[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 2 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 2 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 2 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
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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 Staff
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. 2 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.
=======================================================================
CHAPTER IV, PART A
UNPRECEDENTED INFUSION OF FOREIGN MONEY INTO THE AMERICAN POLITICAL
SYSTEM:
THE RIADY FAMILY AND JOHN HUANG: ACCESS AND INFLUENCE WITH THE CLINTON
WHITE HOUSE
=======================================================================
THE RIADY FAMILY AND JOHN HUANG: ACCESS AND INFLUENCE WITH THE CLINTON
WHITE HOUSE
Introduction
John Huang is the first individual to be associated with
campaign finance improprieties in the 1996 elections. The
scandal was brought to the public's attention in a September
1996 Los Angeles Times article detailing the first known
illegal contribution to the DNC, and naming John Huang as the
fundraiser involved.\1\ Soon thereafter, other questionable DNC
contributions came to light, also related to Huang.\2\ As more
information on possible illegal or inappropriate contributions
to the DNC was reported, the media reviewed Huang's background
and found ties to the Riady family of Indonesia and President
Clinton.\3\
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\1\ The report detailed a $250,000 contribution from a subsidiary
of a South Korean company, Cheong Am America Inc. The DNC acknowledged
that it did not return the contribution until the Los Angeles Times
raised questions about its propriety. Allan C. Miller, Democrats Return
Illegal Contribution, L.A. Times, Sept. 21, 1996, at A16.
\2\ See William Safire, The Asian Connection, New York Times, Oct.
7, 1996, at A2 (detailing $425,000 contribution from Arief and Soraya
Wiriadinata); Glenn R. Simpson & Jill Abramson, Legal Loopholes Let
Overseas Contributors Fill Democrats' Coffers, Wall Street Journal,
Oct. 8, 1996, at A1 (outlining contributions from Lippo Group employees
and entities and a contribution from Keshi Zhan).
\3\ William Safire was the first to link DNC fundraiser John Huang
with the Riady family of Indonesia. Safire also disclosed contributions
to entities related to Bill Clinton from the Riady family of Indonesia
during the 1992 Presidential campaign, as well as a $425,000
contribution from an Indonesian couple with ties to the Lippo Group.
William Safire, The Asian Connection, New York Times, Oct. 7, 1996, at
A2.
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The Riadys are foreign nationals residing in Indonesia,
nevertheless, they were active participants in the 1992 and
1996 campaigns of President Clinton. The family's facilitator
for contributions as well as political matters was John Huang,
a former senior executive with the Lippo Group. The Riadys had
access to the highest levels of the U.S. Government, including
the President and his Cabinet. James and Aileen Riady, well
known to the President, DNC and White House staff as foreign
nationals, attended many exclusive DNC fundraisers which
usually required contributions for attendance.
During the 1996 elections, Huang was a fundraiser for the
DNC after leaving his position at Commerce in late 1995. Huang
had been active in the 1992 campaign, raising money for then-
Governor Clinton, as well as the DNC. The Committee found that
Huang was responsible for nearly half of the money which has
been returned to date by the DNC. Even after Huang organized
events which were widely attended by foreign nationals,
including the Riadys, the DNC did not carefully review the
contributions attributed to Huang. It is incomprehensible that
nobody at the DNC or White House raised concerns about the
fundraising activities occurring at the DNC in the 1996
election cycle.
I. From Indonesia to Arkansas: Riady and Huang's Early Connections
The relationship between John Huang, the Riady Family, and
President Clinton, goes back to the late 1970's in Little Rock,
Arkansas.\4\ The patriarch of the Riady family, Mochtar Riady,
is an Indonesian of Chinese descent who built up the Lippo
Group empire in Asia.\5\ The Lippo Group's core business is
banking and allied financial services within the Asia Pacific
region, and also includes a property development arm.\6\ In the
mid-1970s, Mochtar Riady planned to expand his business
enterprises into the United States and began looking for
partners. He soon met the Stephens family of Arkansas and
subsequently entered into various joint ventures with Stephens
Inc.\7\
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\4\ Id.; Peter Waldman, By Courting Clinton, Lippo Gains Stature at
Home in Indonesia, Wall Street Journal, Oct. 16, 1996 at A1; Seth
Mydans, Family Tied to Democratic Party Funds Built an Indonesian
Empire, New York Times, Oct. 20, 1996 at A10; Howard Fineman & Mark
Hosenball, The Asian Connection, Newsweek, Oct. 28, 1996 at 24.
\5\ See Hip Hing Holdings Document Production 4624-4641, at 4625
(Forbes Magazine, Chinese language edition translated, Mochtar Riady
Swimming with the Current, Oct. 1993) (hereinafter HHH 4624).
\6\ Lippo owns 70 percent of Hong Kong China Ltd., a property
investment and development firm with $1.2 billion in assets. Lippo also
owns 59 percent of Hong Kong Chinese Bank, Ltd, a banking and finance
firm with $2.3 billion in assets. In addition to these holdings, Lippo
has extensive investments in the United States, China, Indonesia, Hong
Kong, Vietnam, and Malaysia. Indonesian Enterprise, The Non Aligned
Movement Toward the Next Millennium, Publication Secretariat for the
Non Aligned Movement, 1995, vol. 3 at 261-274; Lippo, a Player in Asia,
Seeks U.S. Empire, the Washington Times, Oct. 24, 1996.
\7\ Mochtar Riady first met Jackson and Witt Stephens in 1976. At
the time, Riady was looking into buying Bert Lance's share of the
National Bank of Georgia. Although that deal fell through, Riady and
the Stephens brothers formed a friendship and in 1978 established
Stephens Finance Ltd. in Hong Kong. There were several other joint
projects before Lippo and Stephens acquired a substantial stake in
Worthen Bank of Arkansas in 1983. See Deposition of James T. Riady,
Stephens Group, Inc. v. U.S. (Cl. Ct. No. 91-1458T) Mar. 5, 1993 at 26-
28; Deposition of C. Joseph Giroir, Senate Committee on Governmental
Affairs Special Investigation, Apr. 30, 1997 at 32-35 (hereinafter
``Giroir Senate Deposition''); HHH 4624, 4631.
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It was through the Lippo-Stephens partnership that a young
James Riady came to intern at Stephens' off-Wall Street
investment bank in Little Rock, Arkansas. Subsequently, James
Riady came back to the United States to assist with Lippo and
Stephens' new joint venture, Worthen Banking Corporation. By
1983 Riady and Stephens both had invested in the Worthen Bank
in Little Rock, Arkansas.\8\ James Riady ultimately moved to
Little Rock to establish Worthen Bank's international trade
division.\9\ Following James Riady was John Huang, who had been
working for the Riady family in Hong Kong.\10\
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\8\ Giroir Senate Deposition at 32-35.
\9\ According to Joe Giroir's testimony, Lippo's strategy in
investing in Worthen was to expand into the international arena. They
also established ``Edge Act'' offices, authorized to engage in
international transactions--but not take deposits, in New York and Los
Angeles. Giroir Senate Deposition at 38-39.
\10\ Huang was the vice president for the Far East Area at Worthen.
Prior to his position at Worthen, Huang was executive vice president
under James Riady at Stephens Finance Ltd. in Hong Kong. See Giroir
Senate Deposition at 41; LippoBank Production L001710-001713 (Resume of
John Huang) (Exhibit 1).
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While in Little Rock the Riadys met then-Governor Bill
Clinton and formed a friendship lasting through Clinton's
Presidency.\11\ The Riadys not only were friends, but also
financially supported Clinton's gubernatorial campaigns
throughout the 1980s.\12\ During their time spent in Arkansas,
the Riadys met other individuals who later would play a role in
the campaign finance story as well. In particular, James and
Mochtar Riady developed a relationship with C. Joseph Giroir,
Jr., a partner in the Worthen Banking Corporation, attorney at
the Rose Law Firm, and friend of the President and First
Lady.\13\ In addition, they made contacts with individuals who
would later serve on the White House staff and in high-level
positions within various departments and agencies.
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\11\ Deposition of Charles L. DeQueljoe, House Government Reform
and Oversight Committee, June 9, 1998 at 41, 111-112 (hereinafter
``DeQueljoe Deposition'').
\12\ DeQueljoe Deposition at 40-43.
\13\ Giroir Senate Deposition at 35-36.
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James Riady and Huang stayed in Little Rock until
approximately 1987, when the Riadys sold their shares of
Worthen Bank and focused their attention on a bank they
previously had purchased in San Francisco, California.\14\ Soon
thereafter they established the Bank of Trade in Los Angeles,
which later became LippoBank.\15\
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\14\ The Riadys were bought out of Worthen by the Stephens family
after the bank experienced a major defalcation by Bevil Bressler in
1986. After the defalcation, regulators investigated the quality of
Worthen's assets and determined there were problems. Allegations were
made against Worthen's loan practices and asset quality. Eventually,
the Riadys traded their interest in the Worthen Bank for the Stephens'
interest in the Hong Kong Chinese Bank, and also traded their interests
in other joint ventures. Deposition of Arthur Vernon Weaver, House
Government Reform and Oversight Committee, Aug. 11, 1997, at 76; Giroir
Senate Deposition at 47; White House Document Production EOP 037032-034
(Exhibit 2).
\15\ Giroir Senate Deposition at 47.
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The Committee found that although by the 1990s the Lippo
Group had numerous U.S. affiliates and subsidiaries, generally
the U.S. operations were not profitable.\16\ Furthermore,
former Lippo executive Charles DeQueljoe explained that the
U.S. operations were a topic of debate among the senior Lippo
executives.\17\ Many in the Lippo hierarchy felt that the
overall Group should not maintain any unprofitable
operations.\18\ Others argued that LippoBank California was
important ``strategically,'' in order to have a presence in the
United States.\19\ Those believing in the strategic importance
of the U.S. operations prevailed. However, the profitability of
the operations is important as many of the Riady linked
political contributions came from these Lippo entities which
had no or minimal net profits at the time of the
contributions.\20\
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\16\ Based on documents and Committee interviews, most of Lippo's
American based affiliates/subsidiaries were highly specialized
corporations established as either shells with no apparent business or
for the purported purpose of holding property. See generally Chapter 3,
II.
\17\ DeQueljoe Deposition at 92-93.
\18\ Id.
\19\ Id.
\20\ For a detailed analysis of the Riady family and Lippo
entities' contributions, see generally Chapter 3, II.
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Equally important to the Riadys' legal ability to
contribute to political campaigns was the fact that between
1990 and early 1991, James Riady and his wife returned to
Indonesia where James Riady took over Indonesia based Lippo
operations.\21\ After James Riady's departure, Huang was in
charge of Lippo's U.S. operations.\22\ Huang's position with
Lippo in the United States allowed him time to participate in
fundraising activities during the 1992 election cycle.
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\21\ DeQueljoe Deposition at 43-44.
\22\ Id. at 58.
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II. Huang and Riady's Early Relationship With the Democratic National
Committee
A. 1991 DNC Fundraising Trip to Asia
Even from Asia, the Riadys were involved in the DNC's 1992
fundraising effort. The family played host for a DNC
delegation, headed by then-Chairman Ron Brown, visiting Hong
Kong in December 1991.\23\ John Huang organized the Hong Kong/
Lippo portion of the trip from the United States, as noted in a
memorandum written by the organizer of the Asia tour, Melinda
Yee:
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\23\ DNC Document Production E 0000140 (Exhibit 3); F 0010739
(Exhibit 4).
John Huang is our key to Hong Kong. He is also
interested in renewing his trusteeship to us on this
trip through his Asian banking connections. He has
agreed to host a high dollar event for us in Hong Kong
with wealthy Asian bankers who are either U.S.
permanent residents or with U.S. corporate ties. He
will make sure that all of the hotel accommodations,
meals, and transportation are paid for by his bank. He
should be invited to be part of our delegation.\24\
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\24\ Exhibit 3.
The Lippo Group did schedule numerous meetings for the DNC
delegation, including what was referred to on the schedule as,
``DINNER ($$) HOSTED BY LIPPOGROUP [sic] (JOHN HUANG).'' \25\
The dollar signs appear to refer to the fact that the dinner
was held for the purposes of fundraising. Although there were
several fundraising events scheduled, the DNC is unable to
account for any contributions which may have been raised in
conjunction with the Hong Kong trip.\26\
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\25\ DNC Document Production E 0000627-629 (Exhibit 5).
\26\ The Committee sent interrogatories to the DNC regarding the
1991 trip to Asia and Hawaii. The Committee asked the DNC to provide a
list of contributions raised from each leg of the trip: Hong Kong,
Taiwan, and Hawaii. DNC General Counsel Joseph Sandler responded:
Although I have not been able to identify with certainty
all contributions raised from this trip, and know of no way
to do so, I have determined that the DNC's computerized
records of contributions received include a source code
called ``Hawaii Trip,'' which appears to have been created
in December 1991. Attached as Exhibit E is a print out of
the DNC's A/S 400 records of all contributions attributed,
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in those records, to his source code.
All of the contributions listed in Exhibit E related to only the Hawaii
portion of the trip. DNC Document Production DNC 4125841; DNC Response
to Interrogatories from the Committee on Government Reform and
Oversight, Feb. 26, 1998, Interrogatory 10.
It appears that the trip was successful, as then-DNC
Chairman Ron Brown had high praises for John Huang. When Brown
returned from Asia, he wrote to Mochtar Riady, thanking him and
the Lippo Group for hosting the DNC delegation during their
stay in Hong Kong. Brown wrote, ``I especially wanted to
recognize my friendship with John Huang and the tremendous
asset that he is to the Lippo Group.'' \27\
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\27\ Exhibit 4.
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While preparing for the 1991 Asia fundraising trip, John
Huang recommended that the DNC enlist the services of Maeley
Tom for the trip.\28\ In a DNC memo, Ms. Tom's role is
described:
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\28\ DNC Document Production 0856803 (Exhibit 6).
Originally, she was just going to join us on the Hawaii
leg. However, because she can speak Chinese fluently,
has a proven track record in fundraising with donors
from Asia, and has credibility with Maria Hsia and John
Huang, I believe that we will maximize our dollars both
immediately and after the trip with Maeley's presence.
She has already been working with Maria, John and
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others to plan a successful trip for us.
At the time of the trip, Ms. Tom served on the Executive
Committee of the DNC.\29\ Ultimately, Ms. Tom did participate
in the Asia trip with Secretary Brown.
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\29\ Exhibit 6.
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After the election, James Riady hired Maeley Tom to be his
liaison with the DNC.\30\ Ms. Tom explained her new position
with the Lippo Group in a letter to David Wilhelm, then-
Chairman of the DNC:
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\30\ MT 00811-833 (Billing records from Maeley Tom to Lippo Group,
produced to Senate Governmental Affairs Committee); DNC Document
Production DNC 0841082-083 (Exhibit 7); Hip Hing Holdings Document
Production 5090 (request dated Sept. 9, 1994 to Ong Bwee Eng in Jakarta
to wire Hip Hing Holdings [Lippo subsidiary] for reimbursement of, of
among other things, consultant fee to Maeley Tom).
The Riady family, LIPPO GROUP, were [sic] concerned
about the way I was being treated with regards to my
appointment with the SBA. In Seattle, James Riady asked
me to consider working for them on a contractual basis
to put together the business leaders from East Asia
with the Administration for meetings and education
purposes. He felt we could do this thru [sic] the DNC
and use this as a vehicle to raise dollars from a fresh
source for the DNC.\31\
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\31\ Exhibit 7.
Although it is unclear what Maeley Tom did for Riady as his
DNC liaison, Riady kept her on his payroll from July 1994
through August 1996.\32\ In addition, by December 1995, James
Riady had an additional contact at the DNC with the hiring of
John Huang. Riady assisted John Huang in attaining a
fundraising position with the DNC focusing on the Asian
community.\33\
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\32\ It appears from documents produced by Maeley Tom that she was
employed by the Lippo Group from July 1994 through Aug. 1996. MT 00811-
833 (Billing records from Maeley Tom to Lippo Group, produced to Senate
Governmental Affairs Committee).
\33\ For a more detailed description, refer to infra III A.
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B. 1992 Elections: Riady and Huang Support for Clinton
As they had supported Mr. Clinton in his gubernatorial
races, the Riady family, although no longer living in the
United States, supported Clinton in his Presidential race.
After James Riady and his wife Aileen returned to Jakarta in
1990, they personally contributed $450,000 to the DNC and
various state Democratic parties in the weeks and months
leading up to the November 1992 election.\34\
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\34\ The $450,000 figure represents the amount contributed by James
and Aileen personally. A company under the control of the Riadys also
contributed $50,000 to the DNC in support of the Clinton campaign. For
a more detailed analysis of the contributions, see generally Chapter 3,
II.
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It is impossible to discern Riady's motives for
contributing to a U.S. election, as Riady is not cooperating
with investigators. Generally foreign nationals do not have the
same vested interest in a candidate as a citizen living in the
Unites States would have, nor do the laws allow a foreign
national to contribute. However, from documents produced to the
Committee, it is possible to speculate that Riady wanted his
interests to be heard. For example, on August 13, 1992, James
and Aileen Riady contributed a total of $40,000 to Democratic
causes. The following day, then-Governor Bill Clinton, on his
way to a fundraiser, took a 5 minute car ride with James Riady.
The request for the time with Riady is memorialized in an
August 14, 1992 memorandum from then-campaign aide Melinda Yee:
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.\35\
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\35\ Clinton/Gore '92 Document Production CG92B 00543 (Exhibit 8);
see also CG92B 01461 (Exhibit 9).
It is clear from the memorandum that James Riady was not
living in the United States. The President also knew from his
time in Arkansas that the Riady family were Indonesian
nationals. Nevertheless, the car ride meeting and subsequent
contribution began the cycle of the Riadys giving to Clinton
and Democratic causes supporting Clinton's candidacy. The Riady
family remained close to Clinton, who would meet with the Riady
family and hear their concerns on various topics important to
their business.
The Riadys' generosity did not stop when Bill Clinton was
elected. They contributed $200,000 to the 1992 Presidential
Inaugural Committee (``PIC'').\36\ PIC is the entity which
plans and pays for the President's inauguration ceremony and
related festivities. However, not only did the Riadys
personally support the Clinton campaign and inaugural, their
companies and employees did as well.\37\
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\36\ See generally Chapter 3, II.
\37\ For a detailed analysis of other Lippo Group employees and
their contributions, see generally Chapter 3, II.
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More than any other individual affiliated with the Riadys,
John Huang was an active supporter of then-Governor Clinton's
1992 Presidential election. During the 1992 election cycle,
John Huang and his wife Jane contributed a total of $32,800 to
the DNC and California state Democratic party.\38\ Huang also
contributed $86,000 to PIC, which was later reimbursed by the
Lippo Group's Bank of Trade.\39\ Not only did he contribute
himself, but Huang also engaged in fundraising activities in
the Asian American community on behalf of Governor Clinton.\40\
His efforts warranted him a spot on the DNC's ``must consider''
list for government appointments once President Clinton took
office.\41\
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\38\ For a detailed analysis of John and Jane Huang's
contributions, see generally Chapter 3, II.
\39\ For a detailed analysis of John Huang's contributions to PIC,
see generally, Chapter 3, II.
\40\ Huang participated in an Asian Pacific American Unity
Fundraising Lunch in California. In a briefing memo on the event,
written by Melinda Yee, she notes, ``This fundraising lunch, hosted by
California Secretary of State Mar. Fong Eu and John Huang, a banker
(who had met you when he was with James Riady who opened a bank in
Arkansas in 1985). . . .'' Clinton/Gore '92 Document Production CG92B-
00530; CG92B-00398-399.
\41\ In an Aug. 27, 1993 memorandum, DNC Chairman David Wilhelm
wrote to John Emerson in White House Presidential Personnel regarding
``Asian Pacific American Appointments.'' John Huang is described as a
``DNC Trustee, Major Fundraiser . . . Needs extra push for Deputy
Assistant Secretary Position for East Asia & Pacific.'' DNC Document
Production DNC F 0031764-771; see also ``Asian Pacific American Must
Consider Recommendations to the Clinton Administration, Nov. 1992''
White House Document Production EOP 048876-77.
---------------------------------------------------------------------------
III. Employment Relationships Between the Clinton Administration and
the Lippo Group
A. Lippo Employees Obtain Positions within the New Clinton
Administration
Eventually, Huang's fundraising efforts were rewarded with
an appointment as Principal Deputy Assistant Secretary for
International Economic Policy at the International Trade
Administration of the Department of Commerce.\42\ Around the
time of the election Huang began pursuing an appointment
through Clinton's transition team.\43\ Soon after the new
administration took office, Maeley Tom wrote to the new Deputy
Director of Personnel to recommend Huang:
---------------------------------------------------------------------------
\42\ Huang was originally approved in Dec. 1993, but did not
actually begin working at the Commerce Department until July 18, 1994.
DNC Document Production D 0000840-852 (Executive Branch Public
Financial Disclosure Report); see White House Document Production EOP
002131-132 (Exhibit 10). The Senate Governmental Affairs Committee
wrote extensively on the facts surrounding Huang's appointment to the
Commerce Department and his tenure there, therefore the issues will not
be extensively covered in this report. Senate Committee on Governmental
Affairs, Final Report of the Investigation of Illegal or Improper
Activities in Connection with 1996 Federal Campaigns, S. Rept. No. 167,
105th Cong., 2d sess., vol. 1 (1998) (hereinafter ``Senate Report'').
\43\ Huang sent his and Charles DeQueljoe's resume to Jerry Stern,
a member of the Presidential Transition team. (Exhibit 11).
John Huang, Executive Vice President of Lippo Bank, is
the political power that advises the Riady Family on
issues and where to make contributions. They invested
heavily in the Clinton campaign. John is the Riady
Family's top priority for placement because he is like
one of their own. The family knows the Clintons on a
first-name basis because they made a huge investment in
Arkansas when they built their bank there.\44\
---------------------------------------------------------------------------
\44\ Emphasis added. White House Document EOP 052763-769 (Exhibit
12)
Huang's name was considered by Presidential Personnel
several times before his actual appointment in July 1994.\45\
In fact, Bruce Lindsey, then-Director of Presidential
Personnel, was unable to recall anything about Huang's
appointment at the Department of Commerce.\46\
---------------------------------------------------------------------------
\45\ White House Document EOP 009340-341 (Exhibit 13); EOP 002117-
118 (Exhibit 14).
\46\ Lindsey Deposition at 63, 67-68.
---------------------------------------------------------------------------
Along with documents showing Huang's interest in a
government position, the Committee found that James Riady was
also placed on a list of ``must consider'' appointments. Unlike
Huang, who sought a position with a department or agency,
documents show that Riady was interested in placement on a
commission or advisory council dealing with international trade
or banking.\47\ Such commissions or councils normally consist
of U.S. citizens with some expertise or knowledge in the
designated field which qualifies them to advise the U.S.
Government. Although James Riady may have unique knowledge of
international trade and banking, he is not a U.S. citizen.
Nevertheless, one DNC document describes James Riady, who had
not lived in the United States since 1990, as a ``leading
national fundraiser'' for the DNC in 1992.\48\
---------------------------------------------------------------------------
\47\ DNC Document Production DNC 3540680-681 (Exhibit 15).
\48\ All the individuals on the list were considered ``must
considers'' and were to be sponsored by the DNC. DNC Document
Production DNC 1729180-183 (Exhibit 16).
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Not only were both Huang and Riady seeking some sort of
position within the new administration, they also assisted in
the placement of another Lippo employee, Charles DeQueljoe,
within the Clinton administration.\49\ However, DeQueljoe,
unlike James Riady, is a naturalized U.S. citizen who lived in
Jakarta at the time he sought a position on a commission.
Although Riady did not serve on any commissions or advisory
committees, DeQueljoe became a member of the Investment and
Services Policy Advisory Committee (``INSPAC'') of the U.S.
Trade Representative.\50\
---------------------------------------------------------------------------
\49\ DeQueljoe Deposition at 61-63.
\50\ John Huang, at the instruction of James Riady, assisted
DeQueljoe in attaining his position on the Investment and Services
Policy Advisory Committee (``INSPAC''). DeQueljoe lived in Jakarta
while he served, and flew to Washington, DC, to attend the meetings.
However, DeQueljoe was only able to attend three of the meetings held
by INSPAC. DeQueljoe Deposition at 82, 88; Memo to Jerry Stern from
John Huang, undated (Exhibit 11).
---------------------------------------------------------------------------
Huang worked to secure the INSPAC position for
DeQueljoe.\51\ James Riady steered DeQueljoe toward John Huang
for assistance because Huang was ``well-regarded within the
Democratic Party and that he had a number of good relationships
and contacts within the Democratic Party.'' \52\ James Riady
had encouraged DeQueljoe to contribute to the campaign if he
wanted to be noticed in his endeavor to attain a position in
the administration.\53\ Huang then advised DeQueljoe to
contribute $50,000 to the DNC at the end of November 1993.\54\
After taking both Riady and Huang's advice, DeQueljoe was
selected for the INSPAC position.
---------------------------------------------------------------------------
\51\ DeQueljoe depended solely on Huang to acquire a commission
position. At the time he was appointed to INSPAC, DeQueljoe was living
in Jakarta, Indonesia. DeQueljoe testified that he had not interviewed
with anyone in the administration. The only individual in the
administration with whom he spoke about an appointment was Debbie Shon.
Huang had introduced DeQueljoe to Shon during the APEC summit in
Seattle in 1993. During his deposition, DeQueljoe was asked, ``When you
were seeking a position within the Clinton administration, had you
contacted anyone without Huang's assistance?'' He answered, ``No, I did
not.'' DeQueljoe Deposition at 66, 69-70.
\52\ DeQueljoe Deposition at 23.
\53\ DeQueljoe Deposition at 29.
\54\ DeQueljoe Deposition at 28.
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B. Lippo Hires Friends and Former Employees of the Clinton
Administration
Upon President Clinton's election, many friends and
associates of the new President saw an opportunity to further
their own interests by trading on access to his administration.
Similarly, many of Clinton's friends followed him to Washington
to find jobs within the new administration. Having spent time
in Arkansas, both James Riady and John Huang knew officials at
all levels of the administration. In addition, Lippo hired
individuals with ties to the Clintons and contacts within the
administration.
Shortly after the election, in Apr. 1993, C. Joseph Giroir,
a former law partner of First Lady Hillary Rodham Clinton,
incorporated the Arkansas International Development Corporation
(``AIDC'').\55\ AIDC was initially capitalized by funding from
the Lippo Group.\56\ The purpose of AIDC was to develop
projects or joint ventures for the Lippo Group.\57\ In 1995,
Giroir and Lippo formed a limited liability company, also
referred to as AIDC.\58\ Through the corporation, the Riadys
paid Giroir a salary of between $350,000 and $600,000 with
bonuses.\59\ Similar to the Riadys, Giroir was a major
contributor to the DNC. In 1996 alone, Giroir contributed close
to $200,000 in conjunction with fundraisers organized by John
Huang.\60\
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\55\ Deposition of C. Joseph Giroir, Jr., Senate Governmental
Affairs Committee, Apr. 30, 1997 at 15 (hereinafter ``Giroir
Deposition'').
\56\ Giroir testified that the Lippo Group advanced Giroir $50,000
which he used as the initial capitalization of the company. Giroir
Deposition at 15-16.
\57\ Giroir Deposition at 17-18.
\58\ Giroir testified that originally he was paid ``roughly a
couple hundred thousands dollars [sic] a year in fees'' by AIDC-1. In
1995, he was then paid ``roughly $500,000'' per year from AIDC-2. In
each instance, a Lippo subsidiary was paying the salary. Giroir
Deposition at 17.
\59\ Giroir Deposition at 17-19.
\60\ Giroir Deposition at 158-159, 167.
---------------------------------------------------------------------------
In late 1995, around the time that Giroir and Lippo
incorporated the second AIDC, Giroir hired former White House
staffer Mark Middleton.
1. Mark Middleton
Mark Middleton was a Special Assistant to the President and
Deputy to Counselor Mack McLarty before resigning his position
in February 1995.\61\ He had also been a fundraiser for the
1992 Clinton campaign, raising $4 million in Arkansas
alone.\62\ While Middleton was an employee of the White House,
James Riady and John Huang visited him frequently.\63\ In July
1995, Middleton was retained by the Riady funded AIDC and paid
$12,500 per month.\64\ As a consultant, Middleton was supposed
to seek out businesses looking for opportunities in the Asian
market, particularly joint venture partners for Lippo
entities.\65\ Between July 1995 and April 1997, Middleton was
paid his monthly retainer yet delivered no finalized venture
contracts.\66\
---------------------------------------------------------------------------
\61\ White House Document EOP 068500.
\62\ Eliza Newlin Carney and Peter H. Stone, Blind Ambition,
National Journal, June 7, 1997, at 1123.
\63\ White House Document Production EOP 004522-526 (summary of
John Huang WAVES records prepared by White House); White House Document
production EOP 055316-318 (summary of James Riadys WAVES records
prepared by the White House).
\64\ Giroir Deposition at 233-234.
\65\ Giroir Deposition at 229-234.
\66\ Giroir testified that at the time of the deposition in Apr.
1997, there was one contract that Middleton brought to AIDC that was
under negotiations, but not finalized. Therefore Middleton was paid at
least $262,000 by the Riadys in that time period, but produced no joint
venture partners. Giroir Deposition at 234.
---------------------------------------------------------------------------
In addition to his other projects, Middleton arranged
meetings and completed other tasks directly for James Riady.
Mr. Middleton invoked his Fifth Amendment right against self
incrimination in response to a Committee subpoena, therefore
the Committee was unable to ask him about his work for the
Riadys.\67\ However, former Lippo officer Charles DeQueljoe
stated that although he was not aware of the precise work
Middleton was doing, ``from time to time I would overhear
conversations where people would be contacting Mark to ask Mark
for that information or ask Mark for this, something like
that.'' \68\
---------------------------------------------------------------------------
\67\ Letter to Chairman Dan Burton from Robert D. Luskin, attorney
to Mark Middleton, Feb. 27, 1997 (asserting Middleton's fifth amendment
privilege against self incrimination with respect to the Committee
subpoena).
\68\ DeQueljoe Deposition at 134.
---------------------------------------------------------------------------
Soon after leaving the White House, and while working at
International Realty Investors,\69\ Middleton took a trip to
Asia.\70\ During the trip, Middleton received a message from
his assistant, ``[a]lso, Larry [Middleton] spoke with Johnny
Huang who said that you need to get your itinerary to the Riady
Group [sic]. They want to `take care of you' while you are in
Hong Kong--have a car meet you at the airport, etc. . . ..''
\71\ The Riadys also took care of Middleton while he was in
Jakarta, where he stayed at the Riadys' hotel.\72\ Although he
had already resigned his White House position, Middleton passed
out his White House business cards while on the trip. He
requested that his assistant send the business cards to his
brother, Larry Middleton, who would be joining him on the
trip.\73\ Until October 1996, there was a message on
Middleton's old White House voice mail which advised callers of
his new phone number.\74\
---------------------------------------------------------------------------
\69\ International Realty Investors [IRI] was a company privately
owned by Steven J. Green. Green met Middleton through his work at the
White House. Before starting work with IRI, Green was aware that
Middleton would make one trip to Asia. The trip was supposedly to let
some of Middleton's contacts know that he was now in the private
sector, and look for some business opportunities to bring back to
Green. After working for Green for several months, Middleton decided
that he wanted to take on consulting clients of his own, and have Green
as a client rather than an employer/employee relationship. The
relationship never worked out, and Middleton soon began his own
business, CommerceCorp International. Middleton signed a contract with
AIDC before he left IRI. Interview with Stephen J. Green, Committee on
Government Reform and Oversight, Mar. 10, 1998.
\70\ Middleton left for an Asia tour on Mar. 20, 1995, he traveled
to Beijing, Hangzhou, Shanghai, Hong Kong, Macao, Taiwan, Jakarta and
Brunei. Gould Document Production 0265.
\71\ Gould Document Production 0053.
\72\ Middleton wrote a memorandum to Jose Hanna of the Lippo Group:
``I will be arriving in Jakarta on Wednesday, Apr. 5th . . . I am
writing to find out the hotel arrangements you have made for me in
Jakarta and if you have set up a meeting for me with Mr. Bakrie.''
Gould Document Production 0059; 0062.
\73\ Middleton's assistant confirmed that she had sent the cards in
a fax, ``I fedexed your White House cards to Larry.'' Gould Document
Production 0060.
\74\ Deposition of Yusuf Khapra, Government Reform and Oversight
Committee, Aug. 12, 1997, at 99 (hereinafter ``Khapra Deposition'');
White House Bulletin, Oct. 31, 1996, at 2.
---------------------------------------------------------------------------
Middleton had regular contacts with John Huang, who was
then working at the Commerce Department.\75\ In addition, in
this same timeframe, Middleton was visiting the White House
quite frequently. His former intern Yusuf Khapra would admit
him to the White House:
---------------------------------------------------------------------------
\75\ See generally Commerce Department Production of John Huang's
Phone Logs; Gould Document Production, Middleton's Phone Messages.
Generally, cases where I cleared him in and I listed
myself as the visitee, he--it would often be because he
wanted to sort of, you know, work the halls, and meet a
number of different people, drop by on a number of
different offices and didn't have a specific meeting
set with anyone.\76\
---------------------------------------------------------------------------
\76\ Khapra Deposition at 99.
It is unclear what Middleton was doing during his visits to
the White House. However, he organized many White House tours
and lunches for what appear to be his clients. In addition, he
was able to schedule meetings for clients with the President
and First Lady.\77\ Although the Committee does not have much
information on Middleton's duties relating to the Lippo Group,
it is aware of at least one meeting with the President which
Middleton arranged for James Riady.
---------------------------------------------------------------------------
\77\ The First Lady's Oct. 30, 1995 schedule lists meetings with
Nina Wang, of Hong Kong, and Mark Middleton and later Mark Middleton
with the Widjaja family of Indonesia. White House Document Production
EOP 020356. On Nov. 2, 1995 Middleton arranged for the Widjajas to have
their photo taken with President Clinton. EOP 0585027-533 (Schedule of
the President). During the Widjajas visit to the United States,
Middleton also arranged for them to meet with Don Fowler on Nov. 1,
1995. Fowler's schedule notes: the Widjaja family is one of the
wealthiest and most successful families in Indonesia; Mark Middleton
will discuss their giving potential at a later date. [Emphasis added]
DNC 302227.
---------------------------------------------------------------------------
In September 1996, Middleton contacted Mack McLarty about
arranging a meeting between the President and James Riady:
As I remember, Mr. Middleton called me and related that
Mr. Riady and the President had had a visit at some
earlier meeting that I was not in attendance, and they
did not complete their conversation, according to Mr.
Middleton, and that the President had asked Mr. Riady
to arrange an appointment with him to finish their
conversation. And Mr. Middleton is asking me to follow
up on the President's request, making me aware of the
President's request.\78\
---------------------------------------------------------------------------
\78\ Deposition of Thomas F. ``Mack'' McLarty, House Committee on
Government Reform and Oversight, Sept. 5, 1997 at 185-186 (hereinafter
``McLarty Deposition'').
Middleton then sent McLarty a cryptic memorandum referring
to a ``meeting participant,'' \79\ which McLarty confirmed was
about scheduling a meeting with James Riady.\80\ James Riady
arrived in Washington on September 8, 1996 and checked into the
Hay Adams Hotel under the care of Mark Middleton.\81\
---------------------------------------------------------------------------
\79\ It is important to note that the White House never produced
this document, even though McLarty recognized it as a document he
received. However, Mark Middleton's company, CommerceCorp, produced it
in response to a Committee subpoena. CommerceCorp Document Production
CC-H-000157 (Exhibit 17).
\80\ Mack McLarty told Middleton to contact Nancy Hernreich about
setting up a meeting for Riady; McLarty would inform Hernreich ahead of
time. McLarty testified, ``I told [Hernreich] that Mr. Middleton may be
calling her about an appointment for James Riady; that, as I understood
it, the President had requested to see Mr. Riady to complete a
conversation they had had at some earlier point in time.'' Hernreich
then asked Bruce Lindsey to inquire whether the President would like to
meet with Riady. According to Lindsey, he asked the President, and the
President agreed. McLarty Deposition at 185-186, 188-189; Deposition of
Bruce R. Lindsey, House Government Reform and Oversight Committee,
Sept. 8, 1997 at 211 (hereinafter ``Lindsey Deposition'').
\81\ Hay Adams Hotel documents show that Middleton paid for Riady's
accommodations on his corporate credit card. Hay Adams Hotel Documents
(unnumbered).
---------------------------------------------------------------------------
On September 9, 1996, the President, Riady, Middleton and
Bruce Lindsey met. Bruce Lindsey, the only individual available
for questioning about the meeting, described the following:
They discussed, again, they talked about social sort of
things, family, what they were doing. James asked the
President, made some comment to the President about
how--had he given any thought to what he was going to
do after he was President because he'd be so young. . .
. James said something as he was leaving to the effect
of I think you made the right decision on MFN [Most
Favored Nation trading status] and I hope you will stay
engaged in China.\82\
---------------------------------------------------------------------------
\82\ Lindsey Deposition at 218-219.
The Riady family had consistently shown an interest in
China and MFN status. At the time of the meeting, the Lippo
Group had engaged in an expansion of their business into China,
in particular, forming a partnership with China Resources
Company. Shortly after President Clinton took office, Mochtar
Riady wrote to Clinton, advocating among other things, MFN
status for China.\83\
---------------------------------------------------------------------------
\83\ The letter also thanks Clinton for the personal time he spent
with the Riady family on Inauguration day 1993. White House Document
Production EOP 003036-003039 (Exhibit 18).
---------------------------------------------------------------------------
It should be noted that the ethnic-Chinese Riady family's
business was very closely tied to the MFN trading privilege for
China, and the development of the Asian markets generally.\84\
The Riadys made contributions toward then-candidate Clinton's
election even though at that time Clinton was linking the grant
of MFN privilege for China to human rights issues.\85\ In fact,
candidate Clinton criticized President Bush for his stance on
MFN to China.\86\ However, after taking office President
Clinton softened his position on MFN, and ultimately approved
MFN for China in May 1993.\87\ By 1994, President Clinton
completely de-linked China's MFN trading privilege from its
human rights record.\88\ 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 dramatically altered his position on this controversial
issue.
---------------------------------------------------------------------------
\84\ Choi Hak Kim, Mochtar Riady, A Man of Insight, Forbes (Chinese
Language Edition), Oct. 1993.
\85\ David Lauter, Clinton Blasts Bush's Foreign Policy Record,
L.A. Times, Aug. 14, 1992, at A1.
\86\ Id.
\87\ Jim Mann, Clinton Ties China's Trade in Future to Human
Rights, Asia: He Extends Favored-Nation Status, L.A. Times, May 29,
1993, at A1.
\88\ John M. Broder and Jim Mann, President De-links Most Favored
Nation Privilege from Human Rights, L.A. Times, May 27, 1994.
---------------------------------------------------------------------------
On matters relating to Indonesia, Mark Middleton assisted
the Riadys as well. Not only did he organize a meeting with
President Clinton, Middleton also spoke with President Soeharto
of Indonesia on behalf of the Riady family.\89\ In an October
1995 letter to James Riady, Middleton wrote, ``On two separate
occasions, I spoke to President Soeharto and mentioned how
helpful you have been to him here in Washington. He certainly
seemed to be very appreciative of your efforts.'' \90\
Middleton appears to have served two separate functions for the
Riady family, taking care of both political and business
interests.
---------------------------------------------------------------------------
\89\ CommerceCorp Document Production CC-H-000484-487 (Exhibit 19).
\90\ Exhibit 19.
---------------------------------------------------------------------------
2. Webster Hubbell
Before the Riadys brought on Mark Middleton, they had hired
another Clinton administration figure, former Associate
Attorney General Webster Hubbell, who was also a Rose law firm
partner of Hillary Clinton. Hubbell resigned from his position
with the Justice Department in April 1994, citing a dispute
with his former law partners at the Rose Law Firm.\91\ James
Riady hired Hubbell in June 1994, after his resignation from
the Department of Justice that April.\92\ Hubbell was paid a
lump sum of $100,000 for unknown services performed between
June 27, 1994 and December 6, 1994.\93\ The hiring occurred
around the same time as John Huang finally was approved for a
position at the Department of Commerce.
---------------------------------------------------------------------------
\91\ Hubbell's legal problems were first disclosed by the
Washington Post on Mar. 2, 1994. Hubbell officially announced his
resignation from the Department of Justice on Mar. 14, 1994 and
formally resigned on Apr. 8, 1994. Susan Schmidt, Law Firm Probing
Hubbell, the Washington Post, Mar. 2, 1994 at A1; Justice Aide Leaves
Today, New York Times, Apr. 8, 1994 at A6.
\92\ Hearing on the Improper Handling of Documents in Deputy White
House Counsel Vincent Foster's Office after His Death Before the Senate
Special Committee to Investigate the Whitewater Development Corporation
and Related Matters, 104th Cong., 2d sess., 242-244 (1996) (testimony
of Webster Hubbell).
\93\ Both Riady and Hubbell refuse to describe what services, if
any, Hubbell performed. In addition to his salary, the Lippo Group also
paid for a trip to Jakarta and Bali for Hubbell and his wife.
Deposition of Webster L. Hubbell, Senate Select Committee on Whitewater
Development Corp. and Related Matters, June 4, 1996, at 103-124;
NationsBank account records for Webster Hubbell (Exhibit 20); Hip Hing
Holdings Document Production HHH 1415 (Exhibit 21).
---------------------------------------------------------------------------
The timing of Hubbell's hiring raised concerns, as it came
on the heels of an Oval Office meeting between James Riady,
John Huang and Arkansan Mark Grobmyer.\94\ Soon after Hubbell
had resigned from the Department of Justice, he became a target
of the Office of Independent Counsel's Whitewater
investigation. Hubbell was allegedly cooperating with
prosecutors after he left Justice, but by the summer of 1994
all cooperation had ceased.\95\ At the same time, numerous
friends and associates of the President hired Hubbell as a
``consultant,'' although he performed little, if any work for
all of the employers.\96\ However, by December 1994, Hubbell
pleaded guilty to charges of tax evasion and mail fraud related
to his work at the Rose Law Firm. After the guilty plea,
Hubbell was relieved of the majority of his consulting work,
but only after he was paid over $700,000. In the spring of
1995, Hubbell approached Mark Middleton to ask whether the
Riadys would keep him on the payroll as he prepared to enter
prison.\97\ According to Middleton's attorney, Middleton told
Hubbell that he would have to ask James Riady or John
Huang.\98\ At the time, Huang was working at the Commerce
Department, not for the Riadys.
---------------------------------------------------------------------------
\94\ During the week of June 21-25, 1994, James Riady and John
Huang attended several meetings at the White House. At the time, Huang
was scheduled to receive a Presidential appointment at the Department
of Commerce. On June 23, 1994, Riady, Huang and Mark Grobmyer met with
the President at 10 a.m. Before the meeting with the President, Riady
had a 7:30 a.m. breakfast with Webb Hubbell at the Hay Adams Hotel,
where Riady was staying. Directly after the meeting with the President,
Riady had lunch with Hubbell, again at the Hay Adams Hotel. The
$100,000 wire transfer was in Hubbell's account by June 27, 1994. DOT
0084B (June 23, 1994 Calendar of Webster Hubbell); see EOP 055316-318
(WAVES Summary of James Riady).
\95\ Stephen Labaton & Jeff Gerth, Asian Paid $100,000 to Hubbell
Days After Visits to White House, New York Times, Mar. 20, 1997 at A1.
\96\ After leaving Justice, Hubbell received over $700,000 from
friends and associates of President Clinton while he was allegedly
cooperating with the Independent Counsel.
\97\ Jeff Gerth and Stephen Labaton, A Wider Circle at White House
Knew of Efforts to Help Hubbell, New York Times, Apr. 10, 1997, at A1.
\98\ Id.
---------------------------------------------------------------------------
During the investigation of campaign financing matters, all
of the payments to Hubbell came to light due to the connection
to James Riady. The Committee soon discovered that there was an
effort within the Clinton administration, of which the
President and First Lady were aware, to find work for
Hubbell.\99\ Mack McLarty had planned to write a memo to the
President and First Lady, ``to let them know that I had been
supportive of Webb and the transition, while difficult, was not
going to be just completely an impossible one.'' \100\
Ultimately McLarty says he did not write a memo, rather, he
told the President or First Lady in person about prospects for
Hubbell.\101\ However, Hubbell has denied that the Riady
payment or any other money he received from friends of the
President affected his cooperation with the Independent
Counsel.\102\
---------------------------------------------------------------------------
\99\ In fact, a senior administration official was quoted in the
press as saying, ``taking care of Webb became like petting the new
bunny, if you wanted to show the President you were supportive, this
was a good way to do it: pet the bunny.'' David Willman, Efforts on
Hubbell's Behalf May Be a Key to Whitewater Inquiry, L.A.. Times, Apr.
6, 1997 at A1; Deposition of Thomas F. ``Mack'' McLarty, House
Government Reform and Oversight Committee, Sept. 5, 1997 at 56-60
(hereinafter ``McLarty Deposition'').
\100\ McLarty Deposition at 103-104.
\101\ Id. at 104.
\102\ Stephen Labaton & Jeff Gerth, Asian Paid Hubbell $100,000
Days After Visits to White House, New York Times, Mar. 20, 1997 at A1.
---------------------------------------------------------------------------
Unfortunately, the Committee has been unable to receive
testimony from Hubbell on the payments, as he invoked his Fifth
Amendment right against self-incrimination in response to
Committee inquiries on the matter.\103\ Likewise, James Riady
and John Huang, the two individuals who may also have knowledge
of the terms of Hubbell's Lippo employment, have refused to
cooperate with the Committee. An associate of James Riady told
the media that Riady explained, ``Mr. Hubbell was our very
close friend, when he left [the Justice Department], we felt we
should help him out. We didn't like to see him without a source
of income.'' \104\
---------------------------------------------------------------------------
\103\ Doug Buford, who did legal work for the Riady family,
testified about Hubbell's interest in working for the Lippo Group: Webb
called me, after he left Justice, and we were talking, I don't recall
when, but at some point after he left Justice, and, you know, we were
talking about what he was doing and where he was going to work and
stuff like that, and he asked me--told me he was doing consulting work
and asked me if I thought the Lippo Group would be able to use him or
whether he could work for them or not.'' Buford called John Huang and
told him of Hubbell's interest. Buford testified that he was careful to
inform Huang that he was placing the call on his own and had not
discussed it with anyone at the White House. When asked if he thought
there would be a different response if the information came from the
White House, Buford replied, ``I didn't know, but I didn't want to be
party to any confusion.'' Deposition of C. Douglas Buford, Jr., House
Government Reform and Oversight Committee, Oct. 23, 1997 at 53-54.
\104\ Peter Waldman, East Meets West: By Courting Clinton, Lippo
Gains Stature at Home in Indonesia, Wall Street Journal, Oct. 16, 1996,
at A1.
---------------------------------------------------------------------------
It is clear that the Riadys, themselves and through
employees, not only financially supported Clinton and the DNC
during the 1992 campaign, but also hired individuals close to
the Administration. Although James and Mochtar Riady were not
living in the United States, John Huang coordinated the
contributions made by Lippo related individuals and
entities.\105\ After President Clinton was elected in 1992, the
Riadys and Huang remained in contact with him, making frequent
visits to the White House as well.
---------------------------------------------------------------------------
\105\ For a detailed explanation of all contributions, see
generally Chapter 3, II. In addition, another Lippo executive who was
based in Jakarta, Jose Hanna, solicited contributions for U.S.
elections from Lippo employees abroad. It is not clear whether all
individuals who contributed were United States citizens. DeQueljoe
Deposition 36-37, 141.
---------------------------------------------------------------------------
IV. Huang and Riady's Contacts With the Clinton Administration
A. General Contacts
Both the Riady family and John Huang had unusual access to
the President, the White House, and the administration in
general. In total, James Riady visited the White House compound
on at least 20 occasions between April 1993 and September
1996.\106\ During approximately the same time period, March
1993 through October 1996, John Huang visited the White House
over 95 times.\107\ Some of these visits, for both Huang and
Riady, included visits with the President. Their contacts with
the President and high level administration officials even
extended to international events and meetings abroad. The
Riadys' access is unusual for foreign nationals, even though
they were also major DNC contributors.
---------------------------------------------------------------------------
\106\ The total is according to Workers and Visitors Entry System
Records [WAVES] logged by the Secret Service. James Riady's name showed
up on 25 occasions for which he was scheduled to be admitted to the
White House compound. However, there were only 20 occasions for which
there was a ``time of arrival'', meaning that Riady actually was logged
through the gate. Generally, there are also manners in which one also
can get into the compound without being ``waved'' in by a White House
staffer. The Committee is aware of two instances where James Riady
entered the White House compound without creating a record, on June 25
and Sept. 10, 1994. White House Document Production EOP 055316-318.
\107\ The Committee is unable to determine what occurred during the
majority of Huang's visits as he has invoked his fifth amendment right
against self incrimination. Many of Huang's visits were made to Special
Assistant to the President and Deputy to the Counselor Mark E.
Middleton. Mr. Middleton also invoked the fifth amendment in response
to Committee subpoenas. In addition, many witnesses could not remember
anything about Huang's visits. White House Document Production EOP
004522-526.
---------------------------------------------------------------------------
On many occasions when James Riady visited the White House,
John Huang accompanied him.\108\ Riady was granted private
meetings with the President on several occasions as well. For
instance, the entire Riady family was invited to the 1993
Inaugural events and met privately with President and Mrs.
Clinton.\109\ Subsequently, James Riady attended at least two
of President Clinton's Saturday Morning Radio Addresses, along
with Huang and family members.\110\ After the June 24, 1994,
Radio Address President Clinton invited Riady and his family to
remain, ``Just sit everybody down, wherever you want them
James.'' \111\ That June 1994, Riady and Huang were at the
White House on several occasions, not only meeting with
President Clinton, but with White House staff as well. These
visits occurred a month before Huang assumed his position at
the Commerce Department, but also coincided with Riady's hiring
of Webster Hubbell.\112\
---------------------------------------------------------------------------
\108\ White House Document Production EOP 055316-318 (summary of
James Riady's WAVES records); White House Document Production EOP
004522-526 (summary of John Huang WAVES records).
\109\ Exhibit 18.
\110\ White House Document Production EOP 055316-318 (summary of
James Riady's WAVES records); White House Document Production EOP
004522-526 (summary of John Huang WAVES records).
\111\ White House Communications Agency videotape of June 24, 1994
Saturday Morning Radio Address.
\112\ For further discussion of Webster Hubbell's employment with
the Lippo Group, see infra III, B, 2.
---------------------------------------------------------------------------
Soon after the 1992 election, and even before the
inauguration, Huang contacted President-elect Clinton's nominee
for Commerce Secretary, Ron Brown, about arranging a meeting
with Mochtar Riady, father of James Riady and Chairman of the
Lippo Group.\113\ An internal Commerce Department communication
recommended that Brown accept the meeting:
---------------------------------------------------------------------------
\113\ Letter to Ronald H. Brown from John Huang, January 7, 1993
(Exhibit 22).
Yes, Lippobank [sic] is a major banking firm in Asia--
over \1/2\ billion in assets--also headquartered in US
---------------------------------------------------------------------------
in NY with office throughout the US.
John Huang took Pres. Clinton to Hong Kong in 1985 with
an Arkansas Trade Delegation and was very active in
92.\114\
---------------------------------------------------------------------------
\114\ Scheduling Recommendation Office of the Secretary/Executive
Secretariat 1/29/93 (Exhibit 23).
Later that year, Huang and Mochtar Riady requested that
Commerce Secretary Brown meet with Shen Jueren, Chairman of
China Resources and a major partner of the Lippo Group.\115\ In
late 1992, China Resources purchased 15 percent of the Lippo
owned Hong Kong Chinese Bank.\116\ China Resources subsequently
infused the failing LippoLand with tens of millions of dollars,
effectively bailing the Riady family out of a precarious
financial situation.\117\ Since 1993, the Lippo Group and China
Resources entered into dozens of joint venture projects in the
People's Republic of China.\118\
---------------------------------------------------------------------------
\115\ China Resources is a Chinese Government owned company which
is a joint venture partner with the Lippo Group and partner in the
Lippo controlled Hong Kong Chinese Bank. Letter to Ronald H. Brown from
John Huang, Sept. 10, 1993 (Exhibit 24).
\116\ Investigation on Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign--Part II Before the Senate
Committee on Governmental Affairs, 105th Cong., 1st sess., at 29
(testimony of Thomas R. Hampson, president of Search International,
regarding the Lippo Group).
\117\ Id.
\118\ Id.
---------------------------------------------------------------------------
At the time the meetings for Shen Jueren were requested,
China Resources was becoming one of Lippo's most important
partners. During the same visit to the United States, Huang and
Riady also organized a meeting between Vice President Gore and
Shen Jueren as well.\119\ Huang wrote to Vice President Gore's
then-Chief of Staff Jack Quinn, thanking Quinn for meeting with
Shen Jueren and noting a meeting between him and Gore. Quinn
had no recollection of ever meeting Shen Jueren, nor did he
recall the letter from Huang.\120\
---------------------------------------------------------------------------
\119\ White House Document Production EOP 049490 (Exhibit 25).
\120\ Deposition of Jack Quinn, Government Reform and Oversight
Committee, Nov. 4, 1997 at 23.
---------------------------------------------------------------------------
B. 1993 APEC Meeting in Seattle
The Riady family was able to show off its close ties to
President Clinton during the 1993 Asian Pacific Economic
Cooperation (``APEC'') summit in Seattle, Washington. Lippo
organized a group of Indonesian businessmen to visit Little
Rock, Arkansas before the summit.\121\ The group of
Indonesians, along with James Riady, then traveled with a group
of Arkansas businessmen to the APEC summit in Seattle.\122\ A
sister-state agreement between Arkansas and Indonesia was to be
signed at a ceremony during the APEC summit, and James Riady
planned to have President Clinton and President Soeharto
attend.\123\ However, the White House staff had concerns about
the President's participation in such an event, as noted in a
letter from Joe Giroir to James Riady:
---------------------------------------------------------------------------
\121\ Arkansas International Development Corp. Document Production
005381-383 (Exhibit 26).
\122\ DeQueljoe Deposition at 98-99.
\123\ Exhibit 26.
Mack [McLarty] and Mark Middleton indicated that it
will be a determination made by the Director of
National Security; and that the human rights
controversy surrounding East Temor [sic] may be an
impediment that will have to be overcome. I note that
Doug Bufford [sic] is speaking with Bruce Lindsey about
this, this week; John Huang has spoken directly to the
President and the President has indicated, in general,
that he is agreeable to do it. . . .\124\
---------------------------------------------------------------------------
\124\ Id. [Emphasis added].
Ultimately, during the 1993 APEC, President Clinton did
meet with President Soeharto, along with James Riady, over the
objection of his staff.\125\ Joe Giroir, who assisted in
organizing the Indonesia delegation, noted that Bruce Lindsey
was ``mad'' that President Clinton attended the meeting.\126\
However, Lindsey did not recall that particular Soeharto
incident. He did state:
---------------------------------------------------------------------------
\125\ Giroir Deposition at 186; DeQueljoe Deposition at 104-105.
\126\ Giroir Deposition at 187.
I learned that there was a photo op at some time prior
to us going to Tokyo [for the G-7 summit], and there
was a question as to whether or not--during that photo-
op they raised with the President whether or not he was
going to meet with Suharto.\127\
---------------------------------------------------------------------------
\127\ Lindsey Deposition at 52.
The President did meet briefly with Soeharto during a G-7
Summit in Tokyo in July 1993.\128\ After the Summit, President
Clinton added a handwritten message in a letter to James Riady,
that he had enjoyed his visit with Soeharto.\129\
---------------------------------------------------------------------------
\128\ Associated Press, Clinton, Suharto Discuss East Timor Human
Rights Problems, July 7, 1993.
\129\ White House Document 930728 (Exhibit 27).
---------------------------------------------------------------------------
C. 1994 APEC Meeting in Jakarta
The 1994 APEC summit was held in Jakarta, Indonesia. James
Riady initially planned to host a group of Arkansans during the
summit, paying for their airfare and hotel expenses.\130\ Riady
and Joe Giroir drafted a list of individuals to be invited,
including former Associate Attorney General Webster Hubbell,
who was then under investigation by the Whitewater Independent
Counsel.\131\
---------------------------------------------------------------------------
\130\ Arkansas International Development Corp. [AIDC], a company
controlled by Joe Giroir, issued invitations on his and Riady's behalf.
Arkansas International Development Corp. Document Production AIDC
005142-5143 (Exhibit 28). Exhibit 28 is representative of the
invitations sent to invited individuals. Douglas Buford testified that
after he received his invitation, he contacted the travel agency, which
informed him that the hotel and air fare was already paid. Deposition
of C. Douglas Buford, Committee on Government Reform and Oversight,
Oct. 23, 1997 at 47-48; see also DeQueljoe Deposition at 132.
\131\ White House Document Production EOP 020359 (Exhibit 29).
---------------------------------------------------------------------------
The list of invitees was sent from the Lippo Group to John
Huang, who was then employed by the Commerce Department.\132\
Somehow, the White House came into possession of the list of
individuals invited by James Riady to the Jakarta summit.\133\
No one at the White House is able to recall how the memorandum
arrived there. Although the logical answer is that the memo was
sent by John Huang or someone from the Lippo Group to the White
House, someone else may have brought it to the attention of the
White House. Nevertheless, once informed of the plan, the White
House staff held meetings to discuss whether it should go
forward. Mack McLarty described the topic of the meetings as,
``whether or not it was a good idea for this Arkansas
delegation to attend the APEC conference in Indonesia.'' \134\
---------------------------------------------------------------------------
\132\ Exhibit 29 is dated Sept. 21, 1994 and John Huang began
working at the White House on July 18, 1994. Jose Hanna, the author of
the memo, is a Lippo employee.
\133\ Exhibit 29.
\134\ White House staff attending the meetings included Mack
McLarty, Bruce Lindsey, Nancy Hernreich, Marsha Scott and John Podesta.
Deposition of Thomas F. ``Mack'' McLarty, House Government Reform and
Oversight Committee, Sept. 5, 1997 at 176-178 (hereinafter ``McLarty
Deposition'').
---------------------------------------------------------------------------
Eventually the White House did intervene through Deputy
Counsel Bruce Lindsey, and request that Riady cull down his
list of invitees.\135\ Lindsey contacted the Riadys' attorneys
in Arkansas, Doug Buford and John Tisdale of Lindsey's former
law firm.\136\ Through a set of intermediaries, the list was
shortened to only essential individuals acceptable to the White
House.\137\ According to Mack McLarty the issue for the White
House was, ``whether there would be any appearance concerns,
appearance matters raised. I don't believe other states were
going to have any representations [sic] there.'' \138\ This
answer was puzzling considering that the Arkansas and Indonesia
delegations traveled to APEC together the prior year without
incident, and there was a sister-state agreement between the
two as well.
---------------------------------------------------------------------------
\135\ Lindsey Deposition at 93-96; Deposition of C. Douglas Buford,
Government Reform and Oversight Committee, Oct. 23, 1997 at 10, 45, 59
(hereinafter Buford Deposition).
\136\ Lindsey Deposition at 93-96; Buford Deposition at 10, 45, 59.
\137\ Buford testified that Lindsey contacted him about the list,
and in turn, Buford contacted Joe Giroir. Eventually, Joe Giroir called
Buford back with a shorter list. Buford communicated that list to
Lindsey. Lindsey Deposition at 93-96; Buford Deposition at 10, 45, 59
\138\ McLarty also testified that at some point John Podesta may
have also raised some concerns about Webster Hubbell attending: ``. . .
might raise an appearance issue that would be reported on by the
press.'' McLarty Deposition at 176-178.
---------------------------------------------------------------------------
In the end, the White House prevailed, and the majority of
the invitees did not attend. Bruce Lindsey wrote a memorandum
to Mack McLarty and John Podesta informing them that the list
had been cut back and justifying certain persons'
attendance.\139\ Lindsey then noted, ``James Riady and his
father would like to have the opportunity to visit briefly with
President Clinton in the hotel during the visit. James has been
reasonable in culling the list, and I think we should try to
schedule a 15 minute meeting for them.''\140\
---------------------------------------------------------------------------
\139\ The memo notes that Lindsey spoke with John Tisdale and Doug
Buford about APEC. White House Document Production EOP 030679 (Exhibit
30). Buford testified that he wanted to attend APEC, and explained his
conversation with Lindsey:
A: . . . we talked about that and whether it was a good
idea for me to go in my capacity as a chamber
representative, you know, and he eventually said no.
Q: He asked you not to go?
A: Yes.
Buford Deposition at 47.
---------------------------------------------------------------------------
\140\ Exhibit 30.
---------------------------------------------------------------------------
The Riadys did in fact meet with President Clinton at his
hotel in Jakarta. Lindsey explained how the meeting at the
hotel was scheduled:
The Riadys wanted the Clintons to go to their house,
and that was not going to happen. The President was not
going to go to the Riady's house while he was there.
And, so, I think I said to James one time, look, the
President is scheduled to leave at 6:00 to go X. Why
don't you and your dad come by at ten till.\141\
---------------------------------------------------------------------------
\141\ Lindsey Deposition at 103, 105.
Lindsey stated there was no discussion of policy, ``[i]t
was just, `Hello. How are you?' And then they said a prayer . .
. they talked about old times, you know, about when they had
met before . . .'' \142\ Regardless of the content of the
discussion, as the Committee is unable to question the other
attendees of the meeting, the fact that the Riadys were able to
meet privately with the U.S. President at all during the trip
and the amount of time the White House staff spent negotiating
some sort of APEC deal with them, is notable. In addition, the
meeting with the President in Jakarta was not an isolated
incident. The Riady family was granted meetings with other high
level officials in the administration who were traveling
abroad, where policy issues more than likely were discussed.
---------------------------------------------------------------------------
\142\ Lindsey Deposition at 103, 105.
---------------------------------------------------------------------------
D. Meetings with Administration Officials
In February 1994, James Riady hosted a luncheon for
Commerce Department officials traveling in Indonesia to promote
the U.S.-ASEAN Alliance for Mutual Growth.\143\ The luncheon
attendees included Commerce Undersecretary Jeffrey Garten and
Deputy Undersecretary David Rothkopf, who would later be John
Huang's superiors in the International Trade Administration at
Commerce.\144\ Rothkopf was unable to recall who at the
Commerce Department had organized the luncheon, which was held
at James Riady's home.\145\ However, Rothkopf recalled that
Melinda Yee, a good friend of John Huang and the Riady family,
did attend the luncheon as well.\146\ Melinda Yee invoked her
fifth amendment rights against self-incrimination and is not
cooperating in the Committee's investigation. Ms. Yee had
assisted in organizing a Commerce Department contract signing
ceremony with the Lippo Group and its American joint venture
partner.
---------------------------------------------------------------------------
\143\ Event Scenario and Talking Points for Riady Lunch, Feb. 25,
1994, Commerce Department Document Production, unnumbered (Exhibit 31).
\144\ While at Commerce Huang worked directly under Chuck Meissner,
the Assistant Secretary for International Economic Policy at the
International Trade Administration. Meissner, in turn, reported to
Rothkopf and Garten.
\145\ Deposition of David J. Rothkopf, Senate Committee on
Governmental Affairs, June 2, 1997 at 20 (hereinafter ``Rothkopf
Deposition'').
\146\ Id. at 21-22.
---------------------------------------------------------------------------
Along with Melinda Yee, John Huang and Lippo consultant Joe
Giroir played a major role in the Lippo contract's inclusion in
the signing ceremony.\147\ Soon after Huang arrived at
Commerce, he organized a lunch with Joe Giroir and Commerce
Department employees Melinda Yee and Nancy Linn Patton.\148\
Yee and Linn Patton were both working on the upcoming Commerce
Department Trade Mission to the Asian region led by Secretary
Ron Brown. While at the lunch, either Huang or Giroir brought
up the subject of the signing ceremonies in China which would
be held during the trade mission.\149\ Fortuitously, the Lippo
Group and its American partner were ready to close a contract
with the North China Power Group at the time that the trade
mission was to go forward.\150\ Giroir testified that Yee
suggested he talk to Deputy Undersecretary David Rothkopf about
the signing ceremony, and that it was Rothkopf who later
requested that Lippo participate in the ceremony with Secretary
Brown.\151\ However, Rothkopf testified that he did not know
Joe Giroir.\152\ Nevertheless, in August 1994, Secretary Brown
personally traveled to the region, where he attended the
Beijing signing ceremony involving the Lippo Group joint
venture.\153\
---------------------------------------------------------------------------
\147\ Giroir Deposition at 59-61.
\148\ Giroir Deposition at 59-61.
\149\ A signing ceremony is an event held during trade missions
which highlight contracts made between U.S. corporations and businesses
of the host country. They generally are promotional for the businesses
involved. Id.
\150\ Id.
\151\ Id.
\152\ Rothkopf Deposition at 61.
\153\ The signing ceremony was for the Datong power plant project
in China and the principals were the Lippo Group, Entergy Corp. and
North China Power Group. The estimated value of the project was $1
billion. Arkansas International Development Corp. Document Production
AIDC 003888-3890 (Exhibit 32).
---------------------------------------------------------------------------
Riady was involved in other events held abroad with Cabinet
level officials as well. For instance, in June 1996, Riady sat
at the head table with then-Secretary of Commerce Mickey Kantor
at a dinner hosted by the American Chamber of Commerce in
Indonesia.\154\ During a deposition with the Committee, Mr.
Kantor did not recall the June 1996 dinner with James
Riady.\155\ However, he did recall a dinner during the 1994
Jakarta APEC Summit at which he sat next to James Riady.\156\
At that time, Kantor was the U.S. Trade Representative (USTR).
---------------------------------------------------------------------------
\154\ Memo to Jennifer Tate from Carol Walker, executive director
AmCham Indonesia, June 26, 1996, Commerce Department Document
Production, unnumbered (Exhibit 33).
\155\ Deposition of Michael Kantor, House Government Reform and
Oversight Committee, Aug. 8, 1997 at 112-113 (hereinafter ``Kantor
Deposition'').
\156\ Id.
---------------------------------------------------------------------------
The Riadys also had an interest in the USTR's policies. In
1994, the Administration, through USTR, was deciding whether to
renew a special trade status for Indonesia which eliminated
tariffs on industrial goods it exported. The trade status was
renewed even though the Soeharto government of Indonesia had an
abysmal record in workers' rights. Many in the media later
questioned the Riady family's motives in seeking meetings with
USTR officials at the time the decision was being made.\157\
The Administration insisted that then-Ambassador Kantor
declined Riady's requests for a meeting during the crucial
decisionmaking period.\158\ However, the USTR Director for
Southeast Asia Joseph Damond did meet with Riady in
Jakarta.\159\ Mr. Damond described Riady's role in the USTR's
negotiations as a ``cultural intermediary.'' \160\ His role
still does not explain why a copy of a letter to Mickey Kantor,
United States Trade Representative, from the Indonesian
Ambassador to the United States regarding Indonesia's trade
status was produced from Hip Hing Holding's files.\161\
---------------------------------------------------------------------------
\157\ David E. Sanger, Administration Moves to Defend Indonesia
Policy After Criticism, New York Times, Oct. 17, 1996 at A1.
\158\ Id.
\159\ Id.
\160\ Id.
\161\ Hip Hing Holdings Document Production HHH 3585-3596 (Exhibit
34).
---------------------------------------------------------------------------
The special meetings and dinners with the President and
other high level officials in the Administration put the Riady
family in a better position in Indonesia. For instance, surely
the Riadys stance with Indonesian President Soeharto grew when
James Riady was able to organize a meeting between Clinton and
Soeharto; something the Indonesian government appeared unable
to do on its own. Even the appearance of favor with the U.S.
Government would assist Riady. The Riady family was able to
curry favor with the Indonesian government by demonstrating
their political connections to the United States
Government.\162\ During President Soeharto's reign, being in
favor with the Soeharto government meant much more than any
amount of money Riady contributed toward Bill Clinton's
Presidency.
---------------------------------------------------------------------------
\162\ The Riady family is ethnic-Chinese, rather than native
Indonesian or ``Javanese.'' The family patriarch Mochtar Riady found it
necessary to ``Indonesianize'' his name, Li Mo Tie, in order to comply
with strong government pressure to eliminate all symbolism relating to
China, a Communist country. In Indonesia, the ethnic-Chinese
historically have been considered somewhat suspect. During the late
1960's and early 1970's there were periods of violence against ethnic-
Chinese, with thousands disappearing in Indonesia.
---------------------------------------------------------------------------
V. 1996 Elections and Contacts With the DNC
A. Huang's Move from Commerce to the DNC
In July 1994, John Huang was appointed Principal Deputy
Assistant Secretary at the Department of Commerce. However,
after little over a year at the Commerce Department, Huang
wanted to move to the DNC as a fundraiser.\163\ Joe Giroir and
Mark Middleton, both Lippo consultants, approached several DNC
officials on behalf of Huang.\164\ Giroir and Middleton
contacted DNC Chairman Don Fowler, and finance officials
including, Truman Arnold, Marvin Rosen, and Richard
Sullivan.\165\ Even James Riady met with Don Fowler, and
advocated the idea of John Huang raising money for the
DNC.\166\ There was some confusion about whether Huang attended
the meeting as well. Sullivan and Fowler recalled that John
Huang was present, whereas, Joe Giroir stated that Huang was
not there.\167\ In the meeting between Riady and Fowler, Giroir
described their idea for an Asian American fundraising effort:
---------------------------------------------------------------------------
\163\ The circumstances of Huang's move from Commerce to the DNC
was covered extensively in the Senate Report, and will not be repeated
here. Final Report of the Committee on Governmental Affairs, S. Doc.
No. 167, 105th Cong., 2d sess., 1655 (1998).
\164\ Deposition of Richard Sullivan, Senate Committee on
Governmental Affairs, June 4, 1997 at 217 (hereinafter ``Sullivan
Senate Deposition''); Giroir Senate Deposition at 77-78, 93-104.
\165\ Sullivan Senate Deposition at 217; Giroir Senate Deposition
at 77-78, 93-104.
\166\ Giroir Senate Deposition at 94.
\167\ Sullivan Senate Deposition at 241; Deposition of Donald
Fowler, Senate Committee on Governmental Affairs, at 186; Giroir Senate
Deposition at 135.
---------------------------------------------------------------------------
I re-expressed my view that there was a reservoir of
support in the Asian-American community, votes as well
as financial support, and that if they would focus
their attention on that reservoir, that it would be
beneficial to the Democratic Party. . . . And then I
think James probably seconded my idea from his point of
view, having been an Asian American, having resided in
Los Angeles, having voted here, having been involved in
the political process here, and knowing intimately the
Asian community as well as the Asian attitude as well
as the Asian propensities.\168\
---------------------------------------------------------------------------
\168\ Giroir Senate Deposition at 97.
Giroir's statement about Riady's insight into the American
political system is not entirely accurate. Although Riady could
be described as Asian, he was never an Asian American. As Riady
has never been a U.S. citizen, he never legally has voted in
the United States. However, Giroir was accurate in that for
some reason, James Riady was active in the U.S. political
process. Nevertheless, after sharing their ideas with DNC
Chairman Fowler, Giroir and Riady placed their recommendation
for John Huang as the most qualified individual to run such an
Asian fundraising campaign.\169\
---------------------------------------------------------------------------
\169\ Id. at 98.
---------------------------------------------------------------------------
Unfortunately, the group had little luck garnering support
or interest at the DNC, and subsequently Huang, James Riady,
and Joe Giroir visited with the President. On September 13,
1995, Riady, Huang, and Joe Giroir met with President Clinton
and Deputy Counsel to the President, Bruce Lindsey. Lindsey
testified that the group generally discussed family and, ``[a]t
some point in the conversation, I believe John said something
like, you know, maybe I could be of more help at the DNC than
at Commerce.'' \170\ Lindsey, who confirmed Huang's interest in
a later meeting, passed the request along to Harold Ickes.\171\
---------------------------------------------------------------------------
\170\ Deposition of Bruce R. Lindsey, House Government Reform and
Oversight Committee, Sept. 8, 1997 at 167 (hereinafter ``Lindsey
Deposition'').
\171\ Ickes, then-Deputy Chief of Staff, handled most of the
campaign related matters from the White House. Lindsey testified that
once he brought the matter to Ickes' attention, Lindsey was no longer
involved. Lindsey Deposition at 167.
---------------------------------------------------------------------------
Harold Ickes recalled that both Lindsey and the President
told him about John Huang. President Clinton took it upon
himself to bring the subject of Huang up with Ickes, who
coordinated campaign activities through the White House:
[T]he President, had recently spoken to John Huang,
that Huang had indicated that he very much wanted to
help in the President's re-election effort, that he
worked in the election effort in '92, and was prepared
to go to work at the DNC or the Re-Elect, wherever the
President or any of his people felt he could be best
used, and would help not only in raising money but, as
importantly, in what we call in the campaign business
outreach to especially Asian Americans and especially
in California.
The President asked me if I would--what I thought of
that. It sounded fine to me. And the President asked me
to follow up on it with John Huang, which I did, and I
called him and had a meeting with him, and he
subsequently left the Commerce Department and went over
to work at the DNC.\172\
---------------------------------------------------------------------------
\172\ Deposition of Harold Ickes, Senate Governmental Affairs
Committee, June 26, 1997 at 115-116 (hereinafter ``Ickes Deposition'').
Huang, who met with Ickes on October 2, 1995, was prepared
to work at either the DNC or the Clinton/Gore Re-elect,
whatever Ickes thought was best.\173\ Ultimately, Ickes
recommended that Huang work at the DNC and contacted Marvin
Rosen and Don Fowler.\174\ Huang's application still did not
move forward until the President personally mentioned Huang to
the head of DNC fundraising, Marvin Rosen, at a November 8,
1995 fundraiser.\175\ By December 1995, Huang was working at
the DNC.
---------------------------------------------------------------------------
\173\ Ickes Deposition at 117-118.
\174\ Rosen recalled that Ickes called and asked Rosen to interview
Huang. Deposition of Marvin Rosen, Senate Governmental Affairs, May 19,
1997 at 137 (hereinafter ``Rosen Deposition''); Ickes Deposition at
117-118, 127.
\175\ Rosen Deposition at 137; Sullivan Senate Deposition at 222;
Don Van Atta, President Is Linked to Urgent Enlisting of Top
Fundraiser, New York Times, July 7, 1997, at A1.
---------------------------------------------------------------------------
b. huang's fundraising activities at the dnc and riady's involvement
Huang organized numerous events while he was employed by
the DNC, raising $3,422,850.\176\ Out of the total amount
raised by Huang, approximately $1.7 million was returned by the
DNC.\177\ DNC Finance Chairman Marvin Rosen and Director
Richard Sullivan both had concerns about Huang's fundraising in
July 1996, and agreed not to allow him to individually organize
any fundraisers involving the President.\178\ The catalyst to
that decision was a fundraising dinner organized by John Huang
on July 30, 1996, which featured James Riady.
---------------------------------------------------------------------------
\176\ DNC In-Depth Contribution Review as of Feb. 28, 1997 (Exhibit
35).
\177\ The contributions listed in Exhibit 35, were not returned by
the DNC until June 1997, subsequently additional illegal or
inappropriate contributions credited to Huang were returned by the DNC.
Exhibit 35.
\178\ Deposition of Richard Sullivan, Senate Governmental Affairs
Committee, June 5, 1997 at 60, 70, 73 (hereinafter ``Sullivan Senate
Deposition 2'').
---------------------------------------------------------------------------
Although there is no Federal Election Commission record of
James Riady contributing to the DNC in 1994 and 1996, Riady
continued to attend fundraisers and other DNC events which
usually would generate contributions in that election cycle.
For example, internal DNC memoranda show that James Riady was
on a list of invitees to a DNC Business Leadership Forum
(``BLF'') event at the White House held on June 21, 1994.\179\
The memorandum lists Riady as a current BLF member, and
describes him as, ``FOB [Friend of Bill]; Former President
Wortham [sic] Bank in Little Rock; Clinton/DNC donor through
John Huang; Huang requested his invitation and that we send it
to Huang's address.'' James Riady and Huang did attend the BLF
reception at the White House, after they met with then-Special
Assistant to the President Mark Middleton, who also attended
the reception.\180\
---------------------------------------------------------------------------
\179\ DNC Document Production DNC 1276431-433 (DNC Memorandum from
David Mercer to Richard Sullivan and Fran Wakem, June 11, 1994).
\180\ White House Document EOP 055316-318 (WAVES of James Riady);
EOP 004522-526 (WAVES of John Huang).
---------------------------------------------------------------------------
In 1996 James Riady appears on a DNC ``commit list'' for
$15,000 in coordination with a June 10, 1996 fundraising dinner
at the home of Lew and Edie Wasserman in Los Angeles.\181\
Later in 1996, DNC Chairman Don Fowler wrote a thank you letter
to James Riady, addressed to Indonesia, which stated:
---------------------------------------------------------------------------
\181\ DNC Document Production DNC 3088330-334 (DNC Commit List for
June 10, 1996, Dinner at the Wasserman Residence, June 3, 1996.
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.\182\
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\182\ DNC Document Production DNC 1728039 (Exhibit 36).
Fowler was surely aware that James Riady was not a U.S. citizen
and did not live in the United States, thereby making him
ineligible to contribute to the DNC.
Subsequently, a September 18, 1996 form letter from Fowler
to Riady was written, thanking Riady for his participation in
the recent DNC dinner with the President. The letter noted,
``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.'' \183\
Although the second letter appears to be a form thank you
letter, one normally does not get a thank you letter unless he
has contributed.
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\183\ DNC Document Production F 0040618.
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1. July 30, 1996 Jefferson Hotel dinner with James Riady
On July 30, 1996, Huang organized an intimate gathering of
four wealthy businessmen, their families, and President
Clinton. Three of the wealthy businessmen were not American
citizens, and all four lived in Asia. Included in the group was
Huang's former employer, James Riady.\184\ Also attending were
Eugene Wu,\185\ Chairman of the Shinkong Group in Taiwan; James
Lin,\186\ Chairman of Ennead Inc. in Taiwan; and, Ken
Hsui,\187\ an executive at Prince Motors and Cosmos Bank in
Taiwan.\188\ Ken Hsui, who contributed $150,000 toward the
event, is the only U.S. citizen in the group of dinner
attendees.\189\
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\184\ DNC Document Production DNC 4346984-986 (Exhibit 37); see
Photo-Op Inc. Document Production LG 51-52 (photos of James and Aileen
Riady with President Clinton at the Jefferson Hotel on July 30, 1996)
(Exhibit 38) (Exhibit 39).
\185\ Photo-Op Inc. Document Production LG 46 (photo of Eugene Wu
with President Clinton at the Jefferson Hotel on July 30, 1996)
(Exhibit 40).
\186\ Photo-Op Inc. Document Production LG 47 (photo of James Lin
with President Clinton at the Jefferson Hotel on July 30, 1996)
(Exhibit 41).
\187\ Photo-Op Inc. Document Production LG 49-50 (photos of Ken
Hsui with President Clinton at the Jefferson Hotel on July 30, 1996)
(Exhibit 42) (Exhibit 43).
\188\ Eugene Wu's Shinkong Group is a conglomerate in Taiwan
dealing in life insurance, energy, manufacturing, equipment leasing,
construction, agriculture, computers, security, plastics firms, a
department store and bank. Wu is married to the sister of one of the
other guests, James Lin. James Lin's Ennead is a construction firm,
which built many of the structures owned by the Shinkong Group. Lin is
also a co-founder of a California company which was fined $41,000 in
1995 for laundering campaign funds to Los Angeles City Council
Candidates. Lin is also a member of the National Assembly in Taiwan.
The third attendee from Taiwan, Ken Hsui, runs several family
businesses in Taiwan, including Prince Motors, a mid-sized manufacturer
of vehicle parts. Hsui, a U.S. citizen, is married to Eugene Wu's
sister. Although Hsui maintains an apartment in Beverly Hills, he
visits the United States only once or twice a year. The building
manager of Hsui's condominium complex told investigators that Hsui
lives in Taiwan but maintains an apartment in the building for his
visits to the United States. Interview of Gary Thomas, Aug. 15, 1997;
John Huang Document Production 001290-1294 (Exhibit 44); Judy Keen,
Judi Hasson & Tom Squitieri, Dinner Raised $488,000--and Questions, USA
Today Feb. 7, 1997 at A4.
\189\ DNC Document Production DNC 3686958 (check tracking form for
Sen Jong ``Ken'' Hsui) (Exhibit 45).
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DNC Finance Director Richard Sullivan testified to his
reaction when he first saw the prospective list of attendees
for the dinner, ``[a]s I recall, I expressed some dismay.''
\190\ However, as there was no time to organize a new dinner,
the dinner Huang organized went forward.\191\ The list of
attendees was sent to the White House, and was approved.\192\
Sullivan and Rosen had two central problems with the July 30,
1996 fundraiser:
---------------------------------------------------------------------------
\190\ Sullivan Senate Deposition 2 at 67.
\191\ Id.
\192\ Id. at 67-68.
Number one, John is not living up to what he had
voluntarily come to us and said he could do. We have
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been giving him these events.
Number two, we are not all that pleased with the fact
that he put a couple of foreign nationals into a small
dinner with the President. Let me make this clear. The
possible--we were not happy with that, you know,
because of the possible perception. The press has made
a big deal about, oh, you know, why did you have them
in when you knew you weren't going to get money from
them. Well we were just worried about the
perception.\193\
---------------------------------------------------------------------------
\193\ Id. at 73.
A strong indicator of their concerns is that Huang was
barred from organizing Presidential events after the Jefferson
dinner with Riady.
Once at the event, the attendees all had their pictures
taken with the President. Generally the topic of fundraising is
brought up at events where money is supposed to be raised.
Although the event was videotaped by the White House
Communications Agency, not all of the remarks were
covered.\194\ The President did speak about the next APEC
meeting and his decision to send U.S. Air Force carriers to the
Taiwan straits.\195\ The issue was important to the Taiwanese,
who were threatened by China's ``missile testing'' directed
toward Taiwan.
---------------------------------------------------------------------------
\194\ White House Production Tape 18 (White House Communications
Agency Tape of July 30, 1996 dinner at the Jefferson Hotel).
\195\ Id.
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The dinner organized by Huang appeared to be a favor for
James Riady.\196\ Huang, although no longer working for Lippo,
rented a limousine and picked up the Riadys at National
Airport; the bill was charged to the Lippo Group at the Los
Angeles address.\197\ It is unusual for a DNC fundraiser to go
to such lengths for someone who is unable to contribute. In
addition, the three businessmen who attended the dinner were a
group of the wealthiest men in Taiwan and perhaps prospective
or current business partners.\198\ Unfortunately Hsui, a U.S.
citizen, Lin, and Wu all declined requests for meetings in
Taiwan with Committee staff and James Riady has refused to
cooperate with investigators.
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\196\ Earlier that evening, James Riady attended an additional
fundraiser with the President. Huang, Riady, and the President all
attended a fundraiser for Winston Bryant, Senatorial candidate from
Arkansas, held at the Hay Adams Hotel that same evening. White House
Document Production EOP 008591 (Letter to James Riady from Mack
McLarty, Aug. 2, 1996) (Exhibit 46); EOP 044706-712 (Schedule of the
President for Tuesday, July 30, 1996--Final).
\197\ Hip Hing Holdings Document Production HHH 4760 (Exhibit 47).
\198\ Riady had earlier arranged, through John Huang, for a White
House tour for the Hsui family. Huang accompanied them on the July 20,
1993 tour. Hip Hing Holdings Document Production HHH 4736-4737 (Exhibit
48).
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2. ``The Indonesian Gardener:'' Huang's relationship to the
Wiriadinatas
Huang, a prodigious fundraiser, may have been raising money
for the DNC even before he left the Commerce Department. The
most egregious example is that of Arief and Soraya Wiriadinata,
an Indonesian couple with strong ties to the Lippo Group, who
contributed $450,000 to the DNC in the 1996 election
cycle.\199\ Soraya Wiriadinata is the daughter of the late
business partner of Mochtar Riady, Hashim Ning.\200\ Her
husband, Arief Wiriadinata, is a ``landscape engineer'' who was
soon dubbed a gardener in press reports about the Wiriadinatas'
contributions.
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\199\ See DNC Document Production DNC 1684087 (answers of John
Huang to questions posed by Newsweek) (Exhibit 49); DNC Document
Production DNC 3152284-286 (DNC Finance Executive Summary on Arief and
Soraya Wiriadinata) (Exhibit 50).
\200\ Exhibit 49.
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The Wiriadinata's first contribution, totaling $30,000 was
given on November 9, 1995, while Huang was still at
Commerce.\201\ The November contribution was credited to John
Huang's wife, Jane, and DNC fundraiser David Mercer.\202\ In
return for their November contribution, the Wiriadinatas,
accompanied by then-Commerce employee Huang, attended a DNC
fundraiser for Vice President Al Gore.\203\ All subsequent
contributions, made after Huang left Commerce, were credited to
John Huang.\204\
---------------------------------------------------------------------------
\201\ Exhibit 50.
\202\ Id.
\203\ Photo-Op Document Production LG 4-6 (photographs of Arief and
Soraya Wiriadinata with Vice President Gore and DNC Chairman Don Fowler
at Nov. 2, 1995 event; photograph of John Huang with Vice President
Gore at Nov. 2, 1995 DNC event) (Exhibit 51) (Exhibit 52) (Exhibit 53).
\204\ Exhibit 50.
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In addition to issues about the timing of the first
contribution, the funds used to contribute to the DNC by the
Wiriadinatas came from Lippo co-founder Hashim Ning in
Indonesia.\205\ The Wiriadinatas explained that they
contributed to the DNC because of a kind gesture on the part of
President Clinton. Hashim Ning was traveling in the United
States in June 1995, when he fell ill and was
hospitalized.\206\ James Riady and Huang asked Mark Middleton
to secure a get well note from President Clinton.\207\ The
President did in fact send two letters to Mr. Ning: one
delivered in person by Mark Middleton; and, the second,
addressed to Mr. Ning in Indonesia, was sent through Mark
Middleton.\208\
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\205\ The Wiriadinatas set up two bank accounts, one for Soraya and
one for Arief. The only funds in the accounts were wired in early Nov.
from Hashim Ning. The Wiriadinatas used that account to write all their
contributions. Nov. 3, 1995, wire transfer from Hashim Ning to Soraya
Wiriadinata, in the amount of $250,000 (Exhibit 54); Nov. 7, 1995, wire
transfer from Hashim Ning to Arief Wiriadinata, in the amount of
$250,000 (Exhibit 55).
\206\ Exhibit 49.
\207\ Middleton asked his former assistant at the White House,
Yusuf Khapra, to get the letter. Khapra was then working as an
assistant in the Deputy Chief of Staff's office. See Deposition of
Yusuf Khapra, Government Reform and Oversight Committee, Aug. 12, 1997
at 82-83 (hereinafter ``Khapra Deposition'').
\208\ DNC Document Production F 0033816 (Exhibit 56); DNC 1227206
(Exhibit 57).
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The November contribution was the first in a long line of
contributions by the Wiriadinatas. They again donated to the
DNC in December, and on December 15, 1995, Arief Wiriadinata
attended a DNC fundraising coffee at the White House. The
beginning of the coffee was videotaped, as President Clinton
walked around the room greeting all of his guests. When the
President came to Wiriadinata, he grasped the President's hand
and said, ``James Riady sent me.''\209\ The President
responded, ``Yes. I'm glad to see you. Thank you for being
here.''\210\ Wiriadinata's comment about James Riady should
have raised some concerns about the contributions he gave.
---------------------------------------------------------------------------
\209\ White House Communications Agency videotape of the Dec. 15,
1995 DNC coffee.
\210\ Id.
---------------------------------------------------------------------------
In addition, the Wiriadinatas moved back to Indonesia, and
sent many of their checks from abroad. At a November 13, 1996
press conference, DNC Chairman Don Fowler insisted that the
Wiriadinata's $450,000 in contributions had been thoroughly
reviewed and was legal.\211\ Yet only 10 days later, the DNC
announced that it would return the Wiriadinata contributions as
they had failed to file 1995 tax returns and had returned to
Indonesia.\212\
---------------------------------------------------------------------------
\211\ Ruth Marcus, DNC Official Concedes Mistakes of Process, the
Washington Post, Nov. 13, 1996.
\212\ Alan C. Miller, Democrats Give Back More Disputed Money, Los
Angeles Times, Nov. 23, 1996.
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3. Donors and events related to Huang
There were other circumstances where DNC and White House
staff, or even the President himself, should have realized that
there was something wrong with the fundraising events. Huang
put together events attended by numerous foreign nationals,
where it was even noted by DNC officials that in many
instances, guests did not speak any English.
a. February 19, 1996
John Huang's first major event as a DNC fundraiser was a
February 19, 1996 Asian Pacific American event attended by the
President. He was assisted in the fundraising by Charlie Trie,
many of whose contributions and solicitations have also been
established as illegal or inappropriate.\213\ Although Huang
raised $706,000 from the event, at least $200,000 of that has
already been returned by the DNC.\214\ In addition, there are
several other contributions related to the event, which the
Committee has determined should also be returned.\215\ The
dinner was the first part of a 2 day event for approximately
80-100 Asian Pacific American donors from across the United
States, including a breakfast with Vice President Gore the next
day.\216\
---------------------------------------------------------------------------
\213\ For a more detailed analysis of Charlie Trie, see Chapter IV
B.
\214\ The Committee has created a chart of contributions based on
DNC check tracking forms related to the Feb. 19, 1996 Hay Adams
Fundraiser (Exhibit 58).
\215\ See generally Chapter 3.
\216\ DNC Document Production DNC 1579590-600 (briefing memo for
President Clinton written by John Huang).
---------------------------------------------------------------------------
In the February 19, 1996 event briefing memorandum for the
President, John Huang points out that immigration policy was
one of the most important issues to the Asian Pacific American
community.\217\ Included in the memo was an outline of which
immigration policies the Asian Pacific American community
supported, including one of the most important, the ``sibling
preference'' category for immigration.\218\ At the time of the
event, President Clinton was on the record as against the
sibling preference.\219\ However, 1 month later, in an
unprecedented shift of opinion, Clinton supported the
preference.\220\
---------------------------------------------------------------------------
\217\ DNC Document Production DNC 1579590-600 (briefing memo for
President Clinton written by John Huang).
\218\ Id.
\219\ Michael Kranish, Clinton Policy Shift Followed Asian-American
Fund-Raiser, Boston Globe, Jan. 16, 1997, at A1.
\220\ Id.
---------------------------------------------------------------------------
Another troubling aspect of the event was the attendance of
Doris Meissner, Commissioner of the Immigration and
Naturalization Service. Doris Meissner sat at the same table as
Maria Hsia, who worked with Huang on other fundraising
events.\221\ Briefing papers for the President underline the
importance of Meissner's attendance at this event as
immigration and naturalization was a top priority for the Asian
Pacific American community.\222\
---------------------------------------------------------------------------
\221\ Photographs of Hay Adams event, Feb. 19, 1996.
\222\ Briefing for the President of the United States, Feb. 19,
1996, DNC 1579590.
---------------------------------------------------------------------------
The briefing memo on the event notes, ``[p]articipants of
APALC dinner have each donated a minimum of $12,500 to the
Democratic National Committee.''\223\ However, there were a
number of foreign nationals at the February 19, 1996 event. At
least five foreign nationals who were unable to contribute to
the event sat at the head table with the President.\224\ In his
remarks at the event, the President appeared to make a
reference to the fact that many people may not be familiar with
the U.S. holiday, President's Day: ``It was quite a wonderful
thing for me to come here on what we in the United States now
call President's Day and have people say, `Happy New Year and
Happy President's Day,' at the same time.'' \225\ President
Clinton, explaining that it was President's Day, referred to
the fact that it fell on the Chinese New Year. President
Clinton also praised John Huang's fundraising efforts:
---------------------------------------------------------------------------
\223\ DNC Document Production DNC 1579590-600 (briefing memo for
President Clinton written by John Huang).
\224\ Sitting at the head table was: Nina Wang, Ted Sioeng, Kwai
Fai Li, Pauline Kanchanalak, and Ng Lap Seng. White House Document
Production EOP 058577-580 (Exhibit 59).
\225\ White House Communications Agency videotape of the Feb. 19,
1996 Hay Adams fundraiser, Tape 5.
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 had 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.\226\
---------------------------------------------------------------------------
\226\ Id.
---------------------------------------------------------------------------
b. May 13, 1996
Likewise, during a May 13, 1996 fundraiser arranged by
Huang and Charlie Trie, President Clinton again addressed the
large number of foreign nationals attending the event at the
Sheraton Carlton: ``I say to the Asian American community
here--and to those who come from other countries to be with us
here tonight--the United States is very grateful for the people
who have come from the Asian Pacific region, who have made our
country their home.'' \227\ Among the group of foreign
nationals was a high ranking executive at the Lippo Group, Roy
Tirtadji.\228\ Giroir had contributed $100,000 toward the event
so that he and approximately 20 others, including Tirtadji,
could attend.\229\ However, Tirtadji, and not Joe Giroir, sat
at the head table with the President.\230\
---------------------------------------------------------------------------
\227\ White House Communications Agency videotape of the May 13,
1996 Sheraton Carlton event, Tape 6 [Emphasis added].
\228\ Giroir Deposition at 154.
\229\ Id.
\230\ Also at the head table were Nina Wang, a foreign national
unable to contribute, and Mark Jimenez, who was recently indicted by
the Justice Department for among other things, conduit contributions.
DNC Document Production DNC 1604073 (seating list for the head table at
the May 13, 1996 Sheraton Carlton event).
---------------------------------------------------------------------------
Half of the guests seated with the President at this event
were foreign citizens. The President only sat at the head table
for about 15 minutes. According to one witness who sat at the
head table at this event, during the time the President sat at
the table, either no one wanted to speak, or could not speak
English. Therefore, this witness, Jitu Somaya, then struck up
small talk with the President to fill the time.\231\ In fact,
the event contained so many foreign nationals that it provoked
concern among one Democratic official who said, `` `. . . I
hope people are checking this one out. It was peculiar. There
were a lot of people who didn't speak English or spoke very,
very poor English.' '' \232\ The Committee has not found any
evidence of similar concerns at the White House. President
Clinton again singled out Huang and Charlie Trie for praise in
front of the donors they solicited. He did so for good reason.
The event was slated to raise $500,000,\233\ but documents
provided to the Committee show that $577,000 was raised from
only 23 different donors.\234\
---------------------------------------------------------------------------
\231\ Memorandum of Interview of Jitu Somaya, Apr. 21, 1998, at 2-
3.
\232\ Los Angeles Times, Dec. 21, 1997, at A1.
\233\ DNC Finance Summary for May 1996 Events, F 0046523.
\234\ In is not clear how many individuals attended this event as
the DNC never produced a full list of attendees. From a partial list,
at least 132 people attended. DNC Document Production DNC 3341365-367;
see generally Check tracking forms attributed to the May 13, 1996 event
at the Carlton Hotel.
---------------------------------------------------------------------------
c. July 22, 1996
Huang also organized a July 22, 1996 fundraising dinner
held in Century City, California. For all of his hard work,
Huang earned the praise of President Clinton in front of the
constituency Huang needed to impress the most. Although Huang
fell short of the $1 million goal, President Clinton said,
``And I'd like to thank my longtime friend, John Huang . . .
Frankly he's been so effective, I was amazed that you were all
cheering for him tonight after he's been around, his aggressive
efforts to help our cause.'' \235\
---------------------------------------------------------------------------
\235\ White House Communications Agency videotape 17, July 22,
1996. The Committee has been unable to determine the total amount
raised for this event. Based on check tracking forms supplied to the
Committee by the DNC, the amount raised was around $400,000. Another
source listed the amount raised as $700,000. Los Angeles Times, Dec.
21, 1997 at A1.
---------------------------------------------------------------------------
DNC Chairman Don Fowler revealed that President Clinton's
remarks about Huang were not meant as a recognition of Huang's
hard work, but instead, ``It was a laying of his hands on
John's head . . . The president was saying `He's my friend;
he's a good guy.' He was creating a connection. It was a way of
indirectly soliciting the guests.'' \236\
---------------------------------------------------------------------------
\236\ Id.
---------------------------------------------------------------------------
James and Aileen Riady attended the event, which was
shortly before the intimate Jefferson Hotel gathering in
Washington, DC.\237\ James Riady's company, LippoBank or the
Lippo Group, also had a table at the event.\238\ Sitting next
to the President at the head table were two foreign nationals,
James Riady and Ted Sioeng, neither of whom were legally able
to contribute to the event.\239\ Several of the Asian Americans
at the dinner commented on the attendees, noting that ``they
could not recall seeing so many people from the People's
Republic of China at such an event.'' \240\
---------------------------------------------------------------------------
\237\ DNC Document Production F 0046458-463 (List of names for Win
'96 Badges at the July 22, 1996 Century City event).
\238\ Deposition of Harold Arthur, Senate Committee on Governmental
Affairs, Apr. 25, 1997, at 26-28.
\239\ Exhibit 60; see Chapter on Ted Sieong for further discussion.
\240\ David Willman, Allan C. Miller & Glenn F. Bunting, What
Clinton Knew: How a Push for New Fund-Raising Led to Foreign Access,
Bad Money and Questionable Ties, L.A. Times, Dec. 21, 1997, at A1.
---------------------------------------------------------------------------
Apparently Huang, desperate to fill the event, asked
Jessica Elnitiarta, Sieong's daughter, to bring as many people
as she could.\241\ She made the largest contribution of the
event, $50,000, earned her father a seat next to the President
and brought 48 other friends to the event. According to DNC
fundraiser Chong Lo, a large group of Taiwanese government
officials and businessman also attended this event.\242\ This
delegation originally was scheduled to attend an event the next
day in San Francisco organized by the Lotus Fund. However,
Charlie Trie and John Huang intervened and persuaded Norman
Young, Vice Chairman of the Lotus Fund, to have the delegation
attend the event in Century City instead.\243\ This
delegation's political contribution allegedly came from Taiwan
through California National Bank in San Francisco.\244\ The
Committee has not been able to identify the Taiwanese
government officials or businessmen who attended the event.
---------------------------------------------------------------------------
\241\ Senate Committee on Governmental Affairs report at 970.
\242\ Statement of Chong Lo.
\243\ Statement of Chong Lo.
\244\ Id.
---------------------------------------------------------------------------
Generally, the fundraisers organized by Huang should have
raised concerns among the DNC hierarchy. Many of Huang's events
were attended by individuals who were not able to speak
English, or were widely known to be foreign nationals. In
particular, the President and senior levels of the DNC and
White House knew that James Riady was not a U.S. citizen and
that he did not live in the United States. Another example is
Nina Wang, who sat at the head table with the President during
at least two events, and attended several others. It is widely
known that Ms. Wang is a billionaire from Hong Kong. However,
she and other foreign nationals were able to attend fund
raising events with the President of the United States, and no
issues of impropriety were ever raised by White House
officials.
CONCLUSION
The Riady family, as foreign nationals, had unprecedented
access to President Clinton and the highest levels of his
administration. Although the family knew then-Governor Clinton
in Arkansas, there is no indication that they were the best of
friends. In fact, the bulk of the Riadys contributions came
after Clinton had won the primary in 1992, and it appeared that
he had a strong chance of winning the Presidency with enough
financial support. Significant questions remain, among others:
why the Riadys and their employees contributed so much money in
the late days of the 1992 campaign; why the Riadys helped John
Huang move to the DNC in the 1996 elections; and, what the
Riadys wanted in return.
Unfortunately, an unprecedented number of individuals have
invoked their Fifth Amendment right against self-incrimination
or fled the country in the face of questions posed by
representatives of the American public. Only pieces are left to
be patched together to form some sort of story. Investigators
must draw inferences from the information they are able to
gather, because there are few people with whom to talk.
The Committee knows that the Riadys contributed close to a
million dollars toward Clinton's election in 1992. The family
then had access to the President, his staff, and high level
department and agency officials. The Riadys concerns were
heard. Although administration policies such as MFN, sibling
preference in immigration, and access to Vietnam were changed,
questions still remain about what impact contributions may have
had on the shift.
The Committee also knows that the Riadys were active in the
1996 election. The Lippo Group's former executive John Huang
became a DNC fundraiser, with the assistance of James Riady.
Over half of the money raised by John Huang was returned by the
DNC because it was either illegal or inappropriate. Even more
of the 1996 DNC contributions are illegal, inappropriate, or
suspect. Through examining bank records, the Committee has
determined that even more money should be returned. Both Huang
and the Riadys had ties to many of the individuals involved in
the fundraising scandal. However, because the illegalities were
discovered, nobody will know what might have occurred after the
1996 elections.
[Supporting documentation follows:]
=======================================================================
CHAPTER IV, PART B
UNPRECEDENTED INFUSION OF FOREIGN MONEY INTO THE AMERICAN POLITICAL
SYSTEM:
YAH LIN ``CHARLIE'' TRIE AND HIS RELATIONSHIP WITH THE CLINTON
ADMINISTRATION
=======================================================================
YAH LIN ``CHARLIE'' TRIE AND HIS RELATIONSHIP WITH THE CLINTON
ADMINISTRATION
Introduction
Charlie Trie was one of the first major DNC fundraisers to
come under public scrutiny in the wake of the 1996 election.
Many of Trie's most notorious fundraising activities were not
made public until months after the 1996 election. The DNC has
taken the position that Trie was a rogue fundraiser with no
official ties to the Democratic party. The White House has
taken the position that Trie was an old acquaintance of the
President from Arkansas, but not a White House intimate. The
Committee has continued to investigate Trie's activities, and
the material uncovered to date demonstrates that Trie is a
central figure in the plan to funnel illegal campaign
contributions into the 1996 campaign.
The facts uncovered by the Committee indicate that Trie was
a close friend of President Clinton with wide-ranging access to
the White House, Presidential advisors, and Clinton
Administration officials. It appears that Trie used his access
to the Administration and the DNC to promote a number of
different interests, including his own and those of his Asian
business associates. In promoting these interests, Trie
received extraordinary treatment from the White House and the
Administration. Trie was allowed to bring a Chinese national,
Wang Jun, who was the head of a Chinese weapons company, to a
February 1996 coffee with the President when other major donors
were not allowed to bring guests to the coffees. Trie received
the personal attention of a Deputy Assistant Secretary of
Commerce, Jude Kearney, who introduced Trie to numerous
American business contacts. Trie also received the assistance
of the DNC in ventures ranging from the mundane, such as White
House tours, to the significant, such as hosting events for the
Secretary of Commerce. Finally, the White House itself gave
Trie an incredible helping hand. The White House placed Trie on
an expert Asian trade panel in 1996, when by all accounts, he
was completely unqualified to serve. Trie used this appointed
position to promote himself and his business interests.
However, there are still many unanswered questions
regarding Charlie Trie's relationship with the White House and
DNC that the Committee continues to investigate. Many of these
questions cannot be answered because of the persistent
stonewalling faced by the Committee. Trie's innermost circle of
friends and associates has either fled the country or invoked
their Fifth Amendment rights. Trie has taken the Fifth, been
indicted, and faces trial in February 1999. Antonio Pan, who
was indicted with Trie for violating Federal election laws, has
fled the country. Ng Lap Seng, Wang Jun, and most of Trie's
foreign benefactors have refused to cooperate with Committee
investigators. The Clinton Administration has provided no
assistance in obtaining the cooperation of foreign governments.
Trie's American associates, including many linked to the
DNC and White House, have invoked their Fifth Amendment
privileges, including former senior White House aide Mark
Middleton, John Huang, and Commerce Department employee Melinda
Yee. As described throughout this chapter, the final barrier
the Committee has faced is a consistent lack of candor and
cooperation even from those witnesses who have testified. Trie
associates such as Ernie Green, Charles Duncan, and Jude
Kearney have testified, but their testimony is plagued either
with inconsistencies with the testimony of other witnesses and
documentary evidence, or by frequent, disturbing lapses of
memory.
Finally, the Committee's investigation of Trie has been
hampered to a certain extent by the Justice Department's
ongoing prosecution of Trie. A number of documents belonging to
Trie were seized by the Justice Department, and are not
available to the Committee until after Trie's trial. In
addition, Trie's pending trial has made it impossible for the
Committee to grant immunity to a number of witnesses close to
Trie who would offer highly relevant testimony about his
fundraising activities. For example, the Committee has located
and obtained a proffer from a confidential witness offering
substantial evidence against Trie, but the Justice Department
has refused to approve the Committee's plans to grant immunity
until Trie's trial is over. Trie's trial has already been
delayed once, exacerbating the difficulties faced by the
Committee. The Committee is hopeful that after Trie's trial,
these documents and witnesses will be made available to the
Committee so that its investigation may continue.
I. Trie's Arkansas Roots
Yah Lin ``Charlie'' Trie was born on August 15, 1949, in
Fangcheng Hsien, Honan Province, China, and lived in Taiwan
with his family from January 1965 to January 1976.1
Trie emigrated to the United States in February 1976 and began
working at Charlie Chan's restaurant in Little Rock,
Arkansas.2 By 1978, Trie was a co-owner of the Fu
Lin restaurant in Little Rock, Arkansas, with his sister,
Dailin Outlaw.3
---------------------------------------------------------------------------
\1\ Declaration of the Taipei Municipal Police Headquarters, Jan.
22, 1976 (Exhibit 1). There are a number of unexplained discrepancies
regarding Trie's birth and immigration records. Trie has claimed at
least four different birthdays. In addition, there are contradictory
documents regarding Trie's birthplace and residence in Asia. Trie
claims in his biography to have been born and raised in Taiwan for 26
years. See Biography of Yah Lin Trie. However, documents prepared by
Taiwanese authorities state that Trie was born in the People's Republic
of China, and lived there for 16 years before moving to Taiwan.
\2\ INS Application to File Petition for Naturalization for Yah Lin
Trie, Aug. 4, 1983; INS Biographic Information form for Yah Lin Trie,
July 14, 1983.
\3\ INS Biographic Information form for Yah Lin Trie, July 14,
1983.
---------------------------------------------------------------------------
Charlie Trie's political activity began long before he
moved to Washington in 1994. In fact, Trie began donating to
Clinton campaigns even before he became a citizen on December
7, 1984.4 In a 2-week period beginning on September
29, 1982, Trie gave Bill Clinton's gubernatorial campaign five
separate checks totaling $1,100 and his wife, Wang Mei Trie,
gave another $100 on October 23, 1982.5 Bill
Clinton's campaign acknowledged Trie's contributions with five
thank you letters and Bill Clinton, after returning to the
governor's mansion in 1982, became a frequent guest at Trie's
restaurant.6 Clinton and Trie appear to have
developed a friendship during this period of time. In 1988, the
President appointed Trie to the Arkansas Fire Extinguisher
Board.7 Trie's daughter told friends that her father
and Governor Clinton often played basketball together in
Arkansas.8 It was during this period of time that
Trie began referring to then-Governor Clinton as ``Lao Ke,'' a
colloquial Chinese term meaning ``Big Boss.'' 9
President Clinton has also spoken publicly of their friendship.
At a May 1996 DNC fundraiser, Clinton recognized Trie and
remarked that:
---------------------------------------------------------------------------
\4\ Certificate of Naturalization for Yah Lin Trie, Dec. 7, 1984.
\5\ Donor History form for Yah Lin Trie, Clinton-Gore Document
CG92B-00527-28 (Exhibit 2); Donor History form for Wang Mei Trie,
Clinton-Gore Document CG92B-00526 (Exhibit 3).
\6\ Exhibit 2.
\7\ Jill Abramson and Marcus W. Brauchli, ``Mr. Trie Was Serving
Noodles to Clinton Before Oodles of Cash,'' the Wall Street Journal,
Dec. 18, 1996 at A1.
\8\ Interview of Susan Lee, Summer 1997.
\9\ Translation by Herman Liang. See Lena H. Sun and Dan Morgan,
``Asian Firm's First U.S. Ties Included DNC; Contribution Followed 10
Days in Arkansas,'' the Washington Post, Dec. 1, 1996 at A1.
Soon 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.10
---------------------------------------------------------------------------
\10\ White House Communications Agency videotape No. 6, May 13,
1996. Of course, Trie still could not afford the ticket to the May 13
fundraiser, or any other DNC event that he attended without the
assistance of foreign nationals.
A short time later, at a California fundraiser, President
Clinton told Trie's sister, ``[y]our brother has been my close
friend for two decades.'' 11
---------------------------------------------------------------------------
\11\ Deposition of Manlin Foung, House Committee on Government
Reform and Oversight, Sept. 29, 1997 (``Foung Deposition''), at 55.
---------------------------------------------------------------------------
The Committee has also learned that Trie's ties with a
number of his associates in the fundraising scandal predate
Trie's arrival in Washington in 1994. Many of these
relationships go back to Arkansas in the mid-1980s. For
example, it was at the Fu Lin restaurant in 1983 that Trie met
Antonio Pan, then an employee of a company called United
Pacific Trading Inc.12 Trie's fundraising activities
with Pan in 1995 and 1996 led to the indictment of both. Early
in the 1980s, James Riady of the Lippo Group sent one of his
executives, Peter Chen, and Chen's assistant Pan to Little Rock
to run United Pacific, a Lippo subsidiary.13 Pan
worked in Little Rock for 2 years before he was forced to leave
the United States in 1985 because he was unable to obtain a
work permit.14 Trie would renew his relationship
with Chen and Pan in 1995, when both would begin working with
him.15
---------------------------------------------------------------------------
\12\ Interview of Rush Deacon, June 22, 1998, at 2.
\13\ Id.
\14\ Id.
\15\ Business card for Antonio Pan, chief executive officer,
Daihatsu International Trading, Inc. (Exhibit 4).
---------------------------------------------------------------------------
While running his small restaurant in Little Rock, Trie
also struck up a relationship with James Riady of the Lippo
Group. Riady and his family were leaders in Little Rock's small
Asian community, and Trie had met them in this
context.16 Trie also received a $60,000 loan from
Riady in 1985 which allowed him to expand his restaurant
operations.17 Trie would proudly mention his
connections with Riady in 1996, after meeting with him in
Jakarta.18
---------------------------------------------------------------------------
\16\ Andrea Harter, ``Trie Tried to Make LR Click for Him,''
Arkansas Democrat-Gazette, Sept. 28, 1997 at 1A.
\17\ U.S. Small Business Administration Portfolio Financing Report,
May 31, 1985 (Exhibit 5).
\18\ Interview of Clyde Prestowitz, Feb. 18, 1998 (``Prestowitz
Interview''), at 3.
---------------------------------------------------------------------------
In November 1991, Trie sold his restaurant and began a new
career path by starting Daihatsu International Trading Corp.,
an import-export business.19 Trie was hoping to use
his contacts in Asia to strike trade deals between Chinese and
U.S. businesses on a wide variety of commodities. Trie
attempted to put together deals ranging from chickens to
wrenches to cigarette filters. Almost all of these deals ended
in failure.20 For his efforts, though, Trie received
a letter from President-elect Bill Clinton shortly after the
1992 election, congratulating him on establishing Daihatsu
International and thanking him for expanding trade and
understanding between the United States and China:
---------------------------------------------------------------------------
\19\ Daihatsu International Certificate of Incorporation, Nov. 14,
1991, IGI Document HS012411.
\20\ Interview of Jody Webb, Aug. 29, 1998 (``Webb Interview''), at
7.
I am pleased to hear that you are establishing a branch
of your company, Daihatsu International, in the
People's Republic of China. . . . I wish you success in
your new venture, and I appreciate your efforts for our
state. Please let me know about your
progress.21
---------------------------------------------------------------------------
\21\ Letter from Bill Clinton to Charlie Trie, Nov. 10, 1992
(Exhibit 6).
As part of his import-export business, Trie began making
frequent trips to China. During one such trip in September
1992, Trie traveled to Changchun City, China, with several
Arkansas businessmen and the Arkansas State Auditor, Julia
Hughes Jones.22 Through Trie's efforts, this
business trip evolved into a formal sister city relationship
between Little Rock and Changchun City in May
1995.23 Trie apparently attempted to capitalize on
his friendship with Bill Clinton even before he became a major
donor to the DNC. Before his fundraising improprieties were
exposed, Trie told an Arkansas newspaper: ``[i]n China, people
want to know you before they do business with you.''
24 The reporter then observed that ``Chinese also
like to see some proof that you are known and trusted by
prominent people. Trie's letter of best wishes from President-
Elect Bill Clinton, for example, has helped.'' 25
---------------------------------------------------------------------------
\22\ Interview of Julia Hughes Jones, Senate Committee on
Governmental Affairs, June 19, 1997, at 2-3.
\23\ Id.
\24\ Doug Thompson, Expatriate Opening Trade Route to China,
Arkansas Democrat-Gazette, Aug. 14, 1994 at 1G.
\25\ Id.
---------------------------------------------------------------------------
At the same time as he was traveling to China, Trie also
brought at least eight delegations of Chinese government
officials and businessmen to the United States.26
For one such delegation in April 1993, Trie enlisted the help
of Julia Hughes Jones, to arrange a picture between a PRC
governor and President Clinton.27 In his response to
the request, Anthony Lake stated:
---------------------------------------------------------------------------
\26\ Webb Interview at 4-5.
\27\ Memorandum from Anthony Lake to Thomas F. McLarty, Apr. 13,
1993 (Exhibit 7).
The delegation is led by a governor; immediately after
his visit another delegation, led by a PRC Vice
Minister, arrives in Washington. If we arrange for the
governor to meet with the President, we will also need
to arrange a similar meeting for the Vice Minister, who
outranks him. Foreign provincial officials do not
normally meet with heads of state.28
---------------------------------------------------------------------------
\28\ Id.
Despite the barriers to Trie's request identified in Lake's
memo, Trie apparently got his way because he entered the White
House on April 16, 1993 for what was described as a ``photo
op.'' 29
---------------------------------------------------------------------------
\29\ Summary of Charlie Trie's Visits to the White House, White
House Counsel's Office.
---------------------------------------------------------------------------
Trie's efforts did not go unnoticed in Asia. By early 1994,
Ng Lap Seng, a wealthy Macau businessman, became Trie's partner
in his latest venture, an attempt to purchase the dilapidated
Camelot Hotel in Little Rock. Trie and Ng entered the United
States in March 1994 to discuss the hotel proposal and inspect
the building. Ng brought $80,000 in cash with him on his trip
to the United States.30 Witnesses later saw Ng give
Trie thousands of dollars in cash.31 These seem to
be the earliest examples of the receipt by Trie of large
amounts of money from Ng Lap Seng. In the coming years, Trie
was to receive over $1 million from Ng, over $130,000 of which
he would funnel into the DNC.
---------------------------------------------------------------------------
\30\ Currency Transaction Report for Ng Lap Seng, Mar. 23, 1994
(Exhibit 8).
\31\ The amount of cash Ng gave to Trie is in dispute. It ranges
from $5,000 to $20,000. See Deposition of Lorin Fleming, Senate
Committee on Governmental Affairs, July 11, 1997, at 37; Deposition of
Dwight Linkous, Senate Committee on Governmental Affairs, July 10,
1997, at 33-38.
---------------------------------------------------------------------------
Ng has not cooperated with any of the campaign finance
investigations. Nevertheless, the Committee has been able to
learn a number of critical facts regarding Ng. Ng came to Macau
from Guangzhou in China in 1979 ``flat broke,'' and worked in
the Macau garment business.32 However, soon Ng had
experienced a remarkable metamorphosis, and by the 1990s, was a
wealthy Macau landowner. How Ng's transformation was
accomplished is currently unknown. However, there are a number
of facts about Ng that are known, and reveal a great deal about
his roots and loyalties. Ng owns a casino/hotel complex in
Macau that is reportedly frequented by Macau
gangs.33 Ng denies that he has any connections with
organized crime.34 However, it is Ng's political
ties that are of the greatest interest. Ng is a member of the
Chinese People's Political Consultative Congress, a communist
organization in the People's Republic of China.35
The Committee has also interviewed a witness who for several
years worked closely with Ng in Hong Kong and
Macau.36 That witness informed the Committee that Ng
was a peasant farmer before coming to Macau, but somehow had
been selected to act as a front for municipal and provincial
authorities in the People's Republic of China.37 The
witness also informed the Committee that Ng is poorly educated,
and still does not understand many aspects of his business,
frequently erupting in anger at business meetings.38
For his part, Ng has made few comments regarding the campaign
finance scandal. In one of his rare media interviews, he made
the following comments:
---------------------------------------------------------------------------
\32\ Niles Lathem, ``Chinese Checkered Past of Trie Funder,'' New
York Post, Mar. 1, 1998, at 2.
\33\ Id.
\34\ Niall Fraser, ``I'm Caught in Crossfire on Clinton, Says
Tycoon,'' South China Morning Post, Oct. 19, 1997, at 3.
\35\ Lena H. Sun and John Pomfret, ``China Adviser's Gift to DNC
Under Review, After Audit, Party Will Return More Donations''
Washington Post, Feb. 25, 1997, at A1.
\36\ The witness, George Johnson, worked at the Consolidated Trust
Co. in Hong Kong, where he interacted frequently with Charlie Trie and
Trie associates William Peh and Ng Lap Seng.
\37\ Interview of George Johnson, Feb. 13, 1998 (``Johnson
Interview''), at 2.
\38\ Id.
I am very upset, especially about this allegation that
I am linked to organised [sic] crime. It is absolutely
untrue and has no basis in fact. I don't like to talk a
lot because when you find yourself caught up in
something like this, it is very difficult to talk your
way out. This is political. There is a purpose to all
this and the target is President Clinton.39
---------------------------------------------------------------------------
\39\ Niall Fraser, ``I'm Caught in Crossfire on Clinton, Says
Tycoon,'' South China Morning Post, Oct. 19, 1997, at 3.
While Ng has made these statements in the press defending
himself and President Clinton, he has never cooperated with
Committee investigators.
Ng and Trie ultimately lost the bid on the Camelot Hotel.
However, during the bidding process, Trie and Ng made many
valuable contacts. One prominent lawyer who assisted Trie and
Ng was C. Joseph Giroir.40 Giroir was a close friend
of Clinton and a major DNC fundraiser. At one point during the
bidding process, a local official questioned the source of the
money offered by Trie and Ng Lap Seng, suggesting that Ng had
criminal ties in Asia.41 Giroir responded angrily,
calling the questions ``inappropriate and offensive.''
42 But, with the failure of the Camelot Hotel
project, Trie again changed his business focus, and decided to
open an office in Washington, DC.43
---------------------------------------------------------------------------
\40\ Letter from C.J. Giroir, Jr. to Board of Directors, City of
Little Rock, May 20, 1994 (Exhibit 9).
\41\ Interview of Lorin Fleming, Senate Committee on Governmental
Affairs, Aug. 12, 1997 at 3.
\42\ Exhibit 9.
\43\ Interview of Jody Webb, Senate Committee on Governmental
Affairs, June 20, 1997 at 3.
---------------------------------------------------------------------------
II. Trie Comes to Washington
Shortly after his failed attempt to purchase the Camelot
Hotel, Trie moved to Washington, DC, to open a branch of
Daihatsu. Trie's move to Washington in the summer of 1994
coincided with his first major contributions to the DNC, and
the expansion of his ties to the White House. Trie's
contributions allowed him to go from an obscure owner of a
Chinese restaurant to a frequent guest at DNC galas and visitor
at the White House. In June 1994 alone, Trie visited the White
House four times.44
---------------------------------------------------------------------------
\44\ Worker and Visitor Entry System [WAVES] Records of Yah Lin
Trie.
---------------------------------------------------------------------------
In this period of time, Trie would also make his first
contributions to the DNC. Over the course of the next 2\1/2\
years, these contributions would total over $229,000. A summary
of contributions made by Trie, his family, and his companies
follows:
----------------------------------------------------------------------------------------------------------------
Date Donor Amount Recipient
----------------------------------------------------------------------------------------------------------------
May 14, 1994............................. Yah Lin Trie................ $20,000 DNC.
May 14, 1994............................. Yah Lin Trie................ 60,000 DNC.
May 25, 1994............................. Wang Mei Trie............... 20,000 DNC.
June 21, 1994............................ Daihatsu International...... 7,500 DNC.
August 1, 1994........................... Yah Lin Trie................ 20,000 DNC.
October 20, 1994......................... San Kin Yip International... 15,000 DNC.
April 7, 1995............................ Yah Lin Trie................ 500 Daschle Campaign.
April 26, 1996........................... Yah Lin Trie................ 1,000 Stodola Campaign.
June 22, 1995............................ Daihatsu International...... 50,000 DNC.
June 26, 1995............................ E-Fong Do Trie.............. 2,000 Daschle Campaign.
June 26, 1995............................ Wang Mei Trie............... 1,000 Clinton/Gore '96.
February 29, 1996........................ Daihatsu International...... 12,500 DNC.
March 21, 1996........................... Yah Lin Trie................ 1,000 Matsui Campaign.
May 6, 1996.............................. Yah Lin Trie................ 1,000 Mark Warner Campaign.
May 12, 1996............................. Yah Lin Trie................ 10,000 DNC.
July 31, 1996............................ America-Asia Trade Center... 3,000 DNC.
August 26, 1996.......................... Yah Lin Trie................ 560 Fund for Democratic
Leadership.
August 28, 1996.......................... Yah Lin Trie................ 1,000 Coopersmith Campaign.
September 28, 1996....................... Yah Lin Trie................ 2,000 DNC.
October 2, 1996.......................... Yah Lin Trie................ 1,000 Fund for Democratic
Leadership.
----------------------------------------------------------------------------------------------------------------
A. Trie's First DNC Contributions
1. The June 22, 1994, Presidential Gala
Charlie Trie was first solicited to contribute to the DNC
in connection with the June 22, 1994 Presidential Gala in
Washington, DC. Trie was solicited to give $100,000 to the DNC,
even though he had never made any significant political
contributions previously. No one at the DNC demonstrated any
concern about taking $100,000 from an obscure Arkansas
restaurateur with little apparent wealth. Trie was rewarded
with an immediate entree into the world of Washington insiders
and Presidential intimates, and the DNC was rewarded with
badly-needed campaign cash.
Trie was solicited to make his first contributions to the
DNC by Richard Mays, a close friend of the President from
Arkansas. Mays had been appointed to the Arkansas bench by
Governor Clinton, and was also a longtime major DNC donor and
fundraiser. Mays claims that he knew Trie from patronizing his
restaurant in Little Rock.45 Mays claimed not to
recall the exact circumstances of his solicitation of Trie, but
did state that he ``had the distinct impression that [Trie] was
in a position to contribute, and wanted to make a
contribution.'' 46 Mays says he based his conclusion
that Trie was in a ``position to contribute'' to the DNC on the
fact that Trie was traveling between Little Rock and
Washington, DC:
---------------------------------------------------------------------------
\45\ Deposition of Richard L. Mays, House Committee on Government
Reform and Oversight, Nov. 5, 1997 (``Mays Deposition''), at 30.
\46\ Id. at 37.
Question. When you say ``in a position to contribute,'' do
you mean he had sufficient money to contribute?
Mays. I felt he did.
Question. And how did you get that impression?
Mays. I don't know how I got that impression, but
frequently, he seemed like he was traveling extensively, you
know, I knew he owned that Chinese restaurant down there, and
he apparently had engaged in some business, other business
interests. I really didn't have a specific judgment that, in
fact, he could, but I certainly thought it was worth talking to
him about it.
* * * * * * *
Question. Would you ever see him anywhere other than D.C.
or Little Rock?
Mays. I don't recall that I have. I mean, I am not saying I
haven't, but I don't recall.47
---------------------------------------------------------------------------
\47\ Id. at 38-39.
Mays asked Trie what he could contribute, and Trie told him
$100,000.48 Mays claims that he was not surprised by
Trie's offer of $100,000, even though this was the largest
contribution he had ever solicited.49 Trie's
$100,000 contribution was used for the DNC's Health Care
Campaign, which was a public campaign to promote the
President's health care legislative proposal.50
---------------------------------------------------------------------------
\48\ Id. at 39.
\49\ Id. at 41.
\50\ Memorandum from David Mercer to John O'Hanlon, June 18, 1994,
DNC Document F0045848. The DNC's Health Care Campaign was directed in
large part by Harold Ickes.
---------------------------------------------------------------------------
At this point, Mays claimed he still had no concern that a
political novice with little apparent wealth had pledged
$100,000 to the DNC. Rather than conducting any background
research of Trie, or looking into the source of Trie's funds,
he introduced Trie to Terry McAuliffe, then the Finance
Chairman of the DNC.51 Mays set up a breakfast
meeting between McAuliffe and Trie. At this meeting, Trie
confirmed that he would make a $100,000 contribution to the
DNC, and asked only that he be prominently seated at the June
22 gala.52 When asked if he ever had a concern about
the source of Trie's contributions, Mays responded ``[w]hy
would I have some concern?'' 53
---------------------------------------------------------------------------
\51\ Mays Deposition at 42.
\52\ Id. at 44.
\53\ Id. at 45.
---------------------------------------------------------------------------
However, Richard Mays was not the only person who accepted
Charlie Trie's $100,000 contribution without asking any
questions. To his recollection, no one at the DNC ever
expressed any concern about Trie's $100,000
contribution.54 David Mercer, the deputy finance
director at the DNC, stated that:
---------------------------------------------------------------------------
\54\ Id. at 45.
I had no concerns. Whether it was in a situation that
here is a guy who wrote a $100,000 check, Arkansas
ties, and part of the family, if you will, . . . it's
not for me to have those concerns unless something was
presented to me by Charlie, which nothing was. . .
.55
---------------------------------------------------------------------------
\55\ Deposition of David L. Mercer, House Committee on Government
Reform and Oversight, Aug. 21, 1997 (``Mercer Deposition I''), at 125.
At this time, Terry McAuliffe claims that the DNC had an
---------------------------------------------------------------------------
extensive system in place to check contributions to the DNC:
So we generally knew most of the people, and we had a
very good process, and I would like to state for the
record in 1994, we haven't had any problems with
checks. . . . I know Laura [Hartigan] checked everybody
who sat at a head table.56
---------------------------------------------------------------------------
\56\ Deposition of Terence McAuliffe, Senate Committee on
Governmental Affairs, June 6, 1997 (``McAuliffe Deposition''), at 82.
Of course, there have been problems with contributions made to
the DNC in 1994, despite McAuliffe's pride in the DNC's vetting
system. If Charlie Trie's initial contributions were vetted,
the system still allowed an obscure individual with no personal
wealth to give $100,000 to the Democratic party.
a. Trie's $100,000 Contribution Came from Ng Lap Seng
Trie's $100,000 was given to the DNC in three installments:
first, a check for $20,000 dated May 14, 1994; 57
second, a check for $60,000 dated May 14, 1994; 58
and third, a check for $20,000 dated May 25, 1994.59
These contributions were drawn on the First Commercial Bank
account held by Charlie and Wang Mei Trie. The contributions
were made from $100,000 in funds wired directly from Lucky Port
Investments, a Hong Kong corporation with no U.S.
operations.60 In addition, Trie gave $7,500 through
his company, Daihatsu International Trading Corporation, for
this event.61 Although Richard Mays is listed as the
solicitor of this contribution, he failed to recall why he
solicited it, or even if he solicited it at all.62
Nevertheless, the $7,500 contributed by Daihatsu was similarly
derived from foreign sources. Just as Charlie and Wang Mei
Trie's personal account at First Commercial Bank received a
$100,000 wire transfer from Lucky Port shortly before the
contribution, the Daihatsu bank account at First Commercial
similarly received a wire transfer of $100,000 from Ng Lap
Seng's account at the Bank of China in Macau shortly before the
$7,500 contribution was made.63
---------------------------------------------------------------------------
\57\ DNC Check Tracking Form for Contribution of Yah Lin Trie, May
14, 1994, DNC Document DNC 3053401 (Exhibit 10).
\58\ DNC Check Tracking Form for Contribution of Yah Lin Trie, May
14, 1994, DNC Document DNC 3053400 (Exhibit 11).
\59\ DNC Check Tracking Form for Contribution of Yah Lin Trie, May
25, 1994, DNC Document DNC 1075637 (Exhibit 12).
\60\ First Commercial Bank, N.A. Wire Transfer of $99,985.00 from
Lucky Port Investments Ltd. to Yah Lin Trie or Wang Mei Trie; First
Commercial Bank, N.A. Statement for Yah Lin Trie and Wang Mei Trie, May
1994 (Exhibit 13); see also Report, Senate Committee on Governmental
Affairs, Investigation of Illegal or Improper Activities in Connection
with 1996 Federal Election Campaigns, at 2526.
\61\ DNC Check Tracking Form for Contribution of Yah Lin Trie, June
21, 1994, DNC Document F0048749 (Exhibit 14).
\62\ Mays Deposition at 61-62.
\63\ First Commercial Bank, N.A. Wire Transfer of $99,985 from Ng
Lap Seng to Daihatsu International Trading; First Commercial Bank, N.A.
Statement for Daihatsu International Trading Corp., May 1994.
---------------------------------------------------------------------------
b. Ng Lap Seng's Cash
Two days before the gala, Ng Lap Seng and his wife entered
the United States. Ng brought $175,000 in cash with him for his
short stay in the United States.64 It is unclear
what Ng did with this cash during his stay. Two days later, on
June 22, Ng and Trie entered the White House for a meeting with
Mark Middleton.65 The three later had lunch at the
White House mess.66 It is currently unknown what was
discussed at this meeting since Trie and Middleton have invoked
their Fifth Amendment rights, and Ng has not cooperated with
investigators.
---------------------------------------------------------------------------
\64\ Currency Transaction Report for Ng Lap Seng, June 20, 1994
(Exhibit 15).
\65\ WAVES records for Yah Lin Trie and Ng Lap Seng, June 22, 1994.
\66\ DNC Reimbursement of White House Mess Bill, DNC Document DNC
0328622 (Exhibit 16).
---------------------------------------------------------------------------
c. Benefits Received by Trie
Trie received a number of benefits for making his large
contributions to the DNC. First, he was permitted to bring two
tables of guests to the June 22 gala. Among his invitees were:
Ng Lap Seng, the source of much of his money; Pun Nun Ho, the
wife of Ng; Jude Kearney, a Deputy Assistant Secretary at the
Department of Commerce; and Anita Middleton, the mother of Trie
associate Mark Middleton.67 Trie and his wife were
seated at the head table with the President, Vernon Jordan, and
DNC Chairman David Wilhelm.68 To be seated at the
head table, according to David Mercer, Trie had to be approved
by both the DNC and the White House.69 According to
Dan Dutko, a DNC donor and fundraiser also seated at the head
table, the Tries were ``embarrassingly silent'' throughout the
dinner, and did not seem to know anyone at the
table.70 However, both Trie and Ng did have their
photographs taken with the President and First Lady at this
event.71
---------------------------------------------------------------------------
\67\ Facsimile from Charlie Trie/Jody Webb to David Mercer, June
21, 1994, DNC Document F0045837 (Exhibit 17).
\68\ Photograph of head table, June 22, 1994 (Exhibit 18).
\69\ Mercer Deposition I at 112.
\70\ Interview of Dan Dutko, Aug. 19, 1998.
\71\ Photograph of Yah Lin Trie with President Clinton and Hillary
Clinton, June 22, 1994 (Exhibit 19); photograph of Ng Lap Seng with
President Clinton and Hillary Clinton, June 22, 1994 (Exhibit 20).
---------------------------------------------------------------------------
How Charlie Trie went from an obscure Arkansas restaurateur
to a major DNC donor and fundraiser raises a number of
questions. How was it possible for him to donate over $100,000
without raising the slightest suspicion at the DNC at a time
when the DNC claims it was still vetting contributions?
72 Trie was someone the President knew well. Did the
President have any idea how Trie came into such great wealth?
The Committee will not know all of the answers until someone in
Charlie Trie's inner circle stops taking the Fifth and starts
cooperating with the investigation. However, there certainly
were warning signs regarding Trie. It is clear that whatever
signs were present, they were disregarded by DNC fundraisers
eager to bring in campaign funds. What is more remarkable is
that warning signs regarding Trie continued to multiply. Still,
the DNC continued to demand money from Trie, and the White
House continued to make Trie its honored guest.
---------------------------------------------------------------------------
\72\ McAuliffe Deposition at 80-82. It was not until after the 1996
election that the DNC admitted that their vetting of major contributors
ended in May 1994. Deposition of Jeffrey King, Senate Committee on
Governmental Affairs, June 26, 1997, at 24, 30.
---------------------------------------------------------------------------
2. The August 2, 1994 Presidential Birthday Event
The next major DNC event attended by Trie after the June 22
gala was the August 2, 1994, Presidential Birthday fundraiser
in Prince George's County, Maryland. Trie contributed an
additional $20,000 to attend this event.73 The source of
this $20,000 was a wire transfer of $100,000 from Ng Lap Seng's Bank of
China bank account in Macau.74 Ng Lap Seng came to the
United States to attend this event. On July 31, Ng entered the United
States, bringing with him $42,000 in cash.75 On August 1,
1994, Ng and Trie entered the White House to meet and have lunch with
Mark Middleton.76 The following day, on August 2, Trie and
Ng went to the Presidential Birthday fundraiser. Although Ng did not
officially contribute any money to the event, and was in fact not
legally eligible to contribute, he is listed as an ``Event Benefactor''
in the event program.77 According to internal DNC documents,
``Event Benefactors'' were required to either contribute $10,000 or
raise $25,000 for the event.78
---------------------------------------------------------------------------
\73\ DNC Check Tracking Form for Contribution of Yah Lin Trie, Aug.
1, 1994, DNC Document F0048754 (Exhibit 21).
\74\ See Wire Transfer of $100,000 from Bank of China Macau to
First Commercial Bank (Exhibit 22). See also Report, Senate Committee
on Governmental Affairs, Investigation of Illegal or Improper
Activities in Connection with 1996 Federal Election Campaigns, at 2527.
\75\ Currency Transaction Report for Ng Lap Seng, July 31, 1994
(Exhibit 23).
\76\ WAVES records for Charlie Trie and Ng Lap Seng, Aug. 1, 1994.
\77\ 1994 Presidential Birthday Celebration program, Aug. 2, 1994,
DNC Document DNC 3390023 (Exhibit 24).
\78\ President Clinton's Birthday Celebration Event Committee
Requirements and Benefits, Ernest Green Document 000640 (Exhibit 25).
---------------------------------------------------------------------------
It is unknown why Ng was listed as an ``Event Benefactor''
when he was ineligible to contribute, and according to FEC
records, never directly contributed funds to the DNC or raised
funds for the DNC. While it is clear that Ng was the source of
many of Trie's DNC contributions, the DNC has claimed that it
was not aware of this fact. Nevertheless, the fact that Ng was
recognized as an ``Event Benefactor'' on a DNC program does
raise serious questions as to whether the DNC was aware of Ng's
role as the source of Trie's generous contributions to the DNC.
Trie's contributions to the June and August events brought
him far more than a seat at the President's table and 2 nights
of contact with Democratic party donors. Shortly after the
August 2 event, Trie made at least five requests of the DNC:
(1) assistance in obtaining references for the
apartment at the Watergate that he was trying to
obtain;
(2) a videotape of the Presidential Gala;
(3) an invitation to sit on the DNC Finance Board of
Directors;
(4) participation in the Department of Commerce trade
mission to China;
(5) some kind of assistance regarding the Nam Van Lakes
real estate project in Macau.79
---------------------------------------------------------------------------
\79\ Memorandum from David L. Mercer to Martha Shoffner, Aug. 22,
1994, DNC Document DNC 1275756 (Exhibit 26).
---------------------------------------------------------------------------
David Mercer, who was tasked with maintenance of high-
dollar donors, quickly went to work on these tasks. First, he
prepared a letter of recommendation to the Watergate for Trie,
and had Susan Lavine of the DNC and Richard Mays prepare
similar letters as well.80 Mercer also spoke with
Terry McAuliffe, DNC Finance Chairman, and had the invitation
onto the Finance Board of Directors approved.81
Trie's invitation onto the Finance Board of Directors required
him to raise or write a total of $250,000 in contributions to
the DNC over the coming year.82 Mercer also
contacted Kathy Hoffman at the Department of Commerce, to see
if Trie could participate in any of the Department of Commerce
activities during the August-September 1994 trade mission to
China.83 While Trie was not an official participant
on the trade mission, Mercer does not recall whether he was
ultimately successful in having Trie invited to trade mission
activities in China.84 Finally, Mercer gathered
information regarding a private business project that Trie and
Ng Lap Seng were pursuing in Macau, the Nam Van Lakes real
estate project, as a preliminary step to helping Trie find
investors for the project.85 These actions by David
Mercer were only the first of many to assist Charlie Trie with
his political and private business dealings.
---------------------------------------------------------------------------
\80\ Letter from David L. Mercer to Board of Directors, Watergate
South, Aug. 18, 1994, DNC Document DNC 0045405 (Exhibit 27); Letter
from Richard Mays to Board of Directors, Watergate South, Aug. 24,
1994, Watergate South Document 006168 (Exhibit 28); Letter from Susan
E. Lavine to Board of Directors, Watergate South, Aug. 18, 1994,
Watergate South Document 006165 (Exhibit 29).
\81\ Mercer Deposition I at 125.
\82\ Id. at 122.
\83\ Id. at 126.
\84\ Id. at 130. See Doug Thompson, ``Expatriate Opening Trade
Route to China,'' Arkansas Democrat-Gazette, Aug. 14, 1994, at 1G. In
this news interview, Trie mentions that he plans to host a dinner in
China for Secretary Brown. Moreover, Trie's American Express records
indicate that he was in China in late Aug. 1994.
\85\ Mercer Deposition I at 133.
---------------------------------------------------------------------------
3. San Kin Yip's $15,000 Contribution in October 20, 1994
On October 19, 1994, Ng Lap Seng entered the country on his
way from Macau to Washington, DC. Ng brought with him $25,000
in cash.86 On October 20, Trie and Ng entered the
White House for a 1:15 p.m. meeting with Mark
Middleton.87 The same day, Trie and Ng attended a
fundraising dinner hosted by Vice President Gore.88
In connection with this event, the DNC received a check for
$15,000 drafted on the account of San Kin Yip International
Trading Co.89 San Kin Yip was an American trading
company that shared a name with a Macau company owned by Ng.
San Kin Yip had only been incorporated 9 days earlier, and all
of the funds used to make the contribution came from Ng Lap
Seng's overseas bank account.90 However, to the
extent that the DNC and Charlie Trie have discussed this
contribution publicly, they have attempted to make it appear
that Trie made the contribution, and that the DNC accepted it
from Trie without knowing the source of the money used to make
the contribution. Before he fled the country in 1997, Trie told
the Washington Post ``[i]n this case, I think somebody made a
mistake.'' 91 Certain documents support this claim.
For example, the DNC check tracking form was filled out by
Richard Sullivan, and on that form, Sullivan listed himself as
the solicitor of the contribution.92 Sullivan also
wrote that the contact for the San Kin Yip contribution was
Charlie Trie.93 In addition, after the San Kin Yip
contribution was made, David Wilhelm wrote a letter to Trie,
thanking him for the San Kin Yip contribution and participation
in the DNC's Business Leadership Forum (``BLF'').94
---------------------------------------------------------------------------
\86\ Currency Transaction Report for Ng Lap Seng, Oct. 19, 1994
(Exhibit 30).
\87\ WAVES records for Yah Lin Trie and Ng Lap Seng, Oct. 20, 1994.
\88\ Guest list for Business Leadership Forum Dinner with Vice
President Gore, Oct. 20, 1994, DNC Document DNC 1619277-82.
\89\ DNC Check Tracking Form for Contribution of San Kin Yip
International Trading Corp., Oct. 20, 1994, DNC Document DNC 1552787
(Exhibit 31).
\90\ Investigative Group International Document, HS 012504.
\91\ Lena H. Sun, ``DNC Donor Admits `Mistake' ''; Fundraiser's Own
Company Contributed Foreign-Generated Money, Washington Post, Dec. 7,
1996 at A11.
\92\ Exhibit 31. It should be noted that in his deposition before
the Senate Committee on Governmental Affairs, Sullivan denied that he
ever solicited contributions from Charlie Trie. Deposition of Richard
Sullivan, Senate Committee on Governmental Affairs, June 4, 1997
(``Sullivan Senate Deposition''), at 103. This DNC check tracking form
contradicts Sullivan's sworn statement before the Senate.
\93\ Exhibit 31.
\94\ Letter from David Wilhelm to Charlie Trie, Oct. 25, 1994, DNC
Document F 0010778.
---------------------------------------------------------------------------
However, the Committee has located evidence which suggests
that the facts regarding the San Kin Yip contribution may not
be what Trie and the DNC have claimed them to be. First, the
signature on the San Kin Yip check is that of Ng Lap Seng, not
Charlie Trie.95 Second, DNC records indicate that
the DNC knew that the check came from Ng Lap Seng, not Charlie
Trie. A contribution list for the October 20 event credits Ng
with this contribution.96 Finally, DNC documents
show that Trie was already a member of the BLF before the
October 20 event. Therefore, Wilhelm's October 25, 1994 letter
to Trie was unnecessary, and was either mistaken, or was made
with the purpose to distract from the fact that the $15,000
contribution was from Ng Lap Seng, not Charlie Trie. The
Committee has not received any explanation for why certain DNC
records state that the October 20 contribution came from Trie,
and other records state that it came from Ng. However, the
facts show that in fact, the money used to make this
contribution came from Ng, and that the check itself was signed
by Ng. If, as documents suggest, DNC officials were aware that
this contribution came from Ng Lap Seng, it raises important
questions about what knowledge DNC officials had regarding
foreign sources of funds.
---------------------------------------------------------------------------
\95\ While the signature is in Chinese, it is the same as another
signature identified as that of Ng Lap Seng. Compare Letter from Ng Lap
Seng to Mayor Richard Riordan, Sept. 28, 1994, Maria Mapili Document
009104 (Exhibit 32) with Exhibit 31 (showing identical signature is
that of Ng Lap Seng).
\96\ Contributions for Gore Dinner, Oct. 20, 1994, DNC Document DNC
1619290 (Exhibit 33).
---------------------------------------------------------------------------
B. Trie's Expanding Contacts with White House Intimates
As a result of his contributions to the DNC, Trie had
expanded opportunities for contact with high-level officials in
the Administration. Beginning with his contributions to the
DNC, Trie was a frequent guest of Special Assistant to the
President Mark Middleton at the White House, and he met
frequently with Commerce Deputy Assistant Secretary Jude
Kearney and Presidential friend Ernie Green. Trie was able to
use these contacts to advance his private business interests.
In return, Trie was called upon to expand his relationship with
the DNC.
1. Mark Middleton
It is currently unknown how Charlie Trie met Mark
Middleton. However, the two had extensive contact both during
Middleton's tenure in the White House, and after Middleton
moved to the private sector in February 1995. While Middleton
was at the White House, Trie visited him 13 times, beginning in
May 1994.97 In addition, Trie brought his benefactor
Ng Lap Seng with him to a number of these meetings. Ng visited
Middleton at the White House six times before Middleton's
departure.98 Since both Trie and Middleton have
invoked their Fifth Amendment rights, and Ng has refused to
cooperate, we do not know what was discussed at these meetings.
---------------------------------------------------------------------------
\97\ WAVES records of Yah Lin Trie.
\98\ WAVES records of Ng Lap Seng.
---------------------------------------------------------------------------
Currency Transaction Reports show that Ng imported large
amounts of cash into the United States shortly before each of
his meetings with Trie and Middleton. As described earlier, Ng
brought over $200,000 into the United States prior to his
meetings with Middleton on June 22, 1994 and August 1, 1994.
However, Ng also brought $12,000 into the country 1 day before
a February 16, 1995 meeting with Trie and Middleton in the
White House.99 Ng continued his importation of cash
in 1996, and brought $19,000 into the country on February 18,
1996, 1 day before Ng visited the White House, and attended a
major DNC fundraiser in Washington, DC.100 Finally,
Ng's last major importation of cash into the United States
occurred on August 17, 1996, when he brought $70,000 into the
United States, 1 day before he attended the President's
Birthday fundraiser in New York City.101
---------------------------------------------------------------------------
\99\ Currency Transaction Report for Ng Lap Seng, Feb. 15, 1995
(Exhibit 34).
\100\ Currency Transaction Report for Ng Lap Seng, Feb. 18, 1996
(Exhibit 35).
\101\ Currency Transaction Report for Ng Lap Seng, Aug. 17, 1996
(Exhibit 36).
---------------------------------------------------------------------------
Middleton and Trie continued to share a close relationship
after Middleton left the White House in February 1995. After a
brief stint with International Realty Investors, Middleton
opened an international consulting firm called Commerce Corp.
International. Trie was a frequent visitor at Middleton's
offices, and an occasional traveler with Middleton to Asia. As
described below, Middleton and Trie worked together on a number
of business projects, and had financial links with one another.
2. Jude Kearney
Trie met Jude Kearney, the Deputy Assistant Secretary for
Service Industries and Finance at the Commerce Department, in
China in 1993. While Kearney has testified before the
Committee, his recollection on all subjects relating to Trie
was extremely poor. Kearney suggests that Trie merely called
him and introduced himself as an American businessman who did
business in China, and who wanted to meet him.102
Kearney claimed that it was part of his job to meet individuals
such as Trie, and he gladly did so. After Trie's call to
Kearney, the two met in a hotel in Beijing while Kearney was
touring China as part of his duties as a Deputy Assistant
Secretary in the Department of Commerce. Kearney describes the
meeting as a brief ``get-acquainted'' meeting in the lobby of
Kearney's hotel in Beijing.103 However, Kearney
later wrote a letter to Trie thanking him for his ``red carpet
treatment'' during Kearney's trip.104 Kearney also
wrote that it was ``very helpful to have someone around who
knew the ropes--especially a fellow Arkansan.'' 105
Kearney's letter appears to be inconsistent with his account of
his meeting with Trie as being a ``get-acquainted'' meeting.
---------------------------------------------------------------------------
\102\ Deposition of Jude Kearney, House Committee on Government
Reform and Oversight, Feb. 16, 1998 (``Kearney Deposition''), at 14-15.
\103\ Id. at 19.
\104\ Letter from Jude Kearney to Yah Lin Trie, Oct. 1, 1993,
Department of Commerce Document 01BA0469 (Exhibit 37).
\105\ Id.
---------------------------------------------------------------------------
Nevertheless, Trie's cold call to Kearney appears to have
started a close relationship between 1993 and the end of 1996.
Kearney met with Trie a number of times between January 1993
and late 1994 and Kearney attended social events at Trie's
Watergate apartment. Kearney also made an official request that
Trie be included in the events held in connection with the
Department of Commerce trade mission to China in August and
September 1994.106 Kearney stated in his testimony
that Trie expressed an interest in participating in the
Secretary's trade mission in some way, and Kearney passed that
request on to the responsible officials at the Department of
Commerce, Melissa Moss and James Hackney.107 Kearney
denied that he was doing Trie any special favor, and indicated
that he would pass on similar requests made by
anyone.108 Documents received by the Committee
indicate that Trie made this same request of the DNC at the
same time as Kearney made this request.109 However,
Kearney denied that he ever discussed Trie's request with David
Mercer or any other DNC official.110 Kearney also
denied ever discussing political contributions with Trie. Trie
did however, submit documents to Kearney indicating that he was
a large donor to the DNC.111
---------------------------------------------------------------------------
\106\ Memorandum from Jude Kearney to Jim Hackney and Melissa Moss,
Aug. 10, 1994, Department of Commerce Document 01BA0470 (Exhibit 38).
\107\ Kearney Deposition at 39-40.
\108\ Id. at 39-40.
\109\ See Exhibit 26.
\110\ Kearney Deposition at 40-41.
\111\ Exhibit 38 at 3.
---------------------------------------------------------------------------
In addition to meeting with Trie and recommending him as a
host for an event on the Department of Commerce trade mission
to China, Kearney helped Trie in a number of other ways. First,
he introduced him to a number of private business contacts. It
appears that Kearney introduced Trie to: Elvin Moon, a
construction contractor; Bill Sudow, a private lawyer in
Washington, DC; Ernie Green, a DNC Managing Trustee and friend
of Bill Clinton; and Lauri Fitz-Pegado, a high-ranking official
in the Commerce Department.112 Kearney claims that
his numerous introductions of Trie to other private businessmen
was merely part of his job, trying to promote U.S. exports.
However, it is unclear why Mr. Kearney devoted so much time
trying to promote the private business interests of Charlie
Trie, a person who, by all accounts, was a failure at every
enterprise he attempted. In fact, Kearney himself admitted that
he had no idea what Trie did for a living, and knew of no
successful venture in which Trie was involved.113
Nevertheless, he had at least 10 meetings with Trie between
1994 and 1996, and introduced him to a number of high-level
contacts in the public and private sectors.
---------------------------------------------------------------------------
\112\ Kearney Deposition at 33, 48, 87, 53.
\113\ Id. at 111-112.
---------------------------------------------------------------------------
3. Ernie Green
Among the individuals Trie met as a result of his DNC
support was Ernest G. Green. Green is a managing partner at
Lehman Brothers Washington, DC, office, and is a close friend
of President Clinton. Trie was introduced to Green by Jude
Kearney, who thought that Green might be able to assist Trie
with the financing for the Nam Van Lakes real estate project in
Macau, which was owned by Ng Lap Seng, and which was being
promoted by Trie. However, the testimony of the persons
involved differ greatly on the details of the introduction of
Green to Trie. Green states that Kearney introduced him to
Trie, and set up a meal where Trie, Green, Kearney, David
Mercer, and Ng Lap Seng were in attendance.114
Kearney and Mercer, however, deny attending any introductory
meeting between Green and Trie.115 Beginning with
the Nam Van Lakes project discussed at the 1994 breakfast,
Green and Trie would develop a close relationship involving
travel, business, and political fundraising.
---------------------------------------------------------------------------
\114\ Deposition of Ernest G. Green, House Committee on Government
Reform and Oversight, Dec. 17, 1997 (``Green Deposition I'') at 47-48.
\115\ See Deposition of David L. Mercer, House Committee on
Government Reform and Oversight, Aug. 26, 1997, (``Mercer Deposition
II'') at 11-12; Kearney Deposition at 49.
---------------------------------------------------------------------------
III. Trie's 1995 Activities
The year started with Trie taking on a role reserved for
only the top echelon of the DNC. Trie became a member of the
prestigious DNC Finance Board of Directors, joining such other
DNC powerhouses as Paul Montrone, CEO of Fisher Scientific,
Edgar Bronfman, President of Seagram Brothers, and Fred Siegel
of the Beacon Companies.116 As a member of the
Finance Board of Directors, Trie obligated himself to raise
$250,000 for the DNC, even though at the time, he could not
even pay his credit card bills.117 Although Trie
earned this post through his largess in 1994, his contributions
and solicitations to the DNC decreased in 1995. Trie now began
to cash in on political favors and pursue business ventures
with friends he made through the DNC.
---------------------------------------------------------------------------
\116\ Memorandum from David Mercer to Jason McIntosh, Aug. 31,
1994, DNC Document DNC 3423804.
\117\ Charlie Trie's American Express account was delinquent from
October 1994 to February 1995. See American Express account records for
Yah Lin Trie.
---------------------------------------------------------------------------
In 1995, Mark Middleton and Ernie Green emerged as Trie's
principal political and business confidants. Trie toured Asia
with Green and Middleton, and introduced them to powerful
business and political figures in an effort to promote their
businessinterests in Asia. In return, Green and Middleton acted
as Trie's Washington liaison. Both met frequently with Trie, made
introductions for Trie, and accompanied Trie to political events.
Also in 1995, Trie began to take full advantage of his
status as a friend of Bill Clinton and major DNC supporter.
Trie visited the White House frequently, approximately 15 times
in 1995 alone.118 Some of these visits were for
large events, but others were for private meetings with Mark
Middleton. Trie's relationship with the President and his staff
was apparent in other ways as well. Trie gave Nancy Hernreich,
the Director of Oval Office Operations and one of the
President's closest aides, a pearl necklace for
Christmas.119 Trie also received access to the
President's box at the Kennedy Center.120 Finally,
Trie was able to call upon his status with the DNC to receive
special White House tours for family and friends.121
---------------------------------------------------------------------------
\118\ WAVES Records of Yah Lin Trie.
\119\ Hernreich was prevented from accepting the necklace by White
House ethics rules. Letter from Nancy Hernreich to Charlie Trie, Feb.
6, 1995, White House Document EOP 000882 (Exhibit 39).
\120\ Memorandum from Eric Sildon to Debi Schiff and Donald Dunn,
Sept. 15, 1995, DNC Document DNC 1604112 (Exhibit 40).
\121\ Memorandum from Shawn Covell to Susan Lavine, May 19, 1995,
DNC Document F0011404 (requesting tour for Wang Mei Trie, Ng Lap Seng,
Pun Nun Ho, Priscilla Wong, and Kathy Chiu) (Exhibit 41); Memorandum
from Keshi Zhan to Susan Lavine, June 13, 1995, DNC Document F0011401
(requesting tour for Keshi Zhan, Fan Zhan, Ying-Qun Ma, Chao-Chen Wang,
Ying-Xian Shi, Xiao-Peng Yu, and You-Xuan Liu) (Exhibit 42).
---------------------------------------------------------------------------
A. Trie's Spring 1995 Trip to Asia
By 1995, Trie's business activities were expanding in Asia
and the United States. Trie's main company was Daihatsu
International Trading, which he operated out of his Watergate
apartment. Trie also operated San Kin Yip International, which
had offices in Washington, DC, and Little Rock, and was
affiliated with an Asian conglomerate of the same name operated
by Ng Lap Seng in Macau. In February 1995, Trie's stature in
Asia was enhanced when Ng Lap Seng and his friend and business
associate, William Peh, named Trie as a Director of Peh's
business, Consolidated Trust Company.122 Peh has
asserted that he and Ng added Trie to Consolidated Trust's
leadership because they believed his extensive connections on
the China mainland would help them penetrate that
market.123 In addition, Trie's U.S. ties were
helpful to the company. On a CTC corporate fact sheet, Trie was
listed as an ``Advisor to President Clinton.'' 124
Trie brought many friends through the offices of Consolidated
Trust, but no business opportunities developed.125
Around the same time, Peh moved his business into Ng's office
building in Hong Kong.126
---------------------------------------------------------------------------
\122\ Interview of William Peh Kong Wan, Aug. 24, 1998 (``Peh
Interview'').
\123\ Id.
\124\ Johnson Interview at 2.
\125\ Peh Interview.
\126\ Johnson Interview at 1.
---------------------------------------------------------------------------
Just several weeks after Mark Middleton left his White
House job in February 1995, Trie, Mark Middleton and his
brother Larry Middleton traveled to Asia. In a 3 week period,
Trie and Middleton visited China, Hong Kong, Taiwan, Macau,
Jakarta, and Brunei.127 While in Hong Kong,
Middleton visited Consolidated Trust Company, and told Peh and
other CTC employees of his close relationship with the
President and the fact that he had just left the White House to
begin his own company.128 But in fact, Middleton had
not quite severed all of his White House ties because as late
as October 1996, more than 18 months after he left the White
House, he still had a White House telephone number
129 and he was passing out his White House business
cards in Asia.130 In addition, a message on the
White House voice mail system was left saying: ``[t]hank you
for calling the White House. To reach Mack McLarty, please dial
(202) 456-2000. To reach Mark Middleton, please dial (202) 737-
9305. . . . Again, thank you for calling the White House.''
131 The number left by Middleton was the number for
his company, Commerce Corp. International. Yusuf Khapra,
Middleton's former assistant, claimed that he put the message
on the White House voicemail when Middleton left the White
House.
---------------------------------------------------------------------------
\127\ Facsimile from Jennifer Russell to Hsiao-I Zhou, Mar. 17,
1995, Maria Mapili Document 009236 (Exhibit 43) (Translation by Frank
Lee).
\128\ Johnson Interview at 3.
\129\ Memorandum from Jennifer Russell to Mark Jimenez, June 6,
1995, Maria Mapili Document 008000 (Exhibit 44). But see Deposition of
Yusuf Khapra, House Committee on Government Reform and Oversight, Aug.
12, 1997 (``Khapra Deposition''), at 71. Khapra claimed that he left
the message on the White House voice mail without informing Middleton.
\130\ Johnson Interview at 4. It appears that Mark Middleton's
personal assistant, Shawn Covell, sent a batch of Middleton's White
House business cards to Larry Middleton, in preparation for Mark
Middleton's trip to Asia. Larry accompanied Mark on the trip.
Memorandum from Shawn Covell to Mark Middleton, Mar. 28, 1995, Noel
Gould Document 0060 (Exhibit 45).
\131\ White House Bulletin, Oct. 31, 1996; Khapra Deposition at 70-
71.
---------------------------------------------------------------------------
Middleton was looking for business opportunities in Asia
and he was particularly interested in real estate
projects.132 One of the projects that Trie
introduced him to was the Nam Van Lakes project in Macau. This
project was co-owned by Ng Lap Seng and Macau's Ho brothers,
and Trie had heavily promoted the project to others, including
Ernie Green, David Mercer, and Jude Kearney. Middleton
expressed interest in Nam Van Lakes, and mentioned that he
might be able to secure funding for the project from the so-
called ``Green Fund,'' an investment fund managed by Steven
Green, Middleton's boss at International Realty
Investors.133 The Green Fund was intended to raise
funds for projects in newly democratized countries. It was
unlikely that a project in Macau would qualify for funding from
the Green Fund, since Macau was not ``newly democratized,'' and
in fact, was coming under the control of the People's Republic
of China in the near future.134 However, according
to one witness who was present during meetings with Middleton
in Asia, Middleton told Ng and Peh that he would take care of
it and make sure Macau qualified for funding.135
---------------------------------------------------------------------------
\132\ Johnson Interview at 4.
\133\ Id. at 3. The ``Green Fund'' was actually the Central and
Eastern European Newly Independent States fund, or ``CEENIS Fund.''
Macau, a small island in Asia controlled by Portugal, and soon to come
under the control of the People's Republic of China, did not qualify
for support under the requirements of the fund.
\134\ Id. at 3-4.
\135\ Id. at 4. George Johnson is a former employee of William Peh
at the Consolidated Trust Corp. In this capacity, he met Charlie Trie
and Mark Middleton during their visits to Asia. Johnson is one of the
only witnesses who has knowledge of Trie's travel to Asia who has
cooperated with Committee investigators.
---------------------------------------------------------------------------
B. Trie's Fundraising in 1995
Trie's fundraising activities continued in 1995, even
though his own personal contributions decreased. Trie's first
major event of the year was a DNC Finance Board dinner at the
White House with the President and First Lady on February 16,
1995.136 This was a small dinner for the highest
level donors and fundraisers in the DNC. Trie and Ng Lap Seng
attended, accompanied by Ernest Green, and Trie was accorded
the special honor of sitting at the First Lady's
table.137 Trie continued attending high-level events
like this throughout the year.
---------------------------------------------------------------------------
\136\ Memorandum from White House Social Office, Feb. 16, 1995,
White House Document EOP 002306 (Exhibit 46). Customs Service documents
also show Ng Lap Seng entered the country on Feb. 15, 1995, and
declared that he was bringing $12,000 in cash into the United States
Mark Middleton also attended the Feb. 15th dinner.
\137\ Memorandum from Terry McAuliffe, Laura Hartigan, and Ari
Swiller to Harold Ickes, Feb. 15, 1995, White House Document EOP 043683
(Exhibit 47).
---------------------------------------------------------------------------
In May 1995, Trie found another vehicle to increase his
political standing with the founding of the Congressional Asian
Pacific American Caucus Institute (``CAPACI''). Trie became a
CAPACI board member and contributed $25,000.138
President Clinton spoke at CAPACI's inaugural gala on May 18,
1995. Trie attended CAPACI's inaugural, and brought a number of
Asian business associates as guests, including Ng Lap Seng, his
wife, Pun Nun Ho, Priscilla Wong, and Kathy Chio. While these
individuals were in Washington, Trie arranged a number of other
events to demonstrate his political connections: an Asian
Pacific American breakfast meeting with Commerce Secretary Ron
Brown in which John Huang gave a briefing; 139 lunch
at the White House mess set up by the First Lady's office;
140 and a White House tour.141 Mark
Middleton initially requested that Trie and his guests be
included in the President's Radio Address as well, but later
dropped his request, because the same group had already met
with the President at the CAPACI event.142
---------------------------------------------------------------------------
\138\ Daihatsu International Trading Corp. check for $25,000, Apr.
21, 1995.
\139\ Department of Commerce briefing papers for Secretary Ron
Brown for breakfast meeting with Asian Pacific American business
leaders, May 18, 1995, 01CD0217 (Exhibit 48).
\140\ Letter from Mark Middleton to Kelly Crawford, May 18, 1995
(Exhibit 49).
\141\ Memorandum from Shawn Covell to Susan Lavine, May 19, 1995
(Exhibit 50).
\142\ Letter from Mark Middleton to Kelly Crawford, May 19, 1995
(Exhibit 51).
---------------------------------------------------------------------------
In July 1995, Trie hired Antonio Pan to assist him in his
various enterprises. Pan was a longtime employee of the Lippo
Group in Hong Kong and in Arkansas. As a Lippo employee, Pan
had a number of contacts with Presidential friend Joe Giroir.
Infact, when he departed Lippo to work for Trie, Pan wrote a
brief note to Giroir letting him know:
A longtime friend of mine invited me to provide my
service to his company's investment in the Asian
region. After I obtained my current superior's
understand [sic] and concurrence, I will resign my
current position of Senior Vice President of marketing
from this company. Please continue to extend your
support to Lippo Group. . . .143
---------------------------------------------------------------------------
\143\ Letter from Antonio Pan to Joe Giroir, July 18, 1995,
Arkansas International Development Corp. Document AIDC 001094 (Exhibit
52).
While Pan stated that he was coming to help Trie with his
investment activities, it is not clear what substantive
business activities, if any, Pan was involved in. Throughout
1995 and 1996, Pan was most prominently involved in
orchestrating complex schemes to funnel illegal contributions
to the DNC. As described below, in these schemes, Pan was often
a key participant, personally delivering large amounts of cash
to various straw donors.
C. Trie's Summer 1995 Trip to Asia
1. Travel with Mark Middleton
In July 1995, Trie accompanied Mark Middleton on another
trip to Asia. During this trip, Middleton met with Liu Tai-
ying, the chief financial manager of Taiwan's ruling Kuomintang
party. It has been reported during this meeting that Liu
offered the DNC a campaign contribution of $15 million after
Middleton explained his White House connections.144
Both Middleton and Liu have denied this report.145
While no contributions from Liu have been traced to the DNC to
date, Liu did develop a relationship with Middleton and Trie.
On September 21, 1995, Middleton and Trie escorted Liu to a
fundraiser in San Francisco where Liu met President Clinton and
Vice President Gore.146 It is currently unclear how
Trie and Middleton got Liu into the event. To date, there is no
record of Liu making a contribution, direct or indirect.
---------------------------------------------------------------------------
\144\ Sara Fritz and Rone Tempest, ``Ex-Clinton Aide Arranged for
Taiwan Connection,'' Los Angeles Times, Oct. 30, 1996 at A1. The
Committee has not been able to confirm this report, because Middleton
has taken the fifth, and Liu refused to be interviewed by Committee
investigators. After canceling his appointment with investigators, Liu
described them to the press as ``dogs.''
\145\ Michael Weisskopf and Keith B. Richburg, ``Taiwan, in
Courting U.S. Officials, Reflects Yearning for Recognition,'' the
Washington Post, Nov. 12, 1996 at A6.
\146\ Id. See also photograph of President Clinton, Vice President
Gore, Yah Lin Trie and Liu Tai-ying, Sept. 21, 1995 (Exhibit 53).
---------------------------------------------------------------------------
2. Travel with Ernie Green
On August 2, 1995, the last day of meetings scheduled for
Middleton in Taiwan, Ernie Green arrived in
Taiwan.147 Green came to Asia at the invitation and
expense of Charlie Trie and Ng Lap Seng.148 Green
claims that he had been introduced to the Nam Van Lakes project
almost 8 months earlier by Trie, and came to Asia to inspect
the property to see if he could recommend it to his employer,
Lehman Brothers, for financing.149 While on this
trip, Green made a number of detours to pursue personal
business interests. Green says that he started his trip in
Taiwan, where he met with Taiwanese businessmen to pursue
financial backing for a private telecommunications project that
he was heading.150
---------------------------------------------------------------------------
\147\ Passport of Ernest G. Green, Green Document 027124.
\148\ Green Deposition I at 63.
\149\ Id. at 63.
\150\ Id. at 73.
---------------------------------------------------------------------------
Green then traveled to Hong Kong and Macau to meet with Ng
Lap Seng and inspect the Nam Van Lakes project. To this point,
Green claims he had hesitated to lend his support to the
project because Trie and Ng had not provided enough detailed
information about it.151 In order to gain more
information about the project, Green first visited Lehman
Brothers' Hong Kong office to speak with Barry Gold, a Lehman
executive who handled infrastructure projects in
Asia.152 According to Green, they discussed the real
estate market and development in Macau and the impact of Hong
Kong's impending transition to Chinese rule.153 Gold
has no recollection of this meeting, and states that he only
saw Green once in Asia, during Green's second trip to Asia in
October 1995.154 In addition, Gold said Lehman
Brothers would not have any interest in Nam Van Lakes because
it did not participate in real estate projects.155
Gold's statements are clearly at odds with Green's testimony.
---------------------------------------------------------------------------
\151\ Id. at 102.
\152\ Id. at 97-98.
\153\ Id. at 98.
\154\ Interview of Barry Gold, Mar. 26, 1998, (``Gold Interview'')
at 1.
\155\ Gold Interview at 2.
---------------------------------------------------------------------------
At the end of Green's trip to Asia, Trie raised with Green
the possibility of pursuing a new business venture with him to
manufacture and sell self-inflating novelty
balloons.156 Green was soon intrigued by this idea,
and by the following year, had gone into business with Trie to
sell these balloons.
---------------------------------------------------------------------------
\156\ Green Deposition I at 106.
---------------------------------------------------------------------------
Green contends that his contacts with Trie never brought
him into contact with another Trie associate, Mark Middleton.
For example, even though Middleton was also in Taiwan on August
2 and part of Middleton's trip concerned the Nam Van Lakes
project in Macau, Green claims that he never saw Middleton in
Taiwan, was unaware of Middleton's involvement with the Nam Van
Lakes project, and did not know of any business dealings
between Middleton and Trie.157 However, both Green
and Middleton sent letters to Ng Lap Seng expressing their
interest in pursuing the Nam Van Lakes project.158
These letters are practically identical, and suggest that Green
and Middleton may have had knowledge of the other's activities
involving Nam Van Lakes. Green denies that he had any contact
with Middleton while in Taiwan, but it should be noted that
Trie was hosting them both at the same time.159
---------------------------------------------------------------------------
\157\ Id. at 47, 73; Deposition of Ernest G. Green, Senate
Committee on Governmental Affairs, June 18, 1997 (``Green Senate
Deposition''), at 206-10.
\158\ Letter from Mark Middleton to Ng Lap Seng, May 15, 1995
(Exhibit 54); Letter from Ernest G. Green to Ng Lap Seng, June 16,
1995, SCGA 006943 (Exhibit 55).
\159\ Green Deposition I at 64.
---------------------------------------------------------------------------
When Green and Trie returned from Asia, it appears that
Green began to help Trie. Traveling with the First Lady to
Beijing for the Fourth World Conference on Women in September
1995 would allow Trie to showcase his connections to colleagues
and potential business partners in that region of the world.
Green launched the lobbying effort to put Trie on this trip on
August 29 by calling Melanne Verveer in the First Lady's
office, saying he was calling at Alexis Herman's suggestion,
about ``trip to China and supporter from Arkansas, Charlie Tree
[sic].'' 160 Green claims he has no recollection of
this effort to help Trie.161 That same day, less
than 3 hours later, Trie himself called Verveer and left a
message stating: ``spoke with HRC in Little Rock about going to
Beijing wants to know if he can go with her.'' 162
Two days later, Trie had already left for China, and David
Mercer of the DNC called Janice Enright at the White House and
left a message stating ``Charlie Trie left for Beijing, hadn't
heard from HI [Harold Ickes] or FLOTUS [First Lady].'' On this
same slip, there is another message stating ``Ernie Green
already contacted and he's happy!!'' 163 Despite the
existence of these documents, Green denies that he made any
effort to have Trie included in the Beijing Women's
conference.164
---------------------------------------------------------------------------
\160\ White House telephone message slip for Melanne Verveer, Aug.
29, 1995, White House Document EOP 059100 (Exhibit 56).
\161\ Green Deposition I at 116.
\162\ White House telephone message slip for Melanne Verveer, Aug.
29, 1995, White House Document EOP 059101 (Exhibit 57).
\163\ White House telephone message slip for Janice Enright, Aug.
31, 1995, White House Document EOP 059198 (Exhibit 58).
\164\ Green Deposition I at 114-22.
---------------------------------------------------------------------------
In his quest to be included in the Beijing Women's
Conference, Trie also enlisted the aid of Jude Kearney.
Kearney, asked that Trie and one other individual be included
in the private sector events at the Conference.165
Kearney acknowledged trying to help Trie be included in the
Women's Conference, but testified that he was ``trying to
support the businesspeople whom we came to know in foreign
markets and who were very involved in our initiatives; and Mr.
Trie and Mr. Soo fit that description.'' 166
Documents received by the Committee show Trie returning to the
United States from Asia 5 days after the Conference on Women
began.167 The Committee has been unable to determine
if Trie participated in any events connected with the
Conference.
---------------------------------------------------------------------------
\165\ Deposition of Jude Kearney, Senate Committee on Governmental
Affairs, May 27, 1997 (``Kearney Senate Deposition''), at 60-63.
\166\ Kearney Deposition at 61.
\167\ Passenger Activity Report for Yah Lin Trie, U.S. Customs
Service. The Beijing Conference on Women was held Sept. 8-15, 1995.
---------------------------------------------------------------------------
D. Trie's Fall 1995 Travel to Asia
1. Travel with Mark Middleton
In the fall of 1995, Mark Middleton and Charlie Trie
returned to Asia. At one point during this trip, Middleton took
a suite at the Hong Kong Grand Hyatt, where, in the words of a
witness who was there, Middleton ``held court.'' 168
This witness, who worked with William Peh at Consolidated Trust
Company, stated that Middleton had 8 to 10 businessmen and
government officials from mainland China in his suite, all of
whom were waiting to meet with Middleton.169
Middleton was holding private meetings in a bedroom adjoining
the suite.170 This witness also recalls that Trie
and Ng were present during this episode.171 It is
not known what Middleton was discussing with these visitors,
but the episode provides a glimpse of the type of business that
Middleton may have been pursuing with Chinese entities with the
assistance of Trie and Ng.
---------------------------------------------------------------------------
\168\ Johnson Interview at 4.
\169\ Id. at 4.
\170\ Id. at 4.
\171\ Id. at 4.
---------------------------------------------------------------------------
2. Travel with Ernie Green
In October 1995, Green returned to Asia, again at the
expense of Ng Lap Seng.172 Green's second trip to
Asia was a mix of business and a dinner with Commerce Secretary
Ron Brown in Hong Kong. Green acknowledges that again he met
with Ng regarding Nam Van Lakes, but still claims that he had
not received the necessary information regarding the
project.173 However, Green did develop an acute
interest in Trie's pop-up balloon scheme. He visited the
balloon manufacturer's Taiwan offices and the balloon factory
in the People's Republic of China.174 After this
tour, Green decided to begin investment in this project, and to
then start a business with Trie to market the
balloons.175
---------------------------------------------------------------------------
\172\ Green Deposition I at 148.
\173\ Id. at 160-61.
\174\ Id. at 161.
\175\ Id. at 161.
---------------------------------------------------------------------------
3. October 18, 1995 Dinner at the Shangri-La Hotel
After Green's tours of the PRC and Taiwan, he returned to
Hong Kong for the purpose of attending a dinner for Commerce
Secretary Ron Brown. The dinner was held on October 18, 1995,
at Hong Kong's Shangri-La Hotel, and is surrounded by
controversy. The Committee has received contradictory testimony
with respect to whoorganized the dinner, and what transpired at
the dinner. Regardless of who actually planned the dinner, it is clear
that there were four major personalities involved in the dinner: Ron
Brown; Ernie Green; Charlie Trie; and Antonio Pan. At the very minimum,
the dinner represented an unusual private event where the Secretary of
Commerce was introduced to a number of foreign business leaders.
Ernie Green testified that the Shangri-La dinner was
organized by Trie and Ng Lap Seng, and he was merely invited to
the dinner by Trie.176 Yet again, Green's sworn
testimony is contradicted by other witnesses. Melinda Yee, who
attended the event with Secretary Brown, testified before the
Senate that Green hosted the event:
---------------------------------------------------------------------------
\176\ Id. at 152.
Question. Who did host that reception, do you know?
Yee. As you said, Ernest Green.
* * * * * * *
Question. Do you recall the substance of your conversation
[with Green at the reception]?
Yee. No. Just thanked him for hosting the Secretary.
Question. Do you know why he hosted this reception?
Yee. He had just proposed hosting--he was with Lehman,
Lehman Brothers, I believe . . . And they had a lot of business
in Hong Kong and just suggested that it would be a nice thing
to do if they could host a reception for the Secretary. So we
thanked him. I thanked him for that.177
---------------------------------------------------------------------------
\177\ Deposition of Melinda C. Yee, Senate Committee on
Governmental Affairs, May 9, 1997, at 112, 114.
Yee's testimony regarding the event is confirmed by David
Rothkopf, Acting Undersecretary for International Trade.
Rothkopf testified that Green hosted the event, and also
testified that he tried to prevent Brown from attending the
---------------------------------------------------------------------------
event because of the appearance of impropriety that it created:
Question. Did you have any substantive dealing with him
[Ernie Green]?
Rothkopf. I didn't have any substantive dealings with him.
I recall an incident where there was some discussion about the
Secretary in October of '95 going to a dinner party in Hong
Kong on a trip that we were taking to China. Again, in one of
those trip-planning meetings, somebody on the Secretary's
behalf . . . said the Secretary has been invited to a dinner
with Ernie Green in Hong Kong. And I looked--or Ginger Lew said
something or I looked at Ginger Lew, but I remember that there
was an interaction between me and her, and Ginger was kind of
like he shouldn't do that. And I was like he shouldn't do that
because this was a friend of the Secretary. Again, there was
all the scrutiny, and the thought was, you know, the Secretary
should not be lending his office to Lehman Brothers if Lehman
Brothers is doing some dinner.
* * * * * * *
Rothkopf. . . . But, so the dinner was taken off the
schedule for the trip, and I believe it was kept off the
schedule because I remember going up in the elevator at the
hotel in Hong Kong--
Question. This is during the trip?
Rothkopf. During the trip. And the Secretary turned to Bill
Morton, who was the Deputy for Economic Development, sort of
handled, coordinated the logistics of these trips. The
Secretary said to Bill, I'll see you in 15 minutes. And I
said--the Secretary got off, and I said, what are you doing? It
says here, you know, rest of night in the hotel on the
schedule. And he says, oh, the Secretary's going to do
something personal. And it later turned out that it was the--he
just kept the Ernie Green--you know, they just did this dinner,
and then it turned out it was something with a bunch of these
other characters also. But it was something that was
consciously taken off the Secretary's schedule.
* * * * * * *
Question. Were you disappointed to learn that?
Rothkopf. Disappointed? I was frustrated. You know, I mean,
it's frustrating when you're trying to do something and help
somebody to go in a certain direction and they ignore your
advice.178
---------------------------------------------------------------------------
\178\ Deposition of David J. Rothkopf, Senate Committee on
Governmental Affairs, June 2, 1997, at 67-69.
The ``other characters'' at the dinner referenced by
Rothkopf included Charlie Trie, Ng Lap Seng, and Antonio Pan,
who clearly had a role in organizing the dinner, based both on
the fact that Trie spoke at the dinner, and that all three were
prominently placed at the front of the greeting line for
Secretary Brown and Ernie Green.179 Other guests at
the dinner were a sampling of the business elite from Hong
Kong, Macau, and the PRC. Green claims that most of the
individuals who attended the event were invited to it by either
Trie or Ng.180 Attendees at the meal included Eric
and Patricia Hotung, Wang Jun of CITIC, Wong Xu, William Peh,
Priscilla Wong, Yan Sheng Pan, Jie Liu, Trie, Ng, Antonio Pan,
and representatives of Hong Kong and Macau tycoons Stanley Ho
and Li-Ka-shing.181
---------------------------------------------------------------------------
\179\ See Photographs of Shangri-La Dinner, Oct. 18, 1995 (Exhibit
59).
\180\ Id. at 147.
\181\ Marcus W. Brauchli and Craig S. Smith, ``Democratic Fund-
Raising in Hong Kong?,'' the Wall Street Journal, Dec. 4, 1996 at A14.
---------------------------------------------------------------------------
The dinner began with speeches by Brown, Trie, and
Green.182 After that, Secretary Brown and Green were
introduced to a number of guests, including Wang
Jun.183 According to one press account of the
dinner, Trie and Pan then solicited a number of the guests to
contribute to the DNC.184 In addition, Green
reportedly told guests at the dinner not to exchange business
cards and to keep the event quiet.185 Green has
denied this allegation.186 Eric and Patricia Hotung,
whose $100,000 contribution to the DNC was questioned because
of a possible link to a meeting with the National Security
Council, also contributed $99,980 on two starter checks just 8
days prior to the Shangri-La dinner.187 Other
guests, including Ng Lap Seng, William Peh, Yan Sheng Pan, Jie
Liu, Wang Jun, and Priscilla Wong, attended DNC fundraising
events with Trie just months after this event. None were
eligible to contribute to the DNC, and according to FEC
records, none has directly contributed to the DNC. However, the
Committee is investigating whether there is any connection
between the appearance of these individuals at the Shangri-La
dinner in October 1995 and their appearance at DNC fundraising
events later in November 1995 and February 1996. The
Committee's efforts to investigate this event, like many
others, has been hampered by a lack of cooperation in obtaining
visas for foreign travel by investigators as well as the many
witnesses who have asserted their Fifth Amendment privileges.
---------------------------------------------------------------------------
\182\ Green Deposition I at 155; Peh Interview at 2; Gold Interview
at 1. In fact, Gold's impression was that Green and Trie were hosting
the reception. Gold Interview at 1. See also Photographs of Shangri-La
Event, Oct. 18, 1995 (Exhibits 60-62).
\183\ See Photographs of Shangri-La Event, Oct. 18, 1995 (Exhibits
63-71). Exhibit 63 shows Wang Jun, and Exhibit 64 shows Eric Hotung.
\184\ Marcus W. Brauchli and Craig S. Smith, ``Democratic Fund-
Raising in Hong Kong?,'' the Wall Street Journal, Dec. 4, 1996 at A14.
Green and Gold both claims that they did not witness any solicitations
for the DNC which were made in English at the event. Neither speaks
Chinese.
\185\ Id. Green has denied that he told any guests to ``keep the
event quiet.'' Green Deposition I at 157 (denying such statement).
\186\ Green Deposition I at 155, 157.
\187\ DNC Check Tracking Forms for Contribution of Patricia Ann
Shea Hotung, Investigative Group International Documents HS 003003, HS
003005.
---------------------------------------------------------------------------
Trie and Green also pursued private business dealings at
the Shangri-La dinner. First, Trie continued his efforts to
entice Green and Lehman Brothers into involvement in the Nam
Van Lakes real estate project. Trie, Ng, and Peh discussed the
project with Green, as well as Green's Lehman associate, Barry
Gold, who attended the dinner.188 In addition, Green
continued his personal efforts to attract foreign investors to
a PCS project that he was pursuing.189 Reportedly,
Green discussed these efforts with Eric Hotung, but never was
able to obtain Mr. Hotung's support.190
---------------------------------------------------------------------------
\188\ Gold Interview at 1-2. This was the first time that Gold
heard of the Nam Van Lakes project.
\189\ Green Senate Deposition at 98-100.
\190\ Id.
---------------------------------------------------------------------------
E. ``The Trie Team''--The November 1995 Car Barn Fundraiser
On November 8, 1995, the DNC held its top-level African-
American fundraiser at the Car Barn in Washington, DC. The main
fundraisers working on this event were Ernie Green and Richard
Mays.191 The main DNC staffer working on the event
was David Mercer.192 Charlie Trie became involved in
this fundraiser, raised money for it, and attended the event
with a number of guests. DNC documents relating to the event
indicate that Trie committed to raising $100,000 for the Car
Barn event, a substantial portion of the $500,000 the event was
intended to raise overall.193 The only funds that
the Committee has found that Trie raised for the event, though,
is $15,000 contributed by the CHY Corporation and Celia Chau.
It is possible that Trie raised more money for the event, but
the DNC has not provided any further check tracking forms
crediting Trie for contributions made to this event.
---------------------------------------------------------------------------
\191\ Green Deposition I at 165.
\192\ Mercer Deposition II at 24.
\193\ Facsimile from David Mercer to Ernest Green, Nov. 7, 1995,
Ernest Green Document 000141 (Exhibit 72).
---------------------------------------------------------------------------
Trie came to this event with a number of Asian guests,
described by David Mercer as a ``boatload'' of
visitors.194 None of these individuals appear on DNC
guest lists for the event.195 Nevertheless, it
appears that the DNC was prepared for their arrival, and had
nametags printed for them.196 Trie and his guests
attended a special private reception for the largest donors to
the Car Barn event. A videotape belatedly produced by the White
House Communications Agency records the President's
introduction to Trie's group. First the President greeted Trie,
saying ``Hey Charlie, how are you doing.'' 197 Then
Trie introduced the President to Dr. Chun Hua Yeh, a Taiwanese
businessman, and Jiongzhang Tang.198 Then, Ernie
Green introduced the President to Ng Lap Seng.199
Green noted that Ng hosted a reception for Secretary Brown in
Hong Kong, and that he had been ``very helpful.''
200 Green also informed the President that Ng owned
a golf course in Macau, and that the President should use it
when he is in Macau.201
---------------------------------------------------------------------------
\194\ Mercer Deposition II at 25. Mercer estimated that Trie
brought 10-12 guests. Green remembered that Trie brought guests, but
could not say how many. Green Deposition I at 166-67.
\195\ See, e.g., Memorandum Regarding DNC African-American
Leadership Forum Luncheon, Nov. 8, 1995, White House Document EOP
058076; Attendee List, Nov. 8, 1995, DNC Document DNC 1181591.
\196\ See Photographs of DNC Luncheon, Nov. 8, 1995 (Exhibits 73-
75).
\197\ White House Communications Agency videotape No. 52, Nov.
1995.
\198\ Id.
\199\ Id.
\200\ Id.
\201\ Id.
---------------------------------------------------------------------------
Later, the President posed for photographs with Trie's
group. The photographs were being taken by the event
photographer, but also by Ernie Green's wife, Phyllis, and by
Richard Mays.202 After several pictures were taken,
Secretary Brown approached the group, and said ``look at the
crowd you're with!'' 203 He then joined the group
for photographs with the President. While the photographs were
being taken, Brown told the President that ``big business helps
us everywhere.'' 204 As the group was breaking up,
Brown informed the President that ``this is part of the Trie
Team.'' 205 The President answered ``yes.''
206 After the photographs were taken, Green, Mays,
Brown, and the President formed a huddle and exchanged words
for several moments. Neither Green nor Mays recalled what was
discussed, but both deny that Trie or his associates were
discussed.207
---------------------------------------------------------------------------
\202\ Id.
\203\ Id.
\204\ Id.
\205\ Id.
\206\ Id.
\207\ Green Deposition I at 179; Mays Deposition at 90.
---------------------------------------------------------------------------
The remarks made by Green, the President, and Ron Brown at
the Car Barn event remain cryptic. Green and Mays both denied
that they ever heard the term ``Trie Team,'' other than this
one time. Secretary Brown's comments indicate that he was
familiar with Trie and his associates. At least two members of
the ``Trie Team,'' Ng Lap Seng and Yan Sheng Pan, had attended
the Shangri-La event with Brown. Brown also indicated no
surprise at seeing these foreign businessmen at an event for
DNC donors. Green and Mays also denied knowing what Secretary
Brown meant by his comment that ``big business helps us
everywhere.'' Despite the lack of helpful testimony from
individuals familiar with this event, the tape of the Car Barn
event raises a number of questions regarding the relationship
between Trie, Ng, Ron Brown, Ernie Green, Richard Mays, and the
President.
IV. Trie's Appointment to the Bingaman Commission
One of the most significant examples of Trie's access to
the power of the White House is his appointment to the
Commission on United States-Pacific Trade and Investment
Policy, an elite commission formed by the President in 1996.
The story of Trie's appointment though, demonstrates the
lengths to which the Clinton Administration was willing to go
to reward contributors to the DNC. In this case, the
Administration appointed Trie to an expert trade panel despite
the fact that he lacked any qualifications to serve.
Administration officials appointed Trie even though one person
involved in the appointment process, Senate aide Steve Clemons,
objected repeatedly and vociferously to Trie's appointment, on
behalf of Democratic Senator Jeff Bingaman of New Mexico. These
objections were met with the response that Trie was a ``must
appointment'' from ``the highest levels of the White House.''
208
---------------------------------------------------------------------------
\208\ Interview of Steve Clemons, Dec. 5, 1997 (``Clemons Interview
I'') at 3 (Exhibit 76).
---------------------------------------------------------------------------
A. The Appointment Process
On June 21, 1995, President Clinton signed Executive Order
12964 establishing the Commission on United States-Pacific
Trade and Investment Policy.209 The purpose of the
Commission was to study trade between the United States and
Asian countries, and to recommend ways to improve access of
American companies to those markets. The Commission was
commonly referred to as the Bingaman Commission, in honor of
Senator Jeff Bingaman of New Mexico. During the negotiations
between the Senate and White House regarding the vote on GATT,
Senator Bingaman told the President that he would vote in favor
of GATT if the President established such a trade
commission.210 Accordingly, Senator Bingaman and his
staff had a great deal of input in the formation of the
Commission.
---------------------------------------------------------------------------
\209\ Executive Order 12964, June 21, 1995 (Exhibit 77).
\210\ Clemons Interview I at 1.
---------------------------------------------------------------------------
When Executive Order 12964 was originally signed, the
Commission was to have 15 members, appointed by the President.
The Office of the U.S. Trade Representative was given the
responsibility of compiling the list of recommended appointees
for the President's review. The USTR received recommendations
for candidates for the Commission from a number of sources,
including the office of Senator Bingaman.211
---------------------------------------------------------------------------
\211\ Id.
---------------------------------------------------------------------------
The first step in the process by which candidates for the
Bingaman Commission were considered and appointed to the
Commission required the compilation of the names of potential
candidates by Phyllis Jones, the Assistant U.S. Trade
Representative for Intergovernmental Affairs and Public
Liaison. She received suggestions from a variety of sources,
including the USTR, the National Economic Council, Congress,
and the private sector. She discussed these candidates with
interested parties at other government agencies and within the
USTR.212 A list of recommended candidates then had
to be cleared with Mickey Kantor, then the U.S. Trade
Representative.213 After Kantor had cleared the
recommended candidates, the list would be provided to the White
House. The Office of Presidential Personnel would then review
the list, and submit it to the President for his
approval.214 According to one USTR official, the
President was ``sometimes active and nixe[d] or change[d]
names'' of candidates.215
---------------------------------------------------------------------------
\212\ Deposition of Phyllis Jones, House Committee on Government
Reform and Oversight, Feb. 11, 1998 (``Jones Deposition''), at 25.
\213\ Id. at 32.
\214\ Deposition of Charles Duncan, House Committee on Government
Reform and Oversight, Aug. 29, 1997 (``Duncan Deposition''), at 115-16.
\215\ Electronic Mail Message from Caroyl Miller to Jennifer
Hillman, Apr. 25, 1995 (Exhibit 78).
---------------------------------------------------------------------------
1. The White House Used the Commission for Political Payoffs
The office of Senator Bingaman was deeply involved in the
appointment process for the Commission. Senator Bingaman's main
staffer dealing with the Commission was Steve Clemons, Senior
Trade Policy Advisor to the Senator.216 Clemons
provided names of candidates for the Commission to Phyllis
Jones, and he reviewed names that had been compiled by the
USTR. Clemons was also in frequent contact with Charles Duncan,
the Assistant Director of the Office of Presidential Personnel
(``OPP''). Duncan was the main White House official dealing
with the formation of the Bingaman Commission.
---------------------------------------------------------------------------
\216\ The Committee interviewed Clemons twice at his workplace.
Clemons cooperated extensively with the Committee, and during his
second interview, confirmed the key points of his earlier testimony.
The Committee called Clemons as a witness to a hearing on Feb. 25,
1998, but his testimony was blocked by the Senate Office of Legal
Counsel, which raised objections to Clemons testifying about his Senate
duties. After the Committee released staff notes of interviews with
Clemons, Clemons issued a press release objecting to unspecified
``inaccuracies'' in the notes of his interviews. However Clemons made
clear that the substance of the Committee notes was accurate.
Additionally, Clemons has never specified how the Committee staff's
notes are inaccurate, and he has never suggested any clarifications to
the Committee. In light of this fact, and the fact that Clemons was
interviewed twice about the identical subject matter, the Committee is
satisfied with the accuracy of the notes of the staff's interview with
Clemons.
---------------------------------------------------------------------------
Most of the candidates recommended by Clemons were
corporate CEOs or trade experts that he believed would make a
substantive contribution to the Commission.217 Early
in the process, though, Clemons found that it was difficult to
have Senator Bingaman's candidates for the Commission
considered by the White House and the USTR.218
Clemons discussed this issue with Duncan, and Clemons has said
that Duncan told him that he checked the names of all
recommended candidates for the Commission against a list of
donors to the DNC.219 Clemons objected to Duncan,
expressing the sentiment that the Commission should be about
appointing qualified individuals, and not making political
payoffs.220 However, Duncan made it clear to him
that he would follow this process for the appointments to the
Bingaman Commission.221
---------------------------------------------------------------------------
\217\ Clemons Interview I at 1.
\218\ Id. The difficulty faced by Senator Bingaman's office is
alluded to in a number of USTR documents. E-mail messages refer to
efforts to keep Bingaman's staff from ``blowing up,'' Electronic Mail
Message from Phyllis Jones to Jennifer Hillman, July 20, 1995, and the
fact that the Bingaman office may need to be ``admitted to a therapy
unit.'' Electronic mail message from Peter Scher to Nancy Leamond, Nov.
14, 1995.
\219\ Clemons Interview I at 1.
\220\ Id. at 2.
\221\ Id.
---------------------------------------------------------------------------
In fact, Clemons informed the Committee that he became so
desperate to have qualified candidates appointed to the
Commission, that he contacted the DNC, and asked them to
provide him with a list of large donors to the
DNC.222 Clemons spoke with a DNC staffer named David
Carroll, and explained that he had been working with the White
House in trying to fill appointments for the
Commission.223 Clemons told Carroll that he wanted
to review a DNC donor list to see if he could find someone, ``a
CEO who can pass the White House screeners.'' 224
Clemons recalled that Carroll promised to send him something
``discreetly.'' 225 Indeed, Clemons received the
donor list, but was unable to find any qualified candidates on
it that he could recommend to the White House.226
---------------------------------------------------------------------------
\222\ Interview of Steve Clemons, Dec. 10, 1997 (``Clemons
Interview II''), at 1-2 (Exhibit 79).
\223\ Id. at 1.
\224\ Id. at 2.
\225\ Id.
\226\ Id. During their interviews with Clemons, Committee staff
requested Clemons to locate the donor list. Clemons later contacted
Committee staff, and told them that he had located the list and would
provide it to the Committee. However, before Clemons provided the
document to the Committee, he became represented by the Office of
Senate Legal Counsel. Morgan Frankel, Deputy Senate Legal Counsel, took
possession of the donor list from Clemons, but refused to provide it to
the Committee, basing his claim on the fact that Clemons obtained the
donor list in the course of his Senate duties.
---------------------------------------------------------------------------
Clemons' experience with the Office of Presidential
Personnel is denied by Charles Duncan and the White House.
Duncan provided sworn testimony to the Committee that he never
checked the amounts that potential candidates to the Bingaman
Commission, or any other position, had given to the DNC or the
Clinton-Gore campaign.227 However, the Clemons
testimony is confirmed by White House documents. Duncan has
denied that he kept any donor lists in his office, and the
White House has never produced any such lists in response to
the Committee's subpoenas.228 However, the OPP
computer contains a database that shows that OPP kept track of
precisely this type of political fundraising information. The
database contains the names of potential candidates for
appointment to the Clinton Administration. Most of the
information fields in the database contain technical
information like address and telephone number.229
The only field for substantive information appears to be the
``classification'' field of the database.230 This
field contains information relating to candidates' political
activity. The only classifications the Committee has seen in
this field are: ``DNC Trustee,'' ``DNC Key,'' ``C/G Trustee''
and ``C/G Key.'' 231 All of these classifications
refer to levels of political contributions and support given to
the Clinton-Gore campaign and the DNC. This database contains
the names of Charlie Trie, John Huang, Charles DeQueljoe, all
of whom are key figures in the campaign finance scandal, and
all of whom received appointment to the Administration. Trie is
listed in the database as a ``DNC Trustee.'' 232 The
Committee has not received any information regarding how this
donor data got onto the White House computers, but it is one
obvious source for how Charles Duncan tracked the political
contributions of potential candidates for appointment to the
Clinton Administration.
---------------------------------------------------------------------------
\227\ Charles Duncan's Responses to Interrogatories, Apr. 20, 1998
(``Duncan Interrogatories'') at 1.
\228\ See id.
\229\ Database Printout, White House Document EOP 070826-070856
(Exhibit 80).
\230\ Id.
\231\ Id.
\232\ Id.
---------------------------------------------------------------------------
2. Charlie Trie is Considered for the Commission
At some point in mid-1995, Charlie Trie told Ernie Green
that he was interested in an appointment to a position in the
Clinton Administration.233 Green then contacted
Charles Duncan, who had been a friend of Green since the 1970s,
and told him of Trie's interest in an
appointment.234 White House records indicate that on
September 14, 1995, Trie and Green went to the White House to
visit Charles Duncan. While Green denies attending any meeting
between Trie and Duncan, White House WAVES records clearly show
that Green went to the White House, and entered and departed
the Old Executive Office Building at exactly the same time as
Charlie Trie.235 The interview between Duncan, Trie,
and Green lasted approximately 30 minutes. Duncan denies that
he ever discussed the DNC or the Presidential Legal Expense
Trust during his meeting with Trie and Green.236
Duncan has testified that he was interviewing Trie to try to
determine the value that he would add to the
Commission.237 However, when asked if he determined
what value Trie would add to the Commission, Duncan answered as
follows:
---------------------------------------------------------------------------
\233\ Green Deposition I at 125.
\234\ Id. at 127.
\235\ WAVES records of Yah Lin Trie and Ernest Green, Sept. 14,
1995 (Exhibit 81).
\236\ Duncan Deposition at 88. Duncan does not recall if Green was
present at this meeting.
\237\ Id. at 88.
Question. You stated something to the effect that the
purpose of the interview was to evaluate Mr. Trie with regard
to the commission. Did you make a determination with regard to
his qualifications as a result of the interview?
Duncan. I had begun to at that point in time.
* * * * * * *
Question. And what was that evaluation?
Duncan. My initial evaluation was that he would add value
to the commission.
Question. And what was the basis for the beginning that you
said of that judgment?
Duncan. The criteria for the commission was knowledge of
trade barriers with Asian countries. I felt at that time Mr.
Trie did have knowledge. I felt he would add value to it. The
President has been very strong on having an administration and
appointments as diverse as America. Mr. Trie, I thought, added
diversity to it, also. And I thought it was also important to
have small business people on this commission, and Mr. Trie
would have been a small business person.238
---------------------------------------------------------------------------
\238\ Id. at 90-91.
On September 15, 1995, the day following the meeting
between Duncan, Trie, and Green, Green called Mickey Kantor,
the U.S. Trade Representative.239 Green claims that
he does not specifically remember the call, but is certain that
it was not about Charlie Trie's appointment to the Bingaman
Commission.240 Similarly, Ambassador Kantor does not
recall having any involvement in Trie's
appointment.241 It is noteworthy that the September
15 call is the only call between Green and Kantor for which the
Committee has any record. Also on September 15, Trie had the
opportunity to see the President personally. Trie was one of 50
guests at the White House for a dinner recognizing the DNC's
top donors.242 However, it is not clear whether Trie
discussed the possibility of his appointment to the Commission
at this dinner.
---------------------------------------------------------------------------
\239\ Mickey Kantor Phone Message, Sept. 15, 1995 (Exhibit 82).
\240\ Green Deposition I at 136-37.
\241\ Deposition of Mickey Kantor, House Committee on Government
Reform and Oversight, Aug. 8, 1997 (``Kantor Deposition'') at 117-125.
\242\ Memorandum from Ann Stock to the President and the First
Lady, Sept. 15, 1995, White House Document EOP 058062. It is unknown
whether Trie discussed his appointment to the Commission with the
President or any other White House officials at this event. Trie also
received two tickets to sit in the President's box at the Kennedy
Center on this same evening. Exhibit 40. Given Trie's appearance at the
White House dinner that evening, it appears the Kennedy Center tickets
may have been used for guests of Trie.
---------------------------------------------------------------------------
After his interview with Trie and Green, Duncan claims that
he sought references for Trie. He called individuals ``from
Little Rock who knew Mr. Trie,'' specifically, Ernie Green, Bob
Nash, and Lottie Shackelford.243 However, Green was
the person who introduced Trie to Duncan, so it was clear that
he supported Trie's nomination. Also, Green had been
extensively involved in Trie's DNC activities. Duncan also
spoke to Shackelford, who was a DNC Vice-Chair, and who was
aware of Trie's political activities.244 Shackelford
told Duncan that she believed Trie was qualified for
appointment to the Commission.245 However,
Shackelford testified that Duncan never asked her about Trie's
knowledge of international trade, and, by her own admission,
Shackelford had never discussed business of any kind with
Charlie Trie.246 Her contacts with him had come only
through patronizing his restaurant in Little Rock, and more
recently, from attending DNC fundraisers.247 Nash
was Duncan's superior at the Office of Presidential Personnel.
When Duncan asked him about Trie, Nash stated that he believed
Trie was qualified for appointment to the
Commission.248 Nash based his conclusion on the fact
that Trie was ``involved in international trade'' and the fact
that he had established a sister city relationship between
Changchun City, China, and Little Rock.249
---------------------------------------------------------------------------
\243\ Duncan Deposition at 96.
\244\ Deposition of Lottie Shackelford, House Committee on
Government Reform and Oversight, Apr. 14, 1998 (``Shackelford
Deposition''), at 28.
\245\ Id. at 53.
\246\ Id. at 53.
\247\ Id. at 21-22.
\248\ Deposition of Bobby J. Nash, House Committee on Government
Reform and Oversight, Sept. 4, 1997 (``Nash Deposition'') at 92.
\249\ Id. at 92.
---------------------------------------------------------------------------
By this point, Duncan says he had concluded that Trie would
add value to the Commission, and decided to recommend his
appointment to the Commission.250 Duncan had spoken
with only three people with any knowledge of Trie. Of these
three individuals, only one, Green, had any knowledge of Trie's
business activities. The other two, Nash and Shackelford, knew
Trie primarily as a restaurateur. Nevertheless, Duncan claims
that based on this information, he had concluded that Trie was
qualified, and was willing to recommend Trie for appointment to
the Commission.
---------------------------------------------------------------------------
\250\ Duncan Deposition at 90.
---------------------------------------------------------------------------
On September 20, 1995, Duncan spoke to Phyllis Jones of the
USTR to tell her that he wanted Trie added to the list of
recommended candidates for the Commission.251 Duncan
gave Jones three names that were not on the list given by USTR
to the White House, but that he wanted to add. The three were
Trie, Kenneth Lewis, who had been recommended by Senator
Sarbanes, and a third individual who was never
appointed.252 In an e-mail message sent to a USTR
colleague after her conversation with Duncan, Jones described
Trie as a ``DNC nominee:'' 253
---------------------------------------------------------------------------
\251\ See Electronic Mail Message from Phyllis Jones to Jennifer
Hillman and Peter Scher, Sept. 21, 1995 (Exhibit 83).
\252\ Id.
\253\ Id.
Well, I spoke with Charles Duncan about Bingaman late
Wed. Here is the update. They have not bumped anyone
off of our list. However, they want to add 3 people--a
Senator Sarbanes person (Charles will let me know the
name), a DNC nominee Yah Lin Trie, President of
Daihatsu International, an international trading
company, and an Asian-American exec [sic] from Toys R
---------------------------------------------------------------------------
Us.
Charles thinks the best thing to do is to get the exec
[sic] order amended so it can be increased. Jennifer,
how difficult is this to do? They are trying to push
this through but we need to get the question answered
about the commission size. Also we need to extend the
report due date. Thanks.254
---------------------------------------------------------------------------
\254\ Id. (emphasis added).
However, in her deposition, Jones attempted to distance herself
from her own e-mail, claiming that ``[t]he only thing that
Charles told me about Mr. Trie was that he was a small business
person that had done business in Asia.'' 255 She
denied that Duncan told her anything about Trie's support for
the Administration, or his friendship with the
President.256 In addition, both Jones and Duncan
deny that they discussed Trie's support of the DNC during their
conversation.257 Jones was unable to explain why she
referred to Trie as a ``DNC nominee'' if Duncan had never
mentioned Trie's support of the DNC during their discussion:
---------------------------------------------------------------------------
\255\ Jones Deposition at 59.
\256\ Id. at 59-60.
\257\ Id. at 60; Duncan Deposition at 106-07.
Question. . . . You describe Yah Lin, that's Charlie
Trie, as a DNC nominee. What does that mean?
Jones. I don't know.
Question. Did Charles Duncan tell you that Trie was a
DNC nominee?
Jones. I don't know why those choice of words were
used here. I don't recall.
Question. Have you ever used the term ``DNC nominee''
to describe any other potential appointee to any
commission?
Jones. I don't remember using it.
The e-mail message, though, casts grave doubt on Duncan's claim
that he had no knowledge of Trie's support of the DNC, and had
never discussed it with Trie.
It was during this September 20 discussion between Duncan
and Jones that Duncan also recommended that the Commission be
expanded past 15 members in order to accommodate Trie and the
other new candidates.258 Therefore, Jones asked the
USTR legal counsel to draft the required documents that would
allow the President to issue a new Executive order expanding
the Commission.259 On January 31, 1996, the
President signed Executive Order 12987, which expanded the
Commission from 15 to ``up to 20'' members.260 This
Executive order allowed the President to appoint Charlie Trie
to the Bingaman Commission.
---------------------------------------------------------------------------
\258\ Exhibit 83.
\259\ See id.
\260\ Executive Order 12987, Jan. 31, 1996 (Exhibit 84).
---------------------------------------------------------------------------
3. Objections Are Raised to Trie's Appointment
Shortly after the September 20 discussion between Jones and
Duncan, Jones added Trie's name to the list of appointees for
the Commission, and circulated the list among individuals at
USTR.261 When he received Trie's name, Steve Clemons
says he was immediately concerned.262 Trie was
listed as working with Daihatsu International Trading Corp.,
and Clemons was concerned that Trie's company was affiliated
with the Japanese conglomerate of the same name.263
Therefore, Clemons called Trie, to try to confirm that he was
not affiliated with the Japanese company.264 Clemons
spoke to him, and confirmed that his company was not Japanese,
but immediately developed a great concern that Trie was not
qualified to be appointed to the Commission.265
Clemons could tell after one brief conversation that Trie was
not knowledgeable regarding trade issues.266 He was
even more irritated that so many candidates who were more
qualified had been rejected by Duncan, and for some reason,
Duncan saw fit to recommend Trie.267 For example,
Clemons had recommended Ed McCracken, Chairman of Silicon
Graphics, Robert Galvin, the former Chairman of Motorola,
Gordon Binder, Chairman of Amgen, and Steven Ballmer, president
of Microsoft, and all had been rejected.268
---------------------------------------------------------------------------
\261\ Jones Deposition at 64.
\262\ Clemons Interview I at 2.
\263\ Id.
\264\ Id.
\265\ Id.
\266\ Id.
\267\ Id.
\268\ Letter from Senator Jeff Bingaman to President Clinton, July
26, 1995 (Exhibit 85).
---------------------------------------------------------------------------
Clemons was so angered by Trie's appointment to the
Commission that he drafted a letter of protest for Senator
Bingaman to send to President Clinton.269 Senator
Bingaman initially signed the letter to Clinton, but then
instructed Clemons not to send it, and to pursue his objections
with the White House orally, rather than in writing, telling
Clemons that ``this was not the kind of matter to commit to
paper.'' 270 Clemons then began a series of
telephone calls and e-mails to Phyllis Jones and Charles Duncan
objecting to Trie's appointment. Clemons stated that he ``did
everything he could'' to stop the appointment of Charlie Trie
to the Commission.271 Clemons stated that Jones was
generally receptive to his arguments, but told him that since
Trie was a White House selection, there was little she could do
to change their mind.272 Clemons also had a series
of heated conversations with Charles Duncan about Trie. In
these discussions, Duncan stated that Trie was an ``absolute
must appointment'' whose name had come ``directly from the
highest levels of the White House.'' 273 Duncan also
referred to Trie's support of the Administration.274
Duncan concluded by telling Clemons that Trie was not coming
off of the Commission.275 Clemons also says he
repeated all of these objections in e-mail messages to both
Jones and Duncan.276
---------------------------------------------------------------------------
\269\ Clemons Interview I at 2.
\270\ Id. Clemons retained a copy of the draft letter from Senator
Bingaman to President Clinton. However, before he could provide it to
the Committee, he was instructed by the Senate Legal Counsel not to
provide it, because it was prepared in the course of his official
Senate duties. Therefore, the letter presumably still exists in
Clemons' possession, and in the office of Senator Bingaman.
\271\ Id. at 3.
\272\ Id. at 2.
\273\ Id. at 3.
\274\ Id.
\275\ Id.
\276\ Id.
---------------------------------------------------------------------------
When faced with Clemons' charges, Duncan denied them, and
Jones claimed a lack of recall. Jones was questioned at length
about Clemons' charges:
Question. Other than that concern [that Trie's company was
Japanese], do you recall anyone at USTR having any other
concerns about Charlie Trie being appointed to the Commission?
Jones. I don't know.
Question. Did anyone in Senator Bingaman's office raise any
concerns about Charlie Trie being appointed to the Commission?
Jones. I just don't remember.
* * * * * * *
Question. Other than the issue about whether Mr. Trie's
Daihatsu was the same as the Japanese car company Daihatsu, do
you ever recall receiving any e-mails expressing concern about
Charlie Trie being appointed to the Bingaman Commission?
Jones. I don't recall.
Question. Are you aware of any individuals expressing
concern to Charles Duncan about Charlie Trie's appointment to
the Bingaman Commission?
Jones. I don't know.277
---------------------------------------------------------------------------
\277\ Jones Deposition at 83-84.
Faced with Clemons' detailed charges, Jones' testimony is
difficult to believe. Duncan, however, flatly denied Clemons'
---------------------------------------------------------------------------
charges in sworn interrogatories:
Interrogatory. Did anyone involved in the appointment
process for the Bingaman Commission, including, but not
limited to Steven C. Clemons, express any opposition to
the appointment of Mr. Trie?
Duncan. No one expressed opposition, but the relative
strengths and weaknesses of each potential nominee or
potential appointment were discussed, including the
strengths and weaknesses of Charlie Trie.
Interrogatory. Did you tell anyone involved in the
appointment process for the Bingaman Commission,
including, but not limited to Steven C. Clemons, that
Yah Lin ``Charlie'' Trie's name came from high levels
of the Administration?
Duncan. No.
Interrogatory. Did you tell anyone involved in the
appointment process for the Bingaman Commission,
including, but not limited to Steven C. Clemons that
Mr. Trie was a ``must appointment?''
Duncan. No.278
---------------------------------------------------------------------------
\278\ See Duncan Interrogatories.
However, faced with the conflict in the testimony between
that of Steve Clemons and that of Duncan and Jones, the
Committee believes the Clemons testimony is more clear and
accurate. Clemons has detailed recall of the events in
question, and had no vested interest in the outcome of the
investigation. Clemons, like the Committee, had an interest in
seeing why the appointment process for the Bingaman Commission
was so distorted. Jones and Duncan, on the other hand, have a
vested interest in protecting the Clinton Administration from
embarrassment. Jones served in the Clinton Administration, and
Duncan continues to serve in the Office of Presidential
Personnel. In addition, when the testimony of Duncan and Jones
is reviewed, both had frequent lapses in memory, and both
provided evasive answers.
Senator Bingaman's office was additionally dismayed by the
fact that the Commission was being expanded to accommodate
Charlie Trie and one other political appointee. Months earlier,
Senator Bingaman had recommended that the Commission be
expanded to accommodate qualified candidates, including major
corporate CEOs, but Duncan rejected this suggestion out of
hand.279 Now, Clemons found that Senator Bingaman's
suggestion was being followed, not to allow the appointment of
Steven Ballmer or some other qualified individual, but to make
room for Charlie Trie. At the very least, Senator Bingaman's
office hoped that the expansion of the Commission from 15 spots
to ``up to 20'' would allow some of their original suggested
candidates to be appointed.280 But, in the end,
Duncan would not allow any of these candidates to go through.
---------------------------------------------------------------------------
\279\ In his deposition testimony, Duncan suggested that when he
asked USTR to expand the Commission in September 1995, he was acting
upon Senator Bingaman's recommendation to the President of July 1995.
This suggestion was heartily endorsed by minority Committee counsel.
Duncan Deposition at 108, 112. However, Clemons' testimony makes it
clear that Duncan had earlier rejected Senator Bingaman's suggestion to
expand the Commission. Rather, the expansion only took place to
accommodate Charlie Trie and Kenneth Lewis.
\280\ Clemons Interview I at 3.
---------------------------------------------------------------------------
After the failure of Steve Clemons' attempt to derail the
appointment of Charlie Trie, the White House moved forward with
the appointment process. On November 9, 1995, Duncan drafted a
decision memorandum for the Bingaman Commission which listed
Yah Lin Trie as a ``White House selection'' for the
Commission.281 Two weeks later, Duncan drafted
another decision memorandum, which this time listed Trie as an
``Ernie Green'' selection for the Commission.282 In
the final decision memorandum, dated December 12, 1995, Trie
was listed as being sponsored for appointment by Ernie
Green.283 In his testimony before the Committee,
Duncan indicated that he had erroneously listed Trie as a White
House selection on the initial draft of the decision
memorandum, and that he later corrected the
error.284 Green testified that after he had
initially recommended Trie for a position in the
administration, Charles Duncan called him and asked if he would
be ``a supporter of Trie's candidacy.'' 285 However,
the fact that Trie was originally listed as a ``White House
selection'' on the first White House document prepared about
his selection supports the account of Steve Clemons, that Trie
was a ``must appointment'' whose name had come ``from the
highest levels of the White House.''
---------------------------------------------------------------------------
\281\ Draft Memorandum from Bob J. Nash to President Clinton, Nov.
9, 1995, White House Document EOP 002199 (Exhibit 86).
\282\ Draft Memorandum from Bob J. Nash to President Clinton, Nov.
22, 1995, White House Document EOP 002216 (Exhibit 87).
\283\ Memorandum from Bob J. Nash to President Clinton, Dec. 12,
1995, White House Document EOP 048649 (Exhibit 88).
\284\ Duncan Deposition at 190-92.
\285\ Green Deposition I at 140, 288. In a proffer that they gave
to the Committee prior to Green's deposition, Robert Washington and
James Christian, counsel for Mr. Green, asserted that Green had nothing
to do with Trie's nomination for the Bingaman Commission. In this
proffer, Washington and Christian suggested that a recommendation by
Green would be unnecessary, because Trie had more extensive White House
connections than Green. Green later contradicted the proffer offered by
his attorneys, acknowledging that he did recommend Trie for a position
on the Commission.
---------------------------------------------------------------------------
B. Trie's Clearance to Serve on the Commission
As part of his appointment to the Bingaman Commission, Trie
had to prepare a number of documents, including a financial
disclosure form. The form required Trie to disclose, inter
alia, ``each asset or source of income . . . which generated
over $200 in income during the reporting period.''
286 On this form, Trie indicated that he received a
salary of $60,000 from San Kin Yip International Trading
Corporation, and $37,500 from Daihatsu International Trading
Corporation. He did not disclose on the form that he received
hundreds of thousands of dollars from foreign sources, despite
the fact that the form required such information to be
disclosed. In addition, when Trie first turned in his form to
USTR officials, he had failed to sign it.287 USTR
and Commerce officials processing his appointment to the
Commission repeatedly requested that he sign his form, and he
did so only 1 day before the Commission's first
meeting.288
---------------------------------------------------------------------------
\286\ Executive Branch Confidential Financial Disclosure Report,
Commerce Document 01CD0234 (Exhibit 89).
\287\ Executive Branch Confidential Financial Disclosure Report,
Department of Commerce Document 01CD0238 (Exhibit 90).
\288\ Answers to Interrogatories of Michael Cannon, Nov. 21, 1997,
at 4; see also Telephone Notes of Michael Cannon, Mar. 28, 1996.
---------------------------------------------------------------------------
Even once Trie signed his financial disclosure form,
questions remained regarding the nature of his business. In the
spring of 1996, ethics officials at the Commerce Department and
USTR prepared conflict of interest waivers for the members of
the Commission. These waivers provided the members of the
Commission with the necessary legal protection in case they did
have some kind of conflict of interest. Laura Sherman, an
attorney at the USTR, prepared Trie's waiver, stating that
Trie's business interests gave him a ``disqualifying financial
interest in the matter.'' 289 However, Sherman
recommended that the U.S. Trade Representative, Charlene
Barshefsky, grant the waiver because Trie ``possesse[d] special
expertise vital to the work of the Commission and ha[d]
substantial knowledge and/or experience regarding trade
barriers restricting U.S. business access to Asian and Pacific
markets.'' 290
---------------------------------------------------------------------------
\289\ Memorandum from Laura Sherman to Charlene Barshefsky, May 9,
1996, White House Document EOP 017887 (Exhibit 91).
\290\ Exhibit 90 at 2.
---------------------------------------------------------------------------
However, Ambassador Barshefsky refused to sign the waiver,
stating that she had a concern that Trie's companies were
foreign.291 Thereafter, Sherman interviewed Trie
about his business. Trie told her that both Daihatsu and San
Kin Yip were U.S. companies.292 Laura Sherman has
also testified that Trie told her ``San Kin Yip was a joint
venture with a Macao corporation that invests in the United
States; [and] that he provided advice on those investments.''
293 Based on these statements, Sherman concluded
that Trie would not have a conflict of interest in serving on
the Commission. She then submitted the waiver to Barshefsky.
However, the waiver form for Trie was never signed. In press
reports about the affair, USTR sources stated that it simply
``fell through the cracks.'' 294
---------------------------------------------------------------------------
\291\ Answers to Interrogatories of Laura Sherman, Oct. 20, 1997
(``Sherman Interrogatories'') at 2; see also Memorandum from Laura
Sherman to Charlene Barshefsky, June 12, 1996, White House Document EOP
017886 (Exhibit 92).
\292\ Sherman Interrogatories at 3.
\293\ Id.
\294\ Glenn F. Bunting, ``White House Helped Boost Trie Onto Asia
Trade Panel,'' Los Angeles Times, July 21, 1997.
---------------------------------------------------------------------------
C. Trie's Service on the Commission
The fears of Ambassador Barshefsky regarding Charlie Trie's
service on the Commission were well-founded. Trie used his
position on the Commission to promote his business and
political interests. At worst, Trie's actions on the Commission
presented an illegal conflict of interest. At best, they
represent the serious harm that can result when unqualified,
unsavory candidates are appointed to Federal positions without
adequate background checks.
1. Trie's ``Contributions'' to Commission Meetings
Charlie Trie attended at least eight of the meetings of the
Commission.295 These meetings largely consisted of
high-level intellectual discussions between the various members
of the Commission, many of whom had extensive academic or
business experience with Asian trade. Charlie Trie did not
speak very much at Commission meetings, and when he did, his
comments often could not be deciphered by his colleagues. One
of the Commission members remarked that Trie ``sat there like a
bump on a log'' during the meetings, and believed that Trie's
poor command of English caused him to be too embarrassed to
speak.296 Trie brought with him to many Commission
meetings an employee named Chu Lei. Chu Lei would often speak
at meetings on Trie's behalf. One Commission member recalled
that Chu Lei once made a ``stupid, indecipherable'' statement
to the effect that the ``Chinese really like Americans, and
cannot understand why Americans are so harsh with regard to
trade.'' 297 Eventually, because of her frequent and
strange comments at Commission meetings, the members asked the
Chairman of the Commission, to bar Chu Lei from attending any
more Commission meetings.298
---------------------------------------------------------------------------
\295\ Trie's attendance is confirmed in a number of Commission
memoranda. See EOP 015869, EOP 015364, EOP 015361, EOP 013303, EOP
015401, EOP 015386, EOP 013277, EOP 015917.
\296\ Interview of Meredith Woo-Cumings, Feb. 18, 1998 (``Woo-
Cumings Interview''), at 1.
\297\ Id. at 2.
\298\ The Committee has learned that in this same period of time,
Chu Lei was a conduit contributor to the DNC, and also introduced Trie
to the Suma Ching Hai Buddhist cult, which Trie used to funnel $700,000
to the Presidential Legal Expense Trust.
---------------------------------------------------------------------------
Trie also made several written submissions to the
Commission. These documents further confirm the fact that Trie
was unqualified to serve on the Commission. Trie made three
separate submissions to the Commission: ``Proposal of the U.S.-
Asia Trading Partnership Program;'' 299
``Recommendations for what we can do in U.S.-Asia Trade Policy
Formulation;'' 300 and ``Some Recommendations Before
the Asia Trip.'' 301 These documents are rife with
grammatical and typographical errors, and are almost impossible
to understand. After witnessing Trie's performance at
Commission meetings and reviewing these documents, many
Commission members thought it was strange that Trie was on the
Commission, and even the USTR official in charge of the
Commission concluded that ``I believe that more qualified
members could have been found to participate, but believe that
Mr. Trie tried to be a useful participant.'' 302
---------------------------------------------------------------------------
\299\ Proposal of the U.S.-Asia Trading Partnership Program, May
14, 1996 (Exhibit 93).
\300\ Recommendations for what we can do in U.S.-Asia Trade Policy
Formulation, Aug. 1, 1996 (Exhibit 94).
\301\ Some Recommendations Before the Asia Trip, Aug. 25, 1996
(Exhibit 95).
\302\ Answers to Interrogatories of Nancy Adams, Feb. 23, 1998
(``Adams Interrogatories'') at 20.
---------------------------------------------------------------------------
However, a close examination of Trie's contributions to
Commission meetings show that he was not merely unqualified to
participate. Such an examination reveals a great deal about
Trie's political loyalties, and indicates that he was
apparently attempting to use his position on the Commission to
promote strongly pro-China political views. One Commission
member recalled that Trie and Chu Lei ``grew agitated'' when
the Commission members were discussing China in a negative
light.303 The Vice Chairman of the Commission stated
that Trie was interested in promoting more friendly relations
with China, and was ``terribly concerned'' regarding a possible
confrontation between the United States and China over
Taiwan.304 These sentiments are confirmed by Trie's
recorded statements in the transcripts of Commission meetings.
In a June 12, 1996 meeting, Trie stated:
---------------------------------------------------------------------------
\303\ Interview of Jackson Tai, Feb. 18, 1998 (``Tai Interview''),
at 1.
\304\ Prestowitz Interview at 3.
I feel this . . . human right [sic] issue, why we don't
listen the other side people [sic], what kind of
problems they have, what they judge about the U.S. . .
. I feel why we don't find some way to work with them
because potentially they will dominate whole Asia
[sic]? 305
---------------------------------------------------------------------------
\305\ Transcript of Commission Meeting, June 12, 1996, at 227
(Exhibit 96).
---------------------------------------------------------------------------
Later at that same Commission meeting, Trie remarked:
Why don't they have human rights? What problems do they
have? How can we work out together [sic]? . . . We've
got a chance to do the business, but on the human
rights . . . human rights issue is a long way to
[sic]--I don't know. There's a different culture,
different country.306
---------------------------------------------------------------------------
\306\ Id. at 228.
These sentiments were echoed in Trie's written submission to
---------------------------------------------------------------------------
the Commission as well:
There are a lot of territories that we forget to pay
attention to which might bring us advantages we need
such as in India, Southeastern Peninsula. If we work
harder with China (which is actually very friendly to
us) and the underdevelopped [sic] nations, we will find
alot [sic] of rooms [sic] there.307
---------------------------------------------------------------------------
\307\ See, e.g., Recommendations for what we can do in U.S.-Asia
Trade Policy Formulation, at 3.
Beyond promoting China, Trie also used his appointment to
the Commission to promote himself. He mentioned the fact that
he served on the Commission to a number of
individuals.308 Outside of the United States, and
among less sophisticated individuals, where, perhaps, the role
of the Bingaman Commission was not so well understood, Trie
claimed that he served as an ``advisor to the President.''
309 Trie was even listed on the official letterhead
of one Hong Kong company in this capacity.310
---------------------------------------------------------------------------
\308\ Cardozo Senate Deposition I at 42; Mercer Deposition I at 77;
Kearney Deposition at 64.
\309\ Interview of Soo Jung Mok, Sept. 10, 1998; Johnson Interview
at 2.
\310\ Johnson Interview at 2.
---------------------------------------------------------------------------
2. Trie's Participation on the Commission Trip to Asia
Trie also used his position on the Commission to promote
his personal business interests. The vetting process that Trie
went through before his appointment was intended to prevent
this type of gain, but as described earlier, the process was
entirely inadequate. In a document he sent to the Executive
Director of the Commission, Trie recommended that the
Commission meet with ``small and medium business owners who are
the real contributors to Taiwan economics.'' 311 In
the same document, Trie also recommended that the Commission
meet with Wang Jun, the Director of CITIC.312 Of
course, at the same time, Trie and Ernie Green were trying to
arrange business deals with Wang Jun and CITIC.
---------------------------------------------------------------------------
\311\ Exhibit 94.
\312\ Id.
---------------------------------------------------------------------------
During the Commission's September 1996 trip, Trie's
behavior attracted the notice of many members of the
Commission. One Commission member recalled that Trie had
``lieutenants'' in many different Asian cities, who would meet
him whenever the group arrived.313 Another recalled
that Trie introduced him to a governmental official in
Beijing.314 Upon his arrival with the delegation in
Hong Kong, Trie was picked up by a limousine.315
When the Commission met with James Riady in Jakarta, Trie made
it clear that he was friends with Riady, and had known him
since Riady had worked in Little Rock in the
1980s.316 In Beijing, Trie took many Commission
members to a restaurant where Trie clearly had great influence,
and where he was greeted by a group that came and seemingly
``paid homage'' to Trie.317 Another recalled that
Trie traveled by chauffeur-driven limousine while in
Beijing.318 By the end of the trip, the Commission
members were ``amazed by [Trie's] ability to maneuver.''
319
---------------------------------------------------------------------------
\313\ Tai Interview at 2.
\314\ Prestowitz Interview at 4.
\315\ Id. at 3.
\316\ Id.
\317\ Tai Interview at 2.
\318\ Woo-Cumings Interview at 2.
\319\ Tai Interview at 2.
---------------------------------------------------------------------------
Shortly after the return of the Commission delegation to
the United States, press stories broke regarding Trie's
questionable fundraising practices. Trie stopped attending
Commission meetings, and sent a letter of apology to the
Commission members. In his letter, Trie apologized for missing
Commission meetings, and proclaimed his innocence:
However, I want to let you know and want you to have
confidence in me that I did not do anything that is
illegal to assist and to support the Democratic Party
and President Clinton in the campaign activities. I
actually felt proud of myself supporting President
Clinton, who, as you might have the same feeling as I,
is the real person wholeheartedly want to and able to
[sic] lead peacefully not only the United States, but
also the world to the 21st Century.320
---------------------------------------------------------------------------
\320\ Letter from Charlie Trie to Nancy Adams and Commission
Members, Jan. 1, 1997 (Exhibit 97).
After stories about Trie's illegal fundraising had come to
light, many Commission members questioned whether Trie should
remain a member of the Commission.321 The Chairman
of the Commission, Ken Brody, and the USTR decided that since
Trie was a presidential appointee, it was the White House's
decision whether to remove Trie as a member of the
Commission.322 The President ended up leaving
Charlie Trie on the Commission. Therefore, even after Charlie
Trie had fled the country in January 1997, the Commission
continued to fax him Commission documents at his Watergate
apartment.323 The Commission staff faxed Trie drafts
of the Commission report, and asked for his comments, even
though they knew that he was embroiled in the fundraising
controversy, and that he had fled the country. When the report
was published in April 1997, Charlie Trie's name was on the
cover as an official member of the Commission.324
---------------------------------------------------------------------------
\321\ Adams Interrogatories at 33.
\322\ Interview of Kenneth Brody, Feb. 19, 1998, at 2; see also
Adams Interrogatories at 35.
\323\ See, e.g., Memorandum from Nancy Adams to Lawrence Johnson,
Kenneth Lewis, Harold Poling, Charlie Trie, et al., Mar. 3, 1997.
\324\ Building American Prosperity in the 21st Century: U.S. Trade
and Investment in the Asia Pacific Region, April 1997 (``Commission
Report''). It should be noted that three members of the Commission
filed dissenting views from the report. The dissenting members
concluded that the ``report's conclusions are out of touch with the
economic concerns of the majority of the American public.'' They also
stated that ``the report fails to fulfill the President's mandate to
recommend policies that would increase U.S. access to Asian markets
``in such a way that a maximum number of high-wage jobs are created and
maintained in the United States.'' See id. at 62.
---------------------------------------------------------------------------
V. Trie's 1996 Activities
While Trie's career as a DNC fundraiser and Washington
insider was to come crashing to a halt by the end of 1996, for
most of the year, Trie enjoyed unprecedented access to the
White House. Trie brought his friends and business associates
to at least six different White House events, ranging from
tours to arrival ceremonies for heads of state.325
Trie himself visited the White House at least 11 times in 1996,
visiting high-level White House officials such as Charles
Duncan and Ben Johnson.326 Through his frequent
contacts with these officials, Trie built up personal
relationships with many of them. For example, Trie gave a
Christmas gift to close Clinton advisor Mack McLarty, who wrote
back to Trie thanking him, and including a handwritten
acknowledgment in his letter.327
---------------------------------------------------------------------------
\325\ See, e.g., Memorandum from Susan Lavine to ``WAVES,'' Feb.
20, 1996, White House Document EOP 056859 (Exhibit 98); Memorandum from
Susan Lavine to Melinda Bates, Jan. 29, 1996, White House Document EOP
056851 (Exhibit 99).
\326\ WAVES Records of Yah Lin Trie.
\327\ Letter from Mack McLarty to Charlie Trie, Jan. 10, 1996,
White House Document EOP 008589 (Exhibit 100).
---------------------------------------------------------------------------
Trie's personal ties with White House and DNC officials
also led him to host a number of parties at his Watergate
apartment. A number of Administration and DNC officials have
testified to attending multiple events at Trie's apartment. At
various times, Trie's apartment served as a gathering place
for: Mark Middleton,328 Ernie Green,329
Charles Duncan, Associate Director of Presidential
Personnel,330 Jude Kearney, Deputy Assistant
Secretary of Commerce,331 Ben Johnson, Special
Assistant to the President,332 Lottie Shackelford,
Vice-Chair of the DNC,333 David Mercer, Deputy
Finance Director of the DNC,334 and Susan Lavine,
DNC White House Liaison.335
---------------------------------------------------------------------------
\328\ Deposition of Robert Ben Johnson, House Committee on
Government Reform and Oversight, Feb. 20, 1998 (``Johnson
Deposition''), at 89.
\329\ Green Deposition I at 57.
\330\ Duncan Deposition at 183.
\331\ Kearney Deposition at 46.
\332\ Johnson Deposition at 88.
\333\ Shackelford Deposition at 40.
\334\ Mercer Deposition I at 114.
\335\ Deposition of Susan Lavine, House Committee on Government
Reform and Oversight, July 21, 1997 (``Lavine Deposition''), at 95.
---------------------------------------------------------------------------
Charlie Trie was to capitalize on these ties throughout
1996. First, he brought Wang Jun, Chairman of the China
International Trust and Investment Corporation (``CITIC''), a
Chinese government-controlled conglomerate, to the White House
to meet President Clinton at a February 6, 1996, White House
coffee. Trie made the introduction at the same time that Wang's
company was under investigation for smuggling illegal machine
guns into the United States. Also in 1996, Trie raised large
sums of money for the DNC. Trie was prominently involved in
raising funds for at least three major DNC events. Most of the
funds raised by Trie have been determined to be illegal.
A. The February 6, 1996, White House Coffee
On February 6, 1996, Charlie Trie accompanied Chinese
executive Wang Jun to a fundraising coffee held in the White
House. Several weeks after the coffee, a subsidiary of Wang's
company called Poly Technologies was discovered smuggling
illegal machine guns to Los Angeles street gangs.336
After learning late in 1996 who Wang was and which company he
was affiliated with, President Clinton described Wang's
presence at the coffee as ``clearly inappropriate.''
337 However, it appears that Wang's attendance at
the coffee was not a simple mistake, but rather, was the result
of a carefully orchestrated plan of Charlie Trie. It also
appears that Trie had the cooperation and assistance of Ernie
Green, the DNC, and the Clinton White House in getting Wang
into the coffee.
---------------------------------------------------------------------------
\336\ ``Report: Two Chinese Arms Company Representatives
Arrested,'' Associated Press, May 22, 1996.
\337\ Susan Schmidt and Lena H. Sun, ``Clinton Calls Wang Meeting
`Inappropriate,' '' the Washington Post, Dec. 21, 1996 at A1.
---------------------------------------------------------------------------
1. Background of Wang Jun
Wang Jun was known to American governmental officials
before his appearance at the White House coffee. He had visited
the United States, and he had also met with U.S. Governmental
officials in China. It appears that Wang had somehow developed
a relationship with officials in the Department of Commerce,
most notably, Melinda Yee and Jude Kearney. In 1995, during
Secretary Brown's October trade mission to China, Wang
requested that he meet with Brown to discuss trade
opportunities.338 Yee endorsed this request and
forwarded it to Jude Kearney for action.339 It is
unknown whether Wang gained an official audience with Ron Brown
during the trade mission. However, at the end of the trade
mission, Wang did meet with Brown in Hong Kong. Wang was
invited to the October 18, 1995, dinner at the Hong Kong
Shangri-La Hotel organized by Trie and Ng Lap Seng. Photographs
of the event indicate that Wang was one of the approximately 20
foreign business leaders invited by Trie and Ng.340
---------------------------------------------------------------------------
\338\ Facsimile from Jude Kearney to Melinda Yee, Oct. 13, 1995,
Commerce Document 10BA1259 (Exhibit 101).
\339\ Id.
\340\ Exhibit 63.
---------------------------------------------------------------------------
At the Shangri-La dinner, Wang was introduced to Ernie
Green, and according to Green, the two had a ``modest
exchange.'' 341 Green also claims that he collected
the business cards of Wang and an associate of Wang, Wong Xu of
the Shezhen Bao Hua Trading Corporation, a subsidiary of CITIC
involved in international investment.342 Shortly
after the Shangri-La dinner, Green wrote to both Wang and Wong,
inviting them to come to the United States later that year.
Green wrote ``I enjoyed our discussions and feel there are many
business opportunities we may pursue. If your schedule will
allow, I would like to extend an invitation to you to visit the
USA during the month of December.'' 343 Wang, Wong,
and an entourage of CITIC officials used Green's letters of
invitation to apply for a visa to visit the United States on
January 22, 1996.344
---------------------------------------------------------------------------
\341\ Green Deposition I at 155.
\342\ Green Senate Deposition at 117.
\343\ Letter from Ernest Green to Wang Jun, Nov. 6, 1995, Ernest
Green Document 005044 (Exhibit 102); see also Letter from Ernest Green
to Wong Xu, Nov. 6, 1995, Ernest Green Document 005045 (Exhibit 103).
\344\ Visa Application to the U.S. Embassy in Beijing for Wang Jun
and three other individuals.
---------------------------------------------------------------------------
2. Wang Jun's Invitation to the Coffee
In January 1996, Charlie Trie began speaking to high-level
DNC officials about arranging for Wang's attendance at a DNC
coffee in the White House. Trie told David Mercer that he
wanted to attend a DNC coffee, and bring Wang Jun with him as a
guest.345 Mercer responded that his request to bring
a guest was unusual, but requested Wang's biography so that the
DNC and White House could process the request.346
Mercer passed Trie's request on to Richard Sullivan. Sullivan
recalls that Trie had expressed a strong desire to have Wang at
the coffee, and mentioned his extensive fundraising activities
for the DNC in the past, and his planned activities in
connection with John Huang's February 19, 1996, fundraiser at
the Hay-Adams Hotel.347 It appears that the DNC had
several concerns about allowing Wang's attendance at the
coffee. First, there was a DNC policy of not allowing donors to
bring guests to White House coffees.348 Second,
Richard Sullivan claims to have had concerns about the fact
that Wang was a foreign national.349 Therefore,
Sullivan asked Karen Hancox, Deputy Assistant to the President
for Political Affairs, to conduct background research on Wang
and CITIC.350 However, it is not clear whether
Hancox did actually conduct any research regarding Wang before
the coffee.351 Despite any concerns, the DNC and the
White House allowed Wang to attend the coffee.
---------------------------------------------------------------------------
\345\ Deposition of David Mercer, Senate Committee on Governmental
Affairs, May 27, 1997 (``Mercer Senate Deposition''), at 139.
\346\ Id.
\347\ Sullivan Senate Deposition at 103.
\348\ Mercer Senate Deposition at 142.
\349\ Sullivan Senate Deposition at 108.
\350\ Id.
\351\ Deposition of Karen Hancox, Senate Committee on Governmental
Affairs, June 9, 1997, (``Hancox Senate Deposition'') at 74-78. Hancox
did testify, though, that she discussed Wang with Andrew Sens, a
staffer at the National Security Council, after the coffee. Even after
the coffee and the press reports regarding the fact that Wang Jun was
in charge of a company found smuggling weapons into the United States,
Sens still believed it was appropriate to host Wang at the White House.
---------------------------------------------------------------------------
According to Ernie Green, in late January 1996, Green was
informed by Charlie Trie that Wang Jun and his party would be
coming to the United States. At this time, Green began making
plans to entertain the group and introduce them to Lehman
executives in Washington and New York City. He also requested
that Trie provide him with biographical information for Wang
and his party.352 While Green readily admits to
planning for business meetings with Wang, he denies that he had
any role in arranging for Wang's attendance at the February 6
coffee.353 However, the records and testimony
received by this Committee and the Senate Governmental Affairs
Committee indicate that Green did have a role in planning
Wang's attendance at the coffee. First, Richard Sullivan, the
DNC Finance Director, stated that:
---------------------------------------------------------------------------
\352\ Green Deposition I at 193.
\353\ Id. at 196.
I understood David Mercer telling Marvin Rosen and
myself, it was in the context of something that was
important to Ernie and Charlie . . . It was a mistake.
I was--it's obviously a mistake. It was something, as I
understood it, that was important that Ernie had this
guy in town doing business. Ernie had been a longtime
supporter and it was purely as a favor to
Ernie.354
---------------------------------------------------------------------------
\354\ Senate Committee on Governmental Affairs, Hearing 105-300 pt.
I at 132, July 9, 1997 (emphasis added).
In addition, it appears that when the DNC asked Charlie Trie to
provide Wang Jun's resume in order to check his background, it
was provided by Ernie Green, not Charlie Trie.355
Green denies that he was involved in arranging Wang's
attendance at the White House coffee, but is unable to explain
why he faxed Wang's resume to the DNC.356
---------------------------------------------------------------------------
\355\ Resume of Wang Jun, DNC Document 3043714 (containing a fax
header indicating that it was faxed from Lehman Brothers to ``DNC
Chairman'') (Exhibit 104). See also Green Senate Deposition at 171-74.
\356\ Green Senate Deposition at 172-74.
---------------------------------------------------------------------------
3. Ernie Green's $50,000 Contribution
The final, and most significant way that Green appears to
have been involved in providing for Wang's attendance at the
coffee is by making a large contribution to the DNC. Attendance
at White House coffees usually required a sizable contribution
to theDemocratic party by the person attending the coffee.
However, neither Wang nor Trie contributed to attend the coffee. It
appears, though, that Ernie Green made a sizable contribution in this
period of time. On February 6, 1996, the day of the coffee, Green made
a contribution of $50,000 to the DNC. The check he gave was signed by
his wife, Phyllis Caudle-Green. Green has testified that he gave the
$50,000 check to David Mercer at a breakfast on the morning of February
6.357 Green also stated that he and his wife gave the
contribution out of a long-standing feeling that they should give a
large contribution to the DNC.358 Green adamantly denied
that his $50,000 contribution was connected to Trie or Wang
Jun.359
---------------------------------------------------------------------------
\357\ Green Deposition I at 211.
\358\ Id. at 208-09.
\359\ Id. at 210.
---------------------------------------------------------------------------
However, David Mercer denies that he received the $50,000
check from Ernie Green.360 Mercer recalls that he
received the check from Charlie Trie.361 Mercer's
testimony is supported by the DNC check tracking form for
Green's contribution. The form shows that Mercer credited
Charlie Trie with soliciting the Green
contribution.362 In addition to recognizing Trie as
the solicitor of the Green contribution, Mercer credited the
contribution to the February 6 coffee. Mercer's accreditation
of the contribution to the coffee was reviewed by a number of
DNC officials, including Marvin Rosen, Scott Pastrick, and
Richard Sullivan.363 In light of this documentary
evidence, it appears that Ernie Green not only helped arrange
Wang's invitation to the White House coffee, but that he also
may have made a $50,000 contribution to the DNC in connection
with the coffee.
---------------------------------------------------------------------------
\360\ Mercer Deposition II at 35.
\361\ Id.
\362\ Check Tracking Form for Contribution of Ernest G. Green and
Phyllis Caudle-Green, Feb. 6, 1996, DNC Document DNC 3064259 (Exhibit
105).
\363\ Memorandum from David Mercer to Marvin Rosen et al., Feb. 6,
1996, DNC Document DNC 3422907 (Exhibit 106).
---------------------------------------------------------------------------
Records received by the Committee also indicate that in the
2 month period surrounding the time that Green contributed
$50,000 to the DNC, Green deposited over $38,000 cash he cannot
account for into his bank accounts, and separately received
$11,500 from Charlie Trie in travelers checks and a wire
transfer.
a. Ernie Green's Mysterious Cash Deposits
Starting in December 1995, Green began a highly unusual
pattern of banking activity in which he made a number of trips
to the bank to deposit large amounts of cash. Green cannot
account for any of these transactions. On December 15, 1995,
Green deposited $4,000 cash into his NationsBank
account.364 On January 23, 1996, Green deposited
$2,000 cash at NationsBank,365 and $700 into his
account at the Riggs Bank.366 Three days later,
Green made two trips to NationsBank, depositing $300 and $1,000
cash.367 On February 9, Green made four separate
trips to two different banks. He made three trips to
NationsBank, making cash deposits of $1,000, $3,000, and again
$3,000.368 Then Green went to Riggs and deposited
$1,000 cash.369 On February 21, Green made three
trips to the bank, depositing $5,000 and then $3,000 cash at
NationsBank,370 and then $2,500 at Riggs
Bank.371 On February 22, Green deposited $3,000 cash
at NationsBank.372 The following day, Green
deposited $3,500 cash at Riggs Bank.373 On February
28, Green deposited $5,400 cash at NationsBank.374
Green's cash deposits are laid out in the following chart:
---------------------------------------------------------------------------
\364\ Deposit Item, NationsBank Account of Ernest G. Green and
Phyllis Caudle Green, Dec. 15, 1995.
\365\ Deposit Item, NationsBank Account of Ernest G. Green and
Phyllis Caudle Green, Jan. 23, 1996.
\366\ Deposit Item, Riggs Bank, Ernest G. Green Travel Expenses
Account, Jan. 23, 1996.
\367\ Deposit Items, NationsBank Account of Ernest G. Green and
Phyllis Caudle Green, Jan. 26, 1996.
\368\ Deposit Items, NationsBank Account of Ernest G. Green and
Phyllis Caudle Green, Feb. 9, 1996.
\369\ Deposit Item, Riggs Bank, Ernest G. Green Travel Expenses
Account, Feb. 9, 1996.
\370\ Deposit Items, NationsBank Account of Ernest G. Green and
Phyllis Caudle Green, Feb. 21, 1996.
\371\ Deposit Item, Riggs Bank, Ernest G. Green Travel Expenses
Account, Feb. 21, 1996.
\372\ Deposit Item, NationsBank Account of Ernest G. Green and
Phyllis Caudle Green, Feb. 22, 1996
\373\ Deposit Item, Riggs Bank, Ernest G. Green Travel Expenses
Account, Feb. 23, 1996.
\374\ Deposit Item, NationsBank Account of Ernest G. Green and
Phyllis Caudle Green, Feb. 28, 1996
------------------------------------------------------------------------
Date Bank Deposit
------------------------------------------------------------------------
December 15, 1995................... NationsBank............ $4,000
January 23, 1996.................... NationsBank............ 2,000
January 23, 1996.................... Riggs Bank............. 700
January 26, 1996.................... NationsBank............ 300
January 26, 1996.................... NationsBank............ 1,000
February 9, 1996.................... NationsBank............ 1,000
February 9, 1996.................... NationsBank............ 3,000
February 9, 1996.................... NationsBank............ 3,000
February 9, 1996.................... Riggs Bank............. 1,000
February 21, 1996................... NationsBank............ 5,000
February 21, 1996................... NationsBank............ 3,000
February 21, 1996................... Riggs Bank............. 2,500
February 22, 1996................... NationsBank............ 3,000
February 23, 1996................... Riggs Bank............. 3,500
February 28, 1996................... NationsBank............ 5,400
------------------------------------------------------------------------
Green's banking activity during the 2 month period raises a
number of questions. First, the volume of cash deposits, over
$38,000, raises questions regarding the source of the money.
The Committee asked Green, and he could not recall the source
of any of this $38,000.375 Green merely speculated
that it could have come from speaking engagements before
churches and schools which paid him in cash.376
However, when asked about each cash deposit individually, Green
could not recall the source of any of the cash that he
deposited into his bank accounts.377 Green denied
that any of the money came from Trie or Trie's
associates.378 The second question raised by Green's
activity is the unusual pattern of deposits. At several points
during January and February 1996, Green went to the bank
multiple times in 1 day to deposit large amounts of cash. For
example, on February 9, 1996, Green made four trips to the bank
and deposited $8,000 cash. Also, in late February, Green went
to the bank seven times in a 1 week period to deposit $24,400
cash. This pattern suggests that Green may have been attempting
to conceal the size of his deposits, and possibly avoid
Currency Transaction reporting requirements. In his deposition
before the Committee, Green denied that he was aware of, or
attempting to avoid these reporting requirements.379
The Committee invited Green to provide further information to
the Committee explaining the source of the cash deposits, but
thus far, he has not done so.
---------------------------------------------------------------------------
\375\ Deposition of Ernest G. Green, House Committee on Government
Reform and Oversight, Sept. 25, 1998, (``Green Deposition II'') at 20-
22.
\376\ Id. at 16-17.
\377\ Id. at 15-29.
\378\ Id.
\379\ Id. at 24.
---------------------------------------------------------------------------
b. Ernie Green Received At Least $11,500 From Trie
During this same period of time, Green received at least
$11,500 from Trie. First, Trie wired $9,500 to the company run
by Green and his wife to sell the self-inflating novelty
balloons, the Green/McKenzie Group. In January 1996, Trie
visited the family of his sister, Manlin Foung, in
California.380 While he was there, Trie deposited a
$30,000 cashier's check into his sister's bank account at the
Travis Federal Credit Union.381 Then, several days
later, Trie withdrew $15,000 in cash.382 On January
19, Trie asked Foung to wire $9,500 of his remaining money to
the NationsBank account for the Green/McKenzie
Group.383 Before the Committee acquired proof that
Green/McKenzie had received money from Trie, Green adamantly
denied that he had received money from Trie in connection with
the pop-up balloon venture:
---------------------------------------------------------------------------
\380\ Interview of Manlin Foung, Sept. 22, 1998.
\381\ Id.
\382\ Id.
\383\ Id.
Question. Did Green McKenzie receive any funds from
any of Mr. Trie's companies that he was affiliated
with, be it Capitol Hill [Enterprises], Daihatsu or San
Kin Yip?
Green. No. Any--are we speaking of direct
investments?
Question. Yes.
Green. No.
Question. Did you or your wife receive personally any
money from Mr. Trie or any of his companies with
respect to the pop-up balloon venture?
Green. No, we did not.384
---------------------------------------------------------------------------
\384\ Green Deposition I at 145.
However, in his second deposition, once he was shown
evidence of a wire transfer for $9,500 to Green/McKenzie, Green
admitted that Green/McKenzie did receive money from Charlie
---------------------------------------------------------------------------
Trie for the pop-up balloon venture:
Question. Under that agreement, do you know how much
money Green/McKenzie received from Mr. Trie?
Green. I think this incoming wire was $9,500, and
that was the amount.
Question. And that was all the money that you ever
received from Mr. Trie for the balloon project?
Green. That is correct.385
---------------------------------------------------------------------------
\385\ Green Deposition II at 37.
On this point, like many others, Green has offered
contradictory testimony. This time, Green contradicted his own
sworn statement in his first deposition. Especially alarming is
the fact that Green flatly denied receiving money from Trie for
Green/McKenzie in his first deposition, and then recalled with
great precision the transfer of money from Trie to Green/
McKenzie in his second deposition. Green acknowledged receiving
this money from Trie only after the Committee subpoenaed the
bank records of Green/McKenzie.
On February 27, 1996, Green deposited $2,000 at
NationsBank.386 In his second deposition before the
Committee, Green acknowledged that he received $2,000 in
travelers checks from Trie and deposited them into his account:
---------------------------------------------------------------------------
\386\ Deposit Item, NationsBank Account of Ernest G. Green and
Phyllis Caudle Green, Feb. 27, 1996.
Question. I would now like to show you Exhibit EG-16,
which indicates that you made a cash deposit of $2,000
into NationsBank, your account there, on February 27,
1996. Do you recall the form of that deposit, whether
it was cash or travelers checks?
Green. I assume that this is a travelers check.
Question. . . . Charlie Trie gave you these travelers
checks; is that correct?
Green. Yes.
Green's explanation for receiving this money was that he had
won a $2,000 bet on a basketball game with Trie.387
However, Green's admission followed sworn testimony before the
Senate Committee on Governmental Affairs wherein Green flatly
denied ever receiving any money from Trie:
---------------------------------------------------------------------------
\387\ Green Deposition II at 27-28.
Question. Did you ever receive any money from Mr.
Trie?
Green. No, I have not.388
---------------------------------------------------------------------------
\388\ Green Senate Deposition at 192.
Remarkably, Green was able to recall every minute detail of
his $2,000 bet with Charlie Trie, while at the same time
entirely forgetting the source of any of the $38,000 in cash he
deposited between December and February 1996.389
Green's selective memory on this point, as many others,
suggests that his testimony before the Committee about why he
received the $2,000 in travelers checks is not credible.
Green's sworn statements, therefore, that he was never
reimbursed for his $50,000 contribution to the DNC, similarly
carry little weight.
---------------------------------------------------------------------------
\389\ Green recalled his wager with Trie in great detail:
Question. Why did Mr. Trie give you these travelers
checks?
Green. We had a gentlemen's bet on a basketball game.
Question. Which basketball game was that?
Green. It was the Bulls playing--the Bulls were playing
Indiana. It was a Sunday game. I think it was on the 18th,
and the bet was that Michael Jordan would score 40 points
or better, and Charlie was not a big Michael Jordan fan so
he took the bet.
Question. I take it you won this bet, is that correct?
Green. I did. I think Michael Jordan scored 43 points.
Green Deposition II at 27. Green's detailed testimony regarding the
Bulls-Pacers game followed half an hour of questioning in which he was
not able to offer any testimony regarding any of 14 different cash
banking transactions.
4. Wang Jun's Tour of Washington, DC
Wang entered the United States at San Francisco on February
1, 1996. It is unknown where Wang traveled between February 1
and 5. On February 5, Charlie Trie scheduled a reception for
Wang and other CITIC officials at his Watergate apartment.
Little is known about this event or who attended, other than
the fact that Jude Kearney was scheduled to
attend.390 Kearney denied that he had any knowledge
of Wang's attendance at the coffee, and also denied that he
even knew of any connection between Charlie Trie and Wang Jun:
---------------------------------------------------------------------------
\390\ Calendar for Jude Kearney, Feb. 5, 1996, Commerce Document
02AB2576 (Exhibit 107).
Question. Are you aware of any relationship between
Mr. Trie and CITIC?
Kearney. Only what I have read in the
papers.391
---------------------------------------------------------------------------
\391\ Kearney Deposition at 83.
Despite the fact that Kearney testified that he was unaware
of any relationship between Trie and CITIC, Kearney was
scheduled to attend the CITIC reception at Trie's apartment.
Kearney claimed to have no recollection of the reception,
including whether he attended.392
---------------------------------------------------------------------------
\392\ Id. at 84.
---------------------------------------------------------------------------
The following day, February 6, Wang had three significant
appointments. First, he met with Commerce Secretary Ron
Brown.393 Wang and Brown had met earlier at least
once at the Shangri-La dinner, and possibly during Brown's 1995
trade mission to China. It is unknown how this meeting was
arranged, or who specifically attended the meeting. Second,
Wang met with Ernie Green and his Lehman Brothers associate at
Green's offices. According to those present, several
individuals attended the meeting, including Wang, his
translator, Trie, and Ng Lap Seng.394 According to
Green, the purpose of the meeting was to ``reintroduce'' CITIC
to Lehman Brothers.395 At the end of the meeting,
Trie mentioned that he and Wang were going to a White House
coffee.396 It was at this time, Green claims, that
he first learned that Trie and Wang were going to the White
House.397 After the Lehman Brothers meeting, Trie
and Wang went to the White House coffee. White House
photographs indicate that Trie and Wang had a number of
photographs taken with the President.398 However,
other guests present at the coffee have informed the Committee
that neither Trie nor Wang spoke at all during the
event.399 Following the coffee, Trie took the CITIC
delegation to New York, where Ernie Green had arranged a
meeting with other Lehman Brothers officials.400
Shortly after the coffee, Trie and Wang received autographed
copies of the President's State of the Union
address.401 Wang's copy read ``[t]o Wang Jun, with
appreciation, Bill Clinton.'' 402
---------------------------------------------------------------------------
\393\ Calendar for Secretary Ronald H. Brown, Feb. 5-11, 1996,
Department of Commerce Document 10AK0081 (Exhibit 108).
\394\ Green Deposition I at 202-03.
\395\ Id. at 203.
\396\ Id. at 204-05.
\397\ As discussed earlier, Green's claims of ignorance conflict
with several pieces of evidence: (1) the DNC check tracking form
crediting his contribution to the coffee; (2) testimony of DNC
officials acknowledging Green's involvement in arranging the coffee;
and (3) the fact that Green had provided Wang's resume to the DNC.
\398\ White House Communications Agency photographs, BUR 00554
(Exhibits 109-110).
\399\ Nash Deposition at 154. It is not surprising that Wang did
not speak, as it appears that Wang cannot speak English.
\400\ Green Deposition I at 225-226.
\401\ State of the Union Address, Jan. 23, 1996, DNC Document DNC
3059953 (Exhibit 111); State of the Union Address, Jan. 23, 1996, DNC
Document DNC 3059706 (Exhibit 112).
\402\ Exhibit 111.
---------------------------------------------------------------------------
It has been suggested in the press that Wang may have used
his visit to the United States in February 1996 as an
opportunity to thwart the ongoing probe of CITIC's arms-
smuggling activity.403 Shortly after Wang's
Washington tour and appearance at the White House, word of the
Federal investigation into Poly Technologies was leaked to the
press.404 This leak brought an early end to the
sting operation run by the Customs Service. At the time of the
leak, Customs officials were on the verge of arresting high-
ranking Chinese officials for arms smuggling.405
After the leak, which came from ``diplomatic sources,'' the
Customs officials were left only with low-level criminals to
arrest. The Committee continues to review these matters.
---------------------------------------------------------------------------
\403\ See generally Howard Blum, The Tail of the Dragon, Vanity
Fair, December 1997.
\404\ Id.
\405\ Id.
---------------------------------------------------------------------------
B. February 19, 1996, Fundraiser
After Wang's visit to the United States in February 1996,
Trie focused on raising funds for the DNC's February 19, 1996,
Asian-American fundraiser at the Hay-Adams Hotel. This event
was the first major DNC event organized by John Huang, and
Charlie Trie was a major part of Huang's fundraising plans for
the event. However, a large part of the money that was raised
for the event was raised from illegal sources.
At this event, Trie and Ng Lap Seng were rewarded with a
seat at the head table, next to President
Clinton.406 On the other side of the President sat
Pauline Kanchanalak and Ted Sioeng.407 Of the four
individuals who sat around the President at the event, two,
Trie and Kanchanalak, have been indicted, and two, Ng and
Sioeng, have fled the country. Of these four individuals, only
Trie was even able to legally contribute at any time. The
following day, the participants in the February 19 dinner were
invited to a breakfast with Vice President Gore. Trie, Ng, Pan,
and a number of other guests had breakfast, as well as a number
of photographs with the Vice President.408
---------------------------------------------------------------------------
\406\ Photograph of Head Table, Feb. 19, 1996, (Exhibit 113); see
also Photograph of Charlie Trie and President Clinton, Feb. 19, 1996
(Exhibit 114); Photograph of Antonio Pan and President Clinton, Feb.
19, 1996 (Exhibit 115); Photograph of Ng Lap Seng and President
Clinton, Feb. 19, 1996 (Exhibit 116); Photograph of Pun Nun Ho and
President Clinton, Feb. 19, 1996 (Exhibit 117).
\407\ See Photograph of Head Table, Feb. 19, 1996 (Exhibit 118);
see also Exhibit 113.
\408\ Photograph of Charlie Trie and Vice President Gore, Feb. 20,
1996 (Exhibit 119); Photograph of Ng Lap Seng and Vice President Gore,
Feb. 20, 1996 (Exhibit 120); Photograph of Pun Nun Ho and Vice
President Gore, Feb. 20, 1996 (Exhibit 121); Photograph of Antonio Pan
and Vice President Gore (Exhibit 122).
---------------------------------------------------------------------------
1. Trie's Conduit Contributions
Trie brought a number of guests to the event, and raised at
least $230,000. Many of the contributions that Trie raised for
the fundraiser were illegal.
a. Manlin Foung and Joseph Landon
In February 1996, Charlie Trie telephoned his sister,
Manlin Foung, and requested that she and her friend, Joseph
Landon, contribute $12,500 each to the DNC.409 Trie
promised to reimburse both Foung and Landon
fully.410 Foung and Landon agreed to contribute. On
February 19, 1996, Foung and Landon each contributed $12,500
via personal checks to the DNC 411 with the
understanding that they would be reimbursed before their checks
cleared their respective banks.412
---------------------------------------------------------------------------
\409\ Foung Deposition at 40-41, 44-46; Deposition of Joseph
Landon, House Committee on Government Reform and Oversight, Sept. 29,
1996 (``Landon Deposition'') at 12-13.
\410\ Foung Deposition at 44-46.
\411\ DNC Check Tracking Form for Contribution of Manlin Foung,
Feb. 19, 1996, DNC Document 000526 (Exhibit 123); DNC Check Tracking
Form for Contribution of Joseph Landon, Feb. 19, 1996, DNC Document
D0000350 (Exhibit 124).
\412\ Foung Deposition at 40-41, 44-46; Landon Deposition at 13-14.
---------------------------------------------------------------------------
Bank records indicate that on February 22, 1996, Antonio
Pan opened a savings account at the Amerasia Bank in Flushing,
New York, with an initial deposit of $25,200
cash.413 Within minutes of the initial deposit, Pan
withdrew $25,000 cash from the savings account 414
and purchased five sequentially numbered $5,000 cashier's
checks totaling $25,000 from Amerasia Bank.415 Three
of the cashier's checks totaling $15,000 were made payable to
Foung 416 and two totaling $10,000 were made payable
to Landon.417 Pan then sent these checks to Foung
via overnight mail. On February 23, 1996, Foung and Landon
deposited these checks in their accounts.418
---------------------------------------------------------------------------
\413\ Amerasia Bank Signature Card of Antonio Pan, Feb. 22, 1996;
Amerasia Bank Personal New Account Application of Antonio Pan, Feb. 22,
1996; Amerasia Bank Savings Account Statement of Antonio Pan, Mar. 31,
1996; Amerasia Bank Savings Deposit Slip of Antonio Pan, Feb. 22, 1996.
\414\ Amerasia Bank Savings Withdrawal Slip of Antonio Pan, Feb.
22, 1996.
\415\ Amerasia Bank Applications of Antonio Pan for three $5,000
Cashier's Checks to Manlin Foung, Feb. 22, 1996; Amerasia Bank
Applications of Antonio Pan for two $5,000 Cashier's Checks to Joe
Landon, Feb. 22, 1996; three $5,000 Amerasia Bank Cashier's Checks to
Manlin Foung, Feb. 22, 1996; two $5,000 Amerasia Bank Cashier's Checks
to Joe Landon, Feb. 22, 1996.
\416\ Three $5,000 Amerasia Bank Cashier's Checks to Manlin Foung,
Feb. 22, 1996;
\417\ Two $5,000 Amerasia Bank Cashier's Checks to Joe Landon, Feb.
22, 1996.
\418\ Travis Federal Credit Union Deposit Slip of Manlin Foung in
the amount of $14,500, Feb. 23, 1996; three Deposited $5,000 Amerasia
Bank Cashier's Checks to Manlin Foung, Feb. 22, 1996; Travis Federal
Credit Union Posted Transaction Register for the Checking Account of
Manlin Foung.
---------------------------------------------------------------------------
b. Ming Chen and Yue Fang Chu
On February 14, 1996, San Kin Yip Holdings Co. Ltd., a
company controlled by Ng Lap Seng, wired $150,000 from the Bank
of China, Hong Kong, to the joint account of Trie and Ng held
at Riggs Bank, Washington, DC.419 At the time of the
transfer, the account balance was $10,459.55.420 The
wire transfer was received only 5 days before the February 19
dinner. In the days following the wire transfer, four checks
totaling $37,500 were issued by Trie's employee Keshi Zhan from
Trie and Ng's joint account to individuals who subsequently
contributed the same amount of money to the DNC. Zhan issued
check number 382 dated February 19, 1996 to Ming Chen, an
employee of Trie, in the amount of $12,500.421 Yue
Fang Chu, an individual who shares an address and at least two
joint bank accounts with Ming Chen, contributed $12,500 to the
DNC the same day, February 19, 1996, from their joint account
at Bank-Fund Staff Federal Credit Union.422
---------------------------------------------------------------------------
\419\ Lap Seng Ng and Yah Lin Trie, Account Statement, Riggs
National Bank, Washington, DC, Mar. 5, 1996; Lap Seng Ng and Yah Lin
Trie, Wire Transfer Report, Riggs National Bank, Washington, DC, Feb.
14, 1996.
\420\ Lap Seng Ng and Yah Lin Trie, Account Statement, Riggs
National Bank, Washington, DC, Mar. 5, 1996.
\421\ Lap Seng Ng and Yah Lin Trie, Check No. 382, Riggs National
Bank, Washington, DC, Feb. 19, 1996.
\422\ DNC Check Tracking Form for Contribution of Yue Fang Chu,
Feb. 19, 1996, DNC Document 000528 (Exhibit 125).
---------------------------------------------------------------------------
Check number 383 dated February 19, 1996, in the amount of
$7,500 was also issued to Ming Chen.423 That same
day, Yue F. Chu issued a check in the amount of $7,500 to the
DNC from one of her joint bank accounts with Chen held at the
Chevy Chase Bank of Chevy Chase, Maryland.424 Chu
was credited with both the $12,500 and the $7,500 contributions
on the Federal Election Commission records.425
---------------------------------------------------------------------------
\423\ Lap Seng Ng and Yah Lin Trie, Check No. 383, Riggs National
Bank, Washington, DC, Feb. 19, 1996.
\424\ DNC Check Tracking Form for Contribution of Yue Fang Chu,
Feb. 19, 1996, DNC Document 000531 (Exhibit 126).
\425\ FEC Website, www.tray.com/fecinfo.
---------------------------------------------------------------------------
c. Zhengwei Cheng and Xiping Wang
Keshi Zhan issued check number 384 dated February 19, 1996,
to Zhengwei Cheng in the amount of $5,000.426 Xiping
Wang, an individual who shares an address and a checking
account at the Bank-Fund Staff Federal Credit Union with
Zhengwei Cheng, contributed $5,000 to the DNC the same day,
February 19, 1996, from that account.427 Xiping Wang
was credited with the $5,000 contribution on the Federal
Election Commission records.428
---------------------------------------------------------------------------
\426\ Lap Seng Ng and Yah Lin Trie, Check No. 384, Riggs National
Bank, Washington, DC, Feb. 19, 1996.
\427\ DNC Check Tracking Form for Contribution of Xiping Wang/
Zhengwei Cheng, Feb. 19, 1996, DNC Document 000532 (Exhibit 127).
\428\ FEC Website, www.tray.com/fecinfo.
---------------------------------------------------------------------------
d. Keshi Zhan
On February 9, 1996, Trie's assistant Keshi Zhan issued a
check to herself from the joint bank account of Trie and Ng in
the amount of $12,500.429 She then wrote a check to
the DNC in the amount of $12,500.430 Both the check
from Trie to Zhan and the check from Zhan to the DNC are dated
February 9, 1996. However, Zhan did not deposit the check from
Trie into her checking account until February 26,
1996.431 Similarly, Ms. Zhan's check to the DNC did
not clear her account until February 26, 1996.432
Zhan's conduit contribution allowed her to attend the February
19, 1996, dinner with President Clinton as well as the February
20, 1996, breakfast with Vice President Gore and have her
photograph taken with both.433 Ms. Zhan invoked the
Fifth Amendment in response to Congressional requests for
cooperation. Zhan received immunity from the Senate Committee
on Governmental Affairs. However, Committee staff were
convinced that Zhan was not being truthful in her testimony,
and accordingly terminated her deposition, and sealed it so
that she could be prosecuted.
---------------------------------------------------------------------------
\429\ Lap Seng Ng and Yah Lin Trie, Check No. 385, Riggs National
Bank, Washington, DC, Feb. 9, 1996.
\430\ DNC Check Tracking Form for Contribution of Keshi Zhan, Feb.
9, 1996, DNC Document 000530 (Exhibit 128).
\431\ Keshi Zhan, Yongli Su, and Zhengkang Shao, Account Statement,
Bank-Fund Staff Federal Credit Union, Washington, DC, Feb. 29, 1996.
\432\ Id.
\433\ Photograph of Keshi Zhan and President Clinton, Feb. 19, 1996
(Exhibit 129); Photograph of Keshi Zhan and Vice President Gore, Feb.
20, 1996 (Exhibit 130).
---------------------------------------------------------------------------
e. Lei Chu
Lei Chu, Trie's advisor on the Bingaman Commission,
attended the February 19, 1996, fundraiser at the Hay-Adams
Hotel with Charlie Trie.434 She also attended a
breakfast with Vice President Gore the following day at the
Hay-Adams.435 More importantly, Lei Chu made what
appears to be a conduit contribution to attend the event. On
February 20, 1996, Chu established a checking account at the
Citizens Bank of Washington with an initial cash deposit of
$12,520.00.436 On that same day, Chu issued starter
check number 90--the first check ever written on that account--
in the amount of $12,500 to the DNC 437 in
conjunction with the Hay-Adams fund-raiser.438 That
check cleared Chu's account on February 26, 1996,439
and was the sole check written from that account during the
period February 1996-July 1996.440
---------------------------------------------------------------------------
\434\ Photograph of Lei Chu and President Clinton, Feb. 19, 1996
(Exhibit 131).
\435\ Photograph of Lei Chu and Vice President Gore, Feb. 20, 1996
(Exhibit 132).
\436\ Citizens Bank Signature Card of Lei Chu; Citizens Bank
Deposit Ticket of Lei Chu in the amount of $12,520, Feb. 20, 1996;
Citizens Bank Cash In Ticket of Lei Chu; Citizens Bank Checking Account
Statement of Lei Chu, Mar. 15, 1996; Currency Transaction Report by
Form 4789 for Lei Chu.
\437\ 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.
\438\ DNC Check Tracking Form for Contribution of Lei Chu, Feb. 20,
1996, DNC Document 000525 (Exhibit 133).
\439\ Citizens Bank Checking Account Statement of Lei Chu, Mar. 15,
1996.
\440\ Citizens Bank Checking Account Statement of Lei Chu, Apr. 15,
1996; Citizens Bank Checking Account Statement of Lei Chu, May 15,
1996; Citizens Bank Checking Account Statement of Lei Chu, June 15,
1996; Citizens Bank Checking Account Statement of Lei Chu, July 15,
1996.
---------------------------------------------------------------------------
f. J & M International
On February 22, 1996, Antonio Pan was introduced to Jack
Ho, a New York businessman. This is the same day that Pan sent
$25,000 in cashier's checks to Manlin Foung and Joseph Landon.
At this meeting, Pan asked Ho to contribute $25,000 to the DNC,
and assured Ho that he would be reimbursed for this
contribution. Ho agreed, andPan delivered to Ho 35 $1,000 Bank
Central Asia travelers check totaling $35,000,441 all of
which were purchased in Indonesia.442 Ho gave $10,000 cash
over to Pan, and deposited the remainder in his bank
account.443 Immediately after his deposit, Ho issued a check
in the amount of $25,000 444 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.445 The fact that
Trie and Pan received tens of thousands dollars in travelers checks
from Indonesia raise questions about whether they received this money
from the Lippo Group. As described earlier, both Trie and Pan had
extensive ties with the Riadys dating to the 1980s.
---------------------------------------------------------------------------
\441\ Bank Central Asia Travelers Checks Nos. 109 3255 610 009
through 109 3255 610 043; see Citibank Checking Account Statement for J
& M International, Feb. 23, 1996; Citibank Deposit Ticket and Deposited
Items of J & M International in the amount of $5,000, Feb. 22, 1996;
Citibank Deposit Ticket and Deposited Items of J & M International in
the amount of $25,000, Feb. 22, 1996.
\442\ Letter from Christopher M. Curran, Esq., Attorney for Bank
Central Asia, to Committee Senior Investigative Counsel Tim Griffin,
Esq., July 20, 1998.
\443\ Interview of Jack Ho, July 30, 1998.
\444\ Citibank Check No. 730 from J & M International to the DNC in
the amount of $25,000, Feb. 23, 1996; Citibank Checking Account
Statement of J & M International, Mar. 22, 1996.
\445\ DNC Check Tracking Form for Contribution of J & M
International, Feb. 23, 1996, DNC Document 000524 (Exhibit 134).
---------------------------------------------------------------------------
2. Ernie Green's $6,000 Contribution
DNC documents indicate that Charlie Trie also solicited
Ernie Green to give $6,000 to the DNC in connection with this
event. Green gave a contribution to the DNC on March 8, 1996,
and DNC records credit Trie with soliciting this contribution,
and credit the contribution itself to the February 19, 1996,
dinner at the Hay-Adams.446 However, Green denies
that it was solicited by Charlie Trie or had any connection to
the February 19, 1996, dinner.447 Green's denials
bear great similarity to his denials surrounding the February
6, 1996, White House coffee. Again, Green claims that his
contribution was mistakenly credited to the wrong solicitor and
the wrong event. Again, Green's denials are questionable. Not
only do they appear to be contradicted by the documentary
evidence regarding Green's contribution,448 but by
Green's presence at the February 19, 1996, event.449
---------------------------------------------------------------------------
\446\ DNC Check Tracking Form for Contribution of Ernest G. Green,
Mar. 8, 1996, DNC Document D0000353 (Exhibit 135).
\447\ Green Deposition II at 10-11. Both of Green's major
contributions for the period between 1994 and 1996 are credited to
Charlie Trie. Green denies that Trie solicited him to make either
contribution, but cannot explain the documentary evidence to the
contrary, or his seeming bad luck in having his contributions mis-
credited. Green is the only witness to come before the Committee to
dispute the accuracy of solicitation information on a DNC Check
Tracking Form.
\448\ Exhibit 135; Finance System Source Detail Report, Feb. 19,
1996, DNC Document DNC 3438334.
\449\ See Photograph of Ernest G. Green and President Bill Clinton,
Feb. 19, 1996 (Exhibit 136).
---------------------------------------------------------------------------
Also of note, 2 days after the February 19 event, Green
deposited $2,500 cash into his account at Riggs
Bank.450 Two days later, he went back to Riggs and
deposited another $3,500 in cash, making a total of $6,000 in
cash deposits over the 4 days following the Hay-Adams
event.451 Green denies that he received this money
from Charlie Trie or that he was reimbursed for his
contribution.452 However, Green lacks any
explanation for where he received the $6,000, or why he
deposited it in two separate trips to the bank.453
---------------------------------------------------------------------------
\450\ Deposit Item, Riggs Bank, Ernest G. Green Travel Expenses
Account, Feb. 21, 1996.
\451\ Deposit Item, Riggs Bank, Ernest G. Green Travel Expenses
Account, Feb. 23, 1996.
\452\ Green Deposition II at 13-14.
\453\ Id. at 12-13.
---------------------------------------------------------------------------
C. May 13, 1996 Event
In May 1996, Trie was centrally involved in another major
DNC Asian-American fundraiser. Trie gave $10,000 for this
event, and sat at the head table with President
Clinton.454 Moreover, Trie raised over $330,000 for
this event, almost all of it from Yogesh Gandhi. Shortly before
the fundraiser, Gandhi had attempted to gain access to the
Clinton White House to present the ``Gandhi World Peace Award''
to President Clinton.455 The White House staff
rejected Gandhi's offer, and decided not to admit him to the
White House, in large part because of his questionable
background.456 However, Trie told Gandhi that he
could introduce him to the President, and give him the
opportunity to present the Gandhi prize to the President. Trie
asked Gandhi to give $325,000 to the DNC in exchange for the
privilege of attending the meal and meeting the
President.457 Gandhi was happy to oblige, in large
part, because his contribution came not from his own money, but
directly from Yoshio Tanaka, a Japanese
industrialist.458 Gandhi had several tables at the
May 13 event, and two members of his party sat at the head
table with the President.459 One of these
individuals, Teruyoshi Fukunaga was the head of a Japanese cult
widely recognized as the source of widespread fraud in
Japan.460 After the May 13 meal, Trie introduced
Gandhi and his entourage to the President, and Gandhi presented
the Gandhi Prize to the President.461
---------------------------------------------------------------------------
\454\ DNC Check Tracking Form for Contribution of Yah Lin Trie, May
12, 1996, DNC Document DNC 3687040 (Exhibit 137); Memorandum, Head
Table, May 13, 1996, DNC Document DNC 1604073 (Exhibit 138).
\455\ Letter from Yogesh K. Gandhi to President Bill Clinton, Feb.
5, 1996.
\456\ Notes of Ann Eder, White House Document EOP 001534; see also
Letter from Stephanie S. Streett and Ann Walley to Yogesh K. Gandhi,
Apr. 17, 1996, White House Document EOP 003401 (Exhibit 139).
\457\ DNC Check Tracking Form for Contribution of Yogesh K. Gandhi,
May 13, 1996, DNC Document DNC 0829404 (Exhibit 140).
\458\ Citibank F.S.B. Wire Transfer for Yogesh Gandhi, May 20,
1996, May 23, 1996, and May 29, 1996.
\459\ Exhibit 138.
\460\ Willis Witter, ``Japan Got a `Foot' in Fund-Raising Door; But
Democrats Returned $325,000,'' the Washington Times, July 22, 1997 at
A1.
\461\ See Photograph of Presentation of Gandhi Bust, May 13, 1996
(Exhibit 141-42). The photographs of the award presentation indicate
that Craig Livingstone was involved in the presentation of the Gandhi
Prize. See also Photograph of Charlie Trie and President Clinton, May
13, 1996 (Exhibit 143); Photograph of Craig Livingstone and President
Clinton, May 13, 1996 (Exhibit 144); Photograph of John Huang and
President Clinton, May 13, 1996 (Exhibit 145).
---------------------------------------------------------------------------
It was during this event that the President recalled his
long friendship with Trie:
Soon 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.462
---------------------------------------------------------------------------
\462\ White House Communications Agency videotape No. 6, May 13,
1996. Of course, Trie still could not afford the ticket to the May 13
fundraiser, or any other DNC event that he attended without the
assistance of foreign nationals.
However, at the time that Trie was raising massive funds for
the DNC, and contributing $10,000 himself, Trie borrowed $5,000
from Mark Middleton for his personal use.463 He also
was named in a complaint in District of Columbia court for
failing to pay his rent.464 This contradictory
evidence raises many questions regarding Trie's finances, and
helps confirm the fact that much of the money that Trie gave
was not his own.
---------------------------------------------------------------------------
\463\ Check from Commerce Corp. to Charlie Trie for $5,000, May 22,
1996, Commerce Corp. Document CC-H-001147 (Exhibit 146).
\464\ Complaint of NHP Property Management Inc. vs. Yah Lin Trie,
Apr. 12, 1996 (Exhibit 147).
---------------------------------------------------------------------------
D. Trie's Contributions to the Presidential Legal Expense Trust
Charlie Trie did not limit his illicit fundraising
activities to his work on behalf of the DNC. Trie also raised
substantial sums of money for the Presidential Legal Expense
Trust (``PLET''). The PLET was established by the President and
First Lady to cover their expenses related to the Whitewater
and Paula Jones matters. While the PLET initially raised large
amounts of money, by early 1996, its fundraising had slowed to
a trickle. It was at this time that Charlie Trie decided to
start raising money for the PLET. It is unknown why Trie began
raising money for the PLET, or if anyone encouraged him to do
so.
To raise money for the PLET, Trie sought the assistance of
the Suma Ching Hai International Association, a Buddhist cult
based in Taiwan. In March 1996, Trie met with the members of
the Suma Ching Hai cult in New York City, and with the help of
Suma Ching Hai, the leader of the cult, convinced many members
to write checks to the PLET.465 All of them were
reimbursed for their contributions by the cult.466
---------------------------------------------------------------------------
\465\ Deposition of Zhi Hua Dong, Senate Committee on Governmental
Affairs, June 17, 1997, at 68-91.
\466\ Id. at 99-100.
---------------------------------------------------------------------------
Shortly thereafter, on March 21, 1996, Charlie Trie visited
the offices of Michael Cardozo, the head of the
PLET.467 Shortly after his meeting with Cardozo
started, Trie opened a manila envelope stuffed with hundreds of
small checks totaling $380,000.468 Cardozo developed
an immediate suspicion of the money delivered by Trie, based on
the manner of their delivery, the fact that many of the
cashier's checks and money orders were sequentially numbered,
and that there were misspellings on a number of the
checks.469
---------------------------------------------------------------------------
\467\ Cardozo Senate Deposition I at 27-28.
\468\ Id. at 34.
\469\ Id. at 65.
---------------------------------------------------------------------------
1. Taiwan Strait Letter
On March 21, 1996, after Trie delivered the checks to the
PLET offices, he met with Mark Middleton and gave him a letter
for delivery to the White House. The letter indicates that it
was faxed first from ``P.E.C. Co.,'' on March 20.470
The following day, after Middleton received it, he faxed it to
the White House.471 The fact that the letter was
faxed from ``P.E.C. Co.'' the day before it was delivered by
Trie to Middleton raises some question as to whether the letter
was written by Trie or some other individual. However, one
witness informed the Committee that Trie was ``terribly
concerned'' over possible incidents between the United States
and China over Taiwan.472 According to this witness,
Trie spoke of having talked to ``people in the White House and
National Security Council about the danger of confronting China
over Taiwan.'' 473 Middleton faxed Trie's letter to
the White House, and on the cover page, informed the White
House staff that ``[a]s you likely know, Charlie is a personal
friend of the President from L.R. He is also a major supporter.
The President sat beside Charlie at the big Asian fundraiser
several weeks ago. Thanks for your always good assistance.''
474
---------------------------------------------------------------------------
\470\ Letter from Charlie Y.L. Trie to the President, Mar. 21,
1996, White House Document EOP 029284 (Exhibit 148).
\471\ Id.
\472\ Prestowitz Interview at 3.
\473\ Id.
\474\ Exhibit 147.
---------------------------------------------------------------------------
The letter outlined a number of views regarding the Taiwan
Strait crisis which was brewing at the time:
Regarding the current situation in the Taiwan Strait
Crisis and also the U.S. aircraft carriers and cruisers
involvement, I would like to propose some important
points to you in order not to endanger the U.S.
interest based on the followings [sic]:
1. Any negative outcomes of the U.S. decision in the
China Issue will affect your administration position
especially in this campaign year;
2. Why U.S. has to send the aircraft carriers and
cruisers to give China a possible excuse of foreign
intervention and hence launch a real war? And, if the
U.S. recognized ``one China'' policy, don't [sic] such
conduct will cause a conflict for ``intervening China's
internal affairs?'' Therefore, won't the recent
inconsistent talks by the captains and some
governmental officials in the mass media cause problems
for the U.S. policy of not [sic] interference of
China's internal affairs?
* * * * * * *
7. Once the hard parties of the Chinese military
inclined [sic] to grasp U.S. involvement as foreign
intervention, is U.S. ready to face such challenge?
8. It is highly possible for China to launch real
war, based on its past behavior in Sino-Vietnam War and
Zhen Bao Tao war with Russia. . . .475
---------------------------------------------------------------------------
\475\ Id.
Trie's letter received a response from President Clinton just 1
month later. The response, in relevant part, stated that the
U.S. action ``was intended as a signal to both Taiwan and the
PRC that the United States was concerned about maintaining
stability in the Taiwan Strait region. It was not intended as a
threat to the PRC.'' 476 Trie's letter and the
Administration's response to it were handled by several high-
level national security staffers, including National Security
Advisor Anthony Lake and staffer Robert
Suettinger.477
---------------------------------------------------------------------------
\476\ Letter from President Clinton to Charlie Y.L. Trie, Apr. 26,
1996, White House Document EOP 029282 (Exhibit 149).
\477\ Trie's letter was handled by National Security staffer Robert
Suettinger, and National Security Advisor Anthony Lake. See Memorandum
from Anthony Lake to President Clinton, Apr. 24, 1996, White House
Document EOP 029283; Action Data Summary Report, White House Document
EOP 029279.
---------------------------------------------------------------------------
Several aspects of this episode are not yet clear and are
still under investigation. First, it is not clear who drafted
the letter, and why they drafted it. However, it is clear that
Trie's status as a DNC supporter was helpful in having his
letter read by top-level White House national security staff,
and having it answered promptly.
2. Return of Trie's PLET Contributions
After his receipt of Trie's checks, Cardozo immediately
launched an internal investigation of the funds. Cardozo also
visited the White House to inform the President and First Lady,
the beneficiaries of the trust, about the Trie contributions.
On April 4, 1996, Cardozo met with Hillary Clinton and Harold
Ickes, and informed them that a businessman named Charlie Trie
had delivered $380,000 in contributions to the PLET:
I tried to get Mrs. Clinton to guess--I said a
substantial amount of money has been brought to the
trust by someone who says he knows you. Would you like
to try to guess who it is? And she said, well--she
tried. . . . And then I said, well, it's someone from
Arkansas. . . . And then, you know, finally I told her.
You know, she didn't--drew a blank. I mean, she just
did not recognize Charlie Trie's name at all. And then
after 30 seconds or a minute, she said ``Oh yeah, is he
the guy that owns the Chinese restaurant near the
Capitol?'' 478
---------------------------------------------------------------------------
\478\ Cardozo Senate Deposition I at 71.
During April 1996, private investigators hired by Cardozo
investigated the contributions delivered by Trie to the PLET.
On April 24, Trie returned to the PLET offices to contribute
another $179,000 in checks from Suma Ching Hai
devotees.479 By the end of the month, they had
concluded that the contributions had been orchestrated by
members of the Suma Ching Hai cult. Cardozo told the White
House that he intended to return the Trie contributions at a
meeting on May 9, 1996. This meeting was attended by high-level
White House staffers including Bruce Lindsey, Harold Ickes,
Cheryl Mills, and Maggie Williams. During this meeting,
according to Cardozo, Bruce Lindsey stated that Trie was
``involved with the Democratic Party.'' 480
---------------------------------------------------------------------------
\479\ Id. at 83. In addition, Trie appeared at the PLET offices on
a third occasion to contribute money, but his contributions were
rejected by Cardozo. Id. at 188.
\480\ Id. at 175.
---------------------------------------------------------------------------
However, no one in the White House took any action to stop
Trie's frequent visits to the White House or to warn the DNC
about Trie's troubling fundraising practices. Bruce Lindsey and
Harold Ickes both had direct knowledge of Trie's involvement in
DNC fundraising activities. Both received a direct warning from
Michael Cardozo about Trie's fundraising activities on behalf
of the PLET. Nevertheless, neither warned the DNC until the eve
of the 1996 general election. In the interim, between May 9,
1996, and October 1996, Trie would raise hundreds of thousands
of dollars for the DNC, most of it illegal,481 and
would visit the White House six times.482
---------------------------------------------------------------------------
\481\ Trie raised funds for two major DNC events between May 9,
1996, and Oct. 1996: the May 13 DNC Fundraiser in Washington, DC, and
the Aug. 18, 1996, Presidential Birthday Fundraiser in New York City.
Trie's most significant solicitation at any of these events was the
$325,000 he solicited from Yogesh Gandhi. This illegal contribution was
returned by the DNC on Election Day, 1996.
\482\ See WAVES Records of Yah Lin Trie.
---------------------------------------------------------------------------
E. August 18, 1996, Fundraiser
On August 18, 1996, the DNC held a massive fundraiser in
honor of President Clinton's birthday. Charlie Trie and Ng Lap
Seng attended this event, and Trie was also heavily involved in
raising funds for the event as well.483 Trie raised
at least $30,000 in conduit contributions for this event.
---------------------------------------------------------------------------
\483\See Photograph of Ng Lap Seng and President Clinton, Aug. 18,
1996 (Exhibit 150).
---------------------------------------------------------------------------
1. Manlin Foung
On or about August 15, 1996, Trie telephoned his sister,
Manlin Foung, and requested that she contribute $10,000 to the
DNC.484 Trie promised to reimburse her
fully.485 On August 15, 1996, 3 days before
President Clinton's birthday party in New York City, Trie's
company, San Kin Yip, sent a $10,000 wire transfer to Manlin
Foung's checking account at the Travis Federal Credit Union in
Vacaville, California.486 On August 18, 1996,
approximately 1 week later, Foung contributed $10,000 to the
DNC Birthday Victory Fund from that same account.487
---------------------------------------------------------------------------
\484\ Foung Deposition at 60.
\485\ Id. at 61.
\486\ Riggs Bank Wire Transfer Report of Ng Lap Seng and Yah Lin
Trie, Aug. 15, 1996; Travis Federal Credit Union Account Statement of
Manlin Foung, Aug. 31, 1996. Immediately before the transfer, Foung's
checking account balance was $2,146.63, and her savings account balance
was $5,378.95. Travis Federal Credit Union Account Statement of Manlin
Foung, Aug. 31, 1996.
\487\ DNC Check Tracking Form for Contribution of Manlin Foung,
Aug. 15, 1996, DNC Document DNC 1821214 (Exhibit 151); see also FEC
website, www.tray.com/fecinfo.
---------------------------------------------------------------------------
2. David Wang and Daniel Wu
David Wang testified that on the morning of August 16,
1996, John Huang and Antonio Pan visited David Wang at his used
car dealership in order to solicit a contribution to the
DNC.488 Huang asked Wang if he knew of any friends
who might like to contribute.489 Wang suggested
Daniel Wu, a Taiwanese citizen who was living in
Taiwan.490 Wang agreed to contribute $5,000 to the
DNC and also agreed to contribute $5,000 in Wu's name using
Wu's checking account.491 Huang or Pan then
indicated that he might be able to reimburse both Wang and Wu
for their contributions.492
---------------------------------------------------------------------------
\488\ Personal Journal of David Wang (Exhibit 152); Deposition of
David Wang, House Committee on Government Reform and Oversight, Oct. 6,
1997 (``Wang Deposition''), at 16. Whether or not Huang actually
appeared at Wang's place of work is in dispute. Wang has offered sworn
testimony that Huang was there, but Huang's attorney has disputed
Wang's claim, stating that Huang was in New York at the time.
\489\ Wang Deposition at 39.
\490\ Id.
\491\ Id. at 70.
\492\ Id. at 43.
---------------------------------------------------------------------------
That same morning Wang and Wu each contributed $5,000 to
the DNC totaling $10,000--Wang contributed $5,000 from his
personal checking account and $5,000 from Wu's personal
checking account over which Wang held power of
attorney.493 DNC records indicate that the
contributions were in conjunction with the DNC's birthday party
fundraiser held for President Clinton in New York City on
August 18, 1996.494
---------------------------------------------------------------------------
\493\ Id. at 70; DNC Check Tracking Form for Contribution of David
Wang, Aug. 16, 1996, DNC Document D0000323 (Exhibit 153); DNC Check
Tracking Form for Contribution of Daniel Wu, Aug. 16, 1996, DNC
Document DNC 1803086 (Exhibit 154); Bank of Canton of California
Account Statement of Daniel Wu, Feb. 12, 1997; Bank of Canton of
California Statement of Power of Attorney.
\494\ Exhibit 153; Exhibit 154.
---------------------------------------------------------------------------
In the afternoon of August 16, 1996, Pan returned to Wang's
car dealership unaccompanied by Huang and delivered $6,000 cash
to Wang, $3,000 for Wang and $3,000 for Wu.495 Wang
recorded the receipt of these funds in his personal
journal.496 This delivery of cash by Pan partially
reimbursed Wang and Wu. Wang deposited $3,000 into his personal
checking account 497 and $3,000 in Wu's
account.498 On August 20, 1996, Pan returned to
Wang's car dealership unaccompanied by Huang and delivered
$4,000 cash to Wang, $2,000 for Wang and $2,000 for
Wu.499 Wang again recorded the receipt of these
funds in his journal.500 Wang deposited $2,000 into
his personal checking account and $2,000 in to Wu's personal
checking account.501 This delivery of cash by Pan
completed the reimbursement of Wang and Wu. DNC records
indicate that it received Wang and Wu's contributions on August
20, 1996.502
---------------------------------------------------------------------------
\495\ Wang Deposition at 44.
\496\ Exhibit 152.
\497\ See Trans National Bank Account Statement of David Wang, Aug.
16, 1996.
\498\ See Bank of Canton of California Account Statement of Daniel
Wu, Apr. 14, 1997.
\499\ See Trans National Bank Account Statement of David Wang,
Sept. 17, 1996; Bank of Canton of California Account Statement of
Daniel Wu, Apr. 14, 1997; see also Exhibit 152.
\500\ Exhibit 152.
\501\ Trans National Bank Account Statement of David Wang, Sept.
17, 1996; Bank of Canton of California Account Statement of Daniel Wu,
Apr. 14, 1997.
\502\ Exhibit 153; Exhibit 154.
---------------------------------------------------------------------------
3. Kimmy Young
In August 1996, Antonio Pan solicited Kimmy Young, of Ohio,
to contribute $10,000 to the DNC in connection with the
President's birthday fundraiser. Young wrote a check for
$10,000 to the DNC on August 16, 1996.503 Pan
subsequently reimbursed Young in cash for her
contribution.504
---------------------------------------------------------------------------
\503\ DNC Check Tracking Form for Contribution of Kimmy Young, Aug.
16, 1996, DNC Document D0000320 (Exhibit 155).
\504\ See Cash Deposit, Bank One Account 984111998, Sept. 19, 1996;
see also Indictment of Yah Lin ``Charlie'' Trie and Yuan Pei
``Antonio'' Pan, Jan. 1998 (listing the Young contribution as one of
Trie's many illegal contributions).
---------------------------------------------------------------------------
CONCLUSION
Finally, in October 1996, shortly before the election,
Harold Ickes warned the DNC about Charlie Trie. In mid-October
1996, B.J. Thornberry called Ickes about her concerns regarding
John Huang's fundraising activities. During that conversation,
Ickes told Thornberry, ``well, if you're concerned about Huang,
you better look at Charlie Trie.'' 505 While this
warning represented the beginning of the end of Charlie Trie's
fundraising career, Trie would continue to visit the White
House until mid-December.506 Trie visited the White
House for a Christmas party in December 1996, and spoke with
the President, apologizing to him for the embarrassment he had
caused him.507 After his apology, Trie left the
party.508 According to aide Bruce Lindsey, the
President was saddened by Trie's travails:
---------------------------------------------------------------------------
\505\ Deposition of Betty Jane Thornberry, House Committee on
Government Reform and Oversight, July 22, 1997, at 71.
\506\ See WAVES Records of Yah Lin Trie.
\507\ Deposition of Bruce Lindsey, House Committee on Government
Reform and Oversight, Apr. 29, 1998, at 24-25.
\508\ Id.
Question. And what was the President's reaction to
that?
Lindsey. I think he felt sad, because I think, that
Charlie Trie was sorry that he had caused the President
the embarrassment; and the fact that he then left, you
know, I think reflected on that, and I think he was sad
about it.
Question. Was the President at all concerned that he
was at the event or how he got there, given the
situation at that time?
Lindsey. If he was, he didn't reflect that with
me.509
---------------------------------------------------------------------------
\509\ Id.
This report represents just one part of the story regarding
Charlie Trie. While most of Trie's actions are known, the
motives behind them are not known. The full truth regarding
Trie's relationship with the Clinton White House will not be
known until Trie cooperates with the Committee. Only then will
the Committee know the reason he illegally gave hundreds of
thousands of dollars to the DNC, and solicited hundreds of
thousands more in illegal contributions. Only then will it be
known why the Clinton Administration appointed Trie to an
Administration post, and gave him wide-ranging access to the
White House.
The evidence collected by the Committee to date shows a
disturbing pattern of conduct by the White House and the close
associates of the President. This evidence demonstrates that
political contributions were collected from Trie with little
regard to their legality. It also demonstrates that the White
House continued to allow the DNC to accept contributions from
Trie, even though it knew that Trie was engaged in suspect
fundraising practices with respect to the PLET. This evidence
also shows that Trie received special treatment from the White
House and DNC, culminating in an appointment to a Presidential
commission, with little regard for Trie's suspect background.
[Supporting documentation follows:]
=======================================================================
CHAPTER IV, PART C
UNPRECEDENTED INFUSION OF FOREIGN MONEY INTO THE AMERICAN POLITICAL
SYSTEM:
JOHNNY CHUNG: HIS UNUSUAL ACCESS TO THE WHITE HOUSE AND HIS POLITICAL
DONATIONS
=======================================================================
JOHNNY CHUNG: HIS UNUSUAL ACCESS TO THE WHITE HOUSE AND HIS POLITICAL
DONATIONS
Overview
In an interview with the Los Angeles Times in July 1997,
California entrepreneur Johnny Chien Chuen Chung captured the
essence of the campaign fundraising scandal when he observed:
``I see the White House is like a subway--you have to put in
coins to open the gates.'' \1\ Johnny Chung was a frequent
passenger on this subway.
---------------------------------------------------------------------------
\1\ William Rempel and Alan Miller, ``First Lady's Aide Solicited
Check to DNC, Donor Says,'' the Los Angeles Times, July 27, 1997
(Exhibit 1).
---------------------------------------------------------------------------
Between 1994 and 1996, Chung visited the White House 49
times.\2\ His visits to the White House coincided with a large
volume of donations to the Democratic National Committee. In
total, Chung contributed over $366,000 over the same time
period.\3\
---------------------------------------------------------------------------
\2\ White House WAVES Records (Exhibit 2).
\3\ FEC Internet Records www.tray.com/fecinfo/. (Exhibit 3).
---------------------------------------------------------------------------
In the course of its investigation, the Committee has
learned that Chung frequently sought access to senior Clinton
Administration officials on behalf of high-level Chinese
business associates, often with specific objectives. On almost
every occasion, those meetings were facilitated by senior DNC
officials, and often coincided with large political
contributions.
The Committee has also learned that much of the money
contributed by Chung originated overseas. Despite clear
indications that some officials at the DNC were concerned about
the origins of Chung's money as early as February 1995, DNC
officials continued to solicit and accept contributions from
him for another year-and-a-half. In late February 1997, a full
2 years after DNC Finance Director Richard Sullivan first
raised concerns about Chung, the DNC announced its intention to
return all of his contributions.\4\
---------------------------------------------------------------------------
\4\ Sharon Lafraniere and Lena Sun, ``DNC Returns Another $1.5
Million,'' the Washington Post, Mar. 1, 1997 (Exhibit 4).
---------------------------------------------------------------------------
On March 16, 1998, Johnny Chung pled guilty to multiple
campaign-related charges, including making conduit
contributions to Clinton/Gore '96 and the campaign of Senator
John F. Kerry (D-MA), and tax evasion.\5\
---------------------------------------------------------------------------
\5\ Associated Press, ``Fund-raiser Chung Pleads Guilty,'' the
Washington Post, Mar. 17, 1998 (Exhibit 5).
---------------------------------------------------------------------------
Shortly thereafter, the New York Times reported that Chung
told Justice Department investigators that $80,000 that he
donated to the DNC in 1996 was given to him by a Lieutenant
Colonel in China's People's Liberation Army.\6\ According to
the Times account, the money came from Liu Chao-Ying, a senior
aerospace industry executive and the daughter of retired PLA
General Liu Huaqing.\7\
---------------------------------------------------------------------------
\6\ David Gerth, David Johnston and Don Van Natta, ``Democrat Fund-
Raiser Said to Detail China Tie,'' the New York Times, May 15, 1998
(Exhibit 6).
\7\ Id.
---------------------------------------------------------------------------
Background
Johnny Chung was born in Taiwan in 1954 and moved to Costa
Rica at the age of 12 with his Presbyterian missionary
parents.\8\ He returned to Taiwan to attend college, where he
earned a degree in American literature from Fu-Jen Catholic
University.\9\ He then immigrated to the United States, and
later became a citizen in 1988.\10\
---------------------------------------------------------------------------
\8\ Anne Rackham, ``Chung can send fax to thousands at same time--
but who wants to listen?'' Los Angeles Business Journal, Week of Mar.
28-Apr. 3, 1994, DNC 3233807-808 (Exhibit 7).
\9\ Id.; DNC 3363002 (Exhibit 8).
\10\ Anne Rackham, ``Chung can send fax to thousands at same time--
but who wants to listen?'' Los Angeles Business Journal, Week of Mar.
28-Apr. 3, 1994, DNC 3233807-808 (Exhibit 7).
---------------------------------------------------------------------------
Chung also attended the University of California, Los
Angeles, where he took graduate courses in electrical
engineering.\11\ He started Iris Data Computer, Inc. in 1979
and Telform Inc. in 1992.\12\ Telform Inc. later evolved into
Automated Intelligent Systems, Inc. (AISI), in January 1993.
The company brochure states:
---------------------------------------------------------------------------
\11\ DNC 3363002 (Exhibit 8).
\12\ Id.
Automated Intelligent Systems, Inc. provides its
clients with state-of-the-art communications services.
The company, originally known as Telform Inc. in 1992,
was formed to develop AISI's current fax broadcast
system. Recognizing the challenges of rapid
technological growth, Chairman and C.E.O., Mr. Johnny
Chung spent 8 years in designing and developing an
advance [sic] technology that brings a new dimension to
the world of faxing. Today, it is a fast growing
company with its corporate office in Torrance,
California and our branch offices in Washington, D.C.,
Hong Kong and China.\13\
---------------------------------------------------------------------------
\13\ AISI Brochure, DNC 3233800-817 at 3233809 (Exhibit 9).
According to the Los Angeles Business Journal, Chung first
---------------------------------------------------------------------------
appears to have approached the Clintons in the fall of 1992:
[W]hile watching a debate between George Bush and Bill
Clinton on television, it came to him--political
candidates and governments send out more faxes than
private companies. . . . Chung called Clinton's mansion
and offices in Arkansas non-stop and finally he flew to
Little Rock, where he said he banged on the door of the
then-governor's home. He was fortunate enough to meet
Hillary Rodham Clinton and hand her some
information.\14\
---------------------------------------------------------------------------
\14\ Anne Rackham, ``Chung can send fax to thousands at same time--
but who wants to listen?'' Los Angeles Business Journal, Week of Mar.
28-Apr. 3, 1994, DNC 3233807-808 (Exhibit 7).
The story goes on to relate that Chung received a letter
from Mrs. Clinton in April 1993, following the election. The
---------------------------------------------------------------------------
letter states:
Thank you for your letter and my apologies for not
getting back to you sooner. It appears from the
correspondence you have had with federal and state
officials, and with the private sector, that you are
already on the right track. Nevertheless, I wish you
good luck with your innovative system.\15\
---------------------------------------------------------------------------
\15\ AISI brochure, DNC 3233803 which includes an Apr. 26, 1993
letter to Johnny Chung from Hillary Rodham Clinton, F 0018591. [Note:
The Committee has not received from the White House the original letter
from Chung to Mrs. Clinton, but this Apr. 26, 1993 letter appears to be
the first White House contact with Chung on record.] (Exhibit 9).
Chung apparently used this letter from the First Lady to
approach Governor Pete Wilson's office in Sacramento. The
Governor's office became Chung's first client.\16\ The article
further discusses Chung's plans to branch out into government
document services, and Chung's discussions with the Centers for
Disease Control in Atlanta to discuss taking over the faxing of
health-hazard updates to travel agents, communicable disease
reports to health-care providers, and HIV newsletters to
various agencies.
---------------------------------------------------------------------------
\16\ Anne Rackham, ``Chung can send fax to thousands at same time--
but who wants to listen?'' Los Angeles Business Journal, Week of Mar.
28-Apr. 3, 1994, DNC 3233807-808 (Exhibit 7).
---------------------------------------------------------------------------
According to his company brochure which Chung sent to the
DNC in the spring of 1995, the ``Government Division'' of AISI
served 48 state government offices and Federal agencies. Chung
also claims to have expanded his services into the Fortune 500
companies.\17\
---------------------------------------------------------------------------
\17\ DNC 3233809 (Exhibit 9).
---------------------------------------------------------------------------
Chung's Early Contacts at the White House and the DNC
The White House's ``Workers and Visitors Entry System''
(WAVES) records indicate that Chung's first visit to the White
House was on February 2, 1994.\18\ According to the WAVES
records, Chung met with Brian Foucart, who was at that time
working in the White House administrative offices under David
Watkins.\19\ Chung's next recorded visit is on July 22,
1994.\20\
---------------------------------------------------------------------------
\18\ EOP 008708 (Exhibit 2).
\19\ Id.
\20\ EOP 008700 (Exhibit 2).
---------------------------------------------------------------------------
It appears that Chung's initial interest in the White House
was as a potential client for AISI. In documents produced by
the White House, it appears that the White House was comparing
AISI with other companies to contract with for fax broadcast
services.\21\ These documents also make it clear that Chung's
entreaties were being heard at the highest levels, including
the First Lady and Deputy Chief of Staff Harold Ickes. Included
in these White House documents is a page with handwritten notes
that appears to set forth details about AISI, including names
of employees.\22\ It also contains the following notation:
``First Lady--if we don't use Johnny Chung, we're in trouble.''
\23\
---------------------------------------------------------------------------
\21\ EOP 070626-634 (Exhibit 10); 070636-637 (Exhibit 11); 070648-
662 (Exhibit 12); 070679-680 (Exhibit 13).
\22\ EOP 070635 (Exhibit 14).
\23\ Id.
---------------------------------------------------------------------------
On March 21, 1995, White House aide Brian Bailey prepared a
memorandum for Erskine Bowles regarding ``fax issues.'' \24\
The memo states: ``If we are going to use AISI, we need to do
so at the DNC. Using this company in the White House would
raise legal concerns.'' \25\ The memo continues with: ``Even if
we consider other vendors, we still should avoid housing the
operation in the White House.'' \26\
---------------------------------------------------------------------------
\24\ EOP 070638 (Exhibit 15).
\25\ Id.
\26\ Id.
---------------------------------------------------------------------------
A July 17, 1995 memorandum from Deputy White House Chief of
Staff Harold Ickes to DNC Executive Director Bobby Watson
``strongly urges'' the DNC to obtain broadcast fax capability:
We understand that Johnny Chung's firm has such
capability which should be negotiated at a reasonable
price. Erskine Bowles has looked into this and it is
his understanding that once names and addresses are
provided to Mr. Chung's company, as many as 30,000
pages per hour could be faxed at an approximate cost of
$0.17 per page.\27\
---------------------------------------------------------------------------
\27\ EOP 070607 (Exhibit 16).
However, months earlier, Chung had already tried to
contract with the DNC. On March 6, 1995, Richard Sullivan wrote
a memo to ``Bobby'' [Watson, DNC Executive Director at the
---------------------------------------------------------------------------
time] regarding ``AISI Faxcast,'' which stated:
Johnny Chung, Torrance, CA, CEO of Automated
Intelligent Systems, contributed $94,000 to the DNC in
1994 and raised an additional $20,000. Johnny's
company, AISI is a faxcast company with many political
clients including Gov. Chiles, Sen. Kennedy and others.
Johnny would like to get some of our business. Art
Liang, managing director of the company will be in town
on Wednesday and Thursday and would like to meet with
the appropriate person at the DNC. He has said that he
would beat the price of the company we are currently
using. Please advise.\28\
---------------------------------------------------------------------------
\28\ DNC 1096986, Mar. 6, 1995 memo to Bobby Watson from Richard
Sullivan (Exhibit 17).
Although Chung failed to win a contract from either the
White House or the DNC, he put his contacts to work in other
ways to benefit his company. During his numerous visits to the
White House, he obtained numerous photos with the First Lady,
the President, the Vice President, and various other White
House officials. Chung developed a brochure for his company
which included all of these pictures.\29\ Since this brochure
was produced by the White House, presumably White House
officials were well aware of Chung's promotional and commercial
uses of his relationship with the President and the First Lady.
---------------------------------------------------------------------------
\29\ EOP 018020-38 (Exhibit 18).
---------------------------------------------------------------------------
Chung's Contributions to the DNC and Additional White House Visits
Chung's first large contributions to the DNC appear to have
resulted from his involvement in the President's August 2, 1994
birthday party event, which was held at the Sumner Wells estate
in Maryland and was chaired by long-time Presidential friend
and DNC Managing Trustee Ernie Green.\30\ Chung is listed as a
co-chair and bringing 10 guests, along with Charlie Trie.\31\
The event reportedly raised $1.2 million. Approximately 1,500
people attended the dinner, with an additional 200-250
attending a reception. The reception cost $1,000 per couple and
the dinner cost $10,000 per couple. FEC records show that Chung
donated $11,000 to the DNC that week.\32\
---------------------------------------------------------------------------
\30\ DMC 1786472-81 (Exhibit 19).
\31\ Id.
\32\ FEC Internet Records--www.tray.com/FECinfo/ (Exhibit 3).
---------------------------------------------------------------------------
Earlier that same day, Chung entered the White House for a
visit with a staff person named ``Lewis'' at the exact same
time that John Huang entered the White House for a visit with
``Lewis.'' \33\ After Mr. Chung's participation in the
President's birthday event, he became a more frequent visitor
to the White House. In August 1994 alone, Chung visited the
White House six times.\34\
---------------------------------------------------------------------------
\33\ WAVES at EOP08698 (Exhibit 2).
\34\ Id.
---------------------------------------------------------------------------
On December 3, 1994, Chung and his wife attended an
intimate DNC luncheon for the First Lady which included 37
guests.\35\ This event was held by the DNC in California.
---------------------------------------------------------------------------
\35\ F0038495 (Exhibit 20).
---------------------------------------------------------------------------
By the end of 1994, Chung had contributed in excess of
$90,000 to the DNC. In December 1994, he made two separate
$40,000 contributions.\36\
---------------------------------------------------------------------------
\36\ FEC Internet Records-www.tray.com/FECinfo/. (Exhibit 3).
---------------------------------------------------------------------------
Foreign Funds Paid to Chung and His Political Contributions
Between 1994 and 1996, he contributed $366,000 to the DNC.
Over that same time period, he and his company received wire
transfers from outside the country in excess of $2.4 million.
The following table lists foreign wire transfers received by
Chung and contributions made by him in chronological order:
----------------------------------------------------------------------------------------------------------------
Payment Received Amount Political Recipient of
Date From Received Origin of Transfer Contribution Contribution
----------------------------------------------------------------------------------------------------------------
1994:
7/12/94......... [Unknown]........... $100,000 Hong Kong.......... ............ ........................
8/9/94.......... .................... ......... ................... $1,000 DNC
8/9/94.......... .................... ......... ................... 10,000 DNC
11/4/94......... Yi Chen Liu......... 220,000 California......... ............ ........................
12/6/94......... .................... ......... ................... 40,000 DNC
12/22/94........ .................... ......... ................... 40,000 DNC
1995:
1/9/95.......... Yi Chen Liu......... 20,000 New York........... ............ ........................
3/17/95......... .................... ......... ................... 50,000 DNC
4/8/95.......... Yi Chen Liu......... 100,000 California......... ............ ........................
4/8/95.......... .................... ......... ................... 125,000 DNC
4/21/95......... Gold Treasure, Ltd.. 234,985 Canada/Bank of ............ ........................
China.
7/5/95.......... Strong Ever Inv., 99,985 Bank of China NYC/ ............ ........................
Ltd. Hong Kong.
9/14/95......... China Nationalities 49,985 Bank of China/NYC.. ............ ........................
Int'l Trust & Inv.
9/21/95......... .................... ......... ................... 20,000 Clinton/Gore '96
10/12/95........ Gold Treasure, Ltd.. 69,984 Hong Kong Bank of ............ ........................
Canada.
10/19/95........ Brilliance Fin Co 129,985 Bank of China NYC/ ............ ........................
Ltd, HK. Hong Kong.
10/19/95........ .................... ......... ................... 25,000 Africare
1996:
2/1/96.......... Chan Koon Wai....... 199,985 Hong Kong.......... ............ ........................
.............. .................... ......... ................... 25,000 Back to Business
2/7/96.......... Sundart Engr Ltd- 19,985 China.............. ............ ........................
Beijing.
6/3/96.......... Zhen Fa Intl' Inv... 101,985 Chase Bank New York ............ ........................
6/10/96......... Johnny Chung (HK)... 24,980 Standard Chartered ............ ........................
Bank Hong Kong.
6/14/96......... .................... ......... ................... 20,000 DNC
6/30/96......... .................... ......... ................... 2,000 John F. Kerry (D-MA)
7/15/96......... Johnny Chung (HK)... 190,000 Standard Standard ............ ........................
Chartered Bank
Hong Kong.
7/25/96......... .................... ......... ................... 20,000 DNC.
7/19/96......... .................... ......... ................... 25,000 DNC.
8/19/96......... Johnny Chung (HK)... 19,980 Standard Chartered ............ ........................
Bank Hong Kong.
8/15/96......... Johnny Chung (HK)... 79,980 Standard Chartered ............ ........................
Bank Hong Kong.
8/23/96......... HOMKO Intl Finance 99,988 Shanghai Commerce ............ ........................
(Holdings). Bank.
8/29/96......... Bu Ming Trading..... 99,990 Hong Kong.......... ............ ........................
9/6/96.......... .................... ......... ................... 1,000 Loretta Sanchez (D-CA-
46)
9/12/96......... .................... ......... ................... 10,000 John F. Kerry (D-MA)
9/24/96......... .................... ......... ................... 10,000 DNC
9/24/96......... .................... ......... ................... 20,000 DNC
9/24/96......... .................... ......... ................... 5,000 DNC
9/27/96......... .................... ......... ................... 10,000 DSCC
9/30/96......... New Silver Eagle 80,000 New York........... ............ ........................
Holdings, Ltd.
10/4/96......... Johnny Chung........ 150,000 China.............. ............ ........................
10/4/96......... Johnny Chung........ 170,000 Standard Chartered ............ ........................
Bank Hong Kong.
----------------------------------------------------------------------------------------------------------------
White House/DNC Contacts and Johnny Chung's Business Associates
At some point during the months of late 1994 and early
1995, Chung's political activities took on a new focus. He
began to spend less time attempting to line up clients for his
blastfax business and more time trying to help business and
political leaders from the People's Republic of China make
political connections in the United States. Chung began to
develop relationships with numerous prominent Chinese figures,
the first of which was the Chairman of the Haomen Group--Shi
Zeng Chen.
Chung formed several corporations in Los Angeles with his
Chinese associates. Documents produced by Chung show that he
formed no fewer than eight companies with six prominent Chinese
nationals in 1995 and 1996. These individuals include Shi Zeng
Chen of the Haomen Beer Company and Liu Chao-Ying of China
Aerospace.
Financial records from most of those entities do not
indicate significant financial activity typical of an ongoing
concern. In fact, these companies appear to have engaged in no
business activity whatsoever. Testimony from one of Chung's
employees, Irene Wu, indicates that these companies had an
entirely different purpose. According to Ms. Wu, they were
created not to do business, but rather to help Chung's
associates obtain visas to visit the United States. When
questioned about the purpose of one of these companies, Wu
stated the following:
The same purpose like I said earlier, for the three
reasons that they form companies. It was Johnny's way
of talking to those people, for them to form a company
so it would be easier if they want to come and visit.
So it's all for the same reasons. There was no business
conducted in any of those companies at all.\37\
---------------------------------------------------------------------------
\37\ Deposition of Irene Wu, 7/28/98, pp. 228-29.
During questioning about the company Chung formed with Liu
Chao-Ying of China Aerospace, Wu suggested that Chung's
business partners even hoped to obtain permanent residence in
---------------------------------------------------------------------------
the United States through these companies:
To my knowledge, all of these companies that were set
up was because, first of all, it was easier for them to
come and visit if they have a company here. They could
come and visit. And secondly, eventually, it would be
easier for them to get residency here in the United
States. That's my understanding of forming all those
companies. And also if there are any business
potential.\38\
---------------------------------------------------------------------------
\38\ Id.
Wu did not have direct knowledge that Liu Chao-Ying or any
of Chung's other overseas associates were actually seeking
permanent residency.\39\ However, she testified that Chung
frequently wrote letters of invitation to his Chinese
associates to assist them in getting visas to come to the
United States:
---------------------------------------------------------------------------
\39\ Id.
Q. Did Johnny Chung ever mention needing to write
letters to overseas individuals in order to assist with
their acquiring visas?
A. Invitation letters. We did a lot of invitation
letters.\40\
---------------------------------------------------------------------------
\40\ Id. p. 214.
Documents produced to the Committee by the U.S. State
Department verify that Chung's associates in China, including
Liu Chao-Ying of China Aerospace, did indeed bring these
letters to U.S. consulates to acquire visas.\41\
---------------------------------------------------------------------------
\41\ DOS 013146 (Exhibit 21); 013140 (Exhibit 22); 013143 (Exhibit
23); 013154 (Exhibit 24).
---------------------------------------------------------------------------
Shi Zeng Chen and the Haomen Group
Among the earliest instances of Johnny Chung leading
overseas businessmen into the White House was Shi Zeng Chen of
the Haomen Group Company. The Haomen Group is the second
largest beer manufacturer in China. Irene Wu, Johnny Chung's
main assistant at AISI, said that Shi Zeng Chen was one of
Johnny Chung's first contacts in China. She said:
I would know, like Haomen--the President of Haomen. I
know he's one of the first persons that Johnny met in
China, and through him, Johnny met a lot of other
people. . . . How they met, I would not have any
idea.\42\
---------------------------------------------------------------------------
\42\ Deposition of Irene Wu at p. 121.
According to an article in the China Youth Journal, Chung
met Shi Zeng Chen through Haomen's U.S. Representative, Ms.
Yao, who had met a Los Angeles immigration attorney and AISI
shareholder Larry Liou after Haomen opened an office in Los
Angeles.\43\
---------------------------------------------------------------------------
\43\ Hsu Chang-Yin, ``President of Haomen Group,'' China Youth
Journal, Feb. 8, 1995 (Exhibit 25).
1. The White House Holiday Reception
Shi Zeng Chen and Haomen Assistant President Yei Jun He
attended a White House holiday reception along with Johnny
Chung on December 20, 1994.\44\ They met the President and the
First Lady and had their pictures taken with them.\45\
---------------------------------------------------------------------------
\44\ EOP004738-9 (Exhibit 26).
\45\ EOP018036 (Exhibit 27).
---------------------------------------------------------------------------
Chung had initially requested, in a December 14, 1994
letter to DNC Finance Director Richard Sullivan, that Shi Zeng
Chen and Yei Jun He be admitted to the President's radio
address on December 17 and lunch at the White House mess. In
his letter, which he appears to have written from Taiwan, he
states cryptically:
He [Shi Zeng Chen] will play an important role in our
future party functions.\46\
---------------------------------------------------------------------------
\46\ DNC 3233321 (Exhibit 28).
Sullivan testified that he did not assist Chung in getting
into the White House, but referred him to Eric Sildon, the
Director of National Membership Services at the DNC.\47\ Sildon
wrote to David Leavy, Staff Assistant to the Press Secretary at
the White House, requesting that ``Mr. Johnny Chung, a DNC
Managing Trustee from Los Angeles and his guest'' be provided
two spots at the December 17 radio address.\48\ Sildon wrote,
``Chung was extremely supportive of our recent event in
California with Mrs. Clinton and will be meeting with Debra
DeLee, Chair of the DNC, on Monday to reiterate his commitment
for strong future support of the party.\49\
---------------------------------------------------------------------------
\47\ Deposition of Richard Sullivan, pp. 158-159.
\48\ F0038495 (Exhibit 20).
\49\ Id.
---------------------------------------------------------------------------
Chung did not get the invitation to the President's radio
address on the 17th, as he had requested. Instead, according to
the China Youth Journal article, Shi Zeng Chen and Yei Jun He
were scheduled to visit the White House on Sunday, December 18.
However, that visit was postponed after a pedestrian fired
shots at the White House.\50\
---------------------------------------------------------------------------
\50\ Hsu Chang-Yin, ``President of Haomen Group,'' China Youth
Journal, Feb. 8, 1995 (Exhibit 25). See also, Karen De Witt, ``Several
Gunshots Are Fired at the White House as the President and His Family
Sleep,'' the New York Times, Dec. 18, 1998 (Exhibit 29).
---------------------------------------------------------------------------
On the morning of Monday, December 19, Chung and the Haomen
Group delegation went to DNC headquarters to meet with DNC
Chairwoman Debra DeLee.\51\ FEC records show that Chung made a
$40,000 donation to the DNC through AISI at around the same
time.\52\
---------------------------------------------------------------------------
\51\ Id.
\52\ FEC Internet Records www.tray.com/fecinfo/ (Exhibit 3).
---------------------------------------------------------------------------
That afternoon, Chung and the group went to the White House
for lunch at the White House mess. WAVES records show that
Chung was cleared into the White House at 12:30 p.m.\53\ The
author of the China Youth Journal article accompanied the
group, concealing his identity as a reporter for the Xinhua
News Agency by posing as an assistant to Shi Zeng Chen.\54\ He
reported that Chung and the group were met at the White House
gate by White House aide Lenore Lewis and bypassed some
security measures.\55\ Shi Zeng Chen brought a 6-pack of Haomen
beer into the White House, which the group thought would be
prohibited. After lunch, they toured the White House.\56\
---------------------------------------------------------------------------
\53\ WAVES at EOP005040 (Exhibit 2).
\54\ Hsu Chang-Yin, ``President of Haomen Group,'' China Youth
Journal, Feb. 8, 1995 (Exhibit 25).
\55\ Id.
\56\ Id.
---------------------------------------------------------------------------
Later that Monday afternoon, the Haomen delegation visited
the Commerce Department. A week earlier, on the same day that
Chung wrote to Richard Sullivan about visiting the White House,
he also wrote to Mark Harris, Deputy Chief of Staff at the
Commerce Department, seeking a meeting for Shi Zeng Chen.\57\
The date on the letter is December 14, 1995 instead of 1994,
but this appears to be an error.
---------------------------------------------------------------------------
\57\ JCH15036 (Exhibit 30).
---------------------------------------------------------------------------
According to the China Youth Journal article:
In the afternoon, Yei Jun He joined us and went to many
Department of Commerce offices for meetings and the
U.S. officials indicated that they were willing to help
him push for the sale of Haomen Beer in this
country.\58\
---------------------------------------------------------------------------
\58\ Hsu Chang-Yin, ``President of Haomen Group,'' China Youth
Journal, Feb. 8, 1995 (Exhibit 25).
The Haomen delegation was apparently scheduled to return to
the White House to see the President during the day on Tuesday,
December 20, but there were several delays.\59\ According to
the China Youth Journal:
---------------------------------------------------------------------------
\59\ Id.
[i]t later turned out that President Clinton's advisors
were split in their opinion whether to receive Chen.
Some said that Clinton should not receive a member of
the Communist Party. Others disagreed. Finally, Clinton
decided that if the United States wants to do business
in China, he must receive Communist Party members since
most Chinese business officials are Communist Party
Members. . . . [Chen] is a 3rd generation Communist
Party member.\60\
---------------------------------------------------------------------------
\60\ Id.
That evening, Chung escorted Shi Zeng Chen and Yei Jun He
to the holiday reception in the White House residence.\61\ The
President and Mrs. Clinton received the Haomen executives
privately before the reception and had photos taken with
them.\62\ The Haomen executives reportedly used the photos with
the President and the First Lady in advertisements in
China.\63\ It has also been reported that the ad promoted other
Chinese officials to call on Chung, leading to the ``China
Delegation'' that attended the President's Radio Address in
March 1995.\64\
---------------------------------------------------------------------------
\61\ White House WAVES records, EOP 005040 (Exhibit 2).
\62\ Hsu Chang-Yin, ``President of Haomen Group,'' China Youth
Journal, Feb. 8, 1995 (Exhibit 25).
\63\ Liu, Melinda ``The portrait of a hustler; inside Johnny
Chung's mad scramble to the top,'' Newsweek, Mar. 31, 1997 (Exhibit
31).
\64\ Id.
---------------------------------------------------------------------------
2. Shi Zeng Chen's Son
As a favor to Shi Zeng Chen, Chung gave his son, David
Chen, a job with AISI.\65\ Chung gave David Chen the title of
``Special Assistant to the Chairman,'' and put in charge of
AISI's Beijing office. However, David Chen's business card has
the same address as the headquarters of Haomen Group in
Beijing.\66\ According to Ms. Wu's testimony, David Chen's
title was for show, and he did not actually perform any work
for AISI:
---------------------------------------------------------------------------
\65\ Deposition of Irene Wu, p. 105.
\66\ Business cards--GR001, Exhibit 32, Deposition of Gina
Ratliffe.
The office--the real AISI office in Beijing was set
up much later, 1996. The card you show me, two offices
with David Chen's business card, that wasn't really an
office. It was just a title given to David and, you
know, for show purpose. That was not a real office.\67\
---------------------------------------------------------------------------
\67\ Deposition of Irene Wu, July 28, 1998, p. 185.
David Chen was present when the ``China Delegation''
visited the White House in March 1995 and attended President
Clinton's Radio address.\68\ His presence raises important
questions about the involvement of the Haomen Group in these
events.
---------------------------------------------------------------------------
\68\ DNC3233326-3233332 (Exhibit 33).
---------------------------------------------------------------------------
3. Joint Companies in California
Subsequent to these events at the White House, Chung formed
two companies in Los Angeles with President Shi Zeng Chen and
Assistant President Yei Jun He of the Haomen Group.
On April 21, 1995, Johnny Chung and Shi Zeng Chen formed
Yuangao International, Inc. in Artesia, California.\69\ On
October 27, 1995, the company issued 9,900 shares to Beijing
Gaoyuan Trading Company.\70\ According to Irene Wu, Gaoyuan is
a company controlled by Haomen's Yei Jun He.\71\ Johnny Chung
received 100 shares on the same date.\72\
---------------------------------------------------------------------------
\69\ Corporate filings, California Secretary of State (Exhibit 34).
\70\ JC 1271 (Exhibit 35).
\71\ Deposition of Irene Wu, July 28, 1998, p. 130.
\72\ JC 1270 (Exhibit 36).
---------------------------------------------------------------------------
Yuangao's 1995 Federal tax return indicates that the
company had no income and incurred a net loss of $35,617.\73\
The return lists Beijing Gaoyuan Trading Company as a foreign
entity that owned more than 25 percent of Yuangao's voting
shares.\74\ Yuangao's bank account indicates few transactions
over $1,000, and little activity.\75\
---------------------------------------------------------------------------
\73\ JC 1446-51.
\74\ Id.
\75\ JC 1460-92 (Exhibit 37).
---------------------------------------------------------------------------
On June 1, 1995 Johnny Chung and the two Haomen officials
formed Sino-American Economic Development, Inc. (``SAED'').\76\
California State filings list Chung and Shi Zeng Chen as
officers and directors of the corporation.\77\ The filings also
indicate that the purpose of SAED is import/export, general
trading, and telecommunications.\78\ SAED issued 10,000 shares
of stock, split in the following manner: Shi Zeng Chen (3,000
shares/$15,000), Johnny Chung (3,500 shares/$17,500), and Jun
Yei He (3,500 shares/$17,500).\79\ Statements from SAED's bank
account indicate incoming wire transfers totaling $20,000 from
Sundart Engineering, Ltd. of Beijing in April 1996.\80\
---------------------------------------------------------------------------
\76\ JCH13202 (Exhibit 38).
\77\ JCH13200 (Exhibit 39).
\78\ Id.
\79\ JCH13202 (Exhibit 38); JCH13204-6 (Exhibit 40).
\80\ JCH13229 (Exhibit 41).
---------------------------------------------------------------------------
Shi Zeng Chen and Yei Jun He were Chung's guests at a
Clinton/Gore '96 fund-raiser on September 21, 1995.\81\ The
event was a southern California Presidential Gala held in
Century City. Chung squired a delegation of 24 people to the
dinner, many of whom were Chinese nationals. Chung used his
employees and their friends as straw donors to illegally
contribute $20,000 in connection with the event. Those
contributions were among the charges to which Chung pled guilty
in March 1998.\82\
---------------------------------------------------------------------------
\81\ JCH15023 (Exhibit 42).
\82\ Associated Press, ``Fund-raiser Chung Pleads Guilty,''
Washington Post, Mar. 17, 1998 (Exhibit 5).
---------------------------------------------------------------------------
The China Delegation
In February 1995, Chung began to petition the White House
and the DNC to get a meeting with the President for what came
to be known as the ``China delegation.'' A February 2, 1995 e-
mail from Calvin Mitchell at the National Security Council
indicates that Chung had met with him to discuss the impending
visit of one member of this ``China delegation.'' In his e-mail
to his NSC colleagues Roseanne Hill, Stanley Roth, and Robert
Suettinger, Mitchell mentioned that he had met ``several
times'' with Johnny Chung, ``who is a big Clinton supporter. He
has told me that Mr. Zheng Hongye, Chairman, China Chamber of
International Commerce, China Council for the Promotion of
International Trade, the China Member Committee of the Pacific
Basin Economic Council, will be traveling to the U.S. sometime
this spring. If Johnny contacts me again to meet this guy, I'll
let you all know.'' \83\
---------------------------------------------------------------------------
\83\ EOP 039319 (Exhibit 43).
---------------------------------------------------------------------------
1. Seeking Access
Instead on contacting Mitchell, Chung contacted DNC Finance
Director Richard Sullivan. In a letter faxed to Sullivan on
February 27, 1995, Chung wrote:
I am going to need your help again. I am bringing with
me the delegation from China. This is a group of very
important and powerful business leaders from China.
They will be in D.C. from 3/7 to 3/11 and will be
staying at J.W. Marriott. . . . Enclose [sic] please
find the name list and their personal information. As I
have mentioned on the phone, their main purpose would
be as follows:
1) Meet President Clinton
2) Meet Vice President Al Gore
3) Have lunch at the Mess (White House)
4) Tour the White House
5) Meet Secretary Ron Brown
Please help me make arrangements accordingly. Thank you
in advance for all your help. I will see you soon.\84\
---------------------------------------------------------------------------
\84\ DNC 323326 (Exhibit 33), Feb. 27, 1995 letter from Johnny
Chung to Richard Sullivan at the DNC sent via fax.
At the bottom of the letter, there is a handwritten note
that states: ``Meet Don Fowler.'' Sullivan testified that it
was his handwriting, and that either Chung or his assistant,
Irene Wu, called to request that meeting.\85\ Sullivan passed
along the request and Chung's delegation did meet with
Fowler.\86\
---------------------------------------------------------------------------
\85\ Deposition of Richard Sullivan, pp. 177-178.
\86\ Id. pp. 181-82.
---------------------------------------------------------------------------
Attached to the letter was a list of names of the
delegation, with their biographies. They included:
Zheng Hongye. Member of the Seventh and Eighth
Chinese People's Political Consultative Conference,
Chairman of the China International Economic and Trade
Arbitration Commission, Chairman of the China Maritime
Arbitration Commission, Chairman of the Economic and
Trade Coordination Committee for the Two Sides of the
Straits, Chairman of the Association of China Foreign
Service Trade and a concurrent professor of Xiamen
University. He also is Chairman of the China Committee
of the International Chamber of Commerce.
Sheng Huaren. President of China Petro-Chemical
Corporation, Chairman of China International United
Petroleum and Chemicals Co. Ltd, and concurrently Vice
Chairman of China-Korea Economic Council.
Huang Jichum. Director and Vice President of China
International Trust and Investment Corporation (CITIC)
in charge of investment and trade both at home and
abroad as well as enterprise management.
Wang Renzhong. Shanghai Vice Chairman, President of
Shanghai AJ Corporation.
James J. Sun. President of Xinjiang Taihe Enterprise
Group Co. Ltd. The Taihe Group also consists of Taihe
Real Estate Company.\87\
---------------------------------------------------------------------------
\87\ DNC 323326-3233332 (Exhibit 33).
When the delegation arrived in Washington, Sheng Huaren of
China Petrochemical was not among the group. In his place, he
sent his Vice President, Yan Sanzhong.
Testimony received by the Committee suggests that Zheng
Hongye of the China Chamber of International Commerce was the
most influential member of the delegation. Gina Ratliffe, who
worked as an assistant for Chung and who traveled to China with
him a month later, described Zheng as ``the political link.''
\88\ She stated:
---------------------------------------------------------------------------
\88\ Deposition of Gina Ratliffe, p. 102.
The Chamber of Commerce dude seemed to be, and I could
be wrong, but he seemed to be the link between the
higher-up officials.\89\
---------------------------------------------------------------------------
\89\ Id. p. 101.
We spent a lot of time with him (Zheng). We went to his
home one afternoon.\90\
---------------------------------------------------------------------------
\90\ Id. p. 100.
On February 28, 1995, Chung also wrote to Ann McCoy in the
---------------------------------------------------------------------------
White House visitors' office to reinforce his request:
How are you? We would like to request for your
assistance again. I am bringing with me the delegation
from China. This is a group of very important and
powerful business leaders from China. They will be in
DC from 3/7 to 3/11, and as usual, please arrange for a
tour of the White House. I have asked Mr. Richard
Sullivan, Mr. Eric led [sic] of DNC and Mr. Mark
Middleton to assist me in arranging a meeting with
President Clinton, Vice President Al Gore and a lunch
at the Mess in the White House. It would be ideal if
you could arrange a tour either before or after the
lunch at the Mess.\91\
---------------------------------------------------------------------------
\91\ JCH 15011 (Exhibit 44). Note that this document of a letter to
the White House from Chung was NOT produced by the White House but was
only produced by Johnny Chung.
On March 1, 1995, Richard Sullivan and Ari Swiller,
Director of the DNC's Trustees Program, wrote a memo to DNC
Chairman Don Fowler's office requesting a meeting on March 8th
for Chung and his associates from China with Fowler. The memo
discussed Chung's contributions of ``94,000 to the DNC'' and
the fact that he had raised an additional $40,000.\92\ The memo
stated that ``$60,000 of this was for a DNC fundraising
luncheon with the First Lady in Los Angeles on December 3rd,
our first fundraiser after the November elections.'' The memo
mentioned, ``Johnny also does a great deal of business/trade
with China'' and stated that his group ``will be meeting with
Secretary Brown earlier in the day.'' Sullivan and Swiller
enclosed the list of names and their biographies for Fowler.
---------------------------------------------------------------------------
\92\ F 0017561 (Exhibit 45).
---------------------------------------------------------------------------
2. Sullivan's Doubts
Although Sullivan had apparently assisted Chung in getting
the officials from the Haomen Group into the White House Mess
in December 1994, Sullivan testified that he did not assist him
with these Chinese nationals in February 1995. Sullivan told
the Senate in a sworn deposition:
Johnny had showed up at the DNC . . . said that he
would make a contribution to us of $50,000 if I would
get he and five members of his entourage into a radio
address with the President. . . . I think he had
contributed about $100,000 to that point over the past
year, and the fact that--him showing up with these five
people from China . . . I had a sense that he might be
taking money from them and then giving it to us, you
know. That was my concern. So I said, I said, I said I
wouldn't do it.\93\
---------------------------------------------------------------------------
\93\ Deposition of Richard Sullivan (Senate), pp. 228-229.
In his deposition with the Government Reform and Oversight
Committee, Sullivan amplified these concerns. He testified that
he suggested to Fowler that DNC officials review Chung's
---------------------------------------------------------------------------
contributions to make sure they were legal:
In March of 1995, . . . after Johnny had contributed
approximately about $90,000 to date, I asked--and when
Don Fowler gave me a $50,000 contribution from Johnny
that he made in March, I suggested to him that I
thought it would be wise for him to have a conversation
with Joe Sandler [DNC Counsel] in regards to taking
more money from Johnny Chung.\94\
---------------------------------------------------------------------------
\94\ Deposition of Richard Sullivan (House), p. 186.
I didn't get a fog horn and shout, ``Don't take Johnny
Chung's money,'' I just suggested to Don Fowler that he
have a conversation with Joe Sandler.\95\
---------------------------------------------------------------------------
\95\ Id. p. 191.
Fowler has denied receiving such a warning from Sullivan,
stating that, ``I have no memory of that. It's all news to
me.'' \96\ However, Sullivan's attorney, Bob Bauer, told the
Washington Post that Sullivan stands by his recollection of
events.\97\
---------------------------------------------------------------------------
\96\ George Lardner, ``Chung Secured Treasury Meeting For Chinese
Petrochemical Firm,'' Washington Post, July 2, 1998 (Exhibit 46).
\97\ Id.
---------------------------------------------------------------------------
Despite his evident concerns, Sullivan did assist Chung in
getting the China delegation in to see Fowler. Fowler welcomed
them and posed for pictures with an arm around Chung's
shoulder.\98\
---------------------------------------------------------------------------
\98\ William Rempel and Alan Miller, ``First Lady's Aid Solicited
Check to DNC,'' Los Angeles Times, July 27, 1997 (Exhibit 1).
---------------------------------------------------------------------------
3. The Haomen Beer Connection
While Shi Zeng Chen of the Haomen Group was not included in
this delegation, his son, David Chen, did travel with them.\99\
Three days prior to the group's arrival in Washington, the
Haomen Group transfered $150,000 to Johnny Chung's bank
account. The money was transfered through the Bank of China and
a company listed as ``Winlick Investments, Ltd.'' \100\
---------------------------------------------------------------------------
\99\ DNC 3233326-3233332 (Exhibit 33).
\100\ Deposition of Irene Wu, July 28, 1998.
---------------------------------------------------------------------------
The wire transfer carried the following notation: ``Payment
for goods--Haomen.'' However, testimony from Chung's employees
casts doubt as to whether Haomen owed Chung money for any work
he performed. Chung's office manager, Irene Wu, testified that
she was not aware of any payment Chung received for goods or
services he provided to Haomen.\101\ His bookkeeper, Nancy Lee,
testified in a similar vein:
---------------------------------------------------------------------------
\101\ Id. p. 132.
Q. Are you aware of a $150,000 payment from the
Haomen Group to Johnny Chung in March of 1995?
A. I don't remember.
Q. Are you aware of any invoices sent to the Haomen
Group?
A. No.
Q. Do you know of any services provided by Johnny
Chung to the Haomen Group?
A. I don't know.\102\
---------------------------------------------------------------------------
\102\ Deposition of Nancy Lee, p. 63.
Given the proximity of this wire transfer to the $50,000
contribution Chung gave to the DNC, and given the presence of
Zhi Zeng Chen's son in the delegation, it is reasonable to
conclude that this money was sent to Chung to enable him to
make this contribution so that the requested meetings could be
obtained. Prior to the transfer, Chung's bank account did not
contain sufficient funds for him to make the contribution,\103\
which he presented to the First Lady's Chief of Staff, Margaret
Williams, on March 9, 1995. The Committee has been unable to
question Mr. Chung about this matter due to his assertion of
his Fifth Amendment rights. The Committee has also been refused
visas by the Chinese government and has been unable to travel
to China to interview representatives of the Haomen Group.
---------------------------------------------------------------------------
\103\ JCH16554 (Exhibit 47).
---------------------------------------------------------------------------
4. $50,000 ``Opens the Gates''--Meeting with the First Lady
Having failed to get his requests filled through the DNC,
Chung apparently turned to the First Lady's Office on March 8,
1995. Up until this time, according to WAVES records, Chung had
little contact with the First Lady's Office. Evan Ryan, the
assistant to the First Lady's Chief of Staff, Margaret
Williams, has testified that she recalls meeting him at some
point in the Old Executive Office Building when he stopped by
her office, but she does not remember when. She says she
learned that he was a trustee of the DNC and that he was from
Los Angeles and ran a fax business.\104\ It should be noted
that none of the WAVES records indicate that Ryan WAVED in
Chung until March 9, 1995. After that, Ryan WAVED in Chung
almost 20 times.\105\ In fact, after March 9, 1995, Chung was
admitted to the White House almost exclusively by Ryan. Prior
to this, Chung was WAVED in by various White House employees.
---------------------------------------------------------------------------
\104\ Deposition of Evan Ryan, p. 96.
\105\ White House WAVES Records (Exhibit 2).
---------------------------------------------------------------------------
5. Johnny Chung's Account
In a Los Angeles Times article on July 27, 1997, Johnny
Chung provided the following account of how he came to give
$50,000 to the DNC in March 1995. Chung claims he was seeking
``VIP treatment for a delegation of visiting Chinese
businessmen when he was asked to help the First Lady defray the
cost of White House Christmas receptions billed to the
Democratic National Committee.'' \106\ ``I see the White House
is like a subway: You have to put in coins to open the gates,''
Chung has said.\107\ In this interview, Chung says he felt he
had a special relationship with Hillary Clinton because he says
he had met her years earlier at the governor's mansion in
Little Rock, Arkansas, while touting his new fax service. Since
then, according to the Times, Chung was photographed with Mrs.
Clinton on about a dozen occasions.\108\
---------------------------------------------------------------------------
\106\ William Rempel and Alan Miller, ``First Lady's Aide Solicited
Check to DNC,'' Los Angeles Times, July 27, 1997 (Exhibit 1).
\107\ Id.
\108\ Id.
---------------------------------------------------------------------------
As reported in the Los Angeles Times, Chung went to the
First Lady's Office on March 8, 1995, and was greeted by Evan
Ryan, then a staff assistant in the First Lady's Office. He
showed her the business cards of his Chinese companions and
asked if arrangements could be made for them to eat lunch in
the White House mess and meet Hillary Clinton. Chung also asked
if there was anything he could do to help the White House.
After speaking with Maggie Williams, Ryan returned saying:
``Maybe you can help us.'' \109\
---------------------------------------------------------------------------
\109\ Id.
---------------------------------------------------------------------------
Ryan explained that ``the first lady had some debts with
the DNC'' from expenses associated with White House Christmas
parties.\110\ Chung believes that Ryan mentioned a figure of
around $80,000. Ryan told him that she was relaying the request
on behalf of Williams, who hoped Chung could ``help the first
lady'' defray those costs.\111\
---------------------------------------------------------------------------
\110\ Id.
\111\ Id.
---------------------------------------------------------------------------
``Then a light bulb goes on in my mind, I start to
understand,'' Chung said.\112\ ``I said I will help for
$50,000.'' \113\ After making that commitment, Chung left the
White House confident that his wish list would be substantially
fulfilled.
---------------------------------------------------------------------------
\112\ Id.
\113\ Id.
---------------------------------------------------------------------------
The next morning, Chung went back to the White House and
was escorted to Ryan's desk in the reception area of the First
Lady's Office. He said he gave her an unsealed envelope.
According to Chung, Ryan lifted the flap and examined the
contents. Inside was his check \114\ and a note to Williams,
which he recalled said something like: ``To Maggie--I do my
best to help. Johnny Chung.'' \115\
---------------------------------------------------------------------------
\114\ JCH795 (Exhibit 48).
\115\ William Rempel and Alan Miller, ``First Lady's Aid Solicited
Check to DNC,'' Los Angeles Times, July 27, 1997 (Exhibit 1).
---------------------------------------------------------------------------
A short time later, Williams joined them and Ryan handed
the envelope to her, according to Chung. Williams led him into
her office and called to reserve a table for the Chinese
delegation at the White House Mess. Williams has since told
congressional investigators that she never looked at the check.
Chung said there was no need for her to look inside the
envelope. ``I know she knew what was inside, because to me it
was her idea to help,'' he said.\116\
---------------------------------------------------------------------------
\116\ Id.
---------------------------------------------------------------------------
Before the delegation convened for lunch in the White House
Mess, Chung was advised that another wish list item had been
granted. The First Lady could see them before addressing a
teachers' group that afternoon. ``Maggie set up everything,''
Chung said.\117\
---------------------------------------------------------------------------
\117\ Id.
---------------------------------------------------------------------------
Later, waiting for Hillary Clinton in a White House
reception room, Chung said he asked if the First Lady had been
informed of his donation and Ryan responded, ``Yes, she
definitely knows.'' \118\ According to Chung, when the First
Lady met the delegation, she declared to Chung: ``Welcome to
the White House, my good friend.'' \119\
---------------------------------------------------------------------------
\118\ Id.
\119\ Id.
---------------------------------------------------------------------------
6. Evan Ryan's Account
Ryan cannot identify exactly when she met Chung and her
testimony is not clear whether she had met Chung prior to March
8, 1995, when she confirms he did stop by the First Lady's
Office. On March 8, 1995, Chung had been WAVED into the Old
Executive Office Building by Brian Bailey from Erskine Bowles'
office.\120\ Ryan testified that Chung ``showed up'' in her
office that day unannounced.\121\ Chung told her that he had
this delegation visiting from China and ``he would like to see
if he could get them a tour of the White House, to the White
House Mess, if he could get them into the President's radio
address and if he could get a photo with Mrs. Clinton.'' \122\
Chung also mentioned to Ryan that while he was in town, he
would be donating money to the DNC.\123\
---------------------------------------------------------------------------
\120\ WAVES at EOP008683 (Exhibit 2).
\121\ Deposition of Evan Ryan, p. 106.
\122\ Id. p. 105.
\123\ Id. pp. 105, 107-08.
---------------------------------------------------------------------------
According to Ryan's testimony, while Chung was still in the
reception room, she went to speak with Maggie Williams about
Chung's requests.\124\ Ryan told Williams that ``Johnny Chung
was here and he had some businessmen from China here and he was
hoping to get the tour, the radio address, the Mess and the
photo with Mrs. Clinton, and he was also going to be donating
money to the DNC while he was here.'' \125\ Williams told her
that they would see what they could arrange for him and ``that
it was helpful to know about his donation because then maybe
that would enable the DNC to pay off some of their debts.''
\126\ Williams never mentioned to her an amount that Chung
could donate, and, according to Ryan, Ryan never mentioned to
Chung a bill of $80,000 that the DNC owed to the White
House.\127\ Ryan then returned to Chung and told him that they
would try to set up some of these requests.\128\ Chung was
``very pleased'' and ``said he hoped that Maggie got credit for
his donation.'' \129\
---------------------------------------------------------------------------
\124\ Id. pp. 108-09.
\125\ Id. p. 109.
\126\ Id. p. 110.
\127\ Id. pp. 110-11.
\128\ Id. p. 111.
\129\ Id.
---------------------------------------------------------------------------
By the end of the day, each of Chung's requests, with the
exception of the radio address, had been scheduled. Ryan
testified that she contacted the Visitor's Office about the
tour and contacted the Mess about lunch.\130\ Ryan also stated
that Williams set up the photo with the First Lady.\131\ Ryan
believes Chung contacted her later that day and she then
informed him that each of his requests had been scheduled.\132\
---------------------------------------------------------------------------
\130\ Id. p. 114.
\131\ Id.
\132\ Id.
---------------------------------------------------------------------------
The following day, March 9, 1995, Chung and his guests
arrived at the Old Executive Office Building and Ryan escorted
them to the Mess for lunch.\133\ After their lunch, Ryan
believes that Ann McCoy, from the Visitor's Office, took them
on their tour.\134\ From the WAVES records, Ryan believes that
Chung and his guests left the White House and returned later
that day.\135\ Ryan recalls that they were late for their photo
with the First Lady.\136\ As soon as they arrived, Ryan
escorted them to the Map Room for their photo.\137\ Ryan
testified that Mrs. Clinton gave a general greeting to Chung,
not the ``welcome, my good friend'' that Chung has
claimed.\138\
---------------------------------------------------------------------------
\133\ Id. p. 115.
\134\ Id.
\135\ Id.
\136\ Id. p. 116.
\137\ Id. p. 117.
\138\ Id. pp. 121-22.
---------------------------------------------------------------------------
Ryan further testified that Chung did not hand her the
envelope containing his donation. ``I remember that Mr. Chung
was insistent that he wanted to hand this envelope directly to
Maggie Williams. I remember he really wanted to see her and
hand the envelope to her.'' \139\ Chung and his delegation of
Chinese businessmen returned to the Old Executive Office
Building. Ryan told Williams that Chung was there and he wanted
to speak with her. Ryan said Williams seemed ``confused'' at
``why he was delivering a donation to the DNC through her.''
\140\ Ryan brought Mr. Chung to Williams' office, where he
handed the envelope to Williams. Ryan explained that she was
standing near the door and does not remember hearing Chung say
anything to Williams.\141\ Ryan testified that Chung never
asked her whether the First Lady was aware of his contribution,
so she never told him that she was.\142\
---------------------------------------------------------------------------
\139\ Id. p. 117.
\140\ Id. p. 118.
\141\ Id. p. 119.
\142\ Id. p. 125.
---------------------------------------------------------------------------
7. Maggie Williams' Account
Williams does not remember the events of these 2 days as
occurring all at once.\143\ She remembers this sequence of
events as ``separate occasions.'' \144\ Williams does not
recall Chung wanting to get his friends into the White House on
that particular day. She recalls Ryan asking her if she should
arrange a photo for Chung and Williams told her that she
should.\145\ Williams also recalls Chung requesting the use of
her Mess account on a couple of occasions, which she
allowed.\146\ Williams testified that Chung had used her Mess
account prior to receiving his donation.\147\
---------------------------------------------------------------------------
\143\ Deposition of Maggie Williams, p. 247.
\144\ Id. p. 240.
\145\ Id. p. 241.
\146\ Id. pp. 241-42.
\147\ Id. p. 242.
---------------------------------------------------------------------------
Williams testified that Chung often asked her how he could
give to the First Lady. Williams responded that he could not
give to the First Lady, but could give to the DNC.\148\ As to
Chung handing her the check, Williams testified that she was:
---------------------------------------------------------------------------
\148\ Id. p. 240.
[L]eaving the office and coming out into the vestibule,
at which point Mr. Chung enthusiastically said, I give
to the First Lady, I give to the First Lady. I said
something to the effect of, Johnny, I have told you
that you cannot give money to the First Lady, you can
give to the DNC, and I believe I told him that again
and he said, I am giving to the DNC, I am giving
through you, I give through you, I give through the
First Lady's office. I told him again that he should
just give it to the DNC. He continued to be somewhat
insistent. I wanted out. I said, you know, I will take
it, I will give it to the DNC, and I think our
encounter was, I don't even know if it was a minute or
a minute and a half.\149\
---------------------------------------------------------------------------
\149\ Id. pp. 240-41.
Williams stated that she never looked at the check, and did
not even know it was in the amount of $50,000 until she read
about it in the newspapers.\150\ She then placed the check in
her out basket and assumed that Ryan or someone else would get
the check to the DNC.\151\ Williams is not aware of anyone in
the First Lady's office telling Chung about DNC bills for
Christmas parties.\152\
---------------------------------------------------------------------------
\150\ Id. p. 248.
\151\ Id. p. 249.
\152\ Id. pp. 250-51.
---------------------------------------------------------------------------
8. Comparison of Accounts
The principal conflicts between these three accounts center
around the alleged solicitation of Chung's contribution in the
First Lady's office and the delivery of his check the next day.
Regarding Chung's donation, Ryan claims that Chung
volunteered to her unsolicited that he would be donating to the
DNC while he was in town.\153\
---------------------------------------------------------------------------
\153\ Deposition of Evan Ryan, pp. 107-08.
---------------------------------------------------------------------------
Chung claims that after he made his request for assistance,
Ryan left for about 15-20 minutes. She returned saying she had
spoken with Williams and said ``maybe you can help us.'' Chung
has stated that Ryan told her that the First Lady had some
debts with the DNC from expenses associated with White House
Christmas parties. Chung believes Ryan mentioned a figure of
$80,000.\154\ Chung also claims that Ryan told him that the
request was on behalf of Williams, who hoped he could help the
First Lady.\155\ Chung states that it was at this point that he
offered to contribute $50,000.\156\
---------------------------------------------------------------------------
\154\ William Rempel and Alan Miller, ``First Lady's Aide Solicited
Check to DNC,'' Los Angeles Times, July 27, 1997 (Exhibit 1).
\155\ Id.
\156\ Id.
---------------------------------------------------------------------------
Ryan testified that she did leave Chung to speak with
Williams about the requests, and mentioned that Chung told her
he would be donating to the DNC.\157\ According to Ryan,
Williams told her that they would see what they could arrange
for him, and that perhaps his donation would enable the DNC to
pay off their debts to the White House.\158\ Ryan stated that
she never told Chung about the debts the DNC owed the White
House, nor did she ever mention a figure of $80,000.\159\
---------------------------------------------------------------------------
\157\ Deposition of Evan Ryan, pp. 108-09.
\158\ Id. pp. 109-110.
\159\ Id. pp. 110-11.
---------------------------------------------------------------------------
Williams has testified that she recalls Ryan asking if she
could set up the requests for Chung.\160\ However, Williams
states that she never mentioned to Ryan what Chung's donation
to the DNC would be used for.\161\
---------------------------------------------------------------------------
\160\ Deposition of Maggie Williams, pp. 241-42.
\161\ Id. p. 258.
---------------------------------------------------------------------------
It is unlikely that Chung would have been aware of DNC
debts to the White House unless he had been informed of them by
someone who worked there. Given that Ryan recalls Williams
discussing the DNC debt with her, and that Chung recalls Ryan
discussing the debt with him, it is reasonable to conclude that
the DNC debts to the White House were discussed with Chung at
the First Lady's office. However, without sworn testimony from
Chung, it is not possible to determine if this occurred before
or after he offered his contribution.
Internal memoranda demonstrate that the First Lady's office
was being kept appraised of the unpaid debts for the holiday
receptions. White House records of reimbursable political
events held at the White House in December 1994 show a bill of
$236,060.90 for various Christmas Holiday Receptions.\162\
These records indicate that the billing date for these
receptions was February 23, 1995 and the bill was paid in July
1995.\163\ A March 24, 1995 memo for Maggie Williams from the
Chief White House Usher, Gary Walters, addressed the issue of
unpaid bills for collection ``issued by the Executive Residence
at the White House for fiscal years 1994 and 1995.'' \164\ The
memo stated: ``It is very obvious that unpaid bills are
attributed to the DNC.'' \165\ Mr. Walters' memo at this time
notes various ``Holiday events'' in 1994 as being $41,291 and
``partially paid by the DNC.'' \166\ At this time Walters noted
that there was $135,345.25 to be paid by the DNC for fiscal
year 94.\167\ In the memo, Walters noted that there was a
``partial payment of $198,714.56'' paid on March 15, 1995.\168\
---------------------------------------------------------------------------
\162\ Fiscal year 1998 Treasury Postal Appropriations Hearing held
on Mar. 11, 1997.
\163\ Id.
\164\ DNC 3078128-30 (Exhibit 49).
\165\ Id.
\166\ Id.
\167\ Id.
\168\ Id.
---------------------------------------------------------------------------
Regarding the delivery of the check, Chung claims that he
returned the next day and presented Ryan with an unsealed
envelope.\169\ According to Chung, Ryan examined the contents
of the envelope. There was a note inside the envelope that
stated: ``Maggie--I do my best to help. Johnny Chung.'' \170\ A
short time later, Williams joined them and Ryan handed her the
check.\171\ Ryan has testified that Chung insisted that he give
the check to Williams, and that she arranged for him to do
so.\172\ Williams has testified that Chung did hand her an
envelope, but she never looked at the contents.\173\ Williams
does not recall Chung handing her any note.\174\
---------------------------------------------------------------------------
\169\ William Rempel and Alan Miller, ``First Lady's Aide Solicited
Check to DNC,'' Los Angeles Times, July 27, 1997 (Exhibit 1).
\170\ Id.
\171\ Id.
\172\ Deposition of Evan Ryan, p. 117.
\173\ Deposition of Maggie Williams, pp. 240-41, 248.
\174\ Id. p. 296.
---------------------------------------------------------------------------
Chung also stated that he asked Ryan if the First Lady was
aware of his donation and she replied that she knew.\175\
According to Ryan's testimony, Chung never asked her if the
First Lady was aware of his donation, and further, he had not
handed Williams the check until after his photo with the First
Lady.\176\
---------------------------------------------------------------------------
\175\ William Rempel and Alan Miller, ``First Lady's Aide Solicited
Check to DNC,'' Los Angeles Times, July 27, 1997 (Exhibit 1).
\176\ Deposition of Evan Ryan, pp. 117-18, 125.
---------------------------------------------------------------------------
9. The President's Radio Address
It appears that the First Lady's office was able to fulfill
all of Chung's requests, as outlined in his February 27 letter,
except for the most important--an invitation to the President's
radio address. During his testimony before the Senate
Governmental Affairs Committee on September 9, 1997, DNC Co-
Chairman Don Fowler was questioned about his knowledge of how
Johnny Chung and his Chinese delegation were able to attend the
radio address. Mr. Fowler testified that he did not become
aware of Chung's attendance at the radio address until sometime
after the election. His assistant, Carol Khare, was involved
with this, and he questioned her about it. Ms. Khare told Mr.
Fowler:
She received a call from Mr. Chung and he asked her if
he could attend the radio address. This was a
relatively short period of time after we had come to
Washington. She did not know anything about the process
or procedures for arranging such a visit. And, so, she
walked out into this area where three or four people
who work in my office were sitting and just posed the
general question, does anybody know how you get into
the President's radio address?
And one the people there said, a friend of mine who
works in the White House arranged for people to get in
to those addresses. And, so, Mrs. Khare asked this
person to call her friend and make the inquiry. This
person did make that call and the word back was that
her friend, unnamed, and I do know that persons' name,
said that he or she would arrange if it [sic] possible.
She reported that back to Mrs. Khare, and Mrs. Khare
called Johnny Chung back and gave him that
information.\177\
---------------------------------------------------------------------------
\177\ Fowler Senate Governmental Affairs testimony, Sept. 9, 1997
at p. 209.
Fowler testified that Ceandra Scott was the person who
contacted a friend at the White House.\178\ Mr. Fowler did not
know the person contacted at the White House.
---------------------------------------------------------------------------
\178\ Id. p. 210.
---------------------------------------------------------------------------
During her deposition, Ms. Khare explained that Chung had
contacted her by phone and asked for help.\179\ Khare was not
aware at the time that people attended the radio
addresses.\180\ Khare asked the staff assistants if they know
whether they could get people into the radio address.\181\
Ceandra Scott said that she knew someone at the White House who
handled the addresses and would call them.\182\ According to
Khare, Ms. Scott called her contact immediately.\183\ Scott
returned to Khare and told her that Chung and the delegation
could attend the radio address.\184\
---------------------------------------------------------------------------
\179\ Khare deposition at p. 34.
\180\ Id.
\181\ Id.
\182\ Id. pp. 34-35.
\183\ Id. p. 37.
\184\ Id. p. 39.
---------------------------------------------------------------------------
Using the number that Chung had provided, Khare contacted
Chung at the First Lady's office. Khare explained that she knew
it was the First Lady's office because they answered the phone,
``Office of the First Lady.'' \185\
---------------------------------------------------------------------------
\185\ Testimony of Ceandra Scott, House Committee on Government
Reform and Oversight, p. 177.
---------------------------------------------------------------------------
Ceandra Scott recalled contacting the First Lady's office
late Friday afternoon to try to get Chung and the delegation
into the radio address. Scott was not certain if she spoke with
Williams or someone else.\186\ Shortly thereafter, she got a
call back from the First Lady's office and was told that Chung
and the delegation could attend.\187\
---------------------------------------------------------------------------
\186\ Id. p. 211.
\187\ Id.
---------------------------------------------------------------------------
Chung and the delegation did attend the radio address on
March 11, 1995. At the conclusion of the address, Chung
introduced the President to his Chinese associates. Pictures
were taken with the President and each delegation member. In
addition, the delegation presentedthe President with a large
heart-shaped piece of jade.\188\ All of this was captured on videotape
by the White House photographer's office.
---------------------------------------------------------------------------
\188\ EOP 063827 (Exhibit 50).
---------------------------------------------------------------------------
10. National Security Council Staffers Raise Concerns About Chung
According to Nancy Hernreich's Senate deposition, the
President become concerned about the delegation after having
had his picture taken with them:
A. As I recall it, the President said to me, ``You
shouldn't have done that,'' or we shouldn't have done
that.''
Q: Done what? Help me.
A: Well, the Chinese, have the Chinese at that radio
address.
Q: Why not?
A: I don't know. He didn't say.
Q: Did you have any understanding of what he was
talking about?
A: Yes, generally.
Q: What was your understanding?
A: Well, that these were foreign, either officials
or, you know, inappropriate foreign people. This was my
understanding of that.\189\
---------------------------------------------------------------------------
\189\ Hernreich Senate deposition, June 20, 1997, at pp. 67-68.
At this point, the National Security Council was brought
into the picture. White House aide Kelly Crawford testified in
her deposition that she has a vague recollection that the
President asked either Hernreich or herself who the delegation
was, where their request came from and why they were
there.\190\ The President also inquired as to whether anyone at
the National Security Council knew that the delegation was
attending the radio address.\191\ Crawford has a vague
recollection that she took the list of names of the delegation
to Nancy Soderberg or to Tony Lake's office to have them
determine if there was a ``problem'' with any of the
names.\192\
---------------------------------------------------------------------------
\190\ Deposition of Kelly Crawford, p. 50.
\191\ Id. p. 51.
\192\ Id. p. 54.
---------------------------------------------------------------------------
As the NSC's Director for Asian Affairs, Robert Suettinger
was the logical choice to vet Johnny Chung's guests.
Suettinger, a CIA detailee to the NSC and an expert on Asian
affairs, evidently was contacted by Brooke Darby--an assistant
to NSC Staff Director Nancy Soderberg--about Chung's request
that the White House release photographs of the President with
the China delegation.\193\
---------------------------------------------------------------------------
\193\ EOP005438 (Exhibit 51).
---------------------------------------------------------------------------
Darby's e-mail to Suettinger was on behalf of Presidential
assistant Nancy Hernreich, who was ultimately responsible for
deciding whether or not to release the photographs to Chung.
The e-mail was also sent to Stanley Roth, the Senior Director
for Asian Affairs, and another NSC staffer, Roseanne Hill.
According to Darby:
An odd situation on which I need some guidance for the
President's office asap:
A couple of weeks ago . . . the head of the DNC asked
the President's office to include several people in the
President's Saturday Radio Address. They did so, not
knowing anything about them except that they were DNC
contributors.
It turns out that they are various Chinese gurus and
the POTUS \194\ wasn't sure we'd want photos of him
with these people circulating around. Johnny Chung, one
of the people on the list, is coming in to see Nancy
Hernreich tomorrow and needs to know urgently whether
or not she can give him the pictures. Could you please
review the list ASAP and give me your advice on whether
we want these photos circulating around? (FYI--These
people are major DNC contributors and if we can give
them the photos the President's office would like to do
so.) \195\
---------------------------------------------------------------------------
\194\ President of the United States.
\195\ EOP005438 (Exhibit 51).
Suettinger did not object to releasing the photographs to
Chung, but he issued an explicit warning about him for future
---------------------------------------------------------------------------
reference. His reply by e-mail is worthy of lengthy quotation:
The joys of balancing foreign policy considerations
against domestic politics . . . I don't see any lasting
damage to U.S. foreign policy from giving Johnny Chung
the pictures. And to the degree that it motivates him
to continue giving to the DNC, who am I to complain?
Neither do I see any unalloyed benefit either. But as
far as the Chinese on the list are concerned, they all
seem to be bona fide (present or former) Chinese
officials, with the possible exception of James Y. Sun,
``young entrepreneur and self made millionaire.'' Got
some doubts there. Notwithstanding that, these guys
will all hang the pictures on the wall and feel
grateful for the memory.
But a caution--a warning of future deja vu. Having
recently counseled a young intern from the First Lady's
office who had been offered a ``dream job'' by Johnny
Chung, I think that he should be treated with a pinch
of suspicion. My impression is that he's a hustler, and
appears to be involved in setting up some kind of
consulting operation that will thrive by bringing
Chinese entrepreneurs into town for exposure to high
level U.S. officials. My concern is that he will
continue to make efforts to bring his friends into
contact with POTUS and FLOTUS \196\--to show one and
all that he is a big shot, thereby enhancing his
business ventures. I'd venture a guess that not all of
his business ventures--or those of his clients would be
ones that the President would support. I also predict
that he will become a royal pain, because he will
expect to get similar treatment for future visits. He
will be persistent.\197\
---------------------------------------------------------------------------
\196\ First Lady of the United States.
\197\ EOP005439 (Exhibit 52).
Suettinger was interviewed by the Committee on August 20,
1997. When asked about the aforementioned correspondence about
Chung, he stated that Darby was acting on behalf of Nancy
Soderberg. Darby wanted Suettinger to determine who Chung's
``Chinese gurus'' were and whether the release of the photos
would embarrass the President.\198\ He stated that he was not
asked to vet these individuals prior to their invitation to the
President's radio address, but after he received Darby's
request, he checked his handbook of Chinese officials. After
determining that the release of the photographs would not harm
U.S. foreign policy, he claimed that in addition to warning
Darby about Chung being a ``hustler,'' he also warned Stanley
Roth.\199\ Suettinger was concerned that because of Chung's
status as a DNC trustee he would get ``carte blanche''
treatment at the White House.\200\
---------------------------------------------------------------------------
\198\ Committee interview of Robert Suettinger, Aug. 20, 1997.
\199\ Senior Director for Asian Affairs at the NSC and Suettinger's
direct superior.
\200\ Committee interview of Robert Suettinger, Aug. 20, 1997.
---------------------------------------------------------------------------
Even after Suettinger's warning, Chung was still permitted
to visit the White House 23 times.\201\ When asked about
Chung's many White House visits after the ``hustler'' warning,
Suettinger expressed personal dismay. He stated to Committee
investigators that his initial concerns about Chung were based
on his knowledge of PRC and Taiwanese business practices,
evidently referring to widespread influence peddling.
Suettinger feared what he referred to as Chung's ``own agenda''
and felt that it was his responsibility to protect the
President.\202\
---------------------------------------------------------------------------
\201\ White House WAVES records (Exhibit 2).
\202\ Committee interview of Robert Suettinger, Aug. 20, 1997.
---------------------------------------------------------------------------
Darby was also interviewed by the Committee. Even though
Suettinger did not recommend against releasing the pictures,
Darby informed the President's staff that they should not
release the photos.\203\
---------------------------------------------------------------------------
\203\ Committee interview of Melanie Brooke Darby, August 1997.
---------------------------------------------------------------------------
11. The Spielberg Fundraiser--Chung Gets His Pictures
Chung vigorously pursued the release of the radio address
photos with the President through his numerous contacts. On
April 5, 1995, Chung wrote to Maggie Williams, requesting her
assistance in having the photos released before his upcoming
trip to China.\204\ Chung wrote, ``I have learned from Richard
Sullivan of DNC that the National Security Council is holding
on to those pictures.'' \205\ However, the photos were not
released until after Chung contributed an additional $125,000
at an April 8 DNC fundraiser at the home of Director Steven
Spielberg.
---------------------------------------------------------------------------
\204\ JCH15013 (Exhibit 53).
\205\ Id.
---------------------------------------------------------------------------
It appears that this donation, by far the biggest Chung
ever gave, was at least partially underwritten by AISI
shareholder Yi Chen (George) Liu. According to AISI records,
Liu purchased $100,000 of AISI stock on July 12, 1994.\206\ He
purchased another $150,000 worth of stock on November 4,
1996.\207\ Liu's business card describes him as ``Special
Assistant to the Chairman, AISI,'' and lists AISI's California
and Taiwan offices.\208\ Liu and his father toured the White
House in 1995 and attended a Kathleen Brown for Governor event
in San Francisco.\209\
---------------------------------------------------------------------------
\206\ JCH13699 (Exhibit 54).
\207\ Id.
\208\ Documents produced by Gina Ratliffe.
\209\ JCH13699 (Exhibit 54).
---------------------------------------------------------------------------
Liu accompanied the ``China Delegation'' to the White House
in March 1995.\210\ He also accompanied Chung on his April trip
to China,\211\ the trip for which Chung was desperate to
acquire these photos. On April 8, 1995, Liu paid Chung
$100,000.\212\ That same day, Chung contributed $125,000 to the
DNC in order to attend a fund-raiser at Steven Spielberg's
home.\213\ Liu accompanied Chung to the event.\214\
---------------------------------------------------------------------------
\210\ DNC3233326-3233332 (Exhibit 33).
\211\ Deposition of Gina Ratliffe, p. 118.
\212\ N0209 (Exhibit 55).
\213\ JCH797 (Exhibit 56).
\214\ JCH13699 (Exhibit 54).
---------------------------------------------------------------------------
In her deposition, Chung's assistant, Gina Ratliffe,
describes Liu in this way: ``George had a ton of money of his
own . . . George just seemed to have fun with life.'' \215\
---------------------------------------------------------------------------
\215\ Deposition of Gina Ratliffe, p. 119.
---------------------------------------------------------------------------
On April 11, 1995, 3 days after the Spielberg event, Chung
received a fax from Carol Khare in Don Fowler's office: ``The
White House assures me that you now have the pictures--Hurray!
If you don't, give me a call. Have a good trip.'' \216\
---------------------------------------------------------------------------
\216\ JCH15021 (Exhibit 57).
---------------------------------------------------------------------------
Both Hernreich and Crawford testified at the Committee's
November 13 hearing that they believed the photos were not
released to Chung. However, Gina Ratliffe, a former intern in
the First Lady's office who went to work for Chung, testified
that she went to the White House to pick up the photos prior to
her departure to China with Chung.\217\
---------------------------------------------------------------------------
\217\ Deposition of Gina Ratliffe, pp. 62, 70.
---------------------------------------------------------------------------
Chung was accompanied on his subsequent trip to China by
his assistant, Ratliffe. She was an intern in the First Lady's
office when Chung hired her to handle logistics and social
arrangements for groups that he brought to Washington. They
left for China on April 12, 1995, and returned on April
25.\218\
---------------------------------------------------------------------------
\218\ Id. p. 92.
---------------------------------------------------------------------------
Ratliffe states in her deposition that they spent a great
deal of time with officials from the Haomen Group and China
Petrochemical.\219\ She also states that James Sun, the Chinese
entrepreneur who attended the Radio Address at the White House,
came to Beijing to meet them.\220\ During the trip, Chung's
group visited the Forbidden City to visit Vice Premiere
Lee.\221\
---------------------------------------------------------------------------
\219\ Id. pp. 97, 100.
\220\ Id. p. 121.
\221\ Id. pp. 101-102.
---------------------------------------------------------------------------
Chung Tries To Assist in Releasing Harry Wu
Chung's actions in the summer of 1995 indicate that
Suettinger's concerns about his personal White House ``agenda''
were well founded. On July 25, Chung's assistant at AISI, Irene
Wu, faxed a letter on Chung's behalf to Presidential aide Betty
Currie requesting that President Clinton write a ``credential
letter'' for Chung's forthcoming trip to China.\222\ On the
same day, Chung also faxed Currie on the same subject,\223\
enclosing a letter he received from DNC Chairman Don Fowler
that commended Chung for his efforts ``to build a bridge
between the people of China and the United States'' and for
being ``a friend and a great supporter of the DNC.''\224\
---------------------------------------------------------------------------
\222\ JCH 466 (Exhibit 58).
\223\ JCCH 467 (Exhibit 59).
\224\ EOP005057 (Exhibit 60).
---------------------------------------------------------------------------
Chung planned to use his trip to China in late summer 1995
to play the role of unofficial White House envoy in
facilitating the release of imprisoned human rights activist
Harry Wu. Wu, a Chinese-born American human rights activist,
was arrested and detained in Wuhan Province \225\ earlier in
the summer by PRC authorities when he attempted to enter China
secretly.\226\ His detainment caused an uproar in the
international community; California Senator Diane Feinstein and
her husband Richard Blum--both of whom have high-level Chinese
contacts--traveled to Beijing to aid in the Wu
negotiations.\227\ The arrest and outcry presented Chung with
an opportunity to raise his profile with Beijing and the White
House by attempting to portray himself as the President's
personal envoy in seeking Wu's release.
---------------------------------------------------------------------------
\225\ Rone Tempest, ``U.S. citizen detained by China,'' Los Angeles
Times, June 27, 1995 (Exhibit 61).
\226\ ``Do Human Rights Change with Political Agendas?'' The
Columbus Dispatch, Sept. 1, 1995 (Exhibit 62).
\227\ Elaine Sciolino, ``Summit in Washington: The Politics; A
Chinese Visitor Comes Between Longtime California Allies,'' New York
Times, Oct. 30, 1997 (Exhibit 63).
---------------------------------------------------------------------------
Troubled by Wu's arrest, Chung sought to talk to the
President at a DNC reception in California in July 1995. When
he spoke to the President in the receiving line, Chung told him
of his intention to use his own contacts in China to press for
Wu's release.\228\ Chung recalls that the President encouraged
him, jabbing the air with his finger and saying that he should,
``Tell them they have no right to arrest U.S. citizens.''
According to Chung, the President said, ``We have enough
problems between our countries. We don't need any more.'' Chung
recalls that as he stepped away, Clinton called him back,
pointing a finger at Chung's heart and repeating: ``Johnny--
tell them.'' \229\
---------------------------------------------------------------------------
\228\ William Rempel, ``How Big Clinton Contributor Turned into
Freelance Envoy,'' Los Angeles Times, Mar. 2, 1997 (Exhibit 64).
\229\ Id.
---------------------------------------------------------------------------
Chung left the reception convinced that he was an envoy
representing the interests of the President of the United
States, charged with obtaining the release of Harry Wu.
On July 24, 1995, Janice Enright, Assistant to Deputy Chief
of Staff Harold Ickes, sent a memorandum to National Security
Advisor Anthony Lake documenting a telephone call she had with
the Executive Director of the DNC, Bobby Watson, concerning
Chung. Watson had alerted Enright about Chung's plans to visit
China to negotiate for Wu's release on behalf of the
President.\230\ The memo stated:
---------------------------------------------------------------------------
\230\ 003626 (Exhibit 65).
Apparently, Johnny Chung, A DNC Trustee, is traveling
with a group of people to China and meeting with the
President of China this week. His mission is to
---------------------------------------------------------------------------
negotiate the release of Harry Woo.
2Mr. Watson wanted to alert us that Mr. Chung plans to
represent to the President of China that he is
sanctioned by President Clinton in his efforts to get
Mr. Woo released. He bases this representation on the
fact that he recently saw the President during his trip
to California and mentioned to him (I believe on a
photo line) what he was doing in this regard.
Apparently, the President was supportive. To what
extent, is unclear but nevertheless, it is being
construed as a validation and will be represented that
way to the President of China.\231\
---------------------------------------------------------------------------
\231\ Id.
The NSC's Robert Suettinger was tasked to investigate the
---------------------------------------------------------------------------
matter and concluded that:
Johnny Chung's attempt to get Harry Wu released is very
troubling, in part because I was not able to contact
the DNC in time to get them to discourage Chung from
involving himself in this diplomatically difficult and
high stakes issue.\232\
---------------------------------------------------------------------------
\232\ Committee interview of Robert Suettinger, Aug. 20, 1997.
While Chung was unsuccessful in getting a credential letter
from the President, he did receive something similar from DNC
Co-Chairman Don Fowler, a matter of some concern at the NSC.
Suettinger stated that ``the credential letter that the DNC
provided was one thing and all we can do is hope that the
Chinese recognize that his message should be treated with
caution.'' \233\
---------------------------------------------------------------------------
\233\ Id.
---------------------------------------------------------------------------
According to the Los Angeles Times, in the summer of 1995,
the Chairman of China Petrochemical, Huaren Sheng, arranged for
Chung to meet with a senior official from the Chinese foreign
ministry in Beijing to discuss the detention of Wu.\234\ At
this point, the Committee is unable to determine what if any
impact Chung's meddling in this tense situation might have had.
However, it is troubling that, when so many people at the DNC
and the White House had been put on notice that Chung was
preparing to intrude into a sensitive diplomatic matter, nobody
intervened.
---------------------------------------------------------------------------
\234\ William Rempel and Alan Miller, ``Donor's Claim of Altered
O'Leary Letter Investigated,'' Los Angeles Times, Sept. 22, 1997
(Exhibit 66).
---------------------------------------------------------------------------
The Century City Fundraiser
September 1995 brought the political event that would
eventually prove to be Johnny Chung's legal undoing. Chung
brought a large group of Chinese associates to a Clinton/Gore
'96 fundraising dinner in Century City, California on September
21. He attempted to pay for his guests with a large, soft money
contribution to the DNC. However, Clinton/Gore could not
legally accept contributions in excess of $1,000 from a single
individual. The next day, Chung enlisted his employees to
generate a series of $1,000 conduit contributions to pay for
the event. This scheme was the certerpiece of the criminal
information filed by the Justice Department to which Chung pled
guilty in March 1998.\235\
---------------------------------------------------------------------------
\235\ Associated Press ``Fund-Raiser Chung Pleads Guilty,'' the
Washington Post, Mar. 17, 1998 (Exhibit 5).
---------------------------------------------------------------------------
In 1995, Chung became a member of the Clinton/Gore '96
Southern California Finance Council by making a commitment to
Clinton/Gore National Finance Chairman Terry McAuliffe to raise
$100,000 for the campaign.\236\ Chung was later pressed to
fulfill his commitment. He received an August 5 form letter
from the campaign urging him to line up guests for the Century
City dinner.\237\ As the September 21 dinner approached, Chung
was contacted by Kimberly Ray, Deputy Finance Director for
Southern California for Clinton/Gore '96. Ms. Ray wrote,
``Please send list of names for seating arrangements . . .
Johnny, I'm not showing any individual commitments or
contributions toward your 100K commitment you made to Terry.
Time is running out. Please advise.'' \238\
---------------------------------------------------------------------------
\236\ JCH12214 (Exhibit 67).
\237\ Id.
\238\ JCH12220 (Exhibit 68).
---------------------------------------------------------------------------
1. The Guest List
On September 19, 1995, Chung faxed a guest list of 24
people to Karen Sternfeld, Clinton/Gore `96 Deputy Finance
Director for southern California.\239\ The list included
himself and his wife, his parents, and several AISI employees
and stockholders. It also included a dozen Chinese nationals
who were not eligible to contribute to Clinton/Gore. Prominent
on the list were the President and Assistant President of the
Haomen Group, Shi Zeng Chen and Yei Jun He. According to
testimony from Chung's assistant, Irene Wu, most of the
remaining overseas guests were friends and associates of Mr.
He.\240\ As noted earlier, Wu has testified that the Haomen
Beer officials were Chung's first substantial contacts in
China, and that they introduced Chung to many other people.
---------------------------------------------------------------------------
\239\ JCH15023 (additional information is italicized) (Exhibit 42).
\240\ Deposition of Irene Wu, pp. 34-36.
---------------------------------------------------------------------------
Chung went on to develop business relationships with
several of these individuals, including Bin Liu, who has been
identified as the son of a high-ranking Chinese general.\241\
The list includes two other Chinese nationals with whom Chung
went on to form companies in Los Angeles: Mr. Shijin Yu of
Honestwin Limited, and Bao Jian Cui of the Great Wall
International Culture Company. These relationships will be
detailed in a later section of this chapter.
---------------------------------------------------------------------------
\241\ Id. p. 225.
---------------------------------------------------------------------------
According to Karen Sternfeld, Johnny Chung brought a
$25,000 check made out to the Democratic National Committee
(``DNC'') to the Century City event.\242s\ Sternfeld later
explained to Chung that contributions to Clinton/Gore '96 were
limited to $1,000 per individual for the primary election, and
that his $25,000 check to the DNC was not acceptable.\243\
---------------------------------------------------------------------------
\242\ Deposition of Karen Sternfeld, Mar. 10, 1998, p. 40.
\243\ Id.
---------------------------------------------------------------------------
2. Arranging Straw Donors
The following morning, Sternfeld phoned Irene Wu at the
AISI offices. She informed Wu that she had Chung's check, but
that she could not accept it. She told Wu that they could only
accept checks of up to $1,000. Wu informed Sternfeld that most
of Chung's guests had already left, and it would be difficult
for her to get individual checks. Accordicng to Wu, Sternfeld
told her that the individuals who contributed did not
necessarily have to be the same individuals who attended the
event.\244\
---------------------------------------------------------------------------
\244\ Deposition of Irene Wu, pp. 41-42.
---------------------------------------------------------------------------
Sternfeld told Wu that she and her colleagues from the
campaign would be at a restaurant that evening, and that Wu
could deliver the checks to her there.\245\
---------------------------------------------------------------------------
\245\ Id. pp. 78-79.
---------------------------------------------------------------------------
When Chung arrived at the AISI offices, he entered Wu's
office and asked her to help him enlist people to write checks
to Clinton/Gore '96 in return for cash. According to Wu:
When he walked in, we knew we had to take care of this,
so we started talking about it, what needs to be done.
And so he said, ``we have to find the individual
checks.'' And I understood it as part of my job in
assisting him that I would have to call around and get
the checks together.\246\
---------------------------------------------------------------------------
\246\ Id. p. 40.
When Ms. Wu was initially contacted by Committee
investigators in October 1997, she asserted her Fifth Amendment
right to remain silent and declined to be interviewed. The
Committee voted to immunize Wu and co-worker Nancy Lee on June
23, 1998. Wu and Lee were deposed in California by Committee
staff on July 28 and July 29, 1998, respectively.
Wu said that she and other AISI employees assisted Chung in
distributing $1,000 cash payments to friends and co-workers in
return for $1,000 checks made payable to Clinton/Gore '96.\247\
Committee investigators have interviewed 20 individuals,
including Wu and Lee, who wrote those checks in exchange for
cash. Though their accounts vary somewhat as to what day they
made their contributions, they acknowledge doing so shortly
after the date of the event.
---------------------------------------------------------------------------
\247\ Id.
---------------------------------------------------------------------------
The testimony of Sternfeld's supervisor, Clinton/Gore '96
Southern California Finance Director Kimberly Ray, is
essentially consistent with that of Sternfeld.\248\ Both Ray
and Sternfeld deny having any knowledge that Chung reimbursed
anyone for their contributions to Clinton/Gore '96.\249\
---------------------------------------------------------------------------
\248\ See generally, deposition of Kimberly Ray, July 30, 1998.
\249\ Deposition of Kimberly Ray p. 41; deposition of Karen
Sternfeld pp. 43, 62.
---------------------------------------------------------------------------
3. Nancy Lee and Maxtech
After writing a check of her own for $1,000 to the Clinton/
Gore campaign and being reimbursed by Chung, Irene Wu phoned
Nancy Lee.\250\ Lee worked as a part-time bookkeeper for AISI
in the evenings. During the day, she worked for Maxtech, a
computer peripheral manufacturer in Los Angeles. Wu asked Lee
to write a check to Clinton/Gore, which she did, and to get
similar checks from as many coworkers as possible. All of the
donors would be reimbursed that day.\251\
---------------------------------------------------------------------------
\250\ Deposition of Irene Wu, pp. 38-39, 45.
\251\ Deposition of Nancy Lee, pp. 34, 27-29.
---------------------------------------------------------------------------
Lee secured $1,000 checks from five coworkers at Maxtech;
Kathy Chiang, Brenda Hwang, Joyce Tsao, Anna Kulesza, and Mike
Wang.\252\ Later that day, she received cash to reimburse her
coworkers from Johnny Chung's wife, Katherine.\253\
---------------------------------------------------------------------------
\252\ Id. pp. 35-40.
\253\ Deposition of Irene Wu, pp. 47-49. Wu stated that she
overheard Johnny Chung ask his wife to deliver the money to Lee.
---------------------------------------------------------------------------
In late October 1997, Committee investigators interviewed
Anna Kulesza, Joyce Tsao, and Mike Wang at the offices of
Maxtech. All three confirmed that they were separately asked by
co-worker Nancy Lee to write $1,000 checks to Clinton/Gore '96,
and that they were reimbursed in cash. Ms. Kulesza also told
investigators that Ya-Hui Kao (Brenda) Hwang, who also had
contributed $1,000 to Clinton/Gore '96, passed away in early
1996. They said that they had never made political
contributions and explained that they wrote the checks as a
favor to Nancy Lee. They said that they did not know the legal
implications of being reimbursed for their contributions.\254\
---------------------------------------------------------------------------
\254\ Staff interview of Anna Kulesza, Hsi-chun Tsao Kang, Yen-Wen
Wang, Jan. 27, 1998.
---------------------------------------------------------------------------
In January 1998, Committee investigators interviewed Kathy
Chiang at the Maxtech offices. Like the others, she confirmed
that Nancy Lee asked her to write a $1,000 check to Clinton/
Gore '96 in exchange for cash. Ms. Chiang said that she did not
have sufficient funds in her checking account to cover the
check. Ms. Chiang filled out a deposit slip, and Nancy Lee
deposited the cash into her account.\255\
---------------------------------------------------------------------------
\255\ Staff interview of Li-Chuan ``Kathy'' Chiang, Oct. 23, 1997.
---------------------------------------------------------------------------
None of the Maxtech employees who made conduit
contributions to Clinton/Gore '96 attended the September 1995
Century City fund-raising event.
4. Woody Hwang and Victoria Financial Services
Irene Wu also enlisted the aid of her ex-husband, Woody
Hwang, in securing checks for the event. Through his attorney,
Woody Hwang asserted his Fifth Amendment right to remain silent
on January 27, 1998, and declined to speak with Committee
investigators. Through interviews and depositions, the
Committee has learned that Hwang secured seven $1,000 checks,
including his own, to the Clinton/Gore campaign, and delivered
them to Wu in exchange for an equal amount of cash.\256\
---------------------------------------------------------------------------
\256\ Deposition of Irene Wu, pp. 62-71.
---------------------------------------------------------------------------
In late January 1998, committee investigators visited the
offices of Victoria Financial Services (formerly Amazon
Financial). They interviewed employee Chun Ju Cheng about
contributions that she and other employees of that company made
to Clinton/Gore '96. Ms. Cheng said that Irene Wu used to work
for Pacific Title Company, which conducted business with
Victoria Financial. Ms. Cheng said that she and other Victoria
employees met Woody Hwang through Irene Wu.
Ms. Cheng said that Woody Hwang came to the offices of
Victoria Financial and asked several employees to write
contribution checks in exchange for cash. Ms. Cheng said that
she and the others agreed to do so in order to assist a friend.
She said that Mr. Hwang reimbursed the contributors with cash 1
or 2 days later.
Ms Cheng said that she wrote two checks. One on her
account, and another on an account that she shares with her
mother-in-law; Meng Eng Sun. Ms. Cheng said that her sister-in-
law, Yen Ling Shao, also wrote a check at Woody Hwang's
request. Ms. Cheng said that Shao is 62 years of age, never
worked for Victoria Financial, and is currently residing in
either China or Taiwan.
Ms. Cheng and a co-worker named Serena Cheng, who did not
make a contribution to Clinton/Gore '96, witnessed Woody
Hwang's solicitation of Susan Tan, who also wrote a check.
Susan Tan did not work for Victoria Financial. They said that
Tan was visiting the United States and is currently overseas.
Serena Cheng and Chun Ju Cheng said they do not know another
contributor named William Cheng, who also listed Victoria
Financial as his employer when he contributed $1,000 to
Clinton/Gore '96.
Ms. Cheng said that neither she nor the others who
exchanged checks for cash were aware that such action was
illegal at the time that the exchanges were made. None of the
employees attended a fund-raising event for Clinton/Gore '96 in
connection with their contributions.\257\
---------------------------------------------------------------------------
\257\ Staff interview of Chun Ju Cheng and Serena Cheng, Jan. 23,
1998.
---------------------------------------------------------------------------
5. Steven Lin, Chin Lin, and Annie Ho
Committee investigators also interviewed Steven Lin in late
January 1998. He said that his wife, whose maiden name is Annie
Ho, used to work part-time at AISI.
Steven Lin said that Annie Ho asked him and his sister,
Chin Lin, to write a check with the understanding that they
would be reimbursed. Steven Lin, Annie Ho and Chin Lin each
wrote a $1,000 check to Clinton/Gore '96. Lin said that another
AISI employee picked up the checks from Ms. Ho at the office of
her other part-time employer. Ms. Ho reimbursed Steven Lin and
Chin Lin the next day in cash.\258\
---------------------------------------------------------------------------
\258\ Staff interview of Steven Lin, Jan. 27, 1998.
---------------------------------------------------------------------------
Shortly after speaking to Steven Lin, committee
investigators contacted Annie Ho at her home by telephone. Ms.
Ho confirmed that she asked Steven Lin and his sister to write
checks to Clinton/Gore '96 in exchange for cash, but could not
remember whether it was Irene Wu or Nancy Lee who asked her to
make that request.\259\
---------------------------------------------------------------------------
\259\ Staff interview of Annie Ho, Feb. 2, 1998.
---------------------------------------------------------------------------
6. Xiaodong Shan and Tina Wang
Committee investigators also interviewed El Camino Junior
College professor Xiaodong (David) Shan in late January 1998.
When asked about a $1,000 check that he wrote to Clinton/Gore
'96, Mr. Shan said that he wrote the check at the request of a
friend named Tina Wang, who worked for Johnny Chung. He said
that Ms. Wang immediately reimbursed him for his check with
cash. He said that he never attended a party or political event
for Clinton/Gore '96 in connection with the check and was
unaware that it is unlawful to be reimbursed for political
contributions.\260\
---------------------------------------------------------------------------
\260\ Staff interview of David Shan, Jan. 28, 1998.
---------------------------------------------------------------------------
A few days later, Committee investigators interviewed Tina
Wang by telephone. She said that Irene Wu asked her and other
AISI employees to write checks to Clinton/Gore '96 in exchange
for cash. Ms. Wang said that she did not write a check because
she did not have any with her at the time. Instead, she asked
her friend, David Shan, to do so because he worked near her
office in Torrance. Wang said that she did not attend a fund-
raising event in connection with Shan's contribution.\261\
---------------------------------------------------------------------------
\261\ Staff interview of Tina Wang, Feb. 5, 1998.
---------------------------------------------------------------------------
China Petrochemical Company (SINOPEC)
1. Introduction
By the fall of 1995, Chung's reputation in China for having
access to the White House and the top levels of the Clinton
Administration was well established. At this point, according
to Chung, he was asked by the Chairman of the China
Petrochemical Company (SINOPEC), Huaren Sheng, to set up
meetings for him with President Clinton and Secretary of Energy
Hazel O'Leary.\262\
---------------------------------------------------------------------------
\262\ William Rempel and Alan Miller, ``Donor's Claim of Altered
O'Leary Letter Investigated.'' Los Angeles Times, Sept. 22, 1997
(Exhibit 66).
---------------------------------------------------------------------------
Huaren Sheng had originally been scheduled to visit
Washington with the ``China Delegation'' that Chung brought to
the President's radio address in March 1995. However, he sent
SINOPEC Vic President Yan Sanzhong in his place.
According to the Los Angeles Times, Sheng had arranged in
the summer of 1995 for Chung to meet with a senior official
from the Chinese foreign ministry in Beijing to discuss the
detention of human rights activist Harry Wu.\263\
---------------------------------------------------------------------------
\263\ Id.
---------------------------------------------------------------------------
One Energy Department memo described China Petrochemical,
otherwise known as SINOPEC, as China's largest petrochemical
company. The memo states that SINOPEC produces 90 percent of
China's petrochemical products.\264\ A letter from Chung to
Treasury Secretary Robert Rubin states that SINOPEC has 80
subsidiaries and employs 700,000 people.\265\
---------------------------------------------------------------------------
\264\ DOE00465 (Exhibit 69).
\265\ Treasury 00000199 (Exhibit 70).
---------------------------------------------------------------------------
In mid-October 1995, Huaren Sheng led a 10-person
delegation from China Petrochemical to the United States
apparently seeking to explore cooperative agreements with U.S.
companies. According to a briefing paper prepared for Energy
Secretary O'Leary, the delegation had planned to meet with
officials from ``ARCO, AMOCO, DuPont, Dow, Honeywell and
Phillips.'' \266\
---------------------------------------------------------------------------
\266\ DOE00465 (Exhibit 69).
---------------------------------------------------------------------------
Documents produced to the Committee, as well as depositions
of officials at the Treasury Department who met with Sheng,
indicate the purpose of the trip. SINOPEC was making plans to
expand its purchases of high-sulfur crude oil from Saudi Arabia
in the coming years, but it lacked refining capacity to process
the oil. The SINOPEC executives were seeking long-term
financing or cooperative agreements to expand their capacity.
China Petrochemical's plight was spelled out in a letter
Chung received from Yao Mu-Chao of SINOPEC's Planning and
Research Division in December 1995:
We have received your Nov. 21 letter to our President
Mr. Sheng and he had asked me to be in charge of this
issue to discuss with you the processing of crude oil
from the Saudi Arabia.
As you are aware of, the resources of crude oil from
China is not sufficient for China's growing demand. For
the next several years, we would still need to purchase
crude oil from other countries. With reasonable terms
and conditions, we would like to steadily purchase from
Saudi Arabia. The only concern is that Saudi Arabia
crude oil contains a high volume of sulfur that we
would need to special process before it can be used by
our refineries. At the moment, SINOPEC's refineries are
not equipped to process a large volume of crude oil.
According to our initial calculation, it is possible
for us to process eighty million tons of crude oil
within ten years. We wish to make arrangements such
that for the first 5 years of purchase, SINOPEC can
delay payment on one million tons of crude oil purchase
every year. SINOPEC will use the capital to concentrate
on developing and reconstructing a few refineries. . .
. We would like to thank you again for your help and
hard work on bridging SINOPEC and the US
businesses.\267\
---------------------------------------------------------------------------
\267\ JCH13935 (Exhibit 71).
Following a familiar pattern, Chung went to the DNC to try
to arrange high-level meetings at the White House, the Energy
Department, and the Treasury Department. As in previous
instances, DNC Chairman Donald Fowler and DNC Finance Director
Richard Sullivan were aggressive in helping Chung arrange these
meetings. At this point, Chung had given more than $260,000 to
the DNC.\268\
---------------------------------------------------------------------------
\268\ FEC Internet Records--www.tray.com/fecinfo/ (Exhibit 3).
---------------------------------------------------------------------------
On Tuesday, October 17, Chung appeared at DNC headquarters
armed with copies of China Petrochemical's annual report.\269\
He also brought with him personal letters to Energy Secretary
Hazel O'Leary and Treasury Secretary Robert Rubin asking them
to meet with Mr. Sheng. The same day, the DNC faxed letters
from Don Fowler to O'Leary and Rubin, calling Chung ``one of
the top supporters of the Democratic National Committee,'' and
asking them to meet with Huaren Sheng.\270\ Despite Richard
Sullivan's stated reservations in March about helping Chung set
up meetings for Chung's Chinese associates, the fax cover sheet
to the Treasury Department bears Sullivan's name.\271\
---------------------------------------------------------------------------
\269\ Deposition of Wilson Golden, pp. 11-12.
\270\ JCH517 (Exhibit 72); Treasury 00000166-168 (Exhibit 73);
DOE00375 (Exhibit 74).
\271\ Treasury 00000166-168 (Exhibit 73).
---------------------------------------------------------------------------
Chung also sought a meeting with Education Secretary
Richard Riley, but was unsuccessful. Riley wrote to Chung on
October 17, explained that he was unable to meet with Sheng,
but offered a meeting with Undersecretary Mike Smith in his
place.\272\
---------------------------------------------------------------------------
\272\ JCH13055 (Exhibit 75).
---------------------------------------------------------------------------
Ultimately, Chung secured a meeting for the Sheng
delegation with Secretary O'Leary and the White House tour on
October 19, a brief meeting with the President for the SINOPEC
delegation that evening at the Africare dinner, and a meeting
with Deputy Secretary of the Treasury Lawrence Summers on
October 23. The trip to the Energy Department ignited a
controversy over whether access to Secretary O'Leary had been
exchanged for a $25,000 contribution to her favorite charity,
Africare.
2. Hazel O'Leary, Africare, and the U.S. Department of Energy
On Tuesday, October 17, while Chung was at the DNC
enlisting Don Fowler's assistance for the China Petrochemical
delegation, he had a chance meeting with lobbyist Wilson
Golden.\273\ Golden was a consultant for ICF Kaiser, an
international engineering firm with large contracts with the
Department of Energy. Golden had been asked by Secretary
O'Leary on October 5 to help raise money for the upcoming
Africare dinner.\274\ O'Leary was an honorary chairwoman of the
dinner, and was being pressed by its organizers to help raise
funds for it.\275\ Golden and Chung met later that day at the
Army-Navy Club. The sequence of events that followed led to a
flurry of accusations of selling access to Secretary O'Leary
and spawned a Justice Department investigation.
---------------------------------------------------------------------------
\273\ Deposition of Wilson Golden, pp. 10-11.
\274\ Id. pp. 21-24.
\275\ DOE00483 (Exhibit 76); DOE00259 (Exhibit 77).
---------------------------------------------------------------------------
On August 19, 1997, NBC Nightly News and Dateline NBC aired
an interview of Chung by Tom Brokaw. Brokaw questioned Chung
about his efforts to get a meeting with then Secretary O'Leary.
Brokaw. You had some other Chinese friends come who
were in the petrochemical business.
Chung. Yes, sir.
Brokaw. You wanted to see Hazel O'Leary, who was then
the Energy Secretary.
Chung. Yes, sir.
Brokaw. You had a chance encounter with a lobbyist,
who--someone who was working with Ms. O'Leary.
Chung. Yes, sir.
Brokaw. And they knew that she had a favorite
charity. It's Africare, is that the name of it?
Chung. Yes, sir.
Brokaw. So what did they suggest to you?
Chung. They can set it up, a meeting, for us. It
would be nice if you make a donation to Africare.
Brokaw. Were you surprised when someone could get you
in to see Hazel O'Leary if you would write a check to
her favorite charity?
Chung. I begin to understand a little bit, but I am
still a little bit surprised.
Brokaw. Yeah. Who picked up the check?
Chung. There's one gentleman, present himself as the
Energy Department official, and said I'm here to pick
it up, the $25,000 check.
Brokaw. This is the check?
Chung. This is the check.
Brokaw. To Africare?
Chung. To Africare.
Brokaw. A charity that the Energy Secretary supports,
she sends over somebody from the Energy Department to
pick it up, and you get a meeting with her with a very
prominent Chinese petrochemical official.
Chung. Yes.276
---------------------------------------------------------------------------
\276\ NBC News Transcripts, NBC Nightly News, Aug. 19, 1997
(Exhibit 78).
Chung repeated the allegation to the Los Angeles Times. In
an interview, Chung told the Times that Golden referred him to
the Director of the Energy Department's Office of Economic
Impact and Diversity, Corlis Moody. Chung told the Times that
Moody agreed to set up the meeting with Secretary O'Leary, and
---------------------------------------------------------------------------
asked him to contribute $25,000 to Africare in return:
In Moody's office Chung asked to arrange a Sheng-
O'Leary meeting and said that he was told ``no
problem.''
In an interview with the Times last month, Chung said
Moody immediately added: ``It would be nice if you
provide a donation to Africare.'' Although Chung was
not familiar with the charity, he said he was willing
to donate if it meant he could confirm a meeting for
the visiting Chinese oilmen.
``I asked, how much? and she said $25,000 for a table''
at a fund-raising dinner the next night, Chung
said.277
---------------------------------------------------------------------------
\277\ William Rempel and Alan Miller, ``Donor's Claim of Altered
O'Leary Letter Investigated,'' Los Angeles Times, Sept. 22, 1997
(Exhibit 66).
When Golden and Chung met at the Army-Navy Club, Golden was
most interested in setting up a meeting between ICF Kaiser, his
client, and SINOPEC.278 However, according to
Golden, Chung was most interested in talking about himself and
showing pictures.279 Golden was able to briefly
discuss the Africare dinner, and mentioned that the event would
cost $25,000 per table. He told Chung that both O'Leary and
President Clinton would be there.280 Golden then
gave Chung the name and phone number of Corlis Moody, and told
him to contact her.281 Golden contacted Moody after
his meeting to tell her to expect a call from
Chung.282
---------------------------------------------------------------------------
\278\ Deposition of Wilson Golden, p. 17.
\279\ Id. pp. 19-20.
\280\ Id. p. 27.
\281\ Id.
\282\ Id. at p. 26.
---------------------------------------------------------------------------
Moody testified that she had two phone conversations with
Chung that afternoon. She believes that she was first contacted
by Chung about an hour after her call from
Golden.283 Moody denies that she asked Chung to
contribute to the Africare dinner. She stated that Chung
volunteered to buy a table for the Africare dinner and asked
that she help him make the arrangements. Chung also asked for a
meeting with Secretary O'Leary.284 Moody told Chung
that she would work on both requests.285
---------------------------------------------------------------------------
\283\ Deposition of Corlis Moody, p. 54.
\284\ Id. pp. 54-55.
\285\ Id. p. 57.
---------------------------------------------------------------------------
An hour or two later, Moody received another phone call
from Chung. Chung wanted to know whether the meeting with the
Secretary had been scheduled. Moody told him it had not. Chung
also told her that he needed a formal, signed letter confirming
the meeting with the Secretary. Moody testified that she tried
to explain to Chung that he could not get a letter that night
confirming a meeting that had not been scheduled.286
---------------------------------------------------------------------------
\286\ Id. pp. 60-61.
---------------------------------------------------------------------------
Moody described the conversation as being very long,
starting when the sun was up, and ending after the sun had gone
down. She stated that Chung was agitated and
persistent.287 The SINOPEC delegation was in
Houston, with plans to travel to Chicago. Chung was seeking a
firm commitment of a meeting before asking the group to change
their travel plans.288
---------------------------------------------------------------------------
\287\ Id. pp. 61-62.
\288\ Id. William Rempel and Alan Miller, ``Donor's Claim of
Altered O'Leary Letter Investigated,'' Los Angeles Times, Sept. 22,
1997 (Exhibit 66).
---------------------------------------------------------------------------
In the end, Moody says that she agreed to fax a draft
letter to Chung. She typed a letter while she was on the phone
with him and faxed it to him.\289\ The contents of this letter
have been hotly disputed, and have become the subject of a
Justice Department investigation into possible evidence
tampering.\290\
---------------------------------------------------------------------------
\289\ Deposition of Corlis Moody, pp. 61-62.
\290\ William Rempel and Alan Miller, ``Donor's Claim of Altered
O'Leary Letter Investigated,'' Los Angeles Times, Sept. 22, 1997
(Exhibit 66).
---------------------------------------------------------------------------
According to Chung, the letter was a draft letter with
three paragraphs from O'Leary to Huaren Sheng. It welcomed him
to the United States, invited him to a meeting with her at the
Energy Department, and included a paragraph inviting him and
his delegation to the Africare dinner, where they could meet
the President.\291\
---------------------------------------------------------------------------
\291\ Id.
---------------------------------------------------------------------------
Such a letter would have run afoul of the rules governing
the conduct of executive branch employees. Such officials may
not use official resources to promote charitable activities,
and may not use official letterhead to promote non-official
events.\292\
---------------------------------------------------------------------------
\292\ DOE00013-14 (Exhibit 79).
---------------------------------------------------------------------------
Moody's testimony about the letter is confused, at best. In
her deposition, she recalls writing a letter from herself to
Chung, not a letter from O'Leary to Sheng.\293\ Later, when
Justice Department investigators asked her to search her
computer files for the letter, she was unable to locate it.
Eventually, her secretary located a disk in her office which
contained a letter, but is was a letter to Huaren Sheng,
unsigned, from Secretary O'Leary.\294\
---------------------------------------------------------------------------
\293\ Deposition of Corlis Moody, p. 67.
\294\ Id. p. 68.
---------------------------------------------------------------------------
The accounts of Chung and Moody about what happened the
next day again conflict.
Chung told the Los Angeles Times that he called Moody early
the next morning, requesting a formal, signed version of the
letter, and it was faxed to him about 9:30 a.m.\295\
---------------------------------------------------------------------------
\295\ William Rempel and Alan Miller, ``Donor's Claim of Altered
O'Leary Letter Investigated,'' Los Angeles Times, Sept. 22, 1997
(Exhibit 66).
---------------------------------------------------------------------------
Documents produced by the Department of Energy tend to
corroborate Chung's assertion. The Department produced a copy
of an autopen authorization form dated October 18, 1995.\296\
At the top of the document, there is a handwritten note with
the number assigned to this request and ``9:00 a.m.'' \297\
This time is consistent with when Chung claims to have received
the fax.
---------------------------------------------------------------------------
\296\ DOE0058-59 (Exhibit 80).
\297\ Id.
---------------------------------------------------------------------------
Chung went on to state that later that morning, while he
was still in his bathrobe, an Energy Department employee
arrived at his apartment. Chung stated that the employee
requested the check for the Africare dinner, and both faxes
Chung had received.\298\ The employee told Chung that the
Energy Department's General Counsel considered the letter
improper.\299\ Chung said that he gave the courier the check
for $25,000 and both faxes, saying, ``I don't care, as long as
my guy gets his meeting.'' \300\
---------------------------------------------------------------------------
\298\ William Rempel and Alan Miller, ``Donor's Claim of Altered
O'Leary Letter Investigated,'' Los Angeles Times, Sept. 22, 1997
(Exhibit 66).
\299\ Id.
\300\ Id.
---------------------------------------------------------------------------
According to Moody, Chung arrived unannounced at the Energy
Department that morning to ask if the final letter from O'Leary
was ready yet. Moody informed Chung that it was not. Chung
asked if he could wait for it, but Moody advised him that he
should not and that she would contact him when the letter was
done.\301\
---------------------------------------------------------------------------
\301\ Deposition of Corlis Moody, pp. 73-75.
---------------------------------------------------------------------------
Moody stated that Johnny Chung called her again later that
day, still inquiring about the status of the letter. However,
she said that during this call, Chung insisted that she help
him get the SINOPEC delegation into the White House to meet the
President, and that if she did not, he would not make the
Africare contribution. This made Moody angry, they argued, and
she eventually hung up on him.\302\
---------------------------------------------------------------------------
\302\ Id. pp. 81-83.
---------------------------------------------------------------------------
Department of Energy employee Howlie Davis was in Moody's
office at the time of this conversation. At this point, they
discussed getting the faxed letter back from Chung:
A. I think Mr. Davis and I both looked at each other. I
mean, he's watching me on the phone the whole time, he can hear
my side of the conversation. And I think we both went, this
guy, we can't deal with this guy. We need to get that letter
back, because Howlie was with me the night when I faxed the
letter.\303\
---------------------------------------------------------------------------
\303\ Id. p. 92.
* * * * * * *
---------------------------------------------------------------------------
Q. And why did you feel like you needed to get that letter
back?
A. Well now, I think that I'm recognizing that Mr. Chung is
not who we think Mr. Chung is. I'm thinking Mr. Chung is a DNC
trustee interested in facilitating an arrangement for a Chinese
delegation to meet with the Secretary of Energy, to go to an
Africare dinner; and at this point, having just had that
conversation, I'm not sure who I'm dealing with. And I am
already--I have sent him a letter in writing suggesting that
I'm working on getting him both of his requests, and this guy
is not who I thought he was.\304\
---------------------------------------------------------------------------
\304\ Id. p. 93.
Later that afternoon, Chung called Moody back to apologize,
and she accepted his apology. She agreed to continue working to
arrange the meeting with O'Leary.\305\ At this point, the
SINOPEC delegation had received the two faxed versions of the
letters from Chung, and was en route to Washington.\306\
---------------------------------------------------------------------------
\305\ Id. pp. 84-85.
\306\ William Rempel and Alan Miller, ``Donor's Claim of Altered
O'Leary Letter Investigated,'' Los Angeles Times, Sept. 22, 1997
(Exhibit 66).
---------------------------------------------------------------------------
Moody further testified that Howlie Davis told her that he
had gone to pick up the $25,000 check for Africare, as well as
the letter that Moody faxed to Chung. However, Davis said that
he did so the morning of Thursday, October 19, not Wednesday,
October 18, as alleged by Chung.\307\
---------------------------------------------------------------------------
\307\ Id. pp. 122-124.
---------------------------------------------------------------------------
The letter produced to the Committee in response to its
subpoena is an October 18 letter from O'Leary to Shen. It has
only two paragraphs, and there is no mention of the delegation
joining O'Leary and the President at the Africare dinner.\308\
According to the Los Angeles Times, Chung told Justice
Department investigators that the letter was altered from the
version he received.\309\
---------------------------------------------------------------------------
\308\ DOE 00059 (Exhibit 80).
\309\ William Rempel and Alan Miller, ``Donor's Claim of Altered
O'Leary Letter Investigated,'' Los Angeles Times, Sept. 22, 1997
(Exhibit 66).
---------------------------------------------------------------------------
On December 4, 1997, the Committee deposed Hazel O'Leary.
O'Leary testified that she did not solicit the $25,000
contribution from Chung. She explained that it was not until
August 1997, almost 2 years later, that she even knew Chung was
involved in any way with the meeting with Huaren Sheng, whom
she had met once before in China.\310\
---------------------------------------------------------------------------
\310\ Deposition of Hazel O'Leary, pp. 78-88.
---------------------------------------------------------------------------
In August 1997, O'Leary learned that NBC Nightly News was
preparing a story about her and Chung's $25,000 donation to
Africare. O'Leary then contacted Moody, who informed her about
Chung, the donation to the Africare event and his connection
with Huaren Sheng.\311\ Prior to this conversation with Moody,
O'Leary said that she was not aware that Chung had contributed
$25,000 to the Africare event. She stated that the letter to
Huaren Sheng was autopenned, and that she had not seen it at
the time.\312\
---------------------------------------------------------------------------
\311\ Id.
\312\ Id. pp. 94-95.
---------------------------------------------------------------------------
O'Leary also testified during her deposition that, when
interviewed by the Department of Justice, she was shown a draft
of a letter from her to Huaren Sheng. She stated that the
letter welcomed him to the United States and invited him to
meet with her at the Department of Energy.\313\ She then
stated:
---------------------------------------------------------------------------
\313\ Id. pp. 98-99.
It went on in very bizarre language to say I am
inviting you to attend a, I can't remember, an event at
---------------------------------------------------------------------------
the hotel with the President of the United States.
Now, I want to be clear there was no mention of
Africare and there was no mention of the sum $25,000 in
this draft letter that was shown to me.\314\
---------------------------------------------------------------------------
\314\ Id.
Hauren Sheng and the SINOPEC delegation arrived at the
Energy Department and met with O'Leary between 3:30 and 3:45,
according to O'Leary's schedule.\315\ By all accounts, the
meeting was unremarkable.
---------------------------------------------------------------------------
\315\ DOE00437-438 (Exhibit 81).
---------------------------------------------------------------------------
The delegation then went on to the White House for a White
House tour. White House WAVES records indicate that Chung
entered the White House at 4:30 p.m. He was admitted by Evan
Ryan, the assistant to the First Lady's Chief of Staff.\316\
While they were there they were introduced to Presidential aide
George Stephanopoulos.\317\
---------------------------------------------------------------------------
\316\ WAVES at EOP 005032 (Exhibit 2).
\317\ William Rempel and Alan Miller, ``Donor's Claim of Altered
O'Leary Letter Investigated,'' Los Angeles Times, Sept. 22, 1997
(Exhibit 66).
---------------------------------------------------------------------------
By the time the SINOPEC delegation arrived at the Africare
dinner, Chung still had not arranged for them to meet the
President. According to Moody, Chung encountered her at the
reception and pleaded with her to help him get to see the
President. Moody was not able to assist him.\318\ Chung also
encountered lobbyist Wilson Golden, who had first mentioned the
Africare dinner to him at the beginning of the week. Chung also
enlisted Golden's help. Golden introduced Chung to a DNC
employee by the name of Carol Willis, whom he asked to help
Chung. In his deposition, Golden said, ``I basically sort of
turned it over to Carol, who apparently arranged the meeting.''
\319\
---------------------------------------------------------------------------
\318\ Deposition of Corlis Moody, pp. 109-110.
\319\ Deposition of Wilson Golden, p. 37.
---------------------------------------------------------------------------
According to the Los Angeles Times, Chung pushed his way to
the front of a receiving line and asked the President to meet
the delegation.\320\ A private meeting was arranged in a
deserted ballroom where there was only a handful of
presidential aides, security personnel, and a White House
photographer.\321\ Chung recalls Clinton saying ``Johnny is a
good friend [who has been] doing good things for the United
States and China.'' The President also thanked Sheng, for what
Chung believes was his help to Chung in his efforts to free
Harry Wu. Pictures were taken and the brief encounter was
over.\322\
---------------------------------------------------------------------------
\320\ William Rempel and Alan Miller, ``Donor's Claim of Altered
O'Leary Letter Investigated,'' Los Angeles Times, Sept. 22, 1997
(Exhibit 66).
\321\ Id.
\322\ Id.
---------------------------------------------------------------------------
The Chinese delegation left before the dinner to depart for
Chicago.\323\ According to Chung, O'Leary later came by his
table to thank him for his support.\324\ At one point during
the dinner, Chung stopped at the table where Corlis Moody was
sitting. He was elated. Moody described the encounter this way:
---------------------------------------------------------------------------
\323\ Id.
\324\ Id.
He comes up to my table and again grabs me. This time I
am sitting. He kisses me on the cheek and says, thank
you, thank you. . . . I said, you are welcome. I am so
glad everything worked out, that sort of thing. He says
to my husband, you have the best wife in the world. She
has done this wonderful thing for me, and on and on and
on. . . . Then he goes and sits down. I never see him
again.\325\
---------------------------------------------------------------------------
\325\ Deposition of Corlis Moody, p. 111.
On December 2, the Justice Department terminated its
preliminary investigation to determine if an independent
counsel should be appointed for Mrs. O'Leary. In her
announcement, Attorney General Reno stated, ``The investigation
developed no evidence that Mrs. O'Leary had anything to do with
the solicitation of the charitable donation.'' \326\
---------------------------------------------------------------------------
\326\ Department of Justice, ``Notification to the Court of Results
of Preliminary Investigation,'' Dec. 2, 1997 (Exhibit 82).
---------------------------------------------------------------------------
The Attorney General's notice to the court also stated
that, ``These circumstances, and whether there may have been
some unlawful conduct by some participants, warrant further
investigation by the Department of Justice.'' \327\
---------------------------------------------------------------------------
\327\ Id.
---------------------------------------------------------------------------
3. U.S. Department of the Treasury
On Monday, October 23, 1995, the China Petrochemical
delegation returned to Washington for a meeting at the Treasury
Department and a U.S.-China Business Council lunch.\328\
Despite DNC Co-Chairman Don Fowler's letter to Secretary Robert
Rubin, Rubin was apparently unable to meet with Sheng.\329\ On
Friday, October 20, Fowler sent a letter to then-Under
Secretary for International Affairs Lawrence H. Summers, asking
Summers to meet with Sheng.\330\ Summers agreed.
---------------------------------------------------------------------------
\328\ Treasury 00000199 (Exhibit 70).
\329\ DNC 1786470 (Exhibit 83).
\330\ DNC 1786467 (Exhibit 84).
---------------------------------------------------------------------------
Summers was joined at the Monday morning meeting by Todd W.
Crawford, then the Director of the Office of East and South
East Nations, Todd T. Schneider, who was at the time an
international economist for the Department, and James H. Fall,
then the Deputy Assistant Secretary for Developing Nations.
Schneider, Fall, Crawford, and Summers were deposed by the
Committee in December 1997.
At the meeting, Sheng inquired about receiving long-term,
low-interest loans from the U.S. Government to finance energy
development projects. Schneider recalls Chung pulling him aside
before the meeting and informing him that Sheng wanted to ask
for ``a concessional loan from the Treasury Department to
finance energy development projects in west to northwest
China.'' \331\
---------------------------------------------------------------------------
\331\ Deposition of Todd Schneider, p. 22.
---------------------------------------------------------------------------
Schneider recalls the meeting this way:
I believe Mr. Sheng was talking about the need for
energy in the context of China's growing economy and at
some point Mr. Sheng raised the issue or made the
request of a loan from the Treasury Department to
finance these energy development projects in west to
northwest China.
I don't recall the exact words. Mr. Summers' response
was that the Treasury Department did not make loans of
this kind; that we had no funds for this purpose and it
wasn't the function of the Treasury Department in the
U.S. to make these kind of loans.\332\
---------------------------------------------------------------------------
\332\ Id. pp. 23-24.
Notes taken by Crawford during the meeting reflect the
conversation: ``during next 5 year plan--will expand factories.
Wants l-t low i. loan.'' \333\
---------------------------------------------------------------------------
\333\ Treasury 00000197 (Exhibit 85).
---------------------------------------------------------------------------
Schneider also recalls that either Sheng or Chung asked
Summers if the Treasury Department could use its influence with
U.S. banks to convince them to make such loans to SINOPEC.
Summers informed them that the Treasury Department did not do
that.\334\
---------------------------------------------------------------------------
\334\ Deposition of Todd Schneider, p. 24.
---------------------------------------------------------------------------
One official present at the meeting recalled it being
suggested that Sheng contact the U.S. Export-Import Bank for
financial assistance.\335\ Mr. Crawford's notes indicate that
someone at the Treasury Department attempted to set up a
meeting for the delegation with the Chairman of the Export-
Import Bank, but that he was not in town.\336\
---------------------------------------------------------------------------
\335\ Id. pp. 24-28.
\336\ Treasury 00000197 (Exhibit 85).
---------------------------------------------------------------------------
4. Lynn Cutler and the Back to Business Committee
In February 1996, Chung was still attempting to help
SINOPEC in its efforts to import more Saudi Arabian oil.
According to press reports, Chung was referred to former
DNC Vice-Chairwoman Lynn Cutler by Maggie Williams in December
1995.\337\ He chatted with her at a White House Christmas
party, and on February 2, 1996, Chung contributed $25,000 to
the ``Back to Business Committee,'' an organization run by Lynn
Cutler.\338\ The mission of the Committee was to launch a media
campaign to defend the President and First Lady against
Whitewater-related charges.\339\
---------------------------------------------------------------------------
\337\ William Rempel and Alan Miller, ``Donor Speaks Out on Clinton
Group Fund-Raising: Private committee did favors, had White House ties,
Chung's lawyer says.'' Los Angeles Times, Aug. 9, 1997 (Exhibit 86).
\338\ BTB 00614 (Exhibit 87).
\339\ William Rempel and Alan Miller, ``Donor Speaks Out on Clinton
Group Fund-Raising: Private Committee did favors, had White House ties,
Chung's lawyer says.'' Los Angeles Times, Aug. 9, 1997 (Exhibit 86).
---------------------------------------------------------------------------
Chung also claims that he used his relationship with Cutler
to gain a meeting with a Commerce Department official, who
discouraged him from investing in a petroleum business
venture.\340\
---------------------------------------------------------------------------
\340\ Id.
---------------------------------------------------------------------------
On February 7, 1996, Chung sent a letter to Lynn Cutler
apologizing for the delay in his support for President Clinton
and the First Lady.\341\ He enclosed a copy of his
correspondence with SINOPEC and requested a series of favors
indicating that he was still hard at work on SINOPEC's behalf.
He requested:
---------------------------------------------------------------------------
\341\ BTB00563 (Exhibit 88).
(1) a meeting with Ron Brown,
(2) a meeting with the U.S. Ambassador and other
officials in Saudi Arabia, and
(3) that Cutler discuss the oil issue with the
President.\342\
---------------------------------------------------------------------------
\342\ Id.
In the letter, Chung referred to a discussion with the
President about his efforts on behalf of SINOPEC during the
White House Holiday Reception.\343\
---------------------------------------------------------------------------
\343\ Id.
---------------------------------------------------------------------------
Chung also used his relationship with Ms. Cutler to
schedule a meeting in Beijing with Former Senator Jim Sasser
(D-TN), now the ambassador to the People's Republic of China.
On March 8, 1996, Ambassador Sasser sent a fax to Lynn Cutler
at the Kamber Group. He said that Chung visited his office when
he was not available. He informed Cutler that he was searching
Beijing hotels for Chung in an effort to set up a meeting.\344\
---------------------------------------------------------------------------
\344\ JCH13433 (Exhibit 89).
---------------------------------------------------------------------------
5. Conclusion
On October 13, 1997, SINOPEC announced ``an agreement with
Exxon and Aramco of Saudi Arabia for a joint feasibility study
for a refinery and petrochemical complex in East China's
coastal province of Fujian which will involve a total
investment of three billion U.S. dollars.'' \345\ A Xinhua News
Agency article continued: ``After completing the project,
Fujian will become a 10-million-ton refinery center for
processing high-sulfur crude oil with an annual capacity of
manufacturing 600,000 tons of Ethylene.'' \346\ There are
apparently two other joint ventures planned between SINOPEC and
Exxon.\347\
---------------------------------------------------------------------------
\345\ ``Chinese Vice Premier, Exxon CEO Discuss Petrochemical
Pact,'' Xinhua News Agency, Oct. 17, 1997 (Exhibit 90).
\346\ Id.
\347\ Id.
---------------------------------------------------------------------------
Liu Chao-Ying and China Aerospace International Holdings
1. Introduction
On May 15, 1998, the New York Times reported that Chung
admitted to Justice Department investigators that, ``a large
part of the nearly $100,000 he gave to Democratic causes in the
summer of 1996--including $80,000 to the Democratic National
Committee--came from China's People's Liberation Army through a
Chinese Lieutenant Colonel and aerospace executive'' named Liu
Chao-Ying.\348\ This appears to be the first time that a major
figure in the campaign finance scandal has agreed to cooperate
with the Justice Department. It also appears to be the first
time that a high-profile witness has provided corroboration of
Chinese government efforts to influence U.S. elections.
---------------------------------------------------------------------------
\348\ Jeff Gerth, David Johnston, and Don Van Natta, ``Democratic
Fund-Raiser Said to Detail China Tie,'' New York Times, May 15, 1998
(Exhibit 6).
---------------------------------------------------------------------------
Documents and testimony obtained by the Committee indicate
that Liu traveled to the United States twice in 1996 in
coordination with Chung. The Committee's investigation has
determined that there were at least two areas where Chung was
attempting to assist Liu; 1) meeting with representatives of
the U.S. aerospace industry to discuss the purchase of aircraft
parts, and 2) raising capital in U.S. financial markets.
Whether they had anything to show for their efforts will remain
an open question until either Chung or Liu agrees to cooperate
with the Committee's investigation.
Liu Chao-Ying is the Vice President of China Aerospace
International Holdings, Ltd., a Hong Kong-based subsidiary of
China Aerospace Corporation.\349\ China Aerospace is a Chinese
government-owned corporation that deals in satellite
technology, missile sales, and satellite launches. A second
business card produced to the Committee lists Liu as President
of CASIL Import & Export Co., Ltd.,\350\ a Hong Kong subsidiary
of China Aerospace. She is the daughter of retired People's
Liberation Army (PLA) General Liu Huaqing.\351\ In 1996,
General Liu was the Vice Chairman of the Central Military
Commission, and reportedly oversaw the Chinese army's
modernization program. He was also a member of the Standing
Committee of the Politburo of the Communist Party.'' \352\
---------------------------------------------------------------------------
\349\ JCH14321 (Exhibit 91).
\350\ Id.
\351\ Jeff Gerth, David Johnston, and Don Van Natta, ``Democratic
Fund-Raiser Said to Detail China Tie,'' New York Times, May 15, 1998
(Exhibit 6).
\352\ Id.
---------------------------------------------------------------------------
Another subsidiary of China Aerospace, China Great Wall
Industries, is involved in the commercial launch of satellites
aboard Chinese-built rockets.\353\ China Great Wall is at the
center of a growing controversy over whether U.S. ballistic
missile technology was illegally transferred to China.
---------------------------------------------------------------------------
\353\ CRS Report 98-485, p. 2.
---------------------------------------------------------------------------
In February 1996, a March III rocket built by China Great
Wall Industries exploded shortly after lift-off, destroying a
commercial communications satellite built by Loral Space
Systems.\354\ The resulting review of the crash by U.S.
aerospace companies led to accusations of an unauthorized
transfer of missile technology to China that is now the subject
of a criminal investigation.
---------------------------------------------------------------------------
\354\ Associated Press, ``Defective Guidance System Caused
Satellite Explosion,'' Mar. 2, 1996 Exhibit 92.
---------------------------------------------------------------------------
This matter is also under investigation by the House Select
Committee on U.S. National Security and Military/Commercial
Concerns with the People's Republic of China.
2. Overseas Wires and Contributions
Chung's bank accounts and his record of contributions to
the DNC tend to corroborate the account first published by the
New York Times. In July and August 1996, Chung received three
wire transfers from Hong Kong totaling $290,000. Between July
and September 1996, Chung contributed a total of $90,000 to the
DNC.
The wire transfers initiated from a Hong Kong bank account
controlled by Chung. They arrived in the following order:
July 15, 1996........................................... \355\ $190,000
August 15, 1996......................................... \356\ 20,000
August 15, 1996......................................... \357\ 80,000
Total............................................. 290,000
---------------------------------------------------------------------------
\355\ N0220 (Exhibit 93).
\356\ Sumitomo 001 (Exhibit 94).
\357\ CalFed 001 (Exhibit 95).
Due to a lack of cooperation from the Chinese government,
the Committee has been unable to determine how these funds
initially arrived in Chung's Hong Kong account. This is one of
a number of examples of how the lack of cooperation by foreign
governments, especially China, has stymied the Committee in its
efforts to uncover the true origins of millions of dollars that
were wired into the United States and linked to political
contributions.
Chung's donations to the DNC \358\ over the same time
period follow:
---------------------------------------------------------------------------
\358\ FEC Internet Records--tray.com/fecinfo/ (Exhibit 3).
July 19, 1996................................................. $20,000
July 19, 1996................................................. 25,000
Sept. 24, 1996................................................ 10,000
Sept. 24, 1996................................................ 20,000
Sept. 24, 1996................................................ 5,000
Sept. 27, 1996................................................ 10,000
--------------------------------------------------------------
____________________________________________________
Total................................................... 90,000
Chung's relationship with Liu Chao-Ying followed a familiar
pattern. He wrote a letter of invitation to facilitate the
acquisition of a visa. He formed a company with her that never
appeared to do any business. He made contributions to open
doors. He escorted her to fundraisers and meetings with Federal
officials.
3. July 1996--The Eli Broad Fundraiser
It is not known when Chung and Liu first met. Her first
known visit with him in the U.S. came in July 1996. She was
Chung's guest at a July 18 DNC fundraiser at the home of Los
Angeles real estate magnate Eli Broad. President Clinton was in
attendance. Chung listed Liu among his guests in a July 16,
1996 letter to the DNC.\359\ Chung brought another Chinese
businessman to the same event--Yat Hung Yiu, President of China
Medical Development and New Silver Eagle Holdings, Inc.\360\
---------------------------------------------------------------------------
\359\ JCH15017 (Exhibit 96).
\360\ Id.
---------------------------------------------------------------------------
A second DNC fundraiser was held that night in Los Angeles
at the Beverly Hilton. Chung's correspondence with Karen
Sternfeld at the DNC shows that he brought a larger group of
Chinese and Chinese-American associates to this reception.\361\
---------------------------------------------------------------------------
\361\ Id.
---------------------------------------------------------------------------
It is instructive, but not conclusive, that Chung received
a $190,000 wire from Hong Kong 3 days before the event, and
contributed $45,000 to the DNC 1 week after the event. Until
the Committee is able to interview Chung and Liu, it will be
unable to determine conclusively if the wire from Hong Kong was
intended for political contributions.
During the July trip, Chung also arranged for Liu, as part
of a larger group of people, to have lunch in New York with the
Executive Vice President of the Federal Reserve Bank of New
York--Israel Sendrovic.\362\ Sendrovic said that Chung
introduced Liu as the daughter of ``the head of'' the People's
Liberation Army, but did not recall discussing business matters
with her.\363\
---------------------------------------------------------------------------
\362\ Deposition of Israel Sendrovic, May 5, 1998, pp. 40-41.
\363\ Id. pp. 38-39.
---------------------------------------------------------------------------
4. August 1996--Liu's Second Trip
In August, Liu returned to the United States at Chung's
invitation. On August 18, 1996, Chung wrote Liu, inviting her
to visit the U.S. As Chung's assistant Irene Wu testified,
Chung frequently wrote letters of invitation to his Chinese
associates to assist them in getting visas to come to the
United States.\364\
---------------------------------------------------------------------------
\364\ Deposition of Irene Wu, p. 214.
---------------------------------------------------------------------------
The August 18 letter reads:
I would like to invite you to visit the United States
again regarding a couple of issues that we discussed
before. First, I've made arrangement with the Federal
Stock Exchange Commission and a professional investment
broker to discuss the promotion of your company in the
U.S. stock exchange. Since your last meeting with Mr.
Sendrovic, Vice President of the Federal Reserve Bank
of New York, I had several follow up conversations with
him. He had also mentioned that he wished to meet with
you again.
Second, I have contacted Boeing and McDonald (sic)
Douglas regarding your interest of purchasing aircraft
miscellaneous parts. They have agreed to meet with you
and as soon as you inform me of your schedule, I will
be able to make the appointment. Looking forward to
seeing you again.\365\
---------------------------------------------------------------------------
\365\ DOS 013146 (Exhibit 21).
Irene Wu met Liu at the airport in Los Angeles to drive her
to her hotel. She said that Liu mentioned her interest in
meeting with U.S. aerospace companies for the purpose of
purchasing aircraft parts.\366\ Wu said that Liu Chao-Ying
thought that Johnny Chung had connections at those
companies.\367\
---------------------------------------------------------------------------
\366\ Deposition of Irene Wu, July 28, 1998, pp. 217-18.
\367\ Id.
---------------------------------------------------------------------------
Wu also testified that Chung mentioned to her that he
intended to help Liu list her company on a U.S. stock
exchange.\368\
---------------------------------------------------------------------------
\368\ Id. pp. 218-219.
---------------------------------------------------------------------------
5. Senator Kerry and the SEC
Shortly thereafter, Chung and Liu traveled to Washington
and met with Senator John Kerry. Senator Kerry had contacted
Chung ``numerous times that summer because they were nearing
the end of a tough campaign.'' \369\ According to press
reports, Chung ``was interested in learning how to clear the
way for Chinese companies to get listed on U.S. stock
exchanges.\370\
---------------------------------------------------------------------------
\369\ William Rempel and Alan Miller, ``Senator Received $10,000
After Aiding DNC Donor,'' Los Angeles Times, Dec. 24, 1997 (Exhibit
97).
\370\ Id.
---------------------------------------------------------------------------
Chung visited Kerry's office in late August and met the
Senator with ``businessmen and several associates.'' \371\
Chung asked for Kerry's assistance in setting up a meeting at
the Securities and Exchange Commission. Chung claims that a
letter was faxed to the SEC from Kerry's office while Chung was
present.\372\ That afternoon, he and his guests met with Brian
Lane, Director of the SEC's Corporation Finance Division, and
his deputy, Meredith Cross.
---------------------------------------------------------------------------
\371\ Id.
\372\ Id.
---------------------------------------------------------------------------
Lane and Cross did not remember what company those present
at the meeting represented, but the SEC produced a Christmas
card from Liu Chao-Ying of China Aerospace International
Holdings, Ltd.\373\ Lane suspects that the card was sent by one
of the meeting attendees.\374\ Both Lane and Cross recalled
that the executives, at least one of whom was female,\375\ were
interested in listing a Chinese company on U.S. stock
exchanges. They asked about filing requirements, particularly
whether they needed to file complicated ``U.S. Generally
Accepted Accounting Principals'' (``GAAP'') reconciliation
statements, which often show a company to be less profitable
than other accounting methods.\376\ While the Chinese
executives were interested in avoiding GAAP filing
requirements, Lane and Cross agree that they did not
specifically ask for a formal waiver.\377\
---------------------------------------------------------------------------
\373\ SEC 1-2.
\374\ Deposition of Brian J. Lane, pp. 13-15.
\375\ Deposition of Meredith B. Cross, p. 15.
\376\ Deposition of Meredith B. Cross at pp. 19-21; 36-37;
Deposition of Brian J. Lane at p. 17.
\377\ Deposition of Meredith B. Cross at pp. 36-37; Lane at p. 17.
---------------------------------------------------------------------------
According to the Los Angeles Times, a Kerry aide called
Chung a week after the SEC meeting and asked Chung to arrange a
fundraising reception for Kerry.\378\ However, documents
produced by Johnny Chung include a July 31, 1996 fax from
Barbara Kaltenbach of the Kerry Committee to Johnny Chung,
which reads as follows:
---------------------------------------------------------------------------
\378\ ``Senator Received $10,000 After Aiding DNC Donor'' Los
Angeles Times, Dec. 24, 1997 (Exhibit 97).
The following are two ways in which you could be
helpful to John:
1) Host an event in LA on Saturday Sept. 9th.
2) Contribute to the Massachusetts State Party.
Please contact me tomorrow and we can discuss it.\379\
---------------------------------------------------------------------------
\379\ JCH15005-7 (Exhibit 98).
The reception was coordinated by Irene Wu and held on
September 9, 1996 at the Peninsula Hotel in Beverly Hills.\380\
According to the story, ``about a dozen people attended.''
\381\ The guests included four professional fundraisers, Chung,
and a few of Chung's employees and business associates.\382\
---------------------------------------------------------------------------
\380\ JCH09631 (Exhibit 99), JCH09735-8 (Exhibit 100).
\381\ William Rempel and Alan Miller, ``Senator Received $10,000
After Aiding DNC Donor,'' Los Angeles Times, Dec. 24, 1997 (Exhibit
97).
\382\ Id.
---------------------------------------------------------------------------
Chung reimbursed three of his employees for their
contributions, actually writing ``SJ Kerry'' on one of the
reimbursement checks.\383\ Irene Wu testified that Chung asked
her just before the event to write a $2,000 check to Senator
Kerry's campaign, and he reimbursed her with a check.\384\ In
Wu's presence, Chung asked two other employees, Michael Lin and
Steve Huang, to write checks for $2,000. He reimbursed them as
well.\385\
---------------------------------------------------------------------------
\383\ JCH18180-90 (Exhibit 101).
\384\ Deposition of Irene Wu, pp. 104-105.
\385\ Id. pp. 106-108.
---------------------------------------------------------------------------
A shareholder in Chung's company, Ernest Lee, also
contributed $2,000 to Kerry's campaign at the reception.
Chung's bank records indicate that he reimbursed Lee the $2,000
on the same day.\386\
---------------------------------------------------------------------------
\386\ JCH18180-90 (Exhibit 101).
---------------------------------------------------------------------------
In his March 16, 1998 guilty plea, Johnny Chung admitted to
making illegal conduit payments to Senator Kerry's
campaign.\387\
---------------------------------------------------------------------------
\387\ Associated Press, ``Fund-Raiser Chung Pleads Guilty,'' the
Washington Post, Mar. 17, 1998 (Exhibit 5).
---------------------------------------------------------------------------
6. Marswell Investment, Inc.
On August 9, 1996, Johnny Chung and Liu Chao-Ying formed
Marswell Investment, Inc. in the State of California.\388\ Of
100,000 shares, Chung received 20,000 and Liu received
30,000.\389\ The company lists the same Torrance, California
address as Johnny Chung's ``blastfax'' business, AISI.\390\
Public records indicate that a Certificate of Amendment was
filed on June 4, 1997.\391\
---------------------------------------------------------------------------
\388\ California corporate filings.
\389\ JC1272-3 (Exhibit 102).
\390\ California corporate filings.
\391\ Id.
---------------------------------------------------------------------------
Documents produced by Chung to the Committee include a June
25, 1996 letter from a Los Angeles attorney regarding the
incorporation of Marswell, indicating that Chung and Liu Chao-
Ying were discussing the company prior to Liu's July and August
1996 visits to the United States.\392\
---------------------------------------------------------------------------
\392\ JCH13105 (Exhibit 103).
---------------------------------------------------------------------------
The company's bank account records, also produced by Chung,
indicate minimal activity from September 1996 through January
1997.\393\ That is consistent with Irene Wu's testimony that
the companies formed by Johnny Chung and his overseas partners
did not conduct business. Wu said that the purpose of those
companies was to assist Chung's associates in procuring visas
to enter the United States.\394\
---------------------------------------------------------------------------
\393\ JC1356-1364 even numbered pages only (Exhibit 104).
\394\ Deposition of Irene Wu, July 28, 1998, pp. 215, 220-21, 228-
29, 248-49, 258-59.
---------------------------------------------------------------------------
Documents from Chung's blastfax business, AISI, indicate
that Liu was an AISI shareholder. While the notes on the
document are confusing, they appear to indicate that Liu owned
30 shares in the company valued at $300,000.\395\ Whether this
is part of the $315,000 wired to Chung from Hong Kong in the
summer of 1996 remains unclear.
---------------------------------------------------------------------------
\395\ JCH13704 (Exhibit 105).
---------------------------------------------------------------------------
Yat Hung Yiu and New Silver Eagle Holdings
When Johnny Chung escorted Liu Chao Ying to the July 18,
1996, DNC fundraiser at Eli Broad's house in Los Angeles, he
was also accompanied by a second prominent Chinese national--
Yat Hung Yiu.\396\ Like Liu Chao-Ying, it appears that Yat Hung
Yiu was interested in raising capital on U.S. stock exchanges.
---------------------------------------------------------------------------
\396\ JCH15017 (Exhibit 96).
---------------------------------------------------------------------------
Yat Hung Yiu is the president of China Medical Development,
a Chinese company that sought to establish a chain of drug
stores across China. According to witness interviews,\397\ Yiu
was interested in listing his company's stock on U.S. stock
exchanges in order to raise capital.\398\
---------------------------------------------------------------------------
\397\ Staff interviews of Andrew Hanlon and Barry Sendrovic, Feb.
24, 1998.
\398\ Id.
---------------------------------------------------------------------------
China Medical Development merged with a British Virgin
Island company called Beautimate, which then merged with
Natural Way Technologies, a U.S. company that already traded on
the NASDAQ Electronic Bulletin Board.\399\
---------------------------------------------------------------------------
\399\ Staff interview of Andrew Hanlon, Feb. 24, 1998.
---------------------------------------------------------------------------
Yat Hung Yiu is also the president of a New York company
named New Silver Eagle Holdings.\400\ New Silver Eagle Holdings
is named as a ``related party'' to Natural Way Technologies in
an Arthur Anderson audit of Natural Way Technologies.\401\ Both
companies share common directors.\402\ On September 30, 1996,
New Silver Eagle Holdings paid Johnny Chung $80,000.\403\ A New
Silver Eagle Holdings employee recalled that Johnny Chung
billed the company for translation and touring services.\404\
---------------------------------------------------------------------------
\400\ JCH15030 (Exhibit 106); JCH13426 (Exhibit 107).
\401\ Hanlon 039114 (Exhibit 108).
\402\ Id.
\403\ CitiBank 1 (Exhibit 109).
\404\ Staff interview of Fang Fang Miao, May 1, 1998.
---------------------------------------------------------------------------
Chung also escorted Yat Hung Yiu to the President's
Birthday Party fundraiser at Radio City Music Hall in New York
on August 18, 1996.\405\ Another of Chung's guests at this
fundraiser was Israel Sendrovic, the executive vice president
of the Federal Reserve Bank of New York.
---------------------------------------------------------------------------
\405\ JCH15030 (Exhibit 106).
---------------------------------------------------------------------------
Yiu's company, New Silver Eagle Holdings,\406\ employed
Sendrovic's son, New York attorney Barry Sendrovic, to help the
company raise capital.\407\
---------------------------------------------------------------------------
\406\ CitiBank pp. 2-4 (Exhibit 110).
\407\ Staff interview of Barry D. Sendrovic, Feb. 25, 1998.
---------------------------------------------------------------------------
Documents produced by a former New Silver Eagle Holdings
employee include a ``business introduction'' that lists, as one
of the company's strengths, Jiang Zeren as a ``Senior
Consultant'' and ``financial consultant.'' \408\ Jiang is
identified as, ``the cousin of Communist Party Chairman Jiang
Zemin.'' Other senior consultants include Qian Xinzhong, ``a
former head of the Ministry of Health'' \409\ and Lin Minxue,
``former head of the Ministry of Industry and Commerce.'' \410\
---------------------------------------------------------------------------
\408\ Hanlon 039150 (Exhibit 111).
\409\ Id.
\410\ Hanlon 039153 (Exhibit 112).
---------------------------------------------------------------------------
In February 1997, Natural Way Technologies was featured in
``Financial Discoveries,'' a promotional magazine. In one
section, entitled, ``Jackie Yiu: A Man With A Destiny,'' Yiu is
pictured with President Clinton.\411\ The text reads, ``Yiu
travels in the highest circles and was chosen to deliver a
greeting from the Chinese people to Clinton on his 50th
birthday.'' \412\ Another page of the magazine features a
picture of Yiu with Hillary Clinton.\413\
---------------------------------------------------------------------------
\411\ Hanlon 039177 (Exhibit 113).
\412\ Id.
\413\ Hanlon 039105 (Exhibit 114).
---------------------------------------------------------------------------
Chung's correspondence to Mr. Yiu's office indicates that
Yiu is based in Hong Kong.\414\ In an August 12, 1996 letter to
Yiu's secretary, Chung states that he has arranged for Yiu to
attend the President's 50th birthday party celebration, as well
as meeting the next day with Israel Sendrovic. Chung also
states that he has set up meetings with unnamed individuals at
the Departments of Commerce and Agriculture.\415\ The letter
refers to previous meetings arranged by Chung with the
Secretary of Agriculture and Sendrovic.\416\
---------------------------------------------------------------------------
\414\ DOS 013139 (Exhibit 115); DOS 013140 (Exhibit 116).
\415\ Id.
\416\ Id.
---------------------------------------------------------------------------
In his deposition, Sendrovic confirmed that he met Yiu and
Chung at his office on August 19, 1996.\417\ Sendrovic said
that Chung offered to bring pictures of Sendrovic taken at the
President's birthday event the previous evening.\418\ Sendrovic
said that Yiu accompanied Johnny Chung and discussed his
intention to open an office in the World Trade Center.\419\
Sendrovic denied having any knowledge of Yiu meeting anyone at
the Departments of Commerce or Agriculture.\420\
---------------------------------------------------------------------------
\417\ Deposition of Israel Sendrovic p. 31.
\418\ Id.
\419\ Id.
\420\ Id.
---------------------------------------------------------------------------
On October 5, 1996, Johnny Chung again wrote to Yiu's
secretary in Hong Kong, referring to previous meetings between
Yiu and Sendrovic and Yiu and Transportation Secretary
Pena.\421\ The letter indicates that Chung planned the
following events for Mr. Yiu:
---------------------------------------------------------------------------
\421\ DOS 013140 (Exhibit 116).
October 20--To join the party at New York with
---------------------------------------------------------------------------
President Clinton.
October 22--Meeting with Mr. Israel Sendrovic (Federal
Reserve Bank) at New York.
October 25--Department of Transportation and Federal
Commission Exchange at D.C.\422\
---------------------------------------------------------------------------
\422\ Id.
Sendrovic testified that he did not remember meeting Yiu on
October 22.\423\ He also denied any knowledge of meetings
between Yiu and Secretary Pena or anyone at the Department of
Transportation or the Securities and Exchange Commission
(presumably what Chung referred to as the ``Federal Commission
Exchange'').\424\
---------------------------------------------------------------------------
\423\ Deposition of Israel Sendrovic p. 33.
\424\ Id.
---------------------------------------------------------------------------
The same AISI shareholder report that mentions Liu Chao-
Ying of China Aerospace also mentions ``Y.F. Yao, who is the
same person as Yat Hung Yiu.425 The shareholder
report states that Yiu purchased 10 shares of stock in AISI for
$100,000 in October 1996. It also mentions a personal loan of
$200,000 to Chung, and suggests that Yiu plans to purchase more
stock in 1997.426
---------------------------------------------------------------------------
\425\ Staff Interview Andrew Hanlon, June 10, 1998.
\426\ JCH13704 (Exhibit 106).
---------------------------------------------------------------------------
The shareholder report states that Yiu has a 10-year visa
to visit the United States, which may offer an explanation as
to why he and Chung never established a company together in Los
Angeles. The report also states that Chung helped Yiu open his
company in New York: ``He owns a U.S. company that is publicly
traded on the stock exchange. Interested in promoting large
firms from China to be traded in U.S. stock. Wants to bring
Disney World to China.'' 428
---------------------------------------------------------------------------
\428\ Id.
---------------------------------------------------------------------------
The stockholder reports for Liu Chao-Ying and Yat Hung Yiu
suggest that Chung used $200,000 he received from them to repay
a debt he owned to another Chinese company, the Great Wall
International Culture Company. The report attributes $100,000
of that payment to New Silver Eagle Holdings/Yat Hung Yiu and
the remainder to Liu Chao-Ying of China
Aerospace.429
---------------------------------------------------------------------------
\429\ Id.
---------------------------------------------------------------------------
The Great Wall International Culture Company
According to AISI records, a company called Great Wall
International Culture Co., Ltd. (``GWICC'') purchased 20 shares
of AISI stock for $200,000 on February 10, 1996. A letter from
Johnny Chung to GWICC was sent to the ``Great Wall Organization
Building'' in Beijing.430
---------------------------------------------------------------------------
\430\ JCH13739 (Exhibit 117).
---------------------------------------------------------------------------
The Vice Chairman of the Board and General Manager of GWICC
is Cui Baojian,431 who was Johnny Chung's guest at a
September 21, 1995 Clinton/Gore fund-raising event in Los
Angeles.432 Chung's assistant, Irene Wu, testified
that Chung was introduced to Cui by Yei Jun He of the Haomen
Beer Group.433 Johnny Chung contributed $20,000 in
connection with that event, using his employees and their
friends as conduits in order to avoid ``hard money''
restrictions placed on the event.
---------------------------------------------------------------------------
\431\ JCH13739 (Exhibit 117); JCH14312 (Exhibit 118). Documents
JCH14312 (Exhibit 118) and JCH14313 (Exhibit 119) also include business
cards of Qian Chunyuan, Assistant to Chairman of the Board, GWICC; Chai
Feng, GWICC and Cui Senmao, Chairman of the Board and General Manager
of GWICC and Great Wall International Advertising Co., Ltd.
\432\ JCH15023 (Exhibit 42).
\433\ Deposition of Irene Wu, p. 35.
---------------------------------------------------------------------------
The exact date of an agreement between AISI and GWICC is
unclear. While AISI shareholder records indicate that the
$200,000 payment was made by GWICC in February 1996, a letter
from GWICC to Chung refers to the signing of a cooperation
agreement and a $200,000 payment from Hong Kong in November
1995.434 A letter from Chung to GWICC refers to a
December 1, 1995 contract.435
---------------------------------------------------------------------------
\434\ JCH13742 (translation by GROC staff) (Exhibit 120).
\435\ JCH13739 (Exhibit 117).
---------------------------------------------------------------------------
Documentary evidence indicates that the relationship had
gone sour by the end of 1996, and GWICC was seeking to have its
money returned. Documents produced by Chung include a letter
from a GWICC representative dated November 30,
1996.436 The letter's unknown author expresses
regret for a lack of contacts between the companies for almost
a year and notifies Chung that GWICC intends to cancel their
agreement.437 The letter explains that GWICC formed
a business relationship with an American company called BOSSCO
Unlimited and authorizes that company's representative, Peter
Chang, to collect the $200,000 that GWICC initially invested in
AISI.438
---------------------------------------------------------------------------
\436\ JCH 13744-5 (translation by GROC staff) (Exhibit 121).
\437\ Id.
\438\ Id.
---------------------------------------------------------------------------
On December 26, 1996, Chung received another letter from
GWICC, again authorizing Peter Chang to collect GWICC's
$200,000 investment in AISI.439 The second letter
threatens that Peter Chang is also authorized, ``. . . if
necessary, to file complaints [sic] the appropriate agencies of
the U.S. Government in order to protect our company's
interests.'' 440
---------------------------------------------------------------------------
\439\ JCH13743 (Translation by GROC staff) (Exhibit 122).
\440\ Id.
---------------------------------------------------------------------------
Finally, on January 12, 1997, GWICC wrote to Chung
expressing its intent to cancel its agreement with
AISI.441 Chung responded the next day, referring to
the three letters from GWICC and a meeting with Peter Chang on
January 10, 1997.442 Chung agreed to return GWICC's
investment in four monthly installments of
$50,000.443 Included in AISI documents are copies of
four $50,000 checks from AISI to GWICC and Peter Chang and a
receipt signed by Peter Chang.444
---------------------------------------------------------------------------
\441\ JCH13742 (Translation by GROC staff) (Exhibit 120).
\442\ JCH13739 (Exhibit 117).
\443\ Id.
\444\ JCH13740-1 (Exhibit 123).
---------------------------------------------------------------------------
In depositions, AISI employees Irene Wu and Nancy Lee
testified that Peter Change made threatening phone calls to
Chung, and that Chung feared that Chang was involved in
organized crime.445 Wu stated that Chung was afraid
of Chang, and would not take his calls. She added that she
would end up talking to Chang on the phone, and that Chang was
very threatening:
---------------------------------------------------------------------------
\445\ Deposition of Irene Wu, p. 198.
A. If Johnny doesn't come up with the money, then he
knows where Johnny lives, and he'll make sure--he'll
show Johnny. . . . He threatened that if Johnny doesn't
come up with the money, that he knows where Johnny
lives. He knows where his family and his daughters are,
and he knows what Johnny's doing, and he--he'll tell
other [sic] what Johnny's doing.
Q. Did he threaten Johnny's life?
A. Yes.
Q. Or the lives of his family members?
A. Yes.446
---------------------------------------------------------------------------
\446\ Id. pp. 199-200.
Peter Chang was contacted by Committee investigators in
August 1998. He confirmed that he collected $200,000 from
Johnny Chung, but denied making any threats to do
so.447 Mr. Chang said that Cui Baojian is a personal
friend from China who owed him money.448 Chang said
that Johnny Chung owed Mr. Cui $200,000, and that Mr. Cui
authorized Mr. Chang to collect the funds to be applied to Mr.
Cui's debt to Mr. Chang.449
---------------------------------------------------------------------------
\447\ Staff interview of Peter Chang, Aug. 14, 1998.
\448\ Id.
\449\ Id.
---------------------------------------------------------------------------
Mr. Chang said that he does not know anything about Great
Wall International Culture Company, other than knowing that his
friend, Mr. Cui, is employed there.\450\ Mr. Change denied
having any involvement in organized crime.\451\
---------------------------------------------------------------------------
\450\ Id.
\451\ Id.
---------------------------------------------------------------------------
Bin Liu & C.L. International, Inc.
Testimony from Chung's staff indicates that Chung had a
relationship with more than one well-placed child of a Chinese
general. It has been widely reported that Chung was associated
with Liu Chao-Ying, the daughter of retired General Liu
Huaqing. In her deposition testimony, Irene Wu stated that Bin
Liu, a Chinese National whom Chung also escorted to DNC
fundraisers, was also a General's son. She did not know the
name of his father, but she said that Bin Liu was not related
to Liu Chao-Ying.\452\
---------------------------------------------------------------------------
\452\ Deposition of Irene WU, pp. 225-226.
---------------------------------------------------------------------------
Business cards produced by Johnny Chung indicate that Bin
Liu is the Vice Chairman of Yip's International Investment
Holdings, Ltd., Hotel Investor S.A., and Y&D International
Investment (Hong Kong), Ltd.\453\ Liu's office is located in
Hong Kong.\454\
---------------------------------------------------------------------------
\453\ JCH14345 (Exhibit 124), See also, JCH14286 (Exhibit 125),
JCH14342-4 (Exhibit 126) and JCH14346-7 (Exhibit 127) for additional
business cards with identical logo.
\454\ Id.
---------------------------------------------------------------------------
According to Irene Wu, Bin Liu is a friend of Yei Jun He of
the Haomen Group.\455\ Wu said that Bin Liu owns nightclubs and
hotels in China, and is involved with the entertainment
industry.\456\
---------------------------------------------------------------------------
\455\ Deposition of Irene Wu, July 28, 1998, pp. 34-35.
\456\ Id. pp. 225-226.
---------------------------------------------------------------------------
Bin Liu attended the Clinton/Gore `96 fundraiser in Century
City, California on September 21, 1995 with Chung's
delegation.\457\ Bin Liu is also listed as one of Chung's
guests for a DNC reception at the Beverly Hilton on July 18,
1996.\458\ Chung's other guests included Liu Chao-Ying of China
Aerospace International Holdings, Ltd. and Yat Hung Yiu of
China Medical Development Company.\459\
---------------------------------------------------------------------------
\457\ JCH15023 (Exhibit 42).
\457\ JCH15017 (Exhibit 96).
\459\ Id.
---------------------------------------------------------------------------
According to records obtained by the Committee, Chung and
Bin Liu formed C.L. International on July 26, 1996.\460\ The
company's stated principal activity is international
trade.\461\ CL International issued 100,000 shares at $1 per
share.\462\ Chung received 30,000 shares.\463\ Liu received
70,000 shares.\464\
---------------------------------------------------------------------------
\460\ JCH13077 (Exhibit 128); JCH13079 (Exhibit 129); But see
JC1289 (Exhibit 130) (``start date'' listed as 11/1/96).
\461\ JC 1289 (Exhibit 130).
\462\ JC 1290 (Exhibit 131); JC 1297-98 (Exhibit 132); JCH13077
(Exhibit 128).
\463\ JC 1287 (Exhibit 133).
\464\ JC 1288 (Exhibit 134).
---------------------------------------------------------------------------
On December 23, 1996, Chung sent notice to interested
parties that he was resigning from his position at C.L.
International. In his letter to Bin Liu, Chung said the
following:
As we have discussed during your visit in November, I
am hereby resigning . . . . I have assisted in the
initial set up of your company but you have not kept
your promise on the investment capital nor have I seen
any business being conducted during the last six months
. . ..\465\
---------------------------------------------------------------------------
\465\ JCH13088 (Exhibit 135).
Another December 23, 1996 letter from Chung to his attorney
refers to the resignation letter to C.L. International and asks
the attorney to remove Chung's name from corporate
records.\466\ A travel itinerary for Liu indicates that he left
Los Angeles on December 2, 1996, and arrived in Beijing the
next day.\467\
---------------------------------------------------------------------------
\466\ JC 1286 (Exhibit 136).
\467\ JC 127-8 (Exhibit 137).
---------------------------------------------------------------------------
Bank records for C.L. Information indicate that Bin Liu was
bouncing large checks on the company's account. The company's
account statements indicate that two checks totaling $7,000
were written to cash on November 19 and 20, 1996.\468\ Three
$50,000 checks were returned for insufficient funds in December
1996.\469\ A $70,000 check was returned on January 27,
1997.\470\
---------------------------------------------------------------------------
\468\ JC 1599-1602 (Exhibit 138).
\469\ JC 1597 (Exhibit 139).
\470\ JC 1610 (Exhibit 140); JC 1619-20 (Exhibit 141).
---------------------------------------------------------------------------
Irene Wu stated the following about Bin Liu:
Q. Did he mention what type of trouble Bin Liu was
in?
A. First of all, Bin Liu--he didn't pay all the
attorney fees that was owed to Winny Yang, and Johnny
wasn't going to pay the attorney fee, so nobody was
paying. I don't even know if CL International was
officially formed or not. I wasn't sure because he
disappeared for a long time and we couldn't find him.
So Johnny felt he wanted to disassociate with him, and
he felt he might be in some kind of financial trouble.
A. Also, Johnny, being an officer with the company, he
didn't want any liability and responsibility, so he
resigned from CL.
Q. It (the bank statement for C.L. Intl.) says check
108, 109, 110 were all for $50,000. They were returned
for insufficient funds in December 1996. Do you have
any knowledge about those checks?
A. No. I think this is the trouble that Johnny was
talking about, because we got the bank statement and
saw the record, so Johnny figured he's writing checks.
He's in financial trouble. He's writing checks and
there's no money in the account.\471\
---------------------------------------------------------------------------
\471\ Deposition of Irene Wu, pp. 231-233.
---------------------------------------------------------------------------
The Homko Group and Honestwin, Ltd
1. C.M. Information, Inc.
Johnny Chung formed two companies with individuals
connected to Homko International Finance (Holdings), Ltd.
(``Homko''). Homko is reportedly a real estate development firm
with projects in Shanghai and Hainan Province, as well as a $25
million luxury villa project in Beijing.\472\ Documents
produced by Johnny Chung include several business cards from
individuals related to Homko.\473\
---------------------------------------------------------------------------
\472\ China Daily, June 7, 1993.
\473\ JCH14272-73 (Exhibit 142); JCH17318 (Exhibit 143); JCH17342
(Exhibit 144).
---------------------------------------------------------------------------
On September 21, 1995, Chung brought several guests to a
Clinton/Gore '96 fund-raiser. Chung's guests included Chinese
Nationals Shi Jin Yu, Jian Qia Wei, and Hui Jie Li of a Hong
Kong company called Honestwin, Ltd. (``Honestwin''). Documents
produced by Johnny Chung include several business cards from
individuals related to Honestwin.\474\
---------------------------------------------------------------------------
\474\ JCH14276; JCH14340 (Exhibit 145); JCH14344 (Exhibit 146);
JCH14354 (Exhibit 147).
---------------------------------------------------------------------------
On December 27, 1995, Johnny Chung and Shi Jin Yu
incorporated C.M. Information.\475\ The company issued 100,000
shares of stock at $1 per share. Chung received 30,000 shares.
Honestwin received 70,000 shares.\476\
---------------------------------------------------------------------------
\475\ JCH13173-5 (Exhibit 148); JCH13169 (Exhibit 149).
\476\ Id.
---------------------------------------------------------------------------
On July 3, 1996, Johnny Chung wrote an invitation letter to
Hui Jie Li, ``Director and Manageress'' of Honestwin Limited in
Hong Kong.\477\ He referred to an earlier visit to the U.S. by
Li, and wanted, ``to discuss further the possibility of
bringing AISI's telecommunication system to Hong Kong.'' \478\
---------------------------------------------------------------------------
\477\ DOS 013154 (Exhibit 24).
\478\ Id.
---------------------------------------------------------------------------
On July 18, 1996 Shi Jin Yu accompanied Chung to a DNC
fund-raising event at the Beverly Hilton.\479\ Also present
were executives from China Aerospace Holdings and New Silver
Eagle Holdings.\480\ Bin Liu, who formed C.L. International
with Chung, also attended the event as Chung's guest.\481\
---------------------------------------------------------------------------
\479\ JCH15017 (Exhibit 96).
\480\ Id.
\481\ Id.
---------------------------------------------------------------------------
On September 15, 1996 Yu purchased 20 shares of AISI for
$100,000 using funds wired to Chung from Homko.\482\ According
to an AISI shareholder report, Shi Jin Yu toured the White
House, met Maggie Williams, met President Clinton in July 1996,
and attended the Democratic National Convention in 1996 as
Chung's guest.\483\
---------------------------------------------------------------------------
\482\ JCH13705-6 (Exhibit 150).
\483\ Id.
---------------------------------------------------------------------------
Wei Jian Qiao of Honestwin, Ltd. visited the United States
in January 1997. Documents received by the Committee include a
letter to Qiao from Yan Xie of CM Information, Inc.\484\ The
letter mentions business discussions concerning ``the project
of importing 50,000 MT fishmeal from South America in 1997.''
\485\
---------------------------------------------------------------------------
\484\ DOS 013137 (Exhibit 151).
\485\ Id.
---------------------------------------------------------------------------
On February 17, 1997, Yan Xie of C.M. Information wrote to
Shi Jin Yu at Honestwin, Ltd. Yu and an Honestwin accountant
were invited to visit C.M. Information for the following
reason:
[F]or the business discussion . . . of setting up a
fuel station at China's sea and cooperation in this
project with partners. Now we are making contact with
COSTCO about setting up a warehouse supermarket in
Dalian, China. COSTCO would like to meet the President
of C.M. Information for further discussion.\486\
---------------------------------------------------------------------------
\486\ DOS 013158 (Exhibit 152).
---------------------------------------------------------------------------
2. The Homlyn Group, Inc.
In August, 1996, Chung set up a second California company
with his associates from Honestwin. The Homlyn Group was
incorporated on August 29, 1996.\487\ A November 29, 1996
California State filing lists Chung and Jing Wei Li as officers
and directors of the corporation.\488\ The form indicates that
the nature of the company's business is international trading,
real estate investment, and investment development.\489\ C.M.
Information and the Homlyn Group share office space in Los
Angeles.\490\
---------------------------------------------------------------------------
\487\ JCH13181 (Exhibit 153); JCH13178 (Exhibit 154).
\488\ JCH13179 (Exhibit 155).
\489\ JCH13179 (Exhibit 155). See also, JCH13182 (Exhibit 156).
\490\ Investigation by Committee staff on Jan. 23, 1998.
---------------------------------------------------------------------------
The Homlyn Group authorized the issuance of $100,000 shares
of stock at $1,000 per share.\491\ Chung received 1,000
shares.\492\ Homko International Finance (Holdings), Ltd.
purchased 60,000 shares.\493\ Yen Su, Huan-Lian Tung and Yu-Bao
Chiang purchased 1,000 shares each.\494\ A business card
produced by Johnny Chung identifies Jing Wei Li as Chairman of
the Homko Group.\495\
---------------------------------------------------------------------------
\491\ JCH13180 (Exhibit 157); JCH13181 (Exhibit 153); JCH13182
(Exhibit 156).
\492\ JCH13181 (Exhibit 153); JCH13187 (Exhibit 158). See
generally, materials relating to Homlyn's incorporation, JCH13183-88
(Exhibit 159).
\493\ Id.
\494\ Id.
\495\ JCH14318 (Exhibit 160).
---------------------------------------------------------------------------
Records obtained by the Committee include a letter from Don
Fowler inviting Jing Wei Li of Homko to attend the Democratic
National Convention.\496\
---------------------------------------------------------------------------
\496\ DOS 013143 (Exhibit 23).
---------------------------------------------------------------------------
On March 10, 1997, Johnny Chung wrote to Jing Wei Li
resigning his position as Vice President and Director of the
Homlyn Group.\497\ In another letter to Shi Jin Yiu dated the
same day, Chung resigned his position of Director and Vice
President of C.M. Information.\498\
---------------------------------------------------------------------------
\497\ JCH15039 (Exhibit 161).
\498\ JCH15042 (Exhibit 162).
---------------------------------------------------------------------------
Chunn Fat Leung, Z.F. Fortune, Inc., and Education Secretary Richard
Riley
Johnny Chung formed a company called Z.F. Fortune, Inc.
with a Chinese national named Chun Fat Leung. Chung brought
Leung to a DNC fund-raiser and attempted to secure a meeting
with Education Secretary Richard Riley.
Chun-Fat Leung is the Chairman of the Zhen Fa Group.\499\
On June 3, 1996, Zhen Fa wired $101,985 from Hong Kong to
Chung's company, AISI.\500\ On June 10, 1996, Chung brought
Leung and his wife to a DNC fund-raiser at the Los Angeles home
of Edie and Lew Wasserman.\501\ FEC records indicate that Chung
made a $20,000 contribution to the DNC at that time.\502\
Records produced by the DNC include letters from Kimberly Ray,
DNC Southern California Finance Director, to Leung ``c/o Johnny
Chung'' at Chung's Torrance, California address.\503\
---------------------------------------------------------------------------
\499\ JCH12202 (Exhibit 163). See also, JCH14320 (Exhibit 164);
JCH14331 (Exhibit 165) (business cards from Zhen Fa Group).
\500\ N0218 (Exhibit 166).
\501\ JCH12203 (Exhibit 167).
\502\ FEC Internet Records--www.tray.com/fecinfo/ (Exhibit 3).
\503\ DNC 1915241 (Exhibit 168). See also, DNC 1915193 (Exhibit
169); DNC 1915211 (Exhibit 170).
---------------------------------------------------------------------------
On June 11, 1996, immediately following the fundraiser,
Chung's assistant, Irene Wu, wrote to Education Secretary
Richard Riley's assistant, Sandy Rinck.\504\ The letter said,
``Per our conversation, I am sending you the biography of Mr.
Leung and a list of names who will be meeting with Secretary
Riley.'' \505\
---------------------------------------------------------------------------
\504\ JCH12202 (Exhibit 163).
\505\ Id. Note: Documents produced by Chung did not include Chun
Fat Leung's biography, referred to in Irene Wu's letter.
---------------------------------------------------------------------------
On June 12, 1996, Chung wrote a letter to Sandy Rinck as
follows:
I want to inform you of a misunderstanding between Ms.
Rita Lewis of the DSCC and I. Since I became the #1
contributor [to] the DNC in 1995, I get a lot of calls
from everyone for donations. But as much as I tried my
best, I can not satisfy everyone . . .. I believe [Mr.
Leung] deserves the honor of meeting with our Secretary
Riley.
Other than the DNC, I am also trying my best to support
the DSCC whenever I can but sometimes it's quite
difficult. I hope you understand and will not let other
issues come between our relationship. I am totally
committed to the Democratic Party and to our
president.\506\
---------------------------------------------------------------------------
\506\ JCH12203 (Exhibit 167).
On June 19, 1996, DNC Southern California Finance Director
Kimberly D. Ray wrote the following letter to Johnny Chung. She
sent identical letters to Chun-Fat Leung and his assistant S.B.
---------------------------------------------------------------------------
Fu ``care-of'' Johnny Chung.
Thank you for your help in making the event at Edie and
Lew Wasserman's home such a success. President Clinton
truly appreciated you coming out and showing your
support for the Administration and the Democratic
National Committee.
Your assistance will contribute greatly to our efforts
to reelect the President and Vice President, take back
control of Congress, and elect Democrats in California
and nationwide.
Again, thank you for your participation. If you have
any questions, please call me at: 310-445-6825. I look
forward to working with you during the coming
months.\507\
---------------------------------------------------------------------------
\507\ DNC1915193 (Exhibit 169); DNC1915211 (Exhibit 170);
DNC1915241 (Exhibit 168).
On June 21, 1996, Chung and Leung formed ``Z.F. Fortune,
Inc.'' \508\ Records indicate that the corporation engages in
``international trade.'' \509\ One hundred thousand shares of
stock were issued at $1 per share.\510\ Chung received 40,000
shares.\511\ Chun Fat Leung received 60,000 shares.\512\ Chun
Chau and Shu Bai Fu are listed in AISI documents as Secretary
and Treasurer, respectively, of ZF Fortune.\513\
---------------------------------------------------------------------------
\508\ JCH13301 (Exhibit 171); JCH13306 (Exhibit 172). See also,
JCH13299-13333 (Z.F. Fortune corporate records).
\509\ JCH13301 (Exhibit 171); JCH13331 (Exhibit 173).
\510\ JCH13305 (Exhibit 174).
\511\ JCH13302 (Exhibit 175); JCH13306 (Exhibit 172).
\512\ JCH13303 (Exhibit 176); JCH13306 (Exhibit 172).
\513\ Id.
---------------------------------------------------------------------------
This was not Chung's first contact with Secretary Riley. In
a May 1, 1995 letter to the Secretary, Chung recalls meeting
him at the DNC fund-raiser at Steven Spielberg's home in Los
Angeles.\514\ In the letter, Chung said, ``I met with Vice
Premier Lee and with your permission, I have invited him to
visit the U.S.'' \515\
---------------------------------------------------------------------------
\514\ See the section of this report that discusses Yi Chen Liu
(JCH13073).
\515\ Id.
---------------------------------------------------------------------------
On May 26, 1995, Riley wrote two letters: one to Chung and
one to Zhu Kaixuan, Minister of China's Education Commission in
Beijing.\516\ Riley thanked Chung for visiting him and for an
``ornate knife'' that Chung gave him.\517\ He enclosed a copy
of his letter to Zhu, which declined an invitation to visit
China, instead inviting Zhu to visit Washington.\518\
---------------------------------------------------------------------------
\516\ JCH12189-90 (Exhibit 177).
\517\ Id.
\518\ Id.
---------------------------------------------------------------------------
Chung also requested but failed to get a meeting with Riley
for Sheng Huaren of China Petrochemical.\519\
---------------------------------------------------------------------------
\519\ JCH13055 (Exhibit 74). See also, the portion of this report
pertaining to China Petrochemical.
---------------------------------------------------------------------------
Conclusions
1. Immigration Fraud
The Committee views with great concern the ease with which
Johnny Chung was able to manipulate the system to obtain visas
for foreign nationals. In 1995 and 1996, Chung formed seven
companies in Los Angeles with seven Chinese nationals.\520\ All
of them attended DNC and Clinton/Gore fundraisers with Chung at
which the President made appearances. Most of them sent Chung
large sums of money.
---------------------------------------------------------------------------
\520\ Sino-American Development Corp., Yuangao International, C.M.
Information, Z.F. Fortune, C.L. International, the Homlyn Group and
Marswell International.
---------------------------------------------------------------------------
The testimony of Irene Wu, Chung's top assistant, indicates
clearly that these companies were set up for fraudulent
purposes. According to Ms. Wu, the companies were never
intended to do business, they were front companies designed to
enable Chinese nationals to obtain visas to come to the United
States.\521\ The lack of financial activity reflected in the
bank records of these companies, along with invitation letters
from Chung delivered to U.S. consulates in China to obtain
visas, support this testimony. Furthermore, Wu suggested that
some of Chung's associates may have hoped to gain permanent
residence in the United States through these companies.\522\
---------------------------------------------------------------------------
\521\ Deposition of Irene Wu, pp. 228-229.
\522\ Id. p. 220.
---------------------------------------------------------------------------
The thread that connects all of Chung's Chinese associates
is that they all came to the United States to attend high-
profile political fundraisers and meet with senior government
officials--including the President. The fact that Johnny Chung
could bring a Lt. Colonel in the People's Liberation Army and a
senior aerospace executive like Liu Chao-Ying to the United
States to attend a major DNC fundraiser without anyone knowing
her identity is troublesome. The fact that Chung could bring
her to meetings with government officials such as Senator Kerry
and officials at the Securities and Exchange Commission without
anyone knowing her identity is disturbing.
When asked by the Washington Post about Chung's scheme,
Immigration and Naturalization Service spokesman Russ Bergeron
identified this area as a ``growing fraud,'' involving ``all
kinds of scams.''\523\ Bergeron identified such fraudulent
practices as using bogus business cards, letterheads for
nonexistent companies, phony tax returns and fake photos of
business locations.\524\ When we find such practices being
employed by the well-connected offspring of senior Chinese
generals, possibly with an eye to gaining a U.S. green card, it
becomes clear that this is an area that demands further
scrutiny by Congress and the executive branch.
---------------------------------------------------------------------------
\523\ George Lardner, ``Fund-Raiser Set Up Fake Firms for
Chinese,'' the Washington Post, Sep. 21, 1998 (Exhibit 178).
\524\ Id.
---------------------------------------------------------------------------
2. Foreign Money for Contributions
The documentary evidence accumulated to date supports the
conclusion that, on at least four occasions, Chung received
large sums of money from his associates overseas and used that
money to make political contributions for DNC fundraisers. In
each of these four instances, he then took those associates to
the fundraisers, or in the first instance, a meeting with the
President.
The Radio Address
On March 6, 1995, Chung received a $150,000 wire transfer
from the Haomen Group of China.\525\ At the time, the balance
in Chung's account was only $9,860.\526\ On March 9, Chung made
a $50,000 contribution to the DNC from the same bank
account.\527\ On March 11, Chung escorted the son of the Haomen
Group, David Chen, along with a number of Chinese dignitaries,
to the President's Radio Address, for which the $50,000
contribution paved the way.
---------------------------------------------------------------------------
\525\ Wire Transfer, Deposition of Irene Wu.
\526\ JCH16554 (Exhibit 47).
\527\ JCH796; 797 (Exhibit 56).
---------------------------------------------------------------------------
The Spielberg Fundraiser
On April 8, 1995, George Liu, Chung's business associate
from Taiwan, wrote Chung a check for $100,000.\528\ At the
time, the balance in Chung's account was $45,971.\529\ That
same day, from the same account, Chung wrote a check to the DNC
for $125,000.\530\ That evening, Chung and Liu attended the DNC
fundraiser at Steven Spielberg's home.\531\ This contribution
paved the way for Chung to secure the photos of the President
with the ``China delegation'' from the March 10 radio
address.\532\
---------------------------------------------------------------------------
\528\ N 0209 (Exhibit 55).
\529\ JCH16547 (Exhibit 179).
\530\ JCH794-795 (Exhibit 48).
\531\ JCH13699 (Exhibit 54).
\532\ JCH464, JCH465 (Exhibit 180).
---------------------------------------------------------------------------
chun fat leung
On June 3, 1996, Chung received at $102,000 wire transfer
from the Zhen Fa group in Hong Kong.\533\ Zhen Fa is owned by a
Chinese national named Chun Fat Leung. On June 10, Chung
escorted Chung Fat Leung to a DNC fundraiser at the California
home of Lew and Edie Wasserman.\534\ On June 14, Chung wrote a
$20,000 check to the DNC.\535\
---------------------------------------------------------------------------
\533\ N0218 (Exhibit 181).
\534\ JCH12203 (Exhibit 167).
\535\ FEC Internet Records--www.tray.com/fecinfo/ (Exhibit 3).
---------------------------------------------------------------------------
liu chao-ying
According to the New York Times, Chung received $300,000
from China Aerospace executive Liu Chao-Ying in the summer of
1996.\536\ Chung reportedly has told the Justice Department
that he donated up to $80,000 of those funds to the DNC.\537\
Chung's bank records tend to corroborate these statements. On
July 15, 1996, Chung received a $190,000 wire transfer from
Hong Kong.\538\ Prior to receiving this money, his account had
a balance of only $5,720.\539\ On July 18, Chung escorted Liu
Chao-Ying to a high-dollar DNC fundraiser at the Los Angeles
home of Eli Broad.\540\ On July 19, the next day, he wrote two
checks to the DNC totaling $45,000.\541\
---------------------------------------------------------------------------
\536\ David Gerth, David Johnston, and Don Van Natta, ``Democrat
Fund-Raiser Said to Detail China Tie,'' the New York Times, May 15,
1998 (Exhibit 6).
\537\ Id.
\538\ N0220 (Exhibit 91).
\539\ JCH 16327 (Exhibit 182).
\540\ JCH15017 (Exhibit 96).
\541\ JCH16303 (Exhibit 183); JCH16306 (Exhibit 184).
---------------------------------------------------------------------------
3. The DNC's Knowledge
On July 2, 1998 DNC spokesman Rick Hess told the Washington
Post, ``at the time (October 1995) the DNC had no reason to
suspect Mr. Chung or the source of this funds.'' \542\ Such
claims should be taken with a healthy dose of skepticism.
---------------------------------------------------------------------------
\542\ George Lardner, ``Chung Secured Treasury Meeting for Chinese
Petrochemical Firm,'' the Washington Post, July 2, 1998 (Exhibit 46).
---------------------------------------------------------------------------
Richard Sullivan, the DNC's Finance Director, has said
consistently that he had doubts about the sources of Chung's
contributions as early as February 1995.\543\ In his Senate
deposition, he clearly stated:
---------------------------------------------------------------------------
\543\ Sullivan Deposition (Senate), pp. 228-229; Sullivan
Deposition (House), p. 186.
I think he had contributed about $100,000 to that point
over the past year, and the fact that--him showing up
with these five people from China . . . I had a sense
that he might be taking money from them and then giving
it to us, you know.\544\
---------------------------------------------------------------------------
\544\ Sullivan Deposition (Senate), pp. 228-229.
Sullivan said that he suggested to DNC Chairman Don Fowler
that they review Chung's contributions, though Fowler denies
this happened.\545\ Did Sullivan have reason to be concerned? A
letter Sullivan received from Chung in December 1994 suggests
that he did. In the letter, Chung is seeking Sullivan's help in
getting the Chairman of the Haomen Group, Shi Zeng Chen, into
the White House. In the letter, Chung is fairly blunt: ``He
(Shi Zeng Chen) will play an important role in our future party
functions.'' \546\
---------------------------------------------------------------------------
\545\ George Lardner, ``Chung Secured Treasury Meeting for Chinese
Petrochemical Firm,'' the Washington Post, July 2, 1998 (Exhibit 6).
\546\ DNC 3233321 (Exhibit 28).
---------------------------------------------------------------------------
Despite Sullivan's doubts, the DNC went on to accept
another $225,000 in contributions from Chung.\547\ In October
1995, DNC documents show that Sullivan faxed a letter to the
Treasury Department seeking a meeting for Chung and his Chinese
associates from the China Petrochemical Company.\548\
---------------------------------------------------------------------------
\547\ FEC Internet Records--www.tray.com/fecinfo/ (Exhibit 3).
\548\ Treasury 00000167-168 (Exhibit 73).
---------------------------------------------------------------------------
Did Fowler have any reason to suspect that Chung was
funneling Chinese money to the DNC? He met frequently with
Chung's Chinese guests. His correspondence is instructive:
In April 1995, Chung wrote to Fowler, telling that him the
National Security Council was holding onto the pictures of his
``China delegation'' and the President, and pleading for help
to get the pictures released: ``I am going to China next week
and I do need to bring those pictures with me. I have run out
of excuses to tell them why the pictures are taking forever.''
\549\
---------------------------------------------------------------------------
\549\ DNC 3102463 (Exhibit 185).
---------------------------------------------------------------------------
In July 1995, Fowler wrote to Chung and said, ``Best of
luck on your trip to China. I enjoyed meeting your friend who
is the wife of the Chief of Staff of the Chinese Army.'' \550\
---------------------------------------------------------------------------
\550\ DNC 3102487 (Exhibit 186).
---------------------------------------------------------------------------
In September 1995, Fowler wrote to China Petrochemical's
Huaren Sheng in Beijing, at Johnny Chung's request, to invite
him to come to a meeting at the DNC. He went on to write to the
Secretaries of Energy and Treasury to ask them to meet with
Chung and Sheng.
In August 1996, Fowler wrote to Chung's associate Jing Wei
Li at the Homko Group in Hong Kong to invite him to the
Democratic Convention. The letter had to be addressed ``via
facsimile,'' \551\ because there was no U.S. address.
---------------------------------------------------------------------------
\551\ DOS 013143 (Exhibit 23).
---------------------------------------------------------------------------
Fowler's assistants were instrumental in getting Chung and
his ``China delegation'' into the President's radio
address.\552\ Chung showed up at two high-profile Democratic
fundraisers in 1995 and 1996 with large delegations of Chinese
nationals.\553\
---------------------------------------------------------------------------
\552\ Fowler Senate Governmental Affairs testimony, Sep. 9, 1997,
p. 209.
\553\ The Sept. 21, 1995 Century City dinner, and the July 18, 1996
fundraiser at the home of Eli Broad.
---------------------------------------------------------------------------
If DNC officials did not suspect that Chung's money was
coming from China, it is only because they were looking the
other way. The aggressive solicitation of Chung by the DNC
makes it clear that they were intent on raising as much money
as possible without looking too carefully at where it was
coming from. A November 10, 1995 memo from the DNC's Ari
Swiller, asking Fowler to call Chung, captures the hard sell
tactics used by DNC employees, and to which Chung apparently
responded:
Johnny committed to contribute $75,000 to the DNC
reception in Los Angeles on September 21. He has still
not sent his contribution. Tell him if he does not
complete his commitment ASAP bad things will
happen.\554\
[Supporting documentation follows:]
---------------------------------------------------------------------------
\554\ DNC 3353903 (Exhibit 187).
=======================================================================
CHAPTER IV, PART D
UNPRECEDENTED INFUSION OF FOREIGN MONEY INTO THE AMERICAN POLITICAL
SYSTEM:
THE SIOENG FAMILY'S CONTRIBUTIONS AND FOREIGN TIES
=======================================================================
THE SIOENG FAMILY'S CONTRIBUTIONS AND FOREIGN TIES
I. Executive Summary
The Committee's investigation of the political
contributions and related activities of Ted Sioeng and his
family was remarkable both for the extraordinary number of
obstacles it encountered and for the information it developed
in spite of these difficulties. Sioeng, his family, and his
business associates made political contributions of nearly
$600,000 overall in 1995 and 1996, including $400,000 to the
Democratic National Committee and $182,500 to Republican
candidates and organizations. The Committee's attempts to
determine the sources of these contributions and the
motivations behind them were met with a series of hurdles set
in place by Sioeng's family, associates, and attorneys.
The most persistent and crippling obstacle was the number
of persons the Committee sought to interview or depose who
asserted their privileges against self-incrimination, fled the
country, or otherwise refused to cooperate with the
investigation. Attached to this report is a chart listing 28
persons the Committee tried but was unable to speak
to.1 They include every member of Sioeng's extended
family that the Committee attempted to contact, plus a number
of close business and personal associates.
---------------------------------------------------------------------------
\1\ Chart Entitled ``28 Unavailable Sioeng Witnesses.'' Exhibit 1.
---------------------------------------------------------------------------
The Committee voted to immunize one of Ted Sioeng's
business associates, Kent La, but ultimately could not make
public any of his testimony because of Justice Department
concerns that to do so ``would compromise [its] pending
criminal investigation.'' 2 Curiously, after having
been made aware of the Justice Department's decision reflecting
the sensitivity of La's testimony, Ranking Minority Member
Henry Waxman stated in an August 4, 1998 hearing that La said
nothing relevant to the Committee's investigation of campaign
finance abuses.3 Not only is this statement
contradicted by the Justice Department's abject refusal to
allow the Committee to make public any of Kent La's testimony,
but, at the time he made the statement, Representative Waxman
had neither heard Kent La's testimony nor read the deposition
transcript.
---------------------------------------------------------------------------
\2\ Letter from L. Anthony Sutin to Chairman Burton, Aug. 28, 1998.
Exhibit 2. Letter from Mark M. Richard to Chairman Burton memorializes
the Committee's agreement with the Justice Department concerning the
testimony of Kent La, Apr. 22, 1998. Exhibit 3. Letter from Mark M.
Richard to Chairman Burton, Aug. 3, 1998. Exhibit 4.
\3\ At an Aug. 4, 1998 Committee hearing, Ranking Minority Member
Henry Waxman stated the following:
We recall we were told that if we didn't grant immunity to
the four witnesses, we would never know from those people
who have direct knowledge about how the Chinese Government
made illegal campaign contributions in an attempt, apparent
attempt to influence our policy. We granted immunity. We
have taken those depositions. . . . The four witnesses, I
believe, don't know anything about transferring technology
to China. They don't know anything about possible campaign
contributions from the Chinese Government. And they don't
know anything that is of relevance to this committee's
---------------------------------------------------------------------------
investigation.
Note that one of the ``four witnesses'' referred to above was Kent La.
A copy of the hearing transcript is maintained by the Committee.
A second obstacle was the Sioeng-family attorneys, who
orchestrated a sweeping effort to prevent the Committee from
learning the truth about the family's political contributions
and activities. Prominent in the family lawyers' arsenal of
dilatory and obstructionist tactics was their deliberate
failure to comply with Committee subpoenas.
The Committee twice issued subpoenas to three of the Sioeng
family's businesses in the United States, Panda Estates
Investment, Inc., Panda Industries, Inc., and Panda Hotel
Investment, Inc. The first subpoenas were issued in March and
early April and carried early- and mid-April return dates. Two
weeks after productions were due, the Sioeng-family lawyers
objected to the subpoenas on various grounds and produced only
31 pages of unremarkable documents. In June, the Committee
issued new subpoenas seeking documents from the same three
companies. This time, the subpoenas had been narrowed
considerably to reflect concerns expressed by the family
lawyers at a May 15, 1998 meeting called by majority staff to
the Committee. These subpoenas were ignored completely.
The Sioeng-family lawyers also managed to upset an
agreement the Committee had reached with Donald Lam, the
accountant for Sioeng's businesses in the United States. The
Committee subpoenaed Lam in January 1998 and Lam agreed to
produce documents and appear for a deposition in mid-February.
The information sought from Lam related to the income of Panda
Estates and Panda Industries, both of which made political
contributions. Those contributions are accounted for on the
``Reconciliation of Income (Loss) per Books With Income per
Return'' section of the corporate tax form 1120. That section
reconciles a corporation's taxable income with its book income
by, among other things, accounting for expenses--like political
contributions--recorded on books but not deducted from taxes.
In short, the Committee sought financial information to
help it determine the sources of over $250,000 in political
contributions the two companies made in 1995 and 1996. The
information represented one of the Committee's only
opportunities to trace these sources outside U.S. borders.
The Sioeng-family lawyers instructed Donald Lam not to
comply with the Committee'ssubpoena despite the fact that they
did not represent him and, in fact, represented parties that had
conflicting or substantially different interests than his. Lam never
produced the tax records sought by the Committee.4
---------------------------------------------------------------------------
\4\ Letters by the Sioeng-family lawyers to Chairman Burton
eventually objected to the Committee's subpoena, Feb. 13 and 17, 1998.
Exhibit 5. A letter from Chairman Burton to the Sioeng-family lawyers
rejected the objections and ordered that Donald Lam produce the
subpoenaed documents, Feb. 20, 1998. Exhibit 6. Nevertheless, the
documents were never produced.
---------------------------------------------------------------------------
The Sioeng-family lawyers also impeded the investigation's
progress by pledging cooperation with the Committee then
failing to make good on their promises. At a meeting with
Committee staff on January 20, 1998, the family lawyers offered
to answer factual questions posed by Committee staff about the
Sioeng family and its businesses. Committee staff accepted the
lawyers' invitation by a letter dated 2 days later.5
Among other things, the letter asked for information about
foreign businesses used by Sioeng to fund political
contributions and other activities in the U.S. Because the
letter went unanswered, Committee staff again wrote the Sioeng-
family lawyers on May 22, 1998.6 This letter also
was ignored.
---------------------------------------------------------------------------
\5\ Letter from Richard D. Bennett to Steven R. Ross and Mark J.
MacDougall, Jan. 22, 1998. Exhibit 7.
\6\ Letter from Richard D. Bennett to Steven R. Ross and Mark J.
MacDougall, May 22, 1998. Exhibit 8.
---------------------------------------------------------------------------
In spite of these obstacles, the Committee developed a
substantial amount of disturbing information on Sioeng and his
political activities in this country. The Committee found that
approximately three-quarters of the $400,000 in Sioeng-related
political contributions made in 1995 and 1996 can be traced to
foreign money. Many of these contributions are probably
illegal, though the information needed to make an authoritative
determination was withheld from the Committee by the Sioeng-
family's lawyers.
Moreover, the Committee found close and enduring ties
between Ted Sioeng and the government of the People's Republic
of China (PRC). Sioeng's business empire is heavily reliant
upon partnerships with the Chinese government. These ties
support the Senate Committee on Governmental Affairs'
conclusion that ``Sioeng worked, and perhaps still works, on
behalf of the Chinese government.'' 7 These ties,
combined with the foreign sources of many Sioeng-related
political contributions and the Sioeng-family's refusal to
provide information on its foreign businesses and accounts,
strongly suggests that the contributions were illegal and
raises serious questions about the motives behind Sioeng's
sudden immersion into United States politics in 1995 and 1996.
Even the Senate minority concluded, ``The Committee found
evidence that suggests that Sioeng may have participated in
directing political contributions made by his daughter
[Jessica] Elnitiarta,'' which ``raised serious questions about
the ultimate source of the contributions,'' and ``further
investigation by law enforcement authorities into these issues
is clearly warranted.'' 8
---------------------------------------------------------------------------
\7\ Senate Committee on Governmental Affairs, Investigation of
Illegal or Improper Activities in Connection with the 1996 Federal
Election Campaigns, S. Rept. No. 167, 105th Congress, 2d sess. 2505
(1998). Hereinafter ``Senate Campaign Finance Report.''
\8\ Senate Campaign Finance Report at 5584.
---------------------------------------------------------------------------
Ted Sioeng and his daughter, Jessica Elnitiarta, have
stated through the family's attorneys that the political
contributions were ``lawful and properly documented,'' that
``Sioeng is not, and has not been, a political agent of the
Chinese or any other government,'' and that Sioeng's
``activities in Southern California, and those of his family,
are an effort to support the Asian-American community and are
not part of any plot by the Chinese government to influence
American politics.'' 9 Yet Sioeng and his daughter
have offered no factual counter to the information developed by
the Committee.
---------------------------------------------------------------------------
\9\ Statement on Behalf of Jessica Elnitiarta and Ted Sioeng, May
29, 1997. Exhibit 9.
---------------------------------------------------------------------------
Sioeng's implicit denial of his PRC government ties is
unpersuasive. The conclusions of the Senate Committee on
Governmental Affairs were based virtually exclusively on
highly-classified material that cannot be made
public.10 Yet information developed by this
Committee is not classified, can be shared publicly, and is
discussed later in this chapter. This information includes
accounts of Sioeng's ties to high-level Chinese government
officials in the United States and China, his status as an
advisor to Chinese provincial governments, his frequent trips
to Beijing, and his business ventures with the PRC government.
Information developed by the Committee on this latter subject
is particularly significant, as it points to a probable PRC
government tie to the Sioeng family's campaign contributions
and, more generally, to its various activities in this country.
---------------------------------------------------------------------------
\10\ Senate Campaign Finance Report at 2501.
---------------------------------------------------------------------------
The connection is straightforward. Sioeng financed many of
the family's activities in this country--including its
political contributions--through transfers of money from
businesses in Hong Kong and China. Sioeng transferred some $2.7
million from one such business, R.T. Enterprises Limited.
Although Sioeng's family has refused to provide any information
to the Committee on this company, one document obtained by the
Committee from another source provides a telling clue to the
activities of R.T. Enterprises. The document shows a wire
transfer from R.T. Enterprises to Loh Sun International Inc. in
the amount of $97,555.11 Loh Sun is owned by
Sioeng's friend and business associate Kent La, who distributes
Hongtashan cigarettes manufactured by Sioeng in Singapore. As
discussed later in this chapter, the Hongtashan brand name is
owned by the government of China, which has granted Sioeng
rights to manufacture and distribute its cigarettes in
different parts of the world.
---------------------------------------------------------------------------
\11\ Wire transfer from R.T. Enterprises to Loh Sun International
in the amount of $97,555, July 24, 1996. Exhibit 10.
---------------------------------------------------------------------------
The $97,555 wire transfer states that it is ``for
Hongtashan Advertising.'' \12\ The Committee has learned that
Loh Sun advertises Hongtashan cigarettes in various U.S.
publications, including the International Daily News, the
newspaper Sioeng bought and transformed into a PRC-friendly
daily.\13\ The Committee believes it is likely that R.T.
Enterprises, which appears to have reimbursed Loh Sun for
Hongtashan advertisements it placed in U.S. publications, is
part of Sioeng's foreign tobacco empire, and may be owned or
funded in part by the PRC government. It, of course, would make
sense for Sioeng and the Chinese government, partners in the
manufacture and distribution of Hongtashan cigarettes, to fund
attempts to establish a U.S. market for their product. That
appears to be what was done through R.T. Enterprises.
---------------------------------------------------------------------------
\12\ Id.
\13\ Invoice from International Daily News to Loh Sun International
for $35,000, Feb. 7, 1996. Exhibit 12.
---------------------------------------------------------------------------
The Committee's belief is further supported by the fact
that the International Daily News stood to benefit from
Hongtashan advertising placed in the paper. Hence, if indeed
R.T. Enterprises was owned or funded in part by the Chinese
government, then, through R.T. Enterprises, the PRC would have
been financially assisting Sioeng's PRC-friendly publication.
The Committee notes that the Senate Committee on Governmental
Affairs concluded the International Daily News was purchased by
Sioeng at the direction of or with encouragement from the PRC
government.
The balance of this chapter describes in detail Sioeng's
business interests and relationships, and the political
contributions he, his family, and his business associates made
in 1995 and 1996. Of necessity, the Sioeng family's finances
are discussed in significant detail. All told, the chapter
provides a glimpse of the Sioeng family's sudden and complete
immersion into political finances, and the extraordinary
secrecy in which it cloaked these contributions once they were
called into question by this Committee and the Senate.
II. Background
A. Summary
1. Method and Complications
The Committee's investigation of Ted Sioeng, his family and
business associates involved subpoenas to more than 80 bank
accounts, 50 of which were held by businesses. Committee
investigators also obtained information from various Federal
law enforcement agencies, as well as public databases. The
Committee deposed 13 individuals and interviewed 21 others
regarding the political connections of Ted Sioeng, his family,
and business associates.
The investigation was seriously hampered by 28 witnesses
who asserted their Fifth Amendment privilege against self-
incrimination, fled the country, or simply refused to be
interviewed in their home countries. The Committee also
received incomplete or illegible bank records, and, despite
numerous requests for bank records, the government of the
People's Republic of China refused to cooperate.
2. Ted Sioeng, his Family and Associates
Sioeng holds a Belize passport. He has a house in Hong Kong
and maintains a business address in Beijing. Ted Sioeng is
married to Sundari Elnitiarta, an Indonesian national. They
have two sons and three married daughters. The children all use
their mother's maiden name of Elnitiarta. Laureen Elnitiarta,
youngest of the Sioeng's daughters, is married to Subandi
Tanuwidjaja, the son of a powerful Indonesian family. The
Sioeng family also has business connections to the Tanuwidjaja
family.
The Committee learned that, during the period under
investigation, the Sioeng family regularly received money from
overseas through U.S. bank accounts held by his sister, Yanti
Ardi, an Indonesian resident. Jessica Elnitiarta, Sioeng's
daughter, holds a power of attorney over Ardi's bank accounts.
She also held power of attorney over a number of other family
bank accounts. The Committee has determined that Yanti Ardi's
accounts were used as a ``clearing account'' by the Sioeng
family and their businesses.
Another Sioeng associate is Kent La, a U.S. permanent
resident and owner of Loh Sun International, a corporation
headquartered in Los Angeles. Sioeng and La are co-founders of
the Alliance of Chinese-American Groups of USA.
B. Investigation Scope, Methodology, and Complications
1. Scope
The Committee's investigation of campaign finance abuses
inevitably lead to an examination of Ted Sioeng, his family
members, and business associates. The Committee's interest in
Sioeng was sparked by the large amounts of contributions made
by Sioeng, his relatives, and business partners; the fact the
Senate Campaign Finance Report accused Sioeng of working for
the benefit of the PRC government, and allegations by both the
press and senators that there was a so-called ``Chinese plan''
to influence U.S. elections.\14\ As a result of those
allegations, Committee investigators examined Ted Sioeng's
political contributions and funding sources, and his foreign
business interests and activities, including connections to
foreign governments.
---------------------------------------------------------------------------
\14\ See Investigation on Illegal or Improper Activities in
Connection with the 1996 Federal Election Campaign--Part I, Hearings
before the Committee on Governmental Affairs, U.S. Senate, 105th Cong.,
1st sess. at 1.
---------------------------------------------------------------------------
Initially, the investigation into Sioeng's political
contributions and funding focused on all contributions made
between March 1992 through January 1997. Committee
investigators noted that contributions of $10,000 or more
increased significantly during 1995 and 1996. Thus, later
investigative efforts focused on these large contributions
which coincided with state and localpolitical campaigns in
California during 1995, and the Presidential election in 1996.
The investigation of business interests and activity
covered the period from January 1994 through January 1997, and
included efforts to identify connections with officials of the
governments of the PRC and Cambodia.
2. Methodology
The Committee's investigation of Ted Sioeng began in
earnest in May 1997. Committee investigators subpoenaed bank
records, obtained information from Federal, state, and local
governmental agencies, searched public databases, and conducted
interviews and depositions.
More than 80 bank accounts were subpoenaed, which involved
over 50 business entities operating in the United States and
seven other countries. As a result, Committee investigators
reviewed and analyzed more than 30,000 pages of canceled
checks, electronic fund transfers, deposits, account
statements, and supporting loan documents.
Committee investigators obtained information from the
Departments of Justice, including the Immigration and
Naturalization Service; State Department; and Treasury
Department, including the U.S. Customs Service, and Bureau of
Alcohol, Tobacco, and Firearms.
Through public databases, Committee investigators obtained
published articles and corporation registrations in California,
Hong Kong, Singapore, Indonesia, and Belize. Information on
contributions was obtained from the Federal Election
Commission, the Republican and Democratic National Committees,
various state election offices, and the National Policy Forum.
Finally, information was obtained from 21 interviews and 13
depositions 15 of various individuals.
---------------------------------------------------------------------------
\15\ See ``People Deposed by Government Oversight and Reform
Committee.''
---------------------------------------------------------------------------
3. Complications
The Committee's investigation was complicated by several
major problems involving bank records, a lack of cooperation
from the Chinese government, and the absence of witnesses.
The investigation of bank records was slowed by many
transfers between accounts that appeared to constitute
deliberate efforts to conceal the ultimate funding sources.
Further, Committee investigators were unable to determine the
business purpose for many transactions, including a number of
checks made payable to cash. This was partially due to the lack
of cooperation from Sioeng's accountant, Donald Lam.
Additionally, banks could not locate all records the Committee
requested and many copies of documents the Committee received
were of very poor quality. However, the Committee's greatest
obstacle was its inability to subpoena records for bank
accounts maintained outside the United States, and no
assistance from the Administration to force this issue.
The Chinese government also denied Committee investigators
travel visas to enter Hong Kong and China. As a result, the
Committee was unable to examine the source of millions of
dollars that flowed from Hong Kong and Chinese bank accounts
into U.S. bank accounts held by Sioeng family members and
associates, and to interview witnesses residing in Hong Kong or
the PRC. This impasse continues to this day, and makes it
difficult to determine whether the Chinese government attempted
to influence the outcome of U.S. elections.
Finally, 28 people either asserted their Fifth Amendment
privileges against self-incrimination, fled the country, or
simply refused to be interviewed, while remaining beyond the
reach of Committee subpoenas.
One witness, Kent La, was granted congressional immunity
and provided the Committee with a deposition. That testimony
was subject to review and release by the U.S. Department of
Justice (DOJ). Based upon their review, DOJ has indicated that
the release of the deposition or testimony would compromise an
ongoing criminal investigation.16
---------------------------------------------------------------------------
\16\ See Exhibit 4.
---------------------------------------------------------------------------
C. Ted Sioeng and his Family
Ted Sioeng, a foreign national,17 is also known
as Sioeng San Wong,18 or by his Chinese name, Hsiung
De-Lueng.19 Sioeng was born in Indonesia in
1945.20 He has stated that he is of Indian and
Indonesian descent but was raised by an ethnic Chinese family
and considers himself Chinese.21 Along with his
native Indonesian, he speaks three Chinese dialects and a
limited amount of English.22 Several persons
confirmed that Ted Sioeng could carry on a small conversation
in English if it was spoken slowly and a lot of syllables
weren't used, but that he preferred to use an interpreter for
more technical conversations.23
---------------------------------------------------------------------------
\17\ Letter from Ann M. Harkins, Acting Assistant Attorney General,
to Chairman Burton, May 1, 1998. Exhibit 11.
\18\ Grand National Bank signature card, Sioeng San Wong, Feb. 3,
1992. Exhibit 13.
\19\ Business card of Ted Sioeng. Exhibit 14.
\20\ See Exhibit 13.
\21\ K. Connie Kang and David Rosenzweig, Entrepreneur Formed Ties
with China, Then Politicians; Finances: Records, Interviews Show He
Benefited from Beijing Business, Later Gained Access to Clinton,
Gingrich, L.A. Times, May 18, 1997, part A, p. 1.
\22\ Id.
\23\ Deposition of Glenville Stuart, Feb. 18, 1998, at 59
[hereinafter Stuart Depo.]; Deposition of Robert Jack Prins, Jan. 27,
1998, at 49 [hereinafter Prins Depo.]; Deposition of Governor Gary
Locke, July 7, 1998, at 65 [hereinafter Locke Depo.].
---------------------------------------------------------------------------
In 1989, through the Belize Economic Citizenship Investment
Program, Sioeng became a Belize citizen.24 After
generous contributions to Iowa Wesleyan College,25
Sioeng received an honorary degree of Doctor of Business
Administration in 1993.26 Thus, he is frequently
referred to as Dr. Sioeng. He has a house in Hong Kong
27 and a prestigious office address in Beijing where
the Chinese government welcomes foreign
dignitaries.28 Sioeng also travels extensively to
the PRC and Southeast Asia.29
---------------------------------------------------------------------------
\24\ Stuart Depo. at 21-23.
\25\ Prins Depo. at 12, 16.
\26\ Facsimile from Robert J. Prins, president, Iowa Wesleyan
College, to David Rosenzweig, Los Angeles Times, Sept. 2, 1993. Exhibit
15.
\27\ Personal financial statement of Wong Sioeng San and Sundari
Elnitiarta, Sept. 29, 1993; Grand National Bank commercial credit
commitment report, Feb. 12, 1993. Exhibit 16.
\28\ Interview with Tei Fu Chen, president and CEO, Sunrider
International, July 17, 1998.
\29\ James Risen, FBI Said to Suspect Donor as Agent for China,
L.A. Times, May 12, 1997, part A, p. 1.
---------------------------------------------------------------------------
Ted Sioeng is married to an Indonesian citizen, Sundari
Elnitiarta, and they have two sons and three married daughters.
According to Indonesian custom, the children use their mother's
last name of Elnitiarta.30 Sioeng's daughter,
Laureen Elnitiarta, is married to Subandi
Tanuwidjaja,31 a DNC contributor 32 and
the son of Sioeng business associate, Susanto
Tanuwidjaja.33
---------------------------------------------------------------------------
\30\ Interview with Jessica Elnitiarta conducted by U.S. Senate
Committee on Governmental Affairs, Special Investigation, June 19,
1997, [hereinafter Elnitiarta interview].
\31\ Bruce Gilley, A Democratic Donor's Cambodian Connection, Wall
Street Journal, Jan. 13, 1998.
\32\ See ``Democratic Contributions,'' this chapter.
\33\ Interview of Margaret Ng, July 23, 1998.
---------------------------------------------------------------------------
Sioeng's sister is Yanti Ardi.\34\ Committee investigators
traced Ardi to her home outside Jakarta, Indonesia, but were
unable to persuade Ardi to submit to an interview.35
---------------------------------------------------------------------------
\34\ Elnitiarta Interview.
\35\ Photographs of Yanti Ardi's home in Jakarta, Indonesia,
Exhibit 17.
---------------------------------------------------------------------------
Sioeng and his family emigrated to California in
1986.36 However, Sioeng has spent only brief periods
in the United States. Except for Ted Sioeng, most of his family
are U.S. legal permanent residents.37
---------------------------------------------------------------------------
\36\ Elnitiarta interview.
\37\ INS records and Grand National Bank signature card for account
of Sundari, Sandra, and Laureen Elnitiarta, Apr. 12, 1993. Exhibit 18.
---------------------------------------------------------------------------
The following table shows the Sioeng family members' date
and country of birth, citizenship status, and, to the best of
the Committee's knowledge, present location.
TABLE 1.--SIOENG FAMILY MEMBERS' DATE AND COUNTRY OF BIRTH, CITIZENSHIP STATUS AND PRESENT LOCATION
----------------------------------------------------------------------------------------------------------------
Date and Country of
Family Member Birth Citizenship Status Present Location
----------------------------------------------------------------------------------------------------------------
Ted Sioeng.......................... 11/16/45 Indonesia..... Belize................. Hong Kong/Asia.
Sundari Elnitiarta.................. 10/12/46 Indonesia..... Indonesia/U.S. Legal Hong Kong.
Permanent Resident.
Jessica Elnitiarta.................. 3/28/67 Indonesia...... Indonesia/U.S. Legal California.
Permanent Resident.
Sandra Elnitiarta................... 3/30/72 Indonesia...... Indonesia/U.S. Legal Hong Kong.
Permanent Resident.
Laureen Elnitiarta.................. 9/27/73 Indonesia...... Indonesia/U.S. Legal Hong Kong/Indonesia.
Permanent Resident.
Yaohan Elnitiarta................... 7/5/75 Indonesia....... Indonesia/U.S. Legal New York.
Permanent Resident.
Yopie Elnitiarta.................... 7/18/76 Indonesia...... Indonesia/U.S. Legal Hong Kong.
Permanent Resident.
Ridwan Dinata....................... 2/9/66 Indonesia....... Indonesia/U.S. Legal California.
Permanent Resident?*.
Didi Kurniawan...................... 11/19/67 Indonesia..... Indonesia/U.S. Legal Hong Kong.
Permanent Resident?*.
Subandi Tanuwidjaja................. 5/13/65 Indonesia...... Indonesia/U.S. Legal Hong Kong/Indonesia.
Permanent Resident.
Yanti Ardi.......................... 8/30/35 China.......... Indonesia.............. Indonesia.
----------------------------------------------------------------------------------------------------------------
*The Immigration and Naturalization Service has been unable to confirm immigration status.
As indicated above, most of the Sioeng family has left the
United States. The three family members remaining here have
indicated through their attorney that, if forced to testify
before this Committee, they will assert their Fifth Amendment
privilege against self incrimination.38
---------------------------------------------------------------------------
\38\ Letter from Mark H. MacDougall to Chairman Burton, Apr. 23,
1998. Exhibit 19. Letter from Thomas P. McLish to Michael D. Bopp, Mar.
10, 1998. Exhibit 20. Letter from Mark J. MacDougall to Richard D.
Bennett, Feb. 16, 1998. Exhibit 21.
---------------------------------------------------------------------------
D. Sioeng's Connections to the Tanuwidjaja Family
The Sioeng family is related to the powerful Tanuwidjaja
family of Indonesia through marriage and millions of dollars in
business transactions. The Tanuwidjaja family is headed by
patriarch Susanto Tanuwidjaja, whose Susanto Group includes
Sino Bank, as well as textile, umbrella, and apparel factories
in Indonesia.39 The Tanuwidjajas also have
businesses in Hong Kong, including a controlling interest in
the Millennium Group (formerly Allied Industries
International).40 Millennium Group, which is listed
on the Hong Kong Stock Exchange, has many investments in the
PRC.41 By April 1998, the Millennium Group had
acquired 100 percent of Sioeng's Worldwide Golden
Leaf.42
---------------------------------------------------------------------------
\39\ Sino Bank Web site, , Exhibit 22.
\40\ Denise Tsang New-look Allied to Ease Burden, S. China Morn.
Post, Apr. 19, 1997.
\41\ Id.
\42\ Bruce Gilley, Hong Kong: Nicotine Fix, Far East Econ. Rev.,
Apr. 2, 1998.
---------------------------------------------------------------------------
Another Tanuwidjaja business in Hong Kong is Dragon Union,
Ltd., of which Susanto's son Subandi is the sole corporate
director.43 The Committee found that the
Tanuwidjajas have paid $23 million in vendor invoices on behalf
of Sioeng's World Seal operations in mainland China, primarily
through the Tanuwidjajas and Dragon Union.44 In late
1996, the Susanto Group closed its only active U.S. business in
California, CAS, a clothing manufacturer, importer, and
distributor.45
---------------------------------------------------------------------------
\43\ Dragon Union Limited notice of change of directors, Jan. 27,
1997. Exhibit 23.
\44\ Invoices from World Seal Limited to Sunrider Manufacturing,
L.P., July 11, 1996 to Jan. 24, 1997. Exhibit 24.
\45\ The Ta, Tanuwidjaja Donations Came in Fall, Dow Jones News,
Aug. 10, 1997.
---------------------------------------------------------------------------
Margaret Ng, the former senior vice president and general
manager of CAS stated the company had an ongoing business
relationship with Dragon Union.46 She further stated
that Dragon Union served as CAS's agent in Hong Kong, and that
they placed orders for goods for CAS in Asia.47
According to Ng, it was not unusual for money to flow from CAS
to Dragon Union; however, it was very odd to find such large
amounts of money flowing from Dragon Union to CAS.48
Ng explained that CAS was one of Dragon Union's biggest
customers, therefore, the size of Dragon Union was directly
related to the amount of business CAS gave it.49 Ng
stated that CAS did very little business with Dragon Union in
1996, in fact, Ng claimed that CAS's business with Dragon Union
had dropped to ``almost none.'' 50
---------------------------------------------------------------------------
\46\ Interview of Margaret Ng, July 23, 1998, [hereinafter Ng
Interview].
\47\ Id.
\48\ Id.
\49\ Id.
\50\ Id.
---------------------------------------------------------------------------
Besides the business relationships with Ted Sioeng, the
Tanuwidjajas have a personal one. Subandi Tanuwidjaja married
Sioeng's youngest daughter, Laureen Elnitiarta, in Hong Kong in
November 1996.51 Subandi Tanuwidjaja left the United
States in early 1997, a year after his sister, Suryanti, had
moved to Singapore.52 They, therefore, are not
available to provide further information on their political
contributions and ties with Ted Sioeng or his
family.53
---------------------------------------------------------------------------
\51\ Bruce Gilley, A Democratic Donor's Cambodian Connection, Wall
Street Journal, Jan. 13, 1998.
\52\ Ng Interview.
\53\ The Ta, Tanuwidjaja Donations Came in Fall, D. J. News, Aug.
10, 1997.
---------------------------------------------------------------------------
E. Sioeng's Connections to Kent La
Kent La is a U.S. legal permanent resident and is also
known by his Chinese name, Lo Wen Zheng.54 La is
President of Loh Sun International in California which is the
U.S. distributor for Hongtashan cigarettes.55 Ted
Sioeng's connections to Kent La include the Alliance of
Chinese-American Groups and the sale of Hongtashan cigarettes.
In addition to their ties through cigarettes, La and Sioeng may
be involved in other business ventures. For example, Committee
investigators found that $1.8 million of invoices for Sioeng's
World Seal operations in China were paid in January 1997 from a
Hong Kong bank account in the name of Kent La and Yopie
Elnitiarta.56
---------------------------------------------------------------------------
\54\ Kent La Welcome to the Hong Ta Shan Badminton Invitational.
Exhibit 25.
\55\ Id. See also Elnitiarta interview.
\56\ Wire transfer from Kent La and Yopie Elnitiarta to Sunrider
Manufacturing in the amount of $1,830,039, Jan. 22, 1997. Exhibit 26.
---------------------------------------------------------------------------
In addition, Sioeng and La started and funded the Alliance
of Chinese-American Groups of USA. The Alliance is pro-China
and Kent La serves as its President.57 The Committee
has subpoenaed records from the Alliance, but to date has
received nothing.58
---------------------------------------------------------------------------
\57\ Alliance of Chinese-American Groups of USA, California
Secretary of State registration, incorporated Feb. 1, 1996. Exhibit 27.
\58\ Subpoena issued by the Committee on Government Reform and
Oversight to the Alliance of Chinese-American Groups of USA, Apr. 1,
1998. Exhibit 28.
---------------------------------------------------------------------------
On its third attempt, in June 1998, the Committee granted
Kent La immunity in order to ask him about the political
contributions and business activities as a close associate of
Ted Sioeng and his family.59 However, La's
deposition remains under seal, as the Department of Justice has
determined that the release of the transcript and/or public
testimony would compromise an ongoing Federal criminal
investigation.60
---------------------------------------------------------------------------
\59\ Letter from Chairman Burton to Laura S. Shores, June 23, 1998.
Exhibit 29.
\60\ See Exhibit 4.
---------------------------------------------------------------------------
F. The Yanti Ardi Clearing Account
Most of the foreign money the Committee identified flowed
into two personal bank accounts in the name of Ted Sioeng's
sister, Yanti Ardi, a foreign national who resides in
Indonesia.61 These accounts, maintained at the Grand
National Bank, which is 18 percent owned by the Sioeng
family,62 are primarily controlled by Jessica
Elnitiarta through a power of attorney.63 Based upon
an extensive review of bank records, Committee investigators
determined that Yanti Ardi's accounts were used by the Sioeng
family as a clearing account. The account's incoming deposits
were primarily wire transfers from foreign accounts, which
Jessica Elnitiarta quickly disbursed to Sioeng family members
and businesses based upon cash needs or instructions from her
father.
---------------------------------------------------------------------------
\61\ Grand National Bank signature card and passport of Yanti Ardi
with power of attorney over account by Jessica Elnitiarta, Oct. 10,
1991. Exhibit 30.
\62\ Grand National Bank shareholder list, June 30, 1997. Exhibit
31.
\63\ Grand National Bank Durable Power of Attorney, Dec. 20, 1995.
Exhibit 32.
---------------------------------------------------------------------------
The table below summarizes the sources and uses of deposits
and disbursements of $1,000 or more for Yanti Ardi's two Grand
National Bank accounts over the 3 year period endingDecember
31, 1996. As the table indicates, about $26.5 million was deposited and
disbursed from the two accounts. The primary source of account deposits
was about $19.7 million of wire transfers from foreign bank accounts,
mainly in Hong Kong or China. About $5.3 million came from various
family businesses and personal bank accounts in California. The primary
account disbursements were about $14.3 million to various family
business and personal bank accounts and about $6.8 million to repay
bank loans. About $3.6 million of account disbursements were wire
transfers to foreign bank accounts, mainly in Hong Kong or China.
TABLE 2.--YANTI ARDI DEPOSITS AND DISBURSEMENTS ($1,000 OR MORE) FOR THE
3 YEARS ENDING DECEMBER 31, 1996 (DOLLARS IN MILLIONS)
------------------------------------------------------------------------
Source/use of funds Deposits Disbursements
------------------------------------------------------------------------
Foreign accounts from/to...................... $19.7 3.6
Sioeng family businesses from/to.............. 4.4 9.3
Sioeng family personal accounts from/to....... .9 5.0
Bank loan proceeds/payments................... .7 6.8
Certificates of deposit proceeds/purchases.... .5 .3
Supplier payments............................. ......... 1.3
Unknown....................................... .3 .2
-------------------------
Total....................................... 26.5 26.5
------------------------------------------------------------------------
G. Glossary of Names
A glossary of names of persons significant to the Sioeng
investigation are presented below. The names are organized by
the different associations they have to Ted Sioeng or the
investigation. The glossary should assist readers throughout
this chapter and gives a sense of the complexities the
Committee faced in the Sioeng investigation. Note that Chinese
last names are presented first.
1. Sioeng Family Members
Ted Sioeng (Shong) (aka Sioeng San Wong, or by his
Chinese name, Hsiung De-Lueng)--Patriarch of the family. He
made $50,000 in donations to Republican Matt Fong and sat at
the head table at five separate DNC fundraisers. He has left
the United States.
Sundari Elnitiarta (El-nit-e-are-ta) (Chinese name
Nie San Nio)--Wife of Ted Sioeng. She attended at least one
fund-raiser with her husband. She has left the United States.
Jessica Elnitiarta (Chinese name Nie Shiat Chen)--
Eldest daughter of Ted Sioeng. She operates Ted Sioeng's U.S.
businesses and contributed $250,000 to the DNC. She has
asserted the Fifth Amendment privilege against self
incrimination.
Ridwan (Rick) Dinata (Chinese name Kim Liang
Lie)--Married to Jessica Elnitiarta. He operates a gun and
ammunition store in Alhambra, California. He has asserted the
Fifth Amendment privilege against self incrimination.
Sandra Elnitiarta--Second daughter of Ted Sioeng.
She is involved in several of Ted Sioeng's U.S. and overseas
businesses. She has left the United States.
Didi Kurniawan (Kur-nee-ah-wan)--Married to Sandra
Elnitiarta. He works for Ted Sioeng in Hong Kong. He also
attended several DNC events and a meeting with Speaker Gingrich
in Washington, DC. He has left the United States.
Laureen Elnitiarta--Third and youngest daughter of
Ted Sioeng. She is involved in several of Ted Sioeng's U.S.
businesses. She has left the United States.
Subandi (Sue-bon-dee) Tanuwidjaja (Tan-u-wid-
jaya)--Married to Laureen Elnitiarta. He operated several U.S.
businesses until early 1997. He also contributed $80,000 to the
DNC. He has left the United States.
Yopie (Yo-pee) Elnitiarta--Eldest son of Ted
Sioeng. He operates several Sioeng's overseas business and
attended several DNC fundraisers. He has left the United
States.
Yaohan (Yo-han) Elnitiarta--Youngest son of Ted
Sioeng. He has asserted the Fifth Amendment privilege against
self incrimination.
Suryanti (Sur-yon-ti) Tanuwidjaja--Subandi's
sister. She contributed $20,000 to the DNC. She has left the
United States.
Susanto Tanuwidjaja--Father of Subandi and
Suryanti and patriarch of the overseas business. Business
associate and in-law of Ted Sioeng. He has left the United
States.
Yanti Ardi--Ted Sioeng's sister and Jessica
Elnitiarta's aunt who lives in Indonesia. Money from overseas
accounts was transferred into her account before being routed
to family members and businesses and political contributions by
Jessica Elnitiarta who has power of attorney over the account.
She is a foreign witness that the Committee has been unable to
interview.
Nanny Nitiarta--Sister of Sundari Elnitiarta and
Jessica Elnitiarta's aunt who lives in Indonesia. Money from
overseas accounts was transferred into her account before being
routed to family members and businesses by Jessica Elnitiarta
who has power of attorney over the account. She is a foreign
witness that the Committee has been unable to interview.
2. Friends and Business Associates
Kent La (Chinese name, Lo Wen Zheng)--President of
Loh Sun International, importer ofHongtashan cigarettes, and
close business associate of Ted Sioeng. He contributed $50,000 to the
DNC. La originally asserted the Fifth Amendment privilege against self
incrimination but has been granted immunity by the Committee.
Simon Chen--Former owner of the International
Daily News. He has asserted the Fifth Amendment privilege
against self incrimination.
Sioeng Fei Man Hung--Current editor-in-chief of
the International Daily News. Former President of the China
News Agency in New York. He has asserted the Fifth Amendment
privilege against self incrimination.
Lay Kweek Wie--Long time friend and business
associate of Ted Sioeng who served as a director for several
Sioeng family companies. He has asserted the Fifth Amendment
privilege against self incrimination.
Bun Tsun (Benson) Lai--Son of Kweek Wie Lay,
employed by the Sioeng family. He has asserted the Fifth
Amendment privilege against self incrimination.
Li Kwai Fai--President and CEO of LuDanlan Group
in Guangzhou, PRC, and business associate of Sioeng. He
received an honorary degree from Iowa Wesleyan College at Ted
Sioeng's request. He attended the Hay-Adams DNC event where he
sat at the head table with President Clinton. He is a foreign
witness that the Committee has been unable to interview.
Bruce Cheung--Singapore permanent resident and
President of Chinois Tobacco, Sioeng's tobacco company in
Singapore. He attended the Hay-Adams DNC event as Ted Sioeng's
guest. He is a foreign witness that the Committee has been
unable to interview.
Ambrose Hsuing--Canadian representative of Panda
Industries and Vice-President of Sioeng Group. He resides in
Vancouver, Canada. He has refused to cooperate and the
Committee has been unable to interview him.
Tsang Hin Chi--Managing Director of Goldlion Ltd
and business partner of Ted Sioeng. He has also been twice
convicted of mislabeling goods. Tsang is the Standing Committee
Member, The 8th and 9th People's Congress of the People's
Republic of China; and a Member, Prepatory Committee of the
Hong Kong Special Administrative Region. He received an
honorary degree from Iowa Wesleyan College at Ted Sioeng's
request. He is a foreign witness that the Committee has been
unable to interview.
Jimmy Chi Mai Mao Tsang--President of Goldlion
International and Tsang Hin Chi's son. He attended the Hay-
Adams event at Ted Sioeng's request and had pictures taken with
President Clinton. He is a foreign witness that the Committee
has been unable to interview.
Jean Lim Tsang--Jimmy Tsang's wife. She attended
the Hay-Adams event at Ted Sioeng's request and had pictures
taken with President Clinton. She is a foreign witness that the
Committee has been unable to interview.
Chu Shijian--Former manager of the state owned
Yuxi Cigarette Factory in Yunnan Province, who rose to become
chairman of the Hongta Tobacco Group in 1995. Through Chu, Ted
Sioeng was awarded lucrative distribution rights for exporting
Hongtashan cigarettes. In January 1998, the Communist party of
China expelled Chu for public corruption and charged him and
several family members with accepting bribes and embezzling
about $10 million.
Chu Yibin--Attended the Hay-Adams event as Ted
Sioeng's guest with Bruce Cheung and had pictures taken with
President Clinton. May be related to Chu Shijian.
Sylvana Djojomartono--Employee of Sioeng's
Hollywood Metropolitan Hotel. She made conduit payment of
$1,100 to Gary Locke's (D-WA) campaign. She has asserted the
Fifth Amendment privilege against self incrimination.
Gretel Pollard--Employee of the Sunset Market and
Liquor, owned by Sioeng associate Glenville Stuart. Pollard
contributed $1,100 to Gary Locke (D-WA).
Chew Nin Kim--Officer of Supertrip Travel, located
in Sioeng's hotel. Chew contributed $1,100 to Gary Locke (D-
WA).
Yen Chu (Margaret) Kim--Officer of Supertrip
Travel, located in Sioeng's hotel. Yen contributed $1,100 to
Gary Locke (D-WA).
Chen Lo Jun--Leader of Hainan (Province) Tobacco
Study Delegation. He received an honorary degree from American
M&N University at Ted Sioeng's request.
Chio Ho Cheong (aka Chen Kai Kit, aka Tommy
Chio)--Supposed head of Ang-Du International, Macau legislator,
and casino operator. He received an honorary degree from
American M&N University at Ted Sioeng's request. He attended
the Sheraton Carlton event as Ted Sioeng's guest, sat at the
head table, and had pictures taken with President Clinton.
Guo Zhong Jian--Deputy General Manager of China
Construction Bank--Hong Kong Branch. He received an honorary
degree from American M&N University at Ted Sioeng's request. He
attended the Sheraton Carlton event as Ted Sioeng's guest and
had pictures taken with President Clinton.
Lin Fu Qiang--Managing Director of Everbrite Asia
Limited. He received an honorary degree from American M&N
University at Ted Sioeng's request. He attended the Sheraton
Carlton event as Ted Sioeng's guest and had pictures taken with
President Clinton.
Chan Elsie Y.Z.--Managing Director of Ang-Du
International and former Hong Kong movie star. She received an
honorary degree from American M&N University at Ted Sioeng's
request. She attended the Sheraton Carlton event as Ted
Sioeng's guest, sat at the head table, and hadpictures taken
with President Clinton.
He Jian Shan--Attended the Sheraton Carlton event
as Ted Sioeng's guest and had pictures taken with President
Clinton.
Tong Yun Kai--Chinese businessman and member,
Guangdong Province and Fo Shan City Committees of Chinese
People's Political Consultative Conference. He received an
honorary degree from Iowa Wesleyan College at Ted Sioeng's
request.
Feng Shu Sen--Former Counsel General for the
People's Republic of China Consulate in Los Angeles and a
friend of Ted Sioeng's from Yunnan Province. He attended many
social functions with Ted Sioeng.
Zhou Weng Zhong--Former Counsel General of the
People's Republic of China's Consulate in Los Angeles and
former Minister and Deputy Chief of Mission for the Embassy of
the People's Republic of China. Ted Sioeng assisted in getting
Zhou's daughter into Iowa Wesleyan College.
Yang Youzhu--Officer and Director of China
National Tobacco Corporation, Yunnan Province. He received an
honorary degree from Iowa Wesleyan College at Ted Sioeng's
request.
Tie Zhengguo--Officer and Director of China
National Tobacco Corporation, Yunnan Province. He received an
honorary degree from Iowa Wesleyan College at Ted Sioeng's
request.
Deng Jiazhen--Officer and Director of China
National Tobacco Corporation, Guangxi Province. He received an
honorary degree from Iowa Wesleyan College at Ted Sioeng's
request.
Theng Bunma--Cambodian tycoon banned by the State
Department from entering the United States due to suspected
drug trafficking and business partner of Ted Sioeng. He
received an honorary degree from Iowa Wesleyan College at Ted
Sioeng's request and attended Laureen Elnitiarta's wedding in
Hong Kong.
Hun Sen--Former Khmer Rogue leader and ruler of
Cambodia under the Vietnamese. He orchestrated a coup in 1997
to oust the first Prime Minister. He received an honorary
degree from Iowa Wesleyan College at Ted Sioeng's request and
attended Laureen Elnitiarta's wedding in Hong Kong.
Sok An--Minister in Charge of the Presidency and
the Council of Ministers in Cambodia. He serves as Hun Sen's
spokesman and liaison to the Chinese Embassy. He received an
honorary degree from Iowa Wesleyan College at Ted Sioeng's
request.
Tony Tandijono--Runs one of two licensed casinos
in Phnom Penh, Cambodia and part owner of a weapons firing
range north of that city. Business partner of Sioeng in a
cigarette factory in Cambodia. He received an honorary degree
from Iowa Wesleyan College at Ted Sioeng's request.
Sophia Wong--Friend and business partner of
Jessica Elnitiarta. She is half owner of Vision Builders with
her brother Dennis that built Benner Apartments owned by Sophia
and Jessica.
Teng Meini (Mary)--Chinese national and president
of Guangdong Travel. She was a former employee of China state-
owned China Travel Service.
Pu Xiang--Chinese national and manager of Dragon
Rainbow Medicine & Equipment of Yunnan, China. He wire-
transferred $1 million into the account of Yanti Ardi.
Shiping Xu--Chinese national, and officer and
director of Seagull International.
Guo Lin--Chinese national, and officer and
director of American Guizhou Pacific.
Feng Qian--Chinese national, and officer and
director of American Guizhou Pacific.
He Jianghui--Chinese national, and president,
director, and one third owner of Pacific Hotel Investment.
John Huang--Former Commerce Department employee
and DNC fundraiser who solicited contributions from the
Sioengs. Jessica Elnitiarta referred to him as ``Uncle Huang.''
He has asserted the Fifth Amendment privilege against self
incrimination.
Maria Hsia--DNC fundraiser who along with John
Huang organized the April 29, 1996 Buddhist Temple fundraiser
attended by Vice President Gore. She has asserted the Fifth
Amendment privilege against self incrimination.
3. People Deposed by Government Reform and Oversight Committee
Robert Prins (also interviewed)--President of Iowa
Wesleyan College. He awarded Ted Sioeng an honorary degree in
1993 and made him a trustee of the college. He also awarded 14
honorary degrees to Sioeng's associates at Sioeng's request.
Cary Ching (also interviewed)--President of the
Grand National Bank, which is 18 percent owned by the Sioeng
family.
Lily Wong (also interviewed)--President of the US-
China Chamber of Commerce and friend of the Sioeng family.
Johnny Ma (also interviewed)--President of
Sideffects and the California Chinese-American Investment and
Development (CCAID) Group. Former Sioeng business associate who
assisted Sioeng in bringing Chinese officials to the United
States for tours.
Glenville Stuart--Belize citizen and Sioeng's
business partner in Belize tobacco factory venture. He also is
the owner of a liquor store at Sioeng's Hollywood Metropolitan
Hotel complex.
Haddi Kurniawan (also interviewed)--Father of Didi
Kurniawan who sold Sioeng tobacco machinery and toured his
plant in Yunnan, China.
Matt Fong (two volumes)--California Republican
candidate for U.S. Senate and California State Treasurer. He
received $100,000 from Sioeng and his company, Panda
Industries, which he later returned.
Dr. Daniel Wong (also interviewed)--California
Republican, Doctor of Medicine and former Mayor of Cerritos,
California. He received $5,000 from Sioeng's wife, Sundari,
which a Senate report claimed came from the Chinese Consulate
through Sioeng's Hollywood Metropolitan Hotel.
Hoa Bang Huynh (also interviewed)--Cambodia
Importer/Exporter located in Los Angeles and former business
partner in Sioeng's Cambodian tobacco factory venture. He
received an honorary degree from Iowa Wesleyan College at Ted
Sioeng's request.
Joseph Sandler--DNC General Counsel.
Steven Walker, Jr.--Former Controller for the
National Policy Forum.
Governor Gary Locke (D)--Governor of Washington
State. He received $8,700 of contributions from Sioeng family
members, business associates, and employees.
Kent La--See above.
4. People Interviewed by Committee Investigators
Simon Chen--See above.
Julia Wu--Republican member of Los Angeles County
Community College Trustees with some knowledge of Ted Sioeng.
Her husband and campaign Treasurer Alfred Wu received $20,000
from Kent La and Bun Tsun Lai.
Norman Hsu--Republican member of the Hacienda La
Peunte Unified School District and current candidate for State
Assembly. He received $7,500 from Ted Sioeng for his last
school board election.
Jerry Sun--Vice President of Minmet K.N. (USA)
Inc. of Houston, Texas. He attended an honorary degree ceremony
hosted by Ted Sioeng at the Hollywood Metropolitan Hotel and is
the cousin of Simon Chen.
Mike Woo--Former candidate for Mayor of Los
Angeles. He received several small contributions from Sioeng's
family.
David Lang--Los Angeles fund raiser who solicited
the contributions for Mike Woo and Governor Gary Locke (D-WA).
Gary Kroener--Director of Operations, Sunrider
Manufacturing, L.P who conducted business with Victory Trading
Co. and World Seal in Hong Kong.
Thomas Shea--Office Manager, Alhambra Chamber of
Commerce.
Elaine Dung--Office Manager, Monterey Park Chamber
of Commerce.
Peter Woo & Charles Woo--DNC contributors who
attended the Sheraton Carlton event.
Tom Chang--Controller, Tehdex Corp.
Karen Elia--Assistant Manager, Oak Hill
Apartments, Montebello, CA.
Christopher Davis--Director, ACI International,
Inc.
Margaret To--Marketing Director, Asia Pacific.
Andrew Cherng--President and Chief Executive
Officer, Panda Management Co. He attended the Hay-Adams event
and sat at the head table.
Katrina Lai--Daughter of Lay Kweek Wie and sister
of Bun Tsun Lai.
Dr. Tei Fu Chen--President of Sunrider, Inc.
Dr. Nancy Chien (Chinese name Chen Hwa Tsai Liu)--
President of American M&N University.
Margaret Ng--former Senior Vice President and
General Manager of CAS, Inc., a Tanuwidjaja company.
Mr. Boy Z. Lilipaly--President, P.T. Mandiri
Traktor Utama & Mandiri Group.
Mr. Sunaryo Adam Kesuma--President, P.T. Bank
Sino.
III. Sioeng's U.S. Business Interests
a. summary
The Committee found that Ted Sioeng owns or controls 20
businesses--in seven different industries--within the United
States. All of these corporations are located in California.
The Committee also found that many of these businesses are
actually run by Jessica Elnitiarta, who a Grand National Bank
credit report described as being ``the right hand person to her
father, TedSioeng.'' 64 The bank noted that Ms.
Elnitiarta ``spends much of her time coordinating his U.S.
investments.'' 65 Committee investigators developed
information suggesting that, while Jessica Elnitiarta ran many of the
family's businesses in the United States, major decisions were made by
her father, Ted Sioeng.
---------------------------------------------------------------------------
\64\ See Exhibit 16.
\65\ Id.
---------------------------------------------------------------------------
Committee investigators also found documentary evidence
endorsing Elnitiarta's previous statement that ``the source of
her father's funds are his businesses abroad.'' 66
Specifically, Committee investigators have determined that
although some of the Sioeng family's U.S. businesses generated
domestic cash flow, foreign money clearly was needed to sustain
their overall business operations. Those foreign funds were
regularly provided to Sioeng's U.S. businesses. Committee
investigators also determined that some of this foreign money
was used to fund contributions to American political campaigns.
---------------------------------------------------------------------------
\66\ Elnitiarta interview.
---------------------------------------------------------------------------
B. The Sioeng Family Businesses in California
Committee investigators identified approximately 20 Sioeng
family businesses in California which operated in 7 different
industries.
Real Estate
Committee investigators identified five Sioeng family real
estate operations involving commercial and residential
properties. These operations provided the family with a safe
investment for Ted Sioeng's foreign money and enabled family
members to acquire equity and a source of collateral to obtain
bank loans. The companies are described below:
Panda Estates Investment, Inc. was
incorporated in April 1993 to build, own, and manage
Doheny Estates, a 14-unit condominium property in
Beverly Hills, California. Jessica Elnitiarta is the
sole corporate officer, director, and
stockholder.67 In December 1995, Panda
Estates donated $50,000 to the California State
Treasurer campaign of Matt Fong.68 In July
1996, the company contributed $150,000 to the
DNC.69
---------------------------------------------------------------------------
\67\ Doheny Estate Investment, Inc. articles of incorporation, Apr.
15, 1993. Exhibit 33.
\68\ Check No. 1446 from Panda Estates Investment Inc. to Matt Fong
for State Treasurer in the amount of $50,000, Dec. 14, 1995. Exhibit
34.
\69\ Check No. 1632 from Panda Estates to the DNC in the amount of
$100,000, July 12, 1996; Check No. 1652 from Panda Estates to the DNC
in the amount of $50,000, July 29, 1996. Exhibit 35.
---------------------------------------------------------------------------
Panda Property Holdings, Inc. was
incorporated in September 1996, and owns 808 Tower, a
commercial office building in Los Angeles, California.
Jessica Elnitiarta is the sole corporate officer and
director.70
---------------------------------------------------------------------------
\70\ Panda Property Holdings, Inc. articles of incorporation and
statement of domestic stock corporation, Sept. 24, 1996. Exhibit 36.
---------------------------------------------------------------------------
Euclid Medical Center consists of two
commercial and three residential rental properties in
Fullerton, California. The properties were purchased in
October 1991 by Jessica, Sandra, and Laureen
Elnitiarta.71
---------------------------------------------------------------------------
\71\ See Exhibit 40.
---------------------------------------------------------------------------
Benner Property, Inc. incorporated in April
1994, built and now manages a 10-unit apartment
building in Pasadena, California. Jessica Elnitiarta is
a director, president, and half owner. Her friend and
associate, Sophia Wong, is the remaining director,
officer, and owner. The building is co-owned by Jessica
Elnitiarta and Sophia Wong.72
---------------------------------------------------------------------------
\72\ Benner Property, Inc., California Secretary of State corporate
record, Apr. 26, 1994. Exhibit 37.
---------------------------------------------------------------------------
Sioeng's Group, Inc. was incorporated in
June 1996 and is a holding company that owns the stock
of Chen International Publications,73
publisher of the International Daily News. Jessica
Elnitiarta is the sole corporate officer and
director.74 She also holds the largest share
of stock with the remaining shares owned by her mother
and her four siblings.75 Ted Sioeng served
as the chairman of the board of directors and president
of Chen International Publications until April
1997.76
---------------------------------------------------------------------------
\73\ Letter from Akin, Gump, Strauss, Hauer, & Feld, counsel for
Jessica Elnitiarta, to John H. Cobb, Counsel, U.S. Senate Committee on
Governmental Affairs, Special Investigation, June 18, 1997. Exhibit 38.
\74\ Sioeng's Group, Inc. articles of incorporation, June 26, 1996;
statement by domestic stock corporation, Sept. 5, 1996. Exhibit 39.
\75\ See Exhibit 38.
\76\ See Exhibit 80.
---------------------------------------------------------------------------
Other property owned by members of the Sioeng family
include five residential properties and a vacant commercial
lot.77
---------------------------------------------------------------------------
\77\ Various property records for Los Angeles County, CA. Exhibit
40.
---------------------------------------------------------------------------
Trading
Committee investigators identified eight trading companies
owned or controlled by the Sioeng family, some of which did
business with Sioeng's foreign companies. The Committee notes
that as the campaign finance scandal stories began to break in
late 1996, all of the firms listed below began to shutdown
operations or dissolve:
Guangdong China Travel Service Incorporated
(U.S.A.), was incorporated in May 1995.78
The company discontinued operations in June 1996 when
the corporate bank account was closed and all remaining
funds were deposited into Jessica Elnitiarta's personal
bank account.79 Through another Sioeng
Company, CCAID Executive Program, Inc.,80
Guangdong China Travel Service did a limited business
in making travel arrangements for U.S. tours by Chinese
government officials. The president of Guangdong was a
Chinese national, Meini Teng, who formerly worked for
the Chinese state-owned China Travel Service in
Guangzhou, China.81 In October 1995, Teng
was replaced as president by Jessica Elnitiarta, who
also became the sole corporate officer and a
director.82 Mr. Sioeng and Xiashong Chen,
another Chinese national, served as the company's other
two directors.83
---------------------------------------------------------------------------
\78\ Guangdong China Travel Service Inc. (U.S.A.) articles of
incorporation, May 22, 1995; statements of domestic stock corporation,
Oct. 6, 1995 and Oct. 25, 1995. Exhibit 41.
\79\ Check No. 1037 from Guangdong Travel to Jessica Elnitiarta in
the amount of $5,299.02 with deposit slip, June 21, 1996. Exhibit 42.
\80\ Deposition of Johnny Ma, page 15, Feb. 12, 1998, [hereinafter
Ma Depo.].
\81\ Letter from Robert J. Prins, president, Iowa Wesleyan College,
to Teng Mei Ni, Dec. 8, 1994. Exhibit 43.
\82\ See Exhibit 41.
\83\ Id.
---------------------------------------------------------------------------
Supertrip Travel Service, Inc., was
incorporated in January 1991. The company discontinued
operations in December 1996 when the corporate bank
account was closed.Ted Sioeng became president of
Supertrip on March 8, 1995. Chew Nin Kim served as chief financial
officer and director, and his wife Yen Chu (Margaret) Kim served as
corporate secretary and director. The Sioengs made numerous payments to
Supertrip, including a $10,000 loan by Jessica Elnitiarta on July 15,
1996 which the next day was paid to Kent La's Loh Sun
International.84 The Kims also appeared to have made conduit
political contributions from the Sioengs to the Governor Gary Locke
campaign.85
---------------------------------------------------------------------------
\84\ Supertrip Travel Service, Inc. articles of incorporation, Jan.
8, 1991; statements of domestic stock corporation, Mar. 8, 1994 and
Mar. 8, 1995; Grand National Bank signature card for Supertrip Travel,
Mar. 9, 1995; check No. 164 from Jessica Elnitiarta to Supertrip Travel
in the amount of $10,000, July 15, 1996; and check No. 2242 from
Supertrip Travel to Loh Sun International in the amount of $10,000,
July 16, 1996. Exhibit 44.
\85\ See, ``Contributions to Gary Locke.''
---------------------------------------------------------------------------
American Guizhou Pacific Corp was
incorporated in October 1989. The company discontinued
operations in November 1996 when the corporate bank
account was closed and all remaining funds were
deposited into Mr. Sioeng's personal bank account. Its
corporate filings indicated that the firm engaged in
international trade in chemicals and machinery. Ted
Sioeng served as corporate president and a director.
Other officers and directors included Sioeng associate
Lay Kweek Wie, who has asserted his privilege against
self-incrimination in response to a Committee subpoena,
and Jessica Elnitiarta. On February 2, 1994, all
corporate officers and directors were replaced by
Chinese nationals, Guo Lin and Feng Qian.86
---------------------------------------------------------------------------
\86\ American Guizhou Pacific Corporation statements by domestic
stock corporation, Oct. 7, 1989, Apr. 11, 1990, July 8, 1991, Feb. 2,
1994; unnumbered check from American Guizhou to Sioeng San Wong in the
amount of $108,128.01, Oct. 31, 1996. Exhibit 45.
---------------------------------------------------------------------------
Through an examination of bank records, Committee
investigators determined that the American Guizhou's
primary financial activity was to earn interest on
$100,000 transferred from another Sioeng company, Panda
Industries, Inc. According to INS officials, this
limited activity may have been used as justification to
extend the U.S. visas of the two Chinese nationals
appointed as corporate officers and directors, which
were due to expire on March 26, 1994.87
Democratic fundraiser Johnny Chung reportedly used a
similar tactic to set up fake businesses in California,
in an effort to obtain U.S. visas for a half-dozen
Chinese executives.88
---------------------------------------------------------------------------
\87\ Briefing by Immigration and Naturalization Service to staff of
Government Reform and Oversight Committee, May 4, 1998.
\88\ George Lardner, Jr., Fund-Raiser Set Up Fake Firms for
Chinese, the Washington Post, Sept. 21, 1998 at A2.
---------------------------------------------------------------------------
American Dragon Skies, Inc. was incorporated
in July 1993 and was dissolved in January
1998.89 Yopie and Jessica Elnitiarta served
as corporate officers and directors along with Chinese
national, Pu Xiang, manager of the Dragon Rainbow
Medicine & Equipment Company in Yunnan,
China.90
---------------------------------------------------------------------------
\89\ American Dragon Skies, Inc. statement of domestic stock
corporation, Aug. 16, 1995 and certificate of dissolution, Mar. 4,
1998. Exhibit 46.
\90\ Id. See also business card of Pu Xiang. Exhibit 47.
---------------------------------------------------------------------------
According to its incorporation papers, the company
was established in the import/export trades, perhaps in
medical equipment. Committee investigators concluded
that the company was either inactive or a shell
corporation, as the investigation could find no
evidence of company business or financial activity.
However, Committee investigators noted that on January
17, 1995, Pu Xiang wired almost $1 million from a bank
account in Hong Kong into the personal U.S. bank
account of Yanti Ardi.91 Jessica Elnitiarta
then used this money to pay off a family bank
loan.92
---------------------------------------------------------------------------
\91\ Wire transfer from Pu Xiang to Yanti Ardi in the amount of
$996,088.15, Jan. 17, 1995. Exhibit 48.
\92\ Telephone transfer from Yanti Ardi to Laureen & Sandra
Elnitiarta in the amount of $300,000, Jan. 17, 1995. Exhibit 49;
Telephone transfer from Yanti Ardi to Laureen & Sandra Elnitiarta in
the amount of $690,000, Jan. 27, 1995. Exhibit 50.
---------------------------------------------------------------------------
Goldlion International USA, Inc. was
established in July 1995 and discontinued operations in
February 1997. According to incorporation records,
Goldlion was established for the purpose of import/
export trade in garment and leather goods.93
Committee investigators determined that the business
was primarily funded by wire transfers from Goldlion in
Hong Kong.94 Jimmy Chi Mai Mao Tsang, a Hong
Kong resident, was the corporate
president.95 Jimmy Tsang is the son of Dr.
Tsang Hin Chi, a corporate director and Chairman of the
Goldlion Group in Hong Kong.96 Dr. Tsang has
extensive connections in China and is a delegate of the
National People's Congress.97
---------------------------------------------------------------------------
\93\ Goldlion International USA, Inc. statement by domestic stock
corporation, May 9, 1996-July 1, 1997. Exhibit 51.
\94\ Bank statements of Goldlion International USA, Nov. 27, 1995
through Feb. 21, 1997. Exhibit 52.
\95\ See Exhibit 51.
\96\ Id. Undated letter from Tsang Hin Chi, Chairman, Goldlion
Group, to Hong Tan Shan Cup Organizing Committee. Exhibit 53.
\97\ Adela Ma, Goldlion Snares Final China Tobacco Deal Before
Temporary Ban, S. China Morn. Post, Aug. 16, 1995.
---------------------------------------------------------------------------
Jimmy Tsang and his wife, Jean Lim Tsang, were guests
of Sioeng at a Feb. 19, 1996 DNC fundraiser at the Hay-
Adams Hotel in Washington, DC, and had pictures taken
with President Clinton.98 The Tsangs are
believed to be in Hong Kong and have refused to be
interviewed. Other corporate officers and directors of
Goldlion included Ted Sioeng; Jessica, Yopie, and
Yaohan Elnitiarta; and two relatives of Jimmy
Tsang.99
---------------------------------------------------------------------------
\98\ Photographs of Ted Sioeng and guests with President Clinton,
Feb. 19, 1996. Exhibit 54.
\99\ See Exhibit 51.
---------------------------------------------------------------------------
Seagull International, Inc. was incorporated
in January 1997 as an international trading
company.100 Sioeng served as the company's
president and a director.101 The only other
officer and director was Shiping Xu, a Chinese
national.102 The assistant manager where the
company used an apartment as commercial office space
told Committee investigators that the company
prematurely vacated the premises in March 1997, thus
forfeiting their security deposit, and the officers
went back to China.103
---------------------------------------------------------------------------
\100\ Seagull International Inc. statement by domestic stock
corporation, Mar. 3, 1997. Exhibit 55.
\101\ Id.
\102\ Id.
\103\ Interview with Karen Elia, Dec. 9, 1997.
---------------------------------------------------------------------------
Committee investigators suspect that Seagull
International may be a shell corporation, as there is
little evidence of company business or financial
activity.
CCAID (California Chinese-American
Investment Development) Group trades in health food,
shrimp and crab food, and, at one time, medical
equipment.104 The group also included the
CCAID Executive Program, Inc. which was incorporated in
October 1992 as a trading company and discontinued
operations in 1996.105 Sioeng served as the
Executive Program's president and a
director.106 Sioeng associate Johnny Ma was
the only other officer and director.107
---------------------------------------------------------------------------
\104\ Ma Depo. at 14.
\105\ CCAID Executive Program, Inc. article of incorporation, Oct.
29, 1992 and statement of domestic stock corporation, Nov. 12, 1992.
Exhibit 56.
\106\ Id.
\107\ Id.
---------------------------------------------------------------------------
The Executive Program arranged U.S. tours for
delegations of Chinese government officials, primary
from Yunnan Province.108 Simon Chen, the
former owner of the International Daily News, told
Committee investigators that these groups included
Chinese businessmen, Communist party officials, and
provincial governors.109 Johnny Ma testified
in similar terms.110
---------------------------------------------------------------------------
\108\ Ma Depo. at 40-41.
\109\ Interview with Simon Chen, Jan. 14, 1998, [hereinafter Chen
Interview].
\110\ Ma Depo. at 40-41.
---------------------------------------------------------------------------
Assisting in the tour efforts was Sioeng associate
Bun Tsun Lai, a young British (overseas) national who
listed his occupation as a student.111 Lai
is the son of Lay Kweek Wie, a close friend of Ted
Sioeng 112 and a former officer and director
of the International Daily News.113
---------------------------------------------------------------------------
\111\ Grand National Bank signature card, Bun Tsun Lai, July 17,
1995. Exhibit 57.
\112\ Deposition of Dr. Daniel K. Wong, Mar. 12, 1998, at 185,
[hereinafter Wong Depo.].
\113\ Chen International Publications (U.S.A.), Inc. statement by
domestic stock corporation, Feb. 12, 1996. Exhibit 58.
---------------------------------------------------------------------------
Committee investigators found that, from April 1995
through January 1997, Lai received over $300,000 from
Sioeng family members and their foreign and U.S.
businesses. Some of these funds were conduit payments
whereby Lai received money and quickly disbursed the
same amount to various parties as follows: $10,000 from
Glenville Stuart,114 which Lai paid to
Alfred Wu; 115 $100,000 from Pristine
Investments in Hong Kong 116 which Lai spent
$11,030 on travel expenses; 117 $20,000 to
Glenville Stuart for business expenses; 118
and $24,800 to purchase degrees from American M&N
University; 119 $10,000 from Panda
Industries 120 which Lai paid to the Central
Los Angeles Chapter of the United Nations Association;
121 $50,000 from Glenville Stuart
122 which Lai paid to Sundari, Sandra, and
Laureen Elnitiarta; 123 and $97,911 from
Panda Industries which Lai spent on travel
expenses.124 About $24,000 in cash
transactions were also noted which were primarily
funded by Pristine Investments and Victory
Trading.125
---------------------------------------------------------------------------
\114\ Check No. 240 from Glenville A. Stuart to Bun Tsun Lai in the
amount of $10,000 with deposit slip, May 30, 1995. Exhibit 59.
\115\ Check No. 5045 from Bun Tsun Lai to Alfred Wu in the amount
of $10,000, May 29, 1995, Exhibit 60.
\116\ Wire transfer from Pristine Investment to Bun Tsun Lai in the
amount of $100,000, July 28, 1995. Exhibit 61.
\117\ Check No. 302 from Bun Tsun Lai to Supertrip Travel in the
amount of $11,030, July 28, 1995, Exhibit 62.
\118\ Check No. 303 from Bun Tsun Lai to G.A. Stuart in the amount
of $20,000, July 28, 1995. Exhibit 63.
\119\ Starter checks from Bun Tsun Lai in the amounts $9,500,
$9,300, and $6,000 with the memo ``M&N'', July 28, 1995. Exhibit 64.
\120\ Check No. 1119 from Panda Industries Inc. to Bun Tsun Lai in
the amount of $10,000 with deposit slip, Oct. 10, 1995. Exhibit 65.
\121\ Check No. 352 from Bun Tsun Lai to Central Los Angeles
Chapter, United Nations Association, in the amount of $10,000, Oct. 6,
1995, Exhibit 66.
\122\ Check No. 304 from Glenville Stuart to Bun Tsun Lai in the
amount of $50,000, Dec. 5, 1995. Exhibit 67.
\123\ Telephone transfer from Bun Tsun Lai to Sundari, Sandra &
Laureen Elnitiarta in the amount of $50,000, Dec. 15, 1996. Exhibit 68.
\124\ Check No. 1535 from Panda Industries to Bun Tsun Lai in the
amount of $97,911.20, Feb. 1, 1996; Check No. 326 from Bun Tsun Lai to
Horizon Travel in the amount of $67,911.20, Jan. 5, 1996 and Check No.
327 from Bun Tsun Lai to Horizon Travel in the amount of $30,000, Jan.
12, 1996, Exhibit 69.
\125\ Wire transfer from Victory Trading to Bun Tsun Lai in the
amount of $9,985, June 5, 1995, Exhibit 70; See also Exhibit 61.
---------------------------------------------------------------------------
Ginza Strasse consisted of two businesses,
located in the shopping plaza of the family's Hollywood
Metropolitan Hotel, that ceased operations in December
1996.126 Ginza Strasse, Inc. was
incorporated in December 1994 with Laureen Elnitiarta
as the sole officer and director. The firm operated a
retail clothing store until it was dissolved. Ginza
Strasse International, Inc., incorporated in February
1995, was operated by Laureen Elnitiarta as Bali
Hollywood, an Indonesian restaurant.
---------------------------------------------------------------------------
\126\ Ginza Strasse, Inc. articles of incorporation, Dec. 9, 1994;
Ginza Strasse, International, Inc. articles of incorporation, Jan. 19,
1995. Exhibit 71.
---------------------------------------------------------------------------
Tobacco
Committee investigators identified the following two Sioeng
family tobacco companies that complemented Ted Sioeng's
overseas tobacco businesses:
Panda Industries, Inc., the oldest of the
Sioeng family's U.S. businesses, was incorporated in
May 1988 for the import and export of cigarette
machinery.127 Sioeng is a corporate director
and president. Jessica Elnitiarta serves as the only
other corporate director and officer.128
---------------------------------------------------------------------------
\127\ Panda Industries, Inc. articles of incorporation, May 25,
1988. Exhibit 72.
\128\ Id.
---------------------------------------------------------------------------
Committee investigators found that from 1994 through
1996, the company purchased just under $1 million worth
of used tobacco machinery from Hadco General Trading
Co. in Virginia.129 Hadco is solely owned by
Haddi Kurniawan, who is the father of Didi Kurniawan
who is married to Sioeng's daughter, Sandra
Elnitiarta.130 The purchased machinery was
then shipped to China for reconditioning by Sioeng's
Hangao Tobacco Rebuilt Machinery Factory.131
---------------------------------------------------------------------------
\129\ Deposition of Haddi Kurniawan, Apr. 14, 1998, at 26.
\130\ Id. at 27.
\131\ Id.
---------------------------------------------------------------------------
On April 18, 1995, the company made $145,000 in
payments to Kent La for an unknown
purpose.132 On July 18, 1995 Panda
Industries contributed $50,000 to the National Policy
Forum (See ``Republican Contributions,'' and
``Democratic Contributions.'').
---------------------------------------------------------------------------
\132\ Check No. 1032 from Panda Industries to Kent La in the amount
of $85,000, Apr. 18, 1995; Check No. 1033 from Panda Industries to Kent
La in the amount of $60,000, Apr. 18, 1995. Exhibit 73.
---------------------------------------------------------------------------
China American Tobacco Industries, Inc. was
incorporated in March 1994 and dissolved 4 years
later.133 Ted Sioeng served as the sole
director, and Jessica Elnitiarta served as the only
other corporate officer.134 According to its
incorporation papers, the company was established for
import/export trading,135 perhaps in
connection with Sioeng's Chinese cigarette operations.
Committee investigators concluded that the company was
either inactive or a shell corporation, as there is no
evidence of company business or financial activity.
---------------------------------------------------------------------------
\133\ China American Tobacco Industries, Inc. articles of
incorporation, Mar. 21, 1994; and certificate of dissolution, Mar. 4,
1998 and statement by domestic stock corporation, Oct. 30, 1995.
Exhibit 74.
\134\ Id.
\135\ Id.
---------------------------------------------------------------------------
Hotels
Committee investigators identified two hotels run by the
Sioeng family. These businesses likely were used as an
investment for Ted Sioeng's foreign money; a source of domestic
funding from room, store, and office rentals; and an
opportunity to entertain and influence Chinese government
officials:
Panda Hotel Investment, Inc. was
incorporated in February 1993 and owns and operates the
90-room Hollywood Metropolitan Hotel and adjacent 30
stores and offices of the Metropolitan Shopping Plaza
in Hollywood, California.136 Jessica
Elnitiarta is the corporate president and a director
and Sandra and Laureen Elnitiarta are the other
corporate officers and directors.137 Jessica
Elnitiarta, her mother, and four siblings own all of
the hotel's outstanding stock.138 The hotel
was used to house and host receptions for Chinese
government officials, including those on U.S. tours set
up by CCAID Group.139
---------------------------------------------------------------------------
\136\ Hollywood Metropolitan Investment, Inc. articles of
incorporation, Feb. 8, 1993; and statement by domestic stock
corporation, Feb. 16, 1993. Exhibit 75.
\137\ Id.
\138\ Panda Hotel Investment, Inc. stock transfer ledger and stock
certificates, Mar. 8, 1993. Exhibit 76.
\139\ Ma Depo. at 38.
---------------------------------------------------------------------------
Pacific Hotel Investment, Inc. was
incorporated in March 1994 and owns and operates the 44
rooms and five retail stores of the Pacific Inn Hotel
in Los Angeles.140 Jianghui He, a Chinese
national, is the corporate president, a director, and a
one third owner.141 The remaining corporate
officers, directors, and owners are Mr. Sioeng and his
wife, Sundari Elnitiarta.142
---------------------------------------------------------------------------
\140\ Pacific Hotel Investment, Inc. articles of incorporation,
Mar. 16, 1994. Exhibit 77.
\141\ Pacific Hotel Investment, Inc. statement by domestic stock
corporation, Aug. 26, 1994. Exhibit 78.
\142\ Id.
---------------------------------------------------------------------------
Newspaper
Committee investigators identified a newspaper business
that provided the Sioeng family with a media for advertising
their political connections, exerting influence in the local
Chinese community, and promoting the Beijing government:
Chen International Publications (USA), Inc.
was incorporated in April 1981 and owns and operates
the International Daily News, a Chinese language
newspaper published in Los Angeles,
California.143 The stock of the corporation
was sold in October 1995 and now is held by the Sioeng
Group, Inc.144 Jessica Elnitiarta is
currently the sole corporate director,
officer,145 and owner of the largest share
of Sioeng Group stock, and the Group's remaining stock
is owned by Jessica's mother and her four
siblings.146
---------------------------------------------------------------------------
\143\ Chen International Publications (U.S.A.), Inc. articles of
incorporation, Apr. 9, 1981. Exhibit 79
\144\ See Exhibit 38.
\145\ Chen International Publications statements by domestic stock
corporation, Feb. 12. 1996; Apr. 25, 1997; and Jan. 12, 1998. Exhibit
80 See also Chen Interview.
\146\ See Exhibit 38.
---------------------------------------------------------------------------
Ted Sioeng served as Chen's chairman of the board of
directors and president until April 1997.147 At that
time, the paper's editor, Sioeng Fei-Man Hung, became president
until he was replaced by Jessica Elnitiarta in January
1998.148 Kweek Wie Lay, and former owner Simon Chen,
also served as corporate officers and directors until they were
replaced by Jessica Elnitiarta in April 1997.149
---------------------------------------------------------------------------
\147\ See Exhibit 80.
\148\ Id.
\149\ Id.
---------------------------------------------------------------------------
Jessica Elnitiarta stated that it was her father's idea to
buy the paper with her to run itbecause it would enhance the
family's standing in the local community, there were tax advantages in
acquiring the paper's debt, and it was cheap. She further stated that
the family contracted to buy the paper in October 1995 for
approximately $3 million, paying that in a series of installments
through July 1996. She further said that since the purchase, the paper
has consistently lost money, causing her father to subsidize it with
money from overseas.150
---------------------------------------------------------------------------
\150\ Elnitiarta interview.
---------------------------------------------------------------------------
Committee investigators identified $2.88 million in
payments to the International Daily News from the personal bank
account of Yanti Ardi between October 1995 through March
1997.151 These payments, made by Jessica Elnitiarta
using a power of attorney over Yanti Ardi's account, were
funded by wire transfers from Sioeng companies in Hong Kong and
China.152 Another $1.35 million was wired directly
into the paper's bank account from Hong Kong, consisting of
$200,000 from Victory Trading, $830,000 from R.T. Enterprises,
$100,000 from Yopie Elnitiarta, and $220,000 from Ted
Sioeng.153 When Simon Chen expressed concern about
the source of funds used to purchase the paper, Jessica
Elnitiarta told him that the money was ``clean.''
154
---------------------------------------------------------------------------
\151\ Various telephone transfers from Yanti Ardi to the Chen
International Publications totaling $2,880,000, Oct. 27, 1995 through
Mar. 5, 1997. Exhibit 81.
\152\ Exhibit 107-111.
\153\ Wire transfer from Victory Trading Company to Chen
International Publications, Inc. in the amount of $199,985, Nov. 17,
1995; wire transfers from R.T. Enterprises to Chen International
Publications in the amount of $199,977 on May 14, 1996, $197,586 on
Aug. 30, 1996, $200,000 on Jan. 2, 1997, and $230,000 on Mar. 25, 1997;
wire transfer from Yopie Elnitiarta for $99,984, Feb. 3, 1997; and wire
transfer from Ted Sioeng for $219,979, July 3, 1997. Exhibit 82.
\154\ Interview of Simon Chen, Jan. 14, 1998, [hereinafter Chen
Interview].
---------------------------------------------------------------------------
Several articles and sources have stated Sioeng's
acquisition of the paper helps the Chinese government because
the paper has changed from a pro-Taiwan view to a pro-Beijing
view.155 Former owner Simon Chen stated that he
believes Sioeng bought the paper to ``impress Beijing'' and
that he ``couldn't accept'' the new editorial
focus.156
---------------------------------------------------------------------------
\155\ Bruce Gilley, A Democratic Donor's Cambodian Connection, Wall
Street Journal, Jan. 13, 1998.
\156\ Chen Interview.
---------------------------------------------------------------------------
On June 20, 1996, President Clinton sent the International
Daily News a congratulatory letter on the newspaper's 15th
anniversary.157 Jessica Elnitiarta stated that she
had requested the letter from John Huang, as she had seen such
congratulatory letters sent by politicians to other Chinese
language papers on their anniversaries.158
---------------------------------------------------------------------------
\157\ Letter form President Clinton to Ted Sioeng, Chairman,
International Daily News, June 20, 1996. Exhibit 83.
\158\ Elnitiarta Interview.
---------------------------------------------------------------------------
Munitions
Committee investigators identified a Sioeng family-owned
business with a Federal firearms license to sell firearms and
ammunition as follows:
Code 3 USA, L.L.C. was incorporated in May
1996 as a limited liability corporation and is owned by
Jessica Elnitiarta and her husband, Ridwan
Dinata.159 Using a power of attorney,
Jessica Elnitiarta financed the business with $230,000
of foreign funds through Yanti Ardi's personal bank
account.160 The business operates as a
retail store and Dinata indicated that the company will
export firearms and ammunition to Asian
countries.161 He further stated that Code 3
had received an order for 1 million rounds of .38
caliber bullets from the Hong Kong
government.162
---------------------------------------------------------------------------
\159\ Code 3 USA, L.L.C. limited liability company articles of
incorporation, May 17, 1996; Grand National Bank commercial credit
commitment report, July 29, 1997. Exhibit 84.
\160\ Check No. 2302 from Yanti Ardi to Code 3 USA in the amount of
$30,000, May 31, 1996; check No. 2317 from Yanti Ardi to Code 3 USA in
the amount of $200,000, Dec. 5, 1996. Exhibit 85.
\161\ Grand National Bank credit commitment report on Ridwan
Dinata, June 22, 1992. Exhibit 86.
\162\ Id.
---------------------------------------------------------------------------
Committee's investigators found that on August 6,
1996, Code 3 advanced $10,000 163 to
partially cover a July 29, 1996, contribution of
$50,000 to the DNC from Panda Estates Investment,
Inc.164 The advance was repaid by Jessica
Elnitiarta on September 10, 1996.165
---------------------------------------------------------------------------
\163\ Telephone transfer from Code 3 to Panda Estates Investment in
the amount of $10,000, Aug. 6, 1996. Exhibit 87.
\164\ See Exhibit 35.
\165\ Check No. 255 from Jessica Elnitiarta to Code 3 USA in the
amount of $10,000, Sept. 10, 1996. Exhibit 88.
---------------------------------------------------------------------------
Banking
Committee investigators identified partial ownership of a
commercial bank by the Sioeng family. The bank provided
checking and savings accounts, certificates of deposit, and
loans for most of the Sioeng family members and businesses.
Grand National Bank was incorporated in
February 1983.166 In July 1990, Cary Ching
led a group of 13 investors, including the Sioeng
family, to buy the bank and install new management with
Ching as President.167 Committee
investigators obtained a deposition from
Ching.168 Jessica Elnitiarta and her two
sisters own a total of 18 percent of the bank's
stock.169 Ted Sioeng and Jessica Elnitiarta
serve as honorary directors of the bank.170
---------------------------------------------------------------------------
\166\ Grand National Bank Web site . Exhibit 89.
\167\ Id.
\168\ Deposition of Cary Ching, Feb. 11, 1998.
\169\ See Exhibit 31.
\170\ See Exhibit 89.
---------------------------------------------------------------------------
Committee investigators note that the Sioeng family's
ownership and directorships were always mentioned in
loan officer assessments of the family's applications
for loans from the bank. Committee investigators also
note that the bank normally did not charge family
members overdraft fees when negative balances
frequently occurred.
IV. Sioeng's Foreign Business Interests
a. summary
The Committee determined that Sioeng is the driving force
behind his family's business empire. Committee investigators
have identified 16 foreign businesses either owned or
controlled in whole or in part by the Sioeng family. Sioeng's
foreign businesses, operating in seven countries, transferred
millions of dollars from foreign accounts in Hong Kong and the
PRC to subsidize Sioeng family members and businesses in the
United States. These foreign funds, in turn, have been used to
fund over $400,000 in political contributions to both
Republican and Democratic organizations and candidates.
The PRC has provided significant business opportunities for
Sioeng and he is in partnership with its Communist government
through a number of joint venture agreements, particularly with
state-owned tobacco companies.171 Sioeng also claims
to be an economic advisor to six Chinese provinces or
regions.172
---------------------------------------------------------------------------
\171\ Millennium Group Limited, discloseable transactions, May 5,
1997. Exhibit 90.
\172\ Bruce Gilley, A Democratic Donor's Cambodian Connections,
Wall Street Journal, Jan. 13, 1998.
---------------------------------------------------------------------------
Hong Kong, which reverted to the PRC in July 1997, serves
as the base for Mr. Sioeng's business operations. He maintains
a residence in Hong Kong and he and several family members
located there soon after the campaign contributions story broke
in the press. The location also provides easy access to Mr.
Sioeng's business ventures in China and Southeast Asia.
Ted Sioeng also operates out of Singapore where he
distributes, and more recently, manufactures, Chinese brand
cigarettes to Southeast Asia and the United States. According
to news reports, many cigarettes intended only for export are
smuggled through Singapore back into China, to avoid a large
Chinese national consumption tax levied on domestic cigarette
sales.173 Sioeng also has tobacco related business
interests in Belize, Indonesia, Cambodia, and Canada.
---------------------------------------------------------------------------
\173\ Craig Smith, China Moves to Sanction Executive, Wall Street
Journal, Jan. 27, 1998.
---------------------------------------------------------------------------
b. ted sioeng's tobacco empire
Sioeng's main business is the manufacture and distribution
of Hongtashan (Red Pagoda Mountain) cigarettes.174
Hongtashan is the most popular brand of cigarettes in the PRC,
and the third largest-selling brand in the world.175
The China National Tobacco Corporation is a state monopoly that
manages the tobacco industry and oversees the business
operations and factories within the tobacco rich provinces of
Yunnan, Guizhou, and Guengxi.176
---------------------------------------------------------------------------
\174\ Chart, The Chinese Tobacco Connection. Exhibit 91.
\175\ Lana Wong, Brand Names Struggle to Make an Impression, S.
China Morn. Post, Oct. 10, 1996.
\176\ James Harding, China's Cigarette Makers Fear Competition,
Fin. Post, July 4, 1997.
---------------------------------------------------------------------------
In the 1980s, through his contacts with Chu Shijian, then
manager of the state owned Yuxi Cigarette Factory in Yunnan
Province, Ted Sioeng was awarded lucrative distribution rights
for exporting Hongtashan cigarettes.177 By 1995, Chu
had become Chairman of the state-owned Yuxi Hongta Tobacco
Group which had expanded its tobacco business to include
ventures in chemicals and property development.178
In January 1998, the Communist party of China expelled Chu for
public corruption and charged him and several family members
with accepting bribes and embezzling about $10
million.179
---------------------------------------------------------------------------
\177\ Craig Smith, China Moves to Sanction Executive, Wall Street
Journal, Jan. 27, 1998.
\178\ Kari Huus, Hazardous to Health, Far Eastern Economic Review,
July 25, 1996.
\179\ Former Chairman of Cigarette Company Expelled from Party,
Xinhua News Agency, Jan. 25, 1998.
---------------------------------------------------------------------------
Sioeng established operations in Singapore for the
distribution of Hongtashan cigarettes, and in April 1997, for
their manufacture outside of China.180 Sioeng
associate and DNC contributor, Kent La, President of Loh Sun
International, is the U.S. distributor of Hongtashan
cigarettes.181
---------------------------------------------------------------------------
\180\ See Exhibit 90.
\181\ Elnitiarta Interview.
---------------------------------------------------------------------------
Committee investigators identified the following cigarette
and tobacco-related businesses which are owned or controlled by
Sioeng, his family members, and business associates:
Chinois Tobacco International Co., Pte.,
Ltd. is listed in the Singapore Companies Registry and
appears on Sioeng's business card as part of his S.S.
Group. Sioeng serves as the company's chairman and his
associate, Bruce Cheung, is president, a director, and
a 50 percent owner.182 Cheung, a Singapore
permanent resident,183 was Sioeng's guest at
the February 19, 1996, DNC fundraiser at the Hay-Adams
Hotel, and had his picture taken with President
Clinton.184 Through 1997, Chinois exported
Chinese-made Hongtashan cigarettes through a joint
venture with the Chinese state-owned Yuxi Hongta
Tobacco Group.185 This included shipments to
Loh Sun International in the United
States,186 and sponsorship of the Hongtashan
Cup International Badminton
Championships.187
---------------------------------------------------------------------------
\182\ Registry of Companies and Business (Singapore). Exhibit 92.
\183\ Id.
\184\ Picture of President Clinton with Bruce Cheung, Feb. 19,
1996. Exhibit 93.
\185\ Connie Kang and David Rosenzweig, Entrepreneur Formed Ties to
China, L.A. Times, May 18, 1997.
\186\ Invoice from Loh Sun International to Goldlion Tobacco
International Ltd. in the amount of $10,000, Jan. 23, 1997. Exhibit 94.
\187\ Letter from Ted Sioeng, Chairman, and Bruce Cheung,
President, Chinois Tobacco International. Exhibit 95.
---------------------------------------------------------------------------
Worldwide Golden Leaf, Ltd. was incorporated
in the British Virgin Islands in July 1993. Ted Sioeng
and associate Bruce Cheung serve as two of the
company's three directors. The company lay dormant
until April 1997, when it entered into a joint
ventureagreement with the Yuxi Hongta Tobacco Group to manufacture
Hongtashan cigarettes in Singapore and export them to Southeast Asia
and the United States. In addition, two Chinese state owned tobacco
companies agreed to supply Worldwide Golden Leaf with tobacco leaves
for sale in North America and Europe.188 In May 1997, the
Millennium Group, a Hong Kong company controlled by Sioeng's in-laws,
the Tanuwidjaja family, purchased 25 percent of Worldwide Golden Leaf
for $34 million, and in April 1998, the remaining 75 percent for $87
million.189
---------------------------------------------------------------------------
\188\ See Exhibit 90.
\189\ Bruce Gilley, Hong Kong: Nicotine Fix, Far East. Econ. Rev.,
Apr. 2, 1998.
---------------------------------------------------------------------------
Hangao Tobacco Machinery Industry, Ltd.
(Hangao Machinery) appears on Sioeng's business card as
part of his S.S. Group.190 The company is a
joint venture with the Chinese state-owned Hangao
Tobacco Rebuilt Machinery Factory in Guizhou Province.
Hangao Tobacco Machinery is 70 percent owned by Mr.
Sioeng, who claims a capital investment of $5 million.
The remaining 30 percent is owned by the state-owned
Guizhou Tobacco Company.191
---------------------------------------------------------------------------
\190\ See Exhibit 14.
\191\ See Exhibit 90.
---------------------------------------------------------------------------
Using funds from Hong Kong and China, Mr. Sioeng
purchased nearly $1 million of used tobacco machinery
from Hadco General Trading of Virginia and shipped it
to the Chinese factory for rebuilding and sale. Hadco
is owned and operated by Haddi Kurniawan, the father of
Sioeng's son-in-law, Didi Kurniawan.192
---------------------------------------------------------------------------
\192\ Deposition of Haddi Kurniawan, Apr. 14, 1998, at 26.
---------------------------------------------------------------------------
Goldlion Tobacco International, Ltd. is
another company listed on Sioeng's business card as
part of his S.S. Group. It is a joint venture with the
Chinese state-owned cigarette factory in Hainan
Province to manufacture and distribute Goldlion brand
cigarettes.193 The China National Tobacco
Corporation owns 25 percent of the venture. S.S. Group
owns 24 percent of the venture and, according to a
brochure prepared by the company, is to distribute
Goldlion cigarettes in Southeast Asia. The 51 percent
controlling interest in the venture is owned by
Goldlion Holdings Group, headed by Dr. Tsang Hin Chi, a
staunch supporter of the Chinese government who serves
as the only Hong Kong Deputy on the Standing Committee
of the National People's Congress.194 Tsang
also has been twice convicted of mislabeling
goods.195
---------------------------------------------------------------------------
\193\ Adela Ma, Goldlion Snares Final China Tobacco Deal before
Temporary Ban, S. China Morn. Post, Aug. 16, 1995.
\194\ See Chart on Tsang Hin Chi. Exhibit 96.
\195\ Firm Backs Chairman, S. China Morn. Post, July 11, 1995.
---------------------------------------------------------------------------
Panda Belize Tobacco, Inc. appears on
Sioeng's business card as part of his S.S. Group.
However, Belize Panda Industry, Ltd. is listed by the
Belize General Company Registry as a separate entity.
This listing also shows Sioeng as an officer, director,
and 50 percent owner. Sioeng's U.S. business partner,
Glenville Stuart, is the only other officer, director,
and is a 50 percent owner of the company.196
---------------------------------------------------------------------------
\196\ Phone conversation with Belize General Company Registry, May
20, 1998.
---------------------------------------------------------------------------
In 1994, Sioeng and Stuart were building a factory in
Belize to manufacture and distribute Hongtashan
cigarettes in the Caribbean and Central
America.197 Stuart purchased a factory site
from the Government of Belize 198 with
$100,000 transferred to his personal bank account from
Sioeng's Pacific Hotel Investment.199
According to Stuart, the business had not started
production due to an industrial accident.200
---------------------------------------------------------------------------
\197\ Stuart Depo. at 8-13.
\198\ Stuart Depo. at 84.
\199\ Telephone transfer from Pacific Hotel Investment, Inc. to
Glenville Stuart in the amount of $100,000, July 20, 1994. Exhibit 97.
\200\ Stuart Depo. at 9.
---------------------------------------------------------------------------
Asia Indonesia Tobacco Utama, Inc., appears
on Sioeng's business card as part of the S.S. Group. In
October 1995, under the name of Asia Tobacco
International Indonesia, PT., Sioeng received
Indonesian government approval to build a cigarette
factory on Batam Island, Riau.201 The
project was to be managed by Sioeng's son, Yopie
Elnitiarta, and funded by a capital investment of $2.8
million, including participation by World Seal, Ltd., a
Sioeng company in Hong Kong. The plant was to employ 70
people and was scheduled to begin operations in October
1998. The Committee has seen no evidence that this
plant was ever built or where its funding, if any,
originated.
---------------------------------------------------------------------------
\201\ Indonesian Investment Highlights, P.T. Data Consult Inc.,
Nov. 1, 1995. Exhibit 98.
---------------------------------------------------------------------------
The Cambodia Cigarette Factory venture began
in 1995 as Evans International Tobacco,202 a
partnership with Ted Sioeng and Hoa Bang
Huynh.203 A year later, cigarette machinery
for the factory was supplied from Sioeng's rebuilt
tobacco machinery factory in China. Huynh paid $250,000
to Panda Industries,204 with an additional
$450,000 being deposited into Jessica Elnitiarta's
personal bank account.205 Huynh testified
that the machinery delivered was defective, and later
withdrew from the partnership after receiving a refund
of his $700,000 from Cambodian casino operator Tony
Tandijono.206 Sioeng has reportedly
continued building the cigarette factory in Cambodia
with Tandijono and Theng Bunma, a Cambodian tycoon and
suspected drug trafficker with close ties to the
Cambodian government.207
---------------------------------------------------------------------------
\202\ Letter from Fred Wong, May 15, 1998. Exhibit 99.
\203\ Interview of Hoa Bang Huynh, Mar. 12, 1998 [hereinafter Huynh
Interview]. The Committee notes that Huynh did not testify to this
during his Apr. 15, 1998 deposition.
\204\ Check No. 103 from Hoa Bang Huynh to Panda Industries in the
amount of $250,000, Jan. 8, 1996. Exhibit 100.
\205\ Telephone transfer from Hao Bang Huynh to Jessica Elnitiarta
in the amount of $450,000, May 23, 1996. Exhibit 101.
\206\ Deposition of Hoa Bang Huynh at 13-14, Apr. 15, 1998
[hereinafter Huynh Depo.].
\207\ Huynh Interview.
---------------------------------------------------------------------------
C. Other Sioeng Businesses in Hong Kong
Committee investigators found that Sioeng owns or controls
the following companies in Hong Kong:
S.S. Group appears to be the entity that
serves as an umbrella over his businesses worldwide. It
is listed as such on Sioeng's business card. However,
this entity does not appear in the Hong Kong Companies
Registry and may be a holding company or a shell
entity. Correspondence reviewed by Committee
investigators indicated that Jessica and Yopie
Elnitiarta are affiliated with S.S. Group. The Group is
also reported to own 24 percent of a joint venture
between Goldlion Tobacco International, Ltd. and
Chinese state-owned cigarette factory in Hainan
Province.208
---------------------------------------------------------------------------
\208\ Adela Ma, Goldlion Snares Final China Tobacco Deal Before
Temporary Ban, S. China Morn. Post, Aug. 16, 1995.
---------------------------------------------------------------------------
World Seal, Ltd. is a registered private
company in Hong Kong. Yopie and Sandra Elnitiarta
served as corporate directors of World Seal and each
own 15 percent of thecompany's stock.209
Since December 1997, Didi Kurniawan reportedly has served as the
company managing director.210
---------------------------------------------------------------------------
\209\ World Seal Limited certificate of incorporation, Jan. 17,
1997. Exhibit 102.
\210\ Bruce Gilley, A Democratic Donor's Cambodian Connection, Wall
Street Journal, Jan. 13, 1998.
---------------------------------------------------------------------------
Committee investigators found that World Seal ordered
over $20 million worth of health food products from
Sunrider International Corporation for distribution in
China.211 Most of the invoices for these
products were paid by the Tanuwidjaja family of
Indonesia,212 who are in-laws of Sioeng.
---------------------------------------------------------------------------
\211\ See Exhibit 24.
\212\ Wire transfers from World Seal to Sunrider Manufacturing,
July 11, 1996-Jan. 24, 1997. Exhibit 103.
---------------------------------------------------------------------------
Victory Trading Company is not listed on
Sioeng's business card, however, its phone number is
listed. While Victory Trading is registered as a
private company in Hong Kong, company representatives
told Committee investigators that Yopie and Sandra
Elnitiarta were no longer associated with the
firm.213 Committee investigators were also
told by Gary Koerner of Sunrider International
Corporation that Victory Trading became World
Seal.214
---------------------------------------------------------------------------
\213\ Telephone interview with company officials, June 25, 1998.
\214\ Interview of Gary Koerner, May 20, 1998.
---------------------------------------------------------------------------
During 1994, Committee investigators identified
$50,000 in wire transfers from Panda
Industries,215 a company controlled by
Sioeng, and $250,000 in wire transfers from Sioeng's
personal bank account,216 into a Bank of
China account held by Victory Trading. The transfer
from Mr. Sioeng was funded by bank loans made in the
United States to the Sioeng family.217
---------------------------------------------------------------------------
\215\ Wire transfer from Panda Industries to Victory Trading
Company in the amount of $50,000, Mar. 23, 1994. Exhibit 104.
\216\ Wire transfer from Ted Sioeng to Victory Trading Company in
the amount of $250,000, Sept. 21, 1994. Exhibit 105.
\217\ Telephone transfer from Laureen & Sandra Elnitiarta TCD Loan
to Sioeng San Wong in the amount of $250,000, Sept. 21. 1994. Exhibit
106.
---------------------------------------------------------------------------
During 1995, Victory Trading wired about $2.5 million
from a Bank of China account into the personal U.S.
bank account of Sioeng's sister, Yanti Ardi. Jessica
Elnitiarta then used her power of attorney over this
account to transfer this foreign money into family
business and personal accounts and to repay Sioeng
family bank loans.218
---------------------------------------------------------------------------
\218\ Wire transfer from Victory Trading to Yanti Ardi in the
amount of $1,549,985, Mar. 10, 1995, Exhibit 107; Wire transfer from
Victory Trading to Yanti Ardi in the amount of $299,985, Aug. 7, 1995,
Exhibit 108; Wire transfer from Victory Trading to Yanti Ardi in the
amount of $599,985, Oct. 12, 1995. Exhibit 109.
---------------------------------------------------------------------------
On November 17, 1995, Victory Trading wired nearly
$200,000 to Chen International
Publications,219 which may be part of
Sioeng's subsidization of the International Daily News
with overseas money.220
---------------------------------------------------------------------------
\219\ See Exhibit 82.
\220\ Elnitiarta interview.
---------------------------------------------------------------------------
R.T. Enterprises is not listed in the Hong
Kong Companies Registry. Committee investigators could
find no address or phone numbers associated with the
firm.
During 1996, R.T. Enterprises wired $2.7 million from
ING Bank in Hong Kong into the personal U.S. bank
account of Yanti Ardi.221 Jessica Elnitiarta
subsequently transferred these foreign funds into
Sioeng family businesses and personal accounts. Those
transfers included: $1,100,000 to buy and operate the
International Daily News; $60,000 to partially fund a
$100,000 July 29, 1996 political contribution from
Panda Estates Investments to the DNC; and $1,100 to
fund Sundari Elnitiarta's political contribution to
Washington State Governor Gary Locke.
---------------------------------------------------------------------------
\221\ Wire transfer from Victory Trading to Yanti Ardi in the
amount of $1,652,479.98, June 28, 1996, Exhibit 110; Wire transfer from
R.T. Enterprises Limited to Yanti Ardi in the amount of $1,000,000,
Aug. 30, 1996. Exhibit 111.
---------------------------------------------------------------------------
From May 14, 1996 through March 25, 1997, R.T.
Enterprises wired $830,000 to Chen International
Publications,222 which may be part of
Sioeng's subsidization of the International Daily News
with overseas money.223
---------------------------------------------------------------------------
\222\ See Exhibit 82.
\223\ Elnitiarta interview.
---------------------------------------------------------------------------
On July 24, 1996, R.T. Enterprises wired $97,555 into
the U.S. bank account of Loh Sun International. The
Committee believes it is likely that $50,000 of this
money was used to fund a political contribution to the
DNC made by Sioeng associate Kent La on July 29, 1996.
On September 5, 1996, R.T. Enterprises wired $20,000
into the U.S. bank account of Sioeng associate
Glenville Stuart. The Committee believes it is likely
that Stuart used $1,100 of this money to reimburse his
Sunset Market and Liquor business for a conduit
political contribution by one of the market's employees
to Gary Locke on July 29, 1996.224
---------------------------------------------------------------------------
\224\ See ``The Sioeng Contributions to Gary Locke.''
---------------------------------------------------------------------------
Pristine Investments, Ltd. is a private
company registered in Hong Kong. Public filings reveal
no affiliation between Ted Sioeng, his family members,
or associates and the company. However, from January
1994 through May 1996, an ING Bank account in Hong Kong
in the name of Pristine Investments wired $9.9 million
into the personal U.S. bank account of Yanti
Ardi.225 Jessica Elnitiarta then transferred
these foreign funds into Sioeng family U.S. businesses
and personal accounts. That money, in turn, appears to
have been used to fund political contributions of
$20,000 to Julia Wu in 1995; $100,000 to Matt Fong in
1995; and $100,000 to the DNC in 1996.
---------------------------------------------------------------------------
\225\ Wire transfers from Pristine Investments to Yanti Ardi, Jan.
11, 1994-May 24, 1996. Exhibit 112.
---------------------------------------------------------------------------
In April 1995, Pristine Investments also wired
$187,493 into the U.S. bank account of Panda
Industries, Inc.,226 which subsequently paid
$145,000 to Sioeng associate Kent La.227
Sioeng's attorneys refused to answer questions about
Pristine or other companies in Asia that made large
transfers to Sioeng-related accounts.228
---------------------------------------------------------------------------
\226\ Wire transfer from Pristine Investments, Ltd. to Panda
Industries in the amount of $38,286, Apr. 10, 1995; Wire transfer from
Pristine Investments to Panda Industries in the amount of $85,155.95,
Apr. 12, 1995; Wire transfer from Pristine Investments to Panda
Industries in the amount of $64,051, Apr. 18, 1995. Exhibit 113.
\227\ See Exhibit 73.
\228\ Senate Campaign Finance Report at 5581.
---------------------------------------------------------------------------
D. Other Sioeng Businesses in China
Committee investigators also found that Sioeng owns or
controls the following companies in China:
Billion Beer Industry, Ltd. appears on
Sioeng's business card as part of his S.S.
Group.229 It is a joint venture with the
state-owned Fu Haw Bigie Beer Brewery in Guizhou
Province. Sioeng claimed 100 percent ownership of the
venture, and that he made a capital investment in the
company of $3 million.230
---------------------------------------------------------------------------
\229\ See Exhibit 14.
\230\ See Exhibit 16.
---------------------------------------------------------------------------
Panda Industry Building, Ltd. is also listed
on Sioeng's business card as part of his S.S.
Group.231 This appears to involve a
commercial building in Canton Province in which Sioeng
claimed a $3 million capital investment.232
---------------------------------------------------------------------------
\231\ See Exhibit 14.
\232\ Id.
---------------------------------------------------------------------------
Dragon Rainbow Medicine & Equipment Co, Ltd.
in Yunnan Province appears to have some affiliation
with Sioeng. On January 17, 1995, the manager of Dragon
Rainbow, Pu Xiang, wired almost $1 million from ING
Bank in Hong Kong into the personal U.S. bank account
of Yanti Ardi.233 Jessica Elnitiarta used
this money to pay off a $1 million Grand National Bank
credit line loan in the name of Sandra and Laureen
Elnitiarta.234
---------------------------------------------------------------------------
\233\ See Exhibit 48.
\234\ See Exhibits 49, 50.
---------------------------------------------------------------------------
E. Sioeng Business in Canada
Finally, Sioeng claims the following business venture in
Canada:
Panda Industries, Inc. appears on Sioeng's
business card as part of his S.S. Group. Ambrose
Hsiung, who resides in Vancouver, appears to be a
company official and Sioeng's Canadian
representative.235 Hsiung has refused to be
interviewed by Committee staff. The Committee could
find no financial transactions between Sioeng family
members and businesses in the United States with Panda
Industries in Canada.
---------------------------------------------------------------------------
\235\ Business card of Ambrose Hsiung. Exhibit 114.
---------------------------------------------------------------------------
V. Sioeng Connections to Foreign Governments
A. Connections to China
1. Summary
The Committee's investigation found substantial evidence
showing that Ted Sioeng has extensive ties with powerful
political officials of the People's Republic of China, up to
and possibly including Premier Jiang Zemin. Sioeng also has
relationships with officials of both the PRC consulate in Los
Angeles and the embassy in Washington, and made personal
contributions to the consulate. In at least one instance,
Sioeng funneled money from the PRC to an American political
candidate. Finally, both Sioeng and business associates helped
establish and fund pro-PRC propaganda groups in the southern
California area.
Through his businesses, Sioeng also has extensive financial
ties with the PRC. Sioeng's major overseas venture, selling and
exporting Hongtashan cigarettes, depends upon a partnership
with the PRC government. One of Sioeng's U.S.-based companies,
CCAID Executive Program, provides tours for visiting PRC
officials. Sioeng used CCAID and another of his U.S. companies
to provide employment for at least three PRC nationals. In
addition, Sioeng changed the editorial position of the
International Daily News from pro-Taiwan to pro-PRC after
purchasing the newspaper from Simon Chen. He also hired
journalists affiliated with PRC government agencies to write
for the newspaper.
2. Findings
According to the U.S. Senate Committee on Governmental
Affairs, Special Investigation, Ted 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. Before the
campaign finance scandal broke, Sioeng traveled to Beijing
frequently where he reported to and was briefed by Chinese
Communist Party officials.'' 236
---------------------------------------------------------------------------
\236\ S. Rept. No. 105-167, 105th Cong., 2d sess. at 2505-06.
---------------------------------------------------------------------------
The Committee has been able to uncover facts that tend to
support the Senate's conclusions and shed additional light on
the activities of Sioeng and his connections to the People's
Republic of China.
Political Connections
Sioeng is closely associated with several officials of the
PRC's consulate in Los Angeles and its embassy in Washington,
DC. Sioeng's highest-ranking diplomatic contact may be Zhou
Weng Zhong, former Minister and Deputy Chief of Mission to the
PRC embassy. Sioeng introduced Zhou to Robert Prins, President
of Iowa Wesleyan College, during a function at the
consulate.237 At that time, Zhou stated that he
wanted his daughter to study in the United
States.238 Prins stated that he would be happy to
have her, and Sioeng offered to financially support her while
she was a student.239 Prins did not believe that it
was in Sioeng's best interest, or that of the college, to have
Sioeng, as a trustee of the college, dictating who received
scholarship money when the student was related that to a
Chinese politician.240 Therefore, Zhou's daughter
received scholarship money from a separate fund.241
---------------------------------------------------------------------------
\237\ Prins Depo. at 75.
\238\ Id. at 76.
\239\ Id.
\240\ Id.
\241\ Id.
---------------------------------------------------------------------------
Committee investigators also believe that Sioeng is closely
connected to former PRC Counsel General Feng Shu Sen. Feng was
a high-ranking party official in Yunnan province before
becoming the Consul General in Los Angeles.242 After
Feng became Consul General, Sioeng became ``more influential,
almost like whatever he ask for, he will get the cooperation
of'' 243 the consulate. Sioeng became so influential
during pro-PRC activities that he spoke at many such
events.244 He even became a sort-of celebrity or
leader in the community; 245 Sioeng was known as the
number one man or big brother of the community.246
Sioeng was given a place of honor, a seat in the front row,
during a celebration for the Chinese New Year broadcast on
state-owned Chinese cable television.247 This was at
a time when at least one PRC businessman believed that Sioeng
was just getting started in his business dealings with the
PRC.248
---------------------------------------------------------------------------
\242\ Wong Depo. at 57.
\243\ Id. at 58.
\244\ Id. at 54.
\245\ Id. at 32.
\246\ Id. at 56-57.
\247\ Interview of Jerry J. Sun, Mar. 19, 1998 [hereinafter Sun
Interview].
\248\ Id.
---------------------------------------------------------------------------
Sioeng attended several receptions at the consulate itself,
during the terms of several different Consul
Generals.249 Counselor representatives also attended
receptions held by Sioeng at his hotel.250 According
to Dr. Wong, Sioeng apparently knew PRC personnel in other
diplomatic posts in the United States.251 Or, if he
did not know them, they knew him.252
---------------------------------------------------------------------------
\249\ Wong Depo. at 34, 56, See also, Ma Depo. at 59.
\250\ Ma Depo. at 90.
\251\ Wong Interview.
\252\ Wong Depo. at 113.
---------------------------------------------------------------------------
Sioeng was well-known to officials in Beijing, and the
United States.253 According to Dr. Wong, ``. . .
even Jiang Zemin [knew him] before he came here [the United
States].'' 254 Sioeng was even able to obtain a
private meeting with the Premier during his visit to the United
States in October 1995.255 The Committee notes that,
while Premier Zemin has denied there was a Chinese plan to
influence U.S. elections, it is at least curious that such a
prominent source of apparently illegal DNC funds was able to
obtain a private meeting with the head of the PRC.
---------------------------------------------------------------------------
\253\ Id. at 120.
\254\ Id.
\255\ Id. See also, Chairman of the People's Republic of China
Jiang Zemin Meets with Ted Sioeng Separately and Independently,
International Daily News, Oct. 24, 1995. Exhibit 115.
---------------------------------------------------------------------------
Many of Sioeng's activities within the United States helped
in the formation and support of pro-PRC organizations and
entities. Sioeng has given financial assistance to several pro-
PRC organizations and entities, including the consulate itself.
One such group, The Alliance of Chinese-American Groups of USA,
was founded by Sioeng and his associate, Kent La as
president.256 Witnesses have described this
organization as a pro-PRC umbrella group.257 Sioeng
funded this organization in 1996,258 and made
financial contributions to other pro-PRC
associations.259
---------------------------------------------------------------------------
\256\ See Exhibit 27.
\257\ Interview of Norman Hsu, Mar. 30, 1998 [hereinafter Hsu
Interview].
\258\ Sioeng San Wong deposit of $5,000 to open account for the
Southern California United Chinese Association, July 25, 1996. Exhibit
116; Check No. 662 from Sioeng San Wong to Sun Yat Sen Institute in the
amount of $10,000, Nov. 25, 1995, Exhibit 117.
\259\ Check No. 667 from Sioeng San Wong to O.C. China Friendship
Association in the amount of $10,000, Apr. 15, 1995, Exhibit 118.
---------------------------------------------------------------------------
Sioeng and his daughter, Jessica Elnitiarta, also made
personal contributions to the PRC consulate totaling
$50,000.260 In 1994, Sioeng made a donation of
$10,000, and in 1996, Jessica Elnitiarta made out two $20,000
checks to the Consulate General of the PRC for unknown
purposes.261 Kent La also made donations to various
pro-PRC organizations.262
---------------------------------------------------------------------------
\260\ Check No. 604 from Sioeng San Wong to Consulate General of
PRC in the amount of $10,000, July 26, 1994, Exhibit 119; Checks No.
442 and No. 443 from Jessica Elnitiarta to Consulate General PRC in the
amounts of $20,000 each, Nov. 15, 1996, Exhibit 120.
\261\ Id.
\262\ Check No. 0099 from Kent La to Sun Yat Sen Chinese Institute
in the amount of $2,500, July 25, 1995, Exhibit 121; Check No. 127 from
Kent La to Consulate General of PRC in the amount of $5,000, Feb. 14,
1996, Exhibit 122; Check No. 142 from Kent La to League for Reunified
China in the amount of $2,000, July 26, 1996. Exhibit 123.
---------------------------------------------------------------------------
In 1996, Sundari Elnitiarta, Sioeng's wife, contributed
$5,000 to Daniel Wong, a Republican California Assembly
candidate.263 The Senate Campaign Finance Report
concluded that this contribution was funded by the PRC
consulate.264 The Committee noted that Wong
disagreed with that conclusion, however, Wong did believe that
if he wanted to get ``support'' from the PRC government he
could have and he knows of possibly others who have received
such support.265
---------------------------------------------------------------------------
\263\ See Exhibit 243.
\264\ Senate Campaign Finance Report at 2506.
\265\ Wong Depo. at 107-110.
---------------------------------------------------------------------------
Wong believed that one could obtain such support from a PRC
propaganda group which attempts to gain the support of overseas
Chinese.266 The Committee believes that organization
could have been the United Front Work Department (UFWD). Wong
did not recognize the UFWD, but knew of the Tong Jin Bu, or Dui
Wai Sun.267 However, he did not know if Sioeng
worked with these organizations.268
---------------------------------------------------------------------------
\266\ Wong Interview.
\267\ Wong Depo at 80-81.
\268\ Id. at 83.
---------------------------------------------------------------------------
Sioeng's connections to the PRC extend to the provincial
level. According to Sioeng himself, he is an economic advisor
to at least six different Chinese provinces or
regions.269 Others have stated that Sioeng receives
a motorcade escort when he arrives in some provinces,
particularly Yunnan.270
---------------------------------------------------------------------------
\269\ Bruce Gilley, A Democratic Donor's Cambodian Connection, Wall
Street Journal, Jan. 13, 1998 (stating that Mr. Sioeng's business card
lists him as an economic advisor to Yunnan, Guizhou, Guangxi, Jilin,
Heilonjiang, and Inner Mongolia).
\270\ Wong Depo at 37.
---------------------------------------------------------------------------
Financial Connections
As noted elsewhere in this chapter, many of Sioeng's
business activities rely on his strong connection to the
Chinese government for success. One such business is Code 3
USA, the family's gun and ammunition store in Monterey Park,
California, although it is owned by Sioeng's daughter and son-
in-law.271 Code 3 USA indicated in its financial
disclosure forms that it plans on exporting guns and ammunition
to Asian countries, and it had received an order from the Hong
Kong government for 1 million rounds of .38 caliber
bullets.272
---------------------------------------------------------------------------
\271\ See Exhibit 84.
\272\ Id.
---------------------------------------------------------------------------
Sioeng's main business is the selling and exportation of
China's No. 1 selling cigarette, Hongtashan (Red Pagoda
Mountain).273 While discussing Sioeng's PRC
businesses, Cary Ching, president of Grand National Bank,
stated, ``I haven't seen anyone as comfortable operating in the
PRC [as Sioeng].'' 274 As discussed earlier in this
chapter, Sioeng's tobacco venture is the result of direct
partnership between his company and the government of the PRC.
---------------------------------------------------------------------------
\273\ See Exhibit 91.
\274\ Interview of Cary Ching, Dec. 8, 1997.
---------------------------------------------------------------------------
Sioeng strengthened his ties with PRC government officials
by awarding them honorary degrees from Iowa Wesleyan College
where he serves as a trustee of the college.275 In
September 1994, the college awarded degrees to two senior
officials of the state-owned China National Tobacco Corporation
in Yunnan Province.276 In October 1995, the college
awarded a degree to Deng Jiazhen, Director and President of
China National Tobacco Corporation in Guangxi
Province.277 Early in 1997, Sioeng's Millennium
Group entered into lucrative agreements with these tobacco
companies for cigarette manufacturing and the sale of tobacco
leaves outside of the PRC.278
---------------------------------------------------------------------------
\275\ Prins Depo. at 10.
\276\ Honorary degrees and business cards of Yang Youzhu and Tie
Zhengguo, Sept. 24, 1994. Exhibit 124.
\277\ Honorary degree and business card of Deng Jiazhen, Oct. 26,
1995. Exhibit 125.
\278\ See Exhibit 90.
---------------------------------------------------------------------------
Questions remain concerning whether money from the Chinese
tobacco industry, and the Chinese government, were used to make
political contributions in the United States, including ones to
the Democratic National Committee (DNC). One possible example
of Chinese money coming into the accounts of the DNC is
highlighted by transactions involving R.T. Enterprises.
Committee investigators could not obtain records identifying
the ownership interests, officers, directors, or even an
address of R.T. Enterprises. However, R.T. Enterprises
transferred millions of dollars into various accounts held by
Sioeng, his daughter, and his business associate, Kent
La.279 One such transaction suggests that R.T.
Enterprises operates for the benefit of Hongtashan.
---------------------------------------------------------------------------
\279\ See ``Sioeng's Foreign Business Interests.''
---------------------------------------------------------------------------
As discussed previously, on July 24, 1996, R.T. Enterprises
wire transferred $97,555 from Hong Kong into the U.S. bank
account of Loh Sun International for Hongtashan
advertising.280 The Committee believes that some of
this money may have been used to make a $50,000 contribution to
the DNC.
---------------------------------------------------------------------------
\280\ See Exhibit 10.
---------------------------------------------------------------------------
Some people associated with Sioeng have suggested that he
had some difficulties with his tobacco partnership with the PRC
government, and Yunnan province in particular.281
According to Jerry Sun, Vice President of Minmet K.N. (USA),
Inc., Sioeng was upset with the Yunnan government over certain
allegations it leveled against him.282 Specifically,
the government wanted to enforce an agreement with Sioeng that
only allowed him to manufacture Hongtashan cigarettes in
Singapore for export. Despite that agreement, the Yunnan
government claimed that Sioeng was selling cigarettes in the
PRC at greatly inflated prices. Sioeng reportedly said he could
not control some of his sales people and that they were to
blame for the smuggling. Sioeng told Sun that he wanted to
leave Yunnan and open a cigarette factory in Sun's home
province of Guengxi.
---------------------------------------------------------------------------
\281\ See generally, Ma Depo. at 98; Ma Interview; Sun Interview.
\282\ Sun Interview.
---------------------------------------------------------------------------
Another major business venture for Sioeng was arranging
U.S. tours for various PRC government officials and
businessmen. As noted previously, Sioeng formed the CCAID
Executive Program with Johnny Ma.283 Sioeng assisted
the company in marketing its services to Chinese
officials,284 and arranging for airline tickets,
itineraries, and visas for the travelers.285
Depending on the types of delegations that would come, CCAID
also might contact various organizations in order to set up
relevant tours.286 Sioeng's partnership with Ma
lasted from 1992 through 1993, when Sioeng began his own
travel-related company.287 CCAID continued
operations until 1996, during which time it hosted delegations
from Yunnan Province, consisting of Xishuangbana city
officials, public security officials, and border guard and bank
officials.288
---------------------------------------------------------------------------
\283\ See ``Sioeng's U.S. Business Interests.''
\284\ Ma Depo. at 16.
\285\ Id. at 15.
\286\ Id.
\287\ Id. at 16.
\288\ Wire transfers from Yunnan Foreign Service Centre at CCAID in
the amount of $60,722.50, Oct. 17, 1995; $106,235, Nov. 11, 1995;
$208,985, Apr. 15, 1996, Exhibit 126.
---------------------------------------------------------------------------
While at CCAID, Sioeng sought assistance in setting up
tours with an old friend, Lay Kweek Wie.289
Witnesses believe that Lay knew Sioeng from his days in
Indonesia.290 Committee investigators believe that
Lay is currently employed or associated with Sioeng in his
current business, Sioeng's Group, where Lay and his son, Bun
Tsun Lai, guide delegations of PRC officials on tours of the
United States. Both Lay and Lai have asserted their Fifth
Amendment privilege against self-incrimination before the
Committee.291
---------------------------------------------------------------------------
\289\ Ma Depo. at 54.
\290\ Hsu Interview.
\291\ Letter from Laura S. Shores to Michael D. Bopp, May 20, 1998,
Exhibit 127.
---------------------------------------------------------------------------
Sioeng has also brought at least one individual from a PRC
state agency to work in the United States. Teng Meini, formerly
an employee of the China Travel Service in
Guizhou,292 became the registered agent and Chief
Executive Officer of Guangdong China Travel Service,
Inc.293 She served in that capacity from Guangdong's
incorporation on May 23, 1995 until October 25, 1995, when she
was replaced by Jessica Elnitiarta.294 During her
brief tenure as a Guangdong official, Teng carried a PRC
passport, and obtained a Social Security number.295
The Committee does not know Teng's current location or
occupation.
---------------------------------------------------------------------------
\292\ See Exhibit 43.
\293\ See Exhibit 41.
\294\ Id. Oct. 25, 1995.
\295\ Check No. 102 from Bun Tsun Lai to cash, June 8, 1995,
Exhibit 128.
---------------------------------------------------------------------------
In 1994, Sioeng brought two other PRC nationals to work in
the United States under visas valid for only 90
days.296 American Guizhou Pacific Corporation listed
Guo Lin and Feng Qian as the Chief Executive Officer and
Secretary respectively.297 The Immigration and
Naturalization Service failed to provide the Committee with
documentation concerning Teng, Feng, or Guo.
---------------------------------------------------------------------------
\296\ Visa No. 364901837 issued to Qian Feng, Feb. 15, 1994; Visa
No. 364901846 issued to Lin Guo, Feb. 15, 1994. Exhibit 129.
\297\ See Exhibit 44.
---------------------------------------------------------------------------
Another business with apparent ties to the PRC government
is the International Daily News, a newspaper which Sioeng
purchased from Simon Chen in 1995. The Committee has learned
that Sioeng purchased the paper for approximately $3 million in
installments from 1995 through 1997.298 Committee
investigators have traced the funds used to purchase and
operate the paper to bank accounts in Hong Kong held by Yanti
Ardi.299 The Committee notes these same accounts
were used to make many of the Sioeng family's political
contributions.
---------------------------------------------------------------------------
\298\ See ``Sioeng's U.S. Business Interests.''
\299\ See ``Sioeng's U.S. Business Interests.''
---------------------------------------------------------------------------
Members of the Chinese-American community believe that the
paper was losing money at the time.300 In fact, one
source confirmed that the Sioeng family approached him, asking
him to take over the paper, and provided him with documentation
showing that the paper was losing approximately $200,000 per
month.301 Jessica Elnitiarta has stated that her
father knew it was losing money,302 but decided to
purchase the paper to enhance the family's standing in the
local community and to take advantage of the favorable tax
advantages in assuming the paper's debt.303
---------------------------------------------------------------------------
\300\ Ma Depo. at 95 (stating the Mr. Ma loaned Mr. Sioeng $50,000
so the IDN could make its payroll).
\301\ Interview of Tei Fu Chen, July 18, 1998.
\302\ Elnitiarta Interview.
\303\ Id.
---------------------------------------------------------------------------
According to Chen, Sioeng wanted to purchase the paper to
``help and support the Chinese culture.'' 304 Before
Sioeng's purchase of the paper, the editorial position favored
the Taiwanese independence movement.305 After the
purchase, the paper shifted its editorial position to favor the
PRC.306 In addition, the paper began to insert the
``Beijing-controlled Hong Kong newspaper, Wen Wei Boa,''
307 as a ``bonus to its readers.'' 308
---------------------------------------------------------------------------
\304\ Interview of Simon Chen, Jan. 14, 1998.
\305\ Ma Depo. at 96.
\306\ Wong Depo. at 136. See also, Interview of Simon Chen, Jan.
14, 1998.
\307\ David Holley, Friendly Summit in Tokyo Leaves Undercurrents
of Concern, L.A. Times, Apr. 19, 1996 at A4.
\308\ Bruce Gilley, A Democratic Donor's Cambodian Connection, Wall
Street Journal, Jan. 13, 1998.
---------------------------------------------------------------------------
One possible explanation for this change in focus was that
Sioeng may have been trying to impress leaders in the PRC and
show that he could be influential in the overseas Chinese
community in southern California.309
---------------------------------------------------------------------------
\309\ Ma Depo. at 96-99. See also, Wong Depo. at 135; Interview of
Simon Chen, Jan. 14, 1998.
---------------------------------------------------------------------------
That explanation is endorsed by Johnny Ma, a former Sioeng
business partner, who stated that he believed ``he [Sioeng]
wanted to use that newspaper [the International Daily News] to
bargain with the Beijing government, and he wanted the Beijing
government to support his newspaper.'' 310 In fact,
Ma believed that Sioeng ``wanted to have the Beijing government
support him because the newspaper was losing money every month,
so he wants them to give him money so that he can hang in
there.'' 311
---------------------------------------------------------------------------
\310\ Ma Depo. at 96.
\311\ Id. at 97.
---------------------------------------------------------------------------
Daniel Wong stated that the paper ``. . . was a joint
venture with China, in one of China's departments; like
cultural department or the news agency department . . .''
312 The Committee notes that Sioeng brought several
writers and editors from China or Hong Kong to work on the
paper.313 Wong stated that ``I don't think he [Mr.
Sioeng] spent his own money just to run a newspaper and hire
these Chinese people.'' 314 In other words, Wong's
perception was that the Chinese government was financially
supporting the newspaper.
---------------------------------------------------------------------------
\312\ Wong Depo. at 137.
\313\ Wong Depo. at 139.
\314\ Id. at 139.
---------------------------------------------------------------------------
Sioeng has also developed contacts with many powerful PRC
or pro-PRC businessmen, the most prominent of which is Tsang
Hin Chi, President of Goldlion International, a large Hong Kong
based conglomerate.315 His company, which produces
items from cigarettes to men's clothing, derives 80 percent of
its revenue from the PRC.316 Tsang is currently a
member of the Standing Committee of the 9th National People's
Congress, the organization which controls the Communist party
within the PRC.317 Apart from Tsang's personal
involvement in the PRC government, he also frequently meets
with senior PRC leaders in Beijing.318
---------------------------------------------------------------------------
\315\ Tsang Hin Chi biography from the Chinese General Chamber of
Commerce web site, .
Goldlion produces items ranging from cigarettes to men's clothing and
accessories; honorary degree certificate for Tsang Hin Chi, Apr. 25,
1994. Exhibit 130.
\316\ Bruce Gilley, Discordant Sioeng, Far Eastern Econ. Review,
June 25, 1998.
\317\ Id.
\318\ Id.
---------------------------------------------------------------------------
Sioeng has very close business ties with Tsang. Sioeng's
company, SS Group, owns 24 percent of a $7 million cigarette
manufacturing and marketing venture in Hainan
Province.319 Committee investigators believe that
Sioeng assisted Tsang in setting up this venture. On April 25,
1994, Sioeng arranged for Tsang Hin Chi to receive an honorary
degree from Iowa Wesleyan College.320 In 1995,
Sioeng hosted a delegation of Chinese tobacco officials at his
hotel.321 The leader of the delegation from Hainan
Province, Chen Lo Jun, was awarded an honorary degree by
American M&N University at the request of Sioeng.322
That same year, Goldlion reached a business arrangement with
Hainan Province.323
---------------------------------------------------------------------------
\319\ Id.
\320\ See Honorary Degree Certificate for Tsang Hin Chi. Exhibit
130.
\321\ Interview of Nancy Chen, June 26, 1998.
\322\ Id.
\323\ Adela Ma, Goldlion Snares Final China Tobacco Deal Before
Temporary Ban.
---------------------------------------------------------------------------
A year later, Sioeng, Tsang, and Jessica Elnitiarta were
listed as directors of Goldlion's U.S. subsidiary, Goldlion
International, U.S.A., Inc. The President of Goldlion
International was Tsang's son, Jimmy Chi Mai Mao
Tsang.324 On February 19 and 20, 1996, both Jimmy
Tsang and his wife as Sioeng's guests, attended DNC fundraisers
at the Hay-Adams Hotel, in Washington, DC, hosted by President
Clinton and Vice President Gore.325
---------------------------------------------------------------------------
\324\ See Exhibit 51.
\325\ Guest list of Hay-Adams dinner and breakfast. Exhibit 131.
See also, photos of Jimmy Tsang and Jean Lim Tsang with President
Clinton, Exhibit 132.
---------------------------------------------------------------------------
Sioeng's connections to the PRC run through Macau, as well
as Hong Kong. At a May 13, 1996 DNC fundraiser at the Sheraton
Carlton, in Washington, DC, Chio Ho Cheong (aka Chen Kai Kit,
aka Tommy Chio) was a guest of Sioeng's and sat at the head
table with President Clinton.326 Chio used his
apparent access to the President during his campaign for
Macau's legislative body, featuring a picture of himself with
President Clinton prominently in television
advertisements.327 Chio was appointed in 1998 to the
Chinese People's Consultative Conference (CPCC) in
Beijing,328 which is the top advisory body in China
and has senior Communist Party official Li Ruihan as its
chairman.329
---------------------------------------------------------------------------
\326\ Head table and guest lists, Sheraton Carlton event. Exhibit
133. See also, photo of Chio Ho Cheong and President Clinton. Exhibit
134.
\327\ Micah Morrison, The Macau Connection II, Wall Street Journal,
Feb. 27, 1998.
\328\ Id.
\329\ Chinese Newspaper Highlights, Asia Pulse, Mar. 13, 1997 and
China's Li Ruihan to Visit Portugal-Lusa, Reuters World Service, Mar.
4, 1997.
---------------------------------------------------------------------------
Other Chinese businessmen associated with Sioeng include Li
Kwai Fai, Tong Yun Kai, and Guo Zhong Jian:
Li Kwai Fai is President and CEO of LuDanlan
Group, located in Guangzhou, PRC.330 In
February 1996, Li attended the Hay-Adams event as
Sioeng's guest where they sat at the head table and
later had pictures taken with President
Clinton.331 Currently, the picture of
President Clinton with Li is advertised on the LuDanlan
Group's website.332 Sioeng also arranged for
Iowa Wesleyan College to award an honorary degree to
Li.333
---------------------------------------------------------------------------
\330\ See Exhibit 137.
\331\ Photo of Li Kwai Fai with President Clinton. Exhibit 135. See
also Exhibit 131.
\332\ LuDanlan Corporate Philosophy web page, ; honorary degree certificate of Li Kwai
Fai, Dec. 18, 1995. Exhibit 137.
\333\ Id.
---------------------------------------------------------------------------
Tong Yun Kai is a Hong Kong businessman and
member of Guangdong Province and Fo Shan City
Committees of Chinese People's Political Consulative
Conference. He received an honorary degree from Iowa
Wesleyan College at Ted Sioeng's request.334
---------------------------------------------------------------------------
\334\ See Honorary Degree Certificate, December 1997; business
card, and resume of Tong Yun Kai. Exhibit 136.
---------------------------------------------------------------------------
Guo Zhong Jian was the Deputy General
Manager of the China Construction Bank's Hong Kong
office.335 He received an honorary degree
from American M&N University at Ted Sioeng's request.
In May 1996, Guo attended the Sheraton Carlton dinner
with Sioeng. The bank recently sent Guo back to the PRC
from his Hong Kong position to ``help him keep a lower
profile'' after he garnered unwanted attention for his
attendance at the DNC event.336
---------------------------------------------------------------------------
\335\ Photo of Guo Zhong Jian and President Clinton. Exhibit 138.
See also Exhibit 131.
\336\ Intelligence, Far Eastern Econ. Rev., May 21, 1998.
---------------------------------------------------------------------------
Sioeng also does considerable business with the PRC through
World Seal, a company in HongKong operated by his son Yopie
Elnitiarta and son-in-law Didi Kurniawan.337 World Seal
ordered over $20 million in health food products from a California
company for distribution in the PRC.338
---------------------------------------------------------------------------
\337\ Id.
\338\ See Exhibit 24.
---------------------------------------------------------------------------
3. Conclusions
Sioeng's connections to various members of the PRC
government, at the National, Provincial, and business level is
of great concern to the Committee. The U.S. Senate, Committee
on Government Affairs, found in its unclassified report based
upon classified material,339 that Sioeng ``. . .
worked, or perhaps still works, on behalf of the Chinese
government.'' 340 The Committee believes that the
information it has uncovered concerning Sioeng's connections to
the PRC tend to support and further enhance that conclusion.
---------------------------------------------------------------------------
\339\ See Senate Campaign Finance Report at 2501.
\340\ See Senate Campaign Finance Report at 2505.
---------------------------------------------------------------------------
B. Connections to the Cambodian Government
1. Summary
China is not the only country to which Ted Sioeng initiated
close ties. He also developed a cozy relationship with the
government of Cambodia. Sioeng has had two U.S. educational
institutions award honorary degrees to his friends and business
associates to enhance their status. Among the people to whom
these degrees have been awarded are several Cambodian
nationals, two of whom are the current leaders of the
government, and one of whom has been banned from the United
States as a suspected drug dealer. Another individual who
received a degree had a financial relationship with Jessica
Elnitiarta. Through these people to whom college diplomas were
awarded, Sioeng developed close business and personal ties to
the Cambodian government. At the same time as Sioeng was
cultivating those connections, the government was moving closer
to the PRC.
Sioeng's relationships with Cambodian business associates
raise a number of troubling questions, many of which remain
unanswered due to many key witnesses fleeing the country, and/
or asserting their right against self-incrimination and refusal
to answer questions posed by the Committee. One such question
is the use to which Jessica Elnitiarta put the moneys she
received. Another is, what Sioeng's intent was in developing
close ties to the Cambodian government.
2. Findings
Many of his business associates and acquaintances have
described Sioeng as very good at making connections.\341\ One
way in particular that Sioeng sought to make connections is
through the awarding of honorary degrees to his friends and
business associates. Sioeng has used, to the Committee's
knowledge, two U.S. educational institutions to further his
objectives, Iowa Wesleyan College, a college of roughly 840
full and part-time students in Mt. Pleasant, Iowa; \342\ and
American M&N University, a correspondence school of theology
and philosophy registered in Louisiana, but located in a small,
second-floor office in a Monterey Park, California, strip mall.
---------------------------------------------------------------------------
\341\ Interview of Johnny Ma, Dec. 8, 1997; Wong Interview.
\342\ The Iowan, Fall 1997 at 2. Exhibit 139.
---------------------------------------------------------------------------
All told, Sioeng persuaded Iowa Wesleyan and American M&N
to award at least 20 honorary degrees \343\ to various
businessmen and government officials of the PRC (including Hong
Kong), Macau, Indonesia, and Cambodia. Apparently in exchange
for those degrees, Sioeng, through his family and businesses,
donated from $370,000 to $400,000 to Iowa Wesleyan for
administrative and tuition costs between 1993 and 1997.\344\ In
addition to those gifts, Sioeng donated $100,000 to the college
in 1993, allowing the institution to secure a loan needed to
make its payroll.\345\ Sioeng is also a member of Iowa
Wesleyan's Board of Trustees.346
---------------------------------------------------------------------------
\343\ The Committee identified 15 honorary degrees that were
awarded by Iowa Wesleyan College to Ted Sioeng and his associates (See
chart at Exhibit 139), and other 5 degrees by American M&N University.
\344\ Prins Depo. at 14-16
\345\ Id. at 10.
\346\ Id. at 10.
---------------------------------------------------------------------------
Simon Chen introduced Sioeng to Iowa Wesleyan's President,
Robert J. Prins, in 1994.\347\ At the time, Chen was president
of the International Daily News, a Chinese language newspaper
that he sold to Sioeng in 1995.348 According to
Prins, Chen informed him that Sioeng was interested in
obtaining an honorary degree from Iowa Wesleyan College.\349\
Chen told Prins that Sioeng was ``an active businessman that he
had supported many groups, both Chinese and community groups
within the LA area, [and] that he was involved in business, in
both LA and China, [and] Hong Kong . . .'' \350\
---------------------------------------------------------------------------
\347\ Id. at 12.
\348\ See ``Sioeng U.S. Business Interest.''
\349\ Prins Depo. at 13.
\350\ Id.
---------------------------------------------------------------------------
Through Prins, Sioeng met the Governor of Iowa, Terry E.
Branstad.\351\ In fact, Sioeng got his picture taken with the
Governor \352\ and even asked Prins if Governor Branstad needed
some financial help in his re-election campaign.\353\ Sioeng
also brought a business associate of his, Jerry Sun, Vice
President of Minmet K.N. (USA), Inc. to the meeting with the
Governor.\354\
---------------------------------------------------------------------------
\351\ Prins Depo. at 74.
\352\ Photo of Simon Chen, Sundari Elnitiarta, Ted Sioeng, Gov.
Terry Bransted and Robert Prins, Sept. 2, 1993. Exhibit 140.
\353\ Prins Depo. at 74.
\354\ Interview of Jerry J. Sun, Mar. 19, 1998. Minmet K.N. (USA),
Inc. is the U.S. subsidiary of China Minmetals Group, ``one of the 56
Key enterprise groups approved by the State Council.'' China Minmetals
Group Web Site, , Exhibit 141.
---------------------------------------------------------------------------
Prins subsequently traveled overseas with Sioeng on several
occasions.\355\ During one of those trips, in October 1996,
Prins awarded an honorary degree to Cambodia's Second Prime
Minister, Samdech Hun Sen.\356\ Hun Sen, as he is commonly
known, is a former Khmer Rogue officer and leader of Cambodia
during the Vietnamese occupation.\357\ He led a bloody coup in
July 1997 and ousted the elected First Prime Minister, Prince
Norodom Ranariddh.\358\ Turmoil over the coup--and criticism of
Hun Sen's totalitarian style of governance--persists to this
day.\359\
---------------------------------------------------------------------------
\355\ Id. at 39.
\356\ Id. at 40; See also Honorary Degree Certificate for Samdech
Hun Sen. Exhibit 142.
\357\ Tina Rosenberg, Hun Sen Stages an Election, New York Times
Mag., Aug. 30, 1998, at 26.
\358\ Fin. Times (London), July 25, 1998, at 7.
\359\ Tina Rosenberg, Hun Sen Stages of Election, New York Times
Mag., Aug. 30, 1998, at 26.
---------------------------------------------------------------------------
Hun Sen moved Cambodia closer to the PRC. After his
election as Second Prime Minister, Hun Sen began to court
Chinese investment in Cambodia.\360\ For example, he took the
extraordinary step of kicking out Taiwan's representatives from
Cambodia and closing their ``de facto embassy in Phnom Penh.''
\361\ The largest Chinese investor in Cambodia is China
Everbright, ``a huge conglomerate that reports directly to
Beijing's cabinet.'' \362\
---------------------------------------------------------------------------
\360\ Bruce Gilley, Fragile Prospects: Political backing only goes
so far for China's investors, Far East. Econ. Rev., Dec. 11, 1997 at
29.
\361\ Bruce Gilley, Staying Power: Taiwan's Businesses still have
clout in Cambodia, Far East. Econ. Rev., Dec. 11, 1997 at 29.
\362\ Id.
---------------------------------------------------------------------------
The PRC supported Hun Sen during the coup, bringing him to
the capital city of Beijing in July 1996 for a public show of
support.\363\ The People's Republic of China was one of the
first foreign governments to recognize the new, Hun Sen-led
government.\364\ Since then, Hun Sen has made several
concessions to the Chinese government to maintain their
support, including, cutting off a deal to fly direct commercial
flights from Phnom Penh to Taipei, allowing Chinese police more
power in security matters and suing 10 Cambodian newspapers
over stories critical of the Chinese-Cambodian
relationship.\365\
---------------------------------------------------------------------------
\363\ Id.
\364\ Id.
\365\ Id.
---------------------------------------------------------------------------
The Committee has developed information suggesting that
Sioeng's facilitation of honorary degree ceremonies was
consistent with other efforts he undertook to impress the
rulers of Cambodia, and, presumably, to facilitate his business
ventures there. As an example, Sioeng told Hun Sen after his
honorary degree ceremony, that he was close to both President
Clinton and PRC Premier Zemin.\366\ Sioeng also donated
motorcycles and money to Hun Sen.\367\ As further evidence of
the close relationship between Sioeng and Hun Sen, Prins told
the Committee that he communicated with Hun Sen through
Sioeng.\368\
---------------------------------------------------------------------------
\366\ Huynh Interview.
\367\ Huynh Interview. The Committee notes that during his
deposition, Huynh claimed to have no such knowledge of Sioeng's
donations to Hun Sen. (See Deposition of Hoa Bang Huynh, Apr. 15, 1998
at 12, hereinafter Huynh Depo.)
\368\ Prins Depo. at 65; See also photo of Hun Sen and Sioeng at
honorary degree ceremony, Exhibit 143.
---------------------------------------------------------------------------
The Committee found that Iowa Wesleyan awarded three other
honorary degrees at Sioeng's recommendation to Cambodian
nationals. One went to Hun Sen's ``right hand man'' Sok
An,\369\ another to casino operator Tony Tandijono,\370\ and
the third to Hoa Bang Huynh, a Cambodian with U.S. citizenship
and former business partner of Sioeng.\371\
---------------------------------------------------------------------------
\369\ Honorary Degree Certificate and business card for Sok An.
Exhibit 144.
\370\ Honorary Degree Certificate and business card for Tony
Tandijono. Exhibit 145.
\371\ Huynh Depo. at 8; See also, Honorary Degree Certificate and
business card for Hoa Bang Huynh, Exhibit 146.
---------------------------------------------------------------------------
Sok An's title is Minister in Charge of the Presidency and
the Council of Ministers in Cambodia.372 He serves
as Hun Sen's spokesman and liaison to the Chinese
Embassy.373 Huynh was an original partner in the
tobacco manufacturing plant being constructed by Sioeng in
Cambodia. He testified that he purchased $700,000 worth of
tobacco equipment from Sioeng's U.S. company, Panda
Industries.374 However, Huynh sent $250,000 to Panda
Industries 375 and transferred the remaining
$450,000 to the personal account of Jessica
Elnitiarta.376
---------------------------------------------------------------------------
\372\ See Exhibit 144.
\373\ 40th Anniversary of Sino-Cambodia Ties Marked, Xinhua English
Newswire, July 17, 1998. See also, Thai Foreign Minister Meets
Cambodian King Sihanouk, Hun Sen, Deutsche Press-Agentur, June 27, 1998
(Sok An discussing Hun Sen's position concerning the elections with
reporters); Japan Hinted at aid cut unless Ranariddh Pardoned, Japan
Econ. Newswire, Mar. 22, 1998 (describing Sok An as ``. . . a close aid
to Second Prime Minister Hun Sen.''); Cambodian Government plays down
Contract for Elections, Deutsche Presse-Agentur, Mar. 20, 1998
(discussing Sok An's briefing of British, Japanese and Australian
ambassadors on a secret contract).
\374\ Huynh Depo. at 14.
\375\ See Exhibit 100.
\376\ See Exhibit 101.
---------------------------------------------------------------------------
According to Huynh, the equipment was defective, so he
returned the machinery and demanded a refund. As a result,
Sioeng agreed to refund Huynh the money; however, he refunded
the money to Huynh, through Tony Tandijono,377 who
runs one of two licensed casinos in Phonm Penh, and is also
part owner of a weapons firing range north of that
city.378
---------------------------------------------------------------------------
\377\ Huynh Depo. at 14.
\378\ Id.
---------------------------------------------------------------------------
Huynh stated that after Sioeng returned the money, Sioeng
formed a partnership with Theng Bunma 379 and Mr.
Tandijono to run the tobacco plant.380 Reportedly
the richest man in Cambodia, Bunma was a ``staunch supporter of
Hun Sen.'' 381 In fact, he is such a strong
supporter of Hun Sen that he bankrolled the coup against Prince
Ranariddh.382 Bunma donated over $1 million in cash
and gold to finance Hun Sen's takeover of the Cambodian
government.383 Bunma gained international attention
in April 1997 when he stormed off a Cambodian jetliner in Phonm
Penh, demanded a gun from one of his waiting bodyguards, and
shot out the plane's tires, because his luggage had been
lost.384
---------------------------------------------------------------------------
\379\ The Committee notes that in his deposition, Huynh testified
that he did not know Theng Bunma was. (See Huynh deposition at 15).
However, The Far East. Econ. Rev. reported that Huynh is a business
partner of Bunma (See Bruce Gilley, Rising by Degrees, Aug. 20, 1998).
\380\ Huynh Interview.
\381\ Nate Thayer, Tycoon Admits to Role in Cambodian Coup, the
Washington Post, July 25, 1997 at A4.
\382\ Id.
\383\ Id.
\384\ Robin McDowell, Tycoon propelled Hun Sen to power in Cambodia
coup, Washington Times at A11, Aug. 14, 1997.
---------------------------------------------------------------------------
In his interview with the Committee, Huynh stated that
Sioeng acknowledged his political contributions to both
Democrats and Republicans.\385\ Huynh specifically quoted
Sioeng as saying that, for $10,000, he could arrange for Huynh
to sit at the head table with the President, presumably at a
fundraising lunch or dinner.\386\ In addition, Huynh stated
that Sioeng had asked him if he would like to sponsor a table
at the fundraising event scheduled to be attended by President
Clinton.\387\ Huynh did not repeat those assertions under oath.
The Committee notes that Ted Sioeng himself was not the
signatory on any of the contributions to the DNC, rather
Jessica Elnitiarta signed the checks. However, Hunyh's
statements above supports the conclusion that Sioeng directed
Jessica Elnitiarta's contributions.
---------------------------------------------------------------------------
\385\ Huynh Interview.
\386\ Id.
\387\ Huynh Depo. at 22-25.
---------------------------------------------------------------------------
The Committee has been unable to confirm Huynh's
explanation of events, or to reconcile the differences between
what he said when interviewed on March 12, 1998 versus his
deposition testimony on April 15, 1998. One explanation for the
discrepancies is the translation difficulties that arose during
the deposition. It was unclear at times whether Huynh fully
understood the questions posed.
On December 20, 1997, Iowa Wesleyan College awarded an
honorary degree to Theng Bunma at the request of Hun Sen.\388\
The degree was presented at the Intercontinental Hotel in Phnom
Penh, Cambodia which is owned by Bunma.\389\
---------------------------------------------------------------------------
\388\ Honorary Degree Certificate and business card for Theng
Bunma. Exhibit 147.
\389\ Prins Depo. at 52.
---------------------------------------------------------------------------
The U.S. State Department has made it clear that, aside
from his other ventures, Bunma ``is closely and heavily
involved in drug trafficking in Cambodia.'' \390\ Furthermore,
the U.S. Government has banned Bunma from entering the country
due to his alleged narcotics smuggling.\391\
---------------------------------------------------------------------------
\390\ Nate Thayer, Drug Suspects Bankroll Cambodian Coup Leader,
the Washington Post, July 22, 1997.
\391\ Id.
---------------------------------------------------------------------------
Then-Ambassador to Cambodia Charles Twining warned
Cambodian authorities in 1994 of Bunma's alleged narcotics
trafficking.\392\ Despite these warnings, the State Department
``issued Bunma a visa to attend the National Prayer Breakfast
in Washington, an event organized at Congress and presided over
by President Clinton . . . After hearing Clinton's speech,
Bunma was granted a meeting with U.S. officials at the
Pentagon.'' \393\
---------------------------------------------------------------------------
\392\ Id. The Committee noted that Ted Sioeng did not make the
allegations against Bunma known to Prins when Iowa Wesleyan awarded the
honorary degree to Bunma. Prins later confronted Sioeng about those
allegations, and Sioeng apologized. Iowa Wesleyan subsequently
``revoked [the degree] based on the State Department's ruling that
Bunma cannot enter the United States and is currently blacklisted.''
(See Prins Depo. at 53).
\393\ Nate Thayer, Drug Suspects Bankroll Cambodian Coup Leader,
the Washington Post, July 22, 1997.
---------------------------------------------------------------------------
A guest list from Bunma's honorary degree event shows many
Sioeng family members and business associates present at the
event. \394\ This includes: Sandra Elnitiarta; Didi Kurniawan;
Yopie Elnitiarta; Kent La; Hung Fei Man; Li Kwai Fai; \395\
(All of whom attended at least one DNC fundraiser), Frankie
Hum, Manager of Chinois Tobacco, Ltd.; \396\ Ambrose Hsuing,
Vice-President, The Sioeng Co. Group; \397\ Amy Zhang,
Personnel Relations, S.S. Group; \398\ Glenville Stuart,\399\
Belize consulate personnel; Benny Sit, Director, Well & Well
Group; \400\ Yanuar Joeng,\401\ Vice President WGL Tobacco Ltd.
(Director of Worldwide Golden Leaf Tobacco Ltd.); Kook Ying Tai
Peter, (aka Peter Kook),\402\ Chairman, Well & Well Group; and
Yueng Hong Man, Vice-President, International Daily News \403\
(Hong Kong).\404\
---------------------------------------------------------------------------
\394\ International Industrial Commercial Conference guest list.
Exhibit 148; See also, picture at conference. Exhibit 149.
\395\ Id.
\396\ Ted Sioeng serves as Chairman of Chinois Tobacco. See
``Sioeng's Foreign Business Interests.''
\397\ See Exhibit 114.
\398\ See ``Sioeng's Foreign Business Interest''.
\399\ See ``Sioeng's U.S. Business Interests.''
\400\ In December 1997, Peter Kook, Chairman of the Well & Well
Group, was awarded an honorary degree from Iowa Wesleyan College at the
recommendation of Ted Sioeng. Honorary Degree Certificate and business
card for Peter Kook. Exhibit 150.
\401\ See ``Sioeng's Foreign Business Interest''.
\402\ See ``Sioeng's U.S. Business Interest.''
\403\ Id.
\404\ The Committee has been unable to contact or speak with many
people on this guest list. Some, such as Sioeng's family members and
U.S. business associates have asserted their fifth amendment rights.
Others have refused to respond to Committee requests for information or
to calls from Committee investigators to their offices.
---------------------------------------------------------------------------
3. Conclusions
Sioeng's relationship with Hun Sen, Theng Bunma, and others
in Cambodia is a concern to the Committee. Due to Sioeng's
refusal to cooperate with the Committee several important
questions remain unanswered.
The Committee has been unable to confirm that the $700,000
Huynh gave to Jessica Elnitiarta and Panda Industries was for a
legitimate business transaction. Nor has it seen documentation
that the money was returned, as Huynh testified.
Also unaddressed are questions concerning Sioeng's
relationship to powerful figures in Cambodia and China. The
nature of the relationships and Sioeng's motives remain
unclear, largely because Sioeng and his family have refused to
shed light on these and other important questions.
VI. Democratic Contributions
A. John Huang's Role
1. Summary
The Committee has learned that former Commerce Department
employee and DNC fundraiser John Huang solicited funds from Ted
Sioeng and Jessica Elnitiarta. Huang, a major focus of both the
House and Senate investigations into illegal and/or improper
activities during the 1996 campaign, asserted his privilege
against self-incrimination and has refused to cooperate with
the Committee.
2. Findings
DNC tracking forms credit John Huang as the solicitor for
all but the first of the Sioeng related contributions.\405\ The
Committee notes that all DNC tracking forms recording the
Sioeng family's contributions appear to be in Huang's
handwriting. Huang was first introduced to the Sioeng family in
1995.\406\ Huang's first solicitation for the Sioeng family was
in connection with a fundraiser on February 19, 1996, held at
Washington, DC's Hay-Adams hotel.\407\ After some negotiation
with Huang, Jessica Elnitiarta contributed $100,000 in
connection with that event, or $12,500 for each of their eight
guests.\408\ Huang later claimed that because of their late
attendance the family did not have good seats for the
event.\409\
---------------------------------------------------------------------------
\405\ See, Check No. 575 from Jessica Elnitiarta to the DNC in the
amount of $100,000. Feb. 12, 1996, Exhibit 151; Check No. 1632 from
Panda Estates Investment Inc. to the DNC in the amount of $100,000,
July 12, 1996, Exhibit 152; Check No. 1652 from Panda Estates
Investment to the DNC in the amount of $50,000, July 29, 1996, Exhibit
153; Check No. 3881 from Loh Sun International, Inc., to the DNC in the
amount of $50,000, July 29, 1996, Exhibit 154; Check No. 134 from
Subandi Tanuwidjaja to the DNA in the amount of $60,000, Sept. 9, 1996,
Exhibit 155; Check No. 136 from Subandi Tanuwidjaja to the DNC in the
amount of $20,000, Sept. 19, 1996. Exhibit 156; Check No. 1611 from
Suryanti Tanuwidjaja to the DNC in the amount of $20,000, Sept. 16,
1996. Exhibit 157. See also, Elnitiarta Interview.
\406\ Elinitiarta Interview.
\407\ Id.
\408\ Id.
\409\ Id.
---------------------------------------------------------------------------
However, DNC records and photographs show that Sioeng and
one of his Chinese guests sat at the head tables with President
Clinton during the dinner, and Vice President Gore at a
breakfast the next morning.\410\ The Committee notes that, at
the Hay-Adams event, President Clinton specifically thanked
``those [people in attendance] who have come from other
countries to be with us tonight . . .'' \411\
---------------------------------------------------------------------------
\410\ See Exhibit 131.
\411\ White House video of Hay-Adams event.
---------------------------------------------------------------------------
The Committee notes that a DNC staff member told Huang that
the Sioeng family participated inthe Hay-Adams event in a
``relatively major way.'' \412\ The DNC official also stated that the
Tanuwidjaja family ``is also prominent and can play a major role.''
\413\
---------------------------------------------------------------------------
\412\ Facsimile from Anne Edder to John Huang, Mar. 6, 1996.
Exhibit 158.
\413\ Id.
---------------------------------------------------------------------------
Jessica Elnitiarta stated that, following the Hay-Adams
event, Huang gave the family complimentary tickets to a
controversial fundraiser held at a Buddhist temple on April 29,
1996.\414\ However, Huang's personal documents show that he may
have counted on Sioeng for a contribution during that
event.\415\ Furthermore, Subandi Tanuwidjaja, who at the time
was engaged to Laureen Elnitiarta, was listed as attending the
event, but his name was later crossed out.\416\ The apparent
amounts attributed by the DNC to Sioeng, ``100/80,'' correspond
to the amount contributed by Subandi Tanuwidjaja and his
sister, Suryanti Tanuwidjaja in September 1996. The event guest
list show that Ted Sioeng and Sioeng Fej Man Hung, the editor
of the International Daily News, sat at the head table at this
event.\417\
---------------------------------------------------------------------------
\414\ Elnitiarta Interview.
\415\ Notes prepared by John Huang, Exhibit 159.
\416\ Guest list for Tsi Lai Temple event, Apr. 1996. Exhibit 160.
\417\ Id.
---------------------------------------------------------------------------
Huang's next solicitation of Sioeng was in connection with
a May 13, 1996 fundraiser at the Sheraton Carlton Hotel in
Washington, DC. As per DNC protocol, Jessica Elnitiarta faxed a
letter giving the background of most of the family's
guests.\418\ The Committee notes that, in the facsimile,
Elnitiarta referred to ``Uncle Huang.'' \419\ This could either
be a traditional Chinese honorific used for older males, or an
indication that Huang was personally close to the Sioeng
family. DNC records show that Sioeng and two of his guests
attended and sat at the head table.\420\ Jessica Elnitiarta
claimed that she did not contribute for this event until July
12, 1996,\421\ at which time she contributed $100,000 or
$12,500 per-head consistent with the Hay-Adams donation
negotiated with Huang.\422\ Sioeng business associate Kent La
also attended this event and had his picture taken with
President Clinton.\423\
---------------------------------------------------------------------------
\418\ Facsimile from Jessica Elnitiarta to John Huang, Exhibit 161.
\419\ Id.
\420\ See Exhibit 133.
\421\ Elnitiarta Interview.
\422\ Id.
\423\ Picture of President Clinton with Kent La. Exhibit 162.
---------------------------------------------------------------------------
Jessica Elnitiarta stated that Huang then begged her to
participate in a July 22, 1996 fundraiser held at the Century
Plaza Hotel in California, as he was having trouble obtaining
participants.\424\ Elnitiarta said Huang encouraged her to
bring as many guests as she liked.\425\ Sioeng attended the
event, bringing at least one business associate from Hong Kong,
Lam Kwok Man, and 48 other guests.\426\
---------------------------------------------------------------------------
\424\ Elnitiarta Interview.
\425\ Id.
\426\ Id.
---------------------------------------------------------------------------
Sioeng sat at the head table with President Clinton and
Lippo executive James Riady.\427\ Kent La also attended this
event.\428\ Although the DNC credited Huang with La's $50,000
contribution,\429\ they attributed it to a July 30, 1998
Presidential dinner at the Jefferson Hotel in Washington,
DC,\430\ an event that La certainly did not attend. The DNC
also credited Huang with contributions made by Sioeng's in-
laws, the Tanuwidjaja's,\431\ to various events, including the
same $60,000 contribution attributed to two different
events.\432\
---------------------------------------------------------------------------
\427\ Picture of Ted Sioeng, President Clinton, and James Riady.
Exhibit 163.
\428\ Ma Interview.
\429\ See Exhibit 154.
\430\ Id.
\431\ See Exhibits 155-157.
\432\ See Exhibit 155.
---------------------------------------------------------------------------
3. Conclusions
Huang has not cooperated with the Committee in its
investigation of his fundraising activities for the Democratic
National Committee.\433\ Given the total number of
contributions credited to Huang which have been returned as
being improper or illegal, the Committee finds that Huang is a
central figure in the campaign finance scandal. In addition,
the Committee has serious and substantial unanswered questions
about Huang's connections to the People's Republic of China.
---------------------------------------------------------------------------
\433\ See Huang chapter.
---------------------------------------------------------------------------
The Committee concludes that a majority of the
contributions made by Sioeng's family andbusiness associates
are likely illegal.\434\ Huang appeared to influence or participate in
all of the contributions related to Sioeng.
---------------------------------------------------------------------------
\434\ See ``The Sioeng-Related Contributions to the DNC Appear to
Violate Campaign Finance Laws.''
---------------------------------------------------------------------------
b. contributions to the democratic national committee
1. Summary
During the 1996 Federal election cycle, courted by
fundraiser John Huang, Ted Sioeng's family and associates
contributed $400,000 to the DNC. 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.
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 serious doubt on whether they meet
applicable legal and regulatory requirements. Furthermore, they
are largely inappropriate under the DNC's own announced
standards for contribution retention.
2. Findings
a. jessica elnitiarta $100,000
In connection with a February 19, 1996 fundraiser hosted by
the President at the Hay-Adams Hotel, Ted Sioeng's oldest
daughter, Jessica Elnitiarta, a U.S. legal permanent resident,
wrote a personal check for $100,000 to the DNC \435\ against a
bank account balance of only $9,225.\436\ 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,\437\ 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.\438\
---------------------------------------------------------------------------
\435\ See Exhibit 151.
\436\ Grand National Bank statement Jessica Elnitiarta, Feb. 1996.
Exhibit 164.
\437\ Telephone transfer from Yanti Ardi to Jessica Elnitiarta in
the amount of $200,000, Feb. 22, 1996, Exhibit 165.
\438\ Wire transfer from Pristine Investments to Yanti Ardi in the
amount of $518,434, Feb. 12, 1996. Exhibit 166.
---------------------------------------------------------------------------
In short, this $100,000 contribution was funded by
ineligible foreign money and should be returned by the DNC.
This is part of a pattern that recurs throughout the brief but
curious history of Sioeng-related contributions to the DNC.
b. panda estates investment, inc. $100,000
On July 12, 1996, Jessica Elnitiarta, as President of Panda
Estates Investment, Inc., signed a $100,000 company check to
the DNC \439\ against a negative bank account balance of
$599.\440\ The check cleared the bank on July 25, 1996, causing
a negative bank balance of $100,125.\441\ The next day,
Elnitiarta telephone transferred $100,000 from a Panda Estates
receipts account toward the overdraft.\442\ Of this transfer,
$60,000 came from Yanti Ardi's personal bank account,\443\
which in turn was funded by a $1,652,480 wire transfer on June
28, 1996 from R.T. Enterprises in Hong Kong.\444\ R.T.
Enterprises appears to be a Sioeng owned or controlled company.
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.\445\
---------------------------------------------------------------------------
\439\ See Exhibit 152.
\440\ Grand National Bank statement, Panda Estates Investment,
Inc., July 1996. Exhibit 167.
\441\ Id.
\442\ Telephone transfer from Panda Estates Investment receipts
account to disbursement account in the amount of $100,000, July 26,
1996; Check No. 2309 from Yanti Ardi to Panda Estates Investment in the
amount of $60,000, July 26, 1996. Exhibit 168.
\443\ Id.
\444\ See Exhibit 110.
\445\ Grand National Bank statement, Panda Estates Investment,
Inc., deposits into receipts account, July 5-22, 1996. Exhibit 169.
---------------------------------------------------------------------------
In short, this contribution of $100,000 was funded by
$60,000 of foreign money and $40,000 by domestic sources and,
hence, should be returned.
c. panda estates $50,000
Only July 29, 1996, Jessica Elnitiarta signed a $50,000
company check to the DNC \446\ from Panda Estates Investment
against a negative bank account balance of $2,351.\447\ The
check cleared the bank on August 5, 1996, causing a $48,198
overdraft.\448\ The next day, Elnitiarta covered part of the
overdraft through a $40,000 transfer of domestic rental
receipts for the month of August 1996.\449\ The remaining
overdraft was covered by an August 6, 1996 transfer of $10,000
from the bank account of Code 3 USA, the family's gun and
ammunition business, operated by Elnitiarta's husband, Ridwan
Dinata.\450\ This transfer came from an August 5, 1996 advance
of $10,000 against Code 3's $250,000 bank credit line.\451\ On
September 10, 1996, Elnitiarta appears to have repaid Code 3
the $10,000 from her personal bank account.\452\
---------------------------------------------------------------------------
\446\ See Exhibit 153.
\447\ See Exhibit 167.
\448\ Grand National Bank statement, Panda Estates Investment.
Inc., Aug. 1996. Exhibit 170.
\449\ Telephone transfer from Panda Estates Investment (receipts)
to Panda Estates Investment (disbursement) in the amount of $40,000,
Aug. 6, 1996. Exhibit 171.
\450\ See Exhibit 87.
\451\ Telephone transfer from Code 3 USA (loan) to Code 3 USA
(bank) in the amount of $10,000, Aug. 5, 1996. Exhibit 172.
\452\ See Exhibit 88.
---------------------------------------------------------------------------
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 and appropriateness of
this contribution.
d. loh sun international $50,000
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. legal permanent resident, also wrote a $50,000 check
to the DNC.\453\ As President of Loh Sun International, Kent La
signed a company check to the DNC against a July 29, 1996, bank
balance of $262,185.\454\ Five days earlier, on July 24, 1996,
the company account had received a $97,555 wire transfer from
R.T. Enterprises in Hong Kong,\455\ which appears to be owned
or controlled by Ted Sioeng. Although documentation of the wire
transfer indicates the funds were for ``Hongtashan
Advertising,'' \456\ the amount of the transfer as its close
proximity to Loh Sun's contribution to the DNC raised serious
questions about its true purpose and use.
---------------------------------------------------------------------------
\453\ See Exhibit 154.
\454\ United Pacific Bank statement, Loh Sun International, July
1996. Exhibit 173.
\455\ See Exhibit 10.
\456\ Id.
---------------------------------------------------------------------------
Moreover, the mystery surrounding this contribution is
compounded by a check signed by Kent La on an account with his
wife, Nancy.\457\ 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 has
written, ``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.
---------------------------------------------------------------------------
\457\ Check No. 143 from Kent La to Loh Sun International in the
amount of $20,000, Oct. 28, 1996. Exhibit 174.
---------------------------------------------------------------------------
e. the tanuwidjaja family contributions
Within 10 days in September 1996, the Tanuwidjaja family,
to which the Sioeng family is related through marriage and
family businesses, made three contributions to the DNC totaling
$100,000 as follows:
Subandi Tanuwidjaja $80,000
On September 9, 1996, Ted Sioeng's son-in-law, Subandi
Tanuwidjaja, a U.S. legal permanent resident, signed a $60,000
personal check to the DNC \458\ against a U.S. bank balance of
$66,050.\459\ 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.\460\
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.\461\ 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
by a foreign national and should be returned by the DNC.
---------------------------------------------------------------------------
\458\ See Exhibit 155.
\459\ Western State Bank statement, Subandi Tanuwidjaja, Sept. 13,
1996. Exhibit 175.
\460\ Check No. 1026 from Susanto Tanuwidjaja to Subandi
Tanuwidjaja in the amount of $100,000, Sept. 6, 1996. Exhibit 176.
\461\ Wire transfer from Subandi Tanuwidjaja to Susanto Tanuwidjaja
in the amount of $100,000, Aug. 21, 1996. Exhibit 177.
---------------------------------------------------------------------------
On September 19, 1996, Subandi Tanuwidjaja signed a $20,000
personal check to the DNC 462 against a bank balance
of $25,640.463 The day before, the account received
a $20,000 wire transfer from Dragon Union, Ltd. in Hong
Kong.464 Subandi Tanuwidjaja is Dragon Union's sole
corporate director.465 It thus appears that this
$20,000 contribution was funded by foreign money and should be
returned by the DNC.
---------------------------------------------------------------------------
\462\ See Exhibit 156.
\463\ Western State Bank statement, Subandi Tanuwidjaja, Oct. 15,
1996. Exhibit 178.
\464\ Wire transfer from Dragon Union to Subandi Tanuwidjaja in the
amount of $20,000, Sept. 18, 1996. Exhibit 179.
\465\ See Exhibit 23.
---------------------------------------------------------------------------
Suryanti Tanuwidjaja $20,000
On September 16, 1996, Ted Sioeng's daughter-in-law,
Suryanti Tanuwidjaja, a U.S. legal permanent resident, signed a
$20,000 personal check to the DNC 466 against a bank
balance of $61,726.467 Two days later, the account
received a $20,000 wire transfer from Dragon Union, Ltd in Hong
Kong,468 for which her brother, Subandi Tanuwidjaja,
is the sole corporate director.
---------------------------------------------------------------------------
\466\ See Exhibit 157.
\467\ Bank of America Statement, Suryanti Tanuwidjaja, Sept. 27,
1996. Exhibit 180.
\468\ Wire transfer from Dragon Union to Suryanti Tanuwidjaja in
the amount of $20,000, Sept. 18, 1996. Exhibit 181.
---------------------------------------------------------------------------
Hence, although sufficient domestic funds existed at the
time the check was written, the close proximity, same amount,
and similar circumstances of the $20,000 contribution suggests
a coordinated scheme to make a contribution and reimburse the
donation with foreign funds.
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.
C. contributions to governor gary locke
1. Summary
The Committee has found that Ted Sioeng's political
contributions and activities were not limited to political
parties, but included donations to--and apparently fundraising
on behalf of--candidates for state and local offices. One
candidate who benefitted from Sioeng's generosity was Gary
Locke, the current Governor of Washington State, who became the
first Governor of Chinese descent in American history.
Committee investigators identified eight contributions from
Sioeng family members and associates totaling $8,700 around
July 29, 1996 to Gary Locke's 1996 campaign for Governor of
Washington State. Committee investigators traced the funding of
five of the contributions totaling $5,500 to a foreign bank
account in Hong Kong that the Committee has associated with Ted
Sioeng. Additionally, four of the payments totaling $4,400
appear to be illegal ``straw donor'' conduit payments by
employees of companies that the Sioeng family either owns or
does business with. Committee investigators presented
information on one contributor for which they had completed
work to Governor Locke during a deposition on July 7, 1998.
Locke stated, ``The circumstances didn't look at that legit
when they showed it to us.''\469\ The Governor's campaign
refunded the $1,100 contribution on July 23, 1998.\470\
---------------------------------------------------------------------------
\469\ David Postman, Investigation of foreign campaign donations
entangles Locke, Seattle Times, Aug. 6, 1998.
\470\ Letter from Blair Butterworth to Sylvana Djojomartono with
refund check No. 1575 for $1,100, July 23, 1998. Exhibit 182.
---------------------------------------------------------------------------
The Committee has found no evidence to indicate that
Governor Locke knowingly accepted illegal donations from
Sioeng's family and associates. However, the Committee has
serious questions regarding some of the contributions and their
apparent violation of Federal campaign funding laws.
2. The Relationship of Governor Locke to Ted Sioeng
Governor Locke stated that he first met Ted Sioeng during a
DNC fund-raiser at the Sheraton-Carlton Hotel in Washington, DC
which took place on May 13, 1996, and was attended by President
Clinton.\471\ Sioeng told Governor Locke that he was in the
newspaper publishing business and that he manufactured and
exported tobacco products to China.\472\
---------------------------------------------------------------------------
\471\ Locke Depo. at 15.
\472\ Id. at 17.
---------------------------------------------------------------------------
Governor Locke stated that the only other time he recalled
meeting with Ted Sioeng was in Los Angeles in July 1996.\473\
This meeting was arranged by David Lang of Lang, Murakawa, &
Wong, a firm hired by the Gary Locke for Governor campaign to
raise funds in southern California.\474\ The meeting occurred
on July 1, 1996, at the Sioeng owned International Daily News
in Monterey Park, California. The next day, the paper published
an article with the headline, ``Gary Locke and his wife visit
old friend Ted Sioeng at the International Daily News.'' In
this article, Sioeng expressed his support for Locke's campaign
and claimed that he was to be the co-chairman of a large scale
fundraiser for Locke on August 5 in southern California.\475\
---------------------------------------------------------------------------
\473\ Id. at 19.
\474\ Id. at 18
\475\ Article from International Daily News, July 2, 1996
(translated by Michael D. Yan). Exhibit 183.
---------------------------------------------------------------------------
Governor Locke confirmed that Sioeng volunteered to raise
funds for his campaign,\476\ however, the proposed Sioeng
fundraiser never materialized. In addition, Governor Locke
refuted the statement that he was an old friend of Ted Sioeng
and considered it self-promotional.\477\ However, Governor
Locke acknowledged contributions to his campaign by Sioeng
family members.\478\
---------------------------------------------------------------------------
\476\ Locke Depo. at 67.
\477\ Id. at 25.
\478\ Id. at 34.
---------------------------------------------------------------------------
3. The Sioeng Contributions to Gary Locke
The Committee determined that although Ted Sioeng did not
contribute directly to Gary Locke's campaign, he apparently
arranged for some contributions totaling $8,700. An invoice
from David Lang for fundraising services indicated that some
$8,700 contributed by persons related or otherwise connected
with Ted Sioeng's was actually ``raised from Ted Sioeng.''
\479\ The eight contributions from Sioeng family members and
associates were all dated around July 29, 1996, less than a
month after Governor Locke's visit with Ted Sioeng at the
International Daily News:
---------------------------------------------------------------------------
\479\ Invoice from David Lang, Aug. 8, 1996. Exhibit 184.
---------------------------------------------------------------------------
Sylvana Djojomartono (an employee of the
Hollywood Metropolitan Hotel owned by the Sioengs)
contributed $1,100.\480\ Committee investigators
determined this to be an illegal ``straw donor''
contribution funded by foreign money. When subpoenaed
by the Committee, Djojomartono asserted her privilege
against self-incrimination.\481\
---------------------------------------------------------------------------
\480\ Check No. 2882 from Sylvana Djojomartono to Gary Locke for
Governor in the amount of $1,100, July 29, 1996. Exhibit 185.
\481\ Letter from Laura shores to Michael Bopp, July. 17, 1998.
Exhibit 186.
---------------------------------------------------------------------------
On July 29, 1996 Sioeng's daughter, Jessica
Elnitiarta, wrote a $1,100 check from her personal bank
account payable to ``cash'' for which the memo line
said ``Donation for Gary Locke for Governor.'' \482\
The same day, Djojomartono endorsed Elnitiarta's check,
deposited it into her personal bank account, and wrote
an $1,100 check to Gary Locke for Governor. At the time
Jessica wrote the check to ``cash,'' her bank account
was overdrawn by $13,045.\483\ To cover this overdraft,
she transferred $45,000 from the personal bank account
of Ted Sioeng's sister, Yanti Ardi on August 1,
1996.\484\ This transfer, in turn, was financed by a
June 28, 1996 wire transfer of $1,652,480 from RT
Enterprises in Hong Kong, which the Committee has
determined is affiliated with Ted Sioeng and his
tobacco interests overseas.\485\ After committee
investigators presented Governor Locke with the above
information at a July 7, 1998 deposition, this
contribution was refunded to Djojomartono on July 23,
1998. Locke stated, ``The circumstances didn't look at
that legit when they showed it to us.'' \486\
---------------------------------------------------------------------------
\482\ Check No. 198 from Jessica Elnitiarta to cash in the amount
of $1,100, July 29, 1996. Exhibit 187.
\483\ Grand National Bank statements, Jessica Elnitiarta, July
1996. Exhibit 188.
\484\ Telephone transfer from Yanti Ardi to Jessica Elnitiarta in
the amount of $45,000, Aug. 1, 1996. Exhibit 189.
\485\ See Exhibit 110.
\486\ See Exhibit 182. David Postman, Investigation of foreign
campaign donations entangles Locke, Seattle Times, Aug. 6, 1998.
---------------------------------------------------------------------------
Sundari Elnitiarta (Sioeng's wife)
contributed $1,100.\487\ Committee investigators
determined that this contribution was funded by foreign
money. This contribution was written against a bank
balance of $16,264.\488\ The check was financed from a
$30,000 transfer from the personal bank account of
Yanti Ardi on July 24, 1996.\489\ That deposit, in
turn, was financed by a June 28, 1996 wire transfer of
$1,652,480 from R.T. Enterprises in Hong Kong.\490\
---------------------------------------------------------------------------
\487\ Check No. 1533 from Sundari, Sandra, Laureen Elnitiarta to
Gary Locke for Governor in the amount of $1,100, July 29, 1996. Exhibit
190.
\488\ Grand National Bank statement, Sundari, Sandra, Laureen
Elnitiarta, July 1996. Exhibit 191.
\489\ Telephone transfer from Yanti Ardi to Sundari Elnitiarta in
the amount of $30,000, July 24, 1996. Exhibit 192.
\490\ See Exhibit 110.
---------------------------------------------------------------------------
Chew Nin Kim and Yen Chu (Margaret) Kim
(officers of Supertrip Travel along with Ted Sioeng,
located in the Hollywood Metropolitan Hotel complex
owned by the Sioengs \491\ each contributed
$1,100.\492\ Committee investigators believe these to
be illegal ``straw donor'' contributions funded by
foreign money from the Sioengs.
---------------------------------------------------------------------------
\491\ See Exhibit 44.
\492\ Check No. 7206 from Chew Nin Kim to Gary Locke for Governor
in the amount of $1,100, July 28, 1996; Check No. 102 from Yen Chu Kim
to Gary Locke for Governor in the amount of $1,100, July 28, 1996.
Exhibit 193.
---------------------------------------------------------------------------
The Committee believes that Supertrip Travel provided
each officer with $1,100,\493\ which may have been
funded by a July 22, 1996 check from Jessica Elnitiarta
for $4,200.\494\ She financed that check with a $50,000
transfer from the personal bank account of Yanti Ardi
on July 18, 1996.\495\ The source of Ardi's funds,
again, was a June 28, 1996 wire transfer of $1,652,480
from R.T. Enterprises in Hong Kong.\496\ The Committee
notes that it is still awaiting bank documents related
to these transactions.
---------------------------------------------------------------------------
\493\ The Committee is awaiting documents responsive to a subpoena.
\494\ Check No. 177 from Jessica Elnitiarta to Supertrip Travel in
the amount of $4,200, July 22, 1996. Exhibit 194.
\495\ Check No. 2308 from Yanti Ardi to Jessica Elnitiarta in the
amount of $50,000, July 18, 1996. Exhibit 195.
\496\ See Exhibit 110.
---------------------------------------------------------------------------
Glenville Stuart (Sioeng associate)
contributed $1,100 to Gary Locke's campaign.\497\ The
contribution appears to have been funded by a $15,000
loan advance on July 2, 1996.\498\ Committee staff
deposed Stuart on February 18, 1998, before becoming
aware of his contribution to Governor Locke.
---------------------------------------------------------------------------
\497\ Check No. 371 from Glenville Stuart to Gary Locke for
Governor in the amount of $1,100, July 29, 1996. Exhibit 196.
\498\ Telephone transfer from Glenville Stuart loan account to
Glenville Stuart checking account in the amount of $15,000, July 2,
1996. Exhibit 197.
---------------------------------------------------------------------------
Gretel Pollard (an employee of Glenville
Stuart's Sunset Market & Liquor) contributed
$1,100.\499\ Committee investigators believe this is an
illegal ``straw donor'' contribution later reimbursed
with foreign money from Ted Sioeng.
---------------------------------------------------------------------------
\499\ Check No. 224 from Gretel Pollard to Gary Locke for Governor
in the amount of $1,100, July 29, 1996. Bank of America statement for
Gretel Pollard, July 23-Aug. 21, 1996. Check No. 374 from Glenville
Stuart to Gretel Pollard and deposit slip in the amount of $1,500, Aug.
1, 1996.
---------------------------------------------------------------------------
On July 29, 1996, Pollard wrote a $1,100 check to
Gary Locke for Governor against a bank balance of only
$24.\500\ Committee investigators found that on August
1, 1996, Stuart wrote a personal check to Pollard for
$1,500 which she deposited into her personal bank
account to cover the Locke check which Stuart funded
from the July 2, 1996 loan advance.\501\ However, on
September 9, 1996, Stuart reimbursed Sunset Market
$1,100,\502\ against a bank balance of $20,391.\503\
The money for this reimbursement was financed by a
September 5, 1996 wire transfer of $20,000 from R.T.
Enterprises in Hong Kong.\504\
---------------------------------------------------------------------------
\500\ See Exhibit 198.
\501\ See Exhibits 198 and 197.
\502\ Check No. 381 from Glenville Stuart to Sunset Market in the
amount of $1,100, Sept. 9, 1996. Exhibit 199.
\503\ Grand National Bank statement, Glenville Stuart, Sept. 1996.
Exhibit 200.
\504\ Transfer from R.T. Enterprises to Glenville Stuart in the
amount of $20,000, Sept. 5, 1996. Exhibit 201.
---------------------------------------------------------------------------
Ridwan Dinata (Jessica's husband) donated
$1,000,\505\ against a bank balance of $3,426.\506\ The
check was funded by a $3,000 check from Code 3 USA, the
family's gun and ammunition business. The memo line of
the check said ``Transfer to personal acct (Sioeng).''
\507\ Dinata transferred the remaining $2,000 back to
Code 3 on July 31, 1996.\508\ The $3,000 was funded by
domestic business receipts or loan advances from a
business credit line.\509\
---------------------------------------------------------------------------
\505\ Check No. 295 from Ridwan Dinata to Gary Locke for Governor
in the amount of $1,000, July 29, 1996. Exhibit 202.
\506\ Grand National Bank statement, Ridwan Dinata, July 1996.
Exhibit 203.
\507\ Check No. 1129 from Code 3 USA to Ridwan Dinata in the amount
of $3,000, July 29, 1996. Exhibit 204. See also Note 476.
\508\ Check No. 298 from Ridwan Dinata to Code 3 USA in the amount
of $2,000, July 31, 1996. Exhibit 205.
\509\ Grand National Bank statement, Code 3, USA, July 31, 1996.
Exhibit 206.
---------------------------------------------------------------------------
Kent La (Sioeng associate and President of
Loh Sun International) contributed $1,100.\510\ This
contribution was funded from a $4,870 deposit on July
25, 1996, which included $2,940 in cash from an unknown
source.\511\
---------------------------------------------------------------------------
\510\ Check No. 144 from Kent La to Gary Locke for Governor in the
amount of $1,100, July 29, 1996. Exhibit 207.
\511\ Deposit slip, Kent La, July 25, 1996. Exhibit 208.
---------------------------------------------------------------------------
The Committee found no evidence that Gary Locke solicited
contributions from Ted Sioeng, a foreign national, or engaged
in any improper campaign-related activities. However, Locke's
campaign accepted what appear to be conduit contributions
funded with foreign money, and may have actively solicited the
$8,700 in contributions from Ted Sioeng.
VII. The Sioeng-Related Contributions to the DNC Appear to Violate
Campaign Finance Laws
a. summary
There is strong evidence that most of the political
contributions made by Ted Sioeng's family and associates to the
Democratic National Committee are illegal. Over 75 percent of
the funds used to make the $400,000 in contributions described
in the previous section were wired into the United States from
foreign bank accounts in Hong Kong and Indonesia. It is likely
that the contributions were illegally made and should have been
returned over a year ago.
Each of the contributions suffer from one or both of the
following legal deficiencies: (1) the nominal contributor was
influenced by Ted Sioeng or another foreign national who
participated in the contribution decision; or (2) the
contribution was made by a U.S. corporation using foreign
money, and not from its domestic profits as the law requires.
b. contributor influenced by a foreign national
The three contributions made by Jessica Elnitiarta
individually and through Panda Estates to the DNC are highly
suspect--and likely illegal--due to Ted Sioeng's probable
involvement in the decisionmaking processes. As discussed
previously, the three contributions are as follows:
----------------------------------------------------------------------------------------------------------------
Account name Check date Check amount Returned
----------------------------------------------------------------------------------------------------------------
Jessica Elnitiarta.............................. 02/19/96 $100,000 No.*
Panda Estates Investment........................ 07/12/96 100,000 No.*
Panda Estates Investment........................ 07/29/96 50,000 No.*
----------------------------------------------------------------------------------------------------------------
* As of Sept. 16, 1998.
The Federal Election Campaign Act (``Act'') prohibits
foreign nationals from making contributions in connection with
an election to a political office.\512\ The prohibition applies
whether the contribution is made directly or indirectly and is
codified in Federal Election Commission regulations as follows:
---------------------------------------------------------------------------
\512\ 2 U.S.C. Sec. 441e.
A foreign national shall not directly or through any
other person make a contribution, or an expenditure, or
expressly or impliedly promise to make a contribution,
or an expenditure, in connection with a convention, a
caucus, or a primary, general, special, or runoff
election in connection with any local, State, or
Federal public office.\513\
---------------------------------------------------------------------------
\513\ 11 C.F.R. 110.4(a)(1).
Moreover, 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.\514\ In other words, if a foreign national
directed the president of a U.S. corporation to contribute to
the DNC, that would be illegal. Similarly, it would have been
illegal for Ted Sioeng to direct his daughter to contribute to
the DNC, or even to ``participate'' in the decisionmaking
process.\515\ Given what the Committee has learned about the
Sioeng family, it seems extremely likely that Ted Sioeng did
``participate'' in the decisions to contribute $250,000 to the
DNC in 1996.
---------------------------------------------------------------------------
\514\ See 11 C.F.R. 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.
\515\ Id.
---------------------------------------------------------------------------
Three associates of Ted Sioeng told the Committee that the
Sioeng family patriarch likely would have directed or approved
the $250,000 in DNC contributions made by his daughter, Jessica
Elnitiarta.
Business partner Johnny Ma, in response to a question about
Sioeng's control of the family money, testified that, if one of
Sioeng's daughters ``were to write a check, it would have to be
first approved by the father. Only when the father [said] yes,
then she would write a check.'' \516\ In a subsequent
interview, Ma told Committee staff that he avoided business
dealings with Jessica Elnitiarta because she could not act
without permission from her father.\517\ Ma stated further his
belief that Jessica Elnitiarta would have needed Ted Sioeng's
approval to contribute to the DNC.\518\
---------------------------------------------------------------------------
\516\ Ma Depo. at 86.
\517\ Ma Interview.
\518\ Id.
---------------------------------------------------------------------------
Tei Fu Chen, another Sioeng business associate, told
Committee staff that Sioeng raised his family in a traditional,
Chinese manner.\519\ He explained that, consistent with this
style of family life, Sioeng would have controlled the family
businesses and would have made the family's important
decisions.\520\ Chen opined that the $250,000 in DNC
contributions made by daughter Jessica either would have met
with Sioeng's approval, or Sioeng would have directed the
contributions himself.\521\
---------------------------------------------------------------------------
\519\ Interviews with Tei Fu Chen, June 12, 1998 and July 17, 1998.
\520\ Id.
\521\ Id.
---------------------------------------------------------------------------
A third Sioeng associate, Daniel K. Wong, expressed a
similar understanding to the Committee. Wong testified that,
while he believed Jessica Elnitiarta had the power to sign
checks and could attempt to influence her father, he was not
certain as to whether she ``make[s] the final decision or not''
in business contexts.\522\ In a subsequent interview, Wong told
Committee staff that Sioeng--not his daughter--would have
decided whether or not to make political contributions.\523\
Furthermore, Wong said that Jessica Elnitiarta was not involved
in politics and that Jessica's father, not Jessica, was the
family-member approached by political fund-raisers.\524\ This
is consistent with what the Committee has learned about David
Lang's fund-raising for Washington State Governor Gary
Locke.\525\
---------------------------------------------------------------------------
\522\ Wong Depo. at 63-64. Significantly, when asked whether
Jessica Elnitiarta ``was entrusted with making significant business
decisions,'' Wong's immediate response did not focus upon whether
Jessica could make independent decisions for the family businesses, but
whether she could influence her Ted Sioeng's decisions. ``My impression
is . . . she can make influence, and I'm sure that the father might
listen to her in a certain way.'' Id. at 64.
\523\ Wong Interview.
\524\ Id.
\525\ See ``Contributions to Governor Gary Locke.''
---------------------------------------------------------------------------
c. corporate contribution made with foreign funds
The Federal Election Commission interprets the Act and its
regulations as prohibiting a domestic subsidiary of a foreign
corporation from making political contributions with funds from
the parent.\526\ The FEC has applied this prohibition broadly,
ruling that it extends to a situation where ``most'' of the
funds used to make a political contribution ultimately come
from a foreign parent.\527\ Likewise, the FEC has not limited
the prohibition to situations involving a foreign parent
corporation and a domestic subsidiary. Rather, it has applied
the rationale ``to the parallel situation of . . . domestic
corporations majority-owned by foreign national individuals.''
\528\
---------------------------------------------------------------------------
\526\ See FEC Advisory Opinion 1989-20.
\527\ Id.
\528\ In re Royal Hawaiian Country Club, FEC MUR 2892 at 8 (1993).
Exhibit 209.
---------------------------------------------------------------------------
This legal framework makes it abundantly clear that a U.S.
corporation cannot make political contributions with funds
provided from abroad. Yet this is precisely how Panda Estates
funded most of its $100,000 contribution to the DNC. And it is
likely how Loh Sun International funded its $50,000
contribution to the same entity.
d. dnc response
The DNC has not returned any of the $400,000 in Sioeng-
related contributions it received in 1996. This is not because
the DNC failed to review the seven contributions because it
did. Rather, the money was retained after the DNC conducted
what it termed an ``in-depth'' review of many suspect
contributions. In reality, the review was based largely on
information from public databases and representations made by
the contributors themselves, when they actually were
contacted.\529\ However, it is important to note that all of
the witnesses have either taken the Fifth Amendment, fled the
country, or refused to provide any testimony under oath.
---------------------------------------------------------------------------
\529\ See, e.g., Democratic National Committee, DNC In-Depth
Contribution Review, at 2-3. Exhibit 210.
---------------------------------------------------------------------------
On May 14, 1998, the Committee deposed Joseph Sandler,
General Counsel of the Democratic National Committee since
February 1993, on the subject of the Sioeng-related
contributions as well as DNC guidelines concerning what types
of contributions it accepts and retains. The communications
preceding Sandler's deposition are an instructive look into the
DNC's position on these matters.
On March 18, 1998, Committee staff contacted counsel for
the DNC and requested that DNC Chairman, Governor Roy Romer,
agree to be deposed on the above matters. On March 24, 1998,
DNC counsel wrote back, ignoring the request to depose Governor
Romer, but stating the DNC's position on the $250,000
contributed by Jessica Elnitiarta and Panda Estates Investment
as follows:
A review of information relating to these contributors
indicates that Ms. Elnitiarta has been in residence in
the State of California for some time, and that Panda
Estates Investment Inc. was incorporated in the State
of California in April of 1993. Additional inquiry has
shown that both Ms. Elinitiarta and Panda Estates
Investment Inc. have substantial assets in the United
States. Again, all of this information has been
provided to your Committee.
A meeting between counsel for the DNC and counsel for
Ms. Elnitiarta confirmed that Ms. Elnitiarta was a
permanent resident of the United States of substantial
means. The DNC also received the assurance of her law
firm that the referenced contributions were entirely
lawful. Subsequent to this meeting, her law firm has
publicly stated that any political contributions made
by Ms. Elnitiarta personally or through her business
interests, . . . have been lawful and properly
documented. In the same statement they have also
publicly confirmed that Ms. Elnitiarta has been a
permanent resident of the United States for more than
five years and has resided in California for more than
ten years. They go on to state that she is a successful
businesswoman who, along with her family, has done a
great deal to promote the economic and social
development of the Asian-American community in
California and throughout the United States.
* * * * * * *
Based on this information, the DNC determined to retain
the referenced contributions for the simple reason that
no credible information has been advanced to support a
contrary course of action.\530\
---------------------------------------------------------------------------
\530\ Letter from Judah Best, DNC counsel, to Richard D. Bennett,
chief counsel, Government Reform and Oversight Committee, Mar. 24, 1998
(with attachment). Exhibit 211.
This curious explanation rests not on any sort of proof
that the contributions in question are legal, but on the notion
that the money need not be returned unless someone comes
forward with evidence proving its illegality. Essentially, the
DNC's position was (and, presumably, is) that because Jessica
Elnitiarta is a U.S. citizen and Panda Estates a U.S. company,
and both appear to have assets, there is no reason to return
the money. Furthermore, the family lawyers told the DNC that
the contributions were legal, although apparently they did not
explain in any detail the sources of funds used to make the
contributions, or why their clients believe discussing the
matter under oath might incriminate them.
On March 30, 1998, Committee staff wrote counsel for the
DNC again seeking to depose Governor Roy Romer.\531\ The letter
explained that, while the Committee appreciated receiving the
DNC's position on the Elnitiarta and Panda Estates
contributions, the deposition would be broader, exploring DNC
policies on the retention or return of contributions as well as
other matters.\532\
---------------------------------------------------------------------------
\531\ Letter from Richard D. Bennett, chief counsel, Government
Reform and Oversight Committee, to Judah Best, DNC counsel, Mar. 30,
1998. Exhibit 212.
\532\ Id.
---------------------------------------------------------------------------
Counsel for the DNC responded by letter dated April 3,
1998.\533\ In it, DNC counsel explained that ``the DNC's
decision with regard to retaining the contributions from
Jessica Elnitiarta and her company, as well as the other
contributions about which you now indicate you seek information
(contributions from Subandi and Suryanti Tanuwidjaja and Loh
Sun International), were the result of an inquiry commenced in
November of 1996 which concluded in late February of 1997.''
\534\ This was the DNC's ``In-Depth Contribution Review,''
conducted at the DNC's behest by the law firm Debevoise &
Plimpton and the Big-6 accounting firm, Ernst & Young. As part
of the review, the DNC had Debevoise & Plimpton and Ernst &
Young examine all contributions of $2,500 or more solicited by
John Huang, which included the seven Sioeng-related
contributions.\535\
---------------------------------------------------------------------------
\533\ Letter from Judah Best, DNC counsel, to Richard D. Bennett,
chief counsel, Government Reform and Oversight Committee, Apr. 3, 1998
(with attachment). Exhibit 213.
\534\ Id.
\535\ Id. at attachment.
---------------------------------------------------------------------------
In the April 3, 1998 letter, DNC counsel was adamant that
Governor Romer was the wrong person to depose about DNC
policies and the Sioeng-related contributions. As a result, the
Committee agreed to depose Joseph Sandler, and did so on May
14, 1998.
As general counsel to the DNC, Sandler is responsible for
all legal matters affecting the national party, including
campaign finance, election, and ethics-related matters at the
Federal, state, and local levels.\536\ Sandler testified that,
during the 1996 election cycle, the DNC vetted contributions it
received by reviewing each for both appropriateness and
legality.\537\ According to Sandler, it was the responsibility
of the DNC fund-raisers and the finance administrator--not the
general counsel's office--to raise issues concerning the
legality and appropriateness of contributions.\538\ The
appropriateness checks used to consist of ``Nexis,'' or
computer database, searches for contributions over a certain
amount, but that practice ended once the person doing the
searches left the DNC in 1994.\539\
---------------------------------------------------------------------------
\536\ Sandler Depo. at 5.
\537\ Id. at 6.
\538\ Id. at 12, 13.
\539\ Id. at 15.
---------------------------------------------------------------------------
Sandler testified that, throughout the 1996 election cycle,
the DNC's policy was not to accept any contributions from
foreign nationals.\540\ Sandler claimed that the policy applied
to both the DNC Federal and non-Federal accounts, meaning the
DNC's policy was not to accept hard or soft money contributions
from foreign nationals.\541\
---------------------------------------------------------------------------
\540\ Id. at 25.
\541\ Id. at 25.
---------------------------------------------------------------------------
But despite the DNC's policies against accepting money from
foreign nationals, and despite its vetting procedures, it
accepted large amounts of foreign money. Indeed, by the end of
February 1997, the DNC had determined to return nearly $1.5
million in contributions as a result of its in-depth
review.\542\
---------------------------------------------------------------------------
\542\ Statement of Judah Best, DNC counsel, Feb. 28, 1997. Exhibit
214.
---------------------------------------------------------------------------
According to Sandler, the in-depth contribution review was
initiated soon after and because the press broke the campaign
finance scandal. Sandler explained:
There were many, many questions being raised in the
press in October and November of 1996 about
contributions that had been made [to] 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.\543\
---------------------------------------------------------------------------
\543\ Sandler Depo. at 27-28.
As noted, the review was conducted largely by Ernst &
Young, which attempted to contact certain categories of
corporate and individual donors to run through a questionnaire
on their donations and ran ``[s]earches of standard databases
containing publicly available information.'' \544\ The
Committee has not seen summary data on how many contributors
were actually spoken to and provided useful information, but a
review of questionnaires produced by the DNC suggests that
many--including Jessica Elnitiarta, Subandi Tanuwidjaja, and
Suryanti Tanuwidjaja--were never reached.
---------------------------------------------------------------------------
\544\ DNC In-Depth Contribution Review, at 2. Exhibit 210.
---------------------------------------------------------------------------
As a result of the in-depth contribution review, the DNC
decided to return at least 77 contributions.\545\ The DNC
produced to the Committee a chart summarizing the 77 returned
contributions.\546\ The chart consists of five columns and the
fifth is entitled ``Reason.'' Among the reasons stated for
returning contributions are, ``deemed inappropriate,''
``insufficient information,'' ``U.S. sub foreign national,''
``could not confirm source--U.S. $,'' ``U.S. sub foreign
national partic in decision inadvertent,'' and ``U.S. sub--
source did not--U.S. $.'' \547\ As is evident, contributions
were returned for a variety of reasons, including that the DNC
simply did not have sufficient information to verify the
contribution's legality and appropriateness.\548\ Yet, not one
of the Sioeng-related contributions appears on the list.
---------------------------------------------------------------------------
\545\ Id. at 1. The Committee notes that other contributions were
returned by the DNC at a later date.
\546\ Id. The Committee notes that, although there are no page
numbers on the chart, it can be found at the pages Bates-stamped DNC
4298589-DNC 4298593. Exhibit 210.
\547\ Id.
\548\ Id. at 1.
---------------------------------------------------------------------------
The DNC decided to retain Jessica Elnitiarta's and the two
Panda Estates' contributions even though Jessica was never
spoken to and, to Sandler's knowledge, nor was anyone else at
the company.\549\ The Committee notes, once again, that 28
witnesses with knowledge of these contributions either invoked
their Fifth Amendment privilege against self-incrimination,
fled the country, or were foreign witnesses that refused to be
interviewed, rather than answer questions about the donations
to the DNC.\550\ Based entirely on information from public
databases, Sandler said he determined the following:
---------------------------------------------------------------------------
\549\ Sandler Depo. at 86-87.
\550\ See Exhibit 1.
My conclusion was that, first of all, it was pretty
clear that Elnitiarta was a legal permanent resident of
the U.S., and press accounts were all consistent with
that. Secondly, she appeared to own very substantial
assets in the United States, a number of corporations,
residential and commercial real estate, and that was
consistent with making a major contribution; she had
the wherewithal to make the contribution.\551\
---------------------------------------------------------------------------
\551\ Id. at 88.
Later during his deposition, Sandler testified that the
database information he had seen on Elnitiarta indicated ``that
her family has a substantial amount of money.'' \552\ Asked to
expound on this point, Sandler explained his understanding that
the family was engaged in the cigarette business overseas:
---------------------------------------------------------------------------
\552\ Id. at 101.
Q: I'm sorry, what was the family business you are
referring to?
A: It says here that her father is a principal in an
Indonesian cigarette company and--not her father, a
relative is a principal of an Indonesian cigarette
company and--well, also that her family owns some of
this--basically owns some of this property with
her.\553\
---------------------------------------------------------------------------
\553\ Id. at 102.
In short, Sandler was aware of the Sioeng family's foreign
tobacco interests and was satisfied that the database and press
information he saw was sufficient to support the conclusion
that the family's contributions should be retained.\554\
---------------------------------------------------------------------------
\554\ Id. at 89.
Q: So in the case of these three contributions, I take it
you were satisfied with the information provided to you;
you were satisfied that information was sufficient to make
your decision as to whether to retain or return the
contributions?
A: Yes.
Prior to his deposition, Sandler had never seen records of
the bank accounts from which the Elnitiarta and Panda Estates
contributions were made.\555\ Confronted with records that
showed Elnitiarta's contribution was made with foreign
money,\556\ 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.\557\ Sandler explained:
\555\ Id. at 103.
\556\ Committee staff showed Sandler bank records that had been
made exhibits to the Senate Campaign Finance Report. Curiously,
although the report had been made ordered printed on Mar. 10, 1998, and
was widely reported on in the press, neither Sandler nor DNC counsel
was aware that it was publicly available. See Sandler Depo. at 114.
\557\ Sandler Depo. at 121-122.
The Thompson committee, in its characteristically
disingenuous and dishonest and distorted fashion, would
say [Elnitiarta's contribution] is [a] foreign source
contribution, thereby implying that it is illegal.
Absolutely false. Nothing illegal whatsoever about that
contribution if it is my money and I am entitled to it.
The fact that I earned it abroad, I pay taxes on my
worldwide--as a U.S. Citizen, I pay taxes on my
worldwide income. It's my money. Nothing wrong at all
---------------------------------------------------------------------------
with that contribution.
And that's the logical shuffle, distortion, and
twisting, and as I say, unfortunately in my experience,
characteristic of the entire Thompson committee report,
that leads me to the conclusion that this information
is virtually meaningless with respect to whether the
DNC should now conclude that these contributions were
unlawful or inappropriate.\558\
---------------------------------------------------------------------------
\558\ Id. at 122. Shortly after making this statement, Sandler
admitted that the bank account he had been shown was, in fact, relevant
to a determination of whether to return or retain Elnitiarta's
contribution. Id. at 123.
Sandler and the DNC appear to attach no significance to the
fact that Jessica Elnitiarta and her entire family refuse to
communicate on the subject of whether their contributions were
legal. While this remains troubling to the Committee, it
apparently does not to the DNC. Furthermore, it should be noted
that in a meeting with Committee majority staff and the Justice
Department regarding immunity, DOJ opposed granting immunity to
Jessica Elnitiarta because they believed she is a key figure
under review by the Campaign Finance Task Force.
When the DNC was 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, to
fund the contribution.\559\ This argument fails for at least
two reasons.
---------------------------------------------------------------------------
\559\ Id. at 162.
---------------------------------------------------------------------------
First, it is incoherent. If the funds actually used to make
a political contribution can be traced, through bank records,
to a foreign source, then why would it matter, from a legal
standpoint, that the company generated domestic income in the
next month or the next week, even.
Second, the argument is contradicted by FEC practice and
precedent. In Advisory Opinion 1992-16, the FEC was asked to
consider the legality of political contributions a U.S.
subsidiary of a foreign company sought to make. The Commission
opined 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.''
The point is, to test the legality of a contribution, one must
look at its source at the time the contribution was made, and
not at income the corporation might generate over some longer
period of time.\560\
---------------------------------------------------------------------------
\560\ See also, In re West Beach Estates, FEC MUR 2892 (1994)
(holding that contributions violated 2 U.S.C. Sec. 441e(b) because
ultimate source of funds was loans from a Japanese corporation).
Exhibit 215.
---------------------------------------------------------------------------
The $100,000 contribution made by Panda Estates to the DNC
was funded mostly by foreign money. No explanation yet offered
by the DNC sways the Committee from its conclusion that this
contribution is illegal and should be returned by the DNC.
VIII. Republican Contributions
a. contributions to matthew k. fong
1. Summary
Matthew K. Fong, then a candidate for California State
Treasurer, accepted a $2,000 contribution from Jessica
Elnitiarta during his 1994 campaign. The Committee found no
evidence of foreign funding of this contribution by Elnitiarta,
a U.S. permanent resident.
A year later, in an effort to reduce outstanding campaign
debt, Fong personally solicited contributions from Sioeng and
businesses controlled by the Sioeng family. Subsequent to those
solicitations, Ted Sioeng, a foreign national, made
contributions totaling $50,000 from his personal bank account
to Fong's campaign, Panda Estates Investment, Inc., a company
controlled by Sioeng through his daughter, Jessica Elnitiarta,
donated an additional $50,000.
The Committee has determined that all of the 1995
contributions totaling $100,000 were improper and/or illegal
because (1) Sioeng is a foreign national and, thus, arguably
ineligible to contribute under Federal election laws; and (2)
the source of the funds were Sioeng's overseasbusinesses. Fong
returned all of these contributions in April 1997, immediately after
questions arose about their propriety in news accounts.
The Committee has uncovered no evidence suggesting that
Fong knew the contributions were improper, or that he knowingly
solicited improper and/or illegal contributions. The Committee
also notes that Fong informed Sioeng of the appropriate state
laws governing campaign contributions, and that Fong fully
cooperated with this and other investigations of improper and/
or illegal campaign contributions. Of course, Ted Sioeng and
his family have refused to cooperate with the investigation, so
we do not have their accounts of these events.
2. Findings
Fong testified that he first met Mr. Sioeng ``around
1988,'' \561\ after ``being introduced to him by Julia Wu at a
Republican rally in Monterey Park.'' \562\ Fong testified that
his only knowledge of Sioeng at the time of the Republican
rally in Monterey Park was that he came from ``a very prominent
family in the [Asian-American] community,'' \563\ and that they
``were major donors to a lot of the charities.'' \564\ Fong
said that subsequent to meeting Ted Sioeng, he ``developed a
friendship [with Sioeng] that was based upon our seeing each
other at community events, but nothing more than that.'' \565\
---------------------------------------------------------------------------
\561\ Deposition of Matthew K. Fong, vol. I, Mar. 2, 1998 at 15.
[Hereinafter, ``House Fong Dep., vol. I'']
\562\ Id.
\563\ House Fong Depo., vol. I, at 16.
\564\ Id.
\565\ Id. The Committee notes that Mr. Fong was invited to the 1993
wedding of Jessica Elnitiarta, and attended and spoke at the 1995
wedding of Sandra Elnitiarta (See Deposition of Glenville Anthony
Stuart, Feb. 18, 1998 at 94; Interview of Julia Wu, Mar. 12, 1998).
---------------------------------------------------------------------------
Fong stated that, during the time that he was developing a
relationship with the Sioeng family, he also ``was trying to
persuade them to get more involved politically and support
Asian-Americans.'' \566\ Sioeng told Fong that since his
children were raising their families in the United States, he
wanted them to become politically active, and ``would like them
to be the ones to participate politically.'' \567\
---------------------------------------------------------------------------
\566\ House Fong Depo., vol. I, at 28.
\567\ Id.
---------------------------------------------------------------------------
Shortly after that conversation, Jessica Elnitiarta
contributed $2,000 to Fong's successful 1994 campaign for State
Treasurer.\568\ Fong said he believed the contribution was the
result of a $1,000-per-ticket event at the Biltmore Hotel in
Los Angeles.\569\ He further stated that Elnitiarta may have
bought a ticket and decided to contribute an additional
$1,000.\570\ The Committee found no evidence of foreign funding
of this contribution by Elnitiarta, a U.S permanent resident.
---------------------------------------------------------------------------
\568\ Deposition of Matthew K. Fong conducted by U.S. Senate
Committee on Governmental Affairs, Special Investigation, Sept. 19,
1997 at 14. [hereinafter ``Senate Fong Depo.''] Also see check No. 417
from Jessica Elnitiarta to Matt Fongs for State Treasurer in the amount
of $2,000, Sep. 28, 1994. Exhibit 216.
\569\ Id. at 15.
\570\ Id.
---------------------------------------------------------------------------
Following his election as California State Treasurer,
Fong's campaign committee had a deficit of ``at least a few
hundred thousand dollars.'' \571\ In an effort to defray that
debt, Alex Spanos, the owner of the San Diego Chargers football
team, contributed $100,000 to Fong's campaign committee.\572\
Fong used that donation as a ``challenge, to the Chinese-
American community to match it [the amount] ''.\573\ As part of
that challenge, ``Ted [Sioeng] and his family were asked for
support in retiring our debts.'' \574\ Fong acknowledged
personally soliciting Sioeng for contributions from himself,
his family, and business associates.\575\
---------------------------------------------------------------------------
\571\ House Fong Depo. vol. I, at 21.
\572\ Senate Fong Depo. at 29-31.
\573\ Id.
\574\ House Fong Depo. vol. I, at 22.
\575\ Id. at 24.
---------------------------------------------------------------------------
Fong testified that at the time he initially solicited
Sioeng, he informed Sioeng of the pertinent California state
laws regarding political donations. Fong said he specifically
told Sioeng ``that there is no [contribution] limitation in a
state campaign,'' \576\ and that corporate donations are
legal.\577\ Fong also stated that, ``It was also raised at one
point that Mr. Sioeng's partners or the family's partners would
also like to support me.'' \578\ In response, Fong told Sioeng
that, ``Overseas contributions are not acceptable. It has to be
[from] a U.S. citizen or green card holder.'' \579\ The
Committee has uncovered no information disputing Fong's
testimony concerning what he told Sioeng of the appropriate
legal restrictions on political donations.\580\
---------------------------------------------------------------------------
\576\ House Fong Depo. vol. I, at 34, See also Id. at 30-32, 53-55,
61-63; Senate Fong Depo. at 34-40.
The Committee notes Mr. Fong repeatedly stated that his
conversations with Mr. Sioeng about California state campaign finance
statutes occurred in English without an interpreter present. Numerous
other witnesses, including Ms. Elnitiarta, testified that Mr. Sioeng
had a limited grasp of conversational English. See Interview with
Jessica Elnitiarta conducted by U.S. Senate Committee on Governmental
Affairs, Special Investigation; Interview with Julia Wu, Mar. 12, 1998;
Interview the Norman Hsu March 13, 1998; Deposition of Stephen M.
Kinney conducted by U.S. Senate Committee on Governmental Affairs,
Special Investigation, Sept. 23, 1997 at 26. It is unknown whether
Sioeng could understand, in English, the basic rules concerning foreign
national making California state campaign contributions.
\577\ House Fong Depo., vol. I, at 34.
\578\ Id.
\579\ Id.
\580\ The Committee notes that Mr. Sioeng, that only other witness
to the conversation, fled the United States and has refused Committee
requests to be interviewed or deposed.
---------------------------------------------------------------------------
Some time in late 1994 or early 1995, Fong told Ted Sioeng
of Spanos's challenge in order to encourage Sioeng to
contribute.581 Sioeng responded, ``Well, I would
certainly like to be of help in trying [to help] you to match
that.'' 582 Although Fong did not take Sioeng's
words as a commitment of a specific amount of
money,583 he, or his fundraiser, Steven Kinney,
followed up with a phone call to Sioeng asking for a
contribution.584 On or about April 20, 1995, Fong
``dropped by'' to see Sioeng at his office in the Hollywood
Metropolitan Hotel.585
---------------------------------------------------------------------------
\581\ Senate Fong Depo. at 29-30.
\582\ Id. at 30.
\583\ Id.
\584\ Id. at 33.
\585\ House Fong Depo. vol. I, at 28.
---------------------------------------------------------------------------
When Fong arrived, a check in the amount of $20,000
586 was ``already made out,'' 587 meaning
that the ``payee [line] was the only thing that was blank.
Everything else, the date, the amounts, signatures''
588 were filled out. Fong testified that an unknown
person who worked for Sioeng asked him to fill the check out,
but that he had a ``policy'' not to write anything on a check,
so as to avoid being accused of converting campaign funds for
personal use.589 As a result, Fong testified that
the unknown staffer wrote the formal name of his campaign
committee in the ``Pay to the order of'' line.590
---------------------------------------------------------------------------
\586\ Check No. 671 from Sioeng San Wong to Matt Fong for State
Treasurer in the amount of $20,000, Apr. 20, 1995. Exhibit 217
[hereinafter Sioeng Check 1].
\587\ House Fong Depo. vol. I, at 32.
\588\ Id.
\589\ Id. at 34.
\590\ Id. at 33.
---------------------------------------------------------------------------
Eight days later, on April 28, 1995, Sioeng wrote a second
check in the amount of $30,000 to Fong's campaign.\591\ Fong
does not know whether Sioeng gave him both checks at the same
time.\592\
---------------------------------------------------------------------------
\591\ Check No. 672 from Sioeng San Wong to Matt Fong for State
Treasurer in the amount of $30,000, Apr. 28, 1995 [hereinafter Sioeng
Check 2] Exhibit 218.
\592\ House Fong Depo., vol. I at 35. (``Mr. Sioeng handed me an
envelope and the envelope was sealed, and I took it to my office.
Whether that envelope had one check or two, I couldn't tell you. But I
know that I didn't have to go back and pick up a second check.'')
---------------------------------------------------------------------------
The contributions were drafted on a personal checking
account held by Sioeng in his Chinese name, Sioeng San Wong.
Records turned over to the Committee by Fong's campaign show
handwritten notations indicating that the checks were credited
to: ``Dr. Ted Sioeng . . . business owner, Pacific Inn, 2717
Sunset Blvd., L.A., 90026,'' \593\ Fong testified that his
wife, Paula Fong, appears to have written down the tracking
information.\594\ Campaign finance forms filed by Fong's
campaign with the California Secretary of State show that both
contributions were credited to Ted Sioeng.\595\
---------------------------------------------------------------------------
\593\ Sioeng Check 1; Sioeng Check 2.
\594\ House Fong Depo., vol. I, at 36.
\595\ Independent Expenditure Committee and Major Donor Committee
Campaign Statement filed by Matt Fong for State Treasurer, Jan. 1, 1995
to June 30, 1995. Exhibit 219.
---------------------------------------------------------------------------
Fong told the Committee that he ``assumed it [the donation]
was from his family,'' \596\ explaining that Sioeng ``said
earlier he wanted his family to support me, that his daughters,
were supporting me, so I just made the assumption it was from
his family.'' \597\ In addition, Fong stated that he had ``no
personal knowledge that this Sioeng San Wong is in fact Ted
Sioeng,'' \598\ rather, he thought Sioeng San Wong was Sioeng's
``son or daughter'' or some other relative.\599\ In any event,
the point was a moot one to Fong: ``[A]s far as I was
concerned, I had no reason not to accept [the check] even if it
[had] said Ted Sioeng.'' \600\
---------------------------------------------------------------------------
\596\ House Fong Depo., vol. I, at 61. See also House Fong Depo.
vol. II, at 46 (`` This is a family contribution. Sioeng San Wong is a
family contribution as far as I'm concerned.'').
\597\ House Fong Dep., vol. I, at 61.
\598\ Id. at 28.
\599\ Id. at 29.
\600\ House Fong Depo., vol. I. at 29.
---------------------------------------------------------------------------
The third and final contribution from the Sioeng family was
made on December 14, 1995, when Panda Estates Investment, Inc.
made a $50,000 donation to Matt Fong for State Treasurer.\601\
This last contribution was not related to debt left over from
the 1994 campaign; rather, it was a result of ``ongoing fund-
raising'' Fong did as ``a sitting State Treasurer.'' \602\
---------------------------------------------------------------------------
\601\ Independent Expenditure Committee and Major Donor Committee
Campaign Statement filed by Matt Fong for State Treasurer, Jan. 1, 1995
through Dec. 31, 1995. Exhibit 220.
\602\ House Fong Depo., vol. II, at 102-103.
---------------------------------------------------------------------------
3. Sources of Contributions
The Committee has determined that all three contributions
were ultimately funded by wire transfers from Sioeng's overseas
businesses:
At the time Sioeng wrote the $20,000 check
on April 20, 1995, his bank account contained only
$1,613.\603\ Six days after the contribution was made,
Jessica Elnitiarta transferred $30,000 from the
family's loan account into Sioeng's personal checking
account.\604\ The bulk of that loan was repaid by
Jessica Elnitiarta through a November 3, 1996 wire
transfer of $928,432 from Pristine Investments,\605\ a
Hong Kong company firm that appears to be owned or
controlled by Sioeng.\606\
---------------------------------------------------------------------------
\603\ Grand National Bank statement, Sioeng San Wong, Apr. 1-28,
1995. Exhibit 221.
\604\ Telephone transfer request from Laureen & Sandra Elnitiarta
TCD Loan to Sioeng San Wong in the amount of $30,000, Apr. 26, 1995.
Exhibit 222.
\605\ Wire transfer from Pristine Investments to Yanti Ardi in the
amount of $928,432.17, Nov. 3, 1995; Telephone transfer from Yanti Ardi
to Sioeng San Wong in the amount of $992,000, Nov. 3, 1995; Telephone
transfer from Sioeng San Wong to Laureen & Sandra Elnitiarta TCD Loan
in the amount of $991,967, Nov. 3, 1995. Exhibit 223.
\606\ See ``Sioeng's Foreign Businesses Interests.''
---------------------------------------------------------------------------
The second check, dated April 28, 1995, was
made against a balance of $39,635.607 This
balance consisted mainly of a $30,000 check from
Glenville Stuart which Sioeng deposited on the same day
he made the Fong donation.608 Stuart funded
his check from a $55,000 wire transfer which he
received on April 27, 1995 from Pristine
Investments.609 Stuart testified that
Pristine Investments is ``associated with Ted Sioeng.''
610
---------------------------------------------------------------------------
\607\ See Exhibit 221.
\608\ Check No. 224 from Glenville A. Stuart to Sioeng San Wong in
the amount of $30,000, Apr. 28, 1996. Exhibit 224.
\609\ Wire transfer from Pristine Investment to Glenville Stuart in
the amount of $55,000, Apr. 27, 1995. Exhibit 225.
\610\ Stuart Depo. at 65.
---------------------------------------------------------------------------
The Panda Estates Investment company bank
account contained only $7,096 at the time the $50,000
check to Fong's campaign was written.611 The
check cleared the bank 4 days later, causing a $43,889
account overdraft.612 The next day, Jessica
Elnitiarta covered the overdraft by transferring
$50,000 from an account held by Yanti Ardi, Sioeng's
sister.613 This transfer was funded by a
wire transfer of $150,000 from Pristine Investments in
Hong Kong to Ardi account 8 days later.614
---------------------------------------------------------------------------
\611\ Grand National Bank statement, Panda Estates Investment,
Inc., Dec. 1-29, 1995. Exhibit 226.
\612\ Id.
\613\ Wire from Yanti Ardi to Panda Estates in the amount of
$50,000, Dec. 19, 1995. Exhibit 227.
\614\ Wire transfer from Pristine Investment to Yanti Ardi in the
amount of $150,000, Dec. 11, 1995. Exhibit 228.
---------------------------------------------------------------------------
In its April 28, 1997 issue, Newsweek Magazine published an
article on the Sioeng family contributions to Mr. Fong's
campaign.615 The day after that issue appeared on
newsstands, Fong's campaign treasurer wrote a letter to Sioeng
asking for verification that (1) the donations came from
Sioeng's personal funds, and (2) whether Sioeng was a U.S.
citizen or legal resident.616 The letter went on to
state that failure to respond within 24 hours would result in
the campaign returning the donations.617 A virtually
identical letter was sent the same day to Sioeng and Jessica
Elnitiarta at the Panda Estates Investment
office.618 When neither Sioeng nor Elnitiarta
provided a timely response, Fong's campaign committee returned
all three donations.619
---------------------------------------------------------------------------
\615\ Daniel Klaidman and Mark Hosenball, Connecting the Dots: The
Feds explore a China-California Money Trail, Newsweek, Apr. 28, 1997 at
40.
\616\ Letter from William R. Turner, Treasurer of ``Matt Fong for
State Treasurer,'' to Ted Sioeng/San Wong Sioeng, Apr. 21, 1997
[hereinafter Turner Letter 1] Exhibit 229.
\617\ Id.
\618\ Letter from William R. Turner to Ted Sioeng, Panda Estates
Investment, Inc., Apr. 21, 1997 [hereinafter Turner Letter 2] Exhibit
230. The Committee notes that both letters stated that Mr. Fong's
campaign ``will cooperate fulling with any federal or state
investigation,'' and was ``prepared to turn over all records concerning
these contributions to the United States Justice Department for their
on-going investigation.''
\619\ Turner Letter 1, Turner Letter 2. Check No. 1371 from Matt
Fong for State Treasurer to San Wong Sioeng in the amount of $50,000,
Apr. 22, 1997; Check No. 1372 from Matt Fong for State Treasurer to
Panda Estates Investment in the amount $50,000, Apr. 22, 1997. Exhibit
231.
---------------------------------------------------------------------------
More than 1 month after the contributions were returned,
Jessica Elnitiarta's attorney sent a letter to Fong's campaign
protesting the campaign's decision. Counsel contended that
Jessica Elnitiarta was traveling and, thus, unable to respond
in a timely fashion.620 In addition, counsel stated
that Jessica Elnitiarta ``has resided in California for more
than ten years, and has been a permanent resident of the United
States for more than five years.'' 621
---------------------------------------------------------------------------
\620\ Letter from Mark J. MacDougall and Steven R. Ross, counsel
for Ms. Elnitiarta, to William R. Turner, Treasurer, Matt Fong of State
Treasurer, May 27, 1997. Exhibit 232.
\621\ Id.
---------------------------------------------------------------------------
The Committee notes that Jessica Elnitiarta's attorneys
have refused to comply with subpoenas, have refused to produce
Elnitiarta for interviews, and have not produced promised
information.
5. Conclusions
The Committee concludes that all three donations made by
Sioeng and Panda Estates were funded with money transferred
from overseas. However, the Committee finds no evidence that
Fong knew the source of the contributions. In fact, Fong
testified that he notified Sioeng of the relevant sections of
appropriate state law, and his campaign promptly returned the
contributions after questions arose about them.
B. Contribution to the National Policy Forum
1. Summary
On July 18, 1995, in between contributions to Matt Fong,
the Sioeng family contributed $50,000, through its company,
Panda Industries, Inc., to the National Policy Forum (``NPF'').
Established in 1993 by then-Republican National Committee
Chairman Haley Barbour, the NPF was a think tank designed ``to
develop a national Republican policy agenda.'' 622
During the time that Panda Industries made its contribution,
the NPF operated as a non-profit corporation under Section
501(c)(4) of the Internal Revenue Code.623 As such,
the NPF could legally accept donations from corporations and
foreign nationals.624 The story of Sioeng's
contribution to the NPF overlaps with the story of his
contributions to Fong.
---------------------------------------------------------------------------
\622\ Investigation on Illegal or Improper Activities in Connection
with the 1996 Federal Election Campaign--Part II: Hearings before the
Committee on Governmental Affairs, U.S. Senate, 105th Cong., 1st sess.
176 (1997).
\623\ Id. at 215.
\624\ Id.
---------------------------------------------------------------------------
2. Findings
On April 28, 1995, as previously noted in this section,
Sioeng donated $30,000 to ``Matt Fong for State Treasurer.'' At
the time the donation was made, Fong testified that he and
Speaker Gingrich:
. . . worked together on the National Strategies Group,
which is his group, and he and I would regularly meet,
and he extended the invitation to me to stop by when I
was in town, and if I had anybody with me to bring them
with me.625
---------------------------------------------------------------------------
\625\ House Fong Depo., vol. I, at 67.
As a result of that open-ended invitation, Fong had planned
to meet with the Speaker at his Capitol Office in July
1995.626 The details of that meeting were arranged
by Steven M. Kinney, Fong's campaign consultant who also served
as an advance person and fundraiser for the
Speaker.627
---------------------------------------------------------------------------
\626\ Id. at 66.
\627\ Id. at 71. See also Deposition of Stephen M. Kinney before
the U.S. Senate Committee on Governmental Affairs, Special
Investigation, Sept. 23, 1997, at 7.
---------------------------------------------------------------------------
Fong invited Sioeng to attend the meeting because he
``thought this would be a nice opportunity to show my
appreciation for the Sioeng family's [financial] support.''
628 In fact, Fong stated that, had Sioeng rejected
the invitation, he would have extended the invitation to
another donor.629
---------------------------------------------------------------------------
\628\ House Fong Depo., vol. I, at 66.
\629\ Id.
---------------------------------------------------------------------------
The meeting with the Speaker, held during the second week
in July 1995, also was attended bySioeng's son-in-law, Didi
Kurniawan.630 The entire encounter lasted approximately 15
minutes, during which Sioeng and the Speaker exchanged what Fong called
``ordinary'' pleasantries.631 According to Fong, fundraising
was not discussed during the meeting.632
---------------------------------------------------------------------------
\630\ Id. at 73 et seq. See also Deposition of Haddi Kurniawan,
Apr. 14, 1998, at 64, 66.
\631\ House Fong Depo., vol. I, at 73. Also, the Senate minority
reported that: ``As described by Fong, the resulting meeting in
Representative Gingrich's office on July 12 was brief and
inconsequential.'' P. 5579.
\632\ House Fong Depo., vol. I, at 72-74.
---------------------------------------------------------------------------
In the weeks following the meeting with Fong and Sioeng,
the Speaker was planning a series of fundraisers in
California.633 Due to that planned fundraising trip,
Joseph R. Gaylord, ``a political liaison to the Speaker,''
634 approached Kinney and asked him to ``raise some
money'' 635 for the National Policy
Forum.636
---------------------------------------------------------------------------
\633\ Id. at 75.
\634\ Senate Fong Depo. at 56.
\635\ Deposition of Steven M. Kinney before the Senate Governmental
Affairs Committee, Special Investigation, Sept. 23, 1997, at 10. See
also Deposition of Joseph R. Gaylord before the Senate Governmental
AffairsCommittee, Special Investigation, Sept. 16, 1997, at 36.
\636\ Id.
---------------------------------------------------------------------------
Following his conversation with Gaylord, Kinney asked Fong
for ``permission [as to] whether he could approach our donors
to invite them to any of the Gingrich events.'' 637
Fong told the Committee that his discussion with Kinney
involved possible solicitations of ``all my donors.''
638 He also testified that Kinney specifically
``asked me whether the Sioeng family would be interested in
supporting any of the Speaker's activities.'' 639
Whatever the case, Fong granted Kinney permission to seek
contributions from his donors for organizations supported by
the Speaker.640
---------------------------------------------------------------------------
\637\ House Fong Depo., vol. I, at 75.
\638\ Id.
\639\ Senate Fong Depo. at 50.
\640\ House Fong Depo., vol. I, at 75.
---------------------------------------------------------------------------
Kinney subsequently solicited a contribution from Jessica
Elnitiarta,641 telling her the NPF ``was a
foundation that Mr. Gingrich was supportive of and we'd like to
have a contribution.'' 642 Following that
conversation, Fong was contacted by members of the Sioeng
family,643 who stated that they had been approached
by Kinney ``to help Speaker Gingrich,'' 644 and
asked Fong his opinion of Kinney's solicitation.645
---------------------------------------------------------------------------
\641\ Deposition of Steven M. Kinney before the Senate Governmental
Affairs Committee, Special Investigation, Sept. 23, 1997, at 12.
\642\ Id at 20.
\643\ Mr. Fong could not recall whether he spoke with Ms.
Elnitiarta or Mr. Sioeng. See Id. at 77.
\644\ Id at 77.
\645\ Id.
---------------------------------------------------------------------------
Fong told them, ``Speaker Gingrich is my friend. That's a
good idea.'' 646 In his testimony before the
Committee, Fong emphasized that he did not know for what
organization the solicitation was made, as Fong was aware that
Speaker Gingrich raises money for several different
organizations.647
---------------------------------------------------------------------------
\646\ Id.
\647\ Id.
---------------------------------------------------------------------------
On July 18, 1995, Panda Industries wrote a $50,000 check to
the National Policy Forum, against a bank balance of
$46,402.648 Kinney stated that he ``didn't solicit
Panda [Industries],'' but instead, ``solicited a donation
directly from Jessica Elnitiarta.'' 649
---------------------------------------------------------------------------
\648\ Check No. 1060 from panda Industries to the National Policy
Forum in the amount of $50,000, July 18, 1995. Grand National Bank
statement for Panda Industries, July 1995. Exhibit 233.
\649\ Deposition of Steven M. Kinney before the U.S. Senate
Governmental Affairs Committee, Special Investigation, Sept. 23, 1997,
at 12.
---------------------------------------------------------------------------
Information developed by the Committee indicates that the
Panda Industries contribution came from domestic funds. The
investigation specifically reveals that the contribution was
funded by a $50,000 check Sioeng had written to Panda
Industries a day before the company contributed to the
NPF.650
---------------------------------------------------------------------------
\650\ Check No. 590 from Sioeng San Wong to Panda Industries in the
amount of $50,000, July 17, 1995. Exhibit 234.
---------------------------------------------------------------------------
Sioeng's check, in turn, was funded by a $70,000 check
written on July 17, 1995 by Vinh B. La, a Canadian national and
associate of Kent La.651 The $70,000 check was
partially funded by a July 14, 1995 withdrawal of $50,000 by
Kent La from a Loh Sun International, Inc. business savings
account,652 which was opened on January 4, 1995 with
a $200,000 transfer from Loh Sun's business checking
account.653 Hence, the NPF contribution appears to
have been funded with domestic business receipts from Loh Sun
International. The Senate minority report traced the NPF
funding only back to the $50,000 check from Ted
Sioeng.654
---------------------------------------------------------------------------
\651\ Check No. 239 from Vinh B. La to Cash in the amount of
$70,000, July 17, 1995. Exhibit 235.
\652\ Savings withdrawal from Loh Sun International in the amount
of $50,000, July 14, 1995; Deposit slip from La Vinh Binh in the amount
of $50,000, July 14, 1995. Exhibit 236.
\653\ Counter check to Loh Sun International in the amount of
$200,000, Jan. 4, 1995. Exhibit 237.
\654\ Exhibit 234. See also Senate Campaign Finance Report at 5580.
---------------------------------------------------------------------------
The NPF counsel has made a similar representation: ``There
is no evidence anywhere that we are aware of which establishes
that the funds used in connection with the Panda Industries,
Inc./NPF contribution were foreign funds.'' 655
---------------------------------------------------------------------------
\655\ Letter from Thomas E. Wilson, NPF counsel, to Michael D.
Bopp, senior investigative counsel, House Government Reform and
Oversight Committee, June 17, 1998, Exhibit 238.
---------------------------------------------------------------------------
Fong's wife, Paula, played a role in the Panda Industries
contribution to the NPF. Matt Fong testified that during 1995,
Kinney ``hired her [Paula Fong] to help raise money for [the]
Speaker.'' 656 On July 28, 1995, Paula Fong
submitted an invoice requesting $6,500 in fundraising
commissions 657 to Joseph Gaylord at office space he
rented from the Republican National Committee.658
The commissions purported to be related to ``Speaker Newt
Gingrich's California visit on July 20, 1995 to July 23,
1995.'' 659 The invoice also included a request for
compensation for the Panda Industries contribution to the
NPF.660
---------------------------------------------------------------------------
\656\ House Fong Depo., vol. I, at 89.
\657\ Invoice submitted by Paula Fong to Joseph Gaylord, July 28,
1995. [hereinafter Fong invoice] Exhibit 239.
\658\ House Fong Depo., vol. I, at 89; Deposition of Joseph Robert
Gaylord before the Senate Governmental Affairs Committee, Special
Investigation, Sept. 16, 1997, at 9.
\659\ See Exhibit 239.
\660\ Deposition of Steven S. Walker, Jr., July 1, 1998 at 36.
---------------------------------------------------------------------------
Gaylord forwarded the invoice from Paula Fong to Stephen
Walker, the NPF comptroller, who was puzzled upon receiving the
bill.661 Walker specifically said that he ``asked .
. . why did this woman send us a bill and who is she?''
662 While Walker cannot recall to whom he spoke, he
testified that, after performing appropriate ``due diligence,''
663 he was ``satisfied as to the point [that Paula
Fong was entitled to compensation from the NPF],''
664 and paid the bill.665
---------------------------------------------------------------------------
\661\ Id.
\662\ Id.
\663\ Id.
\664\ Id.
\665\ Id.
---------------------------------------------------------------------------
Walker acknowledged that it was ``out of the ordinary''
666 for Gaylord to receive invoices for commissions
from NPF fundraisers. Walker said that he could not recall any
other instance where Gaylord forwarded another person's invoice
to the NPF.667 He also stated that he could not
recall receiving bills from other fundraisers and not having
been aware that they had solicited money for the
NPF.668
---------------------------------------------------------------------------
\666\ Id. at 78.
\667\ Id.
\668\ Id. at 37.
---------------------------------------------------------------------------
Fong testified that the first time he knew that his wife
was paid for the Panda Industries contribution to the NPF was
in March 1996, while preparing to file his state financial
disclosure forms.669 Matt Fong stated that he has no
personal knowledge of the $50,000 contribution from Panda
Industries.670 He testified as follows to his
understanding of his wife's fundraising and the payment to her
from the NPF:
---------------------------------------------------------------------------
\669\ House Fong Depo. vol. I, at 87.
\670\ Id. at 89.
My wife was retained by Steve Kinney to raise money for
the Speaker. My wife is a CPA. She for two years helped
me raise money for my treasurer's campaign. She raised
over a million dollars by herself, and Steve Kinney
hired her to help raise money for the Speaker. In March
of the following year, we reported [on our state
financial disclosure forms] that my wife was paid from
the National Policy Forum, the National Republican
Congressional Committee, Friends of Newt Gingrich and
the Monday Morning PAC. She received a total of $11,000
---------------------------------------------------------------------------
for her effort.
It was always my understanding that she was getting
compensated by Steve Kinney for raising money for
Speaker Gingrich for many of [her] fundraising
activities; and for me, whether it was the National
Policy Forum or the Friends of Newt Gingrich, it was
all, to me, under the same umbrella.671
---------------------------------------------------------------------------
\671\ Id.
In July 1995, the Speaker sponsored a reception for Asian-
American leaders at the Peninsula Beverly Hills
Hotel.672 Prior to the event, Kinney asked Matt Fong
for the names of some community, business and elected leaders
who should be invited.673 Among the names supplied
by Fong were that of Sioeng and his family.674
---------------------------------------------------------------------------
\672\ House Fong Depo., vol. I, at 81; Senate Fong Depo. at 50-53;
Deposition of Joseph R. Gaylord before the Senate Governmental Affairs
Committee, Special Investigation, Sept. 16, 1997, at 33-35.
\673\ Senate Fong Depo. at 51.
\674\ Id.
---------------------------------------------------------------------------
Sioeng attended the reception and, along with four to five
other guests, met with the Speaker for approximately 15
minutes.675 Simon Chen, who sold the International
Daily News to Ted Sioeng and acted as an interpreter during the
meeting between the Speaker and Sioeng, stated that the two
talked generally about the relationship between the United
States and the PRC.676 A photograph of the Speaker
with Sioeng and Chen appeared in the July 21, 1995 issue of the
International Daily News.677
---------------------------------------------------------------------------
\675\ Chen Interview.
\676\ Id.
\677\ Photograph in the International Daily News, July 21, 1995.
Exhibit 240.
---------------------------------------------------------------------------
In December 1995, Jessica Elnitiarta approached Fong and
asked him to secure a congratulatory letter from the Speaker in
connection with a badminton tournament sponsored by one of
Sioeng's businesses.678 Fong secured the requested
letter.679 Fong said that he also helped Jessica
Elnitiarta obtain a congratulatory letter from California
Governor Wilson, from whom a letter appears in a brochure
promoting the tournament.680 A congratulatory letter
from Fong is also published in the brochure.681
---------------------------------------------------------------------------
\678\ Senate Fong Depo. at 62-65.
\679\ Id. at 106. Letter from Speaker Gingrich to Hong Ta Shan
International Badminton Championship Cup Participants and Supporters.
Exhibit 241.
\680\ Id. at 106. Letter from Governor Wilson to Hongtashan
International Badminton Championship Cup Participants, Dec. 18, 1995.
Exhibit 242.
\681\ Letter from Matt Fong, California State Treasurer, to Ted
Sioeng, Hong Ta Shan Cup, Dec. 18, 1995. Exhibit 243.
---------------------------------------------------------------------------
3. Conclusions
Based on the information developed during the course of its
investigation, the Committee concludes that there is no
evidence of improper or illegal activities on behalf of Fong,
or anyone else, regarding the Panda Industries contribution to
the NPF.
The Committee also concludes there is no evidence that the
source of the moneys used for Panda Industries' contribution to
the NPF was from foreign funds. The Committee notes that, in
any event, as a 501(c)(4) corporation, the NPF could legally
accept foreign donations.
C. Contribution to Daniel Wong
1. Summary
Dr. Daniel Wong, a Republican who was elected to local
offices in Cerritos, California, met Ted Sioeng when they were
both attending a 1992 banquet in the People's Republic of
China. At the time, Sioeng, who had little knowledge of U.S.
politics, offered to help finance future political campaigns
undertaken by Wong.
Following that conversation, Wong unsuccessfully solicited
Sioeng for campaign contributions. In 1996, Sioeng finally
agreed to contribute $10,000 to one of Wong's political races.
That contribution came in the form of two $5,000 checks from
female employees of a Sioeng-affiliated travel agency. Both
checks were post-dated, and Wong was instructed to deposit them
on specific dates.
The checks were never deposited, primarily because Wong
knew that Sioeng received most of his money from overseas in
the form of wire transfers. As a result of that knowledge, Wong
called the bank to determine whether there were sufficient
funds to cover the checks.
When informed that there was not enough money to pay the
checks, Wong telephoned Sioeng, who provided a single $5,000
replacement check. That check, ostensibly from Jessica
Elnitiarta, was drawn on an account held by Sioeng's wife and
other two daughters over which Jessica Elnitiarta held power of
attorney.
The Committee concludes that Sioeng's contribution to Wong
was improper because the source of the funds was wire transfers
from an overseas corporation controlled by Sioeng.
2. Findings
Daniel K. Wong is an obstetrician and
gynecologist.682 Born in Hong Kong,683
Wong also sings and acts as a self-styled goodwill ambassador
between the people of the United States and the People's
Republic of China (``PRC'').684 Due to his singing
career and his unofficial activities, Wong is a ``celebrity in
China,'' 685 has traveled extensively in the PRC and
has had repeated meetings with senior communist party
officials.686
---------------------------------------------------------------------------
\682\ Deposition of Daniel K. Wong, Mar. 12, 1998, at 21
[hereinafter Wong Depo].
\683\ Id.
\684\ Id. at 23.
\685\ Id.
\686\ Id. at 24.
---------------------------------------------------------------------------
In addition to the activities listed above, Wong also has
served as a Republican elected official. In 1978, Dr. Wong was
elected to the Cerritos, California, City
Council.687 He subsequently served two terms as the
Mayor of Cerritos, and ran three unsuccessful campaigns for
state assembly.688
---------------------------------------------------------------------------
\687\ Id. at 21.
\688\ Id. at 21-22.
---------------------------------------------------------------------------
Wong first met Ted Sioeng ``out of the blue''
689 in 1992, while both were attending a banquet in
Kunming, PRC.690 At that initial meeting, Wong
testified that Sioeng ``knew nothing about U.S. politics.''
691 Despite his political ignorance, Sioeng said he
knew of Wong through his political career,692 and
went on to tell Wong that:
---------------------------------------------------------------------------
\689\ Id. at 31.
\690\ Id. at 27.
\691\ Id. at 31.
\692\ Id. at 28.
. . . I should be his friend, and he can help me
[financially] in future campaigns and that actually
[Sioeng made] the promise and the commitment to support
any of my future campaigns without any condition
mentioned . . . I remember he even ask me how much does
it take to start to win any election and primary. I
mention to him about $250,000 for some assembly or
congressional [campaign], just to begin with. He said,
``No problem.'' 693
---------------------------------------------------------------------------
\693\ Id.
According to Wong, the purpose behind the conversation was
that Sioeng wanted ``to make a friend with me. He wanted to be
friends, and he also wanted me to move higher up in the
political area.'' 694
---------------------------------------------------------------------------
\694\ Id. at 31.
---------------------------------------------------------------------------
A year or two later, Wong once again had a conversation
with Ted Sioeng about local politics. During that discussion,
Wong suggested that Sioeng become more politically active in
the Asian-American community.695 At the time, Wong
was running for office and asked Sioeng for a campaign
contribution.696 No such donation was forthcoming,
because Sioeng ``was seldom in the United States,''
697 and it was ``[V]ery difficult to get hold of
him.'' 698
---------------------------------------------------------------------------
\695\ Id. at 33.
\696\ Id.
\697\ Id.
\698\ Id.
---------------------------------------------------------------------------
Following those discussions, Wong continued to
unsuccessfully pursue Sioeng for campaign contributions. In
1996, 4 years after his offer of financial support, Ted Sioeng
agreed to support Wong's state assembly campaign. Wong
testified that this agreement came only after he told Sioeng in
late 1995, ``You didn't keep your word. Are you going to help
me?'' 699
---------------------------------------------------------------------------
\699\ Id. at 99.
---------------------------------------------------------------------------
As a result of that comment, Wong went to Sioeng's office
in Hollywood, California, and picked up two
checks.700 Wong stated that ``each check was [for]
$5,000, and those checks were from his affiliated travel
agency, from a lady he called up to his office and she wrote
two checks to me. But they both were postdated.''
701
---------------------------------------------------------------------------
\700\ Id. at 101-102.
\701\ Id. The Committee presumes the checks were written on an
account held by either Supertrip Travel or Guangdong China Travel
Service. Both firms were located in Sioeng's Hollywood Metropolitan
Hotel complex and were owned or managed by the Sioeng family. See
``Sioeng U.S. Business Interests'' this chapter.
---------------------------------------------------------------------------
Wong further stated that Sioeng instructed him to deposit
the two checks on specific dates.702 However, the
checks were never deposited. Wong explained that most of
Sioeng's funds comes from overseas, rather than the United
States, and Sioeng ``will wire them from Hong Kong or
somewhere.'' 703 As a result of that knowledge, Wong
decided to see if the account had money in it before depositing
the first check, and was told--presumably by the bank--to
``hold on and wait for a long time.'' 704
---------------------------------------------------------------------------
\702\ Id.
\703\ Id. at 102.
\704\ Id.
---------------------------------------------------------------------------
When Wong called Sioeng to discuss the fact that there were
not sufficient funds to cover the checks, Sioeng already knew
about it,705 and offered to take back the checks and
have his daughter, Jessica Elnitiarta, write another
check.706 Wong subsequently received ``a replacement
check'' 707 for $5,000 from the account of Sioeng's
wife and two daughters.708 Wong apparently did not
seek a replacement for the second $5,000 check. During his
deposition, he did not explain the circumstances surrounding
the delivery of the replacement check, nor did Wong offer an
explanation for not seeking a replacement for the second $5,000
check.
---------------------------------------------------------------------------
\705\ Id. at 103.
\706\ Id.
\707\ Id. at 101.
\708\ Check No. 1094 from Sundari, Sandra & Laureen Elnitiarta to
Dr. Daniel Wong in the amount of $5,000, Feb. 15, 1996. The Committee
notes that the signature on the checks matches that of Jessica
Elnitiarta and that she holds power of attorney over the check account
of her mother and sisters, Sundari, Sandra and Laureen, respectively.
Exhibit 244.
---------------------------------------------------------------------------
At the time the ``replacement'' check was written, the bank
account held by Sundari, Sandra and Laureen Elnitiarta held
$13,378.709 This balance was funded by a $50,000
telephone transfer 3 days earlier from Yanti
Ardi.710 The same day, Yanti Ardi received a nearly
$519,000 wire transfer from Pristine Investments.711
---------------------------------------------------------------------------
\709\ Grand National Bank statements, Sundari, Sandra & Laureen
Elnitiarta, Feb. 1-29, 1996. Exhibit 245.
\710\ Wire transfer from Yanti Ardi to Sundari Elnitiarta in the
amount of $50,000, Feb. 12, 1996. Exhibit 246.
\711\ See Exhibit 166.
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3. Conclusions
The evidence suggests that the contribution to Wong's
campaign may have come from an eligible U.S. resident. However,
the Committee concludes that the donation was funded by foreign
money. As a result, the Committee concludes that the
contribution was improper and possibly illegal.
d. contribution to julia wu
1. Summary
During 1995, Julia Wu, a Republican, was campaigning for
her third 4-year term on the Los Angeles Community College
District Board of Trustees. Her husband, Alfred Wu, served as
her campaign Treasurer. The Committee identified two $10,000
conduit payments from Sioeng associates Kent La and Bun Tsun
Lai to Alfred Wu. The Committee concluded that these
contributions were ultimately funded from Pristine Investments
in Hong Kong, which is affiliated with Sioeng.
2. Findings
On February 21, 1995, Sioeng associate Kent La wrote a
$10,000 check payable to Alfred Wu.712 The Committee
notes that Julia Wu's campaign reported that La made only one
donation of $1,000, and that it was received on February 23,
1995.713 The $10,000 check to Alfred Wu was funded
by a $50,000 telephone transfer made the same day from Sioeng's
wife and two daughters to La.714 That transfer was
funded in turn by $50,000 from a bank loan account held by the
Sioeng family.715 The bulk of that loan was repaid
by Jessica Elnitiarta through a November 3, 1996 wire transfer
of $928,432 from Pristine Investments.716 Glenville
Stuart testified that Pristine Investments is ``associated with
Ted Sioeng.'' 717
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\712\ Check No. 122 from Kent La to Alfred Wu in the amount of
$10,000, Feb. 21, 1995. Exhibit 247.
\713\ ``Officeholder, Candidate and Controlled Campaign Committee
Statement,'' Feb. 1-29, 1995. Contributions to Julia Wu. Exhibit 248.
\714\ Telephone transfer from Sundari, Sandra, and Laureen
Elnitiarta to Kent La in the amount of $50,000, Feb. 21, 1995. Exhibit
249.
\715\ Wire transfer from Sandra & Laureen Elnitiarta TCD Loan in
the amount of $50,000 to Sundari, Sandra & Laureen Elnitiarta, Feb. 21,
1995. Exhibit 250. Committee notes that on Nov. 3, 1995, the entire
bank loan balance was paid off by Elnitiarta using foreign funds from
Pristine Investments in Hong Kong. Exhibit 223.
\716\ See Exhibit 223.
\717\ Stuart Depo. at 65.
---------------------------------------------------------------------------
On May 29, 1995, Bun Tsun Lai wrote a $10,000 check payable
to Alfred Wu 718 against a bank balance of only
$95.719 To cover the check, Lai deposited a $10,000
check from Glenville Stuart on May 31, 1995.720
Stuart, in turn, funded this check through a $55,000 wire
transfer received from Pristine Investments in Hong
Kong.721
---------------------------------------------------------------------------
\718\ Check No. 5045 from Bun Tsun Lai to Alfred Wu in the amount
of $10,000, May 29, 1995. Exhibit 251.
\719\ Grand National Bank statement, Bun Tsun Lai, May 1996.
Exhibit 252.
\720\ Deposit slip for Bun Tsun Lai, May 31, 1995; Check No. 240
from Glenville Stuart to Bun Tsun Lai in the amount of $10,000, May 30,
1995. Exhibit 253.
\721\ See Exhibit 225.
---------------------------------------------------------------------------
The Committee notes that during the relevant time period,
the Julia Wu campaign does not report any listing of a
contribution from Bun Tsun Lai during this time
period.722 The Committee further notes it is
awaiting bank account records documenting these transactions.
---------------------------------------------------------------------------
\722\ ``Officeholder, Candidate and Controlled Campaign Committee
Statement,'' Mar. 26-June 30, 1995. Exhibit 254.
---------------------------------------------------------------------------
3. Conclusions
The Committee concludes that the funding source for the Wu
contributions was overseas businesses owned and/or controlled
by Sioeng. In addition, the Committee concludes that the
contributions were disguised by using Kent La and Bun Tsun Lai
as conduits to transact the donations. As a result, the
donations are improper and/or illegal.
e. contribution to norman hsu
Another local Republican candidate to whom Ted Sioeng
contributed is Norman Hsu, a member of the Hacienda-La Peunta
School Board. Hsu, who like Sioeng hails from Indonesia, told
Committee investigators that he first met Sioeng in May 1994,
at an Indonesian festival held at Sioeng's Hollywood
Metropolitan Hotel.723 A year later, Hsu and Sioeng
formed an Indonesian-Chinese Benevolent
Association.724 Around the time the association was
formed in early 1995, Hsu asked Sioeng for financial support in
his re-election campaign for the local school
board.725
---------------------------------------------------------------------------
\723\ Interview with Norman Hsu, Mar. 13, 1998 [hereinafter Hsu
Interview].
\724\ Id.
\725\ Id.
---------------------------------------------------------------------------
Sioeng subsequently served as finance chairman for a Hsu
fund-raiser,726 and donated $7,500 to the
campaign.727 The Committee notes that Hsu did not
know that Sioeng was a foreign national, and that Hsu
subsequently became disassociated with Sioeng over political
differences.728
---------------------------------------------------------------------------
\726\ Id.
\727\ Check No. 654 from Sioeng San Wong to Friends of Norman Hsu
in the amount of $7,500, Mar. 11, 1995. Exhibit 255.
\728\ Hsu Interview.
---------------------------------------------------------------------------
Sioeng signed a personal check payable to the Friends of
Norman Hsu on March 11, 1995,729 against an account
balance of only $2,159.730 To cover the check 2 days
later, Jessica Elnitiarta transferred $30,000 from a family
loan account to Sioeng's personal account.731 As
previously stated, Jessica Elnitiarta repaid the bank loan
primarily from a wire transfer from Pristine Investments in
Hong Kong.732
---------------------------------------------------------------------------
\729\ See Exhibit 255.
\730\ Grand National Bank statements, Sioeng San Wong, Feb. 1-Mar.
31, 1995. Exhibit 256.
\731\ Telephone transfer from Laureen and Sandra Elnitiarta TCD
loan account to Sioeng San Wong in the amount of $30,000, Mar. 13,
1995. Exhibit 257.
\732\ See Exhibit 223.
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IX. Access to President Clinton, Vice President Gore, & Speaker
Gingrich
1. Summary
Political contributions totalling $450,000 made by Ted
Sioeng, his family, and his associates opened the gates of
political access to the three highest officials of the U.S.
Government. The Committee believes Sioeng used this access to
gain influence with the governments of China and Cambodia, and
to increase his business opportunities both overseas and within
the United States.733 Sioeng's affiliation with high
level political leaders also helped him to increase his
influence in the California Asian community.734
---------------------------------------------------------------------------
\733\ Wong Depo. at 35.
\734\ Elnitiarta Interview.
---------------------------------------------------------------------------
2. Findings
a. access to president clinton and vice president gore
The Hay-Adams Dinner with President Clinton
On February 19, 1996, the DNC hosted an Asian Pacific
American Leadership Council Presidential Dinner at the Hay-
Adams Hotel in Washington, DC. This is the first major Asian
fundraiser organized by John Huang.
Sioeng and seven guests attended the event, and had their
pictures taken with President Clinton.735 The Sioeng
attendees included: Sandra Elnitiarta and Didi Kurniawan,
Sioeng's daughter and son-in-law; Li Kwai Fai, a Chinese
businessman with factories located in Guangdong Province,
China; 736 Jimmy Tsang and his wife Jean Lim Tsang;
737 Bruce Cheung, a Singapore permanent resident,
and President of Chinois Tobacco, a Singapore company
controlled by Sioeng; and Chu Yibin, an apparent business
associate of Cheung who may be related to Chu Shijian, Chairman
of Yuxi Hongta Tobacco Group.
---------------------------------------------------------------------------
\735\ Photographs of Ted Sioeng and his guests with President
Clinton, Feb. 19, 1996. Exhibit 258.
\736\ The Committee has unsuccessfully attempted to contact Li on
several occasions. The Committee notes that Li currently uses a picture
of himself and President Clinton, taken at the event, on his company's
Web site. See Exhibit 137.
\737\ As stated previously, Jimmy Tsang is President of Sioeng's
Goldlion International, and son of Tsang Hin Chi, Chairman of Goldlion
Holding Group, which controls one of Sioeng's Chinese tobacco ventures
and is also a member of the National People's Congress which controls
the Communist party within the PRC. See Exhibit 130. Tsang, his wife,
and father have all refused to cooperate with the Committee.
---------------------------------------------------------------------------
Jessica Elnitiarta stated that she and Huang has previously
negotiated a contribution of $12,500 per person for all eight
attendees.738 Huang collected Elnitiarta's personal
check of $100,000 from her sister, Sandra Elnitiarta, at the
dinner.739
---------------------------------------------------------------------------
\738\ Elnitiarta Interview.
\739\ Id.
---------------------------------------------------------------------------
The Committee notes that Sioeng and Li sat at the head
table in close proximity to President Clinton which also
included notable figures Pauline Kanchanalak, Charlie Trie, and
Ng Lap Seng.740 The Committee also notes that John
Huang claimed to have raised $1 million at this
event.741 However, DNC records for the event
indicated it raised $716,000 from 50 individuals or
corporations.742
---------------------------------------------------------------------------
\740\ Photograph of Hay-Adams head table, Feb. 19, 1996, Exhibit
259.
\741\ Photograph of John Huang presenting check to Donald Fowler.
Exhibit 260.
\742\ DNC Finance Systems, detail report for Asian Dinner,
documents D0000968 to 973. Feb. 19, 1996.
---------------------------------------------------------------------------
The Breakfast with Vice President Gore
The next morning, the DNC hosted the same attendees for a
White House tour and breakfast with Vice President Gore. Ted
Sioeng and six guests attended the event, and had photographs
taken with the Vice President.743 In fact, Sioeng
and Li sat at the head table with Vice President
Gore.744
---------------------------------------------------------------------------
\743\ Photographs of Ted Sioeng and his guests with Vice President
Gore, Feb. 20, 1996. Exhibit 261.
\744\ See Exhibit 131.
---------------------------------------------------------------------------
The Hsi Lai Temple Luncheon with Vice President Gore
On April 29, 1996, the DNC hosted a fund-raising luncheon
at the Hsi Lai Temple in Los Angeles, California. This event,
organized by John Huang and Maria Hsia, was attended by Sioeng
and four guests.745 Vice President Gore sat at the
head table with Ted Sioeng to his left and Master Hsing Yun,
the Temple's spiritual leader.746 Besides his wife
and two daughters, Sioeng brought Sioeng Fei Man Hung, a
Chinese/Hong Kong national, who was then the general manager of
the International Daily News. Jessica Elnitiarta stated that
the family made no contribution for this event because the
family was ``comped'' by John Huang who cited the family's poor
seating at the Hay-Adams dinner.747 This explanation
is highly questionable given what the Committee has learned of
Sioeng's seats at the Hay-Adams event.
---------------------------------------------------------------------------
\745\ See Exhibit 160.
\746\ Photograph of head table at Hsi Lai Temple event. Exhibit
262.
\747\ Elnitiarta Interview.
---------------------------------------------------------------------------
The Sheraton Carlton Dinner with President Clinton
Two weeks later, on May 13, 1996, the DNC hosted a fund-
raising dinner at the Sheraton Carlton Hotel in Washington, DC.
Jessica Elnitiarta stated that John Huang invited the Sioeng's
family, noting that her father was very excited about the
invitation because he viewed it as a good opportunity to bring
some of his overseas business partners.748
---------------------------------------------------------------------------
\748\ Id.
---------------------------------------------------------------------------
This event was attended by Ted Sioeng and seven guests, all
of whom had photographs takenwith the President.749
Committee investigators have been able to identify photographs of five
of Sioeng's six guests: Macau legislator and casino operator, Chio Ho
Cheong (aka Chen Kai Kit, aka Tommy Chio), who according to his
business card, operates businesses in Thailand, Hong Kong, China, and
Macau;750 Chan Elsie Y.Z., Chio's business partner and
former Hong Kong movie star; Guo Zhong Jian, the Deputy General Manager
of the China Construction Bank; Kent La, President of Loh Sun
International; and either Lin Fu Qiang of Everbrite Asia, Ltd in Hong
Kong, or He Jian Shan, occupation unknown.751 According to a
DNC document of the event, Sioeng, Chio, and Chan sat with President
Clinton at the head table.752
---------------------------------------------------------------------------
\749\ Photographs of Ted Sioeng and his guests with President
Clinton, May 13, 1996. Exhibit 263.
\750\ Tommy Chio business card. Exhibit 264.
\751\ See Exhibit 263.
\752\ See Exhibit 133.
---------------------------------------------------------------------------
According to Jessica Elnitiarta, Huang did not immediately
solicit a contribution for this event, as he wanted them to
attend an upcoming Los Angeles fundraiser.753
Instead, Jessica Elnitiarta paid for the event with a $100,000
Panda Estates Investment check written on July 12,
1996.754 She said she arrived at the figure using
the same $12,500-per-seat rate that she applied to the Hay-
Adams event.755
---------------------------------------------------------------------------
\753\ Elnitiarta interview.
\754\ Id.
\755\ Id.
---------------------------------------------------------------------------
The Century Plaza Dinner with President Clinton
On July 22, 1996, Sioeng attended a Presidential dinner at
the Century Plaza Hotel in Los Angeles, along with 48 family
members and business associates,756 including Kent
La.757 Sioeng sat at the head table with President
Clinton and James Riady, a top Lippo Group
executive.758
---------------------------------------------------------------------------
\756\ Elnitiarta Interview.
\757\ Ma Interview.
\758\ See Exhibit 163.
---------------------------------------------------------------------------
Jessica Elnitiarta said that she paid for the event with a
$50,000 check from Panda Estates Investment to the
DNC.759 She stated that she arrived at the amount
after determining the event was less significant than earlier
ones, which averaged about $1,000 a plate.760 DNC
documents attribute this contribution to a July 30, 1996
Presidential Trustee dinner at the Jefferson Hotel in
Washington, DC.761 However, there is no evidence
that the Sioeng family or business associates attended this
event.
---------------------------------------------------------------------------
\759\ Elnitiara Interview.
\760\ Id.
\761\ See Exhibit 153.
---------------------------------------------------------------------------
The same day as Jessica Elnitiarta wrote the Panda Estates
check to the DNC, Kent La also signed a $50,000 Loh Sun
International check to the DNC.762 Committee
investigators believe the Loh Sun contribution is connected to
the Century Plaza fundraiser, which La attended.763
DNC documents attributed this donation to a July 30, 1996
Presidential Trustee dinner at the Jefferson Hotel in
Washington, DC,764 which La almost certainly did not
attend.
---------------------------------------------------------------------------
\762\ See Exhibit 154.
\763\ Ma Interview.
\764\ See Exhibit 154.
---------------------------------------------------------------------------
b. the tanuwidjaja contributions
In September 1996, the Tanuwidjaja family made three
contributions totaling $100,000 to the DNC. According to
conflicting DNC documents, the same September 9, 1996
contribution for $60,000 by Subandi Tanuwidjaja was attributed
to both a September 18, 1996 Vice Presidential Asia Dinner at
the Hilton Hotel in San Francisco, and the Jefferson Hotel
Trustee dinner.765 DNC documents also attributed a
September 19, 1996 contribution in the amount of $20,000 by
Subandi Tanuwidjaja to the San Francisco dinner 766
and a September 26, 1996 contribution in the amount of $20,000
by Suryanti Tanuwidjaja to an African-American Presidential
Dinner at the Sheraton Carlton Hotel in Washington,
DC.767 The documents all listed John Huang as the
DNC solicitor or contact person for these
contributions.768 The Committee notes that has found
no evidence that the Tanuwidjajas attended any of these events.
---------------------------------------------------------------------------
\765\ See Exhibit 155.
\766\ See Exhibit 156.
\767\ See Exhibit 157.
\768\ See ``John Huang's Role.''
---------------------------------------------------------------------------
c. access to house speaker gingrich 769
---------------------------------------------------------------------------
\769\ See ``Contributions to Matt Fong,'' and ``Contributions to
the National Policy Forum.''
---------------------------------------------------------------------------
After receiving $50,000 in contributions from Ted Sioeng,
California State Treasurer Matt Fong's introduced Sioeng and
his son-in-law, Didi Kurniawan, to Speaker Gingrich on July 12,
1995.770 Shortly thereafter, the Sioeng family was
approached by Steven Kinney, Fong's campaign consultant and a
fundraiser for the Speaker, who asked for contributions to
organizations supported by the Speaker.771 After a
conversation between a member of the Sioeng family and Fong,
Panda Industries donated $50,000 to the National Policy Forum
on July 18, 1995. The next day, Sioeng sat next to the Speaker
at an outreach event for Asian-American community leaders at
the Beverly Hills Hotel, and had his photograph taken with the
Speaker.772 During that second meeting, the Speaker
and Sioeng discussed U.S.-China relations.773
---------------------------------------------------------------------------
\770\ Senate Fong Depo. at 65-66.
\771\ Id.
\772\ See Exhibit 240.
\773\ Chen Interview.
---------------------------------------------------------------------------
Sometime in December 1995, Jessica Elnitiarta approached
Fong to have him obtain a congratulatory letter from the
Speaker for a badminton tournament sponsored by one of Sioeng's
businesses.774 Fong secured the requested letter,
which appeared in a promotional brochure for the
tournament.775
---------------------------------------------------------------------------
\774\ Senate Fong Depo. at 62-65.
\775\ Id. at 63; See Exhibit 241.
---------------------------------------------------------------------------
The Committee notes that the subject of fundraising or
donations did not come up in the July 1995 meeting between the
Speaker and Sioeng. In fact, the two had a ``very cordial
surface'' conversation, and made no mention of political
contributions.776
---------------------------------------------------------------------------
\776\ Fong Depo, vol. I, at 72-74.
---------------------------------------------------------------------------
X. Conclusions
The Committee makes the following conclusions:
1. Ted Sioeng controls 20 businesses within the
United States, most of which are run by his daughter,
Jessica Elnitiarta.
2. Sioeng also owns or controls 16 businesses in
seven foreign countries, the vast majority of which are
located in the People's Republic of China/Hong Kong and
which involve a partnership with the Chinese
government.
3. Sioeng's has close personal, political, and
financial ties to high level Chinese officials,
including Premier Jiang Zemin, whom Sioeng met in
October 1995.
4. The Senate Campaign Finance Report concluded that
$5,000 in political contributions was funded by the PRC
consulate. The PRC or its officials may also have
funded other contributions which Ted Sioeng, his
family, and associates made to American political
campaigns, candidates, and pro-PRC groups. However, 28
witnesses have refused to talk and the Chinese
government refused to cooperate in this investigation
to follow the source of money funding Sioeng's Chinese
and Hong Kong bank accounts.
5. Sioeng also has close personal and financial ties
to high level officials of the Cambodian government,
including the current leader, Hun Sen.
6. The Sioeng family used foreign money to make
improper and/or illegal contributions to a variety of
political candidates and campaigns, including the
Democratic National Committee; Gary Locke, the Governor
of Washington State; Matt Fong, the California State
Treasurer; Daniel Wong, former City Council Member and
mayor of Ceritos, California; Julia Wu, a member of the
Los Angeles Community College District Board of
Trustees; and Norman Hsu, a member of the Hacienda-La
Peunta School Board in California.
7. Sioeng also used conduits to make improper and/or
illegal contributions to other political candidates and
entities, including the Democratic National Committee,
Governor Gary Locke, and Trustee Julia Wu.
8. Neither Gov. Locke nor Treasurer Fong appears to
have knowingly accepted improper contributions from
Sioeng's, his family and/or business associates. Fong
stated that he informed Sioeng of appropriate state
laws.
9. The DNC should return the $400,000 in
contributions associated with the Sioeng's family
because the donations were directed by a foreign
national and/or made using foreign money.
10. The donations made by Sioeng, his family and
business associates provided access to the three
highest level officials of the U.S. Government:
President Clinton, Vice President Gore, and House
Speaker Gingrich. Sioeng used this access to gain
influence with foreign government opportunities for
himself, and obtain a leadership position in the
southern California Asian Community.
[Supporting documentation follows:]