopying.
---------------------------------------------------------------------------
\92\ Letter to Chairman Dan Burton, House Government Reform and
Oversight Committee, from Judah Best, Counsel to the DNC, Nov. 17,
1997.
---------------------------------------------------------------------------
In addition, production logs for many documents were never
provided to the Committee despite repeated requests. This has
made it impossible to ascertain the origin of many key
documents. Documents with consecutive Bates numbers were
produced weeks apart and were separated by thousands of pages.
The DNC offered no reasonable explanation and left the
Committee to simply wonder how and why this occurred. The DNC
continued to extend promises of cooperation but time and time
again the Committee encountered delay after delay. Over a year
and a half after receiving the Committee's March 4, 1997,
subpoena (preceded by a January 15, 1997 document request), the
DNC continues to produce documents with no clear final
production date in sight. As late as September 28, 1998, the
Committee received a production of four boxes from the DNC.
A. DNC's Inability to Meet Deadlines
The Committee first requested documents from the DNC in
January 1997.\93\ From the beginning the DNC chose to ignore
the Committee's requests and indicated that compliance with the
Committee's due dates would be impossible.\94\ After no signs
of cooperation were forthcoming, the Committee was forced to
issue a subpoena for DNC documents on March 4, 1997, with a due
date of March 24, 1997.\95\
---------------------------------------------------------------------------
\93\ Letter request to Senator Christopher J. Dodd and Mr. Donald
Fowler, from Chairman Dan Burton, House Government Reform and Oversight
Committee, Jan. 15, 1997 (requesting documents relating to the Asian
Pacific American Working Group and the Asian Pacific American
Leadership Council).
\94\ Letter to Tim Griffin, senior investigative counsel, from
Joseph Sandler, Counsel to the DNC, Jan. 22, 1997.
\95\ Subpoena to Democratic National Committee from Government
Reform and Oversight Committee, U.S. House of Representatives, Mar. 4,
1997 (Exhibit 13).
---------------------------------------------------------------------------
By April 22, 1997, the DNC had produced little more than
nine boxes of documents. The DNC's rate of production was
surprising, as it was on notice since before the November 1996
elections that Congress would be investigating the fundraising
issues involved in the 1996 federal elections. Nevertheless,
partial productions followed, accompanied by constant excuses
that resources and staff were needed elsewhere, implying that
the Committee's inquiry was labeled a low priority. The
Committee was not provided with an indication of when the DNC
intended to comply with the subpoena. Over the course of the
following 6 months, the DNC provided 127 boxes, which
represented a small percentage of the overall production
requested by the Committee.\96\ This left the Committee with no
real sense that anyone was taking responsibility for complying
with the Committee's request.
---------------------------------------------------------------------------
\96\ Letter to Judah Best, Counsel to the DNC from Chairman Dan
Burton, House Government Reform and Oversight Committee, July 16, 1997
(expressing concern over the slow rate of production exhibited by the
DNC).
---------------------------------------------------------------------------
On September 8, 1997, the Committee sent interrogatories to
the DNC regarding the return of certain contributions.\97\ Even
though the Committee was entitled to accurate answers to these
questions, DNC counsel suggested the information ``may largely
if not entirely'' be found among documents already in the
Committee's possession.\98\ This response was unacceptable and
unrealistic because the Committee was not provided with
production logs; therefore, it would be difficult and
extraordinarily time consuming for staff to locate these
relevant documents. It was November 1997 before the DNC
addressed this issue and agreed to respond to the Committee's
interrogatories by November 21, 1997.\99\ To date, the DNC
continues to tell the Committee that it cannot estimate when
its document production will be completed.
---------------------------------------------------------------------------
\97\ Letter to Judah Best, Counsel to the DNC, from Chairman Dan
Burton, Sept. 8, 1997.
\98\ Letter to Chairman Dan Burton from Judah Best, Counsel for the
DNC, Sept. 15, 1997.
\99\ Letter to Chairman Dan Burton from Judah Best, Nov. 17, 1997.
---------------------------------------------------------------------------
The DNC displayed a propensity to produce significant
information just prior to depositions or just after a
deposition had been completed. The most glaring example, also
reported by the press, was the late ``discovery'' of
significant material from the filing cabinet of DNC Finance
Director, Richard Sullivan.\100\ The DNC originally claimed
that boxes of documents found sitting in a filing cabinet in
Richard Sullivan's office were generic Finance Division
documents that no one had bothered to search.\101\ However,
these documents proved to be some of the most significant
produced, containing Sullivan's handwritten notes, files on
Democratic contributors Roger Tamraz and Johnny Chung, and
fundraising call sheets prepared for Hillary Rodham Clinton.
---------------------------------------------------------------------------
\100\ Bob Woodward, ``Senate Probes DNC Files Delay,'' the
Washington Post, Aug. 8, 1997, p. A1.
\101\ On Friday, Aug. 1, 1997, a DNC attorney called the Senate
Committee on Governmental Affairs and informed it that a number of the
boxes were actually from Richard Sullivan's files. Mr. Sullivan was
deposed in May and again in June, and had been the Senate Committee's
first witness in public hearings on July 9-10.
---------------------------------------------------------------------------
Shortly after the DNC produced these documents, the
Committee deposed Sullivan. At the time, DNC Chairman Roy Romer
stated that the failure to discover the documents earlier was
the result of ``pure, innocent oversight.'' \102\ However,
Richard Sullivan himself said he told Joseph Birkenstock, a
lawyer for the DNC's Office of General Counsel, about the
documents on the day of his departure from the DNC, ``I pointed
out to him the boxes in which I assembled the documents from my
office with the exception of the file cabinet and I pointed out
the file cabinet to him.'' \103\ The Committee must conclude
there was an obvious lack of due diligence in the DNC's search.
---------------------------------------------------------------------------
\102\ Bob Woodward, ``Senate Probes DNC Files Delay,'' the
Washington Post, Aug. 8, 1997, p. A1.
\103\ Deposition of Richard Sullivan before the Senate Committee on
Governmental Affairs, Sept. 5, 1997, p. 215.
---------------------------------------------------------------------------
The Committee was in a similar situation when it deposed
David Mercer, the Deputy Director of the Finance Division, on
August 21, 1997.\104\ The day before his deposition, the DNC
produced a box of documents relevant to the questioning of
Mercer. The Committee had no alternative but to suffer the
inconvenience of bringing Mercer back for additional
questioning. To add insult to injury, at the conclusion of the
deposition, the DNC provided the Committee with three more
boxes of relevant documents. Three days later, four more boxes
of relevant documents arrived. On September 5, 1997, the DNC
gave the Committee another eight boxes of information,
including documents that came from Mercer's own files. The
arrival of documents on a serial basis made it impossible to
conduct a thorough deposition of Mercer. This pattern of
production continued throughout the investigation, and not only
made the deposition process more difficult and time consuming,
but also brought into question whether the witnesses' testimony
was thorough and reliable.
---------------------------------------------------------------------------
\104\ Deposition of David Mercer before the Committee on Government
Reform and Oversight, Aug. 21, 1997.
---------------------------------------------------------------------------
B. Refusal to Provide Production Logs
During the investigation, there were ongoing discussions
over whether the DNC would provide production logs to the
Committee. Such a log, indicating the origin of the documents
produced, would provide some semblance of order to the DNC's
randomly assembled documents. In addition, a production log is
of particular importance when preparing for depositions.
Without a log, it is impossible to know from whose files a
document, such as a calendar or phone log, came. For example, a
memo in one person's possession could be innocuous but in the
hands of another it might raise questions.
The DNC continuously refused to provide the Committee with
a complete production log for all documents, claiming that it
could not afford to divert personnel to accomplish the
task.\105\ The Committee found the DNC's argument of lack of
personnel to be disingenuous after detailed handwritten
production logs were mistakenly left in a document production
to the Committee.\106\ The logs included the document
identification number, the box number in which the document was
located, and a detailed description of the document.\107\
Although the DNC had the time to create logs for itself, if its
arguments are to be believed, the DNC could not afford the
staff time to photocopy the logs for the Committee.
---------------------------------------------------------------------------
\105\ Letter to Chairman Dan Burton, Committee on Government Reform
and Oversight, from Judah Best, Counsel to DNC, Nov. 17, 1997.
\106\ The DNC mistakenly left approximately 300 pages of production
logs in the boxes of documents. A representative sample is produced as
an exhibit. DNC Document Production Log, Aug. 29, 1997 (Exhibit 14)
[Democratic National Committee Production Logs].
\107\ Id.
---------------------------------------------------------------------------
Ultimately, the DNC produced an interim log of the contents
of the first 66 boxes.\108\ However, in one exchange, the
Committee was informed that the DNC had no plan for providing
any form of production log for material contained in boxes
produced subsequent to box 66.\109\ The DNC tried to impose an
agreement on the Committee that was made by the Senate
Committee on Governmental Affairs.\110\ Although the Senate
agreed to forgo production logs, it was under the imposition of
a deadline and needed documents on an expedited basis. The
Government Reform and Oversight Committee, however, had no such
hindrance and would have benefited greatly from the DNC's
cooperation.
---------------------------------------------------------------------------
\108\ Letter to Barbara Comstock, chief investigative counsel, from
Judah Best, Counsel to DNC, July 11, 1997.
\109\ Letter to Paul Palmer, Counsel to the DNC, from James C.
Wilson, senior investigative counsel, July 18, 1997.
\110\ Letter to Barbara Comstock, chief investigative counsel, from
Judah Best, Counsel to the DNC, July 11, 1997 (the Senate Committee
agreed to accept productions after box 66 without detailed
representations regarding the specific sources of all of those
documents).
---------------------------------------------------------------------------
c. adoption of document protocol
The Committee formally adopted its Document Protocol on
April 10, 1997.\111\ The DNC criticized the Protocol claiming
it did not provide adequate protection for sensitive documents.
Such criticism ignored the provision allowing for the public
release of documents only after the Chairman consulted with an
Advisory Committee. Prior to the adoption of the protocol, the
DNC had produced just over nine boxes of documents and refused
to produce certain documents deemed confidential. These
documents were under subpoena, and the DNC was legally
obligated to produce them. Even though the DNC had no basis for
withholding, it allowed the Committee an opportunity to review
these ``confidential'' documents only in the office of the
DNC's counsel.\112\ At this time, there were about 30 boxes of
``sensitive'' documents that the Committee had not received. It
was impossible for staff only to have limited access to these
documents and yet be able to compare them to other documents
and conduct an effective investigation. The Committee made
every attempt to cooperate but the demands made by the DNC were
outrageous.
---------------------------------------------------------------------------
\111\ Protocol for Documents, Apr. 10, 1997 (Exhibit 15).
\112\ Letter to Committee from Judah Best, Counsel for DNC, Apr.
18, 1997.
---------------------------------------------------------------------------
Due to the necessity that the staff review such a large
volume of documents, the Chairman again on May 28, 1997,
requested that the DNC comply with the Committee's document
request.\113\ Ultimately, the DNC agreed to produce the
confidential documents.\114\ However, rather than copy the
documents in its possession and send them to the committee all
at one time, the DNC insisted on producing them in increments.
The manner in which the DNC produced documents to this
committee is yet another example of footdragging.
---------------------------------------------------------------------------
\113\ Letter to Judah Best, Counsel for DNC, from Chairman Dan
Burton, Committee on Government Reform and Oversight, May 28, 1997.
\114\ Letter to Chairman Dan Burton, Committee on Government Reform
and Oversight, from Judah Best, May 29, 1997.
---------------------------------------------------------------------------
D. alleged duplication of senate efforts
During the course of the investigation, the Committee
requested to depose certain present and former employees of the
DNC. The DNC raised concerns that this would be an unnecessary
duplication of the Senate's efforts and suggested that the
Committee staff review prior testimony and limit the inquiry to
matters not previously covered.\115\ In many cases involving
certain DNC witnesses, the Committee did agree to delay
depositions. Although the Committee had no desire to duplicate
efforts, in many instances the Senate depositions were not
available. Even more important, usually the DNC had produced
additional relevant documents relating to an individual after
the Senate deposition, which raised further questions. In
addition, the Committee needed to interview or depose witnesses
who had testified before the Senate because the two
investigations had different scopes. Unlike the Senate, the
Committee was not limited to the 1996 Presidential
Election.\116\ Therefore, the DNC's objection based on
``duplication'' was not valid and impeded the effective
examination of witnesses.
---------------------------------------------------------------------------
\115\ Letter to Barbara Comstock, chief investigative counsel, from
Judah Best, July 3, 1997.
\116\ House Resolution 167.
---------------------------------------------------------------------------
The various obstruction tactics employed by the DNC
hampered the Committee's investigation. The slow response to
the Committee's requests and the pattern of delay undercut any
promises of cooperation made by the DNC. The failure to produce
documents in a timely manner burdened the taxpayers and
inconvenienced the DNC's own employees. Despite the DNC's
resistance, the Committee uncovered a great deal of information
regarding the suspect fundraising practices of the DNC.
IV. Failure of the Clinton Administration To Press for Foreign
Cooperation and the Failure of Foreign Governments To Cooperate
Shortly before the 1996 Federal elections, it was revealed
that the DNC had accepted illegal foreign contributions. As
time passed, the scope of the infiltration of foreign money was
soon realized. Millions of dollars in foreign money were
contributed to the DNC from foreign sources. When the Committee
pursued its investigation, it found that cooperation stopped at
the U.S. borders. In addition, it was difficult to get
cooperation from U.S. citizens, many of whom invoked their
Fifth Amendment right against self-incrimination, or in the
alternative, fled the country. With many important witnesses in
the United States obstructing the investigation, the
cooperation of foreign governments was critical if the identity
of the ultimate sources of contributions and the motivation for
making illegal contributions were to be revealed.
The nature of the Committee's investigation into
contributions from foreign sources necessarily required foreign
documents, particularly bank records, as well as the
cooperation of witnesses in foreign countries. In order to gain
cooperation from such foreign governments, the Committee
followed established diplomatic procedures to request
assistance in its investigation. Generally, all requests
relating to foreign governments would be channeled through the
executive branch, specifically the Department of State.
The Committee was quickly disappointed in the level of
cooperation from both the Clinton Administration and the
relevant foreign governments. Although the Clinton
Administration adopted a public stance of cooperation, it did
almost nothing to assist the Committee, or its own Department
of Justice's investigations. The open refusal of some foreign
governments to cooperate seems to indicate that the belief that
there would be no consequences from the Clinton Administration
for non-cooperation.
a. the clinton administration
In February 1997, the media reported on a Chinese plan to
attempt to infiltrate the U.S. political system.\117\ In the
face of such allegations, President Clinton called for a
thorough investigation.\118\ However, it soon became apparent
that the Administration would not adhere to the President's
public pronouncement.
---------------------------------------------------------------------------
\117\ Bob Woodward and Brian Duffy, ``Chinese Embassy Role in
Contributions Probed,'' the Washington Post, Feb. 13, 1997, at A1.
\118\ Susan Schmidt, ``Clinton: New Allegations Warrant Vigorous
Probe; President Says He Was Unaware of Focus on Chinese,'' the
Washington Post, Feb. 14, 1997, at A12.
---------------------------------------------------------------------------
One month later in March 1997, during an official visit to
China, Vice President Gore dismissed the importance of the
campaign finance investigation by telling Chinese Premier Li
Peng in a private meeting that, ``this in no way would deflect
the administration from pursuing its policy of
engagement.''\119\ In fact, the Vice President did not even
warn Li that there would be serious consequences if the
allegations were proven true.\120\ Foreign governments could
not be faulted for interpreting Vice President Gore's words as
a signal that the Administration was not expecting their
cooperation.
---------------------------------------------------------------------------
\119\ John F. Harris, ``Funds Probe Won't Mar U.S.-China Ties, Gore
Says; Dispute Surfaces Over Talks With Beijing Premier,'' the
Washington Post, Mar. 26, 1997, at A1.
\120\ An official spokesman, who was present at the meeting between
Li and the Vice President, said the Vice President never discussed what
would happen if the allegations were proven true. Later, a more senior
official who refused to be identified, said the first official
statement was erroneous and that the Vice President did say that if the
allegations were true, ``it's a very serious matter.'' Id.
---------------------------------------------------------------------------
According to news reports, allegations of the Chinese
government's role in illegal foreign contributions came from
electronic eavesdropping by U.S. intelligence agencies.\121\
The Vice President, though, downplayed the significance of
those interceptions when he told Li that, ``unproven
allegations are not significant; what are significant are the
facts.'' \122\ Although the Committee shares the Vice
President's view, in order to obtain the facts, foreign
governments must assist in acquiring documents sought by the
Committee and make witnesses available for interviews.
---------------------------------------------------------------------------
\121\ Bob Woodward and Brian Duffy, ``Chinese Embassy Role in
Contributions Probed,'' the Washington Post, Feb. 13, 1997, at A1.
\122\ Hilary Stout and Kathy Chen, ``Gore Assures China On Bid to
Bolster Ties,'' the Wall Street Journal, Mar. 26, 1997, at A3.
---------------------------------------------------------------------------
President Clinton took Vice President Gore's statements a
step further when it was publicly revealed that the FBI had
evidence that top levels of the Chinese government may have
been involved in the illegal contributions.\123\ Although
President Clinton stated that there would be serious
consequences in U.S.-China relations if the allegations were
true, he went on to suggest that perhaps China was simply
trying to increase its lobbying presence in Washington.\124\
---------------------------------------------------------------------------
\123\ John F. Harris, ``Don't Prejudge China, Clinton Urges; He
Says Beijing May Have Sought to Make Voice Heard Here Legally,'' the
Washington Post, Apr. 26, 1997, at A16.
\124\ Id.
---------------------------------------------------------------------------
b. china denies any involvement in a plan to funnel money into u.s.
elections
The Chinese government has steadfastly denied any role in
the funneling of illegal contributions to the DNC. After it was
reported that U.S. intelligence agencies acquired evidence of
the Chinese government's involvement in the scheme, the Chinese
State Information Department said, ``[w]e express indignation
at the evil actions of those persons within the U.S. government
who continue to spread rumors, disrupting and sabotaging Sino-
U.S. relations.''\125\ The Chinese government even went so far
as to insist that U.S. officials should not allow such articles
to appear in the press.\126\
---------------------------------------------------------------------------
\125\ Marc Lacey; Jack Nelson, ``Clinton Tries to Quell China Funds
Impact,'' Los Angeles Times, Apr. 26, 1997, at A1.
\126\ Id.
---------------------------------------------------------------------------
While traveling in China this past summer, President
Clinton held a joint press conference with Chinese President
Jiang Zemin on June 27, 1998. During the press conference Jiang
Zemin stated that his government had conducted a thorough
investigation of the allegations of a Chinese plan and found
that there was no such plan.\127\ In response to questions
about the Chinese government's denial, President Clinton
stated:
---------------------------------------------------------------------------
\127\ White House Press Conference, Beijing China, Office of the
Press Secretary, June 27, 1998.
[Jiang Zemin] said they looked into that [the campaign
finance allegations] and that he was obviously certain.
And I do believe him, that he had not ordered or
authorized or approved any such a thing, and that he
could find no evidence that anybody with governmental
authority had done that.\128\
---------------------------------------------------------------------------
\128\ ``We Can Build a Good Positive Partnership,'' the Washington
Post, July 4, 1998, at A20.
Although President Clinton may have full faith in the
assertions of the Chinese government, other administration
officials are skeptical. Louis Freeh, Director of the FBI, when
asked if he believed Zemin's statement that they conducted an
earnest investigation, replied, ``I'd like to see his report.''
\129\ Director Freeh also stated that the FBI has not accepted
China's statement and has continued to investigate foreign
links with the investigation.\130\
---------------------------------------------------------------------------
\129\ The Need for an Independent Counsel in the Campaign Finance
Investigation, H. Rept. No. 105-155, 105th Cong., 2d sess., 138 (1998).
\130\ Id.
---------------------------------------------------------------------------
c. the committee's attempts to investigate overseas involvement in
illegal foreign contributions
In order to conduct a proper investigation, the Committee
required the assistance of foreign governments in three areas:
production of documents, availability of witnesses, and
overseas travel. The Committee attempted to secure the
cooperation of foreign governments, through the Clinton
Administration, on all three fronts.
1. China
a. Charlie Trie
The first request by the Committee came after Yah Lin
``Charlie'' Trie's June 24, 1997, interview with Tom Brokaw on
``NBC Nightly News.'' Earlier in 1997, Trie had fled the United
States after allegations of his illegal fundraising had
surfaced in the press. After the broadcast of the Trie
interview, the Committee asked President Clinton to formally
petition the Chinese government to make Trie available to the
Committee.\131\ The Committee received nothing but a
perfunctory response \132\ to its requests until Trie made a
July 27, 1997 appearance on a competing nightly news show,
again from China.\133\ According to the broadcast, Trie had
been living in a hotel in Beijing for weeks, registered under
his own name.\134\ Just the week before, Chinese officials
stated that they did not know whether Trie was in China.\135\
---------------------------------------------------------------------------
\131\ Letter from Chairman Burton to President Clinton, June 27,
1997.
\132\ The only response from the State Department thus far stated:
Consistent with the Secretary's commitment to provide the
maximum possible assistance to Congress in this matter, I
am pleased to inform you that, on July 14 the Department
communicated to the Chinese Embassy your request that the
PRC help facilitate the return of Mr. Trie to the United
States for questioning or, at a minimum, make him available
for a deposition by the Committee and its staff. We also
asked the Chinese Government to treat this matter as a high
priority in which Secretary Albright is personally
---------------------------------------------------------------------------
interested.
Letter from Barbara Larkin, Assistant Secretary of Legislative Affairs,
to Chairman Burton, July 21, 1997.
---------------------------------------------------------------------------
\133\ ABC Nightly News (ABC television broadcast, July 27, 1997).
\134\ Id.
\135\ Id.
---------------------------------------------------------------------------
Shortly after the second interview of Trie was broadcast,
the State Department contacted the Committee with a telephone
number for a Beijing hotel where Trie was supposed to be
staying.\136\ The Committee received this information on the
same day that Trie was scheduled to check-out and all attempts
to contact Trie at that telephone number were unsuccessful. The
phone number was absolutely useless to the Committee.
Nevertheless, the administration continued to use it as an
example of the great lengths it went to to cooperate with the
investigation.
---------------------------------------------------------------------------
\136\ Letter from Barbara Larkin, Assistant Secretary of
Legislative Affairs, to Chairman Burton, Aug. 8, 1997. Although the
State Department provided the information to the Committee, it is not
known how the State Department learned of Trie's location. However, in
a later letter to the Committee, the State Department seems to imply
that the Chinese government originally supplied the information to the
State Department. The letter states, ``Chinese Embassy officials
recalled, for example, that last summer Beijing provided information
pursuant to your Committee's request regarding the whereabouts of Yah
Lin ``Charlie'' Trie. Letter from Barbara Larkin, Assistant Secretary
of Legislative Affairs, to Chairman Burton, Feb. 13, 1998.
---------------------------------------------------------------------------
b. Bank Records
Much of the Committee's investigation is dependent upon
securing records of bank accounts showing wire transfers and
the general flow of money to and from accounts. In order to
show that a contribution was made with foreign money or that it
was a conduit payment, one must show from where the money came.
In the case of foreign money, the wire transfers normally lead
to an overseas account. The Committee is therefore unable to
trace the source of such funds without the cooperation of the
foreign government.
In December 1997, the Committee attempted to identify the
ultimate sources of identified foreign contributions through
subpoenas issued to the New York branch of the Bank of China.
The subpoena requested the production of records from the Bank
of China branches in Macau and Hong Kong along with those from
the New York branch. Although the New York branch duly
complied, the bank refused to supply records from the Macau and
Hong Kong branches on the basis that the production of those
documents would violate local laws.\137\ Likewise, the Bank of
China denied records requested by the Justice Department Task
Force.\138\
---------------------------------------------------------------------------
\137\ Letter from Christopher Brady to Committee Counsel, Jan. 13,
1998.
\138\ The Need for an Independent Counsel in the Campaign Finance
Investigation, H. Rept. No. 155, 105th Cong., 2d sess., 137 (1998).
---------------------------------------------------------------------------
c. Visa Requests
In January 1998, the Committee requested visas for four
investigators to enter China and Hong Kong. The Chinese Embassy
in Washington informed the Committee that it had standing
orders from the Chinese Foreign Ministry in Beijing to reject
visa requests from any congressional entity seeking to visit
China that is involved in the present campaign finance
investigation.\139\
---------------------------------------------------------------------------
\139\ Letter from Chairman Burton to Secretary of State Madeleine
K. Albright, Feb. 4, 1998. With the Chinese takeover of Hong Kong in
July 1997, the refusal to process the visas extended to Hong Kong as
well as China.
---------------------------------------------------------------------------
The Committee asked the State Department to intervene and
persuade the Chinese government to reconsider its decision. The
State Department responded that it had urged the Chinese
government to reconsider its decision to deny Committee staff
visas, and mentioned Secretary Albright's personal interest in
the matter.\140\ Not surprisingly, the Chinese government
maintained its position on the visas. The State Department made
no further attempts to assist the Committee or the Justice
Department Task Force in obtaining visas.
---------------------------------------------------------------------------
\140\ Letter from Barbara Larkin, Assistant Secretary of
Legislative Affairs, to Chairman Burton, Feb. 13, 1998.
---------------------------------------------------------------------------
In an effort to find alternative methods of meeting with
witnesses in China, the Committee made several suggestions to
the Administration. On March 9, 1998, Chairman Burton wrote
directly to the President, requesting his assistance.\141\
After receiving no response, the Committee wrote again on March
31, 1998, suggesting that Committee and Justice Department
investigators accompany the President on his pending trip to
China.\142\ Although the President visited China with an
entourage of over 1,000, the Committee and Justice Department
investigators were not invited.
---------------------------------------------------------------------------
\141\ Letter from Chairman Burton to President Clinton, Mar. 9,
1998.
\142\ Letter from Chairman Burton to President Clinton, Mar. 31,
1998.
---------------------------------------------------------------------------
2. Taiwan
As part of its investigation, the Committee found that it
had numerous witnesses to interview in Taiwan. In January 1998,
it approached the representative of Taiwan in the United
States, the Taipei Economic and Cultural Representative's
Office \143\ (``TECRO'') about a staff delegation visit to
Taiwan. Although TECRO represented that it would assist the
Committee, it subsequently decided that the Ministry of Foreign
Affairs in Taiwan would not facilitate any meetings in Taiwan.
After extensive discussions with the Committee, TECRO agreed to
assist the Committee conditioned upon certain ``ground rules''
that the delegation would follow.\144\ The Committee agreed to
the ground rules and arrived in Taiwan on March 10, 1998.
---------------------------------------------------------------------------
\143\ Taiwan does not have an embassy in the United States, as
such, TECRO performs many of the functions of an embassy.
\144\ The ground rules included in pertinent part: the Committee
would conduct no ``investigations'' in Taiwan; private meetings would
be referred to as ``exchanges of opinions on issues of mutual concern
arising out of mutual interest in combating illegal activities''; all
itineraries shall be transparent; meeting with government officials
would be arranged by MOFA and meetings with private individuals would
be arranged by the American Institute in Taiwan [AIT]; and, no
subpoenas, signing documents, audio or video recording, photographing;
MOFA reserved the right to attend all meetings. Letter from Stephen
Chen, TECRO Representative, to Chairman Dan Burton, Feb. 12, 1998.
---------------------------------------------------------------------------
A key element of the ground rules was the Committee's
agreement that the American Institute in Taiwan \145\ (``AIT'')
would coordinate the delegation's activities working closely
with the Republic of Taiwan's Ministry of Foreign Affairs
(``MOFA''). Before the delegation's arrival, the Committee had
requested interviews with approximately 45 individuals living
in Taiwan. Upon the arrival of the delegation, AIT had
scheduled numerous interviews. However, although MOFA agreed to
arrange all requested meetings with government or political
party officials, it had not done so. The delegation raised the
matter with MOFA officials its first working day. MOFA claimed
that it had been unable to secure any meetings with its own
government officials. At that point, the delegation obtained
permission for AIT to approach Taiwanese government and party
officials on its behalf. By March 13th, AIT was able to secure
a number of additional meetings for the staff delegation.
---------------------------------------------------------------------------
\145\ The United States does not have an embassy in Taiwan. AIT is
a quasi-governmental entity which performs many of the functions of an
embassy.
---------------------------------------------------------------------------
The following morning, Saturday, March 14th, MOFA asserted
that there had been a number of ``press leaks'' which made it
necessary to hold a press conference for what it termed as
``damage control.'' However, MOFA did not notify AIT or the
delegation of the planned press event. The press conference,
which disclosed the names of many potential interviewees,
resulted in an outcry from the opposition party and an uproar
in the legislature. At that point, the delegation's mission had
been seriously compromised.
Unknown to the Committee, MOFA had written to all
prospective interviewees prior to the delegation's arrival
telling them, among other things, that they were under no
obligation to cooperate with the delegation and identifying a
number of others with whom meetings were sought. In addition,
at MOFA's request, AIT had provided MOFA with daily updates on
the delegation's meeting schedule. Shortly after receiving the
updates, the scheduled interviews would be canceled. The
Committee could only conclude that MOFA contacted the
interviewees to discourage meetings. Efforts by AIT to
reschedule the meetings were unsuccessful.
[Supporting documentation follows:]
=======================================================================
CHAPTER III
THE DEMOCRATS' FAILURE TO RETURN ILLEGAL CAMPAIGN CONTRIBUTIONS
=======================================================================
THE DEMOCRATS' FAILURE TO RETURN ILLEGAL CAMPAIGN CONTRIBUTIONS
I. The Democratic National Committee's Contribution Review
On November 26, 1996, the DNC announced that it had
retained the law firm of Debevoise & Plimpton \1\ to ``advise
it in connection with questions that had arisen about a number
of contributions to the DNC.'' \2\ Just before the DNC
announced its hiring of Debevoise & Plimpton, the Washington
Post reported that ``for now, the DNC is relying on news
organizations to all but prove that the donations are not
legitimate before it returns them.'' \3\ In a deposition before
the Committee, DNC General Counsel Joseph E. Sandler, Esq.
summarized the factors--particularly heavy press scrutiny--
leading to the contribution review:
---------------------------------------------------------------------------
\1\ Serge F. Kovaleski, ``Democrats Open Investigation Into
Questionable Donations; Specific Queries Won't Be Answered Pending
Completion,'' the Washington Post, Nov. 27, 1996, at A6.
\2\ DNC Summary of In-Depth Contribution Review, at 1 (Exhibit 1).
\3\ Ira Chinoy and Lena H. Sun, ``Unwary DNC Accepted Donations at
Face Value,'' the Washington Post, Nov. 22, 1996, at A1.
Counsel. . . . Can you tell me what led up to this
in-depth contribution review involving Debevoise &
Plimpton . . . ?
Sandler. Yes. There were many, many questions being
raised in the press in October and November of 1996
about contributions that had been made by the DNC
during 1994, 1995, and 1996. And rather than try to
investigate these one at a time, we determined that it
would be best if we did a systematic review of these--
of contributions made during this period to determine
which--you know, if there were, to the extent there
were contributions that we accepted that should now be
refunded.\4\
---------------------------------------------------------------------------
\4\ Committee Deposition of Joseph E. Sandler, Esq., May 14, 1998,
27-28.
Specifically, Debevoise & Plimpton was hired to oversee a
review of select contributions, represent the DNC in
conjunction with the Department of Justice's (``DOJ'') campaign
finance investigation, and assist with an improvement of the
DNC's contribution screening procedures.\5\ According to DNC
Chairman Fowler, Debevoise & Plimpton's duties were to include
``preserving and producing relevant documents and preparing
timely and complete responses to inquiries from applicable
agencies.'' \6\ Chairman Fowler pledged that:
---------------------------------------------------------------------------
\5\ ``DNC Hires Law Firm for Contribution Probe,'' Associated
Press, Nov. 26, 1996.
\6\ Id.
We at the DNC are absolutely determined to correct any
mistakes that have been made and to ensure that they
are not repeated. . . . We will no longer go about this
in a piecemeal fashion but will deal with this
comprehensively and methodically.\7\
---------------------------------------------------------------------------
\7\ Id.
The DNC stated that it would no longer answer questions about
individual contributions until the review was completed.\8\ At
the time the DNC hired Debevoise & Plimpton in November 1996,
it had already returned $1,471,800 in contributions, $1,298,800
of which was raised by DNC Vice Chairman John Huang.\9\ In
addition, by this time a criminal investigation of Huang's
fund-raising activities was underway at the Justice Department.
---------------------------------------------------------------------------
\8\ Serge F. Kovaleski, ``Democrats Open Investigation Into
Questionable Donations; Specific Queries Won't Be Answered Pending
Completion,'' the Washington Post, Nov. 27, 1996, at A6.
\9\ Exhibit 1 DNC Summary of In-Depth Contribution Review, at 4-5;
see ``DNC Hires Law Firm for Contribution Probe,'' Associated Press,
Nov. 26, 1996.
---------------------------------------------------------------------------
In late November 1996, Debevoise & Plimpton hired the
accounting firm Ernst & Young, L.L.P. to assist in the review
of questionable contributions.\10\ Additionally, in early
December 1996, Debevoise & Plimpton hired the Investigative
Group International (``IGI''), a private investigative firm, to
assist in the contribution review.\11\
---------------------------------------------------------------------------
\10\ Id.; see also, Exhibit 1 DNC Summary of In-Depth Contribution
Review, at 1.
\11\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, Deposition of Terry F. Lenzner, 43-47, June 23,
1997.
---------------------------------------------------------------------------
The DNC's initial contribution review began in late
November 1996--after the Presidential election--and continued
through February 1997.\12\ Contributions falling into any one
of the following seven categories--taken directly from DNC
guidelines--were reviewed:
---------------------------------------------------------------------------
\12\ The DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 7; see ``DNC Hires Law Firm for
Contribution Probe,'' Associated Press, Nov. 26, 1996; see also,
Exhibit 1 DNC Summary of In-Depth Contribution Review, at 1.
---------------------------------------------------------------------------
1. Contributions from any contributor who contributed
$10,000 or more in any of the years 1994, 1995 or 1996.
2. Contributions in 1996 for which 430 S. Capitol
Street (address of the DNC's headquarters) had been
listed as an address.
3. Contributions solicited by Mr. John Huang where
the donor contributed a total of $2,500 or more in the
aggregate where the donor was not well known to the
DNC.
4. Contributions made in connection with the April
29, 1996 event at the Hsi Lai Buddhist Temple in
California.
5. Contributions made or solicited by Mr. Charles
Trie, his wife or his company, Daihatsu International.
6. Contributions by Mr. Johnny Chung or his company,
Automated Intelligence Systems.
7. Contributions above $5,000 made in connection with
any DNC fundraising event targeting the Asian Pacific
American community.\13\
---------------------------------------------------------------------------
\13\ DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 7-8.
---------------------------------------------------------------------------
Contributions falling into category 1 were reviewed in-
house by the DNC using standard public databases such as Nexis
and Lexis to verify ``basic information'' \14\ such as
corporate status, address, etc.\15\ Category 2 contributions
were evidently also reviewed in-house by the DNC.\16\ In
contrast, contributions falling into categories 3-7 were
forwarded to Debevoise & Plimpton which reviewed them in
conjunction with Ernst & Young.\17\ IGI was utilized to review
a select group of contributions after Ernst & Young was unable
to obtain sufficient information to determine the legality or
appropriateness of the contribution.\18\
---------------------------------------------------------------------------
\14\ Exhibit 1 DNC Summary of In-Depth Contribution Review, at 2.
\15\ Id.
\16\ Id. at 2-3.
\17\ Id.
\18\ See Id., at 3; see generally Investigation of Illegal or
Improper Activities in Connection with the 1996 Federal Election
Campaign Before the Senate Committee on Governmental Affairs,
Deposition of Terry F. Lenzner, 43-47, June 23, 1997.
---------------------------------------------------------------------------
The DNC's in-house contribution review consisted primarily
of public database searches and attempts to contact
contributors.\19\ In contrast, the review conducted by Ernst &
Young under the auspices of Debevoise & Plimpton was
considerably more extensive. Ernst & Young utilized
professionals from four different areas: Financial Advisory
Services-Dispute Resolution & Litigation Services, Financial
Advisory Services-International Financial Services, the Chinese
Business Group, and the Assurance and Advisory Business
Services, as well as translators.\20\ As described in a DNC
memorandum:
---------------------------------------------------------------------------
\19\ See Exhibit 1 DNC Summary of In-Depth Contribution Review, at
2-3.
\20\ Letter from Daniel G. Lentz of Ernst & Young, L.L.P. to
Debevoise & Plimpton, Feb. 26, 1997, app. 1, DNC 4298600-DNC 4298601
(Exhibit 2).
[Ernst & Young] prepared two questionnaires (one for
individuals and one for corporate donors) that it used
in telephone interviews. Individual donors were asked
to confirm the donor's citizenship, permanent residence
status, social security number, the source of the
donation and other relevant information. Corporate
donors were asked about any possible foreign ownership,
the source of the funds (from a domestic U.S. company
or from abroad) and other relevant information.
Searches of standard databases containing publicly
available information were also conducted to verify
additional information about the donor. Where the donor
requested it, [Ernst & Young] sent a written
questionnaire. . . . Where [Ernst & Young] was not able
to contact the donor or to obtain sufficient
information, further research was conducted under the
supervision of Debevoise & Plimpton.\21\
---------------------------------------------------------------------------
\21\ Exhibit 1 DNC Summary of In-Depth Contribution Review, at 2.
The Ernst & Young auditors kept detailed notes of contacts and
attempted contacts with contributors and ``other significant
information obtained'' \22\ in conjunction with telephone
interviews.\23\ The research work performed by Ernst & Young
and the Investigative Group International produced an
impressive amount of concrete information upon which the DNC
could base its decisions.
---------------------------------------------------------------------------
\22\ Exhibit 2 Letter from Daniel G. Lentz of Ernst & Young, L.L.P.
to Debevoise & Plimpton, Feb. 26, 1997, DNC 4298595.
\23\ Id.
---------------------------------------------------------------------------
Based on the result of the Ernst & Young interviews,
contributors' files were categorized as:
1. Dead End Research (``DER'') if no contact with the
contributor was made.\24\ In this case, Alternative
Procedures were employed consisting of mailing an
interview short form to the contributor via mail to the
``best available address;'' \25\
---------------------------------------------------------------------------
\24\ Id. at 3, DNC 4298597.
\25\ Id. at 4, DNC 4298598.
---------------------------------------------------------------------------
2. Terminated if the contact information was
confirmed as ``good'' \26\ but contact with the
contributor could not be made after ``reasonable
efforts.'' \27\ In this case, Alternative Procedures
were employed consisting of mailing an interview short
form to the contributor via mail to the ``best
available address;'' \28\
---------------------------------------------------------------------------
\26\ Id. at 3, DNC 4298597.
\27\ Id.
\28\ Id. at 4, DNC 4298598.
---------------------------------------------------------------------------
3. Survey Unsuccessful if the interview had been
initiated with the actual contributor . . . but had
been terminated by the contributor after either none or
a portion of the interview had been completed.'' \29\
In this case, Alternative Procedures were employed
consisting of mailing an interview short form to the
contributor via mail to the ``best available address;''
\30\
---------------------------------------------------------------------------
\29\ Id. at 3, DNC 4298597.
\30\ Id. at 4, DNC 4298598.
---------------------------------------------------------------------------
4. Substantially Completed ``where the Interviewer
obtained as much information as possible from the
Contributor on the majority of the questions asked;''
\31\ and
---------------------------------------------------------------------------
\31\ Id. at 3, DNC 4298597.
---------------------------------------------------------------------------
5. Completed if ``all steps through the completion of
the interview have been performed.'' \32\
---------------------------------------------------------------------------
\32\ Id.
---------------------------------------------------------------------------
In certain circumstances, what the DNC termed ``Additional
Procedures'' were used, such as obtaining a credit report when
a contributor signed and returned an authorization form.\33\
---------------------------------------------------------------------------
\33\ Id. at 4, DNC 4298598.
---------------------------------------------------------------------------
The DNC pledged to return any contribution that: (1) may
not satisfy applicable legal and regulatory requirements, (2)
may be inappropriate for the DNC to accept under the
circumstances as the DNC understands them, or (3) for which the
DNC has been unable to obtain sufficient information to verify
its legality or appropriateness.\34\ In short, the DNC pledged
to return contributions in instances of illegality,
inappropriateness, or insufficient information.
---------------------------------------------------------------------------
\34\ Exhibit 1 DNC Summary of In-Depth Contribution Review, at 1;
statement of Judah Best, Debevoise & Plimpton, DNC press conference,
Feb. 28, 1997, at 1-2 (Exhibit 3).
---------------------------------------------------------------------------
Pursuant to category 1, if the DNC--in conjunction with
Ernst & Young--determined that a contribution was made in
violation of the Federal Election Campaign Act of 1971, as
Amended (``the Act''), it was to be deemed illegal and returned
to the contributor or disgorged to the U.S. Treasury.\35\ For
example, DNC records indicate that contributions made by
foreign nationals in violation of 2 U.S.C. Sec. 441e(a) of the
Act \36\ were returned to the donor,\37\ while contributions
made in the name of another in violation of 2 U.S.C. Sec. 441f
\38\ were returned to the U.S. Treasury \39\ as explained by
the DNC:
---------------------------------------------------------------------------
\35\ FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-39;
see generally Exhibit 4 Letter from Joseph E. Sandler, Esq., to
Lawrence Noble, Esq., June 27, 1997, DNC 4298856-DNC 4298857 (citing
FEC Advisory Opinion 1995-19 and FEC Advisory Opinion 1991-39)
(enclosures omitted) (Exhibit 4); see also Letter from Joseph E.
Sandler, Esq., to Lawrence Noble, Esq., Mar. 25, 1998 (Exhibit 5); see
Letter from Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998
(enclosures omitted) (Exhibit 6); DNC List of Contributions Returned or
Disgorged Produced to the Committee on Nov. 20, 1997, at 1-9 (Exhibit
7).
\36\ 2 U.S.C. Sec. 441e(a) provides that:
It shall be unlawful for a foreign national directly or
through any other person to make any contribution of money
or other thing of value, or to promise expressly or
impliedly to make any such contribution, in connection with
an election to any political office or in connection with
any primary election, convention, or caucus held to select
candidates for any political office; or for any person to
solicit, accept, or receive any such contribution from a
foreign national.
---------------------------------------------------------------------------
\37\ See generally Exhibit 7 DNC List of Contributions Returned or
Disgorged Produced to the Committee on Nov. 20, 1997, at 1-9.
\38\ 2 U.S.C. Sec. 441f provides that:
No person shall make a contribution in the name of
another person or knowingly permit his name to be used to
effect such a contribution, and no person shall knowingly
accept a contribution made by one person in the name of
another person.
---------------------------------------------------------------------------
\39\ See generally Exhibit 7 DNC List of Contributions Returned or
Disgorged Produced to the Committee on Nov. 20, 1997, at 1-9; FEC
Advisory Opinion 1995-19; FEC Advisory Opinion 1991-39; Exhibit 4
Letter from Joseph E. Sandler, Esq., to Lawrence Noble, Esq., June 27,
1997 (citing FEC Advisory Opinion 1995-19 and FEC Advisory Opinion
1991-39); Exhibit 5 Letter from Joseph E. Sandler, Esq., to Lawrence
Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from Judah Best, Esq., to
James C. Wilson, Esq., Apr. 15, 1998.
In accordance with F[ederal] E[lection] C[ommission]
guidelines, in those cases in which a donor
specifically indicated that he or she did not make the
contribution, but the real source of the contribution
is not known to the DNC, the contribution has been
refunded to the U.S. Treasury.\40\
---------------------------------------------------------------------------
\40\ DNC press release, ``DNC Refunds Contributions,'' June 27,
1997, at 2 (Exhibit 8).
For example, foreign national Gilberto Pagan's contribution was
returned to him while conduit contributions made in
coordination with Maria Hsia and the International Buddhist
Progress Society were disgorged to the U.S. Treasury.\41\ This
policy is consistent with Federal regulations.\42\
---------------------------------------------------------------------------
\41\ Exhibit 7 DNC List of Contributions Returned or Disgorged
Produced to the Committee on Nov. 20, 1997, at 6 and 8.
\42\ See 11 CFR Sec. 103.3(b) (1) and (2).
---------------------------------------------------------------------------
If a contribution was determined illegal, the DNC generally
did not reach the issue of appropriateness. But, pursuant to
category 2, a contribution could have been deemed inappropriate
notwithstanding the fact that it was legal. In a Committee
deposition, DNC General Counsel Sandler explained the
distinction between legality and appropriateness:
Sandler. Legality goes to the question of whether it
is lawful under the Federal Election Campaign Act,
under the rules of the Federal Election Commission, for
the DNC to accept a contribution. And appropriateness
goes to the question of whether a contribution that is
legal to accept is nonetheless inappropriate because of
the circumstances, background situation, or other
factors relating to the particular contributor.
Counsel. Is it fair to say that the appropriateness
standard is fuzzier than the legal standard?
Sandler. [The a]ppropriateness standard definitely
involves matters of judgment on a case-by-case
basis.\43\
---------------------------------------------------------------------------
\43\ Committee Deposition of Joseph E. Sandler, Esq., May 14, 1998,
6-7.
Whether a contribution was appropriate was an entirely
subjective ad hoc determination.\44\ Current DNC guidelines
regarding compliance with campaign finance laws provide
examples of contributions that may be deemed inappropriate
including those made by individuals:
---------------------------------------------------------------------------
\44\ Id. at 7.
---------------------------------------------------------------------------
1. Convict[ed] of a felony of any nature or of a
misdemeanor involving fraud or moral turpitude, or
civil judgment or finding involving fraud perpetrated
against the government;
2. [Under a] [p]ending active investigation for
criminal misconduct involving fraud or moral turpitude,
or civil fraud involving the government;
3. Convict[ed] for or [under an] active pending
criminal investigation into alleged misconduct
involving dealing with the government or elected
officials, or campaign finance violations;
4. [Involved in an] [u]nresolved bankruptcy
proceeding; and/or
5. [Who has] [s]ubstantial unsatisfied tax liability
or other obligations to the government not being
actively contested in good faith.\45\
---------------------------------------------------------------------------
\45\ Policies and Procedures of the DNC Regarding Compliance with
Campaign Finance Laws, at 18-19 (Exhibit 9).
---------------------------------------------------------------------------
When a ``substantial question'' regarding the ``appropriateness
of [a] contribution'' was raised, ``a committee (consisting of
the DNC's Executive Director, General Counsel, Press
Spokesperson, Compliance Director, and Research Director) made
the final determination of whether to return it.'' \46\ DNC
records indicate that contributions deemed inappropriate were
returned to the contributor or the contributor's counsel.\47\
---------------------------------------------------------------------------
\46\ Exhibit 1 DNC Summary of In-Depth Contribution Review, at 3.
\47\ Exhibit 7 DNC List of Contributions Returned or Disgorged
Produced to the Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
The DNC has returned at least 70 contributions that it
``deemed inappropriate,'' \48\ most notably the contributions
of Praitun Kanchanalak (attributed to her daughter-in-law
Pauline Kanchanalak),\49\ Arief and Soraya Wiriadinata \50\
(the son-in-law and daughter of Lippo Group co-founder Hashim
Ning),\51\ Yah Lin ``Charlie'' and Wang Mei Trie,\52\ Daihatsu
International Trading, Inc.\53\ (a company controlled by Yah
Lin ``Charlie'' Trie) \54\ and the Cheyenne Arapaho Tribes.\55\
The precise reason why these contributions were ``deemed
inappropriate'' is unclear. However, at the time they were
returned, the common thread connecting these contributors was
intense press scrutiny.\56\
---------------------------------------------------------------------------
\48\ Id.
\49\ Id. at 2.
\50\ Id. at 2-3.
\51\ Notes of DNC General Counsel Joseph E. Sandler, Esq., DNC
0829497-DNC 0829535, at 12 (Exhibit 10); see also Glenn R. Simpson and
Jill Abramson, ``Legal Loopholes Let Overseas Contributors Fill
Democrats' Coffers--Asian Interests Are Providing Huge Campaign Gifts,
Gaining Political Clout--A Bust of President Clinton,'' Wall Street
Journal, Oct. 8, 1996; see generally Committee Deposition of Charles
DeQueljoe, June 9, 1998, 136-137.
\52\ Exhibit 7 DNC List of Contributions Returned or Disgorged
Produced to the Committee on Nov. 20, 1997, at 7.
\53\ Id. at 5.
\54\ Daihatsu International Trading, Inc. Business Card of
President Yah Lin Trie (Exhibit 11).
\55\ Exhibit 7 DNC List of Contributions Returned or Disgorged
Produced to the Committee on Nov. 20, 1997, at 4.
\56\ See, e.g. P. Kanchanalak (her contributions were returned in
the wake of numerous articles questioning their legality); Arief and
Soraya Wiriadinata (their contributions were returned in the wake of
numerous articles questioning their legality); Cheyenne Arapaho Tribes
(Their contributions were returned on Mar. 13, 1997, in the wake of the
Washington Post articles, Susan Schmidt, ``Tribes Disappointed After
Gifts to DNC; Land-Seeking Indians Who Gave Cite Pressure to Hire
Consultants, Donate More,'' the Washington Post, Mar. 10, 1997, at
A1.).
---------------------------------------------------------------------------
Pursuant to category 3, whether insufficient information
was obtained pursuant to the contribution review was generally
a subjective determination, however, the DNC established some
objective criteria to assist with that determination:
In general, for an individual who had not been
interviewed, the minimum test was a social security
number, the length of time since it had been issued
(which would be indicative of whether the person was a
citizen or permanent resident), his or her ownership or
possession of a residence or other property and other
information that he or she had the wherewithal to make
the contribution in question.\57\
---------------------------------------------------------------------------
\57\ Exhibit 1 DNC Summary of In-Depth Contribution Review, at 3.
---------------------------------------------------------------------------
In the case of corporations:
[T]he minimum generally consisted of a confirmation of
the company's corporate existence and standing, its
revenue from U.S. operations, whether the individuals
who participated in the decision to make the
contributions possessed social security numbers and for
how long, or other information establishing their
status as U.S. citizens or permanent residents.\58\
---------------------------------------------------------------------------
\58\ Id.
According to the DNC's attorney, Judah Best, Esq. of Debevoise
& Plimpton, sufficient information was information upon which
the DNC could make an ``informed determination'' \59\ as to the
legality or appropriateness of a contribution.\60\ In the
absence of sufficient information, the DNC--pursuant to its own
policy--was required to return the contribution.\61\ The
critical test was whether the source of funds used to make the
contribution was verifiable.\62\
---------------------------------------------------------------------------
\59\ Exhibit 3 Statement of Judah Best, Debevoise & Plimpton, DNC
press conference, Feb. 28, 1997, at 4.
\60\ See generally Exhibit 1 DNC Summary of In-Depth Contribution
Review, at 1.
\61\ Id.
\62\ John King, ``Chairman Acknowledges More Money Will Be
Returned, Urges Reform,'' Associated Press, Feb. 21, 1997.
---------------------------------------------------------------------------
The ``insufficient information'' category is particularly
important because the DNC sometimes faced resistance from
contributors in response to its contribution review.\63\
Moreover, federal authorities have been thwarted in obtaining
information from contributors regarding their contributions.
Even requests for basic information such as a contributor's
address were sometimes refused.\64\ At least 120 individuals
have fled the country and/or refused to cooperate with
investigators in the course of the House, Senate and DOJ
campaign finance investigations.\65\ Of these, at least 79
individuals have invoked their Fifth Amendment privilege
against self-incrimination.\66\ As a result, an inability to
obtain sufficient information is more often the rule rather
than the exception.
---------------------------------------------------------------------------
\63\ See, e.g., Discussion of J & M International, Inc., infra.
\64\ See, e.g., Ernst & Young Contribution Review Materials for
Helen Chien, DNC 1805309, DNC 1805313, DNC 1805315-DNC 1805316, DNC
1805321, DNC 1805326-DNC 1805327, DNC 1805329-DNC 1805331, DNC 1805333-
DNC 1805336, at 4 (Exhibit 12).
\65\ ``Witnesses Who Have Fled or Plead the 5th,'' http://
www.house.gov/reform/oversight/finance/fled.htm, Committee on
Government Reform and Oversight, U.S. House of Representatives; see
also Nathan Abse, ``Campaign Finance Probe: 94 Who Aren't Talking,''
Washington Post, June 9, 1998, at A13; ``10 New Witnesses Take the
Fifth, Total Now at 104, Government Reform and Oversight Investigators
Move Forward in Foreign Money Probe Despite Stonewalling by Crucial
Witnesses,'' Committee press release, June 23, 1998.
\66\ Id.
---------------------------------------------------------------------------
The DNC reviewed the information gathered by Debevoise &
Plimpton in conjunction with Ernst & Young and IGI and then
made the final decision as to which contributions to retain,
return, or disgorge.\67\ According to the DNC, ``the final
decision on which contributions should be returned was solely
that of the DNC.'' \68\ Although ``Debevoise & Plimpton made
recommendations with respect to the disposition of
contributions, . . . in no instance did the DNC take any action
inconsistent with counsel's recommendations.'' \69\
---------------------------------------------------------------------------
\67\ See generally Exhibit 1 DNC Summary of In-Depth Contribution
Review, at 1.
\68\ Id. (emphasis added).
\69\ Id.
---------------------------------------------------------------------------
In addition to the $1,471,800 returned or disgorged in late
1996 prior to the contribution review,\70\ on February 28,
1997, the DNC announced its intention to disgorge or return an
additional $1,492,051 as a result of its contribution
review.\71\ DNC Chairman Roy Romer concluded: ``[i]t is clear
that we did not monitor the contribution process adequately
enough in the recent past. The DNC made mistakes. Today's
actions correct those mistakes. . . .'' \72\
---------------------------------------------------------------------------
\70\ Id. at 4.
\71\ Id.
\72\ ``DNC Chairs Romer and Grossman Announce New Compliance
Procedures and Results of DNC Internal Review,'' DNC press release,
Feb. 28, 1997, at 2 (Exhibit 13).
---------------------------------------------------------------------------
During the period March 13, 1997, through June 26, 1997,
the DNC returned an additional $123,092, including $107,672 to
the Cheyenne Arapaho Tribes.\73\ On June 27, 1997, the DNC
returned or disgorged $1,353,800--the DNC announced its
intention to return $1,348,200 of this $1,353,800 on February
28, 1997, as discussed below--based on its continuing review of
contributions.\74\ According to a DNC press release, the June
27, 1997, disbursements brought the total contributions
returned or disgorged to $2,825,600.\75\ However, Committee
calculations based on records provided by the DNC indicate that
the DNC returned at least $1,943,024 prior to June 27, 1997,
and $3,296,824 through June 27, 1997.\76\
---------------------------------------------------------------------------
\73\ Exhibit 1 DNC Summary of In-Depth Contribution Review, at 4.
\74\ Exhibit 8 DNC press release, ``DNC Refunds Contributions,''
June 27, 1997, at 1.
\75\ Id. at 1.
\76\ Exhibit 7 DNC List of Contributions Returned or Disgorged
Produced to the Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Of the $1,492,051 the DNC identified as improper or illegal
on February 28, 1997, at least $1,348,200 was not returned
until June 27, 1997, 4 months later, in violation of Federal
regulations.\77\ A political committee cannot return or
disgorge prohibited contributions on its own timetable.\78\
Federal Election Commission (``FEC'') regulations provide in
pertinent part that:
---------------------------------------------------------------------------
\77\ Cf. Sharon LaFraniere and Lena H. Sun ``DNC Returns Another
$1.5 Million; Refunds to Include Donations from Foreigners and a
Deceased Woman,'' the Washington Post, Mar. 1, 1997, at A1; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
\78\ See 11 C.F.R. Sec. 103.3(b)(1)-3.
If a treasurer [of a political committee] discovers
that a previously deposited contribution came from a
prohibited source, he or she must refund the
contribution within 30 days of making the discovery.
This situation might arise, for example, if the
treasurer learned that a past contribution was made by
a foreign national. . . . If the committee does not
have sufficient funds to refund the contribution when
the illegality is discovered, the treasurer must use
the next funds the committee receives.\79\
---------------------------------------------------------------------------
\79\ FEC Campaign Guide for Political Party Committees, Aug. 1996,
at 21 (citing 11 C.F.R. Sec. 103.3(b)(2) (emphasis added) (italics in
original)).
Despite the air of contrition and self-reformation on display
at the February 1997, press conference, according to then-DNC
spokeswomen Amy Weiss Tobe, the DNC had no intention of
immediately returning the contributions at the time the
---------------------------------------------------------------------------
announcement was made:
The lights are on and [our employees] are still getting
paychecks. . . . As we can give back donations, we
will. . . . \80\ We hope to do it within the next
several months. . . . We've decided the right thing to
do is to raise the money and return it when we can.\81\
---------------------------------------------------------------------------
\80\ Glenn F. Bunting and Ralph Frammolino, ``Democratic Party
Lacks Funds to Repay Donors Finances: DNC Keeps Finding Contributions
It Must Return Even As It Runs Up at Least $10 Million in Debt,'' Los
Angeles Times, Mar. 2, 1997, at A1.
\81\ Connie Cass, ``Cash-Strapped Democrats Haven't Returned
Tainted Checks Yet,'' Associated Press, Mar. 12, 1997.
To the Committee's knowledge, the FEC has taken no action
regarding the DNC's failure to return or disgorge prohibited
contributions in a timely manner.
From June 28, 1997, through October 30, 1997, the DNC
returned or disgorged an additional $286,300,\82\ including two
illegal contributions from Manlin Foung, Yah Lin ``Charlie''
Trie's sister, totaling $22,500 \83\ and a $100,000
contribution from Global Resource Management, Inc. of Dublin,
Ohio, due to concerns that it may have originated with a
foreign source.\84\
---------------------------------------------------------------------------
\82\ This figure does not include $1,900 returned pursuant to the
DNC's self-imposed $100,000 contribution limit. See Exhibit 7 DNC List
of Contributions Returned or Disgorged Produced to the Committee on
Nov. 20, 1997, at 8-9; Letter from Judah Best, Esq., to Richard D.
Bennett, Esq., Mar. 13, 1998 (confirming the DNC's return of Global
Resources Management, Inc.'s $100,000 contribution) (Exhibit 14).
\83\ Letter from Joseph E. Sandler, Esq., to Lawrence M. Noble,
Esq., Oct. 20, 1997 (enclosures omitted) (disgorging Manlin Foung's
contributions to the DNC totaling $22,500) (Exhibit 15).
\84\ Exhibit 14 Letter from Judah Best, Esq., to Richard D.
Bennett, Esq., Mar. 13, 1998 (confirming the DNC's return of Global
Resources Management, Inc.'s $100,000 contribution); Karen Gullo,
``Democratic Party Returns $100,000 Donation from Ohio Firm,''
Associated Press, Oct. 29, 1997.
---------------------------------------------------------------------------
In a letter to the FEC dated March 25, 1998, the DNC
disgorged an additional $78,200 to the U.S. Treasury in the
wake of the Federal grand jury indictments of Yah Lin
``Charlie'' Trie and Maria Hsia.\85\ The DNC indicated that ``
. . . certain contributions that, at the time they were
received, did not appear to be unlawful, were in fact
contributions made in the name of another.'' \86\ Contributions
returned included those of David Wang and Daniel Wu,\87\ both
of whom made conduit contributions at the request of Antonio
Y.P. Pan, \88\ an ex-Lippo executive \89\ and business
associate of Trie.\90\
---------------------------------------------------------------------------
\85\ Exhibit 5 Letter from Joseph E. Sandler, Esq., to Lawrence
Noble, Esq., Mar. 25, 1998; see also Federal Grand Jury Indictment of
Yah Lin ``Charlie'' Trie, U.S. District Court for the District of
Columbia, Jan. 28, 1998; Federal Grand Jury Indictment of Maria Hsia,
U.S. District Court for the District of Columbia, Feb. 28, 1998.
\86\ Id.
\87\ Id.
\88\ Conduit Payments to the Democratic National Committee Before
the House Committee on Government Reform and Oversight, 105th Cong.,
1st sess., 252-259 (1997) (Testimony of David Wang, Oct. 9, 1997).
\89\ Tati Group (a company controlled by the Lippo Group) Business
Card of Antonio Pan (Exhibit 16).
\90\ Daihatsu International Trading, Inc. Business Card of Chief
Executive Officer Antonio Pan (Exhibit 17).
---------------------------------------------------------------------------
On July 24, 1998, after the federal grand jury indictments
of Pauline Kanchanalak and Duangnet ``Georgie'' Kronenberg, the
DNC returned $105,000 of Kronenberg's $114,000 in
contributions.\91\ This brings the total of returned or
disgorged contributions to at least $3,766,324.
---------------------------------------------------------------------------
\91\ Letter from Joseph E. Sandler, Esq., to Lawrence M. Noble,
Esq., July 24, 1998 (Exhibit 18); see also Amy Keller, ``Burton Eyes
Unreturned DNC Cash,'' Roll Call, July 20, 1998; cf. Federal Grand Jury
Indictment of Pauline Kanchanalak and Duangnet Kronenberg, U.S.
District Court for the District of Columbia, July 13, 1998.
---------------------------------------------------------------------------
Although the DNC's contribution review ignored the 1992
election cycle,\92\ the review--conducted by Debevoise &
Plimpton, Ernst & Young and IGI at the direction of the DNC--
gathered or attempted to gather relevant information to assist
the DNC in determining whether to return a particular
contribution. At a minimum, the DNC's review resulted in a much
needed revamping of the DNC's compliance and fundraising
guidelines. \93\
---------------------------------------------------------------------------
\92\ See Committee Deposition of Joseph E. Sandler, Esq., May 14,
1998, 27-28.
\93\ Exhibit 13 ``DNC Chairs Romer and Grossman Announce New
Compliance Procedures and Results of DNC Internal Review,'' DNC press
release, Feb. 28, 1997, at 2.
---------------------------------------------------------------------------
The efficacy of the DNC's review notwithstanding, the DNC
has failed to abide by its self-imposed and publicly professed
guidelines regarding the return of contributions. This failure
is disturbing and raises serious questions regarding the
sincerity of the DNC's desire to police itself. Particularly
troubling is the fact that the DNC in many instances--detailed
below--has given itself the benefit of the doubt regarding the
legality or appropriateness of a contribution without
justification. It must be remembered that the DNC did not
embark on the contribution review as a self-initiated act of
reformation. The context is critical: the review was initiated
only after hundreds (if not thousands) of press articles
closely scrutinizing the Democrats fund-raising excesses.
For example, as a matter of DNC practice, the fact that a
contributor has invoked his or her Fifth Amendment privilege
against self-incrimination to the House, Senate or the DOJ has
absolutely no bearing on whether the DNC retains or disgorges a
contribution,\94\ notwithstanding the fact that--as a matter of
common sense--an individual's invocation of the Fifth Amendment
regarding a contribution at a minimum casts doubt on the
legality of that contribution.\95\
---------------------------------------------------------------------------
\94\ See, e.g., John Huang, Jane Huang, Duangnet Kronenberg, David
Wang, and Bie Chuan Ong.
\95\ Duangnet Kronenberg, David Wang, and Bid Chuan Ong--just to
name a few--invoked their fifth amendment privilege against self-
incrimination to the Committee, but that invocation did not result in
the return of their contributions by the DNC in response to the
invocation. All of their contributions were illegal.
---------------------------------------------------------------------------
On several occasions, when the DNC could not obtain
sufficient information to confirm the legality or
appropriateness of a contribution, the contribution was
retained. Initially, the DNC represented that it was placing
the burden on itself to demonstrate why a contribution should
be retained, but in actuality, the DNC has repeatedly shifted
the burden to the press and congressional investigators to
demonstrate why a contribution should be returned.
II. Illegal and Suspect Contributions Retained or Belatedly Disgorged
by the Democratic National Committee and State Democratic Parties
The following enumerates and discusses contributions
retained or belatedly disgorged by the DNC, Democratic
Senatorial Campaign Committee (``DSCC''), Democratic
Congressional Campaign Committee (``DCCC'') and state
Democratic parties. Almost all of the contributions at issue
are presently in the coffers of the original recipients.
However, a few of the contributions discussed in this report
were belatedly disgorged to the U.S. Treasury long after
publicly available information should have put the recipient on
notice of the contribution's questionable origins.
Contributions to Republican causes are notably absent from
the following discussion for good reason. While it is safe to
assume that mistakes are made during every election cycle by
both the Democratic and Republican parties, it is no fluke that
the Republican party has returned only $150,000 in contrast to
the approximately $3,766,324 returned by the Democratic party.
These Republican foreign contributions were immediately
returned by the RNC when identified, in contrast to the months
and even years it has taken the DNC to return suspect
contributions. There were no such foreign contributions in the
1996 election cycle at the RNC.
The fact is, after almost 2 years of investigating the
foreign money scandal, it is clear that the problem of foreign
money being funneled into elections was largely--
overwhelmingly--focused on the Democratic party. It is not only
the committee which has focused on the foreign money in the
Democratic party--the press and even the Justice Department
task force has overwhelmingly focused on the illegal foreign
money in the Democratic party. Attempts by defensive Democrats
to shift attention from this fact ignore the simple truth that
if you follow the foreign money trail, all roads lead
overwhelmingly to Democratic coffers.
What explains the vast disparity between the illegal money
received by Republicans and Democrats? Some of the blame most
certainly lies with the contribution vetting procedures--and
lack thereof--employed by the DNC from mid-1994 through the
1996 Presidential election. The failings of that system have
been well documented in other forums.\96\ Perhaps more
importantly, as evidenced by the DNC's own contribution review
and the congressional campaign finance investigations, the
overwhelming majority of all contributions determined illegal
or inappropriate by the DNC can be tied--to varying degrees--to
a handful of players who were welcomed by the DNC and the White
House into their inner circle of fund-raisers and contributors
including: Yah Lin ``Charlie'' Trie, Pauline Kanchanalak, Maria
Hsia, Johnny Chien Chuen Chung and, most notably, James Riady
and his protege, John Huang.
---------------------------------------------------------------------------
\96\ See, e.g., Investigation of Illegal or Improper Activities in
Connection with the 1996 Federal Election Campaign Before the Senate
Committee on Governmental Affairs, S. Rept. No. 167, 195th Cong., 2d
sess., vol. 1, 167-190 (1998).
---------------------------------------------------------------------------
As discussed in the following excerpt of DNC General
Counsel Joseph Sandler's deposition, John Huang was hired by
the DNC at the direct request of President Clinton in response
to James Riady's complaint that Huang was not being properly
utilized at the Department of Commerce:
Sandler. Mr. Huang told me that there was a meeting
in the fall of 1995 at the White House that was
attended by himself, Mr. James Riady, the President,
Bruce Lindsey, and C. Joseph Giroir; and that during
that meeting Mr. Riady made the point that Mr. Huang's
talents and abilities were not being well utilized in
his then current position at the Commerce Department
and he could be helpful in some other way. Mr. Huang
told me that someone suggested--and he wasn't sure if
it was himself or Riady or somebody else in the room--
that Mr. Huang's capacity to help the administration
and re-election effort could be best used if he was
given a position at the DNC. And then I was told--well,
there were various reports of this, but I was told at
some point--I don't remember exactly by who [sic]--that
the President spoke to Mr. Rosen and suggested that Mr.
Huang be hired by the DNC. . . . Mr. Ickes advised [the
DNC] through White House counsel that his recollection
was that . . . that Mr. Lindsey spoke to Mr. Ickes
following this meeting, and that Mr. Ickes then spoke
to Mr. Rosen and Mr. Fowler about the hiring of Mr.
Huang. The recollection of others differs on that
score. . . .
Sandler. . . . Mr. Fowler indicated to me . . . that
essentially Marvin Rosen and Richard Sullivan showed up
in his office with John Huang, and maybe having
previously mentioned it to him or talked to him, and
talked about the hiring of John Huang and the terms of
his employment position and so forth, and that the
Chairman [Fowler] agreed to hire him at that point. . .
.
Counsel. All right. Did Mr. Huang tell you what else
was discussed at that particular meeting?
Sandler. [Huang] indicated to me that the basic
purpose of the meeting was to visit, social in nature,
and that the main substantive point that he recalled
being discussed--he gave me the impression that the
point that Mr. Riady wanted to convey to the President
was what I've already testified to, that Mr. Huang's
abilities were being wasted at Commerce. In effect, he
said something to the effect that he was a pencil
pusher and that he should be utilized in some other
way.
Counsel. Mr. Riady told the President that?
Sandler. Yes.
Counsel. All right. Did Mr. Riady initiate the
meeting? Was the meeting held at the behest of Mr.
Riady?
Sandler. Yes.
Counsel. I presume--the meeting was held at the White
House; correct?
Sandler. Yes.
Counsel. Was the discussion of Mr. Huang moving from
the Department of Commerce to the DNC the primary
purpose of the meeting?
Sandler. Mr. Huang gave me the impression that, apart
from just a social chit-chat, visiting and so forth,
that that was the principal substantive discussion that
Mr. Riady wanted--had and wanted to have with the
President.\97\
---------------------------------------------------------------------------
\97\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, 105th Cong., 1st sess., Deposition of Joseph E.
Sandler, Esq., May 15, 1997, 16-17 and 21-23 (emphasis added).
Even his position and title were specifically created for him.
---------------------------------------------------------------------------
DNC General Counsel Sandler testified of his concern:
Sandler. There was a discussion. . . . John Huang had
requested business cards with the title, Vice Chair,
Finance, of the Democratic National Committee. Our
administrative person, . . . came to me, because this
was an unusual request, and said is this proper, is
this--you know, can we do this, and I raised a
question. . . . I had some concerns about whether it
was appropriate to give somebody a title for a position
that did not, in fact, exist, and I was concerned
because there are Vice Chairs of the Democratic
National Committee who are elected or who have official
positions under our Charter. . . . We also have a
National Finance Chair, and we also have Chairs of
various Donor Councils, and those are lay positions. I
was concerned about a staff person having this
position. . . . No staff person has such a title. . . .
Sandler. And I also discussed it with Richard
Sullivan.
Counsel. All right. And what was the substance of
those conversations?
Sandler. My recollection is that I raised concerns,
you know, these concerns with Mr. Watson and with Mr.
Sullivan; that Mr. Sullivan indicated that this was
important that Mr. Huang have this title for his work
in the Asian-Pacific-American community; and, you know,
it was my feeling that it wasn't so--my concerns were
not of a legal nature or otherwise so compelling as to
insist that the cards not be printed with that title in
view of Mr. Sullivan's belief that it was important
that Mr. Huang have the business cards.
Counsel. All right. So, having voiced your concern,
you ultimately acceded to the request of Mr. Sullivan--
--
Sandler. Yes.
Counsel. . . . that . . . Mr. Huang be given that
title, correct?
Sandler. Yes, or have business cards with that
title.\98\
---------------------------------------------------------------------------
\98\ Id. at 93-95.
John Huang began his employ at the DNC as Vice Chairman for
Finance, on December 4, 1995.\99\
---------------------------------------------------------------------------
\99\ DNC Personnel Change Authorization for John Huang, Dec. 4,
1995, D 0000005 (Exhibit 19). When allegations of illegal fund-raising
surfaced in Oct. 1996, regarding Huang, he fled Washington, DC. He
later sought and received reimbursement from the DNC for his travel
expenses during this period. In his DNC expense report covering Oct.
11, 1996, through Oct. 15, 1996, Huang described the purpose of his
travel as ``stayed away from D.C. return home for materials.'' See
generally DNC Expense Report of John Huang, Oct. 20, 1996, 0000053
(Exhibit 20); E Ticket Receipt and Itinerary, 0000054 (Exhibit 21).
---------------------------------------------------------------------------
John Huang raised $3,422,850 during the 1996 election
cycle.\100\ Prior to the launching of the DNC's contribution
review in late November 1996, the DNC returned $1,298,800 in
contributions raised by Huang\101\ and on February 28, 1997,
announced the return of an additional $324,550 raised by
Huang.\102\
---------------------------------------------------------------------------
\100\ Exhibit 1 DNC Summary of In-Depth Contribution Review, at 5.
\101\ Id.
\102\ Id.; see generally DNC Note from DNC Chairman Donald Fowler
to John Huang, July 4, 1996, DNC 0662886 (praising him for his fund-
raising work and encouraging him to do more) (Exhibit 22).
---------------------------------------------------------------------------
Huang's fund-raising prowess was beyond question as early
as 1993, 2 years before Huang began his employ at the DNC.
Then-Lippo executive Huang attended the September 27, 1993, DNC
reception/fund-raiser in Los Angeles and received high praise
from Vice President Gore for his fund-raising:
And to my friend John Huang and his wife Jane, thank
you for being a long time friend and ally. We go back a
long time. . . . We are long time friends, and John has
been a very faithful and meaningful, productive
supporter of the efforts being made by our party, and I
want to publicly thank you.\103\
---------------------------------------------------------------------------
\103\ WHCA Audiotape of Karatz Residence/DNC Reception, Sept. 27,
1993.
President Clinton similarly praised Huang for his
organization of the February 19, 1996, DNC fund-raiser held at
---------------------------------------------------------------------------
the Hay Adams Hotel in Washington, DC:
I am virtually overwhelmed by this event tonight. I
should have learned by now, I have known John Huang a
very long time. At least to be as young as we are, we
have known each other a long time. And when he told me
this event was going to unfold as it has tonight, I
wasn't quite sure I believed him, but he has never told
me anything that didn't come to pass, and all of you
have made it possible, and I want you to know I am very
grateful to you.\104\
---------------------------------------------------------------------------
\104\ WHCA Videotape of Hay Adams Event, Feb. 19, 1996. It is
unclear when the President had the conversation with John Huang
referenced in the excerpt, but from the context of the President's
statement it appears that Huang estimated the dollar amount to be
raised at the Feb. 19, 1996, event. Huang was involved in the following
Asian American fund-raisers: Feb. 19, 1996, President of the United
States (``POTUS''), Washington, DC.; Apr. 29, 1996, Vice President of
the United States (``VPOTUS''), Los Angeles, CA; May 13, 1996, POTUS,
Washington, DC.; July 22, 1996, POTUS, Los Angeles; July 30, 1996,
POTUS, Washington, DC.; Sept. 18, 1996, VPOTUS, San Francisco, CA;
August 1996, POTUS, Washington, DC. See DNC Memorandum from Richard
Sullivan to Chairman Fowler, Oct. 21, 1996 DNC 1227104 (Exhibit 23).
Of the approximately $706,000 raised at this event, the DNC
has already returned or disgorged at least $190,000, 27 percent
of the total raised.\105\ This report enumerates an additional
$152,500 raised in conjunction with the Hay Adams event that
should be returned or disgorged by the DNC, bringing the total
to at least 49 percent of the total raised.
---------------------------------------------------------------------------
\105\ Exhibit 7 DNC List of Contributions Returned or Disgorged
Produced to the Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
The willingness--perhaps eagerness--of the DNC and the
President to employ and entrust John Huang as a key fund-raiser
is of particular import. The behind the scenes machinations of
Huang are not completely known at this point. However, one
thing is clear: of all the individuals implicated in the fund-
raising scandal, John Huang's name surfaces more than any
other. (The fact that the DOJ does not appear to have actively
pursued Huang is equally troubling and is not altogether an
unrelated issue.) \106\ In fact, the check tracking forms
completed by Huang for each contribution raised by him provided
Committee investigators with a blueprint for the campaign
finance investigation.\107\ In sum, the Republican party has
not suffered equally in the campaign finance scandal because it
did not employ an equivalent of John Huang--the individual
around which the current campaign finance scandal
revolves\108\--with direct ties to the President's close friend
James Riady and the President himself.
---------------------------------------------------------------------------
\106\ See generally Roberto Suro, ``Prosecutors' Approach to Huang
Signals Shift in Campaign Probe,'' the Washington Post, Oct. 2, 1998,
at A17.
\107\ See, e.g., DNC Check Tracking Form for the July 19, 1996,
Contribution of Dae Hee Hong, 001034 (Exhibit 24); DNC Check Tracking
Form for the Aug. 1, 1994, Contributions of Kenneth R. Wynn, DNC
1276339 and DNC 1276340 (Exhibit 25).
\108\ See generally Roberto Suro, ``Prosecutors' Approach to Huang
Signals Shift in Campaign Probe,'' the Washington Post, Oct. 2, 1998,
at A17 (``Following the 1996 election, however, the DNC returned $1.6
million raised by Huang because it came from foreign nationals, who are
ineligible to make campaign contributions, or because the origin of the
money was cloudy. Since then, Huang has been at the center of
allegations ranging from the relatively minor claim that the DNC failed
to adequately screen donations to the still-unsubstantiated charges
that the government of China attempted to influence the 1996 election
by directing money to the Clinton campaign.'').
---------------------------------------------------------------------------
Most of the individuals and entities referenced in the
following discussion have previously been the subject of the
DNC's contribution review or the campaign finance
investigations of the DOJ. In some instances, the information
referenced was obtained by Committee subpoena and was, of
course, unavailable to the DNC--and other political
committees--for its benefit during the contribution review.
Committee interviews and depositions have also been referenced.
This information is intended to assist political committees in
their review of contributions. Some of the information provided
was produced to the Committee by the DNC itself. Finally, much
of the information is accessible from publicly available
databases similar to the ones employed by the DNC during its
contribution review.
Since many of the key fund-raisers involved have refused to
cooperate with the investigation, the committee has in large
part focused on following the money. While this is a more labor
intensive effort than having a cooperative witness who might
explain the various funding schemes and conduit efforts, the
committee has uncovered hundreds of thousands of dollars in
political contributions which should be returned because of the
illegal or questionable sources of such funds. Much of this
money should have been returned months--even years ago. The
Committee's investigation continues and has come a long way
since the early days of the campaign finance scandal when the
DNC and Democratic Members of Congress cynically deflected the
legitimate inquiries regarding illegal foreign money as ``Asian
bashing'' and said there were no illegalities involved.
The contributions addressed below are divided into two
separate categories: illegal and suspect. In the following
context, illegal contributions are those that the Committee has
sufficient evidence to conclude--100 percent certainty is not
the operative standard of the DOJ, the Committee or the DNC--
were made in violation of the Act. Illegal contributions should
be disgorged to the U.S. Treasury pursuant to FEC regulations
and DNC practice.\109\ Suspect contributions are those that
fall under one of two categories derived from DNC policy: (1)
contributions for which the Committee has been unable to obtain
sufficient information to verify its legality or
appropriateness as defined by the DNC and/or (2) contributions
which may be inappropriate--as defined by the DNC--for the
recipient to retain. Suspect contributions should be returned
to the contributor or disgorged to the U.S. Treasury pursuant
to Federal regulations and DNC practice.\110\ The Committee
welcomes any information--consistent with or contradictory to
information gathered to date--that may assist it in determining
the legality or appropriateness of a contribution.
---------------------------------------------------------------------------
\109\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
\110\ Id.
---------------------------------------------------------------------------
Lippo Group Related Contributions During the 1992 Election Cycle
A. Contributions by James Riady, John Huang and Their Spouses During
the 1992 Election Cycle
James Riady $325,000 and Aileen Riady $125,000 (Suspect)
On August 12, 1992, the Lippo Group through Hip Hing
Holdings, Ltd. (``Hip Hing Holdings''), a Lippo
Subsidiary,\111\ contributed $50,000 to the DNC.\112\ Five days
later, on August 17, 1992, John Huang and Agus Setiawan, then-
Lippo/Hip Hing Holdings employees, co-authored a memo to fellow
Lippo employee Mrs. Ong Bwee Eng requesting that she ``[p]lease
kindly wire'' a reimbursement from Lippo Group Indonesia in the
amount of $50,000 specifically for the DNC contribution.\113\
(The DNC returned this $50,000 contribution in 1997 after it
was detailed in a Senate hearing.).\114\
---------------------------------------------------------------------------
\111\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, 105th Cong., 1st sess., part II, S. Hrg. 105-300,
3 (1998) (Testimony of Juliana Utomo, July 15, 1997).
\112\ LippoBank Check No. 2397 from Hip Hing Holdings to the DNC
Victory Fund Non-Federal Account in the Amount of $50,000, Aug. 12,
1992, HHH 1263 (Exhibit 26).
\113\ Memorandum from John Huang and Agus Setiawan to Mrs. Ong Bwee
Eng, Aug. 17, 1992, HHH 0238 (Exhibit 27).
\114\ James Rowley, ``The Senate Investigation of Campaign Fund-
raising Abuses,'' Associated Press, July 15, 1997; Lynn Sweet,
``Democrats to Return $50,000 Foreign Contribution,'' Chicago Sun-
Times, July 16, 1997, at 31.
---------------------------------------------------------------------------
On August 13, 1992, Lippo Group Deputy Chairman James Riady
\115\ and his wife Aileen contributed a total of $30,000 to the
DNC \116\ and $10,000 to the California Democratic party.\117\
The following day, then-Governor Bill Clinton--on his way to a
fund-raiser--took a 5 minute car ride with James Riady as
discussed in an August 14, 1992, memorandum from then-campaign
aide Melinda Yee to then-Governor Bill Clinton which states:
---------------------------------------------------------------------------
\115\ Memorandum from Melinda Yee to Governor Bill Clinton, Aug.
14, 1992 (Exhibit 28).
\116\ LippoBank Checks from James T. and Aileen Riady to the DNC,
Aug. 13, 1992, HHH 1360 (Exhibit 29); see also http://wyl.ewg.org,
Environmental Working Group Website, Compiled from Federal Election
Commission [FEC] Data, Last Updated Sept. 10, 1998.
\117\ Exhibit 29 LippoBank Checks from James T. and Aileen Riady to
the California Democratic party, Aug. 13, 1992, HHH 1360; http://
wyl.ewg.org, Environmental Working Group Website, Compiled from Federal
Election Commission [FEC] Data, Last Updated Sept. 10, 1998
(attributing James T. Riady's $5,000 contribution to the California
Democratic party to Aileen Riady).
James Riady is the Deputy Chairman of Lippogroup [sic]
and a long-time acquaintance of yours. The group is in
financial services in the U.S. and throughout Asia. Mr.
Riady lived in Arkansas from 1985-1987 when he was
---------------------------------------------------------------------------
president of Worthen Bank in Little Rock.
He has flown all they [sic] way from Indonesia, where
he is now based, to attend the fundraiser. He will be
giving $100,000 to this event and has the potential to
give much more. He will talk to you about banking
issues and international business. This is primarily a
courtesy call.\118\
\118\ Exhibit 28 Memorandum from Melinda Yee to Governor Bill
Clinton, Aug. 14, 1992, CG92B 00543 (emphasis added); see also Schedule
of Governor Bill Clinton, Aug. 14, 1992, CG92B 01461 (Exhibit 30).
Over the following weeks leading up to the November election,
James and Aileen Riady contributed an additional $410,000 to
state Democratic parties\119\ bringing the total to $450,000 as
detailed below:
---------------------------------------------------------------------------
\119\ LippoBank Checks from James and Aileen Riady to Various State
Democratic Parties, Sept. 30, 1992, through Oct. 15, 1992, HHH 1363
(Exhibit 31); see also http://wyl.ewg.org, Environmental Working Group
Website, Compiled from FEC Data, Last Updated Sept. 10, 1998.
----------------------------------------------------------------------------------------------------------------
Check FEC
Name Date\120\ Date\121\ Recipient Amount
----------------------------------------------------------------------------------------------------------------
James T. Riady............................... 08/13/92 09/04/92 California Democratic Party.... $5,000
James T. Riady............................... 08/13/92 08/17/92 DNC............................ 15,000
James T. Riady............................... 09/30/92 .......... Michigan Democratic Party...... 75,000
James T. Riady............................... 10/05/92 .......... Ohio Democratic Party.......... 75,000
James T. Riady............................... 10/08/92 .......... Arkansas Democratic Party...... 5,000
James T. Riady............................... 10/08/92 10/27/92 Arkansas Democratic Party...... 75,000
James T. Riady............................... 10/12/92 .......... Louisiana Democratic Party..... 75,000
Aileen Riady................................. 08/13/92 09/04/92 California Democratic Party.... 5,000
Aileen Riady................................. 08/13/92 08/17/92 DNC............................ 15,000
Aileen Riady................................. 10/08/92 10/27/92 Arkansas Democratic Party...... 5,000
Aileen Riady................................. 10/12/92 .......... Georgia Democratic Party....... 50,000
Aileen Riady................................. 10/15/92 10/29/92 North Carolina Democratic Party 50,000
----------------------------------------------------------------------------------------------------------------
\120\ Throughout this document, the ``Check Date'' is taken directly from the contribution check.
\121\ The ``FEC Date'' is taken from FEC data as provided at http://wyl.ewg.org, Environmental Working Group
Website, Compiled from FEC Data, Last Updated Sept. 10, 1998. See also www.tray.com. Experience demonstrates
that the date on the contribution check usually leads the FEC date by anywhere from one day to a month.
After the election, the Riadys contributed $286,000 to the
Presidential Inaugural Committee,\122\ $86,000 of which was
given through John Huang,\123\ then-Lippo executive and co-
director of Hip Hing Holdings, Ltd.\124\ The Riadys and the
Lippo Group contributed a total of $786,000 to Democratic
causes during the closing months of 1992.\125\
---------------------------------------------------------------------------
\122\ LippoBank Checks from James T. and Aileen Riady to the
Presidential Inaugural Committee, Nov. 20, 1992, HHH 1361 (Exhibit 32);
LippoBank Checks from John and Jane Huang to the Presidential Inaugural
Committee, Jan. 5, 1993, 001298, 001300, 001302, and 001304 (John Huang
accidentally dated check no. 1117 Jan. 5, 1992, instead of Jan. 3,
1992.) (Exhibit 33); LippoBank Check from Bank of Trade to John Huang
in the Amount of $86,000, Jan. 12, 1993, and LippoBank Deposit Ticket
of John Huang in the Amount of $86,000, Jan. 13, 1993, L 003318-L
003319 (Exhibit 34).
\123\ Exhibit 33 LippoBank Checks from John and Jane Huang to the
Presidential Inaugural Committee, Jan. 5, 1993, 001298, 001300, 001302,
and 001304 (John Huang accidentally dated check no. 1117 Jan. 5, 1992,
instead of Jan. 3, 1992.); Exhibit 34 LippoBank Check from Bank of
Trade to John Huang in the Amount of $86,000, Jan. 12, 1993, and
LippoBank Deposit Ticket of John Huang in the Amount of $86,000, Jan.
13, 1993, L 003318-L 003319. The Presidential Inaugural Committee is
not bound by the same contribution restrictions as political committees
such as the DNC and state Democratic parties.
\124\ Hip Hing Holdings Certificate of Incorporation, State of
California, HHH 0243 (Exhibit 35).
\125\ It should be noted that the ethnic-Chinese Riady family,
whose future is very closely tied to the Most Favored Nation [MFN]
trading privilege for China and the development of Asian markets, made
these contributions at a time when then-Presidential candidate Clinton
was linking the grant of MFN privilege for China to human rights.
Several months after Bill Clinton was settled in the White House,
Mochtar Riady sent him a confidential letter dated Mar. 9, 1993, in
which he implored the President to reverse his campaign stance on MFN.
The letter states in pertinent part:
You have continued to positively surprise . . . close
friends like me. I appreciate the many kind attention [sic]
and courtesies that you have extended to me, my family, and
my son, James. I also very much enjoyed and appreciated the
very private personal time you and Hillary gave to my
---------------------------------------------------------------------------
family during your busy schedule on Inauguration day.
Riady urged President Clinton to:
Normalize relations with Vietnam. As we speak, I have two
of my managers in Vietnam exploring business opportunities.
They have been rubbing shoulders with American businessmen,
who can now sign deals with Vietnam, but are still
prevented from implementing those contracts. . . . Continue
economic engagement with China. Washington has implemented
over the past decade a policy of promoting Chinese economic
reforms while, on a parallel track, pushed for political
reforms. If Most Favored Nation status is withdrawn from,
or other negative policies are adopted for China by the
U.S., it was argued, Chinese entrepreneurs in effect, those
pushing hardest for reforms would be hurt the most. I
subscribe to the logic behind this argument, and would urge
that these basic principles be maintained. We strongly
believe, as do many others, that the best way of achieving
political reform in China is through capitalist
interaction.
Letter from Dr. Mochtar Riady to President Bill Clinton, Mar. 9, 1993,
EOP 003036-EOP 003039 (Exhibit 36). Of course, President Clinton
softened his position soon after taking office in early 1993; President
Clinton approved MFN for China on May 27, 1993. In 1994 he completely
``de-linked'' China's MFN trading privilege from its human rights
record. While many would certainly argue that there are sound policy
reasons for the extension of MFN status for China, President Clinton is
one of the rare politicians to have so dramatically altered his
position on this controversial issue. See generally Choi Hak Kim,
``Mochtar Riady, a Man of Insight, Forbes (Chinese Language Edition),
October 1993; David Lauter, ``Clinton Blasts Bush's Foreign Policy
Record,'' Los Angeles Times, Aug. 14, 1992, at A1; Jim Mann, ``Clinton
Ties China's Trade in Future to Human Rights, Asia: He Extends Favored-
nation Status; Legislators Back Demand That Beijing Improve Policies by
Next Year,'' Los Angeles Times, May 29, 1993, at A1; ``Clinton Says
China's Favored Trade Status Will Be Renewed for 1 Year,'' Chicago
Tribune, May 28, 1993, at 4; John M. Broder and Jim Mann, ``Clinton
Reverses His Policy, Renews China Trade Status, Commerce: President
`De-Links' Most-Favored-Nation Privilege from Human Rights. He Admits
Failure of Earlier Course and Says Broader Strategic Interests Justify
Switch,'' Los Angeles Times, May 27, 1994.
DNC officials testified that the 1992 vetting system
involved an entire group of DNC staff of 6 to 10 people and DNC
General Counsel Joseph Sandler testified that ``for the 1992
election a procedure known as Major Donor Screening Committee''
was in place.\126\ However, the Committee has received no
evidence to indicate that certain large contributions were
vetted in 1992, notably those from the Riadys and their related
companies and employees. Because the Riadys' contributions were
made in 1992, they were not subject to the DNC's contribution
review.\127\ None of the Riady contributions have been returned
by the DNC or the state parties.\128\
---------------------------------------------------------------------------
\126\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 1,
169 (1998).
\127\ See Committee Deposition of Joseph E. Sandler, Esq., May 14,
1998, 27-28.
\128\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
---------------------------------------------------------------------------
During his years as a Lippo employee, John Huang determined
where the Riadys should direct their political contributions.
In a February 17, 1993, memorandum to then-Deputy Assistant to
the President and Deputy Director of Presidential Personnel
John Emerson, then-DNC Executive Committee member Maeley Tom
wrote:
John Huang, Executive Vice President of Lippo Bank
[sic], is the political power that advises the Riady
family on issues and where to make contributions. [The
Riadys] invested heavily in the Clinton campaign. John
is the Riady family's top priority for placement
because he is like one of their own.\129\
---------------------------------------------------------------------------
\129\ Letter from Maeley Tom to John Emerson, Feb. 17, 1993
(emphasis added) (Exhibit 37).
Huang was eventually placed at the Department of
Commerce.\130\
---------------------------------------------------------------------------
\130\ John Huang began his employ at the Department of Commerce on
July 18, 1994. See Memorandum from Charles F. Meissner to Ann Hughes,
et al., July 15, 1994 (Exhibit 38).
---------------------------------------------------------------------------
FEC data does not record any political contributions by the
Riadys in their personal capacities after 1992.\131\ However,
DNC documents suggest that the Riadys may have contributed--
indirectly perhaps through conduits--to the DNC as late as 1994
and 1996.\132\ A June 11, 1994, DNC memorandum from David
Mercer to then-DNC Finance Director Richard Sullivan and Fran
Wakem discusses an invitation for James Riady to the June 21,
1994, Business Leadership Forum (``BLF'')/White House event
(which Riady later attended).\133\ After listing James Riady as
a current member of the BLF--a DNC fund-raising organization
and ``the principal organization of the nation's top business
leaders supporting the Democratic Party'' \134\--and one of the
``Members to Confirm,'' the memorandum describes Riady and his
relationship with Huang: ``FOB; Former president, Wortham [sic]
Bank in Little Rock; Clinton/DNC donor thru [sic] John Huang;
Huang requested his invitation and that we send it to Huang's
address.'' \135\ Huang was not employed by the DNC at this
time; \136\ he was still at Lippo. Why was a foreign national
who was ineligible to legally contribute under Federal election
law listed as a DNC donor through John Huang?
---------------------------------------------------------------------------
\131\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998. The Wiriadianas'
illegal conduit contributions to the DNC during the 1996 election cycle
appear to be linked to the Riadys:
Bank records received by the Committee provide strong evidence that
Hasjim Ning, co-founder of Lippo and longtime friend of Mochtar and
James Riady, or James Riady directed $450,000 in foreign money to the
DNC and Democratic campaigns through Dr. Ning's daughter Soraya
Wiriadinata and her husband Arief Wiriadinata, a landscape architect in
northern Virginia. These payments followed correspondence between
President Clinton and Mr. Ning and preceded a visit by Arief
Wiriadinata with President Clinton at the White House on Dec. 15, 1995,
at which time he told that President that ``James Riady sent me.'' WHCA
videotape of White House Coffee, Dec. 15, 1995; White House WAVES
Record for Arief Wiriadinata (Exhibit 39). President Clinton responded,
``Yes. I'm glad to see you. Thank you for being here.'' Id.
In June 1995, Dr. Ning suffered a heart attack while visiting the
Washington, DC, area and as a result was hospitalized in northern
Virginia. Alan C. Miller, ``Controversy Swirls Over Donation to
Democrats,'' Los Angeles Times, Oct. 14, 1996, at A1. During Dr. Ning's
hospitalization, James Riady personally requested that President
Clinton send Ning a ``get well'' card. Ruth Marcus and Charles R.
Babcock, ``Visit Spurred Indonesians' Gift, Says DNC; Party Offers
Explanation for $425,000 Donation From Couple Who Never Gave Before,''
the Washington Post, Oct. 12, 1996, at A21. Mark Middleton hand
delivered the requested card dated June 19, 1995 to Dr. Ning which
stated: ``I was so sorry to learn of your health problems. You are in
my thoughts and prayers during this difficult time.'' Id.; Letter from
President Bill Clinton to Dr. Hasjim Ning, June 19, 1995, DNC 1227204
(Exhibit 40). After recuperating and returning to Indonesia, Dr. Ning
responded to President Clinton in a letter dated Sept. 5, 1995 which
stated in part: ``. . . I thank you for your prayers and concern. I
also thank you for sending Mr. Mark Middleton to visit me at that time.
. . . '' Letter from Dr. Hasjim Ning to President Bill Clinton, Sept.
5, 1995, DNC 1227205 (Exhibit 41). In a letter dated Nov. 8, 1995,
President Clinton again wrote Dr. Ning: ``You have been in my thoughts,
and Hillary joins me in sending best wishes for your continued
recovery.'' Letter from President Bill Clinton to Dr. Hasjim Ning, Nov.
8, 1995, DNC 1227206 (Exhibit 42). John Huang, who knew Dr. Ning from
their mutual association with Lippo, also visited him during his
hospitalization. Alan C. Miller, ``Controversy Swirls Over Donation to
Democrats,'' Los Angeles Times, Oct. 14, 1996, at A1; Richard T.
Cooper, ``How DNC Got Caught in a Donor Dilemma,'' Los Angeles Times,
Dec. 23, 1996, at A1. During his visit, Huang met Arief and Soraya
Wiriadinata. Huang recalls that the Wiriadinatas subsequently
``expressed an interest in supporting the Democratic party and the
President, and [he] suggested that they contribute to the DNC.'' Id.
The contributions from the Wiriadinatas began in the fall of 1995.
On Nov. 2, 1995, Arief and Soraya Wiriadinata opened separate
checking accounts at the First Union National Bank of Virginia (First
Union). First Union Account Statement of Arief Wiriadinata, Nov. 2,
1995 (Exhibit 43); First Union of Virginia Account Statement of Soraya
Wiriadinata, Nov. 2, 1995 (Exhibit 44). The next day, on Nov. 3, 1995,
Ms. Soraya Wiriadinata received a $250,000 wire transfer from Dr. Ning
in Djakarta, Indonesia. Exhibit 44 First Union of Virginia Account
Statement of Soraya Wiriadinata, Nov. 2, 1995. Similarly, Mr. Arief
Wiriadinata received a $250,000 wire transfer from Dr. Ning on Nov. 7,
1995. Exhibit 43 First Union of Virginia Account Statement of Arief
Wiriadinata, Nov. 2, 1995.
From Nov. 1995-July 1996, Mr. Wiriadinata and Ms. Wiriadinata each
contributed $1,000 to Jackson for Congress and $226,000 to the DNC from
their personal checking accounts at First Union. First Union Check from
Arief Wiriadinata to the DNC in the amount of $15,000, Nov. 8, 1995
(Exhibit 45); First Union Check No. 1001 from Arief Wiriadinata to
Jackson for Congress in the amount of $1,000, Nov. 20, 1995 (Exhibit
46); First Union Check No. 1005 from Arief Wiriadinata to the DNC in
the amount of $25,000, Dec. 11, 1995 (Exhibit 47); First Union Check
No. 1010 from Arief Wiriadinata to the DNC in the amount of $10,000,
Dec. 15, 1995 (Exhibit 48); First Union Check No. 1015 from Arief
Wiriadinata to the DNC in the amount of $25,000, Feb. 15, 1996 (Exhibit
49); First Union Check No. 1016 from Arief Wiriadinata to the DNC in
the amount of $25,000, May 22, 1996 (Exhibit 50); First Union Check No.
1020 from Arief Wiriadinata to the DNC in the amount of $25,000, May
12, 1996 (Exhibit 51); First Union Check No. 1023 from Arief
Wiriadinata to the DNC in the amount of $25,000, June 25, 1996 (Exhibit
52); First Union Check No. 1025 from Arief Wiriadinata to the DNC in
the amount of $25,000, June 6, 1996 (Exhibit 53); Exhibit 43 First
Union Account Statement of Arief Wiriadinata, Nov. 2, 1995; First Union
Account Statement of Arief Wiriadinata, Nov. 16, 1995 (Exhibit 54);
First Union Account Statement of Arief Wiriadinata, Dec. 15, 1995
(Exhibit 55); First Union Account Statement of Arief Wiriadinata, Jan.
18, 1996 (Exhibit 56); First Union Account Statement of Arief
Wiriadinata, Feb. 15, 1996 (Exhibit 57); First Union Account Statement
of Arief Wiriadinata, Mar. 16, 1996 (Exhibit 58); First Union Account
Statement of Arief Wiriadinata, May 16, 1996 (Exhibit 59); First Union
Account Statement of Arief Wiriadinata, June 15, 1996 (Exhibit 60);
First Union Account Statement of Arief Wiriadinata, July 18, 1996
(Exhibit 61); First Union Check from Soraya Wiriadinata to the DNC in
the amount of $15,000, Nov. 8, 1995 (Exhibit 62); First Union Check No.
1004 from Jackson for Congress in the amount of $1,000, Nov. 20, 1995
(Exhibit 63); First Union Check No. 1008 from Soraya Wiriadinata to the
DNC in the amount of $25,000, Dec. 11, 1995 (Exhibit 64); First Union
Check No. 1012 from Soraya Wiriadinata to the DNC in the amount of
$25,000, Dec. 13, 1995 (Exhibit 65); First Union Check No. 1015 from
Soraya Wiriadinata to the DNC in the amount of $10,000, Dec. 15, 1995
(Exhibit 66); First Union Check No. 1016 from Soraya Wiriadinata to the
DNC in the amount of $10,000, Dec. 18, 1995 (Exhibit 67); First Union
Check No. 1022 from Soraya Wiriadinata to the DNC in the amount of
$25,000, month and day illegible, 1996 (Exhibit 68); First Union Check
No. 1024 from Soraya Wiriadinata to the DNC in the amount of $25,000,
June 7, 1996 (Exhibit 69); First Union Check No. 1026 from Soraya
Wiriadinata to the DNC in the amount of $25,000, May 10, 1996 (Exhibit
70); First Union Check No. 1028 from Soraya Wiriadinata to the DNC in
the amount of $25,000, May 10, 1996 (Exhibit 71); DNC Check Tracking
Form for First Union Check No. 1029 from Soraya Wiriadinata to the DNC
in the amount of $25,000, June 27, 1996 (Exhibit 72); Exhibit 44 First
Union Account Statement of Soraya Wiriadinata, Nov. 2, 1995; First
Union Account Statement of Soraya Wiriadinata, Nov. 16, 1995 (Exhibit
73); First Union Account Statement of Soraya Wiriadinata, Dec. 15, 1995
(Exhibit 74); First Union Account Statement of Soraya Wiriadinata, Jan.
18, 1996 (Exhibit 75); First Union Account Statement of Soraya
Wiriadinata, Feb. 15, 1996 (Exhibit 76); First Union Account Statement
of Soraya Wiriadinata, Mar. 16, 1996 (Exhibit 77); First Union Account
Statement of Soraya Wiriadinata, Apr. 17, 1996 (Exhibit 78); First
Union Account Statement of Soraya Wiriadinata, May 16, 1996 (Exhibit
79); First Union Account Statement of Soraya Wiriadinata, June 15, 1996
(Exhibit 80); First Union Account Statement of Soraya Wiriadinata, July
18, 1996 (Exhibit 81); First Union Account Statement of Soraya
Wiriadinata, Aug. 16, 1996 (Exhibit 82); First Union Account Statement
of Soraya Wiriadinata, Sept. 17, 1996 (Exhibit 83); see also http://
wyl.ewg.org, Environmental Working Group Website, Compiled from FEC
Data, Last Updated Sept. 10, 1998. Copies of check nos. 1007 and 1013
to the DNC in the totaling $50,000 were unavailable to the committee.
Account statements have been provided in their stead. A copy of check
no. 1029 to the DNC in the amount of $25,000 was unavailable to the
Committee. An account statement has been provided in its stead. The
political contributions appear to be the primary reason for the
establishment of both Arief and Soraya Wiriadinatas' First Union
accounts. In sum, Dr. Ning wired a total of $500,000 to the
Wiriadinata's First Union accounts, $452,000 of which was directed to
Democratic causes within 7 months.
Dr. Ning died on Dec. 26, 1995. Arief and Soraya Wiriadinata are
currently residing in Indonesia.
\132\ With regard to the 1996 election cycle, the ultimate source
of the $200,000 in Bank Central Asia Travelers Checks discovered by the
Committee--at least $50,000 of which was funneled illegally into the
DNC--is yet undetermined, but they were disseminated at least in part
by former Lippo executive Antonio Pan and Yah Lin ``Charlie'' Trie, an
associate of John Huang, and were purchased by a yet undetermined
individual in Djakarta, Indonesia, the international headquarters of
the Lippo Group. See Discussion of J & M International, Manlin Foung,
and Joseph Landon, infra; see generally Letter from Christopher M.
Curran, Esq., Attorney for Bank Central Asia, to senior investigative
counsel, Tim Griffin, Esq., July 20, 1998 (Exhibit 84).
\133\ DNC Memorandum from David Mercer to Richard Sullivan and Fran
Wakem, June 11, 1994, DNC 1276431-DNC 1276433 (Exhibit 85). John Huang
began his employ at the Department of Commerce on July 18, 1994. See
Exhibit 38 Memorandum from Charles F. Meissner to Ann Hughes, et al.,
July 15, 1994; see also U.S. Secret Service Records for Entry into
White House Complex, EOP 055316-EOP 055318 (showing attendance of Riady
at June 21, 1994, White House event) (Exhibit 86).
\134\ DNC BLF Document, GROC 000644 (Exhibit 87). According to the
DNC, ``[m]embership in the [Business Leadership] Forum requires a
$10,000 annual contribution for individuals, or $15,000 for
corporations or PACs. Individuals memberships are non-transferable.''
Id.
\135\ Exhibit 85 DNC Memorandum from David Mercer to Richard
Sullivan and Fran Wakem, June 11, 1994, DNC 1276433 (emphasis added).
\136\ Exhibit DNC Personnel Change Authorization for John Huang,
Dec. 4, 1995, D 0000005.
---------------------------------------------------------------------------
On a June 17, 1994, DNC list of ``Positive Responses'' for
the Trustee Gala Reservations, James T. Riady is confirmed for
2 reservations including his guest Aileen Riady and is listed
as a member of the BLF.\137\
---------------------------------------------------------------------------
\137\ DNC List of Positive Responses for Trustee Gala Reservations,
June 17, 1994, DNC 1727213-DNC 1727217 (Exhibit 88). Of note is the
fact that of all the 55 individuals listed as ``Positive Responses'' on
this list, the only individuals for whom no address, phone number or
contact information is listed is James T. Riady. Id. at 4.
---------------------------------------------------------------------------
On June 10, 1996, the DNC held a fund-raiser/dinner at the
home of Edie and Lew Wasserman in Los Angeles.\138\ The DNC
``commit list'' prepared in conjunction with that event lists
the individuals who pledged to contribute and the amount
pledged.\139\ The commit list indicates that Aileen and James
Riady pledged to contribute $15,000 in conjunction with the
Wasserman dinner.\140\
---------------------------------------------------------------------------
\138\ See DNC Commit List for June 10, 1996, Dinner at the
Wasserman Residence, June 3, 1996, DNC 3088330-DNC 3088334, at 1-5
(Exhibit 89).
\139\ Id.
\140\ Id. at 4.
---------------------------------------------------------------------------
On September 16, 1996, DNC Chairman Donald L. Fowler wrote
James Riady a letter--addressed to the Lippo Village in
Tangerrang, Indonesia--which provides in pertinent part that:
Thank you very much for sending me the basket of fruit
and snacks. It was a wonderful surprise, and I greatly
enjoyed its contents.
Your friendship is tremendously important to me in this
crucial time. As you know, all of us are working
diligently to bring about a huge Democratic victory in
November, and your gift reminded me of the support of
good Democrats for these efforts.
Thanks again for the thoughtful gift and for all your
kindness to Cissy. I look forward to seeing you
soon.\141\
---------------------------------------------------------------------------
\141\ Letter from Donald L. Fowler to James Riady, Sept. 16, 1996,
DNC 1728039 (emphasis added) (Exhibit 90). The Committee's copy of the
letter is unsigned.
And on September 18, 1996, DNC Chairman Fowler wrote a thank
you letter to both Aileen and James Riady in the wake of a
dinner with the President.\142\ The letter provides in
pertinent part that:
---------------------------------------------------------------------------
\142\ Letter from Donald L. Fowler to James and Aileen Riady, Sept.
18, 1996, F 0040618 (emphasis added) (Exhibit 91). The Committee's copy
of the letter is signed.
It was a pleasure seeing you at the dinner with the
President recently. Your support enables us to continue
assisting the Administration in achieving its ambitious
agenda. On behalf of the DNC, I am sincerely grateful
---------------------------------------------------------------------------
for your work.
As you know, we are 7 weeks away from the 1996
Presidential Election. We at the DNC are working to
strengthen our cooperation with the State Parties,
businesses and local leaders. I am confident that with
the help of friends like you, we will be victorious in
'96 and will continue to move this country forward into
the 21st century.
My door is always open to you; please do not hesitate
to call on me if I can be of assistance. I look forward
to working closely with you in the months ahead.\143\
---------------------------------------------------------------------------
\143\ Id.
It deserves mention that letters--even form letters--
thanking individuals for their support are generally sent in
response to a political contribution. Additionally, though not
conclusive of possible post-1992 contributions to the DNC by
the Riadys, on March 6, 1996, DNC Chairman Fowler wrote what
appears to be a form fund-raising letter to James Riady asking
for his support.\144\
---------------------------------------------------------------------------
\144\ Letter from Donald L. Fowler to James Riady, Mar. 6, 1996,
DNC 1761242 (Exhibit 92).
---------------------------------------------------------------------------
Although there is no FEC record of Riady contributions
after 1992, these documents and the Riadys' attendance at
numerous fund-raising events \145\ raise logical questions
concerning whether and through whom the Riadys contributed to
the DNC during the 1994 and 1996 election cycles and who had
knowledge of any such schemes.
---------------------------------------------------------------------------
\145\ James Riady is believed to have attended the May 10, 1995,
DNC breakfast with Vice President Gore. See DNC Memorandum from Adam
Crain to David Mercer, Apr. 20, 1995, DNC 3169174 (Exhibit 93); see
also Letter from Mack McLarty to James T. Riady, Aug. 2, 1996, EOP
008591 (``I certainly enjoyed seeing you and John Huang at the Winston
Bryant reception with the President.'') (Exhibit 94).
---------------------------------------------------------------------------
Due to the fact that neither James nor Aileen Riady are
U.S. citizens,\146\ the legality of their 1992 contributions is
questionable. The Act provides in pertinent part that:
---------------------------------------------------------------------------
\146\ See generally Deposition of James T. Riady, Stephens Group,
Inc. v. United States, Case No. 91-1458T (U.S. Ct. Fed. Claims), Mar.
5, 1993, 2; John Solomon, ``Investigators Turn Up First Evidence of
Clinton Link to Foreign Money,'' Associated Press, June 9, 1998. The
Committee would like to cite to Immigration and Naturalization Service
[INS] records regarding the Riadys' permanent resident status. However,
despite requesting them as early as Feb. 5, 1997, Aug. 13, 1997, and
Sept. 26, 1997, and as recently as Oct. 1, 1998, the INS through the
DOJ has yet to produce the Riadys' immigration records to the
Committee. See Letter from Chairman Dan Burton to the Honorable Doris
Meissner, Feb. 5, 1997 (Exhibit 95); Letter from Chairman Dan Burton to
Johnny Stokes, Aug. 13, 1997 (Exhibit 96); Letter from Chairman Dan
Burton to the Honorable Doris Meissner, Sept. 26, 1997 (Exhibit 97).
It shall be unlawful for a foreign national directly or
through any other person to make any contribution of
money . . ., in connection with an election to any
political office or in connection with an election to
any political office . . .; or for any person to
solicit, accept, or receive any such contribution from
a foreign national.\147\
---------------------------------------------------------------------------
\147\ 2 U.S.C. Sec. 441e(a) (emphasis added).
In other words, foreign nationals are prohibited from
making political contributions. Unlike most of the other
provisions of the Act, this prohibition found in 2 U.S.C.
Sec. 441e(a), ``applies to any election for any political
office, including state and local offices.'' \148\
---------------------------------------------------------------------------
\148\ FEC Advisory Opinion No. 1992-16 (emphasis added); see also
Id.
---------------------------------------------------------------------------
Although some might argue that 2 U.S.C. Sec. 441e is
inapplicable to ``soft money'' \149\ and thus, in large part,
may be inapplicable to the Riadys' contributions, the DNC
refuses to accept any contributions from foreign nationals as a
matter of policy as explained by DNC General Counsel Sandler:
---------------------------------------------------------------------------
\149\ ``Campaign Finance Reform: A Sourcebook,'' Brookings
Institution, 1997.
Counsel. -What makes all contributions from foreign
nationals to the DNC illegal?
Sandler. -Foreign nationals as defined in section
441e of the Federal Election Campaign Act are illegal.
In our view, it is illegal--that section applies to
contributions to all of the DNC's accounts; probably as
a matter of law does not apply to contributions to the
building fund but as a policy matter that's what we
instructed our finance staff, all DNC staff, for that
matter.
Counsel. -And by ``all contributions,'' did you mean
contributions to both the DNC Federal and non-Federal
accounts?
Sandler. -Correct.
Counsel. -Is that still the policy of the DNC today?
Sandler. -Yes.\150\
---------------------------------------------------------------------------
\150\ Committee Deposition of Joseph E. Sandler, Esq., May 14,
1998, 25.
The Committee is unaware of any attempts by State parties
to argue the legality of accepting a contribution--regardless
of its technical classification as soft or hard--from foreign
nationals as defined in the Act.
The definition of the term ``foreign national'' is divided
into two separate and distinct parts as excerpted below in
pertinent part:
(b) As used in this section, the term ``foreign national''
means--
(1) a foreign principal, as such term is defined by
section 611(b) of Title 22, except that the term
``foreign national'' shall not include any individual
who is a citizen of the United States; or
(2) an individual who is not a citizen of the United
States and who is not lawfully admitted for permanent
residence . . .\151\
---------------------------------------------------------------------------
\151\ 2 U.S.C. Sec. 441e(b) (1) and (2).
An individual or entity meeting either definition
constitutes a ``foreign national'' for purposes of 2 U.S.C.
Sec. 441e(a).\152\ The term ``foreign national'' does not
include a U.S. citizen under any circumstances.\153\
---------------------------------------------------------------------------
\152\ 2 U.S.C. Sec. 441e(b) employs the disjunctive ``or'' between
subsections (1) and (2).
\153\ 2 U.S.C. Sec. 441e(b) (1) and (2).
---------------------------------------------------------------------------
Addressing subsection (b)(2) first, an individual who is
neither a U.S. citizen nor a permanent resident is a ``foreign
national'' and is unable to contribute.\154\ The Riadys were
permanent residents at the time of their contributions.\155\
So, applying this definition of a ``foreign national'' without
further analysis, the Riadys were not prohibited from making
political contributions during the 1992 election cycle. The
White House and the DNC evidently agree: White House spokesman
James Kennedy indicated that ``[i]n 1992, [James Riady] was a
lawful permanent resident and eligible to contribute to any
political party. Thus there was no basis for anyone to believe
that Mr. Riady's contributions to the DNC might be illegal.''
\156\ DNC spokesman Rick Hess said even ``the most careful
vetting procedures'' would not have raised questions about Mr.
Riady's contributions.\157\
---------------------------------------------------------------------------
\154\ 2 U.S.C. Sec. 441e(a) and (b)(2).
\155\ John Solomon, ``Investigators Turn Up First Evidence of
Clinton Link to Foreign Money,'' Associated Press, June 9, 1998. The
Committee would like to cite to INS records regarding the Riadys'
permanent resident status. However, despite requesting them as early as
Feb. 5, 1997, Aug. 13, 1997, and Sept. 26, 1997, and as recently as
Oct. 1, 1998, the INS through the DOJ has yet to produce the Riadys'
immigration records to the Committee. Exhibit 95 Letter from Chairman
Dan Burton to the Honorable Doris Meissner, Feb. 5, 1997; Exhibit 96
Letter from Chairman Dan Burton to Johnny Stokes, Aug. 13, 1997;
Exhibit 97 Letter from Chairman Dan Burton to the Honorable Doris
Meissner, Sept. 26, 1997.
\156\ Id.
\157\ Id.
---------------------------------------------------------------------------
However, the definition of a ``foreign national'' includes
more than individuals who are neither U.S. citizens nor
permanent residents.\158\ Under subsection (b)(1) the term
``foreign national'' also includes a somewhat broader
definition which includes permanent residents under certain
circumstances.\159\ The term ``foreign national'' must be read
in conjunction with the term ``foreign principal'' as defined
by 22 U.S.C. Sec. 611(b).\160\ A ``foreign principal'' includes
``a person outside of the United States, unless it is
established that such person is an individual and a citizen of
and domiciled within the United States . . .'' \161\ So, a
permanent resident who is ``outside of the United States'' is a
foreign national under the Act and is prohibited from making
political contributions.\162\
---------------------------------------------------------------------------
\158\ 2 U.S.C. Sec. 441e(b)(1).
\159\ Id.; 22 U.S.C. Sec. 611(b).
\160\ 2 U.S.C. Sec. 441e(b)(1).
\161\ 22 U.S.C. Sec. 611(b) (emphasis added).
\162\ 2 U.S.C. Sec. 441e(a) and (b)(1); 22 U.S.C. ( 611(b).
---------------------------------------------------------------------------
Both Federal jurisprudence and the statutory context
suggest that an individual residing and domiciled in a foreign
country is ``a person outside of the United States,'' a
temporary visit to the United States notwithstanding.\163\ It
would be nothing short of a ludicrous and disturbing result if
a permanent resident ``outside of the United States'' were able
to circumvent the statutory prohibition against political
contributions by flying to the United States and stepping off
the plane. Trevor Potter, a former Commissioner of the FEC,
agrees. According to Potter, the issue of green-card holders
who donate while outside the United States is untested, but ``a
careful reading of the law suggests a green-card holder must be
residing in the country to donate.'' \164\ The privilege of
contributing to political campaigns and thereby influencing
elections is not granted to permanent residents who are
residing ``outside of the United States.'' \165\
---------------------------------------------------------------------------
\163\ See generally Levy v. I.R.S. Commissioner, Sec. 76 T.C. 228
(1981) (rejecting literal interpretation of ``a person outside of the
United States'' in tax law context); 22 U.S.C. Sec. 611(b) (requiring
U.S. citizenship as well as a U.S. domiciliary to be excluded from
definition of ``foreign principle;'' citizenship and physical presence
not sufficient).
\164\ John Solomon, ``Investigators Turn Up First Evidence of
Clinton Link to Foreign Money,'' Associated Press, June 9, 1998
(emphasis added).
\165\ See generally 2 U.S.C. Sec. 441e(a) and (b)(1); 22 U.S.C.
Sec. 611(b).
---------------------------------------------------------------------------
In this case, applying the statutory definition of a
``foreign national,'' the operative question is: were James and
Aileen Riady ``outside of the United States?'' \166\ Despite
the Riadys' alleged permanent resident status at the time of
their contributions, the aforementioned August 14, 1992,
memorandum from then-campaign aide Melinda Yee to then-Governor
Bill Clinton indicates that they were residing in Indonesia:
``Mr. Riady lived in Arkansas from 1985-1987 when he was
president of Worthen Bank in Little Rock. . . . He has flown
all they [sic] way from Indonesia, where he is now based, to
attend the fund-raiser.'' \167\ Deposition testimony from
former Lippo executive Charles DeQueljoe is consistent with the
August 14 memo as indicated by the following excerpt:
---------------------------------------------------------------------------
\166\ See generally Id.
\167\ Exhibit 28 Memorandum from Melinda Yee to Governor Bill
Clinton, Aug. 14, 1992 (emphasis added).
Counsel. -When did James Riady live in California, if
you know?
DeQueljoe. -I'd be guessing if I told you. I don't
really know.
Counsel. -Do you know when Mr. Riady moved back to
Jakarta?
DeQueljoe. -Well, I was in Jakarta starting in April
of 1991; and my impression was that James, although he
traveled a lot, that his base was Jakarta.\168\
---------------------------------------------------------------------------
\168\ Committee Deposition of Charles DeQueljoe, June 9, 1998, 43-
44.
The Riadys were ``based'' in Indonesia at the time of their
contributions; \169\ a temporal physical presence to attend a
fund-raiser or two does not change that. Additionally, in a
proceeding held on March 5, 1993, unrelated to campaign
finance, James Riady testified under oath as follows:
---------------------------------------------------------------------------
\169\ Exhibit 28 Memorandum from Melinda Yee to Governor Bill
Clinton, Aug. 14, 1992; Committee Deposition of Charles DeQueljoe, June
9, 1998, 43-44.
Counsel. What is your citizenship, Mr. Riady?
Riady. Indonesian.
Counsel. Do you live in Indonesia?
Riady. Yes.
Counsel. What is your address?
Riady. Jalan Madiun 15, Jakarta.\170\
---------------------------------------------------------------------------
\170\ Deposition of James T. Riady, Stephens Group, Inc. v. United
States, Case No. 91-1458T (U.S. Ct. Fed. Claims), Mar. 5, 1993, 2.
The Senate campaign finance investigation concluded that the
Riadys permanently returned to Indonesia in 1991.\171\ The
evidence leads to the almost inescapable conclusion that the
Riadys, although permanent residents, were ``outside of the
United States'' in 1992 and 1993 and thus, as foreign
nationals, were prohibited from making political contributions
during this period.
---------------------------------------------------------------------------
\171\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 1,
1120 and 1125 (1998).
---------------------------------------------------------------------------
Despite repeated demands, the Riadys have refused to
cooperate with Committee investigators. The Committee is
continuing its review of the Riadys' contributions. In any
event, the Riadys' contributions are highly suspect and
probably illegal and, therefore, should be disgorged to the
U.S. Treasury.\172\ Moreover, James Riady is believed to be the
subject of an ``active pending criminal investigation into
alleged misconduct involving . . . campaign finance
violations.'' \173\ Therefore, in the alternative, the Riady's
contributions should be returned based on the DNC's standard of
appropriateness.
---------------------------------------------------------------------------
\172\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
\173\ See generally Exhibit 9 Policies and Procedures of the DNC
Regarding Compliance with Campaign Finance Laws, at 18-19. Given the
DOJ investigation of John Huang's fund-raising activities, it is
reasonable to assume that the Riadys' contributions are included in
that investigation.
---------------------------------------------------------------------------
John Huang $13,800 and Jane Huang $22,000 (Suspect)
During the 1992 election cycle, John and his wife, Jane
Huang, contributed a total of $35,800 to the DNC, the DSCC and
the California Democratic party as detailed below: \174\
---------------------------------------------------------------------------
\174\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998; see also LippoBank
Account Statement of John and Jane Huang, Aug. 31, 1992, L 004886
(Exhibit 98); LippoBank Check No. 1036 from John and Jane Huang to the
DNC Victory Fund in the amount of $5,000, Aug. 12, 1992, L 004909
(Exhibit 99); LippoBank Account Statement of John and Jane Huang, Sept.
30, 1992, L 004915 (Exhibit 100); LippoBank Check No. 1034 from John
and Jane Huang to the California Democratic party in the amount of
$5,000, Aug. 10, 1992, and LippoBank Check No. 1050 from John and Jane
Huang to the California Democratic party in the amount of $1,500, Aug.
31, 1992, L 004919 (Exhibit 101); LippoBank Check No. 1052 from John
and Jane Huang to the DNC Victory Fund in the amount of $5,000, Sept.
15, 1992, L 004939 (Exhibit 102); LippoBank Check No. 1053 from John
and Jane Huang to the California Democratic party in the amount of
$1,000, Sept., day illegible, 1992, L 004941 (Exhibit 103); LippoBank
Account Statement of John and Jane Huang, Sept. 30, 1992, L 010715
(Exhibit 104); LippoBank Check No. 324 from John and Jane Huang to the
Democratic Victory Fund in the amount of $1,000, Sept. 1, 1992, L
010723 (Exhibit 105); LippoBank Check No. 325 from John and Jane Huang
to the DSCC in the amount of $1500, Sept. 8, 1992, L 010724 (Exhibit
106); LippoBank Check No. 326 from John and Jane Huang to the DNC
Victory Fund in the amount of $5,000, Sept. 15, 1992, L 010725 (Exhibit
107); LippoBank Check No. 327 from John and Jane Huang to the
California Democratic party in the amount of $1,000, L 010726 (Exhibit
108); LippoBank Account Statement of John and Jane Huang, Oct. 30,
1992, L 004945 (Exhibit 109); LippoBank Check No. 1081 from John and
Jane Huang to the DNC in the amount of $2,500, Oct. 27, 1992, L 004969
(Exhibit 110); LippoBank Account Statement of John and Jane Huang, Nov.
30, 1992, L 004971 (Exhibit 111); LippoBank Check No. 1087 from John
and Jane Huang to the DSCC in the amount of $1,000, Oct. 31, 1992, L
004987 (Exhibit 112); On Nov. 2, 1992, Aileen Riady issued a check to
John Huang in the amount of $5,000 which Huang deposited on Nov. 4,
1992. LippoBank Check from Aileen Riady to John Huang in the amount of
$5,000, Nov. 2, 1992, and LippoBank Deposit Ticket of John Huang in the
amount of $5,000, Nov. 4, 1992, L 004975 (Exhibit 113); Exhibit 111
LippoBank Account Statement of John and Jane Huang, Nov. 30, 1992, L
004971.
----------------------------------------------------------------------------------------------------------------
Name Check Date FEC Date Recipient Amount
----------------------------------------------------------------------------------------------------------------
John Huang................................... .......... 02/04/92 California Democratic Party.... $500
John Huang................................... .......... 06/01/92 DNC............................ 800
John Huang................................... .......... 07/28/92 DNC............................ 5,000
John Huang................................... 08/31/92 09/04/92 California Democratic Party.... 1,500
John Huang................................... 09/08/92 09/23/92 DSCC........................... 1,500
John Huang................................... 09/16/92 09/28/92 California Democratic Party.... 1,000
John Huang................................... .......... 10/27/92 Democratic National Committee.. 2,500
John Huang................................... 10/31/92 11/10/92 DSCC........................... 1,000
Jane Huang................................... 08/12/92 08/19/92 DNC............................ 5,000
Jane Huang................................... 08/10/92 09/04/92 California Democratic Party.... 5,000
Jane Huang................................... 09/01/92 09/09/92 DNC............................ 1,000
Jane Huang................................... 09/15/92 09/22/92 DNC............................ 5,000
Jane Huang................................... 09/15/92 09/22/92 DNC............................ 5,000
Jane Huang................................... 09/16/92 09/28/92 California Democratic Party.... 1,000
----------------------------------------------------------------------------------------------------------------
In addition to the contributions listed above, during the
period 1992-1996, John and Jane Huang contributed a total of
$76,872 to the DNC,\175\ $21,500 to the DSCC,\176\ $8,000 to
the DCCC,\177\ $12,500 to the California Democratic party \178\
and in excess of $50,000 to congressional and senatorial
candidates.\179\
---------------------------------------------------------------------------
\175\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998. John Huang: June
25, 1993, $10,000 to the DNC; Dec. 14, 1993, $10,000 to the DNC; Mar.
16, 1994, $10,000 to the DNC. Jane Huang: Dec. 14, 1993, $15,000 to the
DNC; Mar. 16, 1994, $10,000 to the DNC; Apr. 29, 1994, $5,000 to the
DNC; Aug. 11, 1994, $5,000 to the DNC; Dec. 22, 1994, $5,000 to the
DNC.
\176\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998. John Huang: May 7,
1993, $2,500 to the DSCC; June 15, 1993, $1,000 to the DSCC; Oct. 21,
1993, $6,750 to the DSCC. Jane Huang: May 7, 1993, $2,500 to the DSCC;
June 15, 1993, $1,000 to the DSCC; Oct. 21, 1993, $6,750 to the DSCC;
Nov. 14, 1995, $1,000 to the DSCC.
\177\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998. Jane Huang: May
16, 1994, $3,000 to the Democratic Congressional Dinner Committee; Nov.
17, 1995, $5,000 to the DCCC.
\178\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998. John Huang: Feb.
4, 1992, $500 to the California Democratic party. Jane Huang: Apr. 17,
1994, $2,000 to the California Democratic party; Apr. 26, 1994, $10,000
to the California Democratic party; LippoBank Check No. 1426 from John
and Jane Huang to the California Democratic party-Victory 94 in the
amount of $10,000, L 003843 (Exhibit 114).
\179\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
---------------------------------------------------------------------------
Representatives Richard Gephardt,\180\ Howard Berman,
Joseph Kennedy, Nancy Pelosi, and Senators Carol Moseley-Braun,
Alfonse D'Amato, John Kerry, Edward Kennedy, and Barbara
Mikulski have all returned contributions received from either
John or Jane Huang.\181\ Despite the prompt return of the Huang
contributions by Representatives and Senators, the DNC has
retained their contributions and appears determined to keep
them.\182\ In recent interrogatories to the DNC, the Committee
requested information regarding contributions made by John
Huang. The DNC responded:
---------------------------------------------------------------------------
\180\ Contributions to House Minority Leader Richard A. Gephardt
(D-MO-3) referenced in this report were made either to his campaign or
to his Political Action Committee under the name ``The Effective
Government Committee.'' ``Politicians and Their PACs,'' Associated
Press, Dec. 13, 1997.
\181\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\182\ The DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 26-29. FEC data indicates that the
DNC returned $15,000 to John Huang on Feb. 15, 1994, and $5,000 to Jane
Huang on Feb. 15, 1994, apparently for administrative reasons.
All information available to the DNC indicates that Mr.
Huang is and at all relevant times has been a U.S.
citizen and had a substantial income at this time. No
information has been brought to our attention calling
into question the legality or appropriateness of the
referenced contribution.\183\
---------------------------------------------------------------------------
\183\ Id. at 28. (emphasis added).
The same response was given regarding Jane Huang's
contributions.\184\
---------------------------------------------------------------------------
\184\ Id. at 27.
---------------------------------------------------------------------------
It has been widely reported that John Huang is presently
the subject of the DOJ's ``active pending criminal
investigation into alleged misconduct involving . . . campaign
finance violations.''\185\ Pursuant to the DNC's own
guidelines, this information is sufficient to call into
question the appropriateness of Huang's contributions.\186\ The
DNC should be aware of the investigation into Huang's fund-
raising activities as a result of the widely-reported DOJ
investigation of the DNC. Furthermore, the investigation into
Huang's fund-raising activities has been widely reported in the
press.
---------------------------------------------------------------------------
\185\ See generally Exhibit 9 Policies and Procedures of the DNC
Regarding Compliance with Campaign Finance Laws, at 18-19.
\186\ Id.
---------------------------------------------------------------------------
A contribution's link to John Huang is one of the DNC's
seven categories of contributions applied to determine which
contributions to review.\187\ ``Contributions solicited by Mr.
John Huang''--as the DNC put it--were suspicious from the
inception of the DNC's self-imposed review.\188\ John Huang has
pled the Fifth Amendment to the Committee \189\ and--except for
a limited production of documents--both John and Jane Huang
have refused to cooperate with Committee investigators. The DNC
returned the contributions individuals solicited by Huang,
including Kanchanalak, the Wiriadinatas, and the Tries as
previously indicated but not the Huangs.\190\ Setting aside for
the moment the issue of legality, if there has ever been a case
to question the ``appropriateness'' of a contribution, this is
it. Otherwise, the appropriateness standard is rendered
meaningless. Furthermore, it is clear from statements of both
DNC and White House officials that John Huang was dishonest
with the DNC regarding his contribution vetting procedures and
information he claimed to have obtained from various
individuals who were the source of illegal foreign
contributions.
---------------------------------------------------------------------------
\187\ The DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 7.
\188\ Id.
\189\ Letter from Ty Cobb, Esq., to Chairman Dan Burton, Feb. 18,
1997 (Exhibit 115).
\190\ See generally Exhibit 7 DNC List of Contributions Returned or
Disgorged Produced to the Committee on Nov. 20, 1997, at 2-5 and 7.
---------------------------------------------------------------------------
It is beyond dispute that John Huang is at the center of
the current campaign finance scandal and under investigation by
the DOJ. Much of the money he raised has been determined
illegal by the DNC itself, DOJ, and House and Senate campaign
finance investigations. Furthermore, many Members of Congress--
both Democrat and Republican--have returned John and Jane
Huang's contributions. In any event, the Huangs' contributions
are highly suspect and, therefore, should be disgorged to the
U.S. Treasury or returned to the Huangs based on the DNC's own
criteria of appropriateness.\191\
---------------------------------------------------------------------------
\191\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
B. Contributions by Other Lippo Employees and Their Spouses During the
1992 Election Cycle
Shortly before the 1992 Presidential election, in addition
to James and Aileen Riady and John and Jane Huang, at least 11
other individuals with direct ties to the Riadys and the Lippo
Group contributed a total of $200,000 to a variety of
Democratic causes during September and October 1992. The
contributions were made in 10 $20,000 blocks, 1 or 2 $20,000
blocks per family. In every instance, the individuals were
either a Lippo employee or the spouse of a Lippo employee.
The DNC supposedly trains its finance staff to look for
indicia of contributions in the name of another--conduit
contributions in violation of 2 U.S.C. Sec. 441f. Specifically,
according to DNC General Counsel Sandler:
[T]he [indicia] that we typically call [our finance
staff's] attention to would be multiple contributions
from members--employees of the same corporation;
contributions from low-level employees of a corporation
or any indication by a donor that a corporation--an
individual donor purporting to make a personal
contribution, that he or she was going to be reimbursed
by a corporation. These are typical indicia of
contributions in the name of another.\192\
---------------------------------------------------------------------------
\192\ Committee Deposition of Joseph E. Sandler, Esq., May 14,
1998, 23-24 (emphasis added).
As detailed in the following discussion, the timing, amount and
recipients of the contributions by Lippo employees and their
spouses suggest that the contributions may have been
coordinated in some fashion. Notably, many of the contributions
were directed to the same state--all ``swing states'' except
Arkansas--Democratic parties, e.g., California, Georgia,
Louisiana, Michigan, North Carolina, and Ohio. Whether they
were illegally coordinated remains unanswered. However, at
least $40,000 of the $200,000 was contributed illegally by Bie
Chuan Ong and Lucy Jao Ong as discussed below. Given the close
proximity of the contributions, the existence of troubling
deposits by some of these contributors immediately prior to the
contributions, and the fact that most have left the country,
the Committee believes that there is a sufficient pattern to
consider all of the contributions illegal or inappropriate. Any
good faith effort to disgorge illegal or return inappropriate
contributions would have to include these.
Bie Chuan Ong $20,000 and Lucy Jao Ong $20,000 (Illegal)
Bie Chuan Ong is the former Chairman of the Board of
LippoBank/Bank of Trade \193\ who, in conjunction with his
wife, Lucy Jao Ong, contributed $40,000 to the DSCC and state
Democratic parties--some of the same ones targeted by the
Riadys--during the 1992 election cycle.\194\ In 1991, Bie Chuan
Ong began serving as a co-director with James Riady and John
Huang at Hip Hing Holdings.\195\ Bie Chuan Ong's
responsibilities at Hip Hing Holdings included filing quarterly
and annual reports pertaining to its real estate activities.
Hip Hing Holdings owned only one asset, a vacant parking lot on
Hughes Street in Los Angeles.\196\ His annual salary as an
executive of Hip Hing Holdings was $24,000.\197\
---------------------------------------------------------------------------
\193\ Committee Interview of Steve Richmond, July 22, 1997.
\194\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\195\ Exhibit 35 Hip Hing Holdings, Inc. Certificate of
Incorporation, State of California, HHH 0243; Hip Hing Holdings Payroll
Records, HHH 5761, HHH 5758, and HHH 0266 (Exhibit 116); Committee
Interview of Lucy Jao Ong, Aug. 15, 1997; Committee Interview of Bie
Chuan Ong, Sept. 9, 1997.
\196\ Committee Interview of Bie Chuan Ong, Sept. 9, 1997; James
Warren, ``Funds Hearings Focus on China's Links to Indonesian
Conglomerate,'' Chicago Tribune, July 16, 1997, at A10.
\197\ Exhibit 116 Hip Hing Holdings Payroll Records, HHH 5761, HHH
5758, and HHH 0266.
---------------------------------------------------------------------------
At the same time he was employed by Hip Hing Holdings, Bie
Chuan Ong was also a shareholder in Inn Holdings, Inc. (``Inn
Holdings''),\198\ a California corporation \199\ based in San
Francisco that serves as the holding company for Marina Inn, an
inn located in the San Francisco area.\200\ Inn Holdings was
owned by 23 shareholders at the close of 1992, including Bie
Chuan Ong and his wife Lucy Jao Ong in addition to John Huang's
sons, Isaac and Christopher Huang.\201\ As of February 11,
1996, John Huang owned stock in Inn Holdings valued between
$15,000-$50,000.\202\
---------------------------------------------------------------------------
\198\ 1992 U.S. Income Tax Return of Inn Holdings (Exhibit 117).
These tax records have been heavily redacted due to confidentiality
concerns.
\199\ Inn Holdings, Corporate Records, State of California.
\200\ Committee Interview of Dr. Gilbert Lee, June 19, 1998.
\201\ Exhibit 117 1992 U.S. Income Tax Return of Inn Holdings Bie
Chuan Ong is no longer a stockholder in Inn Holdings according to Dr.
Gilbert Lee, Inn Holdings' registered agent. Committee Interview of Dr.
Gilbert Lee, June 19, 1998.
\202\ Executive Branch Personnel Public Financial Disclosure Report
of John Huang, Feb. 11, 1996, D 0000840-D 0000851, at 6, D 0000846
(Exhibit 118).
---------------------------------------------------------------------------
In late September 1992, Four Sisters, a California
management company, issued a check to Inn Holdings in the
amount of $40,000 which was deposited into Inn Holdings'
checking account on September 29, 1992.\203\ On October 20,
1992, Inn Holdings issued check numbers 1103 and 1104 in the
amount of $20,000 each to Lucy Jao Ong and Bie Chuan Ong
respectively.\204\ The checks were allegedly issued so that the
Ongs could bid on real estate on behalf of Inn Holdings.\205\
The memo section of each check bears the notation ``Real Estate
Auction.'' \206\
---------------------------------------------------------------------------
\203\ LippoBank Account Statement for Inn Holdings, Oct. 20, 1992
(Exhibit 119); Committee Interview of Andrew Wong, July 23, 1998.
\204\ LippoBank/Bank of Trade Check No. 1103 from Inn Holdings to
Lucy Jao in the amount of $20,000, Oct. 20, 1992, and LippoBank/Bank of
Trade Check No. 1104 from Inn Holdings to Bie C. Ong in the amount of
$20,000, Oct. 20, 1992 (Exhibit 120); LippoBank Account Statement of
Inn Holdings, Nov. 20, 1992 (Exhibit 121).
\205\ Committee Interview of Dr. Gilbert Lee, June 19, 1998;
Committee Interview of Andrew Wong, June 24, 1998; Committee Interview
of Andrew Wong, July 23, 1998.
\206\ Exhibit 120 LippoBank/Bank of Trade Check No. 1103 from Inn
Holdings to Lucy Jao [Ong] in the amount of $20,000, Oct. 20, 1992, and
LippoBank/Bank of Trade Check No. 1104 from Inn Holdings to Bie C. Ong
in the amount of $20,000, Oct. 20, 1992.
---------------------------------------------------------------------------
Bank records indicate that Bie and Lucy Ong on October 22,
1992, deposited the Inn Holdings checks into their personal
accounts at First Interstate Bank and Security Pacific Bank
respectively.\207\ And, on or about October 20, 1992, Bie Chuan
Ong and Lucy Jao Ong then issued a total of eight checks to
Democratic causes totaling exactly $40,000 as detailed below:
\208\
---------------------------------------------------------------------------
\207\ Id.; First Interstate Bank Checking Account Statement of Lucy
Jao and Bie Chuan Ong, Nov. 5, 1992 (Exhibit 122); First Interstate
Bank Deposit Ticket in the amount of $20,000 of Lucy Jao Ong and Bie
Chuan Ong, Oct. 20, 1992 (Exhibit 123).
\208\ Exhibit 122 First Interstate Bank Checking Account Statement
of Lucy Jao and Bie Chuan Ong, Nov. 5, 1992; First Interstate Bank
Check No. 558 from Lucy Jao and Bie Chuan Ong to the Michigan State
Democratic party in the amount of $5,000, Sept. 30, 1992 (Exhibit 124);
First Interstate Bank Check No. 559 from Lucy Jao and Bie Chuan Ong to
the Arkansas State Democratic party in the amount of $5,000, Oct. 19,
1992 (Exhibit 125); First Interstate Bank Check No. 561 from Lucy Jao
and Bie Chuan Ong to the California State Democratic party in the
amount of $5,000, Oct. 9, 1992 (Exhibit 126); Security Pacific Bank
Check No. 622 from Lucy Jao to the Arkansas State Democratic party in
the amount of $5,000, Oct. 10, 1992 (Exhibit 127); http://wyl.ewg.org,
Environmental Working Group Website, Compiled from FEC Data, Last
Updated Sept. 10, 1998; It should be noted that Bie Chuan Ong listed
his employer as ``Tons of Toys'' in conjunction with his contributions.
According to Tiang Hua Ga, Tons of Toys was a company co-owned by Ong
and a fellow Lippo employee, Joseph Chiang. Committee Interview of
Tiang Hua Gan, Aug. 15, 1997; see also, Committee Interview of Michael
Chi, Aug. 28, 1997.
----------------------------------------------------------------------------------------------------------------
Check
Name Date FEC Date Recipient Amount
----------------------------------------------------------------------------------------------------------------
Bie Chuan Ong................................ 10/09/92 10/21/92 Arkansas Democratic Party...... $5,000
Bie Chuan Ong................................ 10/19/92 10/21/92 California Democratic Party.... 5,000
Bie Chuan Ong................................ .......... 10/23/92 DSCC........................... 5,000
Bie Chuan Ong................................ .......... 10/23/92 Michigan Democratic Party...... 5,000
Lucy Jao Ong................................. 10/10/92 10/21/92 Arkansas Democratic Party...... 5,000
Lucy Jao Ong................................. .......... 10/21/92 California Democratic Party.... 5,000
Lucy Jao Ong................................. .......... 10/22/92 DSCC........................... 5,000
Lucy Jao Ong................................. .......... 10/23/92 Michigan Democratic Party...... 5,000
----------------------------------------------------------------------------------------------------------------
Notwithstanding the purported purpose--as reflected in the
memo section of the checks--of the $40,000 from Inn Holdings,
no real estate was ever purchased with the funds despite the
passage of 6 years.\209\ Dr. Gilbert Lee, Inn Holdings'
registered agent, initially described the $40,000 as an advance
for the purchase of real estate on behalf of Inn Holdings
consistent with the notation on the checks but subsequently
during the same interview described the funds as a loan which
remains outstanding in its entirety.\210\
---------------------------------------------------------------------------
\209\ Committee Interview of Andrew Wong, June 24, 1998.
\210\ Committee Interview of Dr. Gilbert Lee, June 19, 1998.
---------------------------------------------------------------------------
According to Andrew Wong, President of Inn Holdings, he
approved and signed the checks to Bie Chuan Ong and Lucy Jao
Ong but is unaware what happened to the money.\211\ However,
Wong informed a Committee counsel that he had recently spoken
with Bie Chuan Ong, at which time Ong indicated his intent to
repay the loan, almost 6 years after its issuance.\212\ Bie
Chuan Ong never received a salary from and is no longer
affiliated with Inn Holdings.\213\ Neither Dr. Lee nor Wong
were aware of any political contributions made by Bie Chuan Ong
or Lucy Jao Ong.\214\
---------------------------------------------------------------------------
\211\ Exhibit 120 LippoBank/Bank of Trade Check No. 1103 from Inn
Holdings to Lucy Jao [Ong] in the amount of $20,000, Oct. 20, 1992, and
LippoBank/Bank of Trade Check No. 1104 from Inn Holdings to Bie C. Ong
in the amount of $20,000, Oct. 20, 1992; Committee Interview of Andrew
Wong, June 24, 1998.
\212\ Committee Interview of Andrew Wong, June 24, 1998.
\213\ Committee Interview of Dr. Gilbert Lee, June 19, 1998.
\214\ Id.; Committee Interview of Andrew Wong, June 24, 1998.
---------------------------------------------------------------------------
On September 9, 1997, Committee majority and minority
counsel interviewed Bie Chuan Ong in the presence of his
attorney regarding his and his wife's political contributions
totaling $40,000.\215\ He indicated that he knows both John
Huang and James Riady, with whom he had frequent contact during
his employ at Hip Hing Holdings.\216\
---------------------------------------------------------------------------
\215\ Committee Interview of Bie Chuan Ong, Sept. 9, 1997.
\216\ Id.
---------------------------------------------------------------------------
When asked if he was aware of Hip Hing Holdings'
fundraising activities, Ong responded that he ``stayed away
from that business'' and denied ever having a conversation with
John Huang regarding fundraising.\217\ According to Ong, he
never attended a political fundraising event.\218\
---------------------------------------------------------------------------
\217\ Id.
\218\ Id.
---------------------------------------------------------------------------
Bank records and FEC data establish that Bie Chuan Ong and
Lucy Jao Ong contributed $40,000 to the DSCC and various state
Democratic parties. However, during the Committee interview,
Bie Chuan Ong said he did not recall making any political
contributions in October 1992 even when shown FEC data
indicating he and his wife had done so.\219\ The $40,000 in
contributions documented by the Committee did not refresh his
recollection, but he did claim to have made a $10,000
contribution with his wife to Dianne Feinstein in early or mid-
1992.\220\ FEC data does not indicate a contribution in any
amount by Bie Chuan Ong or Lucy Jao Ong to then-Senatorial
candidate Feinstein in 1992.\221\ It should be noted that it is
illegal under the Act for an individual to contribute more than
$1,000 to a U.S. Senate candidate per election, $1,000 primary
and $1,000 general.\222\
---------------------------------------------------------------------------
\219\ Id.
\220\ Id.
\221\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\222\ 2 U.S.C. Sec. 441a.
---------------------------------------------------------------------------
During the interview, Ong also advised that he knew former
Lippo employees Joseph Chiang, Ricor Da Silveira and David Yeh,
but was unaware of any fund-raising activities by any of these
individuals and was unaware of their current employment.\223\
Ong denied knowing former Lippo employees Felix Ma and Joseph
Sund.\224\ However, a Tati Group, Ltd.--a Lippo controlled
---------------------------------------------------------------------------
\223\ Committee Interview of Bie Chuan Ong, Sept. 9, 1997.
\224\ Id.
\225\ Adela Ma, ``Lippo Opts for Leasing,'' South China Morning
Post, Nov. 16, 1995, at 2.
---------------------------------------------------------------------------
company \225\--memorandum from Joseph Sund to John Huang
dated March 23, 1993, specifically refers to a ``Bie Ong,''
presumably the Bie Chuan Ong at issue here.\226\
---------------------------------------------------------------------------
\226\ Memorandum from Joseph Sund to John Huang, Mar. 23, 1993, HHH
4578 and HHH 4579 (Exhibit 128).
---------------------------------------------------------------------------
A review of the contributions made by Bie Chuan Ong and
Lucy Jao Ong totaling $40,000 indicates the following:
1. The funds used for the contributions were provided
by Inn Holdings, a company owned in part by John Huang
and his sons. Ong's attorney Thomas Zaccarro recently
indicated that Ong may have relied on advice from Huang
in making the contributions.\227\ ``I'm sure there was
some coordination . . . . It's likely that [Huang] may
have said to some of his friends, `I think you should
contribute to these particular causes,' '' Zaccarro
opined; \228\
---------------------------------------------------------------------------
\227\ Byron York, ``Roots of a Scandal,'' American Spectator,
October 1998, at 31.
\228\ Id.
---------------------------------------------------------------------------
2. The funds were received almost 6 years ago and
still have not been used for the purported purpose of
purchasing real estate;
3. Neither Wong nor Dr. Gilbert offered any
documentary evidence to indicate that the funds were
part of a loan agreement. In fact, the notation on the
checks themselves and Committee interviews indicate the
contrary;
4. In a Committee interview, Bie Chuan Ong could not
recall having contributed $40,000 in political
contributions in conjunction with his wife during the
1992 cycle or ever for that matter. The only
contribution Bie Chuan Ong recalled making is not in
the FEC's records and, regardless, would have been
illegal if actually made;
5. Bie Chuan Ong's annual salary at the time of the
contributions was $24,000, making it unlikely that the
$40,000 in contributions were made with his own money;
6. Roger Post, a Four Sisters executive and onetime-
Inn Holdings stockholder, has failed to return
telephone calls made by Committee investigators; and
7. Bie Chuan Ong invoked his Fifth Amendment
privilege against self-incrimination recently in
response to the Committee's request to depose him under
oath.
Contributions in the name of another--conduit
contributions--are illegal. The Act provides that:
No person shall make a contribution in the name of
another person or knowingly permit his name to be used
to effect such a contribution, and no person shall
knowingly accept a contribution made by one person in
the name of another person.\229\
---------------------------------------------------------------------------
\229\ 2 U.S.C. Sec. 441f.
In this case, Mr. Ong claimed not to have made
contributions which originate from his personal bank accounts
and were made shortly after deposits totaling $40,000 were
provided by a company with ties to John Huang. Apparently, Inn
Holdings through Bie Chuan and Lucy Jao Ong contributed $40,000
to Democratic causes in violation of the Act.
While the ultimate source of and reason for the conduit
contributions remains a mystery, there are logical conclusions
to be drawn: Bie Chuan Ong and Lucy Jao Ong were given $20,000
each to be used for illegal campaign contributions to the DSCC,
the Arkansas Democratic party, the California Democratic party,
and the Michigan Democratic party in violation of 2 U.S.C.
Sec. 441f. The Ongs' contributions have thus far been retained
by all recipients, but they should be disgorged to the U.S.
Treasury in accordance with Federal regulations and DNC
practice.\230\
---------------------------------------------------------------------------
\230\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Joseph Chiang $20,000 and Donna Chiang $20,000 (Suspect)
Joseph Chiang is a Lippo executive who, in conjunction with
his wife, Donna Chiang, contributed $40,000 to the DNC during
the 1992 election cycle.\231\ As of November 25, 1992, Joseph
Chiang was the executive director of China Consortium, Ltd.,
the Lippo Group's vehicle for investments in mainland
China.\232\ A memorandum from John Huang to Jim H. Tuvin dated
July 9, 1993, listed Felix Ma and Joseph Chiang as points of
contact at the Lippo controlled Tati Development Limited based
at the Lippo Centre in Hong Kong.\233\
---------------------------------------------------------------------------
\231\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\232\ ``Asian Pacific Brief: Lippo to Take Key Stake in Chinese
Venture,'' The Asian Wall Street Journal, Nov. 25, 1992, at 4.
\233\ Memorandum from John Huang to Jim H. Tuvin, July 9, 1993
(Exhibit 129).
---------------------------------------------------------------------------
On or about September 22, 1992, Joseph and Donna Chiang
issued four checks to the DNC totaling $40,000 in conjunction
with the Gore Economic Event on September 25, 1992, as detailed
below: \234\
---------------------------------------------------------------------------
\234\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998; Bank of America
Check No. 7583 from Joseph S. or Donna Chiang to the DNC Victory Fund
in the amount of $10,000, Sept. 22, 1992 (Exhibit 130); DNC Check
Tracking Form for Bank of America Check No. 7583 from Joseph S. or
Donna Chiang to the DNC Victory Fund in the amount of $10,000, Sept.
22, 1992, DNC 3310331 (Exhibit 131); Bank of America Check No. 7576
from Joseph S. or Donna Chiang to the DNC Victory Fund in the amount of
$10,000, Sept. 18, 1992, Bank of America Check No. 7876 from Joseph S.
or Donna Chiang to the DNC Victory Fund in the amount of $10,000, Sept.
22, 1992, Bank of America Check No. 7872 from Joseph S. or Donna Chiang
to the DNC Victory Fund in the amount of $10,000, Sept. 18, 1992
(Exhibit 132); DNC Check Tracking Form for Bank of America Check No.
7876 from Joseph S. or Donna Chiang to the DNC Victory Fund in the
amount of $10,000, Sept. 22, 1992, DNC 3310330 (Exhibit 133); Exhibit
150 List of DNC Contributors for Sept. 25, 1992, Gore Economic Event,
DNC 4125867.2. It should be noted that Joseph Chiang listed his
employer as ``Merchants West'' in conjunction with his Oct. 7, 1992,
contribution to the DNC. Merchants West is a company specializing in
the export of various materials from China. Merchants West purchased
Tons of Toys, a company co-owned by Bie Chuan Ong. Committee Interview
of Steve Richmond, July 22, 1997. All of Joseph and Donna Chiang's
contributions for which the Committee has obtained DNC contribution
information were solicited by Bob Burkett. Exhibit 131 DNC Check
Tracking Form for Bank of America Check No. 7583 from Joseph S. or
Donna Chiang to the DNC Victory Fund in the amount of $10,000, Sept.
22, 1992, DNC 3310331; Exhibit 133 DNC Check Tracking Form for Bank of
America Check No. 7876 from Joseph S. or Donna Chiang to the DNC
Victory Fund in the amount of $10,000, Sept. 22, 1992, DNC 3310330.
----------------------------------------------------------------------------------------------------------------
Check
Name Date FEC Date Recipient Amount
----------------------------------------------------------------------------------------------------------------
Joseph Chiang................................ 09/18/92 09/28/92 DNC............................ $10,000
Joseph Chiang................................ 09/22/92 10/07/92 DNC............................ $10,000
Donna Chiang................................. 09/18/92 09/28/92 DNC............................ $10,000
Donna Chiang................................. 09/22/92 10/07/92 DNC............................ $10,000
----------------------------------------------------------------------------------------------------------------
On September 25, 1992, the day of the Gore fund-raiser, L &
W Supply Global, Inc. (``L & W Supply'') of Anaheim,
California,\235\ issued a check to Donna Chiang in the amount
of $40,000,\236\ the precise amount of the Chiangs'
contributions to the DNC. Ms. Chiang deposited the check into
her joint account with her husband, Joseph Chiang--the same
account out of which the four contributions to the DNC were
made \237\--that same day,\238\ 6 days before any of the
contributions checks cleared their account.\239\ At the time of
the deposit, the Chiangs' checking account balance was
$8,014.64.\240\ In sum, the funds for the Chiangs'
contributions were provided by L & W Supply Global and thus
appear to be conduit contributions in violation of 2 U.S.C.
Sec. 441f.
---------------------------------------------------------------------------
\235\ Donna Chiang listed L & W Supply as her employer at the time
of her 1992 contributions to the DNC. http://wyl.ewg.org, Environmental
Working Group Website, Compiled from FEC Data, Last Updated Sept. 10,
1998.
\236\ Bank of America Check No. 121 from L & W Supply to Donna
Chiang in the amount of $40,000, Sept. 25, 1992, and Bank of America
Deposit Ticket of Joseph S. or Donna Chiang in the amount of $40,000,
Sept. 25, 1992 (Exhibit 134). Donna Chiang also received a check from L
& W Supply in the amount of $8,000, Aug. 25, 1992, for an unknown
reason. Bank of America Check No. 1281 from L & W Supply to Donna
Chiang in the amount of Aug. 25, 1992, and Bank of America Deposit
Ticket of Joseph S. or Donna Chiang in the amount of $8,000, Aug. 25,
1992 (Exhibit 135).
\237\ Exhibit 130 Bank of America Check No. 7583 from Joseph S. or
Donna Chiang to the DNC Victory Fund in the amount of $10,000, Sept.
22, 1992; Exhibit 131 DNC Check Tracking Form for Bank of America Check
No. 7583 from Joseph S. or Donna Chiang to the DNC Victory Fund in the
amount of $10,000, Sept. 22, 1992, DNC 3310331; Exhibit 132 Bank of
America Check No. 7576 from Joseph S. or Donna Chiang to the DNC
Victory Fund in the amount of $10,000, Sept. 18, 1992, Bank of America
Check No. 7876 from Joseph S. or Donna Chiang to the DNC Victory Fund
in the amount of $10,000, Sept. 22, 1992, and Bank of America Check No.
7872 from Joseph S. or Donna Chiang to the DNC Victory Fund in the
amount of $10,000, Sept. 18, 1992; Exhibit 133 DNC Check Tracking Form
for Bank of America Check No. 7876 from Joseph S. or Donna Chiang to
the DNC Victory Fund in the amount of $10,000, Sept. 22, 1992, DNC
3310330; Bank of America Account Statement of Joseph, Donna and
Josephine Chiang, Oct. 29, 1992 (Exhibit 136).
\238\ Exhibit 134 Bank of America Check No. 121 from L & W Supply
to Donna Chiang in the amount of $40,000, Sept. 25, 1992, and Bank of
America Deposit Ticket of Joseph S. or Donna Chiang in the amount of
$40,000, Sept. 25, 1992; Bank of America Account Statement of Joseph or
Donna Chiang, Sept. 29, 1992 (Exhibit 137).
\239\ Exhibit 136 Bank of America Account Statement of Joseph,
Donna and Josephine Chiang, Oct. 29, 1992.
\240\ Exhibit. 137 Bank of America Account Statement of Joseph or
Donna Chiang, Sept. 29, 1992.
---------------------------------------------------------------------------
The Chiangs are believed to be residing in Hong Kong. The
Committee has been unable to contact Joseph and Donna Chiang or
identify the ultimate source of the funds used for the
contributions but is continuing its review.
Again, the Chiangs' 1992 contributions were made at the
same time as the Riadys' contributions and other illegal
contributions from Lippo related individuals, e.g., Bie and
Lucy Jao Ong. The DNC has retained the Chiangs' contributions
totaling $40,000.\241\ However, the Chiangs' contributions
appear to be conduit contributions in violation of 2 U.S.C.
Sec. 441f and, therefore, should be disgorged to the U.S.
Treasury.\242\
---------------------------------------------------------------------------
\241\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\242\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Ricor Da Silveira $15,000 and Brenda Da Silveira $5,000 (Suspect)
Ricor Da Silveira is a Lippo executive who, in conjunction
with his wife, Brenda Da Silveira, contributed $20,000 to the
DSCC and state Democratic parties--many of the same ones
targeted by the Riadys-during the 1992 election cycle.\243\
Ricor Da Silviera has served as an executive for several Lippo
controlled companies.\244\ In 1992, he served as an executive
at Hip Hing Holdings, but became Morning Star, Inc.'s finance
director after its acquisition by Lippo on December 28,
1992.\245\ After Lippo sold its interest in Morning Star on
December 8, 1993, he became a director of Lippo Asia, Ltd.\246\
As early as November 3, 1996, and as recent as August 12, 1997,
he was serving as the managing director of Lippo Investments
Management based in Hong Kong and a director in other Lippo
related companies including Guo Tai Lippo Securities, Edmund de
Rothschild Lippo Company, Ltd., and Weyfang Yongchange Food
Industries in China.\247\
---------------------------------------------------------------------------
\243\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\244\ Although it is unclear whether Ricor Da Silveira was employed
by James Riady in Arkansas, It appears from press reports that Ricor
and Brenda Da Silveira owned property in 1985, during the period that
James Riady was involved with Stephens, Inc. ``Deeds,'' Arkansas
Gazette, June 23, 1985, at D7.
\245\ Rosa Ocampo, ``Morning Star Trying to Rise As China Play,''
South China Morning Post, Dec. 29, 1992, at 3.
\246\ Amy Chew, ``MUI accepts Lippo explanation,'' South China
Morning Post, June 4, 1994, at 2; ``HK's Lippo Unit/China/Fund--Full
Investment by 7th Year,'' Dow Jones International News, July 12, 1995.
\247\ Tan Lee Hock, ``Indonesia Has Made It Harder to Punt on the
Currency, But Many Still See Worthwhile Gains,'' South China Morning
Post, Nov. 3, 1996, at 9.
---------------------------------------------------------------------------
During the period October 19-22, 1992, Ricor and Brenda
DaSilviera issued four checks to Democratic causes totaling
$20,000 as detailed below: \248\
---------------------------------------------------------------------------
\248\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998. LippoBank Checking
Account Statement of Ricor F. Da Silveira and Brenda W. Da Silveira,
Nov. 16, 1992, L 010807 (Exhibit 138); LippoBank Check No. 2203 from
Ricor F. or Brenda W. Da Silveira to the DSCC in the amount of $5,000,
Oct. 19, 1992, and LippoBank Check No. 2206 from Ricor F. or Brenda W.
Da Silveira to the DSCC in the amount of $5,000, Oct. 19, 1992, L
010816 and L 010817 (Exhibit 139); LippoBank Check No. 2224 from Ricor
F. or Brenda W. Da Silveira to the DSCC in the amount of $5,000, Oct.
22, 1992, L 010818 and L 010819 (Exhibit 140); LippoBank Check No. 2209
from Ricor F. or Brenda W. Da Silveira to the Michigan State Democratic
party in the amount of $5,000, Oct. 21, 1992, L 010820 and L 010821
(Exhibit 141). In addition, Ricor DaSilviera contributed $1,000 to Sen.
Edward M. Kennedy in March 1993.
----------------------------------------------------------------------------------------------------------------
Name Check Date FEC Date Recipient Amount
----------------------------------------------------------------------------------------------------------------
Ricor Da Silveira............................ 10/19/92 10/27/92 DSCC........................... $5,000
Ricor Da Silveira............................ 10/21/92 10/27/92 Michigan Democratic Party...... $5,000
Ricor Da Silveira............................ 10/22/92 10/27/92 Arkansas Democratic Party...... $5,000
Brenda Da Silveira........................... 10/19/92 10/27/92 DSCC........................... $5,000
----------------------------------------------------------------------------------------------------------------
Ricor Da Silveira's annual salary as an executive of Hip
Hing Holdings was between $63,000 and $88,200 at the time of
the 1992 contributions.\249\
---------------------------------------------------------------------------
\249\ Exhibit 116 Hip Hing Holdings Payroll Records, HHH 5761, HHH
5758, and HHH 0266.
---------------------------------------------------------------------------
Within days of issuing the checks, Ricor and Brenda Da
Silveira received two wire transfers in the amount of $9,500
and $9,300, on October 27, 1992, and October 28, 1992,
respectively into their joint account at LippoBank.\250\ Both
wire transfers originated from Ricor DaSilviera's bank account
at the Hong Kong Chinese Bank,\251\ a bank located in Hong Kong
and controlled by the Riadys and the Chinese government.\252\
To date, the Committee has received no cooperation from any
foreign banks or foreign governments in obtaining bank records
which would enable to the Committee to trace the ultimate
origin of the funds.
---------------------------------------------------------------------------
\250\ LippoBank Wire Transfer Records of Ricor F. Da Silviera, Oct.
27, 1992 (Exhibit 142) and LippoBank Wire Transfer Records of Ricor F.
Da Silviera, Oct. 28, 1992 (Exhibit 143).
\251\ Id.
\252\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 1,
1120 (1998).
---------------------------------------------------------------------------
The Committee has been unable to contact Ricor and Brenda
Da Silveira or identify the ultimate source of the funds used
for the contributions but is continuing its review. The DSCC,
the Arkansas Democratic party, and the Michigan Democratic
party have retained the Da Silveiras' contributions.\253\
However, the Da Silveiras' contributions are suspect and,
therefore, the contributions should be disgorged to the U.S.
Treasury.\254\
---------------------------------------------------------------------------
\253\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\254\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
David Yeh $20,000 and Christina Yeh $20,000 (Suspect)
David Yeh is a Lippo executive who, in conjunction with his
wife, Christina Yeh, contributed $40,000 to the DNC during the
1992 election cycle.\255\ David Yeh's relationship with the
Riadys predates 1984 at which time the directors of Worthen
Bank based in Little Rock, Arkansas, named James Riady
president.\256\ Worthen then allowed Riady to bring some of his
Lippo employees from Asia to Little Rock.\257\ One member of
that team was David Yeh who was placed in charge of Worthen's
international division with offices in New York and Los
Angeles.\258\ In that position, Yeh earned $187,000, one of the
five highest paid officers at Worthen.\259\ In late 1986, Yeh
was fired by the Worthen board, and the Worthen international
unit was dissolved.\260\
---------------------------------------------------------------------------
\255\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\256\ Paul Sperry, ``National Issue Worthen: A Riady Piggy Bank?,''
Investor's Business Daily, Dec. 30, 1996, at A1.
\257\ Id.
\258\ Id.
\259\ Id.
\260\ Id.
---------------------------------------------------------------------------
In the early 1990s, David Yeh served as the president of
LippoBank, Los Angeles,\261\ and in September 1993, he served
as the Managing Director of Lippo Realty, Ltd. believed to be
located in Hong Kong.\262\
---------------------------------------------------------------------------
\261\ Committee Interview of Bie Chuan Ong, Sept. 9, 1997.
\262\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998; see generally
Susan Schmidt and Sharon LaFraniere, ``Counsel Probes Lippo Links at
White House,'' the Washington Post, Mar. 5, 1997, at A1.
---------------------------------------------------------------------------
On or about August 18, 1992, David and Christina Yeh issued
eight checks to the DNC totaling $40,000 in conjunction with
the Gore Economic Event fund-raiser held on September 29, 1992,
as detailed below: \263\
---------------------------------------------------------------------------
\263\ Bank of America Check No. 206 from David and Christina M.K.
Yeh to the DNC Victory Fund in the amount of $5,000, Aug. 3, 1992, Bank
of America Check No. 207 from David and Christina M.K. Yeh to the DNC
Victory Fund in the amount of $5,000, Aug. 8, 1992, and Bank of America
Check No. 209 from David and Christina M.K. Yeh to the DNC Victory Fund
in the amount of $5,000, Aug. 18, 1992 (Exhibit 144); Bank of America
Check No. 249 from David and Christina M.K. Yeh to Woo for Mayor in the
amount of $1,000, May 23, 1993, Bank of America Check No. 245 from
David and Christina M.K. Yeh to Woo for mayor in the amount of $1,000,
May 22, 1993, and Bank of America Check No. 208 from David and
Christina M.K. Yeh to the DNC Victory Fund in the amount of $5,000,
Aug. 18, 1992 (Exhibit 145); DNC Check Tracking Form for Bank of
America Check No. 208 from David and Christina M.K. Yeh to the DNC
Victory Fund in the amount of $5,000, Aug. 18, 1992, DNC 3310341
(Exhibit 146); DNC Check Tracking Form for Bank of America Check No.
209 from David and Christina M.K. Yeh to the DNC Victory Fund in the
amount of $5,000, Aug. 18, 1992, DNC 3310342 (Exhibit 147); DNC Check
Tracking Form for LippoBank Check No. 943 from David and Christina M.
K. Yeh to the DNC Victory Fund in the amount of $5,000, Aug. 23, 1992,
DNC 3310339 (Exhibit 148); DNC Check Tracking Form for LippoBank Check
No. 944 from David and Christina M.K. Yeh to the DNC Victory Fund in
the amount of $5,000, Aug. 28, 1992, DNC 3310340 (Exhibit 149); List of
DNC Contributors for Sept. 29, 1992, Gore Economic Event, DNC 4125867.2
and DNC 4125867.3 (Exhibit 150); http://wyl.ewg.org, Environmental
Working Group Website, Compiled from FEC Data, Last Updated Sept. 10,
1998. All of David and Christina Yeh's 1992 contributions for which the
Committee has obtained DNC contribution information were solicited by
Bob Burkett. Exhibit 146 DNC Check Tracking Form for Bank of America
Check No. 208 from David and Christina M.K. Yeh to the DNC Victory Fund
in the amount of $5,000, Aug. 18, 1992, DNC 3310341; Exhibit 147 DNC
Check Tracking Form for Bank of America Check No. 209 from David and
Christina M.K. Yeh to the DNC Victory Fund in the amount of $5,000,
Aug. 18, 1992, DNC 3310342; Exhibit 148 DNC Check Tracking Form for
Bank of America Check No. 943 from David and Christina M.K. Yeh to the
DNC Victory Fund in the amount of $5,000, Aug. 23, 1992, DNC 3310339;
Exhibit 149 DNC Check Tracking Form for Bank of America Check No. 944
from David and Christina M.K. Yeh to the DNC Victory Fund in the amount
of $5,000, Aug. 28, 1992, DNC 3310340. David Yeh's annual salary as an
executive of Hip Hing Holdings was $73,333 as of Dec. 28, 1990. Exhibit
116 Hip Hing Holdings Payroll Records, HHH 5761 and HHH 5758.
----------------------------------------------------------------------------------------------------------------
Check
Name Date FEC Date Recipient Amount
----------------------------------------------------------------------------------------------------------------
David Yeh.................................... 08/03/92 09/29/92 DNC............................ $5,000
David Yeh.................................... 08/08/92 09/29/92 DNC............................ $5,000
David Yeh.................................... 08/18/92 10/07/92 DNC............................ $5,000
David Yeh.................................... 08/18/92 10/07/92 DNC............................ $5,000
Christina Yeh................................ .......... 09/29/92 DNC............................ $5,000
Christina Yeh................................ .......... 09/29/92 DNC............................ $5,000
Christina Yeh................................ .......... 10/07/92 DNC............................ $5,000
Christina Yeh................................ .......... 10/07/92 DNC............................ $5,000
----------------------------------------------------------------------------------------------------------------
On September 21, 1992--before any of his 1992 contribution
checks to the DNC cleared his account\264\--David Yeh received
a wire transfer in the amount of $19,985 into his checking
account at Bank of America.\265\ His account balance was
$3,368.63 at the time of the transfer.\266\ The wire transfer
originated from an unidentified account within the United
States.\267\
---------------------------------------------------------------------------
\264\ Bank of America Account Statement for David and Christina
M.K. Yeh, Oct. 8, 1992 (Exhibit 151); Bank of America Account Statement
for David and Christina M.K. Yeh, Nov. 5, 1992 (Exhibit 152).
\265\ Exhibit 151 Bank of America Account Statement for David and
Christina M.K. Yeh, Oct. 8, 1992. In addition to David and Christina
Yeh, Lippo employee Ricor Da Silveira is a signatory on the personal
checking account of the Yehs held at Bank of America. Bank of America
Master Agreement (Exhibit 153).
\266\ Id.
\267\ Bank of America was unable to locate the wire transfer report
for this transaction. Bank of America Subpoena Processing Department
No. 5473 List of Requested Items Not Produced to the Committee, Sept.
29, 1998 (Exhibit 154). As a result, the only information available to
the Committee regarding this $19,985 wire transfer is detailed on the
account statement. The wire transfer appears to be a domestically
initiated transaction rather than an internationally initiated
transaction because it is described as a ``fedwire'' rather than an
``international money transfer,'' the description given to wire
transfers originating abroad. Exhibit 151 Bank of America Account
Statement for David and Christina M.K. Yeh, Oct. 8, 1992; cf. Bank of
America Account Statement for David and Christina M.K. Yeh, Oct. 7,
1993 (Exhibit 155).
---------------------------------------------------------------------------
Christina Yeh made her 1992 contributions from her and
David Yeh's checking account at LippoBank.\268\ The Committee
has subpoenaed her bank records and is awaiting their delivery.
---------------------------------------------------------------------------
\268\ See Exhibit 148 DNC Check Tracking Form for LippoBank Check
No. 943 from David and Christina M.K. Yeh to the DNC Victory Fund in
the amount of $5,000, Aug. 23, 1992, DNC 3310339; Exhibit 149 DNC Check
Tracking Form for LippoBank Check No. 944 from David and Christina M.K.
Yeh to the DNC Victory Fund in the amount of $5,000, Aug. 28, 1992, DNC
3310340.
---------------------------------------------------------------------------
In addition to the foregoing, the Yehs contributed an
additional $20,000 to the DNC \269\ and $12,000 to
congressional and senatorial candidates between 1990 and
1994.\270\
---------------------------------------------------------------------------
\269\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998. On Sept. 28,
1993--before his Sept. 27, 1993, check to the DNC cleared his account,
David Yeh received a wire transfer in the amount of $20,000 into his
checking account at the Bank of America. Bank of America Check No. 0104
from David and Christina M.K. Yeh to the DNC in the amount of $10,000,
Sept. 27, 1993, and Bank of America Check No. 0105 from David and
Christina M.K. Yeh to the DNC in the amount of $10,000, Sept. 27, 1993
(Exhibit 156); Exhibit 155 Bank of America Account Statement for David
and Christina M.K. Yeh, Oct. 7, 1993; Bank of America Account Statement
of David and Christina M.K. Yeh, Nov. 5, 1993 (Exhibit 157); Bank of
America Wire Transfer Report of David and Christina M.K. Yeh, Sept. 28,
1993 (Exhibit 158). His account balance was $13,050.47 at the time of
the transfer. Exhibit 155 Bank of America Account Statement for David
and Christina M.K. Yeh, Oct. 7, 1993. The wire transfer originated from
what appears to be David Yeh's bank account at the Hong Kong Chinese
Bank, a bank located in Hong Kong and controlled by the Riadys and the
Chinese Government. Exhibit 158 Bank of America Wire Transfer Report of
David and Christina M.K. Yeh, Sept. 28, 1993; Investigation of Illegal
or Improper Activities in Connection with the 1996 Federal Election
Campaign Before the Senate Committee on Governmental Affairs, S. Rept.
No. 167, 195th Cong., 2d sess., vol. 1, 1120 (1998).
\270\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998; David Yeh: Sept.
28, 1990, $1,000 to Senator Harvey B. Gantt; June 10, 1993, $1,000 to
Senator Charles S. Robb; Oct. 15, 1993, $10,000 to the DNC; Oct. 25,
1993, $1,000 to Senator James R. Sasser (D-TN); Dec. 23, 1993, $1,000
to Senator Larry Pressler (R-SD); May 23, 1994, $1,000 to
Representative Joseph P. Kennedy (D-MA-8); Sept. 30, 1994, $1,000 to
Representative Mark Takano (D-CA-43); Oct. 11, 1994, $2,000 to the
Effective Government Committee. Christina Yeh: June 10, 1993, $1,000 to
Senator Charles S. Robb (D-VA); Oct. 15, 1993, $10,000 to the DNC; Oct.
25, 1993, $1,000 to Senator James R. Sasser (D-TN); Dec. 23, 1993,
$1,000 to Senator Larry Pressler (R-SD); May 23, 1994, $1,000 to
Representative Joseph P. Kennedy (D-MA-8); Exhibit Bank of America
Check No. 0104 from David and Christina M.K. Yeh to the DNC in the
amount of $10,000, Sept. 27, 1993, and Bank of America Check No. 0105
from David and Christina M.K. Yeh to the DNC in the amount of $10,000,
Sept. 27, 1993; DNC Check Tracking Form for Bank of America Check No.
0104 from David and Christina M.K. Yeh to the DNC in the amount of
$10,000, Sept. 27, 1993, DNC 0039320 (Exhibit 159); DNC Check Tracking
Form for Bank of America Check No. 0105 from David and Christina M.K.
Yeh to the DNC in the amount of $10,000, Sept. 27, 1993, DNC 0039322
(Exhibit 160). See also Bank of America Check No. 283 from David and
Christina M.K. Yeh to Citizens for Joe Kennedy in the amount of $1,000,
Apr. 18, 1994, Bank of America Check No. 285 from David and Christina
M.K. Yeh to Citizens for Joe Kennedy in the amount of $1,000, Apr. 18,
1994, and Bank of America Check No. 0112 from David and Christina M.K.
Yeh to Gray Davis 1994 Committee in the amount of $1,000, Nov. 30, 1993
(Exhibit 161); Bank of America Check No. 0115 from David and Christina
M.K. Yeh to Friends of Larry Pressler in the amount of $1,000, Dec. 1,
1993, Bank of America Check No. 0117 from David and Christina M.K. Yeh
to Friends of Larry Pressler in the amount of $1,000, Dec. 1, 1993, and
Bank of America Check No. 0114 from David and Christina M.K. Yeh to
Gray Davis 1994 Committee in the amount of $1,000, Nov. 30, 1993
(Exhibit 162); Bank of America Check No. 0101 from David and Christina
M.K. Yeh to Sasser for Senate Committee in the amount of $1,000, Sept.
16, 1993, Bank of America Check No. 246 from David and Christina M.K.
Yeh to Friends of Robb for Senate in the amount of $1,000, May 22,
1993, and Bank of America Check No. 250 from David and Christina M.K.
Yeh to Robb for Senate in the amount of $1,000, May 23, 1993 (Exhibit
163).
---------------------------------------------------------------------------
The Yehs' 1993 contributions to the DNC totaling $20,000
were made in conjunction with the September 27, 1993, dinner
featuring Vice President Al Gore.\271\ Both David and Christina
Yehs' $10,000 contributions were solicited by John Huang.\272\
According to DNC documents relating to that event, David Yeh
was a ``permanent U.S. citizen living abroad'' at the time of
the contribution.\273\
---------------------------------------------------------------------------
\271\ Exhibit 159 DNC Check Tracking Form for Bank of America Check
No. 0104 from David and Christina M.K. Yeh to the DNC in the amount of
$10,000, Sept. 27, 1993, DNC 0039320; Exhibit 160 DNC Check Tracking
Form for Bank of America Check No. 0105 from David and Christina M.K.
Yeh to the DNC in the amount of $10,000, Sept. 27, 1993, DNC 0039322.
\272\ Id.
\273\ Id.
---------------------------------------------------------------------------
Former Lippo executive Bie Chuan Ong told Committee
counsels that he knows David Yeh but is unaware of any fund-
raising activities by Yeh and is unaware of his current
employment.\274\ The Committee believes that David and
Christina Yeh are currently residing in Hong Kong and have been
there since 1992.\275\ According to press accounts and former
Lippo executive Charles DeQueljoe, as of June 1998, David Yeh
was serving as executive director of Lippo Limited in Hong
Kong.\276\
---------------------------------------------------------------------------
\274\ Committee Interview of Bie Chuan Ong, Sept. 9, 1997.
\275\ Committee Interview of Betty Wong, Aug. 18, 1997.
\276\ Joseph Lo, ``Lippo Chief Rules Out Expansion,'' South China
Morning Post, June 30, 1998, at 2; see also, Committee Deposition of
Charles DeQueljoe, 53-54.
---------------------------------------------------------------------------
In recent interrogatories to the DNC, the Committee
requested information regarding contributions made by David
Yeh. The DNC responded:
To our knowledge, the referenced contribution from
David Yeh does not fall into any of the seven
categories involved in the DNC's review of prior
contributions. . . . Further, no information has been
brought to our attention calling into question the
legality or appropriateness of Mr. Yeh's
contribution.\277\
---------------------------------------------------------------------------
\277\ DNC Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, 19-20.
The same response was given regarding Christina Yeh's
contributions.\278\ The DNC has retained the Yehs'
contributions.
---------------------------------------------------------------------------
\278\ Id. at 18-19.
---------------------------------------------------------------------------
The Committee has been unable to identify the ultimate
source of the funds used for the contributions because the Yehs
are residing outside the United States, but the Committee is
continuing its review of their contributions. That fact
notwithstanding, on March 19, 1997, House Minority Leader Dick
Gephardt returned $22,000 in campaign contributions, which
included $2,000 contributed by Lippo executive David Yeh.\279\
Gephardt returned an additional $10,500 contributed by other
individuals with ties to Lippo, including Agus Setiawan,
$2,000; Joseph Sund, $2,500; Susanto Widjaja, $1,000; and
Charles and Susan DeQueljoe, $5,000.\280\ According to
Gephardt's press secretary, Laura Nichols, ``[Gephardt] didn't
feel it would be appropriate to retain those contributions. . .
. There is a question about the actual source of these funds.''
\281\
---------------------------------------------------------------------------
\279\ ``Gephardt Returns $22,000,'' Associated Press, Mar. 19,
1997.
\280\ Id.
\281\ Id. (emphasis added).
---------------------------------------------------------------------------
FEC data indicates that David and Christina Yeh each
contributed $1,000 to Senator Larry Pressler in December
1993.\282\ Senator Pressler returned the Yehs' contributions in
October 1996,\283\ apparently upon learning of their potential
link to the Lippo Group.\284\ In May 1994, Representative
Joseph Kennedy received $1,000 contributions from both David
and Christina Yeh but returned the contributions in February
and March 1997 respectively.\285\
---------------------------------------------------------------------------
\282\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\283\ Id.
\284\ Rapid City Journal, Mar. 16, 1997.
\285\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
---------------------------------------------------------------------------
As previously indicated, the DNC has retained the Yehs'
contributions totaling $60,000. However, applying the DNC's own
standards of review, given the unavailability of the Yehs and
the questionable status of these contributions, the DNC should
follow the practice of House Minority Leader Richard Gephardt,
Representative Joseph Kennedy and Senator Pressler: the Yehs'
contributions are suspect and, therefore, should be disgorged
to the U.S. Treasury.\286\
---------------------------------------------------------------------------
\286\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Felix Ma $15,000 and Mary Ma $25,000 (Suspect)
During August and September 1992, Felix Ma, a Lippo
executive,\287\ in conjunction with his wife, Mary Ma, issued
eight checks to the DSCC and various state Democratic parties--
many of the same ones targeted by the Riadys--totaling $40,000
as detailed below: \288\
---------------------------------------------------------------------------
\287\ See Memorandum from John Huang to M.C. Lee and Felix Ma, Aug.
24, 1993 (Exhibit 164).
\288\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998; DNC Check Tracking
Form for LippoBank Check No. 189 from Felix or Mary L.M. Ma to the Ohio
State Democratic party Federal Account in the amount of $5,000, Sept.
30, 1992 (Exhibit 165); Ohio State Democratic party Check Tracking Form
for Check No. 239 from Felix or Mary L.M. Ma to the Ohio State
Democratic party in the amount of $5,000, Sept. 20, 1992 (Exhibit 166);
LippoBank Check No. 239 from Felix or Mary L.M. Ma to the Ohio State
Democratic party in the amount of $5,000, Sept. 20, 1992 (Exhibit 167);
LippoBank Check No. 195 from Felix or Mary L.M. Ma to the DSCC in the
amount of $5,000, Sept. 25, 1992, and LippoBank Check No. 196 from
Felix or Mary L.M. Ma to the DSCC in the amount of $5,000, Sept. 30,
1992 (Exhibit 168); LippoBank Check No. 194 from Felix or Mary L.M. Ma
to the Michigan State Democratic party in the amount of $5,000, Sept.
15, 1992 (Exhibit 169); LippoBank Check No. 189 from Felix or Mary L.M.
Ma to the Ohio State Democratic party in the amount of $5,000, Sept.
30, 1992, LippoBank Check No. 186 from Felix or Mary L.M. Ma to the
DSCC in the amount of $5,000, Aug. 30, 1992, and LippoBank Check No.
187 from Felix or Mary L.M. Ma to the Michigan State Democratic party
in the amount of $5,000, Sept. 10, 1992 (Exhibit 170); LippoBank
Checking Account Statement of Felix Ma or Mary L.M. Ma, Sept. 25, 1992
(Exhibit 171); LippoBank Checking Account Statement of Felix Ma or Mary
L.M. Ma, Oct. 26, 1992 (Exhibit 172); LippoBank Checking Account
Statement of Felix Ma or Mary L.M. Ma, Nov. 25, 1992 (Exhibit 173).
----------------------------------------------------------------------------------------------------------------
Check
Name Date FEC Date Recipient Amount
----------------------------------------------------------------------------------------------------------------
Felix Ma................................... 08/30/92 10/23/92 DSCC.......................... $5,000
Felix Ma................................... 09/10/92 10/23/92 Michigan Democratic Party..... 5,000
Felix Ma................................... 09/30/92 10/23/92 Ohio Democratic Party......... 5,000
Mary Ma.................................... 09/15/92 10/27/92 Michigan Democratic Party..... 5,000
Mary Ma.................................... 09/25/92 10/22/92 DSCC.......................... \289\ 5,000
Mary Ma.................................... 09/30/92 .......... DSCC.......................... \290\ 5,000
Mary Ma.................................... .......... 10/23/92 Missouri Democratic Party..... \291\ 5,000
Mary Ma.................................... .......... 10/28/92 Ohio Democratic Party......... 5,000
----------------------------------------------------------------------------------------------------------------
\289\ Contrary to FEC data, bank records indicate that this contribution was made by Mary Ma not Felix Ma. This
discrepancy appears to be an administrative error. Exhibit 168 LippoBank Check No. 195 from Felix or Mary L.M.
Ma to the DSCC in the amount of $5,000, Sept. 25, 1992.
\290\ The FEC data does not list Mary Ma's $5,000 contribution to the DSCC although her bank records indicate
that she did contribute to the DSCC, and the DSCC did negotiate the check. This appears to be an
administrative error. See Ex. 168 LippoBank Check No. 196 from Felix or Mary L.M. Ma to the DSCC in the amount
of $5,000, Sept. 30, 1992.
\291\ The FEC data indicates that Felix Ma contributed $5,000 to the Missouri Democratic party, but the Mas'
bank records do not confirm that. This appears to be an administrative error. http://wyl.ewg.org,
Environmental Working Group Website, Compiled from FEC Data, Last Updated Sept. 10, 1998.
On the DNC's information card for Felix Ma's contribution
to the Ohio Democratic party, he described himself as the
director of Lippo Hong Kong \292\ and as of March 1993,
continued to serve in that position.\293\
---------------------------------------------------------------------------
\292\ Exhibit 165 DNC Check Tracking Form for LippoBank Check No.
189 from Felix or Mary L.M. Ma to the Ohio State Democratic party
Federal Account in the amount of $5,000, Sept. 30, 1992.
\293\ Kenneth Ko, ``Henderson in $2.43b Yantai deal,'' South China
Morning Post, Mar. 27, 1993, at 2.
---------------------------------------------------------------------------
The funds used for the $40,000 in contributions detailed
above appear to have originated, at least in part, with
California Land Merchants, a company currently under review by
the Committee.\294\ A check issued by California Land Merchants
totaling $15,000 was deposited into the LippoBank account of
Felix and Mary Ma on September 10, 1992.\295\ An additional
$15,000 from an unidentified source was deposited in that same
account on September 2, 1992.\296\
---------------------------------------------------------------------------
\294\ A deposit of check no. 295 from California Land Merchants in
the amount of $15,000 was deposited into the LippoBank account of Felix
and Mary Ma on Sept. 3, 1992. The check bounced and was re-deposited on
Sept. 10, 1992. Exhibit 171 LippoBank Checking Account Statement of
Felix Ma or Mary L.M. Ma, Sept. 25, 1992; LippoBank Deposit Ticket in
the amount of $15,000 of Felix Ma or Mary L.M. Ma, Sept. 3, 1992, and
Sierra National Bank Check No. 295 from California Land Merchants to
Felix and Mary Ma in the amount of $15,000, Sept. 1, 1992, (Exhibit
174); LippoBank Deposit Ticket of Felix Ma or Mary L.M. Ma in the
amount of $15,000, Sept. 10, 1992, and Sierra National Bank Check from
California Land Merchants to Felix and Mary Ma in the amount of
$15,000, Sept. 1, 1992 (Exhibit 175).
\295\ Id.
\296\ LippoBank Deposit Ticket of Felix Ma or Mary L.M. Ma in the
amount of $15,000, Sept. 2, 1992, and a Check to Felix or Mary Ma from
an illegible source in the amount of $15,000, date illegible (Exhibit
176).
---------------------------------------------------------------------------
On August 24, 1993, John Huang wrote a memorandum to Felix
Ma which states in pertinent part:
Senator Larry Pressler is coming to Shanghai. See if we
might be able to arrange a dinner in Shanghai for him
on Tuesday, August 31, 1993 at 6:00 p.m.\297\
---------------------------------------------------------------------------
\297\ Exhibit Memorandum from John Huang to M.C. Lee and Felix Ma,
Aug. 24, 1993.
FEC data indicates that Felix and Mary Ma each contributed
$1,000 to Senator Larry Pressler in December 1993.\298\ Senator
Pressler returned the Mas' contributions in October 1996 \299\
apparently upon learning of their link to the Lippo Group.\300\
In addition to the foregoing, the Mas contributed $20,000 to
the DNC and $15,500 to congressional and senatorial candidates
between 1993 and 1995.\301\
---------------------------------------------------------------------------
\298\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\299\ Id.
\300\ Rapid City Journal, Mar. 16, 1997.
\301\ Felix Ma: June 10, 1993, $1,000 to Senator Charles S. Robb
(D-VA); July 17, 1993, $1,000 to Representative Gary L. Ackerman (D-NY-
7); Aug. 10, 1993, $1,000 to Senator Harris L. Wofford (D-PA); Oct. 15,
1993, $10,000 to the DNC; Oct. 25, 1993, $1,000 to Senator James R.
Sasser (D-TN); Dec. 6, 1993, $1,000 to Senator Edward M. Kennedy (D-
MA); May 23, 1994, $2,000 to Senator Dianne Feinstein (D-CA); May 23,
1994, $500 to Senator Dianne Feinstein (D-CA); July 18, 1994, $1,000 to
Senator Dianne Feinstein (D-CA). Mary Ma: June 10, 1993, $1,000 to
Senator Charles S. Robb (D-VA); July 17, 1993, $1,000 to Representative
Gary L. Ackerman (D-NY-7); Oct. 25, 1993, $1,000 to Senator James R.
Sasser (D-TN); May 23, 1994, $2,000 to Senator Dianne Feinstein (D-CA);
May 23, 1994, $500 to Senator Dianne Feinstein (D-CA); July 18, 1994,
$1,000 to Senator Dianne Feinstein (D-CA); Oct. 15, 1993, $10,000 to
the DNC; Dec. 8, 1995, $500 to John C. Edwards (D-AR-2). http://
wyl.ewg.org, Environmental Working Group Website, Compiled from FEC
Data, Last Updated Sept. 10, 1998; DNC Check Tracking Form for
LippoBank Check No. 258 from Felix Ma or Mary L.M. Ma to the DNC in the
amount of $10,000, Sept. 30, 1993, DNC 0039321 (Exhibit 177); DNC Check
Tracking Form for LippoBank Check No. 259 from Felix Ma or Mary L.M. Ma
to the DNC in the amount of $10,000, Sept. 30, 1993, DNC 0039319
(Exhibit 178); Exhibit 179 LippoBank Checking Account Statement of
Felix Ma or Mary L.M. Ma, Oct. 25, 1993 (Exhibit 179); LippoBank Check
No. 258 from Felix Ma or Mary L.M. Ma to the DNC in the amount of
$10,000, Sept. 30, 1993, and LippoBank Check No. 259 from Felix Ma or
Mary L.M. Ma to the DNC in the amount of $10,000, Sept. 30, 1993
(Exhibit 180).
---------------------------------------------------------------------------
In recent interrogatories to the DNC, the Committee
requested information regarding contributions made by Felix Ma.
The DNC responded:
To our knowledge, the referenced contribution from Mr.
Ma does not fall into any of the seven categories
involved in the DNC's review of prior contributions. .
. . Further, no information has been brought to our
attention calling into question the legality or
appropriateness of the referenced contribution.\302\
---------------------------------------------------------------------------
\302\ DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 16-17.
The same response was given regarding Mary Ma's
contributions.\303\ As is evident from their response, the DNC
has retained the Mas' contributions.
---------------------------------------------------------------------------
\303\ Id. at 17-18.
---------------------------------------------------------------------------
The Committee has been unable to locate Felix and Mary Ma
or identify the ultimate source of the funds used for the
contributions but is continuing its review. However, on March
10, 1997, Senator Dianne Feinstein announced the return of
$12,000 in contributions to her senatorial campaign which
included $2,000 contributed by Felix Ma and $2,000 by Mary
Ma.\304\ Feinstein also returned an additional $8,000
contributed by other individuals with ties to Lippo, including
Joseph Sund, $2,000; Charles DeQueljoe, $2,000; Susan Hene-
DeQueljoe, $2,000; and Kenneth Wynn, $2,000.\305\ According to
Bill Chandler, Feinstein's state director based in San
Francisco, ``[t]he senator believes these contributions to be
legal but because of the uproar over LippoBank she wanted to
exert extreme caution and return the funds. . . .'' These are
all the contributions we know to be related to Lippo Bank.\306\
---------------------------------------------------------------------------
\304\ Judy Holland and Charles J. Lewis, ``China Donor Saga Widens:
Boxer, Pelosi Say They, Too, Were Warned by FBI,'' San Francisco
Examiner, Mar. 10, 1997, at A1.
\305\ Id.
\306\ Id.
---------------------------------------------------------------------------
In December 1993, Senator Edward M. Kennedy received a
$1,000 contribution from Felix Ma but returned the contribution
in December 1996.\307\ The DNC, DSCC, the Ohio Democratic
party, the Michigan Democratic party and the Missouri
Democratic party have retained the Mas' contributions.\308\
However, applying the DNC's own standards of review, given the
unavailability of the Mas and the questionable status of these
contributions, the DNC, DSCC and state parties should follow
the practice of Senators Feinstein, Kennedy and Pressler: the
Mas' contributions are suspect and, therefore, should be
disgorged to the U.S. Treasury.\309\
---------------------------------------------------------------------------
\307\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\308\ See Id.
\309\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Joseph Sund $20,000 (Suspect)
Joseph Sund is a Lippo executive who contributed $20,000 to
Democratic causes--again many of the same ones targeted by the
Riadys--during the 1992 election cycle.\310\ Joseph Sund has
served as an executive for a variety of Lippo controlled
companies including Tati Group Limited of Hong Kong.\311\ As of
December 31, 1996, Sund was employed in the Lippo Group's real
estate brokerage office in Beijing, China.\312\ Sund,
simultaneous with his employment at Lippo, served as President
of Pacific Trade Enterprises, Inc., a New York corporation, as
late as September 30, 1993.\313\
---------------------------------------------------------------------------
\310\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\311\ Exhibit 128 Memorandum from Joseph Sund to John Huang, Mar.
23, 1993, HHH 4578 and HHH 4579; Memorandum from Joseph Sund to John
Huang, Apr. 9, 1993, HHH 4589 (Exhibit 181).
\312\ Gwen Lyle and Mark Wu, ``China: Housing Construction
Market,'' Industry Sector Analysis, Dec. 31, 1996.
\313\ New York Department of State, Corporate Records.
---------------------------------------------------------------------------
During the period September 23-30, 1992, Joseph Sund issued
three checks to Democratic causes totaling $20,000 as detailed
below: \314\
---------------------------------------------------------------------------
\314\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998; Exhibit 150 List
of DNC Contributors for Sept. 25, 1992, Gore Economic Event, DNC
4125867.2; DNC Finance Executive Summary for Joseph T. Sund, Apr. 24,
1998, DNC 4368568 (Exhibit 182); Independence Savings Bank Check No.
104 from Joseph Tat Sund to the Michigan State Democratic party/Federal
Account in the amount of $5,000, Sept. 30, 1992, Independence Savings
Bank Check No. 105 from Joseph Tat Sund to the DNC Victory Fund in the
amount of $10,000, Sept. 24, 1992, and Independence Savings Bank Check
No. 106 from Joseph Tat Sund to the Arkansas State Democratic party in
the amount of $5,000, Sept. 23, 1992 (Exhibit 183); DNC Check Tracking
Form for Independence Savings Bank Check No. 105 from Joseph Tat Sund
to the DNC Victory Fund in the amount of $10,000, Sept. 24, 1992, DNC
3310338 (Exhibit 184). The Committee has received DNC contribution
information only for Sund's 1992 contribution to the DNC, which was
solicited by Bob Burkett. Id.
----------------------------------------------------------------------------------------------------------------
Check
Name Date FEC Date Recipient Amount
----------------------------------------------------------------------------------------------------------------
Joseph Sund.................................. 09/24/92 09/28/92 DNC............................ $10,000
Joseph Sund.................................. 09/30/92 10/21/92 Arkansas Democratic Party...... 5,000
Joseph Sund.................................. .......... 10/23/92 Michigan Democratic Party...... 5,000
----------------------------------------------------------------------------------------------------------------
The extent of Joseph Sund's other fund-raising activity is
unclear. However, on August 26, 1993, LippoBank employee Dewi
C. Tirto wrote a memorandum to Joseph Sund which states in
pertinent part:
John Huang asked me to inform you that Senator Pressler
will be staying at [sic] Portman Hotel in Shanghai.
FYI, the following are Committee assignments of Senator
Pressler: Commerce, Science & Transportation--Foreign
Relations--Juciary [sic]--Small Business--Special
Aging.\315\
---------------------------------------------------------------------------
\315\ Memorandum from Dewi C. Tirto to Joseph Sund, Aug. 26, 1993,
HHH 4588 (Exhibit 185).
FEC data indicates that Joseph and his wife Hylen Sund each
contributed $1,000 to Senator Larry Pressler in December
1993.\316\ Senator Pressler returned the Sunds' contributions
in October 1996, apparently upon learning of their potential
link to the Lippo Group.\317\ In addition to the foregoing, the
Sunds contributed $20,000 to the DNC and $13,500 to
congressional and senatorial candidates.\318\
---------------------------------------------------------------------------
\316\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\317\ Id.
\318\ Id.; Manufacturers Hanover Check No. 4107 from Joseph Sund
and Hylen Sund to the DNC in the amount of $5,000, Sept. 27, 1993, DNC
0102552 (Exhibit 186); Manufacturers Hanover Check No. 4108 from Joseph
Sund and Hylen Sund to the DNC in the amount of $5,000, Sept. 30, 1993,
DNC 0102553 (Exhibit 187); Manufacturers Hanover Check No. 211 from
Pacific Trade Enterprises, Inc. to the DNC in the amount of $10,000,
Sept. 28, 1993, DNC 0102895 (Exhibit 188) (Joseph Sund contributed
$10,000 to the DNC on Sept. 30, 1993, through his company Pacific Trade
Enterprises, Inc.); http://wyl.ewg.org, Environmental Working Group
Website, Compiled from FEC Data, Last Updated Sept. 10, 1998. Joseph
Sund: June 30, 1993, $1,000 to Senator Charles S. Robb (D-VA); July 7,
1993, $1,000 to Representative Gary L. Ackerman (D-NY-7); July 15,
1993, $1,000 to Senator Paul Simon (D-IL); Aug. 10, 1993, $1,000 to
Senator Harris L. Wofford (D-PA); Sept. 30, 1993, $5,000 to the DNC;
Sept. 30, 1993, $5,000 to the DNC; May 24, 1994, $5,000 to Senator
Dianne Feinstein (D-CA); Oct. 11, 1994, $2,500 to the Effective
Government Committee. Hylen Sund: June 10, 1993, $1,000 to Senator
Charles S. Robb (D-VA); July 1, 1994, $2,000 to Senator Dianne
Feinstein (D-CA). Joseph Sund contributed $10,000 to the DNC on Sept.
30, 1993, through his company Pacific Trade Enterprises, Inc.
---------------------------------------------------------------------------
In recent interrogatories to the DNC, the Committee
requested information regarding a contribution made by Joseph
Sund. The DNC responded:
To our knowledge, the referenced contribution from
Joseph Sund does not fall into any of the seven
categories involved in the DNC's review of prior
contributions. . . . Further, no information has been
brought to our attention calling into question the
legality or appropriateness of Mr. Sund's
contribution.\319\
---------------------------------------------------------------------------
\319\ DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 10-11.
As is evident from their response, the DNC has retained Joseph
Sund's contributions.
The Committee has located Joseph Sund who--according to his
attorney--is residing in China and is currently engaged in
discussions with his attorneys to secure his testimony. The
Committee has thus far been unable to identify the ultimate
source of the funds used for the contributions due to lack of
cooperation from Sund, but is continuing its review. That fact
notwithstanding, as detailed earlier, on March 19, 1997, House
Minority Leader Dick Gephardt returned $22,000 in campaign
contributions which included $2,500 contributed by former Lippo
executive Joseph Sund.\320\ Similarly, Joseph Sund's $2,000
contribution to Senator Dianne Feinstein was one of six
returned in March 1997 because of the contributors' ties to the
Lippo Group.\321\ Apparently, Senator Feinstein, like
Representative Gephardt, had concerns over the ultimate source
of the funds, although Senator Feinstein has yet to return the
$2,000 contributed to her campaign by Hylen Sund in 1994.\322\
---------------------------------------------------------------------------
\320\ ``Gephardt Returns $22,000,'' Associated Press, Mar. 19,
1997, at A37.
\321\ ``China Donor Saga Widens: Boxer, Pelosi Say They, Too, Were
Warned by FBI,'' San Francisco Examiner, Mar. 10, 1997.
\322\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
---------------------------------------------------------------------------
The DNC, the Arkansas Democratic party and the Michigan
Democratic party have retained Joseph Sund's
contributions.\323\ However, applying the DNC's own standards
of review, given the unavailability of Sund and the
questionable status of these contributions, the DNC and state
parties should follow the practice of House Minority Leader
Richard Gephardt, Senator Feinstein and Senator Pressler:
Sund's contributions are suspect and, therefore, should be
disgorged to the U.S. Treasury.\324\
---------------------------------------------------------------------------
\323\ Id.
\324\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
C. Contributions by Lippo Controlled Entities During the 1994 Election
Cycle
Hip Hing Holdings $22,500, San Jose Holdings $15,000, and Toy Center
Holdings $17,500 (Suspect)
On September 27, 1993, the DNC held a fund-raiser in Los
Angeles featuring Vice President Al Gore.\325\ In addition to
John and Jane Huang, Agus Setiawan, then-Vice President of
Marketing for LippoBank, and Jueren Shen, a foreign national
and chairman of the China Resources Group--a company owned and
operated by the Communist Chinese government and identified as
a Chinese intelligence gathering operation \326\--were also in
attendance.\327\ In conjunction with this event, three Lippo-
related companies contributed a total of $45,000 to the DNC as
detailed below.
---------------------------------------------------------------------------
\325\ Letter from John Huang to Jack Quinn, Oct. 7, 1993, EOP
049490 (Exhibit 189); Karatz Residence DNC Reception Logistics and
Guest List, EOP 000959-EOP 000964 (Exhibit 190).
\326\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 2,
2504 (1998).
\327\ Exhibit 190 Karatz Residence DNC Reception Logistics and
Guest List, EOP 000959-EOP 000964.
---------------------------------------------------------------------------
On September 23, 1993, in conjunction with this event,
Lippo Group subsidiaries Hip Hing Holdings, San Jose Holdings,
Inc. (``San Jose Holdings'') and Toy Center Holdings of
California, Inc. (``Toy Center Holdings'') \328\ each
contributed $15,000 to the DNC under the signature of then-
Lippo executives John Huang and Agus Setiawan.\329\ Hip Hing
Holdings also contributed $2,500 to the DNC on May 29,
1993,\330\ and $5,000 to the California Democratic party on
September 29, 1993.\331\ On May 28, 1993, Toy Center Holdings
contributed an additional $2,500 to the DNC.\332\ All three
subsidiaries generated negative net income for the fiscal year
ending December 31, 1993, during which the contributions were
made.
---------------------------------------------------------------------------
\328\ List of Directors and Officers for Lippo Group Companies in
USA, June 1, 1990, HHH 0850, HHH 0847, and HHH 0849 (Exhibit 191); see
also Investigation of Illegal or Improper Activities in Connection with
the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 2,
2504 (1998) citing Investigation of Illegal or Improper Activities in
Connection with the 1996 Federal Election Campaign Before the Senate
Committee on Governmental Affairs, 105th Cong., 1st sess., part II, S.
Hrg. 105-300, 13 (1998) (Testimony of Juliana Utomo, July 15, 1997).
\329\ DNC Check Tracking Form for LippoBank Check No. 2626 from Hip
Hing Holdings to the DNC in the amount of $15,000, Sept. 23, 1993, DNC
0102897 (Exhibit 192); DNC Check Tracking Form for LippoBank Check No.
1692 from San Jose Holdings to the DNC in the amount of $15,000, Sept.
27, 1993, DNC 0102898 (Exhibit 193); DNC Check Tracking Form for
LippoBank Check No. 1458 from Toy Center Holdings to the DNC in the
amount of $15,000, Sept. 23, 1993, DNC 0102896 (Exhibit 194). According
to FEC data, Toy Center Holdings also contributed $2,500 to the DNC in
July 1993; the FEC date is July 15, 1993. On Sept. 27, 1993, Calbot
Holdings, Inc., another Lippo subsidiary, contributed $40,000 to the
DNC also under the signatures of John Huang and Agus Setiawan. Bank of
Trade/Lippo Group Check No. 1092 from Calbot Holdings to the DNC in the
amount of $40,000, Sept. 27, 1993, CHI 0035 and CHI 0200 (Exhibit 195).
The Committee is investigating the origins of this contribution.
\330\ DNC Check Tracking Form for LippoBank Check No. 2572 from Hip
Hing Holdings to the DNC in the amount of $2,500, May 28, 1993, DNC
0052705 (Exhibit 196).
\331\ LippoBank Check No. 2628 from Hip Hing Holdings to the
California Democratic party in the amount of $5,000, Sept. 29, 1993,
HHH 0484 and HHH 0485 (Exhibit 197).
\332\ LippoBank Check No. 1418 from Toy Center Holdings to the DNC
in the amount of $2,500, May 28, 1993, TCH 0048 and TCH 0049 (Exhibit
198); DNC Check Tracking Form for LippoBank Check No. 1418 from Toy
Center Holdings to the DNC in the amount of $2,500, May 28, 1993, DNC
0052706 (Exhibit 199).
---------------------------------------------------------------------------
According to documents produced to the Committee, during
the fiscal year ending December 31, 1993, Hip Hing Holdings
generated a gross income of only $35,200 and a negative net
income of -$493,802.93.\333\ Of its $35,200 in gross income,
$32,960 was expended on ``Contribution [sic] and Donations.''
\334\ Hip Hing Holdings' only asset at the time of the
contribution was a vacant parking lot in Los Angeles.\335\
---------------------------------------------------------------------------
\333\ Hip Hing Holdings Income Statement for the Period Ending Dec.
31, 1993, HHH 0043 (Exhibit 200).
\334\ Id.
\335\ James Warren, ``Funds Hearings Focus on China's Links to
Indonesian Conglomerate,'' Chicago Tribune, July 15, 1997.
---------------------------------------------------------------------------
San Jose Holdings, a real estate holding company,\336\
generated a gross income of $172,108 and a negative net income
of -$65,177.09.\337\ Of its $172,108 in gross income, $35,150
was expended on ``Contribution[s] and Donations.'' \338\
---------------------------------------------------------------------------
\336\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 1,
1123 (1998).
\337\ San Jose Holdings Income Statement for the Period Ending Dec.
31, 1993 (Exhibit 201).
\338\ Id.
---------------------------------------------------------------------------
Finally, Toy Center Holdings generated a gross income of
$132,404.24 and a negative net income of -$26,886.67.\339\ Of
its $132,404.24 in gross income, $33,550 was expended on
``Contribution [sic] and Donations.'' \340\ The details of the
business conducted by Toy Center Holdings are unknown to the
Committee.
---------------------------------------------------------------------------
\339\ Toy Center Holdings Income Statement for the Period Ending
Dec. 31, 1993 (Exhibit 202).
\340\ Id.
---------------------------------------------------------------------------
In recent interrogatories to the DNC, the Committee
requested information regarding the September 23, 1993,
contributions of Hip Hing Holdings, San Jose Holdings, and Toy
Center Holdings. The DNC responded:
To our knowledge, the referenced contribution from Hip
Hing Holdings, Ltd. does not fall into any of the seven
categories involved in the DNC's review of prior
contributions. . . . Further, no information has been
brought to our attention calling into question the
legality or appropriateness of the contribution from
Hip Hing Holdings, Ltd. . . . \341\
---------------------------------------------------------------------------
\341\ DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 13-14.
Pursuant to its review of the subsidiaries' contributions, the
DNC reviewed information developed by the Senate Campaign
Finance Investigation including the majority and minority
reports.\342\ In proclaiming the legality of the subsidiaries'
contributions in its response to the Committee's
interrogatories, the DNC quoted and relied upon the following
passage excerpted from the Senate Minority Report:
---------------------------------------------------------------------------
\342\ Id. at 12-14.
In September 1993, the DNC received additional
contributions from Hip Hing Holdings and from two other
holding companies: San Jose Holdings and Toy Center
Holdings. Hip Hing Holdings and Toy Center Holdings
each made $17,500 in contributions to the DNC while San
Jose Holdings contributed $15,000. Unlike the
contribution in 1992, however, [of $50,000 from Hip
Hing Holdings], the requests for reimbursement for the
months in which the contributions were made do not
contain requests for reimbursements of these
contributions. Also, unlike the $50,000 contribution
from Hip Hing Holdings in 1992, each of the companies
generated sufficient rental income to support the cost
of the 1993 contributions. In 1993, Hip Hing Holdings
generated $35,200 in income from rental of the
undeveloped property, while San Jose Holdings generated
$155,979 in income, and Toy Center Holdings generated
$167,000 in income. Accordingly, unlike the 1992
contribution, there is no evidence that the 1993
contributions made by Lippo-related entities were
reimbursed with money from abroad.\343\
---------------------------------------------------------------------------
\343\ Id. at 12 (emphasis added in original text) (citations
omitted in original text) (citing Investigation of Illegal or Improper
Activities in Connection with the 1996 Federal Election Campaign Before
the Senate Committee on Governmental Affairs, S. Rept. No. 167, 105th
Cong., 2d sess., vol. 4, 4793 (1998)).
An identical response was given regarding the contributions of
San Jose Holdings \344\ and Toy Center Holdings,\345\ and as
evidenced by the foregoing responses, the DNC has retained the
$45,000 in contributions.\346\
---------------------------------------------------------------------------
\344\ DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 14-15.
\345\ Id. at 11-12.
\346\ Id. at 11-15.
---------------------------------------------------------------------------
The $50,000 contribution to the DNC referenced in the
Senate Minority Report was made by Hip Hing Holdings in August
1992.\347\ Hip Hing Holdings was immediately thereafter
reimbursed in the amount of $50,000 by the Lippo Group in
Indonesia.\348\ In July 1997, the DNC immediately returned the
$50,000 that it received from Hip Hing Holdings after learning
of its foreign origin from a Senate hearing.\349\ In the case
of the subsidiaries' 1993 contributions totaling $45,000, the
DNC has retained them based upon the fact that the subsidiaries
were not reimbursed for the contributions by a foreign source,
namely the Lippo Group.\350\ On this point, the Minority Report
and the DNC appear to be correct: ``. . . unlike the 1992
[$50,000] contribution [by Hip Hing Holdings], there is no
evidence that the 1993 contributions made by Lippo-related
entities were reimbursed with money from abroad.'' \351\
---------------------------------------------------------------------------
\347\ Exhibit 26 LippoBank Check No. 2397 from Hip Hing Holdings to
the DNC Victory Fund Non-Federal Account in the amount of $50,000, Aug.
12, 1992, HHH 1263.
\348\ Exhibit 27 Memorandum from John Huang and Agus Setiawan to
Mrs. Ong Bwee Eng, Aug. 17, 1992, HHH 0238.
\349\ James Rowley, ``The Senate Investigation of Campaign Fund-
raising Abuses,'' Associated Press, July 15, 1997; Lynn Sweet,
``Democrats to Return $50,000 Foreign Contribution,'' Chicago Sun-
Times, July 16, 1997, at 31.
\350\ DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 12-15.
\351\Id. at 12 (emphasis added in original text) (citations omitted
in original text) (citing Investigation of Illegal or Improper
Activities in Connection with the 1996 Federal Election Campaign Before
the Senate Committee on Governmental Affairs, S. Rept. No. 167, 105th
Cong., 2d sess., vol. 4, 4793 (1998)).
---------------------------------------------------------------------------
However, the DNC's reliance on the example of Hip Hing
Holdings' August 1992 contribution in deciding to retain the
subsidiaries' 1993 contributions is misplaced. The 1993
contributions are illegal based on James Riady's immigration
status. At the time of the contribution, Riady was a permanent
resident ``outside of the United States'' and thus ineligible
to make political contributions in his personal capacity. But
more importantly in this case, having established that--despite
his permanent resident status--Riady has been a foreign
national pursuant to 2 U.S.C. 441(e)a since 1991, Riady was
also ineligible to participate in the decision of a U.S.
corporation to make a political contribution. Pursuant to FEC
regulations:
A foreign national shall not direct, dictate, control,
or directly or indirectly participate in the
decisionmaking process of any person, such as a
corporation, labor organization, or political
committee, with regard to such person's federal or
nonfederal election-related activities, such as
decisions concerning the making of contributions or
expenditures in connection with elections for any
local, state, or federal office or decisions concerning
the administration of a political office.\352\
---------------------------------------------------------------------------
\352\ FEC Advisory Opinion 1992-16 (citing 11 C.F.R.
Sec. 110.4(A)(3)) (emphasis added).
As in the case of the other contributions by Lippo
subsidiaries, if Riady played any part whatsoever in any of the
subsidiaries' decisions to contribute to the DNC, that decision
is tainted by Riadys involvement and the resulting contribution
is illegal.
Moreover, the 1993 contributions by Hip Hing Holdings, San
Jose Holdings and Toy Center Holdings are legally suspect, not
because they each were reimbursed for their contributions, but
because the contributions were not made from profits as
required by FEC Advisory Opinion 1992-96 which states in
pertinent part that ``[t]he domestic subsidiary of a foreign
corporation may make political contributions even though it
received subsidies from its foreign parent if the contributions
are made from domestic profits.'' \353\ In this case, the
contributions were made during a period in which the
subsidiaries suffered major losses and are legally suspect as a
result.
---------------------------------------------------------------------------
\353\ FEC Advisory Opinion 1992-96; Investigation of Illegal or
Improper Activities in Connection with the 1996 Federal Election
Campaign Before the Senate Committee on Governmental Affairs, S. Rept.
No. 167, 105th Cong., 2d sess., vol. 1, 1124 (1998) (citing FEC
Advisory Opinion 1992-96).
---------------------------------------------------------------------------
If made today, pursuant to current DNC policy, these
contributions would not be accepted. According to DNC counsel
Joseph Sandler, ``[w]e don't accept checks from U.S.
subsidiaries of foreign corporations as a matter of policy, not
of law. So, we would not accept a check from a U.S. subsidiary
regardless of the circumstances under our current policy.''
\354\
---------------------------------------------------------------------------
\354\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, 105th Cong., 1st sess., Deposition of Joseph E.
Sandler, Esq., May 15, 1997, 79 (emphasis added).
---------------------------------------------------------------------------
While there is insufficient evidence to declare the
subsidiaries' $52,500 in contributions illegal due to
insufficient information regarding James Riady's participation
in the decisions to contribute, they are highly suspect and
should be returned to the contributors or disgorged to the U.S.
Treasury based on the DNC's own criteria of
appropriateness.\355\ The Committee is continuing its review of
the contributions.
---------------------------------------------------------------------------
\355\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Arkansas International Development Corporation $25,000 (Suspect)
DNC check tracking forms and supporting finance documents
indicate that the Arkansas International Development
Corporation (``AIDC'')--a corporation initially funded by P.T.
Masindo, a subsidiary of the Lippo Group, in the amount of
$50,000 \356\--contributed $25,000 to the DNC on November 25,
1993.\357\ On one check tracking form produced to the
Committee, ``James Riotti'' [sic] was listed as the contact for
the contribution.\358\ A second check tracking form for the
same $25,000 contribution has ``James Riotti'' [sic] marked
through and ``Joe Giroir'' written instead.\359\ This
contribution was attributed to a BLF fund-raiser noted as ``CA-
Dinner.'' \360\ Supporting documents describe the fund-raiser
as the ``Los Angeles Event Pres. Clinton'' held on December 17,
1993.\361\
---------------------------------------------------------------------------
\356\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, Deposition of C.J. ``Joe'' Giroir, Jr., 15-16,
Apr. 30, 1997; see generally Letter from C. Joseph Giroir, Jr., Esq.,
to Winardi Setiaputra, Sept. 21, 1995, AIDC 000005-AIDC 000006 (AIDC II
was also funded in part by the Lippo Group.) (Exhibit 203).
\357\ DNC Check Tracking Form for Worthen Check No. 1010 from AIDC
to the DNC in the amount of $25,000, Dec. 25, 1993, DNC 0048739
(Exhibit 204); DNC Check Tracking Form for Worthen Check No. 1010 from
AIDC to the DNC in the amount of $25,000, Dec. 25, 1993, DNC 1410240
(Exhibit 205).
\358\ Exhibit 204 DNC Check Tracking Form for Worthen Check No.
1010 from AIDC to the DNC in the amount of $25,000, Dec. 25, 1993, DNC
0048739.
\359\ Exhibit 205 DNC Check Tracking Form for Worthen Check No.
1010 from AIDC to the DNC in the amount of $25,000, Dec. 25, 1993, DNC
1410240.
\360\ Exhibit 204 DNC Check Tracking Form for Worthen Check No.
1010 from AIDC to the DNC in the amount of $25,000, Dec. 25, 1993, DNC
0048739; Exhibit 205 DNC Check Tracking Form for Worthen Check No. 1010
from AIDC to the DNC in the amount of $25,000, Dec. 25, 1993, DNC
1410240.
\361\ List of DNC Contributors, 12/1/95 to 2/29/96, DNC 4125867.17
(Exhibit 206); see also DNC Detail Posting of Mr. James Riotti of AIDC
Dec. 17, 1993, DNC 0048107 (Exhibit 207).
---------------------------------------------------------------------------
In an undated DNC memorandum from Ann Braziel to former
White House aide Mark Middleton regarding ``Arkansas Follow-
up,'' Braziel wrote, ``[h]ere are some more prospects/past
donors that we couldn't identify. Do you have any information
or advice on them?'' \362\ The first individual enumerated is:
``Mr. James Riotti [sic] Arkansas International Development
Corp $25k in 1993.'' \363\
---------------------------------------------------------------------------
\362\ DNC Memorandum from Ann Braziel to Mark Middleton, undated,
DNC 3001579-DNC 3001580 (Exhibit 208).
\363\ Id.
---------------------------------------------------------------------------
The ``James Riotti'' referenced is in fact ``James Riady''
of the Lippo Group.\364\ As previously discussed, the Committee
has no FEC records of political contributions made by James
Riady in his personal capacity after 1992. It is, however,
beyond dispute that the AIDC contributed $25,000 to the DNC on
December 25, 1993. At the time of the contribution, Riady was a
permanent resident ``outside of the United States'' and thus
ineligible to participate in the decision of a U.S. corporation
to make a political contribution. In short, if Riady played any
part whatsoever in the AIDC's decision to contribute $25,000 to
the DNC, the contribution is illegal. Precisely how Riady's
name came to be associated with this remains a mystery. But in
any event, based on the documents excerpted above and the DNC's
attribution of the $25,000 contribution--exactly one-half of
the initial capital infusion provided by the Lippo Group to
start AIDC--to Riady, it strains credibility to believe that he
played no role in the AIDC's decision to contribute.\365\
---------------------------------------------------------------------------
\364\ In recent interrogatories to the DNC, the Committee requested
information regarding the $25,000 contribution made by the AIDC. DNC's
Responses to the Committee's June 23, 1998, Interrogatories, Aug. 6,
1998, at 29. The DNC responded in pertinent part that:
The contribution was not made by ``James Riotti,'' but by
[sic] Arkansas International Development Corporation. It
was deposited into the DNC's non-federal corporate account
as a corporate contribution. ``James Riotti'' was listed as
a ``contact'' for the company on the check tracking form. I
have not identified any information indicating whether this
---------------------------------------------------------------------------
is the correct name and spelling for this person.
Id. at 30-31. The Committee does not dispute the DNC's characterization
of the contribution as a corporate contribution made by the AIDC. But
while the DNC is apparently unable to confirm that ``James Riotti''
[sic] associated with the AIDC is ``James Riady'' of the Lippo Group,
the Committee has gathered overwhelming evidence that ``James Riotti''
is in fact ``James Riady'' based on a number of factors including, but
not limited to: the Lippo Group's association with the AIDC, James
Riady's association with C.J. ``Joe'' Giroir, James Riady's history of
contributing to Democratic causes, and his association with a number of
Democratic Arkansans including President Clinton and Mark Middleton.
---------------------------------------------------------------------------
\365\ C.J. ``Joe'' Giroir, Esq., was questioned about an AIDC
disbursement relating to Webster Hubbell. The dialog went as follows:
Counsel. Did you have any reticence about [making a
contribution to the Hubbell Family Trust], was it something
that you thought about?
Giroir. Well, I didn't want to do it without discussing
it with James Riady because I didn't consider it to be a
proper business expense for AIDC. And, so, I wanted to be
sure that he was in concurrence with me that it would be
okay to do.
So, on at least one occasion Giroir consulted with James Riady
regarding the disbursements that he did not consider ``a proper
business expense.'' Whether a contribution to the DNC would constitute
``a proper business expense'' to Giroir is an unanswered question.
Investigation of Illegal or Improper Activities in Connection with the
1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, Deposition of C.J. ``Joe'' Giroir, Jr., 251-253,
Apr. 30, 1997.
Due to insufficient information regarding James Riady's
participation in the AIDC's decision to contribute, the
Committee cannot conclude with 100% certainty that the
contribution is illegal. The evidence available to the
Committee does, however, strongly indicate that the AIDC's
$25,000 contribution is illegal and should be disgorged to the
U.S. Treasury pursuant to Federal law.\366\ The Committee is
continuing its review of the contributions.
---------------------------------------------------------------------------
\366\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
D. The Political Involvement and Influence of the Riadys
The Riadys, John and Jane Huang and most of the Lippo
employees and their spouses who made contributions have either
fled the country or pled the Fifth Amendment in order to avoid
incriminating themselves. Against that backdrop, the foregoing
contributions appear to be part of a larger scheme and pattern
of illegal--or at a minimum, questionable--contributions
involving the Riadys, their companies, and their employees.
Their combined 1992 contributions to the Arkansas Democratic
party, for example, were 23 percent of all contributions
received by the Arkansas party from individuals for the 1992
election cycle.\367\ President Clinton was clearly informed in
August 1992--around the time that the Riadys contributed over
$450,000 to Democratic causes--that James Riady was living and
based abroad and that his interests were primarily vested in
Asia. Given President Clinton and James Riady's close
friendship, many questions regarding the President's knowledge
of the Riadys' political contributions remain to be answered.
---------------------------------------------------------------------------
\367\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
---------------------------------------------------------------------------
Yah Lin ``Charlie'' Trie Related Contributions During the 1996 Election
Cycle
Lei Chu $12,500 (Illegal)
Lei Chu, a onetime close advisor of and assistant to Yah
Lin ``Charlie'' Trie,\368\ played a key role in Trie's service
as a member of the Commission on United States-Pacific Trade
and Investment Policy, otherwise known as the Bingaman
Commission. Chu drafted a number of policy proposals for the
Commission on Trie's behalf and participated in Commission
meetings.\369\ After attending several meetings, she was
prohibited from Commission participation by the Chairman of the
Commission due to concerns over her ties to foreign
corporations.\370\
---------------------------------------------------------------------------
\368\ Lei Chu apparently also has ties to Peter Chen, a one-time
employee of the Lippo Group. See Memorandum from Peter Chen to Joe
Giroir, Antonio Pan, et al., Aug. 12, 1994, AIDC 000972 (Exhibit 209).
Chu served as the Vice President of Sun Union Limited of Hong Kong
under Sun Union President Peter Chen. Sun Union Limited Business Card
of President Peter Chen, A 0003245 (Exhibit 210); Sun Union Limited
Business Card of Vice President Lei Chu, A 0003246 (Exhibit 211).
\369\ Proposal of the U.S.-Asia Trading Partnership Program
(USATP), May 14, 1996 (Exhibit 212); ``Recommendations for what we can
do in U.S.-Asian Trade Policy Formulation,'' Aug. 1, 1996 (Exhibit
213); ``Commission on U.S.-Pacific Trade and Investment Policy: Some
Recommendations Before the Asia Trip,'' Aug. 25, 1996 (Exhibit 214).
\370\ Committee Interview of Clyde Prestowitz, Feb. 18, 1998.
---------------------------------------------------------------------------
On February 18, 1996, Lei Chu flew on China Airlines from
Taipei, Taiwan to Los Angeles, California.\371\ The following
day she attended the DNC's February 19, 1996, fund-raiser at
the Hay Adams Hotel in Washington, DC.\372\ This was John
Huang's first DNC fund-raiser.\373\ At this fund-raiser the
President lauded Huang for his fund-raising prowess as
excerpted previously. Trie was also in attendance.\374\ A
photograph from the event shows John Huang and then-DNC
Chairman Donald Fowler holding a poster size check from the
Asian Pacific Leadership to the DNC in the amount of
$1,000,000.\375\ The Hay Adams fund-raiser failed to raise the
funds expected.\376\ In order to make up for the shortfall,
conduit contributions were made at the request of and with
funds provided by Trie and ex-Lippo executive Antonio Pan in
order to reach the $1,000,000 goal.\377\
---------------------------------------------------------------------------
\371\ U.S. Customs Records for Lei Chu (Exhibit 215).
\372\ Photograph of Lei Chu at the DNC Feb. 19, 1996, Fund-raiser,
Hay-Adams Hotel, Washington, DC (Exhibit 216).
\373\ See generally DNC Briefing for the President of the United
States, DNC Asian Pacific American Leadership Council Dinner, Feb. 19,
1996, Hay-Adams Hotel, Washington, DC, DNC 1579590-DNC 1579600 (Exhibit
217).
\374\ Photograph of Presidential table at the DNC Feb. 19, 1996,
Fund-raiser, Hay-Adams Hotel, Washington, DC (Exhibit 218); List of
Attendees for the Hay Adams event, Feb. 19, 1996, EOP 058577, EOP
058579-EOP 058580 (Exhibit 219).
\375\ Photograph of then-DNC Vice Chairman John Huang and Then-DNC
Chairman Donald Fowler at the DNC Feb. 19, 1996, Fund-raiser, Hay-Adams
Hotel, Washington, DC (Exhibit 220).
\376\ See Committee Interview of Tony Hsu, Sept. 3, 1997.
\377\ See Id.; see, e.g., Discussion of J & M International, Inc.,
Manlin Foung, and Joseph Landon, infra.
---------------------------------------------------------------------------
The following day, on February 20, 1996, Chu established a
checking account at the Citizens Bank of Washington with an
initial cash deposit of $12,520.\378\ On that same day, Chu
issued starter check no. 90--the first check ever written on
that account--in the amount of $12,500 to the DNC \379\ in
conjunction with the Hay Adams fund-raiser.\380\ That check
cleared Chu's account on February 26, 1996,\381\ and was the
sole check written from that account during the period February
1996-July 1996.\382\ It should be noted that check no. 90 to
the DNC--a check drawn on a Washington, DC, bank--bears a
Garland, Texas, address in unidentified handwriting.\383\
---------------------------------------------------------------------------
\378\ Citizens Bank Signature Card of Lei Chu (Exhibit 221);
Citizens Bank Deposit Ticket of Lei Chu in the amount of $12,520, Feb.
20, 1996 (Exhibit 222); Citizens Bank Cash In Ticket of Lei Chu
(Exhibit 223); Citizens Bank Checking Account Statement of Lei Chu,
Mar. 15, 1996 (Exhibit 224); Currency Transaction Report by Form 4789
for Lei Chu, H01805 (Exhibit 225).
\379\ Exhibit 224 Citizens Bank Checking Account Statement of Lei
Chu, Mar. 15, 1996; Citizens Bank Check No. 90 from Lei Chu to the DNC
in the amount of $12,500 (Exhibit 226).
\380\ DNC Check Tracking Form for Citizens Bank Check No. 90 from
Lei Chu to the DNC in the amount of $12,500, 000525 (Exhibit 227).
\381\ Exhibit 224 Citizens Bank Checking Account Statement of Lei
Chu, Mar. 15, 1996.
\382\ Id.; Citizens Bank Checking Account Statement of Lei Chu,
Apr. 15, 1996 (Exhibit 228); Citizens Bank Checking Account Statement
of Lei Chu, May 15, 1996 (Exhibit 229); Citizens Bank Checking Account
Statement of Lei Chu, June 17, 1996 (Exhibit 230); Citizens Bank
Checking Account Statement of Lei Chu, July 16, 1996 (Exhibit 231).
\383\ Exhibit 226 Citizens Bank Check No. 90 from Lei Chu to the
DNC in the amount of $12,500.
---------------------------------------------------------------------------
DNC contribution information lists John Huang as the DNC
Contact for Chu's contribution.\384\ Trie solicited her
contribution and his telephone number was provided as Chu's
contact number.\385\ It was Chu's apparent link to Huang and
Trie that led to a review of her contribution.\386\ Ernst &
Young was unable to confirm the Garland, Texas, address
provided by Chu.\387\ In addition, the notation ``Bad #'' was
inscribed by the Ernst & Young auditor beside the telephone
numbers provided by Chu.\388\ The Research Information Form was
labeled ``No Info.'' \389\ Finally, Chu's Ernst & Young file
was labeled ``DER'' for Dead End Research.\390\ The DNC
received no helpful information as a result of its review. Chu
has fled the United States and is believed to be living in
Taiwan.\391\ The Committee has been unable to contact her.
---------------------------------------------------------------------------
\384\ Exhibit 227 DNC Check Tracking Form for Citizens Bank Check
No. 90 from Lei Chu to the DNC in the amount of $12,500, 000525.
\385\ Id.
\386\ DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 36-37.
\387\ Ernst & Young Contribution Review Materials for Lei Chu, DNC
1804805, DNC 1804808, DNC 1804810, and DNC 1804821-DNC 1804822, at 2
and 4 (Exhibit 232).
\388\ Id. at 5.
\389\ Id. at 4.
\390\ Id. at 1. The Committee has received no evidence of IGI's
participation in this audit.
\391\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, Interview of Mr. and Mrs. Chu Shuo Po, May 22,
1997.
---------------------------------------------------------------------------
In recent interrogatories to the DNC, the Committee
requested information regarding Chu's contribution. The DNC
responded:
The DNC has not returned the referenced contribution
from Lei Chu because the information developed during
the DNC's review of prior contributions met the
criteria for retaining a contribution as set forth in
``DNC In-Depth Contribution Review,'' at page 3.\392\
---------------------------------------------------------------------------
\392\ DNC's Response to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 37.
Despite the paucity of information gathered pursuant to the
Ernst & Young review, the DNC decided to retain Chu's $12,500
contribution.\393\ That fact notwithstanding, based on Trie's
proven history of using conduits to contribute to the DNC \394\
and the suspicious activity evidenced by Lei Chu's bank
records, the evidence indicates that her $12,500 was an illegal
conduit contribution in violation of 2 U.S.C. Sec. 441f.
Therefore, pursuant to Federal regulations and DNC practice,
the DNC should disgorge Chu's $12,500 contribution to the U.S.
Treasury.\395\
---------------------------------------------------------------------------
\393\ Id.
\394\ It deserves mention that Trie was given credit by the DNC for
soliciting the $100,000 contribution of Jimswood International, Inc.
(``Jimswood'') of Los Angeles, CA. Almost every contribution for which
Trie was listed as the solicitor has been determined to be illegal.
However, the Committee has determined Jimswood's contribution to be
legal. Interestingly, this is not an instance of Trie soliciting a
legal contribution. Instead, according to Davisson Wu of Jimswood, Trie
did not solicit the $100,000 contribution. Wu is uncertain why Trie was
given credit for soliciting his contribution. See generally Letter from
Roy H. Aron to Tim Griffin, Esq., Sept. 17, 1998 (discussing Jimswood's
contribution and complementing the Committee's investigation for its
professionalism) (Exhibit 233).
\395\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
J & M International, Inc. $25,000 (Illegal)
On February 17, 1996, ex-Lippo executive and business
associate of Trie, Antonio Pan, entered the United States at
John F. Kennedy International Airport, New York, New York.\396\
Two days later, on February 19, 1996, Pan, Trie, and Huang
attended the DNC Hay Adams Hotel fund-raiser.\397\ The next
day, at 2:45 p.m., Pan, Trie's business partner Ng Lap Seng
a.k.a. Mr. Wu, Trie's personal assistant Lei Chu and
approximately 15 other individuals entered the White House for
a tour arranged by DNC White House Liaison Susan Lavine.\398\
---------------------------------------------------------------------------
\396\ U.S. Customs Records for Antonio Y.P. Pan (Exhibit 234).
\397\ Photograph of Antonio Y.P. Pan at the DNC Feb. 19, 1996,
Fund-raiser, Hay-Adams Hotel, Washington, DC (Exhibit 235); Photograph
of Yah Lin ``Charlie'' Trie at the DNC Feb. 19, 1996, Fund-raiser, Hay-
Adams Hotel, Washington, DC (Exhibit 236); Photograph of John and Jane
Huang at the DNC Feb. 19, 1996, Fund-raiser, Hay-Adams Hotel,
Washington, DC (Exhibit 237).
\398\ White House Memorandum from Molly (Last Name Unknown) to
WAVES, Feb. 20, 1996, EOP 056859 (Exhibit 238).
---------------------------------------------------------------------------
On February 22, 1996, Pan visited his long-time friend Su
Cheng Bin in Flushing, New York.\399\ Pan asked Su if he was
interested in attending a DNC fund-raiser where President
Clinton would be in attendance.\400\ Su declined.\401\ Pan then
inquired if Su had any friends who might be interested in
attending.\402\ Su suggested his friend Jack Ho, President of J
& M International, Inc. (``J & M''), a travel agency, and
subsequently that same day introduced Pan to Ho in a meeting at
the Sheraton LaGuardia East Hotel.\403\ Pan explained to Ho and
Su that, due to his immigration status, he was unable to
contribute to the DNC legally and, therefore, needed Ho to
contribute on his behalf.\404\ Although Su was wary of this
arrangement, Ho agreed to do as Pan requested.\405\
---------------------------------------------------------------------------
\399\ Committee Interview of Su Cheng Bin, Aug. 13, 1998.
\400\ Id.
\401\ Id.
\402\ Id.
\403\ Id.
\404\ Id.
\405\ Id.
---------------------------------------------------------------------------
At the same February 22, 1996, meeting of Pan, Su, and Ho,
ex-Lippo executive Pan delivered to Jack Ho 35 $1,000 Bank
Central Asia travelers check totaling $35,000,\406\ all of
which were purchased as part of a $200,000 block in Jakarta,
Indonesia--home of the Lippo Group and the Riadys.\407\ At
Pan's request, Ho cashed $10,000 in travelers checks for Pan at
Citibank, 38-11-17 Main Street, Flushing, New York: Ho cashed
five of the checks totaling $5,000 \408\ and deposited the
other five totaling $5,000.\409\ Ho then immediately cashed a
check in the amount of $5,000.\410\ Ho then handed the $10,000
cash over to Pan.\411\
---------------------------------------------------------------------------
\406\ Id.; Bank Central Asia Travelers Checks Nos. 109 3255 610 009
through 109 3255 610 043 (Exhibit 239); see Citibank Checking Account
Statement for J & M International, Feb. 23, 1996 (Exhibit 240);
Citibank Deposit Ticket and Deposited Items of J & M International in
the amount of $5,000, Feb. 22, 1996 (Exhibit 241); Citibank Deposit
Ticket and Deposited Items of J & M International in the amount of
$25,000, Feb. 22, 1996 (Exhibit 242).
\407\ See generally Exhibit 84 Letter from Christopher M. Curran,
Esq., Attorney for Bank Central Asia, to Committee Senior Investigative
Counsel Tim Griffin, Esq., July 20, 1998.
\408\ Exhibit 239 Bank Central Asia Travelers Checks Nos. 109 3255
610 039 through 109 3255 610 043.
\409\ Exhibit 240 Citibank Checking Account Statement for J & M
International, Feb. 23, 1996; Exhibit 241 Citibank Deposit Ticket and
Deposited Items of J & M International in the amount of $5,000, Feb.
22, 1996.
\410\ Citibank Check No. 728 from J & M International to Cash in
the amount of $5,000, Feb. 22, 1996 (Exhibit 243).
\411\ Committee Interview of Jack Ho, July 30, 1998; see generally
Id.
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Ho divided the cashing of the $10,000 into multiple
transactions apparently at the instruction of Pan in an effort
to circumvent the generation of a cash transaction report
(``CTR'').\412\ Under Federal law, a CTR must be filed in
conjunction with any cash transaction involving $10,000 or
more.\413\ It is a Federal crime to avoid the generation of a
CTR purposefully \414\--a practice commonly referred to as
``smurfing'' \415\--which appears to be the case here.
---------------------------------------------------------------------------
\412\ See generally 31 U.S.C. Sec. 5313; 31 C.F.R. Sec. 103.22.
\413\ Id.
\414\ 31 U.S.C. Sec. 5322.
\415\ ``Smurfs, Money Laundering, and the Federal Criminal Law: The
Crime of Structuring Transaction,'' Sarah N. Welling, 41 Fla. L. Rev.
287, 288, Spring 1989.
---------------------------------------------------------------------------
During that same visit to Citibank, Ho deposited $25,000 in
travelers checks into the account of J & M \416\ and
immediately thereafter issued a check in the amount of $25,000
\417\ to the DNC in conjunction with the DNC's Asian Dinner
fund-raiser at the Hay Adams Hotel, a fund-raiser that had been
held 3 days prior.\418\ As indicated previously, the Hay Adams
fund-raiser failed to raise the funds expected.\419\ That
shortfall explains Huang's attribution of Ho's contribution to
the Hay Adams fund-raiser.\420\ Similarly, as discussed below,
in conjunction with the Hay Adams event, Trie and Pan funneled
$25,000 through Trie's sister, Manlin Foung, and her boyfriend,
Joseph Landon--$12,500 each--on the same day, February 22,
1996, several days after the Hay Adams fund-raiser.\421\
---------------------------------------------------------------------------
\416\ Exhibit 240 Citibank Checking Account Statement for J & M
International, Feb. 23, 1996; Exhibit 242 Citibank Deposit Ticket and
Deposited Items of J & M International in the amount of $25,000, Feb.
22, 1996; Exhibit 239 Bank Central Asia Travelers Checks Nos. 109 3255
610 014 through 109 3255 610 038.
\417\ Citibank Check No. 730 from J & M International to the DNC in
the amount of $25,000, Feb. 23, 1996 (Exhibit 244); Citibank Checking
Account Statement of J & M International, Mar. 22, 1996 (Exhibit 245).
\418\ DNC Check Tracking Form for Citibank Check No. 730 from J & M
to the DNC in the amount of $25,000, 000524 (Exhibit 246).
\419\ Committee Interview of Tony Hsu, Sept. 3, 1997.
\420\ See generally Exhibit 246 DNC Check Tracking Form for
Citibank Check No. 730 from J & M to the DNC in the amount of $25,000,
000524.
\421\ Committee Deposition of Manlin Foung, Sept. 29, 1997;
Committee Interview of Joseph Landon, Sept. 4, 1997; see Amerasia Bank
Signature Card of Antonio Pan, Feb. 22, 1996 (Exhibit 247); Amerasia
Bank Personal New Account Application of Antonio Pan, Feb. 22, 1996
(Exhibit 248); Amerasia Bank Savings Account Statement of Antonio Pan,
Mar. 31, 1996 (Exhibit 249); Amerasia Bank Savings Deposit Ticket of
Antonio Pan, Feb. 22, 1996 (Exhibit 250); Amerasia Bank Savings
Withdrawal Ticket of Antonio Pan, Feb. 22, 1996 (Exhibit 251); Amerasia
Bank Applications of Antonio Pan for three $5,000 Cashier's Checks to
Manlin Foung, Feb. 22, 1996 (Exhibit 252); Amerasia Bank Applications
of Antonio Pan for two $5,000 Cashier's Checks to Joe Landon, Feb. 22,
1996 (Exhibit 253); Three $5,000 Amerasia Bank Cashier's Checks to
Manlin Foung, Feb. 22, 1996 (Exhibit 254); Two $5,000 Amerasia Bank
Cashier's Checks to Joe Landon, Feb. 22, 1996 (Exhibit 255); Currency
Transaction Report by Form 4789 for Antonio Pan, Feb. 22, 1996 (Exhibit
256); Amerasia Bank Savings Account Statements of Antonio Pan, June 30,
1996, Sept. 30, 1996, Dec. 31, 1996, Mar. 31, 1997, and June 30, 1997
(showing no other account activity from Mar. 31, 1996, through June 30,
1997) (Exhibit 257); see also Travis Federal Credit Union Deposit
Ticket of Manlin Foung in the $14,500, Feb. 23, 1996 (Exhibit 258);
Three Deposited $5,000 Amerasia Bank Cashier's Checks to Manlin Foung,
Feb. 22, 1996 (Exhibit 259); Travis Federal Credit Union Check No. 390
from Manlin Foung to the DNC in the amount of $12,500, Feb. 19, 1996
(Exhibit 260); Travis Federal Credit Union Posted Transaction Register
for the Checking Account of Manlin Foung (Exhibit 261); DNC Check
Tracking Form for Travis Federal Credit Union Check No. 390 from Manlin
Foung to the DNC in the amount of $12,500, Feb. 19, 1996 (Exhibit 262);
DNC Check Tracking Form for Travis Federal Credit Union Check No. 1337
from Joseph Landon to the DNC in the amount of $12,500, Feb. 19, 1996
(Exhibit 263); see also http://wyl.ewg.org, Environmental Working Group
Website, Compiled from FEC Data, Last Updated Sept. 10, 1998.
---------------------------------------------------------------------------
A document produced to the Committee by the DNC lists Trie
as the solicitor and John Huang as the DNC contact for J & M's
contribution.\422\ It was Ho's apparent link to Trie and Huang
that led to an Ernst & Young review of his contribution.\423\
The auditor unsuccessfully attempted to contact Ho on at least
five separate occasions.\424\ On one such occasion, December 9,
1996, the auditor contacted Maria Ho, Jack Ho's wife, regarding
J & M's contribution.\425\ The auditor noted that ``[s]he was
not willing to talk to us.'' \426\ Subsequently, on December
17, 1996, the auditor made her final attempt to reach Jack
Ho.\427\ Her handwritten notes were as follows:
---------------------------------------------------------------------------
\422\ Exhibit 246 DNC Check Tracking Form for Citibank Check No.
730 from J & M to the DNC in the amount of $25,000, 000524.
\423\ See DNC's Responses to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 7.
\424\ Ernst & Young Contribution Review Materials for Jack Ho/J & M
International, DNC 1802501, DNC 1802504, DNC 1802505-DNC 1802506, and
DNC 1802508, at 2 (Exhibit 264).
\425\ Id.
\426\ Id.
\427\ Id.
Spoke with receptionist. She said Jack Ho was not in
the office & that they do not need to answer any
questions. Very angry & hung up on me.\428\
---------------------------------------------------------------------------
\428\ Id.
The DNC received no helpful information as a result of its
review. Ho's Ernst & Young file was labeled ``Term[inated].''
\429\
---------------------------------------------------------------------------
\429\ Id. at 1.
---------------------------------------------------------------------------
After the Ernst & Young review, IGI gathered a limited
amount of additional publicly available information regarding
Ho and J & M.\430\ The DNC did not receive any information
directly from Jack Ho regarding his contributions.\431\
However, through IGI, the DNC was able to determine that his
Social Security number had been valid for over 30 years at the
time of the contribution \432\ and that his home had an
assessed value of $272,500.\433\ This information evidently
provided the DNC with the minimum information needed to
conclude that the contribution was legal and appropriate; the
DNC retained the contribution.
---------------------------------------------------------------------------
\430\ IGI Contribution Review Materials for Jack Ho/J & M
International, HS 006020-HS 006031, at 1-12 (Exhibit 265). Experience
indicates that ``IGI Contribution Review Materials'' often contain
documents generated pursuant to the Ernst & Young Contribution review
process. The converse is not true because the Ernst & Young phase was
conducted prior to the IGI phase.
\431\ See Exhibit 264 Ernst & Young Contribution Review Materials
for Jack Ho/J & M International, DNC 1802501, DNC 1802504, DNC 1802505-
DNC 1802506, and DNC 1802508, at 2.
\432\ Exhibit 265 IGI Contribution Review Materials for Jack Ho/J &
M International, HS 006020-HS 006031, at 6. The DNC was also able to
determine that Maria Ho's Social Security number had been valid for
approximately 30 years. Id.
\433\ Id.
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Despite the paucity of information gathered pursuant to the
Ernst & Young and IGI reviews, the DNC decided to retain the
contribution in the face of mounting evidence that both Trie
and Huang were generating illegal contributions. The DNC
apparently decided that it had sufficient information to
declare the $25,000 contribution appropriate and retain it
without one scintilla of cooperation from Ho. DNC Spokesman
Rick Hess indicated recently that:
[The DNC] would have returned [the $25,000] if we had
any hint that they were [sic] foreign sources or if the
company had insufficient funds. Every indication was
that it was legal and proper.\434\
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\434\ Mary Ann Akers, ``GOP Probers Report $50,000 in Illegal
Donations via Trie,'' Washington Times, Aug. 5, 1998.
The exact opposite is true: there was practically no
information indicating the contribution was ``legal and
proper.'' The DNC's determination notwithstanding, based on
Committee interviews and the conclusive activity evidenced by
Ho's bank records, J & M's $25,000 was an illegal conduit
contribution in violation of 2 U.S.C. Sec. 441f. In addition,
the funds used to make the contribution--the travelers checks--
ultimately originated in Indonesia. Therefore, pursuant to
Federal regulations and DNC practice, the DNC should disgorge J
& M's illegal $25,000 contribution to the U.S. Treasury.\435\
---------------------------------------------------------------------------
\435\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq. to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
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Ted Sioeng Related Contributions During the 1996 Election Cycle
During the 1996 Federal election cycle, courted by fund-
raiser John Huang, Ted Sioeng's family and associates
contributed $400,000 to the DNC.\436\ A review of bank records
strongly suggests that $310,000 of the contributions were
ultimately funded from foreign accounts in Hong Kong and
Indonesia. The remaining $90,000, while funded from U.S.
receipts, remains suspect due to large and continuing foreign
subsidies to the family's U.S. businesses from family patriarch
and Belize national Ted Sioeng. The result of these subsidies
was often a commingling of domestic receipts and foreign funds
in accounts from which political contributions were made.
---------------------------------------------------------------------------
\436\ Note that Sioeng and his company, Panda Estates, contributed
a total of $100,000 to California State Treasurer Matt Fong in 1995.
Matt Fong returned the money in Apr. 1997.
---------------------------------------------------------------------------
Additional questions are raised by the Sioeng family's
deafening silence on the subject of its political
contributions. All of the Sioeng family members and those
associates closest to the family have either asserted the Fifth
Amendment, left the country, or are foreign nationals who have
refused to be interviewed. The fact that the people most likely
to know about the Sioeng family's political contributions
uniformly have refused to talk to the Committee about the
contributions, casts great doubt on whether they meet
applicable legal and regulatory requirements, or are
appropriate for the DNC to retain under the circumstances.
The Committee remains particularly concerned about Sioeng-
related contributions because of Sioeng's close ties to the
government of the People's Republic of China (``PRC''). In the
report of its investigation into campaign finance abuses, the
Senate Committee on Governmental Affairs stated the following
about Sioeng's PRC connections:
The Committee has learned that Sioeng worked, and
perhaps still works, on behalf of the Chinese
government. Sioeng regularly communicated with PRC
embassy and consular officials at various locations in
the United States, and, before the campaign finance
scandal broke, he traveled to Beijing frequently where
he reported to and was briefed by Chinese communist
party officials. . . . The Committee has received
information that [indicted DNC fund-raiser Maria] Hsia
worked with Ted Sioeng and John Huang to solicit
contributions from Chinese nationals in the United
States and abroad for Democratic causes.\437\
---------------------------------------------------------------------------
\437\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 2,
2505-2507 (1998).
---------------------------------------------------------------------------
A. Jessica Elnitiarta and Panda Estates Investment, Inc.; Jessica
Elnitiarta $100,000 (Illegal)
Jessica Elnitiarta is Ted Sioeng's oldest daughter. She is
a U.S. citizen who, at her father's behest, runs the family
businesses in the United States. She also makes more political
contributions than any other family member. On February 19,
1996, Jessica Elnitiarta wrote a personal check for $100,000 to
the DNC \438\ against a bank account balance of only
$9,225.\439\ Elnitiarta took steps to cover the check 3 days
later: on February 22, 1996, Elnitiarta, using a power of
attorney, transferred $200,000 from the personal bank account
of Ted Sioeng's sister, Yanti Ardi,\440\ an Indonesian
national, to her own account. This $200,000 came from a
$518,434 wire transfer 10 days earlier from Pristine
Investments in Hong Kong.\441\ It is likely that Pristine
Investments is owned or controlled by Ted Sioeng.
---------------------------------------------------------------------------
\438\ DNC Check Tracking Form for Grand National Bank Check No. 575
from Jessica G. Elnitiarta to the DNC in the amount of $100,000, Feb.
19, 1996 (Exhibit 266).
\439\ Grand National Bank Account Statement of Jessica G.
Elnitiarta, Feb. 29, 1996 (Exhibit 267).
\440\ Grand National Bank Customer Authorization for Funds Transfer
of Jessica Elnitiarta in the amount of $200,000, Feb. 22, 1996 (Exhibit
268).
\441\ Grand National Bank Credit Ticket of Yanti Ardi in the amount
of $518,433.56, Feb. 12, 1996, and Wire Transfer Report of Yanti Ardi
and Pristine Investments in the amount of $518,434, Feb. 12, 1996
(Exhibit 269).
---------------------------------------------------------------------------
In short, this $100,000 contribution was funded by
ineligible foreign money and should be returned by the DNC.
This transfer of funds from foreign sources is part of a
pattern that recurs throughout the brief but curious history of
Sioeng-related contributions to the DNC.
Panda Estates Investment, Inc. $100,000 ($60,000 Illegal/$40,000
Suspect)
On July 12, 1996, Jessica Elnitiarta, as president of Panda
Estates Investment, Inc. (``Panda Estates''), signed a $100,000
company check to the DNC \442\ against a negative bank account
balance of -$599.\443\ The check cleared the bank on July 25,
1996, causing a negative bank balance of $100,125.\444\ On July
26, 1996, Elnitiarta transferred -$100,000 from a Panda Estates
receipts account toward the overdraft.\445\ Of this transfer,
$60,000 came from Yanti Ardi's personal bank account,\446\
which in turn was funded by a $1,652,480 wire transfer on June
28, 1996 from R.T. Enterprises in Hong Kong.\447\ The remaining
$40,000 was funded by a transfer from a Panda Estates receipts
account that consisted of domestic rents collected for the
month of July 1996.\448\ In short, this contribution of
$100,000 was funded primarily with foreign money and, hence,
should be returned.
---------------------------------------------------------------------------
\442\ DNC Check Tracking Form for Grand National Bank Check No.
1632 from Panda Estates to the DNC in the amount of $100,000, July 12,
1996 (signed by Jessica Elnitiarta) (Exhibit 270).
\443\ Grand National Bank Account Statement of Panda Estates Bank
Statement, July 31, 1996 (Exhibit 271).
\444\ Id.
\445\ Grand National Bank Customer Authorization for Funds Transfer
of Panda Estates in the amount of $100,000, July 26, 1996 (Exhibit
272).
\446\ Grand National Bank Deposit Ticket of Panda Estates in the
amount of $60,000, July 26, 1996, and Grand National Bank Deposited
Check No. 2309 from Yanti Ardi to Panda Estates in the amount of
$60,000, July 26, 1996 (signed by Jessica Elnitiarta) (Exhibit 273).
\447\ Grand National Bank Credit Ticket of Yanti Ardi in the amount
of $1,652,479.98, June 28, 1996, and Grand National Bank Wire Transfer
Report of Yanti Ardi and R.T. Enterprises in the amount of $1,652,480,
June 28, 1996 (Exhibit 274). Based upon an analysis of bank records and
financial transactions, it appears that R.T. Enterprises is a Sioeng
owned or controlled company. The Sioeng family attorneys refused the
Committee's requests to share information on this and other foreign
entities with clear financial ties to Sioeng's holdings in the United
States.
\448\ Grand National Bank Account Statement of Panda Estates, July
31, 1996 (showing seventeen deposits of July rents into the Panda
Estates receipts bank account totaling $48,411 from July 5 through July
22, 1996) (Exhibit 275).
---------------------------------------------------------------------------
Panda Estates Investment, Inc. $50,000 (Suspect)
On July 29, 1996, Jessica Elnitiarta signed a $50,000
company check to the DNC \449\ from Panda Estates against a
negative bank account balance of -$2,351.\450\ The check
cleared the bank on August 5, 1996 causing a -$48,198
overdraft.\451\ The next day, Elnitiarta covered part of the
overdraft through a $40,000 transfer of domestic rental
receipts for the month of August 1996.\452\ The remaining
overdraft was covered by an August 6, 1996 transfer of $10,000
from the bank account of Code 3 USA (``Code 3''), the family's
gun and ammunition business, operated by Elnitiarta's husband,
Ridwan Dinata.\453\ This transfer came from an August 5, 1996
advance of $10,000 against Code 3's $250,000 bank credit
line.\454\ On September 10, 1996, Elnitiarta appears to have
repaid Code 3 the $10,000 from her personal bank account.\455\
---------------------------------------------------------------------------
\449\ DNC Check Tracking Form for Grand National Bank Check No.
1652 from Panda Estates to the DNC in the amount of $50,000, July 29,
1996 (signed by Jessica Elnitiarta) (Exhibit 276).
\450\ Grand National Bank Account Statement of Panda Estates, July
31, 1996 (Exhibit 277).
\451\ Grand National Bank Account Statement of Panda Estates, Aug.
30, 1996 (Exhibit 278).
\452\ Grand National Bank Customer Authorization for Funds Transfer
of Panda Estates in the amount of $40,000, Aug. 6, 1996 (transfer from
Panda Estates receipts account to Panda Estates disbursement account)
(Exhibit 279).
\453\ Grand National Bank Customer Authorization for Funds Transfer
of Code 3 in the amount of $10,000, Aug. 6, 1996 (Ridwan Dinata's
transfer of $10,000 from Code 3's account to Panda Estates' Account)
(Exhibit 280).
\454\ Grand National Bank Customer Authorization for Funds Transfer
of Ridwan Dinata in the amount of $10,000, Aug. 5, 1996 (telephone
transfer of $10,000 from Code 3's loan account to its checking account)
(Exhibit 281).
\455\ Grand National Bank Deposit Ticket of Code 3 in the amount of
$10,000, Sept. 10, 1996, and Grand National Bank Check No. 255 from
Jessica Elnitiarta to Code 3 in the amount of $10,000, Sept. 10, 1996
(Exhibit 282).
---------------------------------------------------------------------------
In conclusion, this $50,000 contribution appears to have
been funded by domestic rental receipts. Nevertheless, Ted
Sioeng's probable involvement with this and the two other DNC
contributions made by his daughter, Jessica, raises troubling
and severe doubts about the legality of the $50,000
contribution.
conclusion
Ted Sioeng's probable involvement with the $250,000 in
contributions made to the DNC by Jessica Elnitiarta and her
company raises serious questions about the legality of those
contributions, all of which have been retained by the DNC.
Note that the DNC is adamant that it has not seen
information about the Panda Estates and Elnitiarta
contributions sufficiently troubling to return the money. On
May 14, 1998, the Committee deposed DNC General Counsel Sandler
on the subject of the Sioeng-related contributions as well as
DNC guidelines concerning what types of contributions it
accepts and retains. Prior to the deposition, Sandler had never
seen records of the bank accounts from which the Elnitiarta and
Panda Estates contributions were made.\456\ Confronted with
records that showed Elnitiarta's contribution was made with
foreign money, Sandler became incensed, insisting that the
``information tells us virtually nothing that we would need to
know to determine whether the contribution was an illegal
contribution in the name of another,'' and that the foreign
money may have been Elnitiarta's.\457\ Of course, the point is,
the Committee has no way of directly determining whether the
foreign money was Elnitiarta's as she and her entire family
refuse to discuss the contribution. While this remains
troubling to the Committee, it apparently does not to the DNC.
---------------------------------------------------------------------------
\456\ Committee Deposition of Joseph E. Sandler, May 14, 1998, 103.
\457\ Id. at 121-122.
---------------------------------------------------------------------------
When shown that a large portion of the contribution made by
Panda Estates came from foreign funds, Sandler put forward the
confusing contention that, even if one could trace a
corporation's political contribution to a foreign source, the
contribution would still be legal if the company had sufficient
income over some longer period, say a year.\458\ This argument
makes no intuitive sense and is contradicted by FEC practice
and precedent.\459\ Moreover, whether or not Ted Sioeng made
actual conduit contributions through his daughter and family
business, Panda Estates Investment, his likely participation in
the decision to have Panda Estates contribute to the DNC
violates Federal campaign regulations. FEC regulations prohibit
individuals who are foreign nationals from directing,
dictating, controlling, or participating in decisionmaking
processes through which a domestic corporation decides to make
a political contribution.\460\ Committee witnesses have
indicated that Ted Sioeng played a significant role in his
daughter's business decisions. Given that Jessica Elnitiarta
has pled the Fifth Amendment to the Committee, there should be
a presumption that the foreign money is not entirely legal, and
it should be returned.
---------------------------------------------------------------------------
\458\ Id. at 162.
\459\ See FEC Advisory Opinion 1992-16 (Noting in the context of a
U.S. subsidiary of a foreign company that ``the subsidiary must be able
to demonstrate through a reasonable accounting method that it has
sufficient funds in its account, other than funds given or loaned by
its foreign national parent, from which the contribution is made. See
by analogy 11 CFR (102.5(b)(1)(ii).'').
\460\ See 11 CFR Sec. 110.4(a)(3). Note that the prohibition
extends to persons as well. Hence, under Federal regulations, a foreign
national may not ``directly or indirectly participate in the decision-
making process of any person'' with regard to a political contribution.
Id.
---------------------------------------------------------------------------
California Treasurer, Matt Fong received a total of
$100,000 in contributions from Ted Sioeng and his company Panda
Estates Investment. In stark contrast to the DNC, Fong returned
these contributions in April 1997, immediately after questions
were raised regarding their legality in the press.
B. Loh Sun International $50,000 (Suspect)
On July 29, 1996, the same day as Jessica Elnitiarta wrote
the above $50,000 check to the DNC, Ted Sioeng associate Kent
La, a U.S. permanent resident, also wrote a $50,000 check to
the DNC.\461\ La is president of Loh Sun International, a Los
Angeles-based importer of Chinese cigarettes and other
commodities. Kent La signed a company check to the DNC against
a July 29, 1996 bank balance of $262,185.\462\ Five days
earlier, on July 24, 1996, the company account had received a
$97,555 wire transfer from R.T. Enterprises in Hong Kong,\463\
which appears to be owned or controlled by Ted Sioeng. Although
documentation of the wire transfer indicates the funds were for
``Hongtashan Advertising,'' \464\ the amount of the transfer
and its proximity to Loh Sun's contribution to the DNC raise
questions about its true purpose and use.
---------------------------------------------------------------------------
\461\ DNC Check Tracking Form for United Pacific Bank Check No.
3881 from Loh Sun International to the DNC in the amount of $50,000,
July 29, 1996 (signed by Kent La) (Exhibit 283).
\462\ United Pacific Account Statement of Loh Sun International,
July 31, 1996 (Exhibit 284).
\463\ United Pacific Bank Credit Ticket of Loh Sun International in
the amount of $97,555, July 24, 1996, and United Pacific Bank Wire
Transfer Report of Loh Sun International and R.T. Enterprises in the
amount of $97,555, July 24, 1996 (Exhibit 285).
\464\ Id.
---------------------------------------------------------------------------
Moreover, the mystery surrounding this contribution is
compounded by a check signed by Kent La on an account with his
wife, Nancy.\465\ The check, dated October 28, 1996 in the
amount of $20,000, is payable to Loh Sun International, but was
not deposited until December 23, 1996. On the memo line La
wrote, ``Donation to DNC--7/29/96.'' It is unclear why La would
reimburse his own company for a political contribution. One
explanation is that he was attempting to ``cure,'' after the
fact, a conduit contribution funded by Ted Sioeng with foreign
funds. While La has been deposed by Committee staff, the
transcript has not been made public. The DOJ has asked the
Committee not to release any part of the deposition transcript
as doing so ``would jeopardize [the Department's] pending
criminal investigation relating to Mr. La.'' \466\
---------------------------------------------------------------------------
\465\ Grand National Bank Check No. 143 from Kent and Nancy La to
Loh Sun International in the amount of $20,000, Oct. 28, 1996 (Exhibit
286).
\466\ Letter from L. Anthony Sutin, Acting Assistant Attorney
General, to Chairman Dan Burton, Aug. 28, 1998.
---------------------------------------------------------------------------
C. The Tanuwidjaja Family
Subandi Tanuwidjaja $80,000 ($20,000 Illegal/$60,000 Suspect)
Within 10 days in September 1996, the Tanuwidjaja family,
to which the Sioeng family is related through marriage and
business interests, made three contributions to the DNC
totaling $100,000 as follows:
On September 9, 1996, Ted Sioeng's son-in-law, Subandi
Tanuwidjaja, a U.S. permanent resident, signed a $60,000
personal check to the DNC \467\ against a U.S. bank balance of
$66,050.\468\ Three days before, the account received a
$100,000 personal check from the U.S. bank account of his
father, Susanto Tanuwidjaja, an Indonesian national.\469\
Susanto's check was funded by a $100,000 wire transfer on
August 21, 1996 from an Indonesian bank account in the name of
Subandi Tanuwidjaja.\470\ The fact that the foreign money was
wired into Susanto's U.S. bank account and not his son's
suggests that the money may have been his, and raises questions
about the legality of the contribution. It thus appears that
this $60,000 contribution may have been funded by foreign money
and by a foreign national and should be returned by the DNC.
---------------------------------------------------------------------------
\467\ DNC Check Tracking Form for Western State Bank Check No. 134
from Subandi Tanuwidjaja to the DNC in the amount of $60,000, Sept. 9,
1996 (Exhibit 287).
\468\ Western State Bank Account Statement of Subandi Tanuwidjaja,
Sept. 13, 1996 (Exhibit 288).
\469\ Western State Bank Check No. 1026 from Susanto Tanuwidjaja to
Subandi Tanuwidjaja in the amount of $100,000, Sept. 6, 1996, and
Western State Bank Deposit Ticket of Subandi Tanuwidjaja in the amount
of $100,000, Sept. 9, 1996 (Exhibit 289).
\470\ Western State Bank Wire Transfer Report of Susanto
Tanuwidjaja and Subandi Tanuwidjaja in the amount of $99,985, Aug. 21,
1996 (transfer from Subandi Tanuwidjaja to Susanto Tanuwidjaja)
(Exhibit 290).
---------------------------------------------------------------------------
On September 19, 1996, Subandi Tanuwidjaja signed a $20,000
personal check to the DNC\471\ against a bank balance of
$25,640.\472\ The day before, the account received a $20,000
wire transfer from Dragon Union, Ltd. in Hong Kong.\473\
Subandi Tanuwidjaja is Dragon Union's sole corporate
director.\474\ It thus appears that this $20,000 contribution
was funded by foreign money and should be returned by the DNC.
---------------------------------------------------------------------------
\471\ DNC Check Tracking Form for Check No. 136 from Subandi
Tanuwidjaja to the DNC in the amount of $20,000, Sept. 19, 1996
(Exhibit 291).
\472\ Western State Bank Account Statement of Subandi Tanuwidjaja,
Oct. 15, 1996 (Exhibit 292).
\473\ Western State Bank Wire Transfer Report of Subandi
Tanuwidjaja and Dragon Union in the amount of $20,000, Sept. 18, 1996
(transfer from Dragon Union to Subandi Tanuwidjaja) (Exhibit 293).
\474\ Dragon Union Limited Companies Ordinance on Change of
Director Regarding Subandi Tanuwidjaja, Jan. 27, 1997 (Exhibit 294).
---------------------------------------------------------------------------
Suryanti Tanuwidjaja $20,000 (Illegal)
On September 16, 1996, Ted Sioeng's daughter-in-law,
Suryanti Tanuwidjaja, a U.S. permanent resident, signed a
$20,000 personal check to the DNC \475\ against a bank balance
of $61,726.\476\ Two days later, the account received a $20,000
wire transfer from Dragon Union, Ltd. in Hong Kong.\477\ As
noted, Suryanti's brother, Subandi, is Dragon Union's sole
corporate director.
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\475\ DNC Check Tracking Form for Bank of America Check No. 1611
from Suryanti Tanuwidjaja to the DNC in the amount of $20,000, Sept.
16, 1996 (Exhibit 295).
\476\ Bank of America Account Statement of Suryanti Tanuwidjaja,
Sept. 27, 1996 (Exhibit 296).
\477\ Bank of America Wire Transfer Report of Suryanti Tanuwidjaja
and Dragon Union in the amount of $20,000, Sept. 18, 1996 (transfer
from Dragon Union to Suryanti Tanuwidjaja) (Exhibit 297).
---------------------------------------------------------------------------
Hence, although sufficient domestic funds existed at the
time the DNC contribution check was written, the close
proximity and same amount of the foreign wire transfer suggests
that this $20,000 contribution was reimbursed by ineligible
foreign money, and should be returned by the DNC. In this case,
as with Subandi's $20,000 contribution, it appears that the
Dragon Union transfers were intended to fund or reimburse the
DNC contributions in the same amounts.
Maria Hsia Related Contributions During the 1996 Election Cycle
Chee Kien Koh a.k.a. the Rev. Hai Kai $5,000 (Illegal)
On September 16, 1996, Chee Kien Koh a.k.a. the Rev. Hai
Kai deposited into his checking account $3,000 cash and a
$2,000 check from the International Buddhist Progress Society
(``IBPS''),\478\ the organization that arranged the Hsi Lai
Temple fund-raiser featuring Vice President Al Gore and
facilitated a number of conduit contributions to the DNC in
conjunction with that event and others.\479\ The next day, on
September 17, 1996, Koh issued a check in the amount of $5,000
to the DNC in conjunction with the DNC's September 18, 1996,
Asian Dinner fund-raiser featuring Vice President Al Gore.\480\
Yi Chu, the Hsi Lai Temple's treasurer, testified to Senate
investigators that Chee Kien Koh was reimbursed for his $5,000
contribution to the DNC with a check from the IBPS in the
amount of $3,000 and $2,000 cash, precisely what the bank
records indicate.\481\
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\478\ Bank of America Deposit Ticket of Chee Kien Koh in the amount
of $5,500, Sept. 16, 1996, Bank of America Cash Ticket of Chee Kien Koh
in the amount of $3,000, Sept. 16, 1996, and General Bank Check No.
4118 from IBPS to Cash in the amount of $2,000, Sept. 16, 1996 (Exhibit
298); Bank of America Account Statement of Chee Kien Koh, Oct. 16, 1996
(Exhibit 299).
\479\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 2,
1749-2497 (1998).
\480\ Bank of America Check No. 0094 from Chee Kien Koh to the DNC
in the amount of $5,000 (Exhibit 300). The check cleared Chee Kien
Koh's Bank of America account on Sept. 26, 1996. Exhibit 299 Bank of
America Account Statement of Chee Kien Koh, Oct. 16, 1996.
\481\ Investigation of Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, Deposition of Yi Chu, 79-82, Aug. 7, 1997;
Investigation of Illegal or Improper Activities in Connection with the
1996 Federal Election Campaign Before the Senate Committee on
Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d sess., vol. 2,
1773, fn. 136 (1998).
---------------------------------------------------------------------------
Interestingly, the DNC did not attribute Koh's contribution
to Koh; they attributed it to Maria Hsia,\482\ a former DNC
fund-raiser who pled the Fifth Amendment to both the Committee
and the Senate and is currently under grand jury indictment for
violating Federal election laws in conjunction with the Hsi Lai
Temple fund-raiser.\483\ Koh's contribution was most likely
attributed to Hsia due to her orchestration of conduit
contributions through individuals with ties to the Temple. The
FEC most likely credited the contribution to Hsia based on
information provided by the DNC.\484\ In addition, the
contribution information provided to the Committee by the DNC
lists John Huang as the DNC contact for the contribution.\485\
Despite the contribution's apparent link to Hsia and Huang and
the Senate's discussion of it in its Final Report, the DNC did
not conduct a review of it. The DNC has disgorged to the U.S.
Treasury a number of other contributions with links to Hsia and
the Hsi Lai Temple but has retained Koh's $5,000.\486\
---------------------------------------------------------------------------
\482\ DNC Check Tracking Form for Bank of America Check No. 0094
from Chee Kien Koh to the DNC in the amount of $5,000, Sept. 17, 1996
(Exhibit 301); http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\483\ See Federal Grand Jury Indictment of Maria Hsia, U.S.
District Court for the District of Columbia, Feb. 18, 1998.
\484\ See generally http://wyl.ewg.org, Environmental Working Group
Website, Compiled from FEC Data, Last Updated Sept. 10, 1998.
\485\ Exhibit 301 DNC Check Tracking Form for Bank of America Check
No. 0094 from Chee Kien Koh to the DNC in the amount of $5,000, Sept.
17, 1996.
\486\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998; See Exhibit 4
Letter from Joseph E. Sandler, Esq., to Lawrence Noble, Esq., June 27,
1997 (citing FEC Advisory Opinion 1995-19 and FEC Advisory Opinion
1991-39); Exhibit 5 Letter from Joseph E. Sandler, Esq., to Lawrence
Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from Judah Best, Esq., to
James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7 DNC List of
Contributions Returned or Disgorged Produced to the Committee on Nov.
20, 1997, at 1-9.
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Based on the proven history of using conduits to contribute
to the DNC by Hsia and the IBPS and the suspicious activity
evidenced by Chee Kien Koh's bank records, Koh's $5,000 was an
illegal conduit contribution in violation of 2 U.S.C.
Sec. 441f. Therefore, pursuant to Federal regulations and DNC
practice, the DNC should disgorge Koh's $5,000 contribution to
the U.S. Treasury.\487\
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\487\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
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Hsiao Jie Su $2,500 (Illegal)
On February 16, 1996, the International Buddhist Progress
Society issued a check to Hsiao Jie Su in the amount of
$2,500.\488\ The next day, on February 17, 1996, Su issued a
check in the amount of $2,500 to the DNC in conjunction with
the DNC's Asian Dinner fund-raiser held at the Hay Adams Hotel
in Washington, DC.\489\ Su deposited the IBPS's check into her
checking account at the International Bank of California in Los
Angeles on February 20, 1996.\490\ The contribution check
cleared Su's account on February 26, 1996.\491\
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\488\ International Bank of California Check No. 3301 from the IBPS
to Hsiao Jie Su in the amount of $2,500, Feb. 16, 1996, and
International Bank of California Deposit Ticket of Hsiao Jie Su in the
amount of $2,500, Feb. 20, 1996 (Exhibit 302).
\489\ International Bank of California Check No. 304 from Hsiao Jie
Su to the DNC in the amount of $2,500, Feb. 17, 1996 (Exhibit 303); DNC
Check Tracking Form for International Bank of California Check No. 304
from Hsiao Jie Su to the DNC in the amount of $2,500, Feb. 17, 1996
(Exhibit 304).
\490\ Exhibit 302 International Bank of California Check No. 3301
from the IBPS to Hsiao Jie Su in the amount of $2,500, Feb. 16, 1996,
and International Bank of California Deposit Ticket of Hsiao Jie Su in
the amount of $2,500, Feb. 20, 1996; International Bank of California
Account Statement of Hsiao Jie Su, Mar. 15, 1996 (Exhibit 305).
\491\ Id.; Exhibit 303 International Bank of California Check No.
304 from Hsiao Jie Su to the DNC in the amount of $2,500, Feb. 17,
1996.
---------------------------------------------------------------------------
Consistent with other contributions made by individuals
linked to the IBPS, DNC contribution information lists Maria
Hsia as the solicitor and John Huang as the DNC contact.\492\
It was Su's apparent link to Hsia and Huang that led to a
review of her contribution.\493\ Su completed and signed an
Ernst & Young questionnaire on January 18, 1997, in which she
confirmed that the money contributed to the DNC was her
own.\494\ Su also advised Ernst & Young auditors of her
unwillingness to answer followup questions via telephone.\495\
---------------------------------------------------------------------------
\492\ Exhibit 304 DNC Check Tracking Form for International Bank of
California Check No. 304 from Hsiao Jie Su to the DNC in the amount of
$2,500, Feb. 17, 1996.
\493\ See generally DNC Response to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 7.
\494\ Ernst & Young Contribution Review Materials for Hsiao Jie Su,
DNC 1807597, DNC 1807599, DNC 1807601-DNC 1807602, DNC 1807604-DNC
1807606, DNC 1807619-DNC 1807620, DNC 1807754, and DNC 1807757-DNC
1807758, at 1-3 (Exhibit 306).
\495\ Id. at 3.
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Su's Ernst & Young file was labeled ``DER'' for dead end
research \496\ and passed to IGI for a determination of Su's
Social Security number and date of birth, which IGI
provided.\497\ Through IGI, the DNC was able to determine that
her Social Security number had been valid for almost 20 years
at the time of the contribution but was unable to confirm her
address.\498\ This information evidently provided the DNC with
the minimum information needed to conclude that the
contribution was legal and appropriate; the DNC retained the
contribution.
---------------------------------------------------------------------------
\496\ Id. at 1.
\497\ IGI Contribution Review Materials for Hsiao Jie Su, HS
002392-HS 002413, at 4 (Exhibit 307).
\498\ Id.; see Id. at 1-22.
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Based on the proven history of using conduits to contribute
to the DNC by Hsia and the IBPS and the suspicious activity
evidenced by Hsiao Jie Su's bank records, the evidence
indicates that Su's $2,500 was an illegal conduit contribution
in violation of 2 U.S.C. Sec. 441f. Therefore, pursuant to
Federal regulations and DNC practice, the DNC should disgorge
Su's $2,500 contribution to the U.S. Treasury.\499\
---------------------------------------------------------------------------
\499\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
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Other Suspect or Illegal Contributions During the 1992, 1994 and 1996
Election Cycles
Sy Zuan Pan $20,000 (Illegal)
On September 18, 1996, Sy Zuan ``Roger'' Pan issued a check
in the amount of $20,000 to the DNC in conjunction with the
DNC's Asian Dinner fund-raiser featuring Vice President Gore,
held that day, in San Francisco.\500\ Ernst & Young conducted a
review of Pan's September 1996 $20,000 contribution.\501\ The
DNC mailed a review questionnaire to Pan on a date uncertain
but apparently received no immediate response; \502\ the copy
of Pan's questionnaire provided to the Committee is
predominantly blank.\503\ Attempts to reach Pan at the number
provided to the DNC were also unsuccessful. The Ernst & Young
auditor noted that: ``[Pan is] currently in China. [N]ot
knowing [sic] his number. Also he's moving a lot in China.''
\504\ Ernst & Young designated the Pan file ``Term[inated].''
\505\ After Ernst & Young's unsuccessful attempt to verify the
legality of Pan's contribution, IGI made an attempt.\506\ On
January 16, 1997, an IGI employee contacted one of Pan's
employees regarding the contribution.\507\ According to notes
from the IGI interview, ``[the woman] was unable to answer
whether [Pan] is a U.S. citizen, but said that he or she would
call us back next week to answer our questions.'' \508\ There
is no indication that Pan ever returned IGI's call and the IGI
notes indicate that it was unable to gather any additional
information on Pan.\509\
---------------------------------------------------------------------------
\500\ DNC Check Tracking Form for Wells Fargo Bank Check No. 1091
from Sy Zuan Pan to the DNC in the amount of $20,000, Sept. 18, 1996,
D0000443 (Exhibit 308); Ernst & Young Contribution Review Materials for
Sy Zuan Pan, DNC 1802793-DNC 1802794, DNC 1802797, DNC 1802799, DNC
1802801-DNC 1802802, and DNC 1802812-DNC 1802814, at 7 (Exhibit 309).
\501\ Id.
\502\ Id. at 1-9.
\503\ Id. at 4-6.
\504\ Id. at 8.
\505\ Id. at 1.
\506\ IGI Contribution Review Materials for Sy Zuan Pan, HS 006439-
HS 006441 (Exhibit 310).
\507\ Id. at 2.
\508\ Id.
\509\ Id. at 1-3.
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In the wake of IGI's investigation of Pan's contribution,
Pan's attorney, Arnold Chin of San Francisco, in a January 29,
1997, letter to an Ernst & Young auditor requested that the
contribution be returned, stating that:
I represent Mr. Sy Zuan Guo [sic] with regards to his
donation/contribution of the sum of $20,000 to the
Democratic National Committee for the 1996 Presidential
Election. I am in receipt of your questionnaire
concerning the donation/contribution made from my
client.
If the donation is subject to inquiry then on behalf of
my client, I am requesting that the donation/
contribution be returned through my office. My client
will not complete any questionnaire.\510\
---------------------------------------------------------------------------
\510\ Letter from Arnold Chin, Esq., to Eric Guo, Jan. 26, 1997
(emphasis added) (Exhibit 311).
The DNC has returned over 50 contributions at the request
of contributors, but the DNC retained Pan's contribution.\511\
---------------------------------------------------------------------------
\511\ Exhibit 7 DNC List of Contributions Returned or Disgorged
Produced to the Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Pan has cooperated with the Committee through his attorney
Chin. On July 23, 1998, a Committee counsel interviewed Chin
regarding his client's contribution to the DNC.\512\ Chin
indicated that at the time of the contribution and currently,
Pan is not ``technically a resident for the purposes of
migration [sic].'' \513\ Chin confirmed that Pan's contribution
was illegal under Federal election law.\514\ That same day,
Chin wrote the Committee to confirm that Pan ``requested the
return of the money from the DNC after he found out that he
could not make such a donation . . . The DNC never knew that he
was not eligible to donate because of his immigration status in
the United States.'' \515\ The Federal election law provision
to which Chin refers in his interview and his letter is 2
U.S.C. Sec. 441e(a) which makes it unlawful for a foreign
national to make a political contribution.\516\
---------------------------------------------------------------------------
\512\ Committee Interview of Arnold Chin, July 23, 1998.
\513\ Id.
\514\ Id.
\515\ Letter from Arnold Chin, Esq., to Tim Griffin, Esq., July 23,
1998 (Exhibit 312).
\516\ See generally Committee Interview of Arnold Chin, July 23,
1998.
---------------------------------------------------------------------------
Even though Pan did not complete the Ernst & Young
questionnaire as requested and Pan's attorney requested the
return of Pan's $20,000 contribution, the DNC retained it.
Based on the foregoing, Pan's contribution was given in
violation of 2 U.S.C. Sec. 441e(a)--the prohibition against
contributions by foreign nationals. Therefore, the DNC should
return Pan's contribution to him or disgorge it to the U.S.
Treasury.\517\
---------------------------------------------------------------------------
\517\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
K&L International, Inc. $150,000 (Illegal)
On May 6, 1996, Il Sung Construction Co., Ltd. (``Il
Sung''), a Korean corporation based in Soeul, Korea,
transferred $200,000 via electronic wire into the checking
account of Chong Kim & Associates, Inc.,\518\ a California
corporation based in Los Angeles.\519\ On May 11, 1996, Chong
Kim, the President of Chong Kim & Associates, issued a check in
the amount of $150,000 to the DNC on the Wilshire State Bank
checking account of K&L International, Inc. (``K&L''),\520\
another California corporation controlled by Chong Kim.\521\ At
the time the $150,000 check was written, K&L's checking account
balance was $3,341.24.\522\ In order to insure that K&L's
account would have a sufficient balance to cover the check, on
May 17, 1996, Chong Kim purchased a $150,000 cashier's check
from Sumitomo Bank of California (``Sumitomo Bank'') in Los
Angeles \523\ and deposited it into K&L's checking
account.\524\ But it was too late: the check to the DNC had
bounced on May 15, 1996, due to insufficient funds.\525\
Although Kim could not recall whether he forwarded another
check to the DNC in the amount of $150,000 to replace the
bounced check or whether the initial check cleared his account
on the second attempt,\526\ bank records indicate that the
original check issued on May 15, 1996, was rerouted through
Wilshire Bank and cleared on June 3, 1996.\527\
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\518\ Sumitomo Bank Account Statement of Chong Kim & Associates,
May 31, 1996 (Exhibit 313); Sumitomo Bank Wire Transfer Report of Chong
Kim & Associates, May 31, 1996 (Exhibit 314); Committee Interview of
Chong Kim, July 20, 1998.
\519\ Office of California Secretary of State, Corporate Records.
\520\ Wilshire State Bank Check No. 1087 from K&L to the DNC in the
amount of $150,000, May 11, 1996 (Exhibit 315); DNC Check Tracking Form
for Wilshire State Bank Check No. 1087 from K&L to the DNC in the
amount of $150,000, May 11, 1996 (Exhibit 316).
\521\ Office of California Secretary of State, Corporate Records.
\522\ Wilshire State Bank Account Statement for K&L, May 31, 1996
(Exhibit 317).
\523\ Exhibit 313 Sumitomo Bank Account Statement of Chong Kim &
Associates, May 31, 1996; Sumitomo Bank Cashier's Check Register of K&L
in the amount of $150,000, May 17, 1996 (Exhibit 318); Sumitomo Bank
Cashier's Check, May 17, 1996 (Exhibit 319); Sumitomo Bank Cashier's
Check (Copy No. 2), May 17, 1996, and Wilshire State Bank Deposit
Ticket of K&L in the amount of $150,000, May 17, 1996 (Exhibit 320).
\524\ Exhibit 317 Wilshire State Bank Account Statement for K&L,
May 31, 1996; Exhibit 320 Sumitomo Bank Cashier's Check (Copy No. 2),
May 17, 1996, and Wilshire State Bank Deposit Ticket of K&L in the
amount of $150,000, May 17, 1996; Exhibit 319 Sumitomo Bank Cashier's
Check, May 17, 1996.
\525\ Exhibit 315 Wilshire State Bank Check No. 1087 from K&L to
the DNC in the amount of $150,000, May 11, 1996; Exhibit 317 Wilshire
State Bank Account Statement for K&L, May 31, 1996.
\526\ Committee Interview of Chong Kim, Aug. 28, 1998.
\527\ Wilshire State Bank Account Statement for K&L, June 28, 1996
(Exhibit 321); Exhibit 315 Wilshire State Bank Check No. 1087 from K&L
to the DNC in the amount of $150,000, May 11, 1996; see generally
http://wyl.ewg.org, Environmental Working Group Website, Compiled from
FEC Data, Last Updated Sept. 10, 1998.
---------------------------------------------------------------------------
Interestingly, although K&L's initial check was signed by
Kim,\528\ K&L's contribution was not attributed to him; it was
attributed to Los Angeles businessman Robert Lee, a friend and
business associate of Kim.\529\ The contribution information
provided to the Committee by the DNC lists then-DNC Finance
Director Richard Sullivan and David Carroll as the DNC contacts
for the contribution and Arkansas attorney Larry Wallace as the
solicitor.\530\
---------------------------------------------------------------------------
\528\ Exhibit 315 Wilshire State Bank Check No. 1087 from K&L to
the DNC in the amount of $150,000, May 11, 1996; Committee Interview of
Chong Kim, July 7, 1998; Exhibit 316 DNC Check Tracking Form for
Wilshire State Bank Check No. 1087 from K&L to the DNC in the amount of
$150,000, May 11, 1996.
\529\ Committee Interview of Chong Kim, July 7, 1998; Exhibit 316
DNC Check Tracking Form for Wilshire State Bank Check No. 1087 from K&L
to the DNC in the amount of $150,000, May 11, 1996.
\530\ Id.
---------------------------------------------------------------------------
According to Wallace, Lee, whom he had known for several
years, initially approached him seeking business opportunities
for Korean based Il Sung.\531\ Lee also expressed an interest
in making a contribution to the DNC.\532\ Wallace introduced
Lee to then-DNC Finance Director Richard Sullivan and David
Carroll at the DNC and asked them to assist Lee with his
contribution.\533\ Wallace told Committee counsel that he
advised Sullivan and Carroll to insure that Lee understood the
contribution must be made with his money.\534\ The only time
Wallace ever met Kim is when Lee and Kim visited him at his
hotel room in Washington, DC, at which time Lee expressed the
desire to contribute.\535\ According to Wallace, he tried to
make it very clear to them that they had to contribute U.S.
money and that it could not simply be funds routed through a
U.S. bank account.\536\
---------------------------------------------------------------------------
\531\ Committee Interview of Larry Wallace, Aug. 7, 1998.
\532\ Id.
\533\ Id.
\534\ Id.
\535\ Id.
\536\ Id.
---------------------------------------------------------------------------
Chong Kim advised Committee investigators that he has never
owned any part of Il Sung.\537\ At the time of the
contribution, K&L had yet to complete its first business
project.\538\ According to Kim, his contribution to the DNC was
part of an effort to develop overseas business opportunities in
conjunction with Il Sung.\539\ The remaining $50,000 of the
$200,000 received by Chong Kim from Il Sung was paid to Larry
Wallace and Robert Lee, $25,000 each.\540\ Kim advised
Committee counsel that Wallace and Lee were paid to assist in
the development of overseas business opportunities.\541\
Wallace confirmed that he assisted Lee with some overseas
business projects but was unaware that any of the money given
to the DNC or paid to him was provided by Chong Kim or Il
Sung.\542\ Wallace said he was under the mistaken impression
that Lee was the source of the funds and that Lee was the
contact for K&L.\543\ This would possibly explain the
attribution of K&L's contribution to Lee on the DNC check
tracking form.\544\
---------------------------------------------------------------------------
\537\ Committee Interview of Chong Kim, July 20, 1998.
\538\ IGI Contribution Review Materials of K&L, HS 003786, HS
011373, and HS 003787-HS 003815, at 2 (Exhibit 322); Ira Chinoy and
Lena H. Sun, ``Unwary DNC Accepted Donations at Face Value,'' the
Washington Post, Nov. 22, 1996, at A1.
\539\ Committee Interview of Chong Kim, July 7, 1998.
\540\ Committee Interview of Chong Kim, July 7, 1998; Committee
Interview of Larry Wallace, Aug. 7, 1998; Sumitomo Bank Payment Order
of Chong Kim & Associates in the amount of $25,000, May 6, 1996
(Exhibit 323); Exhibit 313 Sumitomo Bank Account Statement of Chong Kim
& Associates, May 31, 1996.
\541\ Committee Interview of Chong Kim, July 7, 1998.
\542\ Committee Interview of Larry Wallace, Aug. 7, 1998.
\543\ Id.
\544\ See Exhibit 316 DNC Check Tracking Form for Wilshire State
Bank Check No. 1087 from K&L to the DNC in the amount of $150,000, May
11, 1996.
---------------------------------------------------------------------------
Ernst & Young conducted a review of K&L's May 1996 $150,000
contribution and was unable to confirm the address and
telephone number provided by K&L.\545\ Apparently, no review
questionnaire was completed.\546\ After Ernst & Young's
unsuccessful attempt to verify the legality of K&L's
contribution, IGI made an attempt.\547\ On January 9, 1997, an
IGI employee interviewed Lee regarding K&L's contribution.\548\
Lee asserted that although K&L ``has not done any commercial
development in the United States . . . , the funds he
contributed came from `earnings in the U.S.' '' \549\
---------------------------------------------------------------------------
\545\ Ernst & Young Contribution Review Materials of K&L, DNC
1806062, and DNC 1806066-DNC 1806072, at 2 (Exhibit 324).
\546\ Id. at 1-8.
\547\ Exhibit 322 IGI Contribution Review Materials of K&L, HS
003786, HS 011373, and HS 003787-HS 003815.
\548\ Id. at 2.
\549\ Id.
---------------------------------------------------------------------------
Despite the questions raised by the Ernst & Young review of
K&L's contribution, the DNC retained it. Moreover, the
Committee has no evidence that the DNC discussed the
contribution with then-Finance Director Richard Sullivan, David
Carroll or Larry Wallace in conjunction with the DNC's
contribution review, even though Wallace had warned Sullivan
and Carroll to proceed with caution. In any event, K&L's
$150,000 contribution violated both 2 U.S.C. Sec. 441e(a) and 2
U.S.C. Sec. 441f, and thus, the DNC should disgorge K&L's
illegal $150,000 contribution to the U.S. Treasury.\550\
---------------------------------------------------------------------------
\550\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
American Great Ground Group $7,000 (Suspect)
On July 20, 1996, American Great Ground Group, Inc.
(``AGGG''), a California corporation, issued a check to the DNC
in the amount of $7,000 \551\ in conjunction with the July 22,
1996, DNC Asian Dinner fund-raiser at the Century Plaza Hotel
in Los Angeles.\552\ John Huang was the DNC contact for the
contribution.\553\
---------------------------------------------------------------------------
\551\ Bank of America Check No. 1524 from AGGG to the DNC in the
amount of $7,000, July 20, 1996 (Exhibit 325); DNC Check Tracking Form
for Bank of America Check No. 1524 from AGGG to the DNC in the amount
of $7,000, July 20, 1996 (Exhibit 326).
\552\ Id.
\553\ Id.
---------------------------------------------------------------------------
Ernst & Young conducted a review of AGGG's July 1996 $7,000
contribution and was unable to confirm the address provided by
AGGG.\554\ The DNC mailed a review questionnaire to James
Shang, the contact for AGGG, in December 1996, but apparently
received no response; the copy of AGGG's questionnaire provided
to the Committee is completely blank.\555\ Attempts to reach
Shang at the number provided to the DNC were also
unsuccessful.\556\ Ernst & Young's review notes indicate that
it was unable to gather any significant information on AGGG and
designated the file ``Term[inated].'' \557\ After Ernst &
Young's unsuccessful attempt to verify the legality of AGGG's
contribution, IGI made an attempt.\558\ Shang did not return a
Committee investigator's telephone calls.
---------------------------------------------------------------------------
\554\ IGI Contribution Review Materials for AGGG/James Shang, HS
007737-HS 007760, at 3-4 (Exhibit 327).
\555\ Id. at 2.
\556\ Id. at 11-18.
\557\ Id. at 2.
\558\ See Id. at 1-24.
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The Committee has reviewed AGGG bank records: apparently,
AGGG's predominant source of revenue at the time of the
contribution was a series of wire transfers, all of which
originated with the Bank of Communications in Shenyang,
China,\559\ a bank owned and operated by the Chinese
government.\560\ Although inconclusive, AGGG's bank records
appear to indicate that the Bank of Communications was not only
the issuing bank but also the ultimate source of the
funds.\561\
---------------------------------------------------------------------------
\559\ Bank of America Account Statement of AGGG, June 28, 1996
(Exhibit 328); Bank of America Wire Transfer Report of AGGG in the
amount of $35,785, June 26, 1996 (Exhibit 329); Bank of America Account
Statement of AGGG, June 31, 1996 (Exhibit 330); Bank of America Account
Statement of AGGG, Aug. 30, 1996 (Exhibit 331); Bank of America Wire
Transfer Report of AGGG in the amount of $47,985, Aug. 23, 1996
(Exhibit 332).
\560\ Cheung Lai-Kuen, ``Outlook on China Groups Lowered,'' South
China Morning Post, Mar. 22, 1997, at 2.
\561\ Exhibit 329 Bank of America Wire Transfer Report of AGGG in
the amount of $35,785, June 26, 1996; Exhibit 332 Bank of America Wire
Transfer Report of AGGG in the amount of $47,985, Aug. 23, 1996.
---------------------------------------------------------------------------
As indicated previously, foreign nationals are prohibited
from making a political contribution directly or through any
other person, or making an expenditure, in connection with an
election to any political office.\562\ The term ``person''
includes a corporation.\563\ The term ``foreign national''
includes the foreign principal of a domestic corporation.\564\
In FEC Advisory Opinion 1989-20, the FEC ``prohibited
contributions by a real estate development company that was
predominately funded by a foreign national parent, and whose
projects were not yet generating income.'' \565\ The ultimate
source of the wire transfers in this case are not conclusively
known. However, if the wire transfers, and thus the
contribution, originated with a foreign principal of AGGG's,
AGGG's contribution was an illegal contribution by a foreign
national in violation of 2 U.S.C. Sec. 441e(a).
---------------------------------------------------------------------------
\562\ 2 U.S.C. Sec. 441e(a); 11 CFR Sec. 110.4(a) (1) and (2); FEC
Advisory Opinion No. 1992-16, June 26, 1992.
\563\ 2 U.S.C. Sec. 431(11).
\564\ FEC Advisory Opinion 1992-16 (citing 22 U.S.C. Sec. 611(b); 2
U.S.C. Sec. 441e(b)(1); 11 CFR Sec. 110.4(a)(4)(i)).
\565\ FEC Advisory Opinion 1992-16 (citing FEC Advisory Opinion
1989-20).
---------------------------------------------------------------------------
As on other occasions, despite the paucity of information
gathered pursuant to the Ernst & Young and IGI reviews, the DNC
decided to retain AGGG's $7,000 contribution. However, based on
an analysis of AGGG's bank records, its $7,000 contribution
appears to constitute a violation of 2 U.S.C. Sec. 441e(a) and,
in any event, should be disgorged to the U.S. Treasury based on
the DNC's own criteria of insufficient information.\566\
---------------------------------------------------------------------------
\566\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Yong Xing Huang $10,000 (Suspect)
On May 6, 1996, Y.X. Huang, a relative of John Huang,\567\
deposited $5,000 cash into his checking account at Asia Bank,
N.A. (``Asia Bank''), in Elmhurst, New York.\568\ At the time
of the deposit, Y.X. Huang's checking account balance was
$8,146.74.\569\ Three days later, on May 9, 1996, Y.X. Huang
deposited an additional $5,000 cash.\570\ On May 13, 1996, Y.X.
Huang issued a check in the amount of $10,000 to the DNC in
conjunction with the DNC's Asian Pacific American Leadership
Council May 13, 1996, fund-raiser held the same day at the
Sheraton-Carlton Hotel in Washington, DC.\571\ (Of the $579,000
raised at this event, the DNC returned or disgorged at least
$475,000, 82 percent of the total raised.) \572\ According to
documents produced to the Committee by the DNC, John Huang was
both the solicitor of and the DNC contact for Y.X. Huang's
contribution.\573\
---------------------------------------------------------------------------
\567\ Committee Interview of Y.X. Huang, Aug. 14, 1998.
\568\ Asia Bank Cash In Ticket of Y.X. Huang in the amount of
$5,000, May 6, 1996, and Asia Bank Deposit Ticket of Y.X. Huang in the
amount of $5,000, May 6, 1996 (Exhibit 333); Asia Bank Account
Statement of Y.X. Huang, May 20, 1996 (Exhibit 334).
\569\ Id.
\570\ Asia Bank Cash In Ticket of Y.X. Huang in the amount of
$5,000, May 9, 1996, and Asia Bank Deposit Ticket of Y.X. Huang in the
amount of $5,000, May 9, 1996 (Exhibit 335); Exhibit 334 Asia Bank
Account Statement of Y.X. Huang, May 20, 1996.
\571\ Id.; Asia Bank Check No. 102 from Y.X. Huang to the DNC in
the amount of $10,000, May 13, 1996 (Exhibit 336); DNC Check Tracking
Form for Asia Bank Check No. 102 from Y.X. Huang to the DNC in the
amount of $10,000, May 13, 1996 D 0000335 (Exhibit 337).
\572\ See generally Investigation of Illegal or Improper Activities
in Connection with the 1996 Federal Election Campaign Before the Senate
Committee on Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d
sess., vol. 4, 4816 (1998); Exhibit 7 DNC List of Contributions
Returned or Disgorged Produced to the Committee on Nov. 20, 1997, at 1-
9.
\573\ Exhibit 337 DNC Check Tracking Form for Asia Bank Check No.
102 from Y.X. Huang to the DNC in the amount of $10,000, May 13, 1996 D
0000335.
---------------------------------------------------------------------------
Ernst & Young conducted a review of Y.X. Huang's May 1996
$10,000 contribution.\574\ Although Ernst & Young discussed
Y.X. Huang's contribution with his daughter,\575\ they did not
receive any information directly from Y.X. Huang regarding his
contributions.\576\ The Ernst & Young auditor noted that ``[w]e
need to speak to father [sic] directly,'' \577\ but apparently
neither Ernst & Young nor the DNC ever did.\578\ Two review
forms relating to Y.X. Huang's contribution were provided to
the Committee: one of the review forms is blank and labeled
``Terminated.''\579\ The other review form is complete and
labeled ``Unsuccessful.'' \580\
---------------------------------------------------------------------------
\574\ IGI Contribution Review Materials for Y.X. Huang, HS 007153-
HS 007190, at 6 (Exhibit 338).
\575\ Id. at 22.
\576\ Id. at 1-38.
\577\ Id. at 28.
\578\ Id. at 1-22.
\579\ Id. at 6.
\580\ Id. at 22
---------------------------------------------------------------------------
After the Ernst & Young review, IGI gathered a limited
amount of additional information regarding Y.X. Huang.\581\
However, through IGI, the DNC was able to determine that his
Social Security number had been valid for approximately 10
years at the time of the contribution \582\ and that his home
had an assessed value of $361,000.\583\ This information
evidently provided the DNC with the minimum information needed
to conclude that the contribution was legal and appropriate;
the DNC retained the contribution.
---------------------------------------------------------------------------
\581\ Id.
\582\ Id. at 2.
\583\ Id. at 2.
---------------------------------------------------------------------------
The Committee was successful in contacting Y.X. Huang.\584\
On August 14, 1998, Y.X. Huang contacted a Committee attorney
telephonically through his daughter Sharon Huang, who served as
a translator;\585\ Y.X. Huang speaks only limited English.\586\
Y.X. Huang indicated that his relative John Huang solicited his
contribution in the amount of $10,000.\587\ Y.X. Huang advised
that he has not seen John Huang in several months.\588\ When
asked about the source of the $10,000 cash deposited into his
account, Y.X. Huang indicated that a ``traditional Chinese
organization loaned him the money.'' \589\ He denied that the
money was John Huang's.\590\ Y.X. Huang was unwilling or unable
to provide additional details regarding the loan.\591\
---------------------------------------------------------------------------
\584\ Committee Interview of Y.X. Huang, Aug. 14, 1998.
\585\ Id.
\586\ Id.
\587\ Id.
\588\ Id.
\589\ Id.
\590\ Id.
\591\ Id.
---------------------------------------------------------------------------
Particularly suspicious is the fact that the $10,000 cash
was deposited in two separate portions of $5,000 each.\592\
Y.X. Huang had no explanation for breaking the deposit into two
equal halves.\593\ As indicated previously, under Federal law,
a CTR must be filed in conjunction with any cash transaction
involving $10,000 or more.\594\ It is a Federal crime to avoid
the generation of a CTR purposefully.\595\
---------------------------------------------------------------------------
\592\ Exhibit 334 Asia Bank Account Statement of Y.X. Huang, May
20, 1996.
\593\ Committee Interview of Y.X. Huang, Aug. 14, 1998.
\594\ See generally 31 U.S.C. Sec. Sec. 5313 and 5322; 31 C.F.R.
Sec. 103.22.
\595\ 31 U.S.C. Sec. 5322.
---------------------------------------------------------------------------
With regard to matters discussed with Committee
investigators, Y.X. Huang's veracity is questionable: when
asked about a $50,000 cashier's check that he received from a
Cecilia Soohoo \596\ and deposited into his Asia Bank
account,\597\ he did not recall receiving the $50,000 check and
denied knowing Soohoo.\598\ Committee counsel informed Y.X.
Huang that the Committee is in possession of his bank
records,\599\ nonetheless, during detailed questioning
regarding the $50,000, Y.X. Huang repeated his previous
answers.\600\
---------------------------------------------------------------------------
\596\ John Huang is reportedly related to a Linda Soohoo.
\597\ Citizens Bank Cashier's Check No. 806626213 from Cecelia H.Y.
Soohoo to Yong Xing Huang in the amount of $50,000, May 13, 1996, and
Asia Bank Deposit Ticket of Y.X. Huang in the amount of $50,000, May
23, 1996 (Exhibit 339); Asia Bank Account Statement of Y.X. Huang, May
21, 1996 (Exhibit 340); Asia Bank Withdrawal Ticket of Y.X. Huang in
the amount of $50,030, May 24, 1996 (Exhibit 341).
\598\ Committee Interview of Y.X. Huang, Aug. 14, 1998.
\599\ Id.
\600\ Id.
---------------------------------------------------------------------------
Later that same day, on August 14, 1998, Y.X. Huang re-
contacted Committee counsel telephonically through his daughter
Sharon Huang.\601\ At that time, Y.X. Huang indicated that he
then recalled receiving the $50,000.\602\ According to Y.X.
Huang, he received the $50,000 in the form of a wire transfer
from his relative Sin Yun Chen of Hong Kong who needed to store
the money in his account because she wanted to purchase a home
in the United States.\603\ Bank records indicate that the
$50,000--after being deposited into Y.X. Huang's account on May
23, 1996 \604\--was sent via wire transfer to the People's
Construction Bank of China in Zhe Jiang, China on May 24,
1996.\605\ Moreover, Committee counsel informed Y.X. Huang that
the $50,000 was not a wire transfer; it was a cashier's check
from Cecilia Soohoo.\606\ He again denied knowing Soohoo.\607\
Y.X. Huang was unable to provide further details regarding the
transaction.\608\
---------------------------------------------------------------------------
\601\ Id.
\602\ Id.
\603\ Id.
\604\ Exhibit 339 Citizens Bank Cashier's Check No. 806626213 from
Cecelia H.Y. Soohoo to Yong Xing Huang in the amount of $50,000, May
13, 1996, and Asia Bank Deposit Ticket of Y.X. Huang in the amount of
$50,000, May 23, 1996; Exhibit 340 Asia Bank Account Statement of Y.X.
Huang, May 21, 1996.
\605\ Exhibit 341 Asia Bank Withdrawal Ticket of Y.X. Huang in the
amount of $50,030, May 24, 1996; Asia Bank Wire Transfer Report of Y.X.
Huang in the amount of $50,000, May 24, 1996 (Exhibit 342).
\606\ Committee Interview of Y.X. Huang, Aug. 14, 1998.
\607\ Id.
\608\ Id.
---------------------------------------------------------------------------
Despite the fact that the DNC's review of Y.X. Huang's
contribution was labeled ``Terminated'' and labeled
``Unsuccessful,'' the DNC apparently decided that it had
sufficient information to declare the contribution appropriate
and retain it. That fact notwithstanding, based on Huang's
proven history of using conduits to contribute to the DNC and
the suspicious activity evidenced by Y.X. Huang's bank records,
the evidence indicates that his $10,000 was most likely another
illegal conduit contribution generated by John Huang in
violation of 2 U.S.C. Sec. 441f. In any event, the Y.X. Huang's
$10,000 contribution is highly suspect and should be disgorged
to the U.S. Treasury based on the DNC's own criterion of
insufficient information.\609\
---------------------------------------------------------------------------
\609\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Platinum Realty, Inc. $22,500 (Suspect)
Platinum Realty, Inc. (``Platinum'') contributed $12,500 to
the DNC on February 19, 1996, in conjunction with the DNC's
Asian Dinner fund-raiser held that same day at the Hay Adams
Hotel \610\ and contributed an additional $10,000 to the DNC on
July 18, 1996, in conjunction with the DNC's July 22, 1996,
Asian Dinner fund-raiser at the Century Plaza Hotel, Los
Angeles, California.\611\ Both contribution checks were issued
from Platinum's checking account at the American International
Bank in Los Angeles and signed by Platinum's president Huey Min
Yu.\612\
---------------------------------------------------------------------------
\610\ DNC Check Tracking Form for American International Bank Check
No. 1409 from Platinum Realty to the DNC in the amount of $12,500, Feb.
19, 1996 DNC 1803275 (Exhibit 343).
\611\ DNC Check Tracking Form for American International Bank Check
No. 1644 from Platinum Realty to the DNC in the amount of $10,000, July
18, 1996 DNC 1803276 (Exhibit 344).
\612\ Id.; Exhibit 343 DNC Check Tracking Form for American
International Bank Check No. 1409 from Platinum Realty to the DNC in
the amount of $12,500, Feb. 19, 1996 DNC 1803275.
---------------------------------------------------------------------------
John Huang was the DNC contact for and solicitor of
Platinum's contributions.\613\ In addition, telephone records
and other documents produced to the Committee provide
additional links between Yu and Huang.\614\ The telephone
records show calls between Yu and Huang around the time of Yu's
July contribution.\615\
---------------------------------------------------------------------------
\613\ Id.; Ernst & Young Contribution Review Materials for Huey Min
Yu, DNC 1803240, DNC 1803242-DNC 1803244, DNC 1803247-DNC 1803248, DNC
1803252, DNC 1803258, and DNC 1803270-DNC 1803276 (Exhibit 345).
\614\ Phone Records of John Huang Compiled by Committee
Investigators (Exhibit 346); Invoice of Berry & Associates, Aug. 1,
1996 (Exhibit 347); Facsimile from Huey Min Yu to Paul C. Berry, May
14, 1996 (Exhibit 348).
\615\ Exhibit 346 Phone Records of John Huang Compiled by Committee
Investigators.
---------------------------------------------------------------------------
On several occasions during December 1996 and January 1997,
the DNC and Ernst & Young personnel contacted Yu and one of his
employees regarding his contributions to the DNC.\616\ On
January 7, 1997, Yu provided an Ernst & Young auditor with the
information requested by the Ernst & Young questionnaire.\617\
The auditor inquired of Yu:
---------------------------------------------------------------------------
\616\ Exhibit 345 Ernst & Young Contribution Review Materials for
Huey Min Yu, DNC 1803240, DNC 1803242-DNC 1803244, DNC 1803247-DNC
1803248, DNC 1803252, DNC 1803258, and DNC 1803270-DNC 1803276, at 2-3,
and 8.
\617\ Id. at 4-8.
Would you be willing to send me a letter confirming
that fact, and also confirming that none of the money
came from outside of the United States or from a source
other than [company's] U.S. funds? \618\
---------------------------------------------------------------------------
\618\ Id. at 7.
Yu responded yes.\619\ Yu apparently never confirmed the source
of the funds used for the contribution. The auditor's notes
indicate that Yu ``was aggravated by the questions,
particularly citizenship & income. Mentioned having someone
from the DNC call him.'' \620\ The Ernst & Young auditor
labeled Yu's review file ``Survey Unsuccessful.'' \621\ The
Committee twice unsuccessfully attempted to contact Yu.
---------------------------------------------------------------------------
\619\ Id.
\620\ Id. at 2.
\621\ Id. at 1. The Committee has received no evidence of IGI's
participation in this review. Id.
---------------------------------------------------------------------------
In a letter to an Ernst & Young auditor written the same
day of the Ernst & Young interview, Huey Min Yu requested the
return of his contribution, stating in pertinent part that:
I regret to hear that DNC [sic] has considered my
contributions unacceptable due to lack of information .
. . Should the receiving entity to [sic] my
contribution captioned above considered [sic] the
information given by me at the time of contribution as
``incomplete'' and therefore is an unacceptable
transaction, then please consider this letter as my
formal request that the subject contributions be
returned as soon as possible.\622\
---------------------------------------------------------------------------
\622\ Facsimile from Huey Min Yu to Alyson Payne, Jan. 7, 1997
(Exhibit 349).
As a result of his objection to the DNC review, Yu provided no
information which would have enabled the DNC to make an
informed determination regarding the legality or
appropriateness of Platinum Realty's contribution. But despite
the paucity of information gathered pursuant to the Ernst &
Young review and its own characterization of the review as
``unsuccessful,'' the DNC retained Yu's $22,500 in
contributions. The DNC has returned over 50 contributions at
the request of the contributor.\623\ Due to insufficient
information and Yu's own request for the return of his
contributions, the DNC should return Yu's $22,500 to him or
disgorge his contributions to the U.S. Treasury.\624\
---------------------------------------------------------------------------
\623\ Exhibit 7 DNC List of Contributions Returned or Disgorged
Produced to the Committee on Nov. 20, 1997, at 1-9.
\624\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Ji Ping Yu $5,000 (Suspect)
On August 17, 1996, Ji Ping Yu issued a check in the amount
of $5,000 to the DNC's Victory '96 fund.\625\ Two days later,
on August 19, 1996, Ji Ping Yu deposited $5,500 in cash in two
separate transactions, $2,500 and then $3,000.\626\ Yu's
checking account balance was $2,745.86 at the time of the
initial deposit.\627\ Although difficult to decipher due to
poor copy quality, the deposits appear to have been made almost
simultaneously.\628\ The check cleared Yu's Citibank checking
account on August 23, 1996.\629\
---------------------------------------------------------------------------
\625\ Citibank Check No. 833 from Tze Hwa Yu and Ji Ping Yu to
Victory 96 in the amount of $5,000, Aug. 17, 1996 (Exhibit 350);
Citibank Account Statement of Tze Hwa Yu and Ji Ping Yu, Aug. 26, 1996
(Exhibit 351).
\626\ Id.; Citibank Deposit Ticket of Ji Ping Yu in the amount of
$2,500, Aug. 19, 1996 (Exhibit 352); Citibank Deposit Ticket of Ji Ping
Yu in the amount of $3,000, Aug. 19, 1996 (Exhibit 353).
\627\ Id.
\628\ The sequential transaction numbers stamped on the rear of the
deposit tickets are evidence that the two deposits were made in
sequence and simultaneously. Exhibit 352 Citibank Deposit Ticket of Ji
Ping Yu in the amount of $2,500, Aug. 19, 1996; Exhibit 353 Citibank
Deposit Ticket of Ji Ping Yu in the amount of $3,000, Aug. 19, 1996.
While the deposit tickets are dated Aug. 18, 1996 in handwriting, the
account statement indicates that the deposits were made on Aug. 19,
1996. Exhibit 351 Citibank Account Statement of Tze Hwa Yu and Ji Ping
Yu, Aug. 26, 1996.
\629\ Id.
---------------------------------------------------------------------------
According to DNC contribution information provided to the
Committee, the contribution was solicited by Yah Lin
``Charlie'' Trie in conjunction with the President's Birthday
Party fund-raiser held in New York City on August 19,
1996.\630\ The DNC contact/fund-raiser for the contribution was
Richard Sullivan.\631\ The DNC apparently reviewed Yu's
contribution, but the Committee has limited--three pages with
information obtained by the contributor at the time of
contribution--information regarding the review.\632\
---------------------------------------------------------------------------
\630\ IGI Contribution Review Materials for Ji Ping Yu, HS 002576-
HS 002578, at 3 (Exhibit 354).
\631\ Id. at 2.
\632\ Id. at 1-3.
---------------------------------------------------------------------------
It is essential to note that Trie used a number of conduit
contributors to funnel thousands of dollars into the DNC during
August 1996, most, if not all, of which was in conjunction with
the DNC's Birthday Party fund-raiser for the President.\633\
Based on Trie's proven history of using conduits to contribute
to the DNC and the suspicious activity evidenced by Ji Ping
Yu's bank records, the evidence indicates that Yu's $5,000 may
have been an illegal conduit contribution in violation of 2
U.S.C. Sec. 441f. In any event, the DNC--and the Committee for
that matter--have been unable to obtain sufficient information
to make an informed decision as to the legality or
appropriateness of this contribution. Therefore, pursuant to
DNC criteria and DNC practice, the DNC should return Yu's
$5,000 contribution to him or disgorge it to the U.S.
Treasury.\634\
---------------------------------------------------------------------------
\633\ See Federal Grand Jury Indictment of Yah Lin ``Charlie''
Trie, U.S. District Court for the District of Columbia, Jan. 28, 1998.
\634\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Kuang Tao Zhou $50,000 (Suspect)
On April 18, 1996, Mei Chi Kuo Chow of Los Angeles,
California, issued a check in the amount of $30,000 to Kuang
Tao Zhou,\635\ a college student who resides in Philadelphia,
Pennsylvania.\636\ The entire $30,000 can be traced to a
$60,000 February 27, 1996, wire transfer from Tzu Shih Chow's
account at Chinatrust Commercial Bank to Mei Chi Kuo Chow's
account at Union Bank, Santa Monica, California.\637\ Zhou
deposited the $30,000 check into his account at Jefferson Bank
of Philadelphia that same day.\638\ His checking account
balance was $3,646.70 at the time of the deposit.\639\ The
following day, on April 19, 1996, Zhou issued a check in the
amount of $30,000 to the DNC in conjunction with the April 26,
1996, Philadelphia POTUS GalaRendell Dinner.\640\ DNC
contribution information produced to the Committee attributes
the solicitation of Zhou's contribution to Mayor Ed Rendell of
Philadelphia.\641\ In addition to the foregoing, Zhou
contributed an additional $26,500 to the DNC, $2,000 to the
DSCC and $4,000 to congressional and senatorial
candidates.\642\
---------------------------------------------------------------------------
\635\ Union Bank of California Account Statement of Mei Chi Kuo
Chow, Apr. 24, 1996 (Exhibit 355); Union Bank of California Check No.
2772 from Mei Chi Kuo Chow to Kuang Tao Zhou in the amount of $30,000,
Apr. 18, 1996, and Jefferson Bank Deposit Ticket of Kuang Tao Zhou in
the amount of $37,000, Apr. 18, 1996 (Exhibit 356).
\636\ IGI Contribution Review Materials for Kuang Tao Zhou, HS
001600-HS 001620, at 2 (Exhibit 357); ``Rendell's Top Donor Just Wants
Spot in Law School,'' Harrisburg Patriot, Dec. 18, 1996, at B6.
\637\ Union Bank of California Wire Transfer Report of Mei Chi Kuo
Chow in the amount of $59,985, Feb. 28, 1996 (Exhibit 358); Union Bank
of California Account Statement of Mei Chi Kuo Chow, Mar. 26, 1996
(Exhibit 359).
\638\ Exhibit 356 Union Bank of California Check No. 2772 from Mei
Chi Kuo Chow to Kuang Tao Zhou in the amount of $30,000, Apr. 18, 1996,
and Jefferson Bank Deposit Ticket of Kuang Tao Zhou in the amount of
$37,000, Apr. 18, 1996; Jefferson Bank Account Statement of Kuang Tao
Zhou, May 13, 1996 (Exhibit 360).
\639\ Exhibit 360 Jefferson Bank Account Statement of Kuang Tao
Zhou, May 13, 1996.
\640\ Id.; Jefferson Bank Check No. 480 from Kuang Tao Zhou to the
DNC Non-Federal in the amount of $30,000, Apr. 19, 1996 (Exhibit 361);
Exhibit 357 IGI Contribution Review Materials for Kuang Tao Zhou, HS
001600-HS 001620, at 2.
\641\ Id.
\642\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998. Apr. 24, 1996,
$10,000 to the DNC; Apr. 24, 1996, $10,000 to the DNC; Aug. 12, 1996,
$1,500 to the DNC Birthday Victory Fund; June 6, 1997, $2,000 to
Representative Richard Gephardt (D-MO-3); Oct. 10, 1997, $1,000 to
Senator Edward M. Kennedy (D-MA); Oct. 22, 1997, $5,000 to the DNC;
Oct. 28, 1997, $2,000 to the DSCC; Mar. 31, 1998, $2,000 to Geraldine
Ferraro (D-NY); Apr. 9, 1998, $500 to Robert A. Borski (D-PA-3).
---------------------------------------------------------------------------
Also on April 19, 1996, Zhou received a $19,985 wire into
his Jefferson Bank account from Tzu Shih Chow in Taiwan.\643\
FEC data and press reports indicate that Zhou contributed an
additional $20,000 to the DNC in April 1996 in two separate
$10,000 contributions which Zhou has described as a ``credit
card'' contribution.\644\
---------------------------------------------------------------------------
\643\ Jefferson Bank Account Credit Ticket of Kuang Tao Zhou in the
amount of $19,977, Apr. 19, 1996 (Exhibit 362).
\644\ http:wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998; ``Rendell's Top
Donor Just Wants Spot in Law School,'' Harrisburg Patriot, Dec. 18,
1996. The Committee has gathered credit card records that confirm a
$10,000 contribution to the DNC on Apr. 23, 1996. Citibank Credit Card
Account Statement for Kuang Tao Zhou, Apr. 30, 1996 (Exhibit 363). The
Committee has not confirmed the second $10,000 contribution made on
Apr. 24, 1996, as indicated by the FEC data and in the press.
---------------------------------------------------------------------------
Ernst & Young conducted a review of Zhou's April 1996
$30,000 contribution and was unable to confirm the address and
telephone number provided by Zhou.\645\ The DNC mailed a review
questionnaire to Zhou on January 6, 1997,\646\ but apparently
received no response; the copy of Zhou's questionnaire provided
to the Committee is completely blank.\647\ After Ernst &
Young's unsuccessful attempt to verify the legality of Zhou's
contribution, IGI made an attempt.\648\ IGI's review notes
indicate that it was unable to gather any additional
information on Zhou.\649\
---------------------------------------------------------------------------
\645\ Exhibit 357 IGI Contribution Review Materials for Kuang Tao
Zhou, HS 001600-HS 001620, at 3 and 5-7.
\646\ Id. at 3.
\647\ Id. at 9-21.
\648\ Id. at 1-21.
\649\ Id. at 6-8.
---------------------------------------------------------------------------
On July 8, 1998, Committee investigators unsuccessfully
attempted to telephone and locate Mei Chi Kuo and Tzu Shih Chow
in Los Angeles, California. Also, Committee investigators
repeatedly made unsuccessful attempts to telephone Zhou in
Philadelphia at numbers provided by him to the DNC.
As in other instances of suspect contributions, despite the
paucity of information gathered pursuant to the Ernst & Young
and IGI reviews, the DNC decided to retain Zhou's $30,000
contribution. The DNC apparently did not conduct a review
regarding Zhou's additional $20,000 in contributions also made
in April 1996. While Zhou is a U.S. Citizen, according to Ernst
& Young notes \650\ and the son of a wealthy Taiwanese
magnate,\651\ bank records indicate that his three
contributions to the DNC totaling $50,000 appear to have been
illegal conduit contributions in violation of 2 U.S.C.
Sec. 441f. In any event, the DNC has insufficient information
to determine the legality or appropriateness of Zhou's
contributions. Therefore, pursuant to Federal regulations and
DNC practice, the DNC should disgorge Zhou's $50,000 in
contributions to the U.S. Treasury.\652\
---------------------------------------------------------------------------
\650\ Id. at 4.
\651\ ``Rendell's Top Donor Just Wants Spot in Law School,''
Harrisburg Patriot, Dec. 18, 1996.
\652\ See FEC Advisory Opinion 1995-19; FEC Advisory Opinion 1991-
39; Exhibit 4 Letter from Joseph E. Sandler, Esq., to Lawrence Noble,
Esq., June 27, 1997 (citing FEC Advisory Opinion 1995-19 and FEC
Advisory Opinion 1991-39); Exhibit 5 Letter from Joseph E. Sandler,
Esq., to Lawrence Noble, Esq., Mar. 25, 1998; Exhibit 6 Letter from
Judah Best, Esq., to James C. Wilson, Esq., Apr. 15, 1998; Exhibit 7
DNC List of Contributions Returned or Disgorged Produced to the
Committee on Nov. 20, 1997, at 1-9.
---------------------------------------------------------------------------
Pauline Kanchanalak Related Contributions During the 1992, 1994 and
1996 Election Cycles
Duangnet Kronenberg $261,500 and Pauline Kanchanalak $112,500 (Illegal)
During the period September 1992 through June 1996, then-
DNC fund-raiser Pauline Kanchanalak and her sister-in-law,
Duangnet ``Georgie'' Kronenberg, illegally funneled at least
$679,000 to the DNC and other Democratic causes.\653\ In the
wake of intense press scrutiny and a DNC internal investigation
regarding Kanchanalak and her fund-raising activities, the DNC
returned Kanchanalak's contributions totaling $253,500 \654\ on
November 20, 1996.\655\ In contrast, the press paid far less
attention to Kronenberg, whose contributions are detailed
below: \656\
---------------------------------------------------------------------------
\653\ Federal Grand Jury Indictment of Pauline Kanchanalak and
Duangnet Kronenberg, U.S. District Court for the District of Columbia,
July 13, 1998.
\654\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
\655\ Marcy Gordon, ``DNC Returns $253,000 Attributed to Thai
Donor; Businesswoman, a Legal U.S. Resident, Says Money Actually Came
from Mother-in-Law,'' the Washington Post, Nov. 21, 1996; see also,
http://wyl.ewg.org, Environmental Working Group Website, Compiled from
FEC Data, Last Updated Sept. 10, 1998.
\656\ Id.
----------------------------------------------------------------------------------------------------------------
Check
Name Date FEC Date Recipient Amount
----------------------------------------------------------------------------------------------------------------
Duangnet Kronenberg.......................... 09/23/92 09/28/92 DNC............................ $4,000
Duangnet Kronenberg.......................... 09/24/92 09/28/92 DNC............................ 5,000
Duangnet Kronenberg.......................... 05/26/94 05/27/94 DNC............................ 20,000
Duangnet Kronenberg.......................... 06/07/94 06/13/94 DNC............................ 15,000
Duangnet Kronenberg.......................... 02/26/96 02/29/96 DNC............................ 5,000
Duangnet Kronenberg.......................... 03/08/96 03/11/96 DNC............................ 5,000
Duangnet Kronenberg.......................... 03/14/96 03/15/96 DNC............................ 5,000
Duangnet Kronenberg.......................... 05/23/96 06/06/96 DNC............................ 5,000
Duangnet Kronenberg.......................... 06/18/96 06/19/96 DNC............................ 50,000
----------------------------------------------------------------------------------------------------------------
Owing to what appears to have been relatively little press
scrutiny of Kronenberg--a database search of national
periodicals indicates that only 27 articles mentioning
Kronenberg were published between the breaking of the campaign
finance scandal on September 21, 1996, and December 31, 1996,
in contrast to 149 articles mentioning Kanchanalak \657\--the
DNC retained her contributions totaling $114,000 until recently
when it disgorged $105,000 to the U.S. Treasury; \658\ it did
not disgorge $9,000.\659\ On July 13, 1998, Kanchanalak and
Kronenberg were indicted by a Federal grand jury and charged
with ``conspiring to impair and impede the FEC and to cause the
submission of false statements to the FEC.'' \660\ It was not
until the indictment that the DNC pledged to return
Kronenberg's contributions.\661\
---------------------------------------------------------------------------
\657\ The search referenced was conducted on the ``allnewsplus''
library of the Westlaw database. The search used regarding Kronenberg
was ``date (1996) and (Georgie Duangnet) +2 Kronenberg. The search used
regarding Kanchanalak was ``date (1996) and Pauline +2 Kanchanalak.''
\658\ See Exhibit 18 Letter from Joseph E. Sandler, Esq., to
Lawrence M. Noble, Esq., July 24, 1998.
\659\ According to a letter from the DNC to the FEC, the DNC did
not disgorge the Sept. 23, 1992, $4,000 contribution to the DNC and the
Sept. 24, 1992, $5,000 contribution to the DNC. See generally Exhibit
18 Letter from Joseph E. Sandler, Esq., to Lawrence M. Noble, Esq.,
July 24, 1998.
\660\ Federal Grand Jury Indictment of Pauline Kanchanalak and
Duangnet Kronenberg, U.S. District Court for the District of Columbia,
July 13, 1998.
\661\ Amy Keller, ``Burton Eyes Unreturned DNC Cash,'' Roll Call,
July 20, 1998.
---------------------------------------------------------------------------
In addition to the DNC, 10 state Democratic parties
received contributions from Kanchanalak and Kronenberg as
detailed below: \662\
---------------------------------------------------------------------------
\662\ http://wyl.ewg.org, Environmental Working Group Website,
Compiled from FEC Data, Last Updated Sept. 10, 1998.
----------------------------------------------------------------------------------------------------------------
Check
Name Date FEC Date Recipient Amount
----------------------------------------------------------------------------------------------------------------
Pauline Kanchanalak.......................... 10/20/92 .......... California Democratic Party.... $5,000
Pauline Kanchanalak.......................... 06/25/96 .......... California Democratic Party.... 24,500
Pauline Kanchanalak.......................... 06/27/96 .......... Florida Democratic Party....... 35,000
Pauline Kanchanalak.......................... 06/29/96 .......... Ohio Democratic Party.......... 33,000
Pauline Kanchanalak.......................... 07/05/96 .......... Illinois Democratic Party...... 25,000
Pauline Kanchanalak.......................... 07/05/96 .......... Pennsylvania Democratic Party.. 25,000
Duangnet Kronenberg.......................... 09/08/94 .......... Massachusetts Democratic Party. 5,000
Duangnet Kronenberg.......................... 10/06/94 .......... Maryland Democratic Party...... 4,000
Duangnet Kronenberg.......................... 10/06/94 .......... Oklahoma Democratic Party...... 5,000
Duangnet Kronenberg.......................... 10/06/94 .......... Kentucky Democratic Party...... 2,500
Duangnet Kronenberg.......................... 10/06/94 .......... West Virginia Democratic Party. 1,000
Duangnet Kronenberg.......................... 06/13/96 .......... California Democratic Party.... 30,000
Duangnet Kronenberg.......................... 06/15/96 .......... Florida Democratic Party....... 25,000
Duangnet Kronenberg.......................... 06/18/96 .......... Illinois Democratic Party...... 30,000
Duangnet Kronenberg.......................... 06/21/96 .......... Ohio Democratic Party.......... 20,000
Duangnet Kronenberg.......................... 06/25/96 .......... Pennsylvania Democratic Party.. 25,000
----------------------------------------------------------------------------------------------------------------
Recently, the Committee wrote the 10 state Democratic
parties who received contributions from Kanchanalak and
Kronenberg to inquire as to the state parties' retention of
these contributions and inform them of the indictment and the
DNC's practice of returning illegal political contributions to
the U.S. Treasury pursuant to Federal election law.\663\ The
Committee has received information that Florida, Maryland, and
Ohio have returned the contributions.\664\ Massachusetts has
informed Committee counsel that it is reviewing the matter. The
remainder have, to date, yet to respond to the Committee.\665\
These contributions are illegal and should be returned.
---------------------------------------------------------------------------
\663\ Letters from Chairman Dan Burton to the state Democratic
parties of Maryland, Oklahoma, Kentucky, West Virginia, California,
Florida, Illinois, Ohio, and Pennsylvania, July 24, 1998, and
Massachusetts, Aug. 3, 1998 (Exhibit 364). Kanchanalak's contributions
to state Democratic parties include: Oct. 20, 1992, $5,000 to the
California Democratic party; June 25, 1996, $24,500 to the California
Democratic party; June 27, 1996, $35,000 to the Florida Democratic
party; June 29, 1996, $33,000 to the Ohio Democratic party; July 5,
1996, $25,000 to the Illinois Democratic party; July 5, 1996, $25,000
to the Pennsylvania Democratic party.
\664\ Letter from Maryland Democratic party to Chairman Dan Burton,
July 29, 1998 (Exhibit 365); Letter from Florida Democratic party to
Chairman Dan Burton, July 29, 1998 (Exhibit 366); Letter from Ohio
Democratic party to Chairman Dan Burton, July 30, 1998 (Exhibit 367).
\665\ The Committee has not received a response from the state
Democratic parties of Massachusetts, Oklahoma, Kentucky, West Virginia,
California, Illinois, and Pennsylvania.
---------------------------------------------------------------------------
The DNC conducted a review of Kronenberg's contributions in
December 1996.\666\ Kronenberg cooperated with Ernst & Young
auditors and indicated that the money contributed to the DNC
was her own.\667\ In the fall of 1997 much more information
regarding Kronenberg's contribution came to light as a result
of the House and Senate campaign finance investigations. On
September 16, 1997, the Senate Governmental Affairs Committee
held a hearing focusing directly on certain contributions of
Kanchanalak and Kronenberg.\668\ The Senate committee publicly
disclosed the foreign source of these contributions.\669\
However, until recently, the DNC and state Democratic parties
evidently were ignorant of the publicly available evidence that
Kronenberg's contributions were highly suspect and possibly
illegal.
---------------------------------------------------------------------------
\666\ Ernst & Young Contribution Review Materials for Duangnet
Kronenberg, DNC 1802603, DNC 1802606, DNC 1802609-DNC 1802610, DNC
1802612, DNC 1802615, DNC 1802617, and DNC 1802619-DNC 1802623, at 1-12
(Exhibit 368).
\667\ Id. at 5.
\668\ See generally Investigation of Illegal or Improper Activities
in Connection with the 1996 Federal Election Campaign Before the Senate
Committee on Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d
sess., vol. 1, 206-223, 1192, and 475 (1998).
\669\ See generally Id. at 208 and 475; Investigation of Illegal or
Improper Activities in Connection with the 1996 Federal Election
Campaign Before the Senate Committee on Governmental Affairs, 105th
Cong., 1st sess., part VII, S. Hrg. 105-300, 384 (1998).
---------------------------------------------------------------------------
And, if that were not sufficient, the Final Report of that
same Senate committee dedicated over 15 pages to detailing the
fund-raising activities of Kanchanalak and Kronenberg.\670\ The
report directly questioned the legality of the contributions
\671\ and contains sufficient information for the DNC to
conclude that Kronenberg's contributions were possibly illegal
and, at a minimum, inappropriate under the DNC's own criteria
of appropriateness. DNC General Counsel Sandler even admitted
to the Committee that he read the Senate report ``about the
time'' it was made public,\672\ but the DNC still did not
return Kronenberg's contributions.
---------------------------------------------------------------------------
\670\ See generally Investigation of Illegal or Improper Activities
in Connection with the 1996 Federal Election Campaign Before the Senate
Committee on Governmental Affairs, S. Rept. No. 167, 105th Cong., 2d
sess., vol. 1, 206-223 and 1192 (1998).
\671\ Id. at 208; see also Investigation of Illegal or Improper
Activities in Connection with the 1996 Federal Election Campaign Before
the Senate Committee on Governmental Affairs, 105th Cong., 1st sess.,
part VII, S. Hrg. 105-300, 384 (1998).
\672\ Committee Deposition of Joseph E. Sandler, Esq., May 14,
1998, 113.
---------------------------------------------------------------------------
The DNC ignored the publicly available evidence regarding
Kronenberg's contributions until she was indicted by a Federal
grand jury.\673\ In the wake of the indictment, DNC spokesman
Rick Hess reacted with surprise:
---------------------------------------------------------------------------
\673\ DNC Response to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 38-39.
Until the indictment was handed down last week, there
was no indication that donations from Ms. Kronenberg
were from anybody but herself.\674\
---------------------------------------------------------------------------
\674\ Amy Keller, ``Burton Eyes Unreturned DNC Cash,'' Roll Call,
July 20, 1998 (emphasis added).
Additionally, DNC General Counsel Sandler in a July 24,
---------------------------------------------------------------------------
1998, letter advised the FEC that:
Prior to the date of the indictment, the DNC had no
information indicating that these specific
contributions were in any way unlawful or
improper.\675\
---------------------------------------------------------------------------
\675\ Exhibit 18 Letter from Joseph E. Sandler, Esq., to Lawrence
M. Noble, Esq., July 24, 1998 (emphasis added).
Prior to the date of the indictment, the public record
indicated otherwise. The DNC's litany of misleading statements
that were issued when the campaign scandal broke in 1996
continue even today.
It is interesting to note that although the DNC ignored the
Senate Final Report with regard to Kronenberg's contributions,
it has cited that same Final Report to the Committee when it
has supported their decision to retain certain
contributions.\676\ Furthermore, Ms. Kronenberg has refused to
cooperate with both House and Senate investigators and has
invoked her Fifth Amendment privilege against self-
incrimination.
---------------------------------------------------------------------------
\676\ DNC Response to the Committee's June 23, 1998,
Interrogatories, Aug. 6, 1998, at 12.
---------------------------------------------------------------------------
In sum, the DNC returned Kanchanalak's contributions in
late 1996 in the wake of the breaking campaign finance scandal
under the lights of intense press scrutiny. As a result of its
internal inquiry regarding Kanchanalak, the DNC was aware of
Kronenberg's contributions and her relationship with
Kanchanalak. But the DNC retained Kronenberg's contributions.
In September 1997, the Senate held campaign finance hearings
which specifically questioned the legality of Kronenberg's
contributions. But the DNC retained Kronenberg's contributions.
The Senate published its Final Report in early 1998 again
directly questioning the legality of Kronenberg's contributions
and, soon thereafter, DNC General Counsel Sandler read it. But
the DNC retained Kronenberg's contributions. In July 1998,
Kronenberg was indicted by a Federal grand jury for campaign
finance violations. Finally, the DNC returned Kronenberg's
contributions. Even then the DNC maintained that they never had
any indication Kronenberg's contributions were ``unlawful,''
``improper,'' or ``from anybody but herself.'' The DNC's
actions with regard to Kronenberg's contributions are
indicative of the disingenuous approach the DNC has taken
throughout the campaign finance scandal.
Conclusion
After an extensive and thorough investigation of the DNC's
contribution review process and contributions received by it
from 1992-1996, it is clear that the DNC's public words often
were and continue to be at odds with its intentions and
actions. Time and time again, the DNC received information
regarding the illegality or inappropriateness of contributions,
but failed to take the appropriate action of returning or
disgorging them. Moreover, often when the DNC received no
significant information regarding contributions, it retained
the funds. Prompting the DNC to return illegal or otherwise
questionable contributions has at times closely resembled the
painful and difficult process of pulling teeth.
The Committee's conclusions would likely be altogether
different were the contributions at issue not linked to a
variety of other suspicious individuals--most of which have
refused to cooperate with Federal authorities--and
circumstances under investigation by the Department of Justice
as well as the Committee. Though the Committee has been
severely hampered in its investigation by non-cooperative
witnesses, it still has been identified over $1.7 million in
illegal or suspect contributions that remains in Democratic
coffers, over $1 million of which is held by the DNC alone.
Hundreds of thousands of dollars in additional questionable
contributions--many of which are almost certainly illegal--are
still under investigation by the Committee. Many questions
regarding the orchestration of illegal campaign contributions
remained unanswered. The American People deserve the truth. For
that reason, the Committee's investigation continues.
APPENDIX
ILLEGAL AND SUSPECT CONTRIBUTIONS RETAINED OR BELATEDLY DISGORGED BY
THE DEMOCRATIC NATIONAL COMMITTEE AND STATE DEMOCRATIC PARTIES \1\
I. Illegal Contributions (Sorted by Name, Check Date and FEC Date)
----------------------------------------------------------------------------------------------------------------
Check FEC Date
Name Date \2\ \3\ Recipient Amount
----------------------------------------------------------------------------------------------------------------
Lei Chu...................................... 02/20/96 02/23/96 Democratic National Committee.. $12,500
Jessica Elnitiarta........................... 02/19/96 02/23/96 Democratic National Committee.. 100,000
J&M International............................ 02/23/96 02/27/96 Democratic National Committee.. 25,000
K&L International............................ 05/11/96 05/14/96 Democratic National Committee.. 150,000
Pauline Kanchanalak.......................... 10/20/92 .......... California Democratic Party.... 5,000
Pauline Kanchanalak.......................... 06/25/96 .......... California Democratic Party.... 24,500
Pauline Kanchanalak.......................... 06/27/96 .......... Florida Democratic Party....... 35,000
Pauline Kanchanalak.......................... 06/29/96 .......... Ohio Democratic Party.......... 33,000
Pauline Kanchanalak.......................... 07/05/96 .......... Illinois Democratic Party...... 25,000
Pauline Kanchanalak.......................... 07/05/96 .......... Pennsylvania Democratic Party.. 25,000
Chee Kien Koh................................ 09/17/96 09/25/96 Democratic National Committee.. 5,000
Duangnet Kronenberg.......................... 09/24/92 09/28/92 Democratic National Committee.. 5,000
Duangnet Kronenberg.......................... 09/23/92 09/28/92 Democratic National Committee.. 4,000
Duangnet Kronenberg.......................... 05/26/94 05/27/94 Democratic National Committee.. 20,000
Duangnet Kronenberg.......................... 06/07/94 06/13/94 Democratic National Committee.. 15,000
Duangnet Kronenberg.......................... 09/08/94 .......... Massachusetts Democratic Party. 5,000
Duangnet Kronenberg.......................... 10/06/94 .......... Kentucky Democratic Party...... 2,500
Duangnet Kronenberg.......................... 10/06/94 .......... Maryland Democratic Party...... 4,000
Duangnet Kronenberg.......................... 10/06/94 .......... Oklahoma Democratic Party...... 5,000
Duangnet Kronenberg.......................... 10/06/94 .......... West Virginia Democratic Party. 1,000
Duangnet Kronenberg.......................... 02/26/96 02/29/96 Democratic National Committee.. 5,000
Duangnet Kronenberg.......................... 03/08/96 03/11/96 Democratic National Committee.. 5,000
Duangnet Kronenberg.......................... 03/14/96 03/15/96 Democratic National Committee.. 5,000
Duangnet Kronenberg.......................... 05/23/96 06/06/96 Democratic National Committee.. 5,000
Duangnet Kronenberg.......................... 06/13/96 .......... California Democratic Party.... 30,000
Duangnet Kronenberg.......................... 06/15/96 .......... Florida Democratic Party....... 25,000
Duangnet Kronenberg.......................... 06/18/96 .......... Illinois Democratic Party...... 30,000
Duangnet Kronenberg.......................... 06/18/96 06/19/96 Democratic National Committee.. 50,000
Duangnet Kronenberg.......................... 06/21/96 .......... Ohio Democratic Party.......... 20,000
Duangnet Kronenberg.......................... 06/25/96 .......... Pennsylvania Democratic Party.. 25,000
Bie Chuan Ong................................ 10/09/92 10/21/92 California Democratic Party.... 5,000
Bie Chuan Ong................................ 10/19/92 10/21/92 Arkansas Democratic Party...... 5,000
Bie Chuan Ong................................ .......... 10/23/92 Michigan Democratic Party...... 5,000
Bie Chuan Ong................................ .......... 10/23/92 Democratic Senatorial Campaign 5,000
Committee.
Lucy Jao Ong................................. 10/10/92 10/21/92 Arkansas Democratic Party...... 5,000
Lucy Jao Ong................................. .......... 10/21/92 California Democratic Party.... 5,000
Lucy Jao Ong................................. .......... 10/22/92 Democratic Senatorial Campaign 5,000
Committee.
Lucy Jao Ong................................. .......... 10/23/92 Michigan Democratic Party...... 5,000
Sy Zuan Pan.................................. 09/18/96 09/27/96 Democratic National Committee.. 20,000
Panda Estates Investment Inc................. 07/12/96 07/23/96 Democratic National Committee.. \4\ 60,0
00
Hsiao Jie Su................................. 02/17/96 02/23/96 Democratic National Committee.. 2,500
Subandi Tanuwidjaja.......................... 09/19/96 10/02/96 Democratic National Committee.. 20,000
Suryanti Tanuwidjaja......................... 09/16/96 09/27/96 Democratic National Committee.. 20,000
----------------------------------------------------------------------------------------------------------------
\1\ The contributions indicated in italics were belatedly disgorged. All other contributions have been retained
by the recipient.
\2\ The ``Check Date'' is taken directly from the contribution check where available.
\3\ If the Committee is not in possession of the check or is unable to discern the date on the check, Federal
Election Commission [FEC] data as provided at http://wyl.ewg.org and/or www.tray.com is used. In those
instances, the ``FEC Date'' given reflects the date the contribution was registered with the FEC not
necessarily the precise date of contribution as reflected on the contribution check. The date on the
contribution check usually pre-dates the FEC date by anywhere from one day to a month.
\4\ This illegal $60,000 is a portion of a $100,000 contribution. Committee investigators consider the remaining
$40,000 suspect.
II. Summary of Illegal Contributions
----------------------------------------------------------------------------------------------------------------
Belatedly
Retained vs. Disgorged Total
----------------------------------------------------------------------------------------------------------------
Arkansas Democratic Party Illegal........................... $10,000 $10,000
California Democratic Party Illegal......................... 69,500 69,500
Democratic National Committee Illegal....................... 415,000 $114,000 529,000
Democratic Senatorial Campaign Committee Illegal............ 10,000 10,000
Florida Democratic Party Illegal............................ ......... 60,000 60,000
Illinois Democratic Party Illegal........................... 55,000 55,000
Kentucky Democratic Party Illegal........................... 2,500 2,500
Maryland Democratic Party Illegal........................... ......... 4,000 4,000
Massachusetts Democratic Party Illegal...................... 5,000 5,000
Michigan Democratic Party Illegal........................... 10,000 10,000
Ohio Democratic Party Illegal............................... ......... 53,000 53,000
Oklahoma Democratic Party Illegal........................... 5,000 5,000
Pennsylvania Democratic Party Illegal....................... 50,000 50,000
West Virginia Democratic Party Illegal...................... 1,000 1,000
----------- ------------- ---------
Total Illegal Contributions............................. 633,000 + 231,000 = 864,000
----------------------------------------------------------------------------------------------------------------
III. Suspect Contributions (Sorted by Name, Check Date and FEC Date)
----------------------------------------------------------------------------------------------------------------
Check
Name Date FEC Date Recipient Amount
----------------------------------------------------------------------------------------------------------------
American Great Ground Group.................. 07/20/96 07/31/96 Democratic National Committee.. $7,000
AIDC \5\..................................... 12/25/93 .......... Democratic National Committee.. 25,000
Donna Chiang................................. 09/18/92 09/28/92 Democratic National Committee.. 10,000
Donna Chiang................................. 09/22/92 10/07/92 Democratic National Committee.. 10,000
Joseph Chiang................................ 09/18/92 09/28/92 Democratic National Committee.. 10,000
Joseph Chiang................................ 09/22/92 10/07/92 Democratic National Committee.. 10,000
Brenda Da Silveira........................... 10/19/92 10/27/92 Democratic Senatorial Campaign 5,000
Committee.
Ricor Da Silveira............................ 10/19/92 10/27/92 Democratic Senatorial Campaign 5,000
Committee.
Ricor Da Silveira............................ 10/21/92 10/27/92 Michigan Democratic Party...... 5,000
Ricor Da Silveira............................ 10/22/96 10/27/92 Arkansas Democratic Party...... 5,000
Hip Hing Holdings............................ 05/28/93 .......... Democratic National Committee.. 2,500
Hip Hing Holdings............................ 09/23/93 09/30/96 Democratic National Committee.. 15,000
Hip Hing Holdings............................ 09/29/93 .......... California Democratic Party.... 5,000
Jane Huang................................... 08/12/92 08/19/92 Democratic National Committee.. 5,000
Jane Huang................................... 08/10/92 09/04/92 California Democratic Party.... 5,000
Jane Huang................................... 09/01/92 09/09/92 Democratic National Committee.. 1,000
Jane Huang................................... 09/15/92 09/22/92 Democratic National Committee.. 5,000
Jane Huang................................... 09/15/92 09/22/92 Democratic National Committee.. 5,000
Jane Huang................................... 09/16/92 09/28/92 California Democratic Party.... 1,000
Jane Huang................................... 04/30/93 05/07/93 Democratic Senatorial Campaign 2,500
Committee.
Jane Huang................................... .......... 06/15/93 Democratic Senatorial Campaign 1,000
Committee.
Jane Huang................................... 10/05/93 10/21/93 Democratic Senatorial Campaign 6,750
Committee.
Jane Huang................................... 12/01/93 12/14/93 Democratic National Committee.. 15,000
Jane Huang................................... .......... 03/16/94 Democratic National Committee.. 10,000
Jane Huang................................... .......... 04/26/94 California Democratic Party.... 10,000
Jane Huang................................... 04/20/94 04/29/94 Democratic National Committee.. 5,000
Jane Huang................................... .......... 05/16/94 Democratic Congressional Dinner 3,000
Committee.
Jane Huang................................... .......... 08/11/94 Democratic National Committee.. 5,000
Jane Huang................................... 12/18/94 12/22/94 Democratic National Committee.. 5,000
Jane Huang................................... .......... 11/14/95 Democratic Senatorial Campaign 1,000
Committee.
Jane Huang................................... .......... 11/17/95 Democratic Congressional 5,000
Campaign Committee.
John Huang................................... .......... 02/04/92 California Democratic Party.... 500
John Huang................................... .......... 06/01/92 Democratic National Committee.. 800
John Huang................................... .......... 07/28/92 Democratic National Committee.. 5,000
John Huang................................... 08/31/92 09/04/92 California Democratic Party.... 1,500
John Huang................................... 09/08/92 09/23/92 Democratic Senatorial Campaign 1,500
Committee.
John Huang................................... 09/16/92 09/28/92 California Democratic Party.... 1,000
John Huang................................... 10/27/92 .......... Democratic National Committee.. 2,500
John Huang................................... 10/31/92 11/10/92 Democratic Senatorial Campaign 1,000
Committee.
John Huang................................... 04/30/93 05/07/93 Democratic Senatorial Campaign 2,500
Committee.
John Huang................................... .......... 06/15/93 Democratic Senatorial Campaign 1,000
Committee.
John Huang................................... .......... 06/25/93 Democratic National Committee.. 10,000
John Huang................................... 10/05/93 10/21/93 Democratic Senatorial Campaign 6,750
Committee.
John Huang................................... 12/01/93 12/14/93 Democratic National Committee.. 10,000
John Huang................................... .......... 03/16/94 Democratic National Committee.. 10,000
Yong Xing Huang.............................. 05/13/96 05/17/96 Democratic National Committee.. 10,000
Loh Sun International........................ 07/29/96 08/02/96 Democratic National Committee.. 50,000
Felix Ma..................................... 08/30/92 10/23/92 Democratic Senatorial Campaign 5,000
Committee.
Felix Ma..................................... 09/10/92 10/23/92 Michigan Democratic Party...... 5,000
Felix Ma..................................... 09/30/92 10/23/92 Ohio Democratic Party.......... 5,000
Mary Ma...................................... 09/15/92 10/27/92 Michigan Democratic Party...... 5,000
Mary Ma...................................... 09/25/92 10/22/92 Democratic Senatorial Campaign 5,000
Committee.
Mary Ma...................................... 09/30/92 .......... Democratic Senatorial Campaign 5,000
Committee.
Mary Ma...................................... .......... 10/23/92 Missouri Democratic Party...... 5,000
Mary Ma...................................... .......... 10/28/92 Ohio Democratic Party.......... 5,000
Panda Estates Investment Inc................. 07/12/96 07/23/96 Democratic National Committee.. \6\ 40,0
00
Panda Estates Investment Inc................. 07/29/96 08/01/96 Democratic National Committee.. 50,000
Platinum Realty.............................. 02/19/96 02/22/96 Democratic National Committee.. 12,500
Platinum Realty.............................. 07/18/96 08/01/96 Democratic National Committee.. 10,000
Aileen Riady................................. 08/13/92 09/04/92 California Democratic Party.... 5,000
Aileen Riady................................. 08/13/92 08/17/92 Democratic National Committee.. 15,000
Aileen Riady................................. 10/08/92 10/27/92 Arkansas Democratic Party...... 5,000
Aileen Riady................................. 10/12/92 .......... Georgia Democratic Party....... 50,000
Aileen Riady................................. 10/15/92 10/29/92 North Carolina Democratic Party 50,000
James T. Riady............................... 08/13/92 09/04/92 California Democratic Party.... 5,000
James T. Riady............................... 08/13/92 08/17/92 Democratic National Committee.. 15,000
James T. Riady............................... 09/30/92 .......... Michigan Democratic Party...... 75,000
James T. Riady............................... 10/05/92 .......... Ohio Democratic Party.......... 75,000
James T. Riady............................... 10/08/92 10/27/92 Arkansas Democratic Party...... 5,000
James T. Riady............................... 10/08/92 .......... Arkansas Democratic Party...... 75,000
James T. Riady............................... 10/12/92 .......... Louisiana Democratic Party..... 75,000
San Jose Holdings............................ 09/27/93 09/30/93 Democratic National Committee.. 15,000
Joseph Sund.................................. 09/24/92 09/28/92 Democratic National Committee.. 10,000
Joseph Sund.................................. 09/30/92 10/23/92 Michigan Democratic Party...... 5,000
Joseph Sund.................................. .......... 10/21/92 Arkansas Democratic Party...... 5,000
Joseph Sund.................................. 09/28/93 09/30/93 Democratic National Committee.. 10,000
Joseph Sund.................................. 09/30/93 10/30/93 Democratic National Committee.. 5,000
Joseph Sund.................................. 09/30/93 10/30/93 Democratic National Committee.. 5,000
Subandi Tanuwidjaja.......................... 09/09/96 .......... Democratic National Committee.. 60,000
Toy Center Holdings.......................... .......... 07/15/93 Democratic National Committee.. 2,500
Toy Center Holdings.......................... 09/23/93 09/30/93 Democratic National Committee.. 15,000
Christina Yeh................................ .......... 09/29/92 Democratic National Committee.. 5,000
Christina Yeh................................ .......... 09/29/92 Democratic National Committee.. 5,000
Christina Yeh................................ .......... 10/07/92 Democratic National Committee.. 5,000
Christina Yeh................................ .......... 10/07/92 Democratic National Committee.. 5,000
Christina Yeh................................ .......... 10/25/93 Democratic National Committee.. 10,000
David Yeh.................................... 08/03/92 09/29/92 Democratic National Committee.. 5,000
David Yeh.................................... 08/08/92 09/29/92 Democratic National Committee.. 5,000
David Yeh.................................... 08/18/92 10/07/92 Democratic National Committee.. 5,000
David Yeh.................................... 08/18/92 10/07/92 Democratic National Committee.. 5,000
David Yeh.................................... 09/27/93 10/25/93 Democratic National Committee.. 10,000
Ji Ping Yu................................... 08/17/96 .......... Democratic National Committee.. 5,000
Kuang Tao Zhou............................... .......... 04/24/96 Democratic National Committee.. 10,000
Kuang Tao Zhou............................... .......... 04/24/96 Democratic National Committee.. 10,000
Kuang Tao Zhou............................... 04/19/96 04/25/96 Democratic National Committee.. 30,000
----------------------------------------------------------------------------------------------------------------
\5\ The Arkansas International Development Corp.
\6\ This suspect $40,000 is a portion of a $100,000 contribution. Committee investigators consider the remaining
$60,000 illegal.
IV. Summary of Suspect Contributions
----------------------------------------------------------------------------------------------------------------
Belatedly
Retaiained vs. Disgorged Total
----------------------------------------------------------------------------------------------------------------
Arkansas Democratic Party Suspect......................... $95,000 .......... $95,000
California Democratic Party Suspect....................... 34,000 .......... 34,000
Democratic Congressional Campaign Committee Suspect....... 5,000 .......... 5,000
Democratic Congressional Dinner Committee Suspect......... 3,000 .......... 3,000
Democratic National Committee Suspect..................... 623,800 .......... 623,800
Democratic Senatorial Campaign Committee Suspect.......... 49,000 .......... 49,000
Georgia Democratic Party Suspect.......................... 50,000 .......... 50,000
Louisiana Democratic Party Suspect........................ 75,000 .......... 75,000
Michigan Democratic Party Suspect......................... 95,000 .......... 95,000
Missouri Democratic Party Suspect......................... 5,000 .......... 5,000
North Carolina Democratic Party Suspect................... 50,000 .......... 50,000
Ohio Democratic Party Suspect............................. 85,000 .......... 85,000
------------ ------------ -----------
Total Suspect Contributions........................... 1,169,800 + 0.00 = 1,169,800
----------------------------------------------------------------------------------------------------------------
V. Summary of Contributions (Illegal vs. Suspect)
----------------------------------------------------------------------------------------------------------------
Illegal vs. Suspect Total
----------------------------------------------------------------------------------------------------------------
Arkansas Democratic Party.................................. $10,000 95,000 $105,000
California Democratic Party................................ 69,500 34,000 103,500
Democratic Congressional Campaign Committee................ ......... 5,000 5,000
Democratic Congressional Dinner Committee.................. ......... 3,000 3,000
Democratic National Committee.............................. 529,000 623,800 1,152,800
Democratic Senatorial Campaign Committee................... 10,000 49,000 59,000
Florida Democratic Party................................... 60,000 .......... 60,000
Georgia Democratic Party................................... ......... 50,000 50,000
Illinois Democratic Party.................................. 55,000 .......... 55,000
Kentucky Democratic Party.................................. 2,500 .......... 2,500
Louisiana Democratic Party................................. ......... 75,000 75,000
Maryland Democratic Party.................................. 4,000 .......... 4,000
Massachusetts Democratic Party............................. 5,000 .......... 5,000
Michigan Democratic Party.................................. 10,000 95,000 105,000
Missouri Democratic Party.................................. ......... 5,000 5,000
North Carolina Democratic Party............................ ......... 50,000 50,000
Ohio Democratic Party...................................... 53,000 85,000 138,000
Oklahoma Democratic Party.................................. 5,000 .......... 5,000
Pennsylvania Democratic Party.............................. 50,000 .......... 50,000
West Virginia Democratic Party............................. 1,000 .......... 1,000
----------- ------------ -----------
Total Contributions.................................... 864,000 + 1,169,800 = 2,033,800
----------------------------------------------------------------------------------------------------------------
VI. Summary of Contributions (Retained vs. Belatedly Disgorged)
----------------------------------------------------------------------------------------------------------------
Belatedly
Retained vs. Disgorged Total
----------------------------------------------------------------------------------------------------------------
Arkansas Democratic Party................................. $105,000 105,000
California Democratic Party............................... 103,500 103,500
Democratic Congressional Campaign Committee............... 5,000 5,000
Democratic Congressional Dinner Committee................. 3,000 3,000
Democratic National Committee............................. 1,038,800 114,000 1,152,800
Democratic Senatorial Campaign Committee.................. 59,000 59,000
Florida Democratic Party.................................. 60,000 $60,000
Georgia Democratic Party.................................. 50,000 50,000
Illinois Democratic Party................................. 55,000 55,000
Kentucky Democratic Party................................. 2,500 2,500
Louisiana Democratic Party................................ 75,000 75,000
Maryland Democratic Party................................. 4,000 4,000
Massachusetts Democratic Party............................ 5,000 5,000
Michigan Democratic Party................................. 105,000 105,000
Missouri Democratic Party................................. 5,000 5,000
North Carolina Democratic Party........................... 50,000 50,000
Ohio Democratic Party..................................... 85,000 53,000 138,000
Oklahoma Democratic Party................................. 5,000 5,000
Pennsylvania Democratic Party............................. 50,000 50,000
West Virginia Democratic Party............................ 1,000 1,000
------------ ------------ -----------
Total Contributions................................... 1,802,800 + $231,000 = 2,033,800
----------------------------------------------------------------------------------------------------------------
VII. Summary of Contributions
--------------------------------------------------------------------------------------------------------------------------------------------------------
Belatedly
Illegal vs. Suspect Retained vs. Disgorged Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Arkansas Democratic Party................................ $10,000 95,000 105,000 105,000
California Democratic Party.............................. 69,500 34,000 103,500 103,500
Democratic Congressional Campaign Committee.............. 5,000 5,000 5,000
Democratic Congressional Dinner Committee................ 3,000 3,000 3,000
Democratic National Committee............................ 529,000 623,800 1,038,800 114,000 1,152,800
Democratic Senatorial Campaign Committee................. 10,000 49,000 59,000 59,000
Florida Democratic Party................................. 60,000 60,000 60,000
Georgia Democratic Party................................. 50,000 50,000 50,000
Illinois Democratic Party................................ 55,000 55,000 55,000
Kentucky Democratic Party................................ 2,500 2,500 2,500
Louisiana Democratic Party............................... 75,000 75,000 75,000
Maryland Democratic Party................................ 4,000 4,000 4,000
Massachusetts Democratic Party........................... 5,000 5,000 5,000
Michigan Democratic Party................................ 10,000 95,000 105,000 105,000
Missouri Democratic Party................................ 5,000 5,000 5,000
North Carolina Democratic Party.......................... 50,000 50,000 50,000
Ohio Democratic Party.................................... 53,000 85,000 85,000 53,000 138,000
Oklahoma Democratic Party................................ 5,000 5,000 5,000
Pennsylvania Democratic Party............................ 50,000 50,000 50,000
West Virginia Democratic Party........................... 1,000 1,000 1,000
----------- ------------ ------------ ------------ -----------
Total Contributions.................................. 864,000 + 1,169,800 or 1,802,800 + 231,000 = 2,033,800
--------------------------------------------------------------------------------------------------------------------------------------------------------
[Supporting documentation follows:]