[Senate Report 105-167]
[From the U.S. Government Publishing Office]



105th Congress                                            Rept. 105-167
                                SENATE

 2d Session                                                      Vol. 2
_______________________________________________________________________


 
    INVESTIGATION OF ILLEGAL OR IMPROPER ACTIVITIES IN CONNECTION
                   WITH 1996 FEDERAL ELECTION CAMPAIGNS

                               __________

                              FINAL REPORT

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                             together with

                     ADDITIONAL AND MINORITY VIEWS

                             Volume 2 of 6





                 March 10, 1998.--Ordered to be printed


INVESTIGATION OF ILLEGAL OR IMPROPER ACTIVITIES IN CONNECTION WITH 1996 
                  FEDERAL ELECTION CAMPAIGNS--VOLUME 2


105th Congress                                            Rept. 105-167
                                SENATE

 2d Session                                                      Vol. 2
_______________________________________________________________________

                                     


                      INVESTIGATION OF ILLEGAL OR

                   IMPROPER ACTIVITIES IN CONNECTION

                       WITH 1996 FEDERAL ELECTION

                               CAMPAIGNS

                               __________

                              FINAL REPORT

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                             together with

                     ADDITIONAL AND MINORITY VIEWS

                             Volume 2 of 6





                 March 10, 1998.--Ordered to be printed


                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
SUSAN COLLINS, Maine                 JOHN GLENN, Ohio
SAM BROWNBACK, Kansas                CARL LEVIN, Michigan
PETE V. DOMENICI, New Mexico         JOSEPH I. LIEBERMAN, Connecticut
THAD COCHRAN, Mississippi            DANIEL K. AKAKA, Hawaii
DON NICKLES, Oklahoma                RICHARD J. DURBIN, Illinois
ARLEN SPECTER, Pennsylvania          ROBERT G. TORRICELLI, New Jersey
BOB SMITH, New Hampshire             MAX CLELAND, Georgia
ROBERT F. BENNETT, Utah
          Hannah S. Sistare, Staff Director and Chief Counsel
                 Leonard Weiss, Minority Staff Director
                       Lynn L. Baker, Chief Clerk
                                 ------                                

                             MAJORITY STAFF

                   Michael J. Madigan, Chief Counsel

                  J. Mark Tipps, Deputy Chief Counsel

                   Donald T. Bucklin, Senior Counsel

                     Harold Damelin, Senior Counsel

                 Harry S. Mattice, Jr., Senior Counsel

                  John H. Cobb, Staff Director/Counsel

                        K. Lee Blalack, Counsel

                         Michael Bopp, Counsel

                        James A. Brown, Counsel

                        Brian Connelly, Counsel

                       Christopher Ford, Counsel

                        Allison Hayward, Counsel

                      Matthew Herrington, Counsel

                        Margaret Hickey, Counsel

                          Dave Kully, Counsel

                        Jeffrey Kupfer, Counsel

                          John Loesch, Counsel

                   William ``Bill'' Outhier, Counsel

                         Glynna Parde, Counsel

                          Phil Perry, Counsel

                          Gus Puryear, Counsel

                Mary Kathryn (``Katie'') Quinn, Counsel

                         Paul Robinson, Counsel

                         John S. Shaw, Counsel

                       David Hickey, Investigator

                     Stephen J. Scott, Investigator

                     Matthew Tallmer, Investigator

                     Darla Cassell, Office Manager

                   Mary D. Robertson, Office Manager

                       Kenneth Feng, GAO Detailee

                      Mark Kallal, Legal Assistant

                   John W. M. Claud, Legal Assistant

                     Mike Marshall, Legal Assistant

                   Michael Tavernier, Legal Assistant

                     Michael Vahle, Legal Assistant

                     Amy Alderson, Staff Assistant

                    Kim Bejeck, Executive Assistant

                  Deborah Collier, Executive Assistant

                    Daniel Donovan, Staff Assistant

                      Leanne Durm, Staff Assistant

                 Michele Espinoza, Executive Assistant

              Cheryl Ethridge-Morton, Executive Assistant

                    Heather Freeman, Staff Assistant

                      John Gilboy, Staff Assistant

                   Janat Montag, Executive Assistant

                 Kathryn O'Connor, Executive Assistant

                     Wayne Parris, Staff Assistant

                     Jason Parrott, Staff Assistant

                    Sahand Sarshar, Staff Assistant

                       Jerome Sikorski, Archivist

                  Loesje Troglia, Executive Assistant

                  Sandra Wiseman, Executive Assistant

                   GOVERNMENT AFFAIRS COMMITTEE STAFF

                   Frederick S. Ansell, Chief Counsel

                  Richard A. Hertling, Senior Counsel

              Curtis M. Silvers, Professional Staff Member

                 Paul S. Clark, Communications Director

                     Michal S. Prosser, Chief Clerk

                   Matthew Peterson, Assistant Clerk

              Christopher W. Lamond, Systems Administrator

                  Steve Diamond, Senator Susan Collins

                   Jim Rowland, Senator Sam Brownback

              Brian Benczkowski, Senator Pete V. Domenici

                  Michael Loesch, Senator Thad Cochran

                   Barbara Olson, Senator Don Nickles

                William J. Morley, Senator Arlen Specter

                   Rick Valentine, Senator Bob Smith

                Bill Triplett, Senator Robert F. Bennett

                             MINORITY STAFF

                   Alan Baron, Minority Chief Counsel

                  Pamela Marple, Deputy Chief Counsel

                   David McKean, Deputy Chief Counsel

                 Jeffrey Robbins, Deputy Chief Counsel

                         Alan Edelman, Counsel

                       Jonathan Frenkel, Counsel

                           Jim Lamb, Counsel

                        Deborah Lehrich, Counsel

                      Cassandra Lentchner, Counsel

                      Dianne Pickersgill, Counsel

                        Lisa Rosenberg, Counsel

                         Kevin Simpson, Counsel

                       Howard Sklamberg, Counsel

                          Beth Stein, Counsel

                     David Cahn, Assistant Counsel

                   Sarah Des Pres, Assistant Counsel

                   Peter Rosenberg, Assistant Counsel

                       Larry Gurwin, Investigator

                      Jim Jordan, Press Secretary

                          Holly Koerber, Clerk

                      Bill McDaniel, Investigator

                      Jay Youngclaus, Investigator

                  Caroline Badinelli, Staff Assistant

                     Ann Metler, Research Assistant

                   Jessica Robinson, Staff Assistant

                   Rachael Sullivan, Staff Assistant

                    Nichole Veatch, Staff Assistant

     Linda Gustitus, Governmental Affairs Committee, Senator Levin

       Elise Bean, Governmental Affairs Committee, Senator Levin

  Laurie Rubenstein, Governmental Affairs Committee, Senator Lieberman

      Nanci Langly, Governmental Affairs Committee, Senator Akaka

     Marianne Upton, Governmental Affairs Committee, Senator Durbin

 Matthew Tanielian, Governmental Affairs Committee, Senator Torricelli

    Bill Johnstone, Governmental Affairs Committee, Senator Cleland

                               FBI DETAIL

                       Anne Asbury, Investigator

             Jerome Campane, Investigator-FBI Detail Leader

                        Becky Chan, Investigator

                      Jeffrey Harris, Investigator

                    Steven Hendershot, Investigator

                       James Kunkel, Investigator

                       Kelli Sligh, Investigator

                     Vo ``Ben'' Tran, Investigator


                            C O N T E N T S

                              ----------                              
                                                                   Page
Chapter:
    1. Preface...................................................     1
    2. Procedural Background and Overview........................     5
    3. Summary of Findings.......................................    31
    4. The Thirst for Money......................................    51
    5. The White House Controlled the DNC and Improperly 
      Coordinated the Activities of the DNC and Clinton/Gore '96.   105
    6. The DNC Dismantled Its System for Vetting Contributions...   167
    7. DNC Fundraising in the White House: Coffees, Overnights, 
      and Other Events...........................................   191
    8. Fundraising Calls from the White House....................   499
    9. White House Vetting of Individuals with Access to the 
      President..................................................   751
    10. Johnny Chung and the White House ``Subway''..............   781
    11. The Contribution of Yogesh Gandhi........................   917
    12. Ted Sioeng, His Family, and His Business Interests.......   961
    13. John Huang's Years at Lippo..............................  1117
    14. John Huang at Commerce...................................  1153
    15. John Huang Moves from Commerce to the DNC................  1653
    16. John Huang's Illegal Fundraising at the DNC..............  1689
    17. The Hsi Lai Temple Fundraiser and Maria Hsia.............  1749
    18. The China Connection: Summary of Committee's Findings 
      Relating to the Efforts of the People's Republic of China 
      to Influence U.S. Policies and Elections...................  2499
    19. Charlie Trie's and Ng Lap Seng's Laundered Contributions 
      to the DNC.................................................  2517
    20. Charlie Trie's Contributions to the Presidential Legal 
      Expense Trust..............................................  2711
    21. The Saga of Roger Tamraz.................................  2905
    22. DNC Efforts to Raise Money in the Indian Gaming Community  3071
    23. The Hudson, Wisconsin Casino Proposal....................  3165
    24. The Cheyenne and Arapaho Tribes: Their Quest for the Fort 
      Reno Lands.................................................  3547
    25. The Offer of R. Warren Meddoff...........................  3623
    26. White House, DNC and Clinton-Gore Campaign Fundraising 
      Efforts Involving the International Brotherhood of 
      Teamsters..................................................  3655
    27. Compliance by Nonprofit Groups with Committee Subpoenas..  3833
    28. Role of Nonprofit Groups in the 1996 Elections...........  3993
    29. Allegations Relating to the National Policy Forum........  4195
    30. White House Document Production..........................  4277
    31. DNC Document Production..................................  4425
    32. Campaign Finance Reform Issues Brought to the Forefront 
      by the Special Investigation...............................  4459
    33. Recommendations..........................................  4503

                            Additional Views

    34. Additional Views of Chairman Fred Thompson...............  4511
    35. Additional Views of Senator Susan Collins................  4535
    36. Additional Views of Senator Arlen Specter................  4539
    37. Additional Views of Senator Robert Bennett...............  4545

                             Minority Views

    38. Additional Views of Senators Glenn, Levin, Lieberman, 
      Akaka, Durbin, Torricelli and Cleland......................  4557
    39. Additional Views of Senator Glenn........................  9507
    40. Additional Views of Senator Levin........................  9511
    41. Additional Views of Senator Lieberman....................  9525
    42. Additional Views of Senator Akaka........................  9559
    43. Additional Views of Senator Durbin.......................  9565
    44. Additional Views of Senator Torricelli...................  9571





              The Hsi Lai Temple Fundraiser and Maria Hsia

    The fundraiser attended by Vice President Gore on April 29, 
1996 at the Hsi Lai Temple in Hacienda Heights, California, has 
been the focus of considerable attention and controversy ever 
since reports first surfaced in the national press revealing 
that some of the donations given to the DNC in connection with 
this event were unlawfully reimbursed.1 Over the 
course of its investigation, the Committee has examined the 
various allegations of illegality and impropriety that have 
surfaced in connection with this event. Furthermore, the 
Committee has conducted a broader inquiry into the unlawful 
involvement of the Hsi Lai Temple in the 1995-96 election cycle 
and the complex chain of events that produced this involvement.
---------------------------------------------------------------------------
    \1\ See, e.g., Phil Kuntz, ``Instant Karma: Cash Gets to Democrats 
Via Buddhist Temple,'' Wall Street Journal, Oct. 17, 1996 (recounting 
allegations by Buddhist nun that DNC donation for Gore event was 
reimbursed). This early coverage prompted the Christian Coalition to 
file a complaint against the DNC with the Federal Election Commission 
in connection with the Hsi Lai Temple fundraiser. See generally Colleen 
Sealander, letter to Master Shing Yun, Oct. 29, 1996 (Ex. 1) 
(forwarding complaint to Temple, with attachments).
---------------------------------------------------------------------------
    As a result of these inquiries, it has become apparent that 
the DNC's Hsi Lai Temple fundraiser on April 29, 1996 was 
merely one instance--albeit the most significant one--in an 
ongoing campaign of illegal Temple donation-laundering arranged 
by a woman named Maria L. Hsia in support of Democratic 
candidates. Nor was this campaign merely an aberration confined 
to the 1995-96 election cycle. Rather, it had roots stretching 
back to 1988, with the decision of James Riady, John Huang, 
Maria Hsia, and others to organize themselves into a political 
fundraising and lobbying organization in order to advance their 
interests through U.S. politics.
    The Temple-related issue that has hitherto received the 
most attention in the press--Vice President Gore's knowledge 
(or alleged lack thereof) with regard to the status of his 
April 29 luncheon as a DNC fundraiser--is addressed in this 
section. It will be obvious from the evidence recounted herein 
that despite his various denials, the Vice President was well 
aware that the event was one designed to raise money for his 
party. Preoccupied by a narrow debate over the inconsequential 
terminology of ``community outreach,'' ``finance-related 
events,'' ``donor maintenance,'' and ``fundraisers,'' many 
observers have missed the forest for the trees. The real 
significance of the Temple incident lies not in the Vice 
President's lack of candor, but in the ongoing relationship 
this affair illustrates between him--and the Democratic Party--
and a small but influential political clique headed by Riady, 
Huang, and Hsia.
    As will become clear, despite the participation of Temple 
monastics in criminal wrongdoing in connection with the April 
1996 event and in Hsia's broader campaign of Democratic Party 
donation-laundering, the Temple itself seems to have been only 
a secondary actor in this drama. Indeed, Temple officials seem 
to have known little--if anything--about the political 
campaigns they illegally supported at Hsia's 
direction.2 The real significance of the Temple 
incident may therefore be found in what it reveals about the 
activities and agenda of its key decision-makers--Maria Hsia 
and John Huang.
---------------------------------------------------------------------------
    \2\ Since the Hsi Lai Temple received electronic alarm services 
from a corporation called ``DNC,'' many of the monastics solicited to 
give money to the Democratic National Committee may have mistaken the 
party for the company. Cf., e.g., IBPS check #1278, Jan. 5, 1996 (Ex. 
2) ($50 payment to ``DNC,'' apparently for alarm services).
---------------------------------------------------------------------------
    Hsia and Huang have both asserted their Fifth Amendment 
privilege against self-incrimination and have refused to 
cooperate with the Committee. Nevertheless, from documentary 
evidence produced pursuant to subpoena and from interviews and 
depositions of persons involved, the Committee has been able to 
develop a detailed understanding both of the events at issue 
and of the role of Hsia and Huang therein.

                             i. maria hsia

    Hsia Ling--better known by the Anglicized version of her 
name, Maria Lynn Hsia--was born in 1951 and first came to the 
United States on a student visa in 1973. After returning 
briefly to her native Taiwan in 1974, she returned to this 
country to become a permanent resident in 1975. Not long after 
her arrival, she began working as a case worker at Popkin & 
Shamir, a personal injury and immigration law firm.3 
She became a U.S. citizen in 1986.4
---------------------------------------------------------------------------
    \3\ Maria Hsia, hearing transcript from Hsia v. Hom, Ca. Super. 
Ct., No. BC 059523, Aug. 16, 1995, pp. 16-17 (Ex. 3).
    \4\ James Sterngold, ``Political Tangle of Taiwan Immigrant,'' New 
York Times, June 9, 1997.
---------------------------------------------------------------------------
    Though not a lawyer, Hsia took up several successive 
positions with various immigration law firms, leaving Popkin 
for a firm headed by Patrick Fleming, working as a consultant 
for Damrell, Damrell & Nelson, then joining Howard Hom & 
Associates, and working with Arnold Malter, before going into 
business under her own name as Hsia & Associates in 
1991.5 Throughout this period, the immigration 
services business generally treated Maria Hsia well. In the 
late 1970s and early 1980s, providing immigration services to 
Taiwanese citizens was an ``extremely lucrative'' 
field.6 Hsia, it appears, profited accordingly. Her 
reported income in 1982, for example, was $637,000.7
---------------------------------------------------------------------------
    \5\ Hsia's involvement with former INS lawyer Howard Hom began in 
the summer of 1979, when they were both enrolled in Cantonese language 
classes at the University of California in Los Angeles. Deposition of 
Howard Hom, Aug. 27, 1997, pp. 8-9. They began living together in 1980, 
and when the Fleming firm split up in 1986, Hom went into business with 
Hsia as they took over most of Fleming's immigration clients. See 
Memorandum of Interview of Howard Hom, Aug. 10, 1997, p.1. This 
personal-cum-business relationship with Howard Hom lasted until late 
1990. Howard Hom deposition, p.9.
    \6\ See Trial Brief of Defendant and Cross-Complainant Howard Hom 
in Hsia v. Hom, Ca Super. Ct., No. BC 059523, p. 6 (Ex. 4) (describing 
immigration law as profitable ``largely due to tremendous uncertainty 
in Taiwan over the future of the island nation'' caused by the U.S. 
government's abrogation of formal diplomatic relations with Taiwan).
    \7\ Ex. 3, p. 69. Her income in 1983 was $449,000. By 1986 it had 
slipped to $362,000. Id. According to press reports, this stream of 
revenue enabled her to purchase a Rolls Royce automobile and a home in 
Beverly Hills. Sterngold, supra note 4.
---------------------------------------------------------------------------
    Hsia's first contact with political fundraising came in 
early 1982 at a cocktail party she attended with Howard Hom. At 
that reception, they met briefly with March Fong-Eu, an Asian-
American woman who was then California's Secretary of State, 
and Fong-Eu's son, Matthew Fong, who was then his mother's 
campaign manager and subsequently became California's state 
treasurer. At a subsequent meeting, Fong enlisted Hom and Hsia 
to help with fundraising for his mother's re-election. As Hom 
later recalled it, ``Maria offered to take over the fund-
raising activity and, in fact, she explained to Mr. Fong that 
she felt that she and her friends could probably do a better 
fund-raiser than Howard and his lawyer friends . . . . That was 
the genesis of how fund-raising got started with 
Maria.''8
---------------------------------------------------------------------------
    \8\ Hom deposition, pp. 10-12.
---------------------------------------------------------------------------
    It was her immigration work that helped propel Hsia into 
the political arena. Her interest in political activity was 
heavily mercenary: it provided her with contacts and friends in 
government circles in ways that she believed helped her 
immigration services business in at least two ways.
    First, such contacts might be useful in helping her clients 
with specific immigration matters. When she and Hom ran into 
some difficulty with Immigration and Naturalization Services 
(INS) officials in 1983 over a series of visas they had 
obtained for clients through the U.S. consulate in American 
Samoa, for example, Hsia decided that ``a political approach 
might be useful'' to complement more conventional litigation 
strategies.9 Through her political contacts, she 
persuaded U.S. Senator Alan Cranston and U.S. Representatives 
Mel Levine, Howard Berman, and Harry Reid to write letters to 
the INS on her behalf. Cranston was already a recipient of 
political contributions Hsia had raised through her contacts in 
California's Asian community,10 and after their help 
with this immigration issue Hsia began raising money for 
Levine, Berman, and Reid as well.11 Their queries 
forced the INS to undertake the unusual additional step of 
publishing a report in December 1983 on its handling of these 
particular cases.12 The message was not lost on Hsia 
that political contacts and political fundraising could indeed 
pay her concrete dividends.13
---------------------------------------------------------------------------
    \9\ Id., p. 18.
    \10\ Maria Hsia's fundraising efforts on Senator Cranston's behalf 
continued, in fact, at least through May 1989. See Handwritten note by 
Hsia's assistant Jeffrey Su listing attendees at Cranston fundraiser on 
May 23, 1989, including Maria Hsia and John Huang (Ex. 5). As a result 
of Hsia's longstanding contacts with Cranston, he invited her to 
address a field hearing of the Senate Foreign Relations Committee's 
Subcommittee on Asia and Pacific Affairs (which he chaired) at UCLA in 
February 1989. See Alan Cranston, letter to Maria Hsia, Jan. 23, 1989 
(Ex. 6); see generally Hom deposition, pp. 180-82.
    \11\ Hom deposition, p. 20.
    \12\ Sterngold, supra note 4.
    \13\ See generally Hom deposition, p. 15 (``[E]specially on the 
Federal level, when Maria started to meet Congressmen and Senators, she 
realized that this was helpful to my immigration clients who, because 
of the[ir] contact with the Federal Government, might have some need of 
a letter from a Senator or a Congressman to get a case moving through 
the red tape of the bureaucracy.'').
---------------------------------------------------------------------------
    Apart from concrete help with specific immigration cases, 
however, Hsia's political activity was useful to her business 
in a second, more general sense: it helped her cultivate an 
image of a ``connected'' political ``player'' who could ``make 
things happen'' for her clients. As Hom put it,

          [I]t was also good in the sense of a public relations 
        image where the Chinese newspapers would say, Here's 
        Howard Hom and Maria Hsia having a reception with the 
        particular Senator or Congressman, the implication 
        obviously being that we were well-connected and that 
        clients should view that, if anything happened to their 
        case, we had this kind of extra protection, so to 
        speak.14
---------------------------------------------------------------------------
    \14\ Id.

Her political fundraising in California politics, for example--
which had begun with her involvement with Hom in March Fong-
Eu's campaign in 1982--quickly proved useful in this regard. 
With help from fundraising beneficiaries March Fong-Eu and 
California Lieutenant Governor Leo McCarthy, for example, Hsia 
was appointed to several honorary state positions, the prestige 
of which benefitted her immigration work.15
---------------------------------------------------------------------------
    \15\ See, e.g., Ex. 3, p. 58 (``I was sitting on the California 
Economic [Development] Commission, which gave me a lot of exposure and 
[helped] to draw more [immigrant] investors [under the Immigration Act 
of 1990] to come into this country.'') These state positions included 
seats on the Commission for Economic Development and the California-
Taiwan Sister State Legislative Task Force, and received weighty titles 
as March Fong-Eu's ``Honorary Deputy Secretary of State'' and ``Special 
Assistant for Asian Affairs.'' See Maria Hsia biography, p. 2 (Ex. 7) 
(listing positions); Hom deposition, pp. 12-13; Leo McCarthy, letter to 
Maria Hsia, April 8, 1991 (Ex. 8) (discussing upcoming seminar for 
Commission for Economic Development).
    Hsia's early political activity also had national results. DNC 
Chairman Ronald Brown, who would later supervise Hsia's friend John 
Huang in his Department of Commerce, appointed Hsia to the DNC's 
``National Convention Site Selection Committee.'' Cf. Ronald H. Brown, 
letter to Maria Hsia, June 14, 1990 (Ex. 9).
---------------------------------------------------------------------------
    As luck would have it, however, the synergy between Hsia's 
political activity and her immigration business did not flow in 
only one direction. Her immigration work may, in fact, have 
introduced her to Indonesia's Lippo Group conglomerate. Having 
been put in contact with the Indonesian section of Lippo Bank 
by one of her clients, she acquired some further clients 
through them.16
---------------------------------------------------------------------------
    \16\Maria L. Hsia, deposition in Hsia v. Hom, California Superior 
Court, No. BC 059523, May 18, 1994, pp. 29-31 (Ex. 10).
---------------------------------------------------------------------------
    By the late 1980s, Hsia had begun to attempt on the 
national stage what she had by then accomplished in California: 
building close fundraising and political ties to prominent 
politicians who were in a position to help her and her friends. 
At least initially, however, this project--which was to 
culminate with her efforts to involve the Hsi Lai Temple on 
behalf of national Democratic candidates in the 1996 
elections--could not be accomplished alone. To move more into 
national politics, Hsia required some new friends.
    The involvement of Hsia and the Hsi Lai Temple in donation-
laundering in support of the Clinton/Gore ticket in 1996 was 
the culmination of a relationship between Hsia and Vice 
President Gore that stretches back to 1988--the year that James 
Riady, John Huang, Maria Hsia, Eddy Yang, Howard Hom, Fred 
Hong, and others established the Pacific Leadership Council 
(PLC) as a fundraising and lobbying organization to promote 
their interests in U.S. politics.17
---------------------------------------------------------------------------
    \17\ As Hom recalled it, the purpose was to build the group into a 
powerful political organization; it was designed to give its charter 
members ``the same kind of clout as, say, other organized groups . . . 
like the Teamsters or the National Rifle Association . . . .'' Hom 
deposition, p. 24.
---------------------------------------------------------------------------
    From the beginning, it should be noted, the PLC was in 
large part a vehicle for the advancement of Lippo interests. 
James Riady, the son of Mochtar Riady and scion of the family 
dynasty that ran the Lippo Group, was instrumental in the PLC's 
founding and served alongside Hsia and Fred Hong as one of the 
organization's first co-chairs.18 Indeed, James 
Riady was perhaps the single most important figure in the PLC's 
early political activity, hosting its first political 
fundraiser on April 22, 1988,19 using his business 
contacts to facilitate the group's fundraising,20 
and employing his own money and that of Lippo employees to make 
up for unanticipated shortfalls in PLC fundraising 
efforts.21
---------------------------------------------------------------------------
    \18\ Id.
    \19\ Id. p. 26; see also Maria Hsia, facsimile transmission to John 
Huang, March 30, 1988 (Ex. 11) (referring to upcoming event at 
``James's house on 4/22/88'').
    \20\ One document recounting contributions made to the Democratic 
Senatorial Campaign Committee (apparently in 1988), for example, lists 
13 persons or couples who had contributed between $5,000 and $10,000 to 
that organization. Beside each name is listed the name of the person 
who solicited that contribution. James Riady's name appears next to 11 
of the 13 donations, suggesting that he was responsible for every 
contribution but two (the ones that were made by Hsia and Hom 
themselves). David Lang, memorandum to Mary Leslie, May 4, 1988 (Ex. 
12); see also Hom deposition, p. 28 (explaining that handwritten 
notations next to each name indicate solicitor). Another document 
produced to the Committee, recounting solicitations for new membership 
in the ``Leadership Circle/Business Round Table Circle,'' lists Maria 
Hsia and James Riady as having each solicited $55,000. List of 
Leadership Circle Solicitations, undated (Ex. 13).
    \21\ John Huang, Riady's employee, was particularly active in this 
regard. See Hom deposition, pp. 30-32 (recounting that John Huang 
commonly ``stepped in to fill the slot'' if Hsia or others ``would fall 
short of [their] goal and would have to look for other people to bail 
her out . . . [by] making an extra contribution''); John Huang, note to 
Maria Hsia, Dec. 16, 1989 (Ex. 14) (forwarding blank check drawn on 
account at Lippo bank with handwritten instructions to use it for 
either $500 or $1,000 donation to Fund for a Democratic Majority, 
depending upon whether another contributor met anticipated commitment); 
Jeff Su, letter to ``Pamela,'' April 15, 1991 (Ex. 15) (enclosing Huang 
check to ``Mikulski for Senate'' in order to ``serve as a replacement 
for Phillip So's check''); Maria Hsia, letter to Rick Weiland, April 
28, 1988 (Ex. 16) (forwarding check from Huang which ``represents David 
Yeh and Ossy Tirta's contributions''); Ex. 13 (listing solicitations by 
Riady for ``New Members Leadership Circle/Business Round Table Circle'' 
with handwritten alterations replacing names of Ossy Tirta and David 
Yeh with that of John Huang).
---------------------------------------------------------------------------
    A ``wish list'' 22 James Riady submitted to Hsia 
in April 1988 summarizing ``issues need[ing] to be followed 
up,'' 23 for example, suggests Riady's role in 
steering the PLC and interest in enlisting it, and through it 
the Democratic Senatorial Campaign Committee (DSCC), as a 
vehicle for the promotion of Lippo interests. This list, 
prefaced by a handwritten memorandum on Bank of Trade/Lippo 
Group 24 stationery, outlined Riady's plans for the 
group's political activity in U.S. politics on a Senator-by-
Senator basis, outlining a specific ``agenda'' for six U.S. 
Senators: Daniel Inouye, Tim Wirth, Kent Conrad, James Exon, 
John Melcher, and Tom Daschle. More broadly, Riady suggested a 
number of ``[o]ther issues'' that the PLC should pursue, among 
them:
---------------------------------------------------------------------------
    \22\ The term is Howard Hom's. See Hom deposition, p. 36.
    \23\ James Riady, memorandum to Maria Hsia, April 26, 1988, p. 1 
(Ex. 17).
    \24\ The Bank of Trade was a Lippo-owned bank that is now known 
simply as Lippo Bank.
---------------------------------------------------------------------------
          ``(i) The need for the Senators to impress upon 
        Taiwan to allow Asian-American banks (or at least Bank 
        of Trade) to be allowed to open a branch office in 
        Taiwan in the very near future.
          (ii) Appointments of Asian-Americans to policy making 
        positions in the Federal Government.
          (iii) Visit of US Senators on an ongoing and regular 
        basis to Indonesia, Hong Kong and Taiwan at our 
        invitation or with us as host.
          (iv) Participation of Senators at specific Asian-
        American community activities in California such as the 
        NACAB, The Asia Society, the Indonesian Business 
        Society and other similar bodies.
          (v) Funds of various Federal Government Agencies or 
        government bodies as well as that of DSCC to be 
        deposited at the Asian-American banks in the U.S. 
        Perhaps the DSCC could start by making a deposit at 
        Bank of Trade.
          (vi) Assistance for special, exceptional immigration 
        cases when and if it arises.'' 25
---------------------------------------------------------------------------
    \25\ Ex. 17, p. 3.
---------------------------------------------------------------------------
    Riady's role in personally directing such activity, 
however, declined over time as it became difficult for him to 
reconcile the broader responsibilities of helping run his 
family's international business empire with day-to-day 
involvement in U.S. politics. As a consequence, he found it 
necessary to step down as co-chair of the PLC. To ensure that 
Lippo's interests were still advanced by the organization, 
however, Riady delegated his role to Huang, who was at that 
time a top executive with the Lippo-owned Bank of Trade and 
thus Riady's employee. Huang thereafter served as Riady's agent 
``both on the PLC, taking over Riady's position as the 
organization's co-chair, and more generally with regard to U.S. 
political activity.26 As Maria Hsia herself 
27 put it in a facsimile transmission to her PLC co-
chair Fred Hong, ``John Huang . . . is putting D.S.C.C. 
together for James.'' 28
---------------------------------------------------------------------------
    \26\ See Hom deposition, pp. 24-25.
    \27\ As suggested by Riady's April 1988 ``wish list,'' Hsia was 
apparently also expected to play a role in implementing James Riady's 
agenda. See Ex. 17, p. 1 (noting that with regard to political agenda, 
``it may be best to coordinate through a person--i.e., you.'').
    \28\ Maria Hsia, facsimile transmission to Fred Hong, March 30, 
1988 (Ex. 18).
---------------------------------------------------------------------------
    The PLC swung its weight in behind Democratic Party 
candidates in several of the major national races of 1988, most 
prominently Michael Dukakis' campaign for President and Leo 
McCarthy's campaign for the U.S. Senate.29 Both of 
these campaigns, however, were conspicuously unsuccessful--
leading the PLC to cast around for a way to rekindle its 
political fortunes. Ultimately, the PLC decided to try to 
revive the organization's political activity by organizing a 
high-profile trip to Asia for a group of U.S. 
Senators.30 Significantly, it was this search for 
new political opportunities in 1988-89 that helped bring Hsia 
and the Riady/Huang group together, simultaneously, both with 
Venerable Master Hsing Yun's Fo Kuang Shan Buddhist order and 
with then-U.S. Senator Al Gore.
---------------------------------------------------------------------------
    \29\ See generally Hom deposition, pp. 22-25, ``89 for 90,'' Los 
Angeles Times Magazine, Jan. 1, 1989, p. 34 (identifying Hsia as ``at 
the center of a predominantly Asian group of fund-raisers rapidly 
emerging as a major force in the hotly competitive Los Angeles 
political money scene. Last fall, the group raised substantial sums 
for, among others, the Dukakis and McCarthy campaigns. Throughout 1989, 
its' leading delegations of Senators and Congressmen on tours of the 
far east''). Hsia was also a ``regional chair'' for the 1988 Democratic 
Senate Dinner in Los Angeles and--along with Huang, Hom, and Fred Hong, 
among others--co-chaired at least one Dukakis campaign fundraising 
dinner in Los Angeles sponsored by the ``Asian-American Friends of 
Dukakis.'' (The ``general chairman'' for the latter event was the now-
convicted campaign-finance violator Albert Lum.) See 1988 Democratic 
Senate Dinner brochure, p. 1 (Ex. 19); Dukakis dinner program (Ex. 20).
    \30\ As it turned out, this trip would be among the PLC members' 
most important steps toward implementing the U.S. political agenda 
James Riady had spelled out in April 1988, see supra text accompanying 
note 25 (listing agenda item of having Asian-Americans appointed to 
high office), until the success in 1994 of the group's efforts to have 
Huang appointed to a high government position. See Hom deposition, p. 
39; see also Ex. 21 (letters on behalf of John Huang: Howard Hom, 
letter to Doris Matsui, Dec. 14, 1992; Sen. Paul Simon, letter to Susan 
Brophy, Jan. 6, 1993; Sen. Thomas Daschle, letter to Richard Riley, 
Jan. 8, 1993; Mike Wantanabe, letter to Melinda Yee, Jan. 19, 1993; 
Sen. Kent Conrad, letter to Bruce Lindsey, Jan. 21, 1993; Nancy H. Au, 
letter to Melinda Yee, Jan. 26, 1993; Kathleen Brown, letter to Jody 
Franklin, Jan. 28, 1993; Maeley Tom, letter to John Emerson, Feb. 17, 
1993; Leo McCarthy, letter to Bruce Lindsey, Feb. 22, 1993; Leo 
McCarthy, letter to John Emerson, Feb. 22, 1993).
---------------------------------------------------------------------------
    The connection between Hsia and her fellow PLC members and 
the Fo Kuang Shan Buddhist order 31--the Taiwanese 
parent organization of the International Buddhist Progress 
Society (IBPS) and its Hsi Lai Temple in Hacienda Heights, 
California--came about through Eddy Yang. Yang, also a founding 
member of the PLC, headed the Sunlight Corporation a furniture 
company and had been for many years an ``advisor'' to the Fo 
Kuang Shan order in Taiwan.32 As Howard Hom 
recalled, Yang stepped in and ``volunteered the temple's 
auspices'' after Hsia had ``problems lining up a corporate 
sponsor that she knew,'' making the temple available to help 
underwrite the cost of the PLC's trip to Asia for Senator Gore 
in early 1989.33
---------------------------------------------------------------------------
    \31\ This Taiwanese-based sect was founded in 1969 by Li Kuo-Shen, 
who subsequently took the name Hsing Yun (``Stars and Clouds'') as his 
``Dharma name'' upon becoming a monk. By the mid-1990s, the Order had 
developed into a worldwide network having some 130 temples, as many as 
1.5 million adherents, and over $400 million in assets. See Kevin 
Sullivan, ``Monk at Issue is an Icon in Taiwan,'' Washington Post, Oct. 
25, 1996, p. A22; Geoff Spencer, ``Buddhism Blossoms in Australia's 
Industrial Heartland.'' Ap Worldstream, Oct. 8, 1995.
    \32\ See Hom deposition, pp. 49-50.
    \33\ Id.
---------------------------------------------------------------------------
    Involving the Fo Kuang Shan Order in the PLC's agenda was 
in many ways an inspired choice, as it had acquired a 
reputation for political activity in Taiwan.34 
Master Hsing Yun saw himself as destined to play an important 
role on the world stage as an unofficial advisor to political 
leaders both in Taiwan and elsewhere.35 Not for 
nothing, therefore, was Master Hsing Yun known as ``the 
political monk.'' 36
---------------------------------------------------------------------------
    \34\ Master Hsing Yun, for example, has since served 1988 on the 
Central Advisory Committee to Taiwan's ruling Kuomintang Party (KMT), 
supported an independent Buddhist candidate (Chen Lu-an) in Taiwan's 
1995-96 presidential election campaigns, and in 1997 accepted an 
appointment to the Taipei government's cabinet-level Overseas Chinese 
Affairs Commission. Debbie Kuo, ``Master Hsing Yun Appointed 
Commissioner of O'Seas Chinese Affairs,'' Central News Agency [Taiwan], 
Feb. 16, 1997; Sullivan, supra note 31, p. A22; Tsong Ching, ``Master 
Hsing Yun and Preceptor of State Yu Lin,'' Pacific Journal, May 3, 1996 
(Ex. 22) (translated by Michael Yan for the Governmental Affairs 
Committee). According to press reports, Hsing Yun's ``pattern of 
influence building'' has given him ties to ``a number of world 
leaders.'' Sullivan, supra  note 31; see also generally Stuart 
Chandler, Establishing Friendly Relations: The Fokuangshan Perspective 
on the Hsi Lai Temple Political Donations Controversy (unpublished 
monograph, June 14, 1997) (Ex. 23, p. 13).
    \35\ Hsing Yun once wrote a novel about a Buddhist monk named Yu 
Lin, who was appointed to political office as ``Preceptor of State'' by 
an emperor of the Ch'ing dynasty. This story, which was made into a 
movie and a television series in Taiwan, outlines Hsing Yun's 
``critique and expectations of a religious-leader-turned-Preceptor-of-
State'' and suggests that he entertains similar ambitions for himself. 
Ching, supra note 34; cf. Fu Chi-ying, Handing Down the Light: The 
Biography of Venerable Master Hsing Yun (Hsi Lai University Press 1996) 
(translated by Amy Lui-Ma) (Ex. 24, p. 106).
    \36\ John Mintz, ``Fund-Raisers Pressured Temple After Gore Visit; 
12 Donors Were Reimbursed,'' Washington Post, June 13, 1997, p. A20 
(recounting that Hsing Yun has called himself ``political monk''); see 
also Ching supra note 34.
---------------------------------------------------------------------------
    To this end, in expanding his order to the United 
States,37 Hsing Yun apparently hoped to continue 
``spreading the Dharma,'' i.e., increasing popular receptivity 
to Buddhist ideas and culture, through political fundraising in 
U.S. politics.38 As he made clear to the Committee 
when he was interviewed in Taiwan in June 1997,
---------------------------------------------------------------------------
    \37\ The name of the elaborate temple complex constructed by the 
IBPS to be the headquarters of the Fo Kuang Shan order's North American 
operations illustrates its intended mission of spearheading the order's 
expansion into the United States: Hsi Lai means ``Coming to the West.'' 
Hsing Yun's biographer describes the founding of the temple in Hacienda 
Heights as ``a milestone that mark[ed] the Dharma coming to the Western 
world.'' (Ex. 24, p. 342).
    \38\ See Ex. 23, p. 4 (``As another means to establish Hsi Lai 
Temple as a legitimate, fully accepted member of the [U.S.] community, 
Master Hsing Yun and the temple's various abbots have consistently 
sought to secure `friendly relations' with local and national political 
leaders.''); id., p. 16 (describing order's political involvement in 
Taiwan and noting that ``[i]n light of Master Hsing Yun's willingness, 
even eagerness, to create `friendly relations' with government 
officials, both in Taiwan and abroad, the fact that he invited Gore to 
Fokuangshan in 1989, and subsequently honored him with a banquet as Hsi 
Lai Temple, no longer seems so bizarre.'').

          Speaking of political donations, I feel that, my 
        entire life, I have been a person who enjoys doing good 
        deeds and giving to others. . . . I give people 
        assistance. I am grateful for the economic aid that the 
        United States government gave to the Republic of China 
        thirty or forty years in the past. Having established 
        two-way communication with the United States, I feel 
        that I ought to express my gratitude and repay the 
        country.39
---------------------------------------------------------------------------
    \39\ Hsing Yun, ``Statement to Governmental Affairs Committee Fact-
finding Team'' June 17, 1997 (Ex. 25, p. 2). (This document was 
prepared by Hsing Yun for the Committee in advance of his interview on 
June 17, 1997; it does not represent an account of this interview.)

This penchant for political involvement helped make Hsing Yun's 
Fo Kuang Shan order an eager collaborator in Maria Hsia's 
political activity.40 Over the next few years, Hsing 
Yun's organization helped Hsia and her PLC co-founders in three 
principal ways:
---------------------------------------------------------------------------
    \40\ Ironically, however, according to Howard Hom, Maria Hsia was 
generally contemptuous of persons who became involved in political 
activity through political conviction; she believed that real political 
power flowed from campaign contributions rather than passion and policy 
activism. Hom interview, p. 3.
---------------------------------------------------------------------------
          (1) The Fo Kuang Shan order helped pay for the PLC's 
        trip to Asia in early 1989 and hosted the PLC 
        delegation at its temple headquarters in Kiaoshung, 
        Taiwan;
          (2) The order provided Maria Hsia with a lucrative 
        sideline in procuring ``religious worker'' visas and 
        green cards for Temple monastics and devotees coming to 
        the United States under provisions of the 1990 
        immigration act for the passage of which she had 
        successfully lobbied; and
          (3) The order gave Hsia access to a deep reservoir of 
        money for illegally laundered political donations, upon 
        which she would draw heavily in the years to come.
In return, the Fo Kuang Shan order perceived itself as becoming 
increasingly influential within the Democratic Party. By late 
1996, brochures prepared by the Hsi Lai Temple had come to 
describe Hsing Yun as an ``informal liaison to the White House 
on Asian affairs.'' 41
---------------------------------------------------------------------------
    \41\ Lena H. Sun, ``Gore `Community Outreach' Touched Wallets at 
Temple: April L.A. Event Raised Funds and Questions,'' Washington Post, 
Oct. 25, 1996, p. A1.
---------------------------------------------------------------------------
    The PLC's trip to Asia in 1989 was organized by John Huang, 
James Riady, and Maria Hsia, with Huang playing the lead role. 
Here again, James Riady's enormous role in the PLC was visible: 
according to a report on the preparations Huang gave to a PLC 
meeting in November 1988, Riady and his employee Huang provided 
$10,000 in seed money to help cover the trip's costs. This 
money was deposited in an account controlled by Huang, Hsia, 
and Fred Hong at Riady's own Bank of Trade.42 
Overall sponsorship of the trip was ostensibly to be provided 
by a ``non profit organization in Indonesia''; this was being 
arranged by James Riady.43
---------------------------------------------------------------------------
    \42\ Minutes of PLC Meeting, Nov. 10, 1988, p. 1 (Ex. 26).
    \43\ Riady's role as perhaps the single most important figure 
behind the 1989 trip is also suggested by a letter sent in July 1988 by 
Huang's assistant to a member of Senator Kent Conrad's staff as part of 
the PLC's efforts to organize the Asia trip. According to this letter, 
Riady had picked the ``dignitaries, public officials and business 
leaders in Taiwan, Hong Kong, Singapore and Indonesia'' who were to be 
visited by the PLC delegation. Interestingly, this list included a 
number of ``PRC Related Officials,'' including the head of the Xinhua 
News Agency in Hong Kong, described as ``equivalent to PRC 
Ambassador,'' and the head of China Resources, which was called ``PRC's 
key foreign trading company.'' Virginia H. White, letter to Karen 
Frederickson, July 28, 1988 (Ex. 27). (For more about China Resources, 
see the sections of this report dealing with Lippo and with 
intelligence matters.)
    The Fo Kuang Shan order also contributed an additional $4,000 
toward the PLC's expenses through its U.S. subsidiary, the 
International Buddhist Progress Society. See Check #1938 from 
International Buddhist Progress Society for $4,000 to ``Pacific 
Leadership,'' Dec. 28, 1988 (Ex. 28).
---------------------------------------------------------------------------
    Originally, the plan had been to invite as many as five 
U.S. Senators, accompanied by 15 PLC members, on a trip to 
Taiwan, Indonesia, and Hong Kong.44 All but one of 
the Senators invited to participate, however, turned down the 
Council's invitation.45 But Senator Gore faced re-
election in 1990, and had depleted his campaign funds in his 
failed 1988 presidential bid.46 Having been told by 
Senator Gore that he ``would like to know the Asian community 
better and would like to be closer to them,'' 47 
Maria Hsia explicitly promised Senator Gore her political 
support, as well as that of PLC co-founders such as James Riady 
and John Huang, if he would come join them in Asia. Indeed, 
Hsia advised him bluntly that ``[i]f you decide to join this 
trip, I will persuave [sic] all my colleagues in the future to 
play a leader role in your future presidential race.'' 
48 Gore thereupon accepted, becoming the only 
national-level U.S. politician to join the PLC in Taiwan.
---------------------------------------------------------------------------
    \44\ Ex. 26, p. 2.
    \45\ Hom deposition, p. 56.
    \46\ See Al Gore, letter to Maria Hsia, May 23, 1989 (Ex. 29).
    \47\ Maria Hsia, letter to Albert Gore, Nov. 22, 1988 (Ex. 30) 
(recounting conversation with Gore during event at home of Pamela 
Harriman). This Harriman event was probably not the same event 
referenced in a document in the handwriting of Jeff Su--Maria Hsia's 
political assistant--representing a fax transmission from Hsia to John 
Huang at Bank of Trade. This document describes a dinner party for 25-
30 guests at Harriman's house costing $3,000 to $5,000 per person with 
proceeds going to Friends of Al Gore. See Maria Hsia, memorandum to 
John Huang (undated) (Ex. 31). According to Howard Hom, Jeff Su only 
began working for Hsia in 1989, suggesting that the Harriman event 
referenced in Hsia's November 22, 1988 letter was a prior fundraiser. 
See Hom deposition, pp. 77-78.
    \48\ Ex. 30. This letter is in the Committee's possession only in 
``draft'' form, but Howard Hom recalls that it was ultimately sent as 
written. See Hom deposition, p. 59.
---------------------------------------------------------------------------
    Thanks to the partial financial sponsorship provided by 
Hsing Yun, part of the Taiwan leg of the PLC's Asia trip 
consisted of a visit to the Fo Kuang Shan temple in Kiaoshung. 
Attending with a delegation that included James Riady and his 
wife Aileen, John Huang and his wife Jane, Eddy Yang and his 
wife Jenny, Fred Hong, Howard Hom, and Maria Hsia, as well as 
Gore staff members Peter Knight and Leon Fuerth, 49 
Senator Gore toured the Kiaoshung Monastery on January 11, 1989 
and met with Hsing Yun.50
---------------------------------------------------------------------------
    \49\ Pacific Leadership Council, attendance list for January 1989 
trip (Ex. 32). Knight was then Gore's chief of staff, while Fuerth was 
his foreign policy advisor. (This document was not a final list of 
participants, but Howard Hom recalls it being accurate apart from 
exceptions that are irrelevant for present purposes. See  Hom 
deposition, pp. 61-62.)
    \50\ Indeed, during their meeting, Senator Gore and the Venerable 
Master discussed the Senator's hopes to win the U.S. presidency. 
According to Hsing Yun, when

      Senator Gore visited Fo Kuang Shan . . . I said to him, 
      ``You can become the president of the U.S.'' He was excited 
      upon hearing that and said, ``I will visit you when I 
---------------------------------------------------------------------------
      become the president.''

Hsing Yun, article in Universal Gates Monthly (May 1996) (Ex. 33, pp. 
183-184) [translated from the Chinese by SA Becky Chan for the 
Governmental Affairs Committee].
    This was the start of an extremely close relationship 
between Hsia and Senator Gore. After the January 1989 trip to 
Taiwan, Hsia became an active fundraiser for the Senator's 
reelection campaign.51 Over the next 22 months, 
until his reelection to the Senate in November 1990, for 
example, Hsia was involved with--with the help of her 
``political assistant'' Jeffrey Su 52--numerous 
fundraising events for the Gore campaign, working in 
conjunction with campaign officials to refer her own friends 
and fundraising colleagues to Gore events in Southern 
California.53 Hsia also helped organize Asian-
Americans and Indo-Americans in Tennessee in support of Senator 
Gore's re-election, forwarding lists of affluent Chinese-
Americans in Tennessee to the Senator's fundraising staff and 
helping publicize Indo-American events among her PLC 
fundraising colleagues.54
---------------------------------------------------------------------------
    \51\ She and her colleagues also did fundraising for other 
Senators. See, e.g., DSCC Tally Sheet (1989-1990) (ex. 34) (listing 
DSCC recipients including Senators Paul Simon, Tom Harkin, John Kerry, 
and Carl Levin); List of contributors to Sen. Howell Heflin dinner, 
Nov. 27, 1989 (Ex. 35). Gore, however, was the particular object of 
Maria Hsia's attentions.
    \52\ Jeffrey Su was hired by Hsia in early 1989--after her return 
from the trip to Taiwan--to help her run her various political 
activities and particularly to assist her in working for Senator Gore. 
Hom deposition, pp. 75 & 78.
    \53\ See, e.g., Maria Hsia, memorandum to DSCC members, March 20, 
1989 (Ex. 36) (list of upcoming Gore events); Debra Fried, memorandum 
to ``Finance leadership and contacts/Friends of Al Gore,'' July 27, 
1990 (Ex. 37) (forwarding list of upcoming Gore fundraisers on West 
Coast in August 1990); Hari Lal, letter to Debra Fried, Aug. 14, 1990 
(Ex. 38) (discussing Gore visit to Los Angeles); Handwritten memorandum 
on ``Gore Reception 3/21'' chaired by Eddy Yang at home of PLC founding 
member Tina Bow (otherwise undated) (Ex. 39); Jeff Su, fax transmission 
to John Huang, Aug. 6, 1990 (Ex. 40) (discussing ``the Gore reception 
on Thursday''); Jeff Su, fax transmission to Hari Lal, Aug. 15, 1990 
(Ex. 41) (discussing upcoming Gore events).
    \54\ See Ju Hong Taur, letter to Maria Hsia, Feb. 9, 1989 
(translated by SA Becky Chan for the Governmental Affairs Committee) 
(Ex. 42) (forwarding list of Chinese persons for fundraising 
solicitation and political organization); Ex. 43 (Maria Hsia, fax 
transmission to John Huang, March 9, 1990 [RE: Reception for Senator 
Gore by Indo-American community'']; Hari Lal, fax transmission to Maria 
Hsia, Oct. 1, 1990 [advising Hsia of Indo-American plans for Gore 
fundraisers in Tennessee]); see generally Hom deposition, pp. 78-81 
(recounting Hsia's role in organizing Asian-Americans and Indian-
Americans).
---------------------------------------------------------------------------
    The PLC organized a fundraiser of its own for Senator 
Gore's campaign on May 21, 1989--a $250-per-person event held 
at the California home of PLC founding member Tina Bow and 
consisting of a ``private reception'' with the Senator for PLC 
members and event sponsors followed by a ``general reception.'' 
55 The event was chaired by Fo Kuangshan advisor 
Eddy Yang, but Hsia was one of its principal organizers, 
designing and mailing the invitations for the affair, helping 
arrange musical entertainment 56 and inviting ``DSCC 
Members and Friends'' to participate, advising them that 
Senator Gore was ``a likely candidate for president in 1992.'' 
57
---------------------------------------------------------------------------
    \55\ Maria Hsia, letter to ``DSCC Members and Friends,'' May 5, 
1989 (Ex. 44) (discussing May 21 fundraiser); R.S.V.P. return and from 
Maria Hsia's computer file, May 3, 1989 (Ex. 45) (indicating $250 
solicitation for event ``sponsors'').
    \56\ See Ex. 45 (draft invitations from Maria Hsia's computer file, 
with handwritten edits, and handwritten draft of invitation); Maria 
Hsia, letter to Johan Sendjaja, May 3, 1989 (Ex. 46) (discussing 
arrangements for band and public address system at May 21 Gore 
reception); Handwritten notes from Maria Hsia's file detailing 
preparations for May 21 reception (Ex. 47).
    \57\ Ex. 44.
---------------------------------------------------------------------------
    Nor were Hsia and her colleagues above using Fo Kuang Shan 
monastics in their fundraising for Senator Gore. Underlining 
the PLC's reciprocal commitments with the Senator, for example, 
Eddy Yang helped arrange for several monks and nuns from the 
Temple to attend the May 21, 1989 Gore fundraiser.\58\ This 
event reportedly raised nearly $20,000 for Senator Gore; he 
accordingly wrote a thank-you letter afterwards to one of the 
monastics saying that he ``deeply appreciates your support and 
the support of your congregation.'' \59\ Senator Gore 
thereafter thanked Hsia for her support, assuring her that this 
assistance was vital because
---------------------------------------------------------------------------
    \58\ Hom deposition, p. 67 (``[T]he temple sent a team of monks and 
nuns to the event, and as I recall, someone spoke as the representative 
of that [organization], and because of that connection or linkage, Eddy 
Yang was an event chair because of his connection initially with the 
Buddhist temple that helped subsidize the trip to Taiwan.'').
    \59\ William Rempel, Alan Miller & Henry Weinstein, ``Buddhist 
Temple repaid some DNC Donations,'' Los Angeles Times, May 23, 1997, p. 
A1.

          my involvement in the Presidential race over the past 
        two years has delayed my efforts to raise money for the 
        1990 campaign and left our coffers empty for the 
        upcoming race. Your contribution at the early stage of 
        this effort has helped to replenish our account and 
        will allow me to build a strong organization. . . .\60\
---------------------------------------------------------------------------
    \60\ Ex. 29

    In addition to Gore-specific fundraising events, the DSCC's 
political-contribution ``tally'' system proved to be a valuable 
tool for Hsia as she swung her newfound fundraising clout 
behind Senator Gore, representing as it did a convenient way 
around limits on ``hard'' campaign finance contributions.\61\ 
Rather than limit their overall support of a particular 
candidate to the $2,000 level specified for total individual 
``hard'' donations, contributors to the DSCC arranged to 
earmark much larger ``soft'' money contributions for particular 
candidates. As Howard Hom remembered it,
---------------------------------------------------------------------------
    \61\ By federal law, contributions to individual candidates for 
Congress are limited to $1,000 per contributor for the primary and 
general election campaigns, for a total of $2,000 per contributor.

          The contributor donated under the name of DSCC, and 
        DSCC could do with it as they wished, but as the group 
        found out during the Leo McCarthy campaign for the U.S. 
        Senate in 1988, . . . we could request that all or a 
        portion of any donation be tallied or allocated to use 
        in a particular race. So we could say we want 90 
        percent to go to Al Gore and 10 percent to go to, say, 
        Leo McCarthy.\62\
---------------------------------------------------------------------------
    \62\ Hom deposition, p. 71; see also id., p. 88 (noting that ``the 
DSCC soft money tally would be separately allocated'' from ``the 
individual contribution to the 2,000-per-year max[imum]'').

In other words, donors would give money to the DSCC itself in 
large, unregulated ``soft'' money contributions, so that the 
DSCC could funnel designated amounts of each personal total to 
designated candidates with exactly the same result as if the 
$1,000 limitations had never existed. This system was 
ultimately found to be illegal--with the result that the DSCC 
paid $75,000 in fines to the FEC \63\--but for several years 
this ``tally'' system proved an invaluable means of skirting 
federal election laws.
---------------------------------------------------------------------------
    \63\ See Federal Elections Commission, Matter Under Review 3620, 
conciliation agreement, Aug. 11, 1995.
---------------------------------------------------------------------------
    After returning from the PLC's Taiwan trip, Hsia also 
worked for Senator Gore's re-election campaign through this 
DSCC tally system.\64\ As documented in files of her 
fundraising activity kept by Hsia and Howard Hom, for example, 
a donor named Michael Reyes became the frequent target of her 
efforts to earmark his DSCC contributions for Gore's re-
election campaign.\65\ In the period before the 1990 elections, 
the DSCC ``tallied'' at least $29,500 to Senator Gore's 
campaign.\66\ Senator Gore was well aware of this work she 
undertook on his behalf. As he put it in a letter he wrote to 
Hsia in January 1989, for example,
---------------------------------------------------------------------------
    \64\ Ex. 34 (``RE: DSCC tally to Senator Gore/Please check to see 
if the DSCC did in fact tally money to Sen. Gore per our request''); 
Jeff Su, fax transmission to Debra Fried, Aug. 22, 1990 (Ex. 48) 
(``John Huang will be attending the DSCC 1990 Fall Dinner. Maria will 
contact John and tell him [to] tally his $1,500 to Sen. Gore.'').
    \65\ See, e.g., Maria Hsia, fax transmission to Michael Reyes, Dec. 
2, 1988 (Ex. 49) (``I would like to tally your contribution to Senator 
Al Gore if you have no objections since his reelection is coming.'').
    \66\ Senator Paul Simon received even more DSCC money, being the 
recipient of $36,500 in DSCC ``tallies.'' Other recipients included 
Senators Howell Heflin ($7,500), Carl Levin ($2,500), Max Baucus 
($1,000), John Kerry ($1,000), and Tom Harkin ($4,000). See Ex. 34.

          I wanted to thank you for your generosity in 
        crediting by DSCC tally with the checks from Michael 
        Reyes and Tony Hsu. I have sent letters to both 
        thanking them and crediting you as the contact. Thanks 
        so much; it will help a great deal as we move into the 
        1990 Senate campaign. You are a wonderful friend.\67\
---------------------------------------------------------------------------
    \67\ Al Gore, letter to Maria Hsia, Jan. 31, 1989 (Ex. 50); see 
also Ex. 48 (``Senator Gore should call Michael [Reyes] and ask him to 
tally the remaining $5,000 to his campaign once it is paid.'').

Another letter in December 1990 similarly thanked Hsia for 
``your generous contribution to the Democratic Senatorial 
Campaign Committee, which you had tallied to me.'' \68\ 
Throughout the 1989-90 re-election campaign, Hsia remained in 
close contact about fundraising matters with Senator Gore and 
campaign officials such as Debra Fried of Friends for Al Gore.
---------------------------------------------------------------------------
    \68\ Albert Gore, letter to Maria Hsia, Dec. 5, 1990 (Ex. 51).
---------------------------------------------------------------------------
    All of this fundraising support was, of course, part of the 
rather explicit bargain Hsia had struck with Senator Gore in 
inviting him to visit Taiwan in November 1988. Hsia approached 
her political fundraising with clear objectives in mind, \69\ 
and Senator Gore's presidential ambition appears to have been 
her most favored long-term prospect. As Hsia put it in a note 
to one DSCC contributor, whom she was at that point trying to 
persuade to ``tally'' an additional $5,000 to Friends of Al 
Gore, help for Senator Gore was important because he had been 
``willing to take the Lead role to travel [to] Asia and [was] 
willing to work with us on a long term relationship for his 
future presidency.'' \70\
---------------------------------------------------------------------------
    \69\ Hsia advised Michael Reyes in January 1989, for instance, that 
$5,000 should be allocated to Senator Paul Simon, ``since he sits on 
the immigration sub-committee [and] he will be a very helpful source on 
any immigration related issues.'' A final $5,000 should be reserved, 
she said, for ``any [other] Senator who is responsive to our group's 
needs.'' Maria Hsia, fax transmission to Michael Reyes, Jan. 18, 1989 
(Ex. 52).
    \70\ Id.
---------------------------------------------------------------------------
    In fact, never a woman to say with circumspection what 
might be put bluntly, Hsia made no secret of her expectations 
even when writing to the Senator himself. Four days after the 
PLC's first fundraiser for Al Gore on May 21, 1989, she wrote 
to tell him that

          We were so happy that you were able to spend some 
        time with members of the Asian Pacific American 
        community here in Los Angeles. . . . I appreciate your 
        willingness to provide an opportunity for people to get 
        to know you better. I would also like to see you become 
        one of the senators closest to the Asian Pacific 
        community. But for that to occur, we need time and a 
        special commitment from each other. If you share the 
        same sentiments, please allow my colleagues and I a 
        role in developing this relationship.\71\
---------------------------------------------------------------------------
    \71\ Maria Hsia, letter to Albert Gore, May 25, 1989 (Ex. 53).

    Because of her work in the immigration services business, 
U.S. immigration law was another area of great personal 
interest to Hsia. By February 1989, a major immigration reform 
bill was being prepared in Congress,\72\ ultimately to become 
the Immigration Act of 1990. As this bill moved through the 
legislature during 1989, it became the subject of much lobbying 
by immigration services providers such as Hsia and Howard Hom. 
As finally adopted, the Act included a number of provisions of 
great value to such persons. First, the Act restricted 
deportation and provided work authorization for the spouse or 
unmarried children of legalized aliens.\73\ Second, the Act 
contained new provisions for what would become known as 
``investor immigrants'' (persons who received special visa 
preferences by virtue of their willingness to invest and/or 
create jobs in the United States) \74\ and ``multinational 
executive'' immigrants (persons employed by a foreign 
corporation seeking to work for it in the United States).\75\ 
Third, the Act created an entirely new visa category for 
``religious workers'' who belong to ``religious denomination[s] 
having a bona fide nonprofit, religious organization in the 
United States'' and who seek entry in order to work here for 
their denomination.\76\
---------------------------------------------------------------------------
    \72\ Tom Griffith & Steve Huefner, letter to Christopher A. Ford, 
Aug. 18, 1997 (Ex. 54) (detailing legislative history of Immigration 
Act of 1990).
    \73\ P.L. 101-649, Sec. 301 [104 Stat. 4978, 5029]. As a result, an 
immigration services provider could use one alien's legal residence in 
the United States as a lever with which to secure visas (and ultimately 
legal residency) for other members of his or her family. This often 
enabled immigration services companies to develop an expanding ``tree'' 
of paying customers out of a single initial client contact. Hom and 
Hsia did a lucrative business by such expedients; according to Hom, 
losing the family reunification preferences ``would have wiped out a 
certain percentage of the client base.'' See Hom deposition, p. 120.
    \74\ P.L. 101-649 Sec. 121(b)(5) [104 Stat. 4978, 4989-90].
    \75\ Id., Sec. 121(b)(1)(C) [104 Stat. at 4988]. By the nature of 
these two categories, it was difficult to be both poor and eligible for 
their visa preferences. Moreover, demand for such visas far exceeded 
their supply--necessitating the development of a lottery system and 
leading clients eagerly to seek any chance for a perceived special 
advantage. See Hom deposition, pp. 128-129.
    \76\ P.L. 101-649, Sec. 151 [104 Stat. at 5004-05]. Similar 
provisions applied for temporary work visas, and these religious worker 
nonimmigrants were exempted from the overall visa caps established 
elsewhere in the legislation. Id. at Sec. Sec. 201(b)(1)(B) & 209 [104 
Stat. at 4981 & 5027]. For a discussion of the new religious worker 
rules, see Hom deposition, pp. 132-33.
---------------------------------------------------------------------------
    All three of these visa categories were to become lucrative 
parts of Hsia's business, especially after her association with 
the Fo Kuang Shan order gave her and Howard Hom the job of 
handling immigration work for foreign members of the Order 
affiliating with its U.S. branches such as the Hsi Lai Temple 
in Hacienda Heights, California.\77\ Hsia had long believed 
that her political activity provided important intangible 
advantages in her immigration services work, feeling that if 
she were ``politically active,'' her clients would conclude 
that she had ``more ability and more power to help them in 
their cases.'' \78\ In 1989, with an immigration bill pending 
in Congress that could provide a vehicle for visa provisions of 
such value to her business, Hsia set about to use her political 
ties to reap more concrete benefits as an immigration law 
lobbyist.
---------------------------------------------------------------------------
    \77\ When Hom and Hsia stopped living together, Hsia took the 
Temple's immigration business with her, making it a major part of her 
work with Hsia & Associates. Hom deposition, pp. 160-61; Deposition of 
Man Ho, Aug. 6, 1997, pp. 51-54; Deposition of Yi Chu, Aug. 7, 1997, p. 
24; see also Deposition of Matthew Gorman, Sept. 23, 1997, pp. 140-43; 
(Ex. 55) (collection of illustrative immigration documents and invoices 
for services rendered sent from Hsia & Associates to Temple in 1996); 
Deposition of Man Ya Shih, Aug. 20, 1997, p. 16 (recounting that she 
obtained green card through Hsia at Temple's expense); Deposition of 
Siuw Moi Lian, Aug. 20, 1997, p. 11 (same); Deposition of Huei-Tsan 
Huang, Aug. 20, 1997, pp. 11-12 (discussing Hsia's role in obtaining a 
green card for her and in performing immigration services for Temple). 
According to Hsia's assistant at Hsia & Associates, Matthew Gorman, 
work for the Temple made up somewhere between 20 and 35 percent of 
Hsia's immigration business. Gorman deposition, pp. 75-76. Maria Hsia 
even handled immigration matters for Venerable Master Hsing Yun 
himself. See Notice of Entry of Appearance as Attorney or 
Representative for Hsing Yun, Oct. 28, 1996 (Ex. 56).
    \78\ Ex. 3, p. 28. According to Hsia, political involvement 
occasionally could lead to help with specific cases. Congressman Howard 
Berman's office, she claimed, helped her develop ways to improve 
client's chances in certain visa lotteries. Ex. 10, p. 26. Similarly, 
when Hsia asked for help with a particular immigration case from DSCC 
``tally'' recipient Senator Paul Simon, ``he made a phone call in front 
of me to the immigration commissioner in Washington, DC.'' Maria Hsia, 
deposition in Hsia v. Hom, Ca. Super. Ct., No. BC 059523, May 10, 1994, 
p. 78 (Ex. 57). Senator Gore also apparently helped Hsia on at least 
one occasion, by referring a particular case to her. See Hom 
deposition, pp. 117-118; Leon Fuerth, memorandum to Maria Hsia, Dec. 
14, 1989 (Ex. 58) (with attachments).
---------------------------------------------------------------------------
    One of the principal objects of Hsia's attentions--and 
fundraising support--in this respect was Congressman Bruce 
Morrison of Connecticut, who was the immigration bill's sponsor 
in the House of Representatives and the author of the religious 
worker and ``employment-based'' immigrant provisions so 
important to Hsia.\79\ Morrison was in the middle of a 
difficult (and ultimately unsuccessful) gubernatorial bid in 
Connecticut, and badly needed the funds with which Hsia and her 
PLC colleagues set out to provide him. Significantly, among 
other things, the PLC organized a fundraiser for Morrison at 
the Hsi Lai Temple in Hacienda Heights on April 22, 1990.\80\ 
It was apparently not the first time Hsia had used the Temple 
for a political fundraising event,\81\ and it was not to be the 
last.
---------------------------------------------------------------------------
    \79\ See Ex. 54, p. 2.
    \80\ See Ex. 59 (Jeffrey Su, fax transmission to Pat Andrews, April 
20, 1990 [enclosing press release announcing upcoming Morrison event at 
Hsi Lai Temple]; Invitation to Asian-Pacific American Friends of United 
States Congressman Bruce Morrison event at Hsi Lai Temple [giving price 
as ``$500 per couple/$300 per person'']). Hsia was even able to turn 
Morrison's Connecticut defeat to her advantage by hiring him as an 
immigration ``consultant'' immediately after the election of 1990--for 
a fee of $10,000 a month for six months. See Ex. 57 (containing as sub-
exhibit Consultancy Agreement between Bruce Morrison and Maria Hsia, 
Jan. 22, 1991). As Hsia explained it, Morrison had written ``the 
business provision which provides for the jo[b] creating investor 
category,'' and ``[t]he definition of ``new entrepreneur' will depend 
on Congressional intent and the implementation of the new 
regulations.'' Maria Hsia, fax transmission to Jamie Yang, Nov. 26, 
1990 (Ex. 60). Who better, therefore, to have on one's masthead and 
payroll as an immigration consultant?
    \81\ Eddy Yang apparently organized a fundraiser at the Hsi Lai 
Temple for Leo McCarthy's campaign. See Debbie McConville, memorandum 
to Maria Hsia, undated (Ex. 61) (listing ``Southern California Event 
Fundraising'' and indicating that ``Eddie Yang Event/Budhist [sic] 
Temple Event'' raised $10,450). Howard Hom also recalled that one of 
Senator Paul Simon's several visits to the Hsi Lai Temple had been a 
fundraiser. See Hom deposition, pp. 87-88; cf. Maria Hsia, fax 
transmission to Floyd Fithian, June 23, 1990 (Ex. 62) (describing Simon 
``event'' at Temple); Paul Simon, letter to Maria Hsia, Jan. 22, 1990 
(Ex. 63) (thanking Hsia for ``our visit to the Hsi Lai Temple''); Hom 
deposition, p. 172 (recalling that when Hsia described meeting with 
politician as ``event'' it was most probably a fundraiser). Other 
officials may also have benefited from fundraisers at the temple. Cf. 
Jeff Su, fax transmission to ``Elka,'' Jan. 22, 1990 (Ex. 64) 
(discussing opportunity for California State Controller Gray Davis to 
meet with ``Master Hsing Yun and potential supporters at Hsi Lai 
Temple'').
---------------------------------------------------------------------------
    Part of Hsia's lobbying effort during the summer of 1989--
at the same time she and her colleagues were pushing DSCC 
donors to earmark their unregulated ``soft'' money 
contributions to Senators Simon and Gore--involved traveling to 
Washington to lobby legislators in person on the pending 
immigration bill. According to Hom, the delegation Hsia took to 
Washington even included a pair of nuns from the Hsi Lai 
Temple. The presence of these monastics was intended to remind 
members of Congress of

          the Al Gore sponsorship to the Temple in Taiwan and 
        what the group--the Temple--did subsequently to let 
        other Senators know that if they came on board on the 
        immigration issue and other Asian issues, then they 
        could expect the same reciprocation . . . [through] 
        [t]rips to Taiwan and fundraising in the U.S.\82\
---------------------------------------------------------------------------
    \82\ Hom deposition, p. 153.

Hsia's group met with a number of U.S. Senators and 
Representatives on July 10 and 11, 1989.\83\
---------------------------------------------------------------------------
    \83\ See Maria Hsia, Schedule for July 10-11, 1989 (Ex. 65). See 
also, e.g., Ex. 7 (noting that Hsia ``organized and led delegations . . 
. to visit Washington, DC during debate on the bill in an effort to 
preserve the family reunification categories'').
---------------------------------------------------------------------------
    One of her contacts on this trip was with Senator Gore, who 
joined staff members Peter Knight and Leon Fuerth in meeting 
with Hsia on July 10. Her notes of the meeting recount that 
they discussed his trip to Taiwan with her in 1989, and that 
Gore ``want[ed] to involve [himself] in the Asian Community 
more for [the] future.'' 84 With regard to a 
particular amendment to the immigration bill which had by that 
point been reported out of the Senate Judiciary Committee's 
Subcommittee on Immigration and Refugee Affairs and was rapidly 
approaching a full Senate vote 85 --``he said [he 
had] no problem for co-sponsorship.'' 86 The 
amendment they were discussing --the ``family unity'' 
provisions that were so important to Hsia's immigration 
practice was, in fact, adopted by the Senate two days later. 
Senator Gore was one of its co-sponsors.87
---------------------------------------------------------------------------
    \84\ Maria Hsia, notes of meeting with Senators, July 10, 1989, p. 
2 (Ex. 66); cf. Maria Hsia deposition in Hsia v. Hom, Ca Super. Ct., 
No. BC059523, apparently July 6, 1993, pp, 87-93 (Ex. 67) (discussing 
lobbying trip and taking handwritten notes).
    \85\ See Ex. 54, p.1.
    \86\ Ex. 66 p. 2.
    \87\ Ex. 54, pp. 1-2, On her Washington lobbying trip, Maria Hsia 
employed a simple system of ``grading'' Senators on an A-to-F scale 
based upon their responsiveness to her concerns; Senator Gore received 
an ``A''. Ex. 66, pp. 1-2. In fact, to some extent, Hsia apparently 
coordinated her lobbying on the pending immigration bill with Senator's 
Gore office--as well as the offices of Senator Simon and Representative 
Howard Berman--in promoting her favored legislative provisions. See 
Maria Hsia, fax transmission to Leon Fuerth, Jan. 24, 1989 (Ex. 68); 
see also generally Hom deposition. pp. 142-143.
---------------------------------------------------------------------------
    Writing to Senator Gore upon her return to Los Angeles, 
Hsia thanked him for ``your support on the recent immigration 
bill,'' adding that ``[o]n behalf of the Pacific Leadership 
Council and the communities we represent, I thank you for all 
that you have done.'' 88 Writing back to her in 
response, Senator Gore described himself as being ``pleased to 
have been able to assist you'' on the immigration bill. 
``Without your superb contribution,'' he said, ``it would have 
been much more difficult to find my way in these matters. I 
continue to value your good counsel.'' 89 As John 
Huang himself later described it to then-Vice President 
Gore,``you worked very hard on immigration issues; you worked 
very hard for us.'' 90
---------------------------------------------------------------------------
    \88\ Maria Hsia, letter to Albert Gore, July 17, 1989 (Ex. 69).
    \89\ Albert Gore, letter to Maria Hsia, Aug. 28, 1989 (Ex. 70). By 
all accounts, Maria Hsia appears to have been a significant ``player'' 
in crafting the Immigration Act of 1990--to the point that Senator Paul 
Simon, one of the bill's sponsors, later presented her with the pen 
used to sign the bill into law. See Hom deposition, pp. 158-159. So 
important was this pen, in turn, to Hsia that she reported broke into 
the offices of her law ``partner'' Arnold Malter in July 1995 in order 
to retrieve it after their business relationship collapsed. See 
Monterey Park Police, Crime Report for file number 95-4822, July 15, 
1995 (Ex. 1995 (Ex. 71) (describing theft of pen as recounted by Malter 
to police).
    \90\ John Huang, opening remarks at Vice Presidential event in 
Santa Monica, Sept. 27, 1993, on WHCA audiotape of Santa Monica event, 
Sept. 28, 1993 [transcription by Government Affairs Committee stafff]. 
The White House Communications Agency apparently misdated this tape: 
the event actually occurred on September 27. See John Huang, letter to 
Jack Quinn, Oct. 7, 1993 (Ex. 72) (``We enjoyed meeting you again on 
the following Monday, September 27 in Los Angeles. Vice President Gore 
was just super.'').
---------------------------------------------------------------------------
    In addition to more conventional communications thanking 
her for her fundraising on his behalf,91 Senator 
Gore sent effusive handwritten comments informing Hsia and 
Howard Hom, for example, that ``I cannot thank you enough. You 
two are great friends. See you soon. Al.'' 92 Hsia's 
involvement with Senator Gore extended even to helping him 
prepare his book Earth in the Balance: as Gore Chief of Staff 
Peter Knight wrote to Hsia in March 1991,
---------------------------------------------------------------------------
    \91\ See e.g., Ex. 51; Albert Gore, letter to Maria Hsia, Dec. 10, 
1990 (Ex. 73); Ex. 29; Ex. 50; cf Invitation sent to Maria Hsia for 
reception for swearing-in-ceremony on January 3, 1991 (Ex. 74).
    \92\ Albert Gore, letter to Maria Hsia, Oct. 2, 1990 (Ex. 75); see 
also Albert Gore, handwritten letter to Maria Hsia, undated (Ex. 76).

          The materials you got for Al's book on the 
        environment were perfect. Thanks so much for taking the 
        time to do it. He would have been lost without your 
        efforts because the chapter on religion and the 
        environment is integral to his work.93
---------------------------------------------------------------------------
    \93\ Peter Knight, letter to Maria Hsia, March 6, 1991 (Ex. 77).

    As will be described below, the close relationship between 
Maria Hsia and Al Gore continued at least through 
1996.94
---------------------------------------------------------------------------
    \94\ Even apart from DNC fundraiser and the April 29, 1996 Gore 
fundraiser, for example, Maria Hsia interceded with Deputy Chief of 
Staff David Stauss to procure a congratulatory message for the annual 
conference of the Buddha's Light International Association (BLIA) in 
Paris in August 1996. Compare Maria Hsia, letter to David Strauss, July 
2, 1996 (asking for help in obtaining congratulations message), with 
Albert Gore, letter to Maria Hsia, July 26, 1996 (extending 
congratulations) (both Ex. 78. Hsia went so far as to invite President 
Clinton to attend the conference, but be declined--opting instead 
merely to send a congratulatory message of his own. See Ex. 79 (Maria 
Hsia, letter to Bill Clinton, June 13, 1996, Stephanie Streett & Ann 
Hawley, letter to Maria Hsia, Sept. 25, 1996; Bill Clinton, letter to 
Buddha's Light International Association, Aug. 2, 1996). As recounted 
by Temple official Man Hua during the deposition of her colleague Man 
Ho, Hsia became involved in trying to arrange such favors for the BLIA 
after learning that Yah Lin (``Charlie'') Trie was attempting to do so. 
Protecting her exclusive relationship with the Temple by telling Hsing 
Yun that Trie was ``not reliable,'' Hsia thereupon set about arranging 
this herself. See Man Ho deposition, pp. 54-68.
---------------------------------------------------------------------------
    Considerable publicity has surrounded the illegal 
reimbursement of DNC donors by the Hsi Lai Temple in connection 
with an April 1996 fundraiser organized by Hsia and Huang for 
Vice President Gore. The pattern for this conduct, however, was 
actually set at least three years earlier. Both Hsia and Huang 
were involved in similar donation-laundering at least as early 
as 1993, when they laundered contributions in connection with a 
meeting they helped arrange between Vice President Gore's chief 
of staff and the head of a company reportedly linked with the 
intelligence apparatus of the People's Republic of China. On 
Thursday, September 23, 1993, Huang wrote two checks to the 
DNC--for $15,000 each--drawn against accounts at Lippo Bank 
held in the name of two U.S. subsidiaries of James Riady's 
Lippo Group, for which Huang still worked. Four days later, on 
September 27, he wrote a third $15,000 check on the account of 
a third Lippo subsidiary.95 Two days later, Hsia 
arranged for three nuns from the Hsi Lai Temple to write checks 
to the DNC totaling $5,000.96 All of these donations 
were illegal, representing money from foreign sources or money 
from ``straw donors'' illegally reimbursed by another party.
---------------------------------------------------------------------------
    \95\ See Ex. 80 (Hip Hing Holding check #2626 for $15,000 on 
September 23, 1993; San Jose Holding check #1692 for $15,000 on 
September 27, 1993; Toy Center Holdings check #1458 for $15,000 on 
September 23, 1993).
    \96\ See Ex. 81 (DNC check tracking form for Pi Hsia donation of 
$2,000 on September 27, 1993; DNC check tracking form for Hsin Kuang 
Shih donation of $2,000 on September 27, 1993; DNC check tracking form 
for Hsiu Chu Lin donation of $1,000 on September 27, 1993). Each check 
tracking form lists Maria Hsia as the solicitor of the donation 
described. On the ``memo'' position of Pi Hsia Hsio's check is written 
``Maria Hsia.''
---------------------------------------------------------------------------
    Huang's three DNC checks came from Lippo subsidiaries--Hip 
Hing Holdings, San Jose Holdings, and Toy Center Holdings--each 
of which had negative income at the time the checks were 
written.97 In other words, they were losing money; 
the money for his three $15,000 contributions actually came 
from Lippo accounts overseas.98 With regard to the 
$5,000 in DNC donations from Temple monastics arranged by Hsia, 
each nun was reimbursed that same day for their donations, 
through checks written on the Temple's general expenses account 
by the Temple's treasurer, Yi Chu.99
---------------------------------------------------------------------------
    \97\ See Ex. 82 (Hip Hing Holdings. Ltd., Income statement for 
period ending December 31, 1993; San Jose Holdings, Inc., Income 
statement for period ending December 31, 1993; Toy Center Holdings of 
Ca., Inc., Income statement for period ending December 31, 1993). For 
more information, see the section of this report dealing with John 
Huang and Lippo.
    \98\ Since the money clearly did not come from the U.S. operations 
of these companies, this was a violation of federal election law. See 
FEC A.O. 1992-16, Fed. Election Camp, Fin. Guide (CCH) para. 6059, at 
11,811, June 26, 1992.
    \99\ See Ex. 83 (IBPS check #8086 for #2,000 to Pi-Hsiao on 
September 27, 1993; IBPS check #8087 for $2,900 to Hsing Kuang Shih on 
September 27, 1993; IBPS check #8088 for $1,000 to H.C. Lin on 
September 27, 1993). Temple treasurer Yi Chu's lay name Tsui-Hsueh 
Hsueh appears on the checks. (The reimbursement to Hsing Kuang Shih was 
apparently $900 more than her $2,000 DNC donation because she also 
needed to be reimbursed for $900 in unrelated expenses she had also 
borne on the Temple's behalf.) All three monastic ``straw donors'' 
received letters from DNC Chairman David Wilhelm thanking them for 
their ``participation in the Los Angeles Vice Presidential Dinner on 
September 27.''  See  Ex. 84 (David Wilhelm, letter to Pi-Hsia Hsiao, 
Oct. 15, 1993; David Wilhelm, letter to Ksing Kuang Shih, Oct. 15, 
1993; David Wilhelm letter to Hsiu Chu Lin, Oct 15, 1993). Federal 
election law prohibits funneling donations through third parties. See 2 
U.S.C. Sec. 441f.
---------------------------------------------------------------------------
    On Friday, September 24, 1993, the day after Huang's first 
$30,000 in laundered Lippo donations to the DNC, Huang escorted 
Shen Jueren, the head of a company called China 
Resources,100 to the White House for a meeting with 
Vice President Gore's top adviser, his then-chief of staff Jack 
Quinn.101
---------------------------------------------------------------------------
    \100\ China Resources is owned by the government of the People's 
Republic of China, and is a major business partner of the Riady-owned 
Lippo Group. For more information about China Resources, see the 
sections of this report on John Huang's activities at Lippo Bank.
    \101\ See Ex. 72 (``I want to thank you for having taken the time 
out of your busy schedule to receive myself, Chairman Shen Jueren and 
his assistant, Miss Liang of China Resoruces Group on September 24 at 
your office.'') U.S. Secret Service WAVES list for June 7 through 
September 24, 1993 (Ex. 85) (showing Huang appointment to enter White 
House complex on September 24 with approval to enter both the Old 
Executive Office Building and the East Wing). There is a possibility 
that the Vice President may have also met Shen Jueren that day. The 
Committee has an audiotape of a September 27, 1993 meeting for Asian-
Americans in Santa Monica, California, at which an individual 
introduced himself to the Vice President by giving his name and saying, 
``we met just last Friday, in your office.'' The Vice President 
responded, ``Yes, of course, we just spoke.'' The Friday before this 
meeting in Santa Monica was the day Shen Jueren met with Quinn in the 
White House complex. The individual's name is not clearly intelligible, 
but prior to this brief conversation a word that may be ``Shen'' can be 
heard being spoken in the background of the audiotape. White House 
Communications Agency audiotape of September 27, 1993 Santa Monica 
event (misdated ``September 28, 1993'').
---------------------------------------------------------------------------
    The involvement of Huang and Hsia with Shen Jueren and 
China Resources raises an interesting and possibly troubling 
issue. As is detailed elsewhere in this report,102 
the Committee has learned that Hsia has been an agent of the 
Chinese government, that she has acted knowingly in support of 
it, and that she has attempted to conceal her relationship with 
the Chinese government. In view of this information--coupled 
with information suggesting that Huang may have had a direct 
financial relationship with the Chinese government 
103--the Committee has examined carefully the 
longstanding efforts by Huang and Hsia 104 to 
develop close ties to U.S. politicians and cultivate influence 
in the U.S. political system. This information might raise 
concerns regarding Huang and Hsia's involvement with China 
Resources' Shen Jueren in 1993.
---------------------------------------------------------------------------
    \102\ See chapter of report entitled, ``The China Connection.''
    \103\ See id.
    \104\ Nor should it be forgotten that James Riady himself played a 
significant role in trying to put U.S. Senators in contact with the 
head of China Resources in connection with the PLC's Asia trip during 
the 1988-89 period. See supra note 43. As recounted more fully in the 
report chapter, ``The China Connection,'' the Committee has learned 
from recently-acquired information that James and Mochtar Riady have 
had a long-term relationship with a Chinese intelligence agency.
---------------------------------------------------------------------------
    Public sources have for some years linked China Resources 
to the PRC's intelligence apparatus, describing it as an 
important source of what in U.S. espionage parlance is known 
as--non-official cover'' 105 for espionage and other 
intelligence-related activities, e.g., covert influence 
operations. As one Defense Intelligence Agency employee put it 
in a book published in 1994, for example,
---------------------------------------------------------------------------
    \105\ Intelligence officers operating under ``non-official cover'' 
are known as ``NOCs,'' and if caught will not have the protection of 
diplomatic immunity. See, e.g., Norman Polmar & Thomas B. Allen, Spy 
Book: The Encyclopedia of Espionage (New York: Random House, 1997), p. 
400.

          [Chinese] [c]ase officers make extensive use of 
        commercial covers. For example, a vice president of the 
        China Resources Holding Company (Hua Ren Jituan) in 
        Hong Kong is traditionally a military case officer from 
        Guangzhou. This officer coordinates the collection 
        activities of other intelligence personnel operating 
        under Hwa Ren [China Resources] cover.106
---------------------------------------------------------------------------
    \106\ Nicholas Eftimiades, Chinese Intelligence Operations (Naval 
Institute Press, 1994), p. 80.

The increased prestige in commercial and political circles that 
could be derived from access to U.S. politicians would 
presumably be of no small value to such an operation.
    The link between Hsia and the Chinese government might also 
cast into a different light certain other episodes in Hsia's 
history of political activity in the United 
States.107 Among these would be her ties to Ted 
Sioeng, who as described elsewhere, has worked, and perhaps 
still works, on behalf of the Chinese government.108 
Sioeng sat at the head table next to Vice President Gore and 
Hsia at the April 29, 1996 Hsi Lai Temple fundraiser. The 
Committee has received information that Hsia worked with Sioeng 
and Huang to solicit contributions from Chinese nationals in 
the United States and abroad for Democratic 
causes.109
---------------------------------------------------------------------------
    \107\ For example, Hsia apparently considered lobbying for the 
People's Republic of China on a commercial basis after the end of her 
relationship with Howard Hom, and claimed to have become increasingly 
involved with the PRC in immigration matters after 1992. See Ex 57 
(containing as sub-exhibit Bruce Morrison, memorandum to Maria Hsia, 
April 14, 1991); Ex. 3, p. 58; see also Hom deposition, p. 184. Though 
she claimed in a November 1997 interview that ``I have never had a 
single conversation with any Chinese government official about U.S. 
politics,'' Hsia also invited four Chinese consular officials to a 
reception in honor or Senator Tim Wirth in 1991, and hosted delegation 
of Chinese government officials on a trip to Washington during the 
summer of 1996. Compare David Johnston, ``Files on China Embarrass 
F.B.I. and Reno, and Miff Subject,'' New York Times, Nov. 15, 1997, p. 
A12 (quoting Hsia), with Jeff Su, memorandum to Paul DeNino, May 8, 
1991 (Ex. 86) (listing consular officials at Wirth event), and Gorman 
deposition, pp. 119-23; Matthew Gorman, sworn statement to Governmental 
Affairs Committee, Aug. 27, 1997 (Ex. 87, p. 3, para. 17) (discussing 
visit to Washington).
    \108\ See chapter, ``The China Connection.''
    \109\ See the section of this report entitled ``The China 
Connection.''
---------------------------------------------------------------------------
    Quite apart from these individuals' ties to the Chinese 
government, however, it should be clear by now that if one is 
to understand the Hsi Lai Temple's involvement in the 1995-96 
election cycle, and even the issue of Vice President Gore's 
knowledge with regard to the Temple fundraiser of April 29, 
1996, one must first understand the breadth and depth of the 
relationship between Maria Hsia and Vice President Gore. What 
the Vice President knew and when he knew it is not a question, 
in other words, that may be understood in isolation from the 
past. Rather, it must be placed in context, as the outgrowth of 
the long history of Vice President Gore's dealings with Maria 
Hsia, John Huang, James Riady, and Hsing Yun's Fo Kuang Shan 
Buddhist order.
    As the preceding pages indicate, the relationship between 
these five key figures was complex, but it was one firmly 
grounded in mutual advantage and revolving around political 
fundraising. Understood from the perspective of its 
participants, therefore, this history places the events of 1996 
in a new light. Ultimately, given the elaborate system of 
reciprocal assistance among them and the considerable financial 
investments the PLC's founding members had made in Vice 
President Gore's political career, the Vice President had to 
have understood that any DNC event organized at the Temple by 
Maria Hsia and John Huang could only really be for one purpose.
     Despite the political salience of this ``knowledge'' 
issue, however, the Temple incident involves much more than 
simply a single fundraiser unwisely attended by the Vice 
President and unlawfully supported by Hsia and Temple monastics 
who had become accustomed to relying upon Hsia to steer their 
illegal financial support to U.S. politicians. The DNC 
donation-laundering arranged by Huang and Hsia in April 1996 
was part of a broader pattern dating back at least to their 
collaboration in the Shen Jueren affair of September 1993. In 
some sense, the Temple episode of 1996 may even be understood 
as the product of a mutually-reinforcing relationship between 
Huang and Hsia that began in the late 1980s with their 
involvement in the PLC and their fundraising for the DSCC.
    Huang's appointment as a DNC fundraiser in early 1996 
brought Huang and Hsia back together in ways familiar to both 
of them, and with higher stakes than ever. As we have seen, 
Huang had used Lippo resources to help Hsia make up for 
unanticipated financial shortfalls in her political 
fundraising.110 By early 1996, the tables had 
turned, and Hsia had an opportunity to return the favor by 
greatly expanding what had hitherto been a relatively small-
scale Hsi Lai Temple donation-laundering scheme into a potent 
fundraising machine for the Clinton/Gore campaign. The infamous 
Hsi Lai Temple fundraiser of April 1996 is thus only part of 
this story; over the course of 1996, Hsia and Huang would raise 
over $100,000 in laundered Temple donations to help keep Bill 
Clinton and Al Gore in the White House.
---------------------------------------------------------------------------
    \110\ See supra text accompanying footnote 24.
---------------------------------------------------------------------------

            II. A PATTERN OF DONATION-LAUNDERING: 1993-1996 

    Hsia's involvement with illegally laundering money from the 
Hsi Lai Temple to U.S. politicians began at least as early as 
June 1993, with a donation made by Hsia herself to a longtime 
Hsia fundraising beneficiary, California Secretary of State 
March Fong-Eu. Hsia wrote a $500 check to March Fong-Eu's 
campaign in June 1993, having been earlier given $500 for that 
purpose by the Temple's treasurer.111 In September 
1993, as indicated previously, Hsia also arranged to launder 
$5,000 of the Temple's money through three monastic ``straw 
donors'' to the DNC for an event with Vice President Al 
Gore.112
---------------------------------------------------------------------------
    \111\ See Ex. 88 (Form 490, List of Contributions Received by March 
Fong Eu Campaign Committee '94 recording $500 contribution by Maria L. 
Hsia in June 1993; IBPS check #7562 for $500 to Maria Hsia on June 4, 
1993); Man Ho deposition, p. 214 (testifying that Temple supported 
March Fong-Eu).
    \112\ See supra text accompanying notes 96-99.
---------------------------------------------------------------------------
    The September 1993 episode involving the Vice President set 
a pattern for Temple donation-laundering that would persist 
until the 1996 elections: Hsia would telephone a nun at the 
Temple named Man Ho,113 who served as the Temple's 
chief administrative officer during this period, to inform her 
that she needed a certain sum of money in connection with a 
particular political fundraising event or political campaign. 
Man Ho would then pass along this request to the Temple's 
Abbess or Abbot of the time. The Abbot or Abbess would, in 
turn, approve a check request form prepared by Man Ho, who 
would give this completed form to Yi Chu, the Temple's 
treasurer.114
---------------------------------------------------------------------------
    \113\ Because Temple officials and monastics invoked their Fifth 
Amendment privilege against self-incrimination when asked about their 
involvement in DNC fundraising, the Committee granted immunity to five 
nuns in exchange for their testimony: Man Ho, Yi Chu, Man Ya Shih, 
Hueitsan Huang, and Siuw Moi Lian.
    \114\See Testimony of Man Ho, Sept. 4, 1997, pp. 48-49; Man Ho 
deposition, pp. 85-86 (testifying that September 1993 was first time 
Hsia asked Man Ho for political donations); id., p. 92 (affirming 
repetition of same pattern with other contributions); id., pp. 199 & 
211-13 (discussing pattern of calls from Hsia).
---------------------------------------------------------------------------
    Unbeknownst to Man Ho until late in 1996,115 
upon receiving the check request for political contributions, 
Yi Chu would then approach Temple monastics or devotees and ask 
them to write personal checks.116 The total amount 
raised by means of these checks would be the total figure Hsia 
had requested and the amount that Man Ho had indicated on the 
check request form approved by the Abbot or 
Abbess.117 Either the person who wrote the check or 
Yi Chu would place the name of the political recipient on the 
payee line of the check.118
---------------------------------------------------------------------------
    \115\ Man Ho deposition, pp. 199-201.
    \116\ Yi Chu deposition, pp. 69, 79, 84, & 92 (discussing pattern). 
The reimbursement was not, however, unknown to Hsia: as noted above, 
she herself was reimbursed for a donation to March Fong-Eu in June 
1993.
    \117\ Man Ho deposition, pp. 196-97.
    \118\ Yi Chu testified that she did not know what ``DNC'' stood for 
until the scandal broke in the press; she believed that few, if any, of 
the individual reimbursed donors had a much understanding of to whom, 
or for what purpose, their checks were being written. Yi Chu 
deposition, pp. 77-79; Testimony of Chu, Sept. 4, 1997, pp. 46-47.
---------------------------------------------------------------------------
    At about the same time she received each personal check 
from the monastics whom she had solicited, Yi Chu would write a 
check for the identical amount, drawn on the Temple's general 
expenses account and made payable to the ostensible political 
contributors.119 Hsia typically stopped by the 
Temple to pick up the monastics' donation checks from Yi Chu or 
Man Ho, while Yi Chu gave the Temple's reimbursement checks to 
the donors so that they could cover the cost.120
---------------------------------------------------------------------------
    \119\ Yi Chu deposition, pp. 86-87.
    \120\ See, e.g., id., pp. 39-42 & 46 (recounting that reimbursement 
checks were needed because monastics often could not afford 
contributions otherwise).
---------------------------------------------------------------------------
    The money used for these laundering transactions belonged 
to the Hsi Lai Temple as a whole: the reimbursement checks were 
all drawn upon the Temple's ``general expenses'' account, which 
was in turn filled exclusively from an account into which 
flowed donations made to the Temple and the Fo Kuang Shan order 
by faithful Buddhist devotees in all walks of 
life.121
---------------------------------------------------------------------------
    \121\ Id., pp. 86-88; Yi Chu testimony, p. 47. Though some 
monastics did keep so-called ``Futien accounts'' at the Temple, their 
money being held by the institution in a form of private banking and 
segregated for each monastic's own use, these Futien accounts were not 
used to reimburse political donations. See generally Yi Chu deposition, 
pp. 16-19; Yi Chu testimony, pp. 50-51.
---------------------------------------------------------------------------
    The general pattern was simple: Hsia would select the 
recipient politician, ask the Temple for money, and the Temple 
would funnel its own institutional funds through monastic straw 
donors to that politician's campaign. This scheme served Hsia 
and a number of U.S. politicians quite well until the 1996 
elections, by which point Hsia was using it so frequently that 
Yi Chu complained to Man Ho that the requests left her too 
little time to find monastic donors who could be 
reimbursed.122
---------------------------------------------------------------------------
    \122\ See Man Ho testimony, p. 48; Yi Chu deposition, p. 84. As a 
result, for the last known Temple reimbursement--in October 1996--Yi 
Chu simply gave Man Ho five blank Temple checks and left it for Man Ho 
to solicit the donors/reimbursees herself.
---------------------------------------------------------------------------
    Hsia's laundering of Temple donations to U.S. politicians 
continued in 1994 with two separate episodes in which money was 
funneled to Julia Wu, a local school board candidate. In the 
first such instance, a monastic named Jou Sheng donated $2,000 
to Wu's campaign in March 1994 and was reimbursed the next day 
by Yi Chu.123 According to the Temple's attorneys, 
another $3,000 was also laundered to Julia Wu at this time, 
being passed through Pi-Hsia Hsiao and Nancy Mao, who were also 
reimbursed with checks numbered sequentially with that written 
to Jou Sheng.124 The Temple laundered money to Wu's 
campaign again in May 1994, with at least $2,000 passing 
through Temple Abbess Hsing Kuang Shih, as well as an 
additional $3,000 through Pi-Hsia Hsiao and Hsiu Chu 
Lin.125 In July 1994, Pi-Hsia Hsiao gave $900 to the 
campaign of another local California official, Los Angeles 
County Tax Assessor Kenneth Hahn, and was reimbursed by Yi Chu 
for her efforts.126 Hsia and the Temple returned to 
national-level fundraising in September 1994 by laundering 
$5,000 to the campaign of Senator Edward Kennedy.127
---------------------------------------------------------------------------
    \123\ See Ex. 89 (Jou Sheng check #187 for $2,000 to Friends of 
Julia Wu on March 2, 1994; IBPS check #8880 for $2,000 to cash on March 
3, 1994, endorsed on reverse by Jou Sheng).
    \124\ See Ex. 90 (IBPS check #8881 for $2,000 to cash on March 3, 
1994, endorsed on reverse by Pi-Hsia Hsiao; IBPS check #8882 for $1,000 
to ``cash NANCY MAO'' on March 3, 1994, endorsed on reverse by Nancy 
Mao). Interestingly, Man Ho--normally the conduit for Hsia's requests--
claimed not to have been involved in the Julia Wu donations, leaving 
open the question of which other present or former Temple officials 
have been involved in Hsia's donation-laundering schemes.
    \125\ See Ex. 91 (Hsing Kuang Shih check #587 for $2,000 to Julia 
L. Wu on May 4, 1994; IBPS check #9167 for $2,000 to Hsing Kuang Shih 
on May 6, 1994); see also Ex. 92 (IBPS check #9168 for $2,000 to Pi-
Hsia Hsiao on May 6, 1994; IBPS check #9169 for $1,000 to Hsiu Chu Lin 
on May 6, 1994).
    \126\ Ex. 93 (Ph Hsia Hsiao check #174 for $900 to Committee to Re-
elect Assessor Kenneth Hahn on June 15, 1994; IBPS check #9397 for $900 
to Pi-Hsia Hsiao on July 1, 1994).
    \127\ See FEC Info database printout of individual contributor data 
(Ex. 94) (listing total of $2,000 in contributions by Pi-Hsia Hsiao to 
Kennedy for Senate, recorded by campaign on September 15, 1994); Id. 
(listing $2,000 to Kennedy for Senate from Ling-Tzen Huang, recorded on 
same date); id. (listing $1,000 to Kennedy for Senate from Hsiu-Chu 
Lin, recorded on same date); Ex. 95 (Pi-Hsia Hsiao check #179 for 
$2,000 to Kennedy for Senate on September 6, 1994; Hsiu Chu Lin check 
#365 for $1,000 to Kennedy for Senate on September 6, 1994; IBPS check 
#1034 for $2,000 to Pi-Hsia Hsiao on September 6, 1994; IBPS check 
#1035 for $2,000 to Ling-Tzen Huang on September 6, 1994; IBPS check 
#1036 for $1,000 to cash, endorsed on reverse by Hsiu Chu Lin).
---------------------------------------------------------------------------
    The first recipient of laundered Hsi Lai Temple money 
arranged by Maria Hsia in 1995, was apparently the DNC itself, 
in connection with a Clinton/Gore event in September for which 
Hsia reportedly raised $5,000 in unlawful Temple 
donations.128 Los Angeles County Supervisor Don 
Knabe and Senator Edward Kennedy also each received $3,000 in 
laundered Temple donations arranged by Hsia in 
1995.129
---------------------------------------------------------------------------
    \128\ See Ex. 96 (IBPS check #2727 for $2,500 to Hsiu Chu Lin on 
September 20, 1995; IBPS check #2729 for $2,500 to cash, endorsed on 
reverse by what appears to be the name ``Tong Sew Long''; Jou Sheng 
bank records for 09/09/95 through 10/10/95 showing deposit of $2,500 on 
September 22, 1995 and debit of $2,500 on September 28 with cashing of 
check #215). (On their ``memo'' lines, the IBPS check to Tong Sew Long 
bears the Chinese characters for ``public relations''--the term Maria 
Hsia used for political fundraising. See Yi Chu deposition, p. 106. The 
check to Hsiu Chu Lin is strangely annotated with Chineses characters 
and the English phrase ``birthday gift.'') According to the Temple's 
attorneys, at least two additional $2,500 checks were filled out by Fo 
Kuang Shan monastics in connection with this event--but the payee line 
was left blank and Maria Hsia subsequently diverted it for her own 
purposes, filling it out not to the originally-intended political 
recipient but to a company called Shen He International, Inc. See Ex. 
97 (Gin F.J. Chen check #405 for $2,500 on September 20, 1995; Jou 
Sheng check #215 for $2,500 on September 20, 1995; IBPS check #2728 for 
$2,500 to Jou Sheng on September 20, 1995).
    \129\ See Ex. 98 (Shiwen W. Teh a.k.a. Shiwen Wang check #1772 for 
$1,500 to Kanabe for Supervisor on October 25, 1995; Knabe for 
Supervisor, list of Monetary Contributions Received for 10/01/95 
through 12/31/95 period, indicating $1,500 contributions from Hsiu Chu 
Lin and Shiwen Teh, both recorded on November 11, 1995; IBPS check 
#2846 for $1,500 to cash, endorsed on reverse by Melissa Wang [a.k.a. 
Shiwen Teh] on October 24, 1995; IBPS check #2847 for $1,500 to Hsiu 
Chu Lin on October 24, 1995; Federal Election Commission, Selected 
Receipts & Expenditures (95-96), showing $1,500 in contributions on 
December 1, 1995 from Hsiu-Chu Lin and Shiwen W. Teh; Hsiu Chu Lin 
check #623 for $1,500 to Edward M. Kennedy; Shiwen W. Teh a.k.a. Shiwen 
Wang check #1776 for $1,500 to Edward M. Kennedy on November 13, 1995; 
IBPS check #2923 for $1,500 to Melissa Wang [a.k.a. Shiwen Teh] on 
November 10, 1995; IBPS check #2924 for $1,500 to Hsiu Chu Lin on 
November 10, 1995).
---------------------------------------------------------------------------
    As noted, however, Hsia's fundraising scheme for funneling 
Temple money through ``straw donors'' expanded dramatically in 
1996 after John Huang went to work at the DNC and began to 
organize Democratic fundraisers among California's Asian 
community. It was not by coincidence, therefore, that Hsia's 
biggest foray yet into Temple donation-laundering occurred in 
conjunction with the first significant event Huang organized 
for the DNC: a fundraiser with President Clinton at the Hay-
Adams Hotel in Washington in February 1996. For this event, 
Hsia telephoned Man Ho at the Temple to ask for $25,000 in 
contributions,130 an amount which was duly collected 
from nine monastic straw donors who were thereafter 
reimbursed.131 Don Knabe also continued to receive 
the Temple's support during 1996. At the end of February, Hsia 
made a $1,500 donation to Don Knabe's campaign, being duly 
reimbursed by the Temple for her pains.132
---------------------------------------------------------------------------
    \130\ Man Ho deposition, pp. 196-97; Yi Chu deposition, pp. 69-73.
    \131\ See Ex. 99 (DNC Check Tracking Form for Hsiu Chu Lin check 
#667 for $3,000 to DNC on February 17, 1996; IBPS check #3286 for 
$3,000 to Hsiu Chu Lin on February 14, 1996; DNC Check Tracking Form 
for Jou Sheng check #223 for $3,000 to DNC on February 16, 1996; IBPS 
check #3294 for $3,000 to Jou Sheng on February 16, 1996; DNC Check 
Tracking Form for Pi-Hsia Hsiao check #194 for $2,500 to DNC on 
February 16, 1996; IBPS check #3300 for $2,500 to Pi-Hsia Hsiao on 
February 16, 1996; DNC Check Tracking Form for Suh-Jen Wu check #107 
for $3,000 to DNC on February 16, 1996; IBPS check #3298 for $3,000 to 
Suh-Jen Wu on February 16, 1996; DNC Check Tracking Form for Hsing 
Kuang Shih check #600 for $3,000 to DNC on February 16, 1996; IBPS 
check #3295 for $3,000 to Hsin Kuang Shih on February 16, 1996; DNC 
Check Tracking Form for Gin F.J. Chen check #486 for $3,000 to DNC on 
February 17, 1996; IBPS check #3299 for $3,000 to Gin F.J. Chen on 
February 16, 1996; DNC Check Tracking Form for Hsin Cheng Shih check 
#137 for $3,000 to DNC on February 19, 1996; IBPS check #3297 for 
$3,000 to Hsing Cheng Shih on February 16, 1996; DNC Finance Executive 
Summary of $2,500 contribution from Hsiao Jie Su on February 19, 1996; 
IBPS check #3301 for $2,500 to Hsiao Jie Su on February 16, 1996; Hsiao 
Jie Su check #304 for $2,500 to DNC; DNC Check Tracking Form for Jen 
Chin Hsueh a.k.a. Gary Hsueh check #269 for $2,000 to DNC on February 
16, 1996; IBPS check #3296 for $2,000 to Jen-Chin Hsueh on February 16, 
1996. The Temple's computerized accounting records list this series of 
payments by consecutively numbered checks as ``No Name'' payments. See 
Hsi Lai Temple, Transaction Detail by Account (February 1996) (Ex. 
100).
    \132\ Ex. 101 (IBPS check #3318 for $1,500 to Maria Hsia on 
February 29, 1996 with ``memo'' notation apparently reading ``re: 
contribution of Don Knabe'' [sic]; Knabe for Supervisor, List of 
Monetary Contributions Received for period 02/11/96 through 03/09/96, 
indicating $1,500 contribution recorded on March 7, 1996).
---------------------------------------------------------------------------
    At least four additional episodes of donation-laundering, 
occurred between the April 1996 event and the general elections 
in November 1996. In July 1996, Hsia contacted Man Ho at the 
Temple, informing the nun that Hsia would need $50,000 in order 
to purchase two tickets to an upcoming fundraising luncheon 
with President Clinton at a private home. Hsia subsequently 
changed her plans, however, deciding instead upon a less 
expensive $5,000-per-person dinner at the Century Plaza 
Hotel.133 In the end, two Temple monastics donated 
$5,000 each for the Century Plaza event,--thereby making it 
possible for Hsia to become one of its co-chairs, a status 
contingent upon raising $10,000 134--and were 
reimbursed by the Temple.135
---------------------------------------------------------------------------
    \133\ Man Ho deposition, pp. 202-06; Yi Chu deposition, pp. 75-76.
    \134\ See Invitation to July 22, 1996 Presidential Gala (undated) 
(Ex. 102) (noting that status of ``Co-Chair for the Presidential Gala'' 
requires one personally to contribute $5,000 or to raise $10,000).
    \135\ Ex. 103 (Bih-Yueh Jeng check #158 for $5,00 to DNC on July 
22, 1996; Wang Chi Rung check #135 for $5,000 to DNC on July 22, 1996; 
IBPS check #3894 for $5,000 to Wang Chi Rung on July 17, 1996; IBPS 
check #3890 for $5,000 to Bih-Yueh Jeng on July 17, 1996).
---------------------------------------------------------------------------
    In September 1996, two Temple monastics donated a total of 
some $6,500 to the DNC and were reimbursed by the 
Temple.136 Also that month, Hsia and her assistant, 
Matthew Gorman, arranged for the nun Pi-Hsia Hsiao to donate 
$1,000 to Don Knabe's re-election campaign,137 a 
donation which was reimbursed by the Temple on the same day it 
was made.138 Finally, Hsia arranged for $5,000 in 
Temple funds to be laundered to the campaign of Representative 
Patrick Kennedy for a fundraiser held in Los Angeles on October 
5, 1996. For this event, the occasion on which an exasperated 
Yi Chu finally refused to arrange to funnel the money through 
monastic ``straw donors'' 139--Hsia used blank 
Temple checks to reimburse herself and four friends for their 
$1,000 contributions to Kennedy's campaign.140 These 
laundered donations--along with another $100 check from Hsia's 
friend Richard Choi--were handed to Rep. Kennedy and a campaign 
aide as they emerged back onto the street at the end of a visit 
to the Hsi Lai Temple on October 5.141
---------------------------------------------------------------------------
    \136\ Ex. 104 (FECInfo database printout of individual contributor 
data,showing $1,500 contribution to DNC from Hsiu Chu Lin on October 2, 
1996; IBPS check #4119 for $1,500 to Hsiu Chu Lin). According to Yi 
Chu, Chee Kien Koh (a.k.a the Rev. Hai Kai) also donated to the DNC at 
this time, being reimbursed in cash ($3,000) and with a check made out 
to cash ($2,000). See Yi Chu deposition, pp. 79-82; IBPS check #4118 
for $2,000 to cash, with ``memo'' notation reading ``Chee Kien Koh'' 
(Ex. 105). It may be, however, that Koh failed to pass the $2,000 on to 
its intended political recipient; he returned $2,000 to the Temple in 
two $1,000 payments in December 1996 and January 1997. See IBPS, Chee 
Kien Koh deposit check records (Ex. 106).
    \137\ Ex. 107 Matthew Gorman, letter to Peter Kelly, Sept. 18, 1996 
[forwarding Pi-Hsia Hsiao check #197 for $1,000 to Don Knabe for L.A. 
County Supervisor dated September 18, 1996]; Knabe for Supervisor, List 
of Monetary Contributions received for period 10/01/96 through 10/19/96 
listing $1,000 contribution from Pi-Hsia Hsiao). Pi-Hsia Hsiao's check 
was filled out improperly, however, and had to be reissued. See Matthew 
Gorman, letter to Dardy Chen, Oct. 8, 1996 (Ex. 108) (forwarding 
reissued check, also dated September 18, 1996).
    \138\ IBPS check #4120 to Pi-Hsia Hsiao for $1,000 on September 18, 
1996 (Ex. 109).
    \139\ See Yi Chu testimony, p. 48.
    \140\ The other reimbursees were Hilary Goldstone and Donald Burns, 
two Los Angeles attorneys and longtime Kennedy family fundraisers, as 
well as Hsia's business colleague Stephen Zhou and his wife May Lin 
Zhou. See Ex. 110 (Federal Election Commission, Selected List of 
Receipts & Expenditures [95-96], listing $1,000 contributions on 
October 5, 1996 by Burns, Goldstone, Hsia, and the Zhous; IBPS check 
#4193 for $1,000 to Hilary Goldstone on October 5, 1996; IBPS check 
#4194 for $1,000 to Donald Burns on October 5, 1996; IBPS check #4195 
for $1,000 to Maria Hsia on October 5, 1996; IBPS check #4196 for 
$1,000 to May Lin Zhou on October 5, 1996; IBPS check #4197 for $1,000 
to Stephen Zhou on October 5, 1996).
    Stephen Zhou was the head of Zarks International, a company located 
in the same office spaces as Hsia & Associates. Zhou also leased office 
space to T&W Arts & Crafts--the U.S. subsidiary of a company from 
Hangzhou, China, called Yalong Economics & Trade Corporation--as well 
as apparently serving as an officer of T&W. See Ex. 111 (Commercial 
Lease between Zarks International, Inc. and T&W Arts & Crafts dated 
Feb. 14, 1996; Projected Organizational Chart of T&W Arts & Crafts 
(USA), Inc. (undated), listing Stephen Zhou as vice president).
    \141\ Having received this money just outside the door of the 
Temple apparently enabled Representative Kennedy to claim later that 
``our story could not be compared to the vice president's because we 
never did a fundraiser at the temple.'' See John Mulligan, ``Grand Jury 
probes Buddhist temple fundraising,'' Providence Journal-Bulletin, Oct. 
20, 1997, pp. A1 & A6; John Mulligan, ``Kennedy explains his rationale 
in returning money raised at temple,'' Providence Journal-Bulletin, 
Sept. 9, 1997, p. A4. All of these funds have apparently been returned.
---------------------------------------------------------------------------
    Counting the Temple fundraiser in April 1996, which yielded 
at least $65,000 in unlawful Temple donations, this elaborate 
system of donation-laundering, in which Temple officials 
marshaled funds to political candidates and causes chosen by 
Maria Hsia, may ultimately have funneled $146,400 to various 
U.S. political candidates. Of this total, some $116,500 went to 
the DNC in support of the Clinton/Gore ticket.

         III. THE HSI LAI TEMPLE FUNDRAISER OF APRIL 29, 1996 

    The idea to hold a DNC fundraising event at the Hsi Lai 
Temple appears to have had its beginnings in March 1996, when 
Hsia persuaded Venerable Master Hsing Yun to meet with Vice 
President Gore by visiting the White House. Although Temple 
officials apparently understood ahead of time that some White 
House trip was in the offing, arrangements for this visit seem 
to have been hastily concluded at the last minute while Hsing 
Yun and a delegation of Temple monastics were in New York City 
on other business.142 On March 14, 1996, Hsing Yun 
received a telephone call from Hsia in California, informing 
him that the White House meeting had finally been arranged. 
Temple administrator Man Ho thereupon made flight arrangements 
to take Hsing Yun's delegation to Washington the next day, and 
obtained for the White House the social security numbers of 
those who would meet with the Vice President.143 The 
Master was reportedly initially reluctant to rearrange his 
schedule in order to accommodate this last-minute change, but 
he was ultimately persuaded by Hsia's entreaties and by those 
of former Temple abbess Hsing Kuang Shih enlisted by Hsia to 
help in this regard.144
---------------------------------------------------------------------------
    \142\ Man Ho deposition, pp. 94-95 & 101.
    \143\ Id., pp. 88-96 & 110.
    \144\ Man Ho deposition, p. 96; see also Transcript of Hsing Yun 
interview by Governmental Affairs Committee Staff, June 17, 1997, p. 2 
(Ex. 112) (recounting that Hsia had called him in New York to urge that 
he meet with Gore, and that although ``reluctant to go'' Hsing Yun has 
``said, `O.K., I'll go.' ''). (This transcription of the Committee 
staff's interview with Hsing Yun was transcribed by Stuart Chandler, 
who attended the meeting apparently on behalf of the Temple's 
attorneys.)
---------------------------------------------------------------------------
    John Huang played the central role in setting up the March 
15 meeting with Vice President Gore. Even before Hsing Yun's 
delegation left for New York on March 10, Huang had telephoned 
Man Ho in order to obtain the Master's social security number 
for the anticipated White House visit.145 It was 
Huang who requested the Hsing Yun meeting,146 and he 
both worked with Gore scheduler Kim Tilley in arranging it 
147 and wrote the Vice President's briefing 
notes.148
---------------------------------------------------------------------------
    \145\ Man Ho deposition, p. 99. Maria Hsia called Man Ho later--
when the Temple delegation was in New York--to obtain social security 
numbers from the other members of the delegation who would be visiting. 
Id., p. 110.
    \146\ John Huang, memorandum to Albert Gore, March 15, 1996 
(describing meeting as having been ``requested by John Huang''). Hsing 
Yun suggested that the meeting had been the idea of John Huang and 
Maria Hsia. See Transcription of Hsing Yun interview, p. 2.
    \147\ See John Huang, memorandum to Kim Tilley, April 11, 1996 (Ex. 
113) (''You know we have together arranged Master Hsing Yun to visit 
the Vice President Gore [sic] in the White House in March of this 
year.''). The Vice President's schedule also listed John Huang as the 
staff contact for the Hsing Yun meeting. Gore schedule for March 15, 
1996 (Ex. 114).
    \148\ John Huang, fax transmission to Eric Anderson, March 15, 1996 
(Ex. 115) (forwarding briefing notes for Vice President ``prepared by 
John Huang'').
---------------------------------------------------------------------------
    On the morning before the March 15 meeting, Hsia spoke 
personally with Vice President Gore by telephone from the 
delegation's room at the Hay-Adams Hotel. Although the Vice 
President had already agreed to the meeting, and the Temple 
delegation was at that point waiting at their hotel, the Vice 
President's staff had become concerned over the potential 
political implications of a visit from Hsing Yun. Taiwan was 
then in the midst of its 1996 presidential election campaign, 
which involved, among others, an independent Buddhist candidate 
named Lian Chien, who had been endorsed by Venerable Master 
Hsing Yun. Vice President Gore's foreign policy advisors 
worried that meeting Hsing Yun could be seen as an implicit 
endorsement of Dr. Chien, and feared that the Master would 
somehow interject Taiwanese politics into the White House 
meeting.149 As Gore national security staffer John 
Norris later recalled,
---------------------------------------------------------------------------
    \149\ Man Ho deposition, pp. 106-07; Deposition of Kimberly Tilley, 
June 23, 1997, p. 138.

          After we became aware of the scheduling proposal [for 
        the Hsing Yun meeting], I checked with State and NSC 
        (Taiwan Coordination Staff) to get information on Hsing 
        Yun's background. Neither office thought there was a 
        high risk that the meeting would lead to an incident in 
        our relations with either China or 
        Taiwan.150
---------------------------------------------------------------------------
    \150\ John Norris, memorandum, Oct. 16, 1996 (Ex. 116) (recounting 
``my recollection of the two VP events involving Hsing Yun, the Taiwan 
Buddhist leader, and the DNC'').

So concerned was Vice President Gore that despite having 
received such a sanguine assessment from the State Department 
and the NSC, he called Hsia personally at the Hay-Adams for 
additional reassurances. As recounted by Man Ho, who was in the 
room as Hsia spoke with him, the Vice President ``was afraid 
that [M]aster might talk to him about political issues or 
[M]aster might bring some message [from] Lian Chen [sic].'' 
Hsia assured Gore that Hsing Yun ``was not going to talk 
[about] any political issue with the Vice President.'' 
151 The group then went to the White House to meet 
with Vice President Gore, leaving Man Ho and one Temple devotee 
behind at the hotel.152
---------------------------------------------------------------------------
    \151\ Man Ho deposition, pp. 105-07; see also Ex. 116 (``[Y]ou or 
(Bill [Wise]) expressed concern about the sensitivities to Scheduling. 
As a result of those conversations, Hsia called the VP and assured him 
the meeting would be nothing more than a courtesy call.''). Tilley 
deposition, pp. 139-40 (recalling hearing about a talk between Gore and 
Maria Hsia).
    \152\ Man Ho deposition, p. 111. As used in this report, 
``devotees'' of the Hsi Lai Temple are lay persons who nonetheless 
worship there regularly and who take part in various Temple activities. 
By contrast, Temple ``monastics'' are those who formally take religious 
vows and join the Fo Kuang Shan order itself (i.e., monks and nuns)--
shaving their heads, adopting distinctive monastic clothing, and 
usually living in the Temple complex.
---------------------------------------------------------------------------
    The meeting involved little more than exchanges of 
greetings and pleasantries and a ``photo op'' with the Vice 
President. Hsing Yun, accompanied by three other Temple 
monastics 153 as well as both Hsia and Huang, met 
with the Vice President for approximately ten 
minutes.154 At the end of this brief meeting, the 
Master invited Gore to visit the Hsi Lai Temple.155 
As to when this visit might occur, Hsing Yun told the Committee 
staff that Gore had indicated that he would be in Los Angeles 
at some point within the next six or seven weeks, i.e. in late 
April 1996.156
---------------------------------------------------------------------------
    \153\ Yumei Yang, Ke-Chun Hong, and Abbess Suh-Jen Wu (a.k.a. Tzu 
Jung).
    \154\ Ex. 113; Ex. 114.
    \155\ Ex. 112, pp. 4-5; see also Ex. 113.
    \156\ Memorandum of Interview of Hsing Yun, June 17, 1997, p. 2 
(``At the close of this meeting the Master invited Gore to visit the 
Hsi Lai temple in California. In reply, Gore indicated that he would be 
traveling to California `in the near future' and would be glad to 
accept the invitation. No specific date was discussed but the Master 
recalled that Gore indicated he would be in LA within 6-7 weeks--that 
is, late April.''). (In contrast to the document prepared by Chandler 
purporting to be a near-verbatim transcription of the interview, this 
memorandum was prepared by Governmental Affairs Committee Staff.)
---------------------------------------------------------------------------
    Within a week of the White House meeting, Maria Hsia sent a 
letter to Leon Fuerth at the White House, advising him that 
``Master Hsing Yun . . . could be very helpful for Vice 
President Gore's re-election.'' 157 The next day, 
Hsia wrote the Vice President himself, informing him that

    \157\ Maria Hsia, letter to Leon Forth [sic], March 22, 1996 (and 
earlier drafts dated March 20 & 22) (Ex. 117); see also Progress Sheet 
from Hsia & Associates (Ex. 118) (indicating ``sent final draft letters 
to Gore & Forth [sic]'' on March 24, 1996).

          John Huang has asked me to help with organizing a 
        fund-raising lunch event, with your anticipated 
        presence, on behalf of the local Chinese community. 
        After the lunch, we will attend a rally at the Hsi Lai 
        Temple where you will have the opportunity to meet 
        representatives from the Asian-American community to 
        visit again with Master Hsing Yun. The even is 
---------------------------------------------------------------------------
        tentatively scheduled for April 29. . . .158

    \158\ Maria Hsia, letter to Albert Gore, dated March 23, 1996 (and 
earlier drafts dated March 20 & 23) (Ex. 119). It should be noted, 
however, that neither Hsia's March 22 letter to Feurth nor her March 23 
letter to the Vice President was produced to the Committee by the White 
House in the voluminous Temple-related records delivered to the 
Committee pursuant to subpoena.

Though this letter did not make clear whether the ``fund-
raising lunch event'' being organized by Huang and Hsia would 
take place at the Temple or at some other unspecified location, 
unambiguous arrangements were worked out over the next few days 
to have both the fundraising luncheon and the rally at the 
Temple. By April 4, the DNC has apparently prepared invitations 
to a Vice Presidential luncheon at the Hsi Lai Temple, 
159 and Hsia's assistant Gorman had opened a file 
specifically identifying April 29, 1996 as the date of the Vice 
President's anticipated visit. This file was entitled ``Vice 
President Gore Hsi Lai event April 29, 1996--DNC Fundraiser.'' 
160 By April 8, the Vice Presidential Protective 
Division of the U.S. Secret Service had begun planning for 
Gore's April 29 luncheon in Los Angeles.161
---------------------------------------------------------------------------
    \159\ Maria Hsia, fax transmission to Ted Marino, April 4, 1996 
(Ex. 120) (forwarding invitation on DNC letterhead for Vice 
Presidential event at Hsi Lai Temple).
    \160\ Ex. 121 (Photocopy of file header opened on April 4, 1996; 
Maria Hsia, memorandum to Matthew Gorman of April 4, 1996 instructing 
him to ``open file under V.P. Gore Hsi Lai Temple Visit 4/29/96''); 
Gorman deposition, pp. 20-22 (confirming opening file on April 4, 
1996).
    \161\ U.S. Secret Service, VPPD Scheduling Document, April 8, 1996 
(Ex. 122) (including William Pickle, letter to Sen. Fred Thompson, 
Sept. 2, 1997 [explaining document]).
---------------------------------------------------------------------------
    In late March 1996, Hsia notified the Master and others at 
the Temple that the Vice President would visit on April 29, 
1996. Immediately, Hsia set up meetings to plan the event. Hsia 
requested, and it was accordingly decided that a luncheon would 
be served in the Temple's dining hall.\162\ Both Man Ho and Yi 
Chu testified that in one of these early planning meetings at 
the Temple, the Abbess told to the monastics in attendance that 
it would be ``acceptable'' or ``appropriate'' for the monastics 
to contact devotees of the Temple to indicate that they could 
attend the luncheon with the Vice President and, for $5,000, 
have their photograph taken with him.163
---------------------------------------------------------------------------
    \162\ Man Ho deposition, pp. 117-119.
    \163\ Man Ho testimony, pp. 27-28; see also Man Ho deposition, pp. 
125-31. In her deposition testimony, Man Ho recalled that the Abbess 
might perhaps have said that the price for a photograph was $5,000 per 
couple. Nor is it clear who suggested to the Abbess that she encourage 
contributions in connection with the event, or how she arrived at this 
$5,000 figure.
---------------------------------------------------------------------------
    After one or two early planning meetings at the Temple, and 
early in the month of April, both the Abbess and Hsia left the 
U.S. for Taiwan, where they remained until very shortly before 
the April 29 event. In their stead, Hsia and the Abbess left 
Matt Gorman and Man Ho, their respectiveassistants, to take 
care of the day-to-day planning and preparation for the 
event.164 Most of Gorman's responsibilities consisted of 
arranging for the invitation of special VIP guests, who did not have to 
pay to attend the DNC fundraiser--at Hsia's direction.165 
Among the nonpaying guests Hsia invited to the event were two senior 
officials from the INS, Joseph Thomas and Daniel Hesse, and a federal 
judge from Los Angeles, Robert Tagasuki.166 The VIP guest 
list also included Monte Perez, chairman of the ``Nationwide 
Citizenship Association,'' and Tom Byun, who headed the ``Radio Korea 
Citizenship Nationwide Program.'' 167
---------------------------------------------------------------------------
    \164\ Man Ho testimony, pp. 29-30; Man Ho deposition, pp. 132-33; 
see also Gorman deposition, pp. 23 & 25.
    \165\ Gorman deposition, pp. 22-25.
    \166\ These three men were to have their invitations specially 
hand-delivered. See Ex. 123 (Matthew Gorman, fax transmission to 
Richard Choi, April 22, 1996 (forwarding to Choi copies of invitations 
that were to be hand delivered to Thomas, Hesse, and Tagasuki); Matthew 
Gorman, fax transmission to Man Ho, April 12, 1996 (advising Man Ho 
that Thomas, Hesse, and Tagasuki will attend as ``V.I.P. guests''). It 
is not clear, however, that Judge Tagasuki actually attended. Senator 
Daniel Inouye and Congressman Matthew Martinez were also invited, but 
neither official attended. See Ex. 124 (Matthew Gorman, fax 
transmission to Mary Lou, April 12, 1996 [inviting Inouye]; Matthew 
Gorman, fax transmission to Rev. Man Ho, April 12, 1996 [containing 
invitation for Martinez]).
    \167\ See Ex. 125 (Richard J. Soon Choi, letter to Matthew Gorman, 
April 24, 1996 [responding to confirm acceptance of invitation by Perez 
and Byun]; Matthew Gorman, fax transmission to Richard Choi, April 24, 
1996 [advising Man Ho of attendance of Byun and Perez)].
---------------------------------------------------------------------------
    At some point in mid- or late-April, Hsia telephoned Gorman 
in order to request that he solicit money from a number of 
individuals for the Gore luncheon. Many of these individuals 
apparently did not speak English well, if at all, and Gorman 
left the solicitation of these persons to another Hsia & 
Associates employee, Betty Luk, because he did not speak 
Chinese particularly well.168 Among these persons 
were Huang Guang Miao, president of the U.S. subsidiary of a 
Chinese company, and Joseph Chen,169 the head of a 
Taoist religious organization called the Great Tao Foundation 
of America and secretary-general of the World I-Kuan Tao 
Headquarters in Taiwan.170
---------------------------------------------------------------------------
    \168\ Gorman deposition, pp. 47-48; Matthew Gorman, memorandum to 
Betty Luk (Ex. 126) (giving list of names for solicitation: ``Professor 
Lo,'' Jennifer Tsai, Huang Guang Miao, Celia Wu, Joseph Chen, Zhou Buo, 
Chan Ya Shery, & Jeffrey Lin).
    \169\ Chan had written John Huang earlier in April to ask if Vice 
President Gore could visit the anniversary celebrations of the Great 
Tao Foundation after stopping at the Hsi Lai Temple on April 29. ``If 
you could make arrangements so that the vice-president after the 
luncheon at the Hsi Lai Temple could say a few congratulatory remarks 
at our ceremony between 2:00 and 2:30 P.M., and pose for photos with 
all attending Taoists,'' Chen wrote, ``the Great Tao Foundation will 
respectfully donate $25,000 toward the campaign funds.'' Joseph Chen, 
letter to John Huang, April 10, 1996 (Ex. 127) [translated by Michael 
Yan for the Governmental Affairs Committee]. The Vice President did not 
ultimately attend Chen's event on April 29, 1996, but Maria Hsia did 
arrange to bring Chen to an event with President Clinton and Vice 
President Gore in Los Angeles in September 1995. See Maria Hsia, letter 
to Joseph Chen, Sept. 19, 1995 (Ex. 128) (forwarding details of event 
to Chen, with handwritten note ``Thank you very much for everything 
that you've done!'').
    \170\ See generally Gorman deposition, pp. 49-52.
---------------------------------------------------------------------------
    Gorman was not the only person soliciting funds for the 
Vice President's Temple fundraiser, however. In addition to 
funds solicited independently by Huang and perhaps 
Hsia,171 Temple monastics, acting on the suggestion 
by Abbess Tzu Jung that it would be ``appropriate'' for them to 
do so, solicited a number of donations to the DNC from Temple 
devotees in advance of the Vice President's visit. The checks 
thereby obtained totaled $32,500.172
---------------------------------------------------------------------------
    \171\ See infra note 202.
    \172\ See Ex. 129 (Photocopied checks from files of Hsia & 
Associates, reproducing, inter alia: $5,000 check from K-Stone 
Industries, Ltd.; $5,000 check from Micro International U.S.A., Inc.; 
$7,500 check from Ying-Chiu Tien; and $2,500 check from Min Hsiang 
Teng; $5,000 check from Shu Woei Huang and Jan Yueh Lian Huang; $5,000 
check from Henry J. Chen & Jessie F. Chen; $2,500 check from Marina 
Chiu); see also Man Ho deposition, pp. 159-60 (recalling that ``Chiu 
Tien'' and Marina Chu were on list summarizing Temple-solicited pre-
event donations).
---------------------------------------------------------------------------
    In addition to money openly raised from Temple devotees, 
Man Ho and Yi Chu also helped arrange for two devotees 
anonymously to give a total of $10,000 in cash to the DNC. This 
money was deposited by the two anonymous donors into the 
Temple's bank account, and three Temple monastics were chosen 
to make corresponding contributions to the DNC.173 
These three nuns were thereupon reimbursed by Yi Chu out of the 
Temple's general expenses account.174
---------------------------------------------------------------------------
    \173\ These persons were Jou Sheng, Shiwen The (a.k.a. Melissa 
Wang), and Hsin Cheng Shih. See Yi Chu deposition, pp. 94-95 & 96-98; 
Man Ho deposition, pp. 149-50. At least two of them, Jou Sheng and Hsin 
Cheng Shih, are Fo Kuang Shan nuns.
    \174\ See Ex. 130 (DNC Check Tracking Form for Jou Sheng check #227 
for $5,000 to DNC on April 16, 1996; IBPS check #3523 for $5,000 to Jou 
Sheng on April 16, 1996; DNC Check Tracking Form for Shiwen Teh check 
#1808 for $2,800 to DNC on April 16, 1996; IBPS check $3521 for $2,800 
to Melissa Wang [a.k.a. Shiwen Teh] on April 15, 1996; DNC Check 
Tracking Form for Hsin Cheng Shih check $141 for $2,200 to DNC on April 
18, 1996; Hsing Cheng Shih bank records for period 03/21/96 through 04/
19/96 [indicating cash deposit of $3,000 on April 18, 1966]); Yi Chu 
deposition, pp. 100-01 (confirming reimbursement of these three 
individuals). Each of the DNC check tracking forms for these straw 
donations credit Hsia with having solicited the contribution.
---------------------------------------------------------------------------
    Also as part of the preparations for the Vice President's 
fundraiser, Huang visited the Hsi Lai Temple on three different 
occasions during April 1996 prior to Gore's arrival. On the 
last of these pre-event visits, on April 28, the day before the 
luncheon, Huang, Hsia, and DNC fundraiser Maeley Tom worked 
together in a room at the Temple, using their cellular 
telephones to call guests and potential guests for the next 
day's event. As Gorman recalled it, they spoke to these persons 
in Chinese, and though he was far from fluent,

          My impression was that they were kind of soliciting 
        contributions, soliciting guests maybe. I got the 
        feeling they were kind of--they were kind of urgent in 
        trying to get like as many people as possible. Maybe 
        they had not gotten as much--raised as much 
        contributions [sic] as they'd wanted. . . 
        .175
---------------------------------------------------------------------------
    \175\ Gorman deposition, pp. 77-78; see also Ex. 87, p. 2, para.12.

At one point, Huang's telephone ran out of battery power, and 
he began to pick up a nearby wired telephone--only to be 
stopped by Maeley Tom, who admonished him that he should not 
use the Temple's telephones.176
---------------------------------------------------------------------------
    \176\ Gorman deposition, pp. 78-79. Hsia had previously warned that 
``the telephones at the Hsi Lai Temple were not to be used for 
`political purposes' because this would jeopardize the Temple's non-
profit (tax exempt) status.'' Ex. 87, p. 2, para. 11; cf. infra text 
accompanying note 212 (discussing tax exempt status of Temple).
---------------------------------------------------------------------------
    During this last-minute telephone effort by Huang, Hsia, 
and Tom, Man Ho delivered to Huang a list of those guests 
Temple officials expected to attend the fundraiser. Next to 
each name was a notation of the amount of money each person 
had, or was expected to, contribute to the DNC. When Huang saw 
the list, he asked Man Ho if she knew of anyone else who would 
like to attend the luncheon for $2,500. In response, Man Ho 
called a friend, Catherine Chen, who agreed to contribute 
$2,500.177 On top of the donations solicited by 
monastics from Temple devotees, and the illegally laundered 
$10,000 in anonymous contributions described above, Chen's 
donation brought the total raised at the Temple prior to Gore's 
visit to $45,000.178
---------------------------------------------------------------------------
    \177\ Man Ho deposition, pp. 143-47 (discussing giving list to 
Huang and identifying solicitation of Catherine Chen, ``Bill Chen's 
wife,'' as the subsequent $2,500 donor); Yuh How Bill Chen and Nancy 
Kainan Mao check #959 (Ex. 131). Catherine Chen's $2,500 check bore the 
name of her husband, Bill Chen, as well as that of ``Nancy Kainan 
Mao.'' This suggests that Catherine Chen is the same `'Nancy Mao'' who 
was apparently reimbursed by the Temple for a donation made in early 
1994. See supra Note 124.
    \178\ Man Ho deposition, p. 148.
---------------------------------------------------------------------------
    The Vice President arrived at the Temple at approximately 
12:30 p.m. on April 29. A throng of invitees and a local high 
school band were outside to meet him. Inside the entrance hall, 
Hsia, Huang, Congressman Bob Matsui, and Donald Fowler were 
among the official greeters. After meeting briefly in a holding 
room with Master Hsing Yun, the Vice President walked up the 
Temple's courtyard, between a phalanx of monastics, to the 
Temple's Buddha shrine, to which the Vice President made a 
flower offering. From there, the Vice President was escorted 
downstairs to have his photograph taken with VIP attendees and 
those who had contributed in connection with the event.\179\
---------------------------------------------------------------------------
    \179\ See generally Man Ho deposition, pp. 176-82; Ex. 122, pp. 11-
13.
---------------------------------------------------------------------------
    At lunch in the Temple's dining hall, the Vice President 
sat at the head table with Master Hsing Yun, Hsia, and Ted 
Sioeng, among others.\180\ John Huang apparently did not sit at 
one of the tables, instead circulating amongst the tables 
working with Temple officials and Gore's ``advance'' team to 
ensure that things ran smoothly.\181\ As part of a brief series 
of speeches after lunch that included remarks by Hsing Yun, 
Huang and Fowler, Congressman Matsui, who then also served as 
the DNC's treasurer, introduced Vice President Gore--who spoke 
for a few minutes to the assembled guests as Hsia interpreted 
his comments into Chinese.\182\ Immediately following his 
speech, the Vice President posed outside with all Temple 
monastics, and left the Temple at about 2:00 p.m. From there, 
the Vice President departed for the airport, flying on Air 
Force Two to San Jose, and ending up at a DNC fundraising 
dinner that evening at a private home in Los Altos Hills, 
California.\183\
---------------------------------------------------------------------------
    \180\ According to the seating chart, at Gore's table were seated 
Maria Hsia, Ted Sioeng, Don Knabe, Joseph Thomas, Yvonne Burke, and 
Gary Shaw, among others. Dining Hall Guest List--April 29th Vice 
President Gore Event (Ex. 132).
    \181\ See, e.g., Photograph of Vice President Gore at lunch, April 
29, 1996 [produced by Temple to the Committee] (seated with Hsing Yun, 
Maria Hsia, and Ted Sioeng, with Huang in background talking to Bain 
Ennis of the Vice President's advance staff).
    \182\ Ex. 122.
    \183\ Id., pp. 12-17. There were several other quick stops after 
the Vice President flew to San Jose before his motorcade arrived at the 
home of George and Judy Marcus in Los Altos Hills for this event.
---------------------------------------------------------------------------
    At around 3:00 p.m., following the Vice President's 
departure, the Master and Hsia held a press conference at the 
Temple. A number of reporters were angry because they had not 
been permitted to attend the event itself; some also questioned 
the propriety of holding a political event at the Temple. 
According to Man Ho,

        some reporters say that it was not proper to have this 
        type of luncheon at the temple, but Maria told them 
        that someone has checked with the White House and 
        [they] say that it's okay to have luncheon at the 
        temple.\184\
---------------------------------------------------------------------------
    \184\ Man Ho deposition, pp. 182-83.

    Even on April 29, it had become apparent that the Hsi Lai 
Temple fundraiser had not raised as much money as Huang and 
Hsia had hoped. That evening, after the Vice President's 
departure, Gorman spoke briefly with Hsia at the Temple while 
she awaited an audience with Venerable Master Hsing Yun. Hsia 
``seemed disappointed not so much as to how the event itself 
went, but that they had not been able to raise the amount of 
---------------------------------------------------------------------------
money that they wanted to raise.'' \185\ As Gorman recalled,

    \185\ Gorman deposition, p. 86.

          After the event, I asked Ms. Hsia how she felt the 
        Vice Presidential visit had gone. She responded to the 
        effect that they didn't raise as much [money] as they 
        wanted, but she had talked to the Master and he had 
        said ``he would take care of it.'' \186\
---------------------------------------------------------------------------
    \186\ Ex. 87, p. 3, para. 14.

This need for more DNC donations, however, became an urgent 
priority the next day when DNC officials in Washington began to 
pressure Huang for more money.
    As DNC Finance Director Richard Sullivan later recalled it, 
he telephoned Huang the day after the Gore luncheon as part of 
his ``general practice'' of trying to ``rally the troops at the 
end of the month and ask them to get in money.'' He 
``remember[ed] having a conversation with John'' in which he 
told Huang that ``we need you to get some money in.'' \187\ 
According to Sullivan,
---------------------------------------------------------------------------
    \187\ Deposition of Richard Sullivan, June 25, 1997, pp. 41-42.

          I remember being disappointed . . . I remember just 
        fine, being somewhat personally disappointed--you know, 
        between San Jose and the fact that it [had been] so 
        important to somebody out there that the event be at 
        the temple, that . . . you would have thought . . . we 
        would get a big contribution out of somebody.\188\
---------------------------------------------------------------------------
    \188\ Id., pp. 46-47.

Sullivan had ``expected that they were going to make some big 
contributions.'' ``I was expecting . . . maybe some 15s and 
20s'' \189\--i.e., individual contributions of $15,000 or 
$20,000 each. Since this had not occurred, Sullivan asked Huang
---------------------------------------------------------------------------
    \189\ Id., pp. 50-51.

          Can you get some [more] funds in? Can you send some 
        money in? Don't you have some outstanding money out? . 
        . . I may have said, John, get some money in from your 
        people in Los Angeles, get some money . . . . I 
        probably did say, John, get some California money 
        in.\190\
---------------------------------------------------------------------------
    \190\ Id., pp. 45-46.

    Huang apparently wasted little time in passing this message 
on to Hsia and to the Temple, for during a break in a seminar 
program being conducted for the assembled monastics by Hsing 
Yun, Man Ho received a telephone call from Hsia informing her 
that Huang needed to raise more money. Huang, Hsia told her, 
needed another $55,000, enough to bring the total raised at the 
Temple to $100,000. Hsia also told Man Ho that Huang needed 
this money before he returned to Washington that very 
evening.\191\
---------------------------------------------------------------------------
    \191\ Man Ho deposition, p. 183; Man Ho testimony, p. 41; Yi Chu 
testimony, pp. 42 & 47 48. When Man Ho went to inform Hsing Yun and 
Abbess Tzu Jung of this sudden need for more money, she discovered that 
they had already been told. Man Ho deposition, p. 185.
---------------------------------------------------------------------------
    Man Ho then contacted Yi Chu, telling her that ``we were a 
certain number [of donations] short, and she wanted me to make 
it up.'' What was needed, Man Ho informed her, was to add 
another $55,000 to the $45,000 the Temple had collected 
already.\192\ Accordingly, given the need for haste, Yi Chu 
approached the first monastics she saw, soliciting donations 
from the first 11 monks or nuns she encountered who happened to 
have their checkbooks with them.\193\ Because many of them did 
not have enough money to cover the $5,000 sum Yi Chu asked of 
them \194\--and because after 1993 it was the Temple's standard 
practice to reimburse monastics who made donations to political 
causes \195\--Yi Chu reimbursed every one of these eleven 
monastics.\196\
---------------------------------------------------------------------------
    \192\ Yi Chu deposition, p. 51; Yi Chu testimony p. 43.
    \193\ Yi Chu deposition, pp. 55-56; Yi Chu testimony, p. 43.
    \194\ See, e.g., Yi Chu deposition, p. 60; Yi Chu testimony, pp. 
45-46; Siuw Moi Lian deposition, pp. 31-32; Huei-Tsan Huang deposition, 
pp. 21 & 25.
    \195\ Yi Chu deposition, pp. 56-57.
    \196\ See id., pp. 61-65; Yi Chu testimony, pp. 43-44 & 47-48. Some 
of the donors even postdated their checks to the DNC so that the check 
Yi Chu wrote them from the Temple's general expenses account would 
clear first. See e.g., Yi Chu deposition, pp. 46-47 (discussing 
postdated check from Siuw Moi Lian); Yi Chu testimony, pp. 45-46.
---------------------------------------------------------------------------
    Hsing Yun was among those solicited and reimbursed in this 
fashion. By his own admission, in fact, the Master appears to 
have been well aware that in assuring Hsia that ``he would take 
care of'' Huang's cash shortfall, he was authorizing monastics' 
reimbursement for their DNC contributions. As Hsing Yun put it 
to Committee staff who met with him at his temple in Kiaoshung 
in June 1997,

          In [the] Hsi Lai Temple there were some monastic and 
        lay disciples who, influenced by my own conduct, also 
        wanted to help Mr. Gore. In truth, they had only 
        limited funds since they ordinarily donate all of their 
        money to Hsi Lai Temple. However, when they want to use 
        some of it, Hsi Lai Temple ought to give it to them. 
        Therefore, when they did not have enough money to cover 
        the checks they were donating, I thought Hsi Lai Temple 
        could help these disciples.\197\
---------------------------------------------------------------------------
    \197\Ex. 25, p. 4.

``Some devotees did not have enough money,'' he said, ``so the 
temple, due their past good service, when they need money the 
temple will give them the money they want.'' \198\ ``Influenced 
by [the Master's] own conduct'' in making a contribution that 
day, \199\ ten other monastics joined Hsing Yun in writing 
$5,000 checks to the DNC--and in being reimbursed by Yi Chu for 
the cost of these donations.\200\
---------------------------------------------------------------------------
    \198\Id., p. 8.
    \199\Id., p. 4.
    \200\ Ex. 133 (DNC Check Tracking Form for Shing Yun check #102 for 
$5,000 to DNC on April 30, 1996; IBPS check #3573 for $5,000 to Shing 
Yun on May 1, 1996; DNC Check Tracking Form for Man Ya Shih check #509 
for $5,000 to DNC on April 30, 1996; IBPS check #3576 for $5,000 to Man 
Ya Shih on April 30, 1996; DNC Check Tracking Form for Hsiu Chu Lin 
check #702 for $5,000 to DNC on April 30, 1996; IBPS check #3581 for 
$5,000 to Hsiu Chu Lin on May 1, 1996; DNC Check Tracking Form for Suh-
Jen Wu check #121 for $5,000 to DNC on May 1, 1996; IBPS check #3574 
for $5,000 to Suh-Jen Wu on May 1, 1996; DNC Check Tracking Form for 
Pi-Hsia Hsiao check #195 for $5,000 to DNC on April 30, 1996; IBPS 
check #3571 for $5,000 to Pi-Hsia Hsiao on May 1, 1996; DNC Check 
Tracking Form for Siuw Moi Lian check #1016 for $5,000 to DNC dated May 
6, 1996; IBPS check #3577 for $5,000 to Man Ya Shih on May 1, 1996; DNC 
Check Tracking Form for Hueitsan Huang check #243 for $5,000 to DNC on 
April 30, 1996; IBPS check #3575 for $5,000 to Hueitsan Huang on April 
30, 1996; DNC Check Tracking Form for Hsiu Luan Tseng check #140 for 
$5,000 to DNC dated May 6, 1996; IBPS check #3572 for $5,000 to Hsiu 
Luan Tseng on May 1, 1996; DNC Check Tracking Form for Bor Yun Jeng 
check #221 for $5,000 to DNC on April 30, 1996; IBPS check #3570 for 
$5,000 to Bor Yun Jeng on May 1, 1996; DNC Check Tracking Form for Seow 
Fong Ooi check #497 for $5,000 to DNC on April 30, 1996; IBPS check 
#3578 for $5,000 to Seow Fong Ooi on May 1, 1996).
    According to Yi Chu, Seow Fong Ooi actually contributed $10,000 to 
the DNC. Yi Chu deposition, pp. 63-64. Thus, according to the Temple's 
attorneys, Seow Fong Ooi's second $5,000 was actually paid to another 
Fo Kuang Shan nun named Chia-Hui Ho. See DNC Check Tracking Form for 
Chia-Hui Ho donation of $5,000 on May 1, 1996 (Ex. 134); Ex. 133, p. 19 
7284 (IBPS check #3579 providing second Temple payment of $5,000 to 
Seow Foing Ooi on April 30, 1996). The Temple's accounting records show 
this series of payments in sequentially-numbered checks as ``No Name'' 
payments. See Hsi Lai Temple, Transaction Detail by Account, May 1996 
(Ex. 135).
---------------------------------------------------------------------------
    Hsia was at the Temple later that evening when Huang 
stopped by briefly to pick up the checks, before leaving for 
Washington.\201\ With this money, the amount of money raised by 
the Temple for the DNC by the April 29 event now totaled 
$100,000: $35,000 in donations solicited ahead of time by 
Temple monastics, $10,000 in laundered donations by anonymous 
devotees before the Vice Presidential luncheon, and $55,000 in 
laundered donations in response to Huang's request for more 
funds just after the event. Added to the sum Huang and perhaps 
others apparently solicited independently of the Temple, the 
Vice Presidential fundraiser raised $166,750 for the DNC.\202\
---------------------------------------------------------------------------
    \201\ Man Ho deposition, pp. 183-84 & 187.
    \202\ Democratic National Committee, DNC Contribution Review, Feb. 
1997 (Ex. 136) (excerpts), p. 4 (listing ``[t]otal raised in connection 
with event'' for ``Hsi Lai Temple Event'' as $166,750); cf. Man Ho 
deposition, p. 149 (remarks of Man Hua) (explaining that Man Ho 
``doesn't know what others contribute[d]'' beyond DNC donations 
solicited by Temple officials). As described earlier, the Hsi Lai 
Temple raised at least $146,400 in illegal reimbursed contributions for 
local, state, and national political campaigns from 1993 through the 
elections of 1996. Some $116,500 of this total went directly to the DNC 
for events involving Bill Clinton, Hillary Clinton, and Al Gore; other 
recipients included Senator Ted Kennedy and Representative Patrick 
Kennedy. Sections 441e and 441f of Title 2 of the U.S. Code prohibit 
knowingly accepting such unlawful donations, and therefore presumably 
prohibit keeping donations that one discovers have been raised 
illegally. See 2 U.S.C. Sec. 441c (``It shall be unlawful . . . for any 
person to solicit, accept, or receive any such contribution from a 
foreign national.''); id. at Sec. 441f (``No person shall . . . 
knowingly accept a contribution made by one person in the name of 
another.'').
    Although the reimbursed monastic donations with regard to the April 
29 event have been the subject of media reporting for months, the 
Committee's depositions of actual straw donors who gave money to the 
DNC suggests the DNC has not yet paid back all of the donations it 
claims to have returned. Man Ya Shih and Siuw Moi Lian, for example, 
testified in their depositions in August 1997 that although they each 
gave $5,000 to the DNC, they have yet to receive their donations back. 
Siuw Moi Lian deposition, p. 36; Man Ya Shih deposition, p. 44.
---------------------------------------------------------------------------
    The repeated donation-laundering in which Hsia and Temple 
officials, and perhaps Huang, engaged clearly violated federal 
elections laws barring political contributions made through 
``straw donors'' \203\ and meets the legal definition of a 
``criminal conspiracy.'' \204\ Moreover, Temple officials have 
admitted that at least two of the monastics who gave money in 
connection with the Gore event, Chia-Hui Ho and Seow Fong Ooi, 
were foreign nationals prohibited from making political 
contributions \205\ at the time they made their donations.\206\ 
Nor were these two individuals the only foreign nationals 
reimbursed by the Temple after making contributions to the DNC. 
According to her responses to a DNC telephone survey, 
reimbursed Temple donor Bih-Yueh Jeng was neither a U.S. 
citizen nor a permanent U.S. resident at the time she made her 
$5,000 contribution to the DNC in connection with the 
Presidential event in Los Angeles in July 1996.\207\ Since 
Temple officials made no efforts to ascertain the immigration 
status of monastics or devotees solicited for political 
contributions, or those selected to participate in ``straw 
donor'' reimbursement schemes, it may have been no more than 
blind luck that prevented even more foreign nationals from 
making donations.\208\
---------------------------------------------------------------------------
    \203\ 2 U.S.C. Sec. 441f (``No person shall make a contribution in 
the name of another person or knowingly permit his name to be used to 
effect such a contribution, and no person shall knowingly accept a 
contribution made by one person in the name of another person.'').
    \204\ United States v. Hopkins, 916 F.2d 207 (5th Cir. 1990) 
(holding that conducting donation-laundering scheme can amount to 
criminal conspiracy to defraud the United States and to make fraudulent 
statements to Federal Elections Commission in violation of 18 U.S.C. 
Sec. Sec. 371 & 1001); id. at 212 (describing elements of conspiracy, 
and citing United States v. Medrano, 836 F.2d 861, 863-64 (5th Cir. 
1988); United States v. Colwell, 764 F.2d 1070, 1072 (5th Cir. 1985)).
    \205\ See 2 U.S.C. Sec. 441e(1) (``It shall be unlawful for a 
foreign national directly or through any other person to make any 
contribution of money or other thing of value, or to promise expressly 
or impliedly to make any such contribution, in connection with an 
election to any political office or in connection with any primary 
election, convention, or caucus held to select candidates for any 
political office; or for any person to solicit, accept, or receive any 
such contribution from a foreign national.''). The term ``foreign 
national'' is defined to mean persons who are neither U.S. citizens nor 
permanent resident aliens See 2 U.S.C. Sec. 441e(b) (defining ``foreign 
national'' to exclude ``any individual who is a citizen of the United 
States'' and any person ``lawfully admitted for permanent residence'').
    \206\ Man Ho deposition, pp. 232-33 (identifying Chia Hui-Ho and 
Seow Fong Ooi as having been neither U.S. citizens nor permanent 
residents at time of DNC donations); Yi Chu deposition, p. 96 
(similarly identifying Seow Fong Ooi); Ex. 137 (Peter Kelly, letter to 
Joseph Sandler, Nov. 15, 1996 [discussing Chia Hui-Ho's $5,000 
contribution to DNC and noting that ``this individual's application for 
legal permanent residence is still pending before the Immigration and 
Naturalization Service'']; Immigration and Naturalization Service, 
approval notice for Sec. 101(a)(27)(C)(ii) special immigration 
[religious worker] status for Chia Hui-Ho, Oct. 7, 1996; James 
Robinson, letter to INS, Nov. 7, 1996 [enclosing Chia-Hui Ho's 
application for permanent resident status]).
    \207\ Ex. 138 (Bih-Yueh Jeng, Debevoise & Plimpton survey response 
via telephone interview, Dec. 17, 1996, p. DNC 1803698 [answering 
``No'' to question ``Are you a United States citizen?'' and ``No'' to 
question ``Are you a permanent resident of the United States?'']. 
Immigration and Naturalization Service, Petition for a Nonimmigrant 
Worker, Sept. 27, 1996 [granting Bih-Yueh Jeng's petition for 
nonimmigrant religious worker status several months after the Temple 
event]).
    \208\ See Yi Chu deposition, p. 95 (``Well, I didn't know whether 
contributions were prohibited from the noncitizens or nonpermanent 
residents. All I did was to encourage people to make donations.''). 
Moreover, the Temple's donation-laundering scheme raises questions as 
to the ultimate source of the monies that flowed into the DNC's coffers 
over the 1993-96 period. As noted previously, the reimbursements were 
all made out of the Temple's general expenses account, which in turn 
got its money from the account into which Buddhist devotees made 
donations to the Temple. Because Temple officials never screened 
Buddhist contributors to the Temple for U.S. citizenship or permanent 
resident alien status, there is no way of knowing whether or not the 
money that ended up being funneled to the DNC by Hsia and Huang 
ultimately came from foreign nationals. See id. (stating that ``[n]o 
attempt was ever made'' to determine whether devotees were citizens or 
permanent residents).
---------------------------------------------------------------------------
    Richard Sullivan and the DNC clearly knew that it was 
inappropriate to have a fundraiser at the Temple. As he told 
John Huang when Huang first described his Temple plan, for 
example, ``you know, . . . you can't do a fund-raiser at a 
temple.'' 209 Nevertheless, faced with huge 
pressures to raise money for the re-election of Bill Clinton 
and Al Gore, Sullivan let Huang continue with the event even 
though Huang admitted that ``he'd get money out of it'' and 
``he'd get some money out of them.'' 210 But the 
impropriety could not be erased simply because Huang promised 
that he would not solicit all attendees for money. 
211 As one of the DNC's own auditors noted after the 
Temple affair had begun to appear in the national press, 
contributions from the Temple should be returned because ``[i]t 
was a temple, you idiot!'' 212
---------------------------------------------------------------------------
    \209\ Sullivan deposition, June 25, 1997, p. 23.
    \210\ Id., p. 24.
    \211\ Id., pp. 24 & 26.
    \212\ Democratic National Committee, list of contributions returned 
since September 1996, Nov. 22, 1996 (Ex. 139) (listing $5,000 donation 
from ``Buddhist Temple'' and noting as reason for refund that ``It was 
a temple, you idiot!'').
---------------------------------------------------------------------------
    One reason why it was wrong to hold the fundraiser there is 
that the Hsi Lai Temple--in its corporate incarnation as the 
International Buddhist Progress Society (IBPS)--is a 
Sec. 501(c)(3) organization for federal income tax 
purposes.213 Like all churches, therefore, it is 
prohibited by law, not to mention its own organizational 
charter, from engaging in political activity. As the Temple's 
own articles of incorporation state, ``the corporation shall 
not participate or intervene in any political campaign . . . on 
behalf of any candidate for public office.'' 214 
Political activity of the sort in which Temple officials 
engaged, e.g., donating Temple money to political campaigns and 
soliciting funds for such campaigns, is impermissible. 
Moreover, contributions made by faithful Buddhists to the 
Temple are tax deductible. On top of the various legal concerns 
already discussed herein, this raises at least two additional 
troubling issues.
---------------------------------------------------------------------------
    \213\ See, e.g., Internal Revenue Service, Cumulative List of 
Organizations, vol. 1, Sept. 30, 1995, p. 1049 (Ex. 140) (listing 
``International Buddhist Progress Society, Hacienda Heights, Ca.'' as 
tax-exempt organization). The IBPS was also exempt from California 
taxes as a nonprofit organization. See International Buddhist Progress 
Society, Statement by Domestic Nonprofit Corporation, March 15, 1996 
(Ex. 141) (document signed by Hsing Huang Shin, Liang Yueh Fang, and 
Tsui-Hsueh Hsueh [a.k.a. Yi Chu], listing Hsia as agent for service of 
progress).
    \214\ International Buddhist Progress Society, Articles of 
Incorporation, Aug. 4, 1978, p. 1 (Ex. 142). This document was signed 
by three Temple officials, two of whom were Hsing Yun himself and 
former Temple Abbess Hsing Kuang Shih, id., p.3--both of whom were 
subsequently involved in unlawful Temple donation-laundering in support 
of various political causes.
---------------------------------------------------------------------------
    First, the checks laundered through Temple monastics to the 
DNC--over $100,000 worth in 1996 alone--apparently consisted of 
money derived directly from tax-exempt charitable contributions 
made to the Temple. In essence, therefore, this amounts to 
taxpayer funding for political contributions to the DNC, which 
is clearly prohibited.
    Second, this use of Temple funds perpetuated a fraud upon 
faithful Buddhists who donated to the Temple upon the 
assumption that their money would be used to advance the 
Temple's legitimate religious purposes and not be given to a 
political party. Through the Temple's donation-laundering and 
willingness to host political fundraisers for various 
candidates, however, money given by faithful devotees to the 
Temple was illegally diverted without their knowledge to 
support the re-election of Bill Clinton and Al 
Gore.215
---------------------------------------------------------------------------
    \215\ Another potential consequence to the Temple from this 
violation of its Section 501(c)(3) status relates to the validity of 
visas and green cards Hsia obtained for Fo Kuang Shan religious workers 
under the terms of the Immigration Act of 1990. Because the Temple had 
apparently been engaged in unlawful political activity through hsia 
since at least 1993, it is open to question as to whether the Hsi Lai 
Temple qualifies as such a ``bona fide nonprofit'' organization. As 
Hsia's assistant Matthew Gorman recognized, political activity by the 
Temple might threaten the validity of all the religious worker visas 
and green cards obtained for Temple affiliates since 1993. See Gorman 
deposition, p. 75.
---------------------------------------------------------------------------
    It is also worth noting that there is a problem here even 
apart from the Temple's reimbursements of DNC donors. As the 
Committee learned from Maura McManimon, the DNC's event 
coordinator for the Temple luncheon, the DNC had no expenses in 
organizing the Temple event apart from Huang's airfare to Los 
Angeles. The DNC apparently did not even give McManimon a 
budget for this event, and had absolutely no idea what the 
Temple luncheon cost because the Temple paid for 
everything.216 These expenditures alone amounted to 
a large, in-kind contribution to the DNC by the Temple.
---------------------------------------------------------------------------
    \216\ Deposition of Maura McManimon, July 25, 1997, pp. 49-50 & 58-
59.
---------------------------------------------------------------------------
    Significantly, the DNC did not repay the Temple for this 
significant in-kind contribution until the day after the first 
stories about the Temple affair appeared in the Wall Street 
Journal on October 17, 1996.217 It was only then 
that the DNC decided to reimburse the Temple for the money it 
saved the DNC in organizing the Gore event, by sending the 
Temple a check for $15,000.218
---------------------------------------------------------------------------
    \217\ Kuntz, supra note 1.
    \218\ The DNC's check for this reimbursement was written on the 
very day the first stories appeared. See Ex. 143 (Bradley Marshall, 
letter to Man Ho, Oct. 18, 1996, enclosing $15,000 check to cover 
estimated costs of April 29, 1996 event; DNC Services Corporation check 
#025100 for $15,000 to Buddha's Light International Association on 
October 17, 1996).
---------------------------------------------------------------------------
    When press accounts of the Temple fundraiser and associated 
donation-laundering by the Temple began to appear in the fall 
of 1996, Temple officials became alarmed. Both Man Ho and Yi 
Chu, in fact, ``panicked'' and set about destroying and 
altering documents in their files which they felt were 
``embarrassing.'' Man Ho destroyed a number of documents 
relevant to the Temple's illegal donation-laundering, 
including:
          (1) The check-request forms that Man Ho had prepared 
        for the Abbess' signature after receiving calls from 
        Maria Hsia requesting political contributions;
          (2) The list of attendees Man Ho gave to John Huang 
        on April 28 indicating guests who would attend the Gore 
        luncheon, who among them had agreed to donate money to 
        the DNC, and the amount of each contribution; and
          (3) Most of the paperwork held at the Temple in 
        preparation for the Vice President's visit, including 
        invitations (including newspaper clippings of the 
        event). 219
---------------------------------------------------------------------------
    \219\ See Man Ho deposition, pp. 155-58 & 219-20 (recounting 
``panic,'' ``embarrassment,'' and document destruction).
---------------------------------------------------------------------------
    Venerable Master Hsing Yun has subsequently claimed that 
the destruction of these documents was merely part of an 
ongoing process by which the Temple would ``regularly purge old 
files in storage and add new ones'' and ``has nothing to do 
with destruction of evidence.'' 220 It is clear from 
Man Ho's testimony, however, that this is untrue. Furthermore, 
when questioned by Senator Susan Collins during Committee 
hearings, Yi Chu admitted that the nuns' document purge was 
anything but ordinary:
---------------------------------------------------------------------------
    \220\ Hsing Yun, statement in response to Governmental Affairs 
Committee hearings, Sept. 6, 1997 (Ex. 144) [translated by Michael Yan 
for the Governmental Affairs Committee].

          Senator Collins. When the press stories appeared 
        regarding the temple fund-raiser and the 
        reimbursements, were you worried that the negative 
        publicity would hurt the temple's reputation?
          Ms. Yi-Chu. Yes.
          Senator Collins. And you also did not want to 
        embarrass the Vice President or . . . Maria Hsia; is 
        that correct?
          Ms. Yi-Chu. Yes.
          Senator Collins. So that was your motivation for 
        making these changes and altering these documents as 
        well as destroying other documents; is that correct?
          Ms. Yi-Chu. Yes.221
---------------------------------------------------------------------------
    \221\ Yi Chu testimony, Sept. 4, 1997, p. 65; see also id., pp. 34-
35 & 97 (confirming that motive for destruction was to avoid 
embarrassment).

    In addition to this campaign of document destruction, Yi 
Chu testified that in approximately November of 1996, she 
modified some of the cashed Temple checks used to reimburse 
monastic donors on the day following the event. After stories 
about the Temple incident began to appear in the press, she 
added, often in Chinese characters, the words ``loan'' or 
``Futien account'' on the previously-blank ``memo'' lines of a 
number of checks.222 This, she hoped, would conceal 
the actual origin of the reimbursements: while the checks had 
actually come out of the Temple's general expenses account with 
no expectation of repayment, she wanted to create the 
impression they were either ``loans'' to the monastic donors or 
had come from these donors' own funds held for them by the 
Temple in so-called Futien accounts.223
---------------------------------------------------------------------------
    \222\ These altered checks were the ones produced to the Committee 
pursuant to its subpoena of the Temple, but the forgery can clearly be 
seen if one compares the altered checks produced by the Temple with 
photocopies kept by the bank when the checks were originally cashed in 
their unaltered form. Exhibit showing ``Checks as produced by Temple'' 
alongside ``Checks as cashed by bank'' (Ex. 145) (reproducing 
illustrative IBPS reimbursement checks to Hsiu Chu Lin, Hsiao Jie Su, 
and Seow Fong Ooi).
    \223\ See Yi Chu deposition, pp. 47-50, 83-84, & 108-09.
---------------------------------------------------------------------------
    Yi Chu's alteration of these checks is significant not only 
because of the cover-up it demonstrates, but because it 
emphasizes the fact that while Yi Chu could have selected to 
make contributions only monastics who had sufficient funds in 
their personal ``Futien'' accounts to cover the cost--and 
thereby create at least the basis for an argument that the 
political contributions by these monastics were voluntary ones 
made from personal monies--she instead followed her usual 
pattern of immediately reimbursing the ostensible donors from 
the Temple's general expenses account, which is funded with 
tax-deductible contributions to the Temple itself. These 
alterations underscore the fact that the Temple's numerous 
reimbursements during the 1993-96 period were not done with the 
donors' ``own'' money, and they make clear that Temple 
officials clearly understood that it was wrong to reimburse 
donors with the Temple's funds.
    Temple monastics were also less than candid in responding 
to press inquiries and official investigations of the Temple 
affair. Man Ya Shih--whose false story about donation-
laundering had helped first bring the episode to light when it 
was reported in the Wall Street Journal in October 1996 
224--was the worst offender in this regard. In a 
letter to Hsia apologizing for certain false statements she had 
made to the Journal and seeking Hsia's approval of a proposed 
written response to FEC inquiries, for example, Man Ya Shih 
promised Hsia that ``I will cover the fact if I did help anyone 
in laundering the money.'' 225 Thereafter, in a 
signed and sworn statement to the FEC, Man Ya Shih did exactly 
this--swearing that no one had given her the money she used to 
make her $5,000 donation to the DNC.226
---------------------------------------------------------------------------
    \224\ See Kuntz, supra note 1.
    \225\ Ex. 146 (Man Ya Shih, letter to Maria Hsia, Nov. 7, 1996; Man 
Ya Shih, excerpt from November 7, 1996 letter to Maria Hsia translated 
from Chinese by Michael Yan for Governmental Affairs Committee).
    \226\ Man Ya Shih, sworn declaration to Federal Elections 
Commission, Nov. 30, 1996, p. 2 (Ex. 147), (``Please note that I was 
not given money to donate to DNC. But money given to me from the past 
years was used to be donated to DNC by my kind intention to support the 
people to elect the right persons to the Government''.) Hsia apparently 
also forwarded information to Man Ya Shih regarding the requirements of 
federal election law, and attempted to arrange for Man Ya Shih to 
receive legal representation from Hsia's own lawyer, James Robinson. 
See Ex. 148 (Progress Sheet from files of Hsia & Associates [recounting 
Man Ya Shih inquiry about election law, apparently on Nov. 1, 1996]; 
Maria Hsia, fax transmission to Jim Robinson, Nov. 6, 1996 [forwarding 
``Statement of Designation of Counsel'' signed by Man Ya Shih]). As the 
DNC attempted to assess the scope of its illegal-donation problem in 
late 1996 and early 1997, Hsia apparently helped a company called 
Matsunichi of America prepare a response to the DNC's questionnaire in 
which it denied that its president, Pan Su Tong, had ever made any 
contributions to the DNC. At the time, however, Hsia possessed both a 
photocopy of Pan's $5,000 check to the DNC on July 22, 1996 and a copy 
of the bank statement showing that it had been cashed by the DNC. Ex. 
149 (Packet of materials forwarded to Matt Gorman by Matsunichi of 
America, including: check in name of Pan Su Tong signed by Lance Zheng; 
copy of bank statement for August 1996; draft letter denying 
contribution written on letterhead of Matsunichi of America and 
prepared for signature by Lance Zheng; copy of questionnaire sent to 
Pan by Ernst & Young on behalf of DNC).
---------------------------------------------------------------------------
    In early 1997, Maria Hsia also played a role in 
coordinating monastics' responses to the Ernst & Young surveys 
sent to contributors by the DNC as part of their review of 
campaign finance problems--helping them respond to difficult 
questions such as who had solicited their donations and whether 
anyone else had provided them with money for this 
purpose.227
---------------------------------------------------------------------------
    \227\ See e.g., Matthew Gorman, fax transmission to Jan Yueh Lian 
Huang, Jan. 9, 1997 (Ex. 150) (noting that ``I will ask Ms. Hsia about 
item number 16.''); id. at SEN 00329 (enclosure of Ernst & Young DNC 
donor survey). Question 16 of Huang's survey was an inquiry as to ``who 
was the person who asked or solicited you to make this contribution.'' 
Moreover, this survey response contains a handwritten note by Matt 
Gorman in the response portion of Question 15--which asks ``If this 
money was not yours, we need to know whose mney it was. Please tell us 
whose money was given to the DNC and give us his/her name.'' Gorman's 
note, which was written in Chinese, indicates that he will ask Maria 
Hsia about this question. Id.: see generally Gorman deposition, p. 92 
(identifying authorship and content of handwritten note); Matthew 
Gorman, fax transmission to Maria Hsia, Jan. 11, 1997 (Ex. 151) 
(forwarding Huang's query about survey and requesting ``Please let me 
know how you suggest she should respond.''); Ex. 87, p. 3, para. 15 
(``In late 1996 or early 1997, Ms. Hsia asked me to help any persons 
who had donated to the DNC in connection with the April 29, 1996 event 
who needed help in responding to questionnaires sent by Ernst & Young 
on behalf of the DNC.''). According to Gorman, he did indeed ask Hsia 
about Huang's responses, but was told merely to ``say whatever is 
true.'' Gorman deposition, p. 94. He could not remember whether he 
helped other donors ``coordinate'' their responses with Hsia.
---------------------------------------------------------------------------
    Another nun, Siuw Moi Lian--who donated $5,000 to the DNC 
in connection with the Gore luncheon and was reimbursed by the 
Temple--appears to have submitted a false response to the DNC 
when asked about her role. When asked on behalf of the DNC by 
the accounting firm of Ernst & Young whether anyone had 
solicited her donation and what the source of the money for it 
had been, Siuw Moi Lian wrote ``myself.'' 228
---------------------------------------------------------------------------
    \228\ Siuw Moi Lian response, undated (Ex. 152).
---------------------------------------------------------------------------
    Hsia barred reporters from viewing the videotape taken by 
King & I Productions, videographers hired for the Vice 
President's Temple luncheon, including that taken of the 
speeches made by Vice President Gore and others to the 
assembled guests.229 Within two days of the 
luncheon, all copies of the videotape footage were gathered up 
from the film company and quickly shipped to 
Taiwan.230 Moreover, the monastic who took the tape 
from the production company on May 3, 1996--a monk by the name 
of Man-Chin 231--left the Fo Kuang Shan order 
shortly after the Committee served Temple officials with a 
subpoena for the videotape; he has since disappeared. 
232 Despite the repeated assurances of Temple 
officials that they are looking for this missing tape--and 
despite the fact that Temple officials have used short excerpts 
from this tape in making a brief publicity video that appeared 
on the Cable News Network--the full videotape record of the 
event with Vice President Gore on April 29, 1996 remains hidden 
to this day.
---------------------------------------------------------------------------
    \229\ See Memorandum of Interview of Anonymous Chinese newspaper 
reporter, May 16, 1997, pp. 1-2.
    \230\ Hank Tseng, letter to Christopher Ford, Aug. 27, 1997 (Ex. 
153); Hearing testimony, Sept. 4, 1997, pp. 167-69 & 173-81.
    \231\ See Ex. 153.
    \232\ Hearing testimony, Sept. 4, 1997, pp. 174-75 & 179 (remarks 
of Man Ho, Senator Fred Thompson, and Brian Sun).
---------------------------------------------------------------------------
    It has continued to be difficult to establish precisely 
what the Vice President claims to have known about the nature 
of the Temple fundraiser. At first, he claimed that he believed 
the Templelunch was only a ``community outreach'' 
event.233 Later, Vice President Gore said that he had 
believed it to be a ``finance-related'' event,234 a term 
that the White House apparently now uses to describe a range of events 
including, but not limited to, fundraisers. More recently--after it 
became apparent to the Committee that no one at the White House or the 
DNC could ever recall seeing or using the term ``finance-related'' 
prior to the point at which the Hsi Lai Temple story first broke in the 
press in October 1996 235--Vice President Gore adjusted his 
position again. On the day before Committee hearings on this subject, 
White House officials told reporters that the Vice President had 
actually believed it to be a ``donor-maintenance'' event, by which they 
apparently meant that he felt it to be an affair for DNC contributors 
at which money was not to be raised.236 The Vice President 
has said that ``no money was offered or collected or raised at the 
event,'' 237 and he has insisted that ``[i]t was not a 
ticketed event.'' 238 According to his spokeswoman Ginny 
Terzano, ``[a]ny money collected was without our knowledge.'' 
239
---------------------------------------------------------------------------
    \233\ Albert Gore, interview by Nina Totenberg for National Public 
Radio, Oct. 22, 1996 (``It was billed as a community outreach event . . 
.'')
    \234\ See Brian McGrory, ``Gore says he knew Buddhist event was 
fund-raiser; He earlier cited `community outreach,' '' Boston Globe, 
Jan. 15, 1997, at A9.
    \235\ According to the Vice President's scheduler Kim Tilley, in 
fact, the term ``Finance-related event'' was never used at all. Tilley 
deposition, p. 128 (``We would not call them DNC Finance-related 
events.'').
    \236\ See David Stout, ``Gore's Presence at Fund-Raiser Called 
Innocent,'' New York Times, Sept. 3, 1997, p. A19.
    \237\ Albert Gore interview, supra note 233.
    \238\ See Dan Balz, ``For Vice Presdent Gore, a Term of 
Transition,'' Washington Post, Jan. 20, 1997, p. E31.
    \239\ See John Mintz, ``Fund-Raisers Pressured Temple After Gore 
Visit,'' Washington Post, June 13, 1997, p. A20.
---------------------------------------------------------------------------
    Virtually everyone at the DNC and on the Vice President's 
staff, however, not only clearly understood the Hsi Lai Temple 
event to be a ``fundraiser,'' but also freely and repeatedly 
described it as such. Indeed, the Vice President himself once 
referred to his DNC engagement in Los Angeles that day as a 
``fundraiser''--and did so at a point after which he had 
already accepted Hsing Yun's invitation to visit the Temple. 
Moreover, it is clear that both the Vice President himself and 
his staff members understood that whatever the event was 
ostensibly called, its purpose was to raise money for the DNC.
    The Vice President was advised of this, for example, by 
Harold Ickes, who described the event's anticipated fundraising 
total to the Vice President on the day before the Vice 
President received his briefing notes from the DNC for the 
Temple visit. In fact, at least two of the guests who attended 
the event in Hacienda Heights on April 29, 1996 recall 
fundraising actually being discussed from the lectern--in the 
presence of the Vice President. While there are obvious reasons 
for the Vice President to wish to distance himself from the 
Temple event by claiming that he had no idea fundraising was 
involved, such a claim is improbable.
    To understand what the Vice President really knew about the 
Temple, one must first understand the ``dire financial 
situation'' that faced the DNC after Republicans won majorities 
in Congress in 1994.240 Without vast new infusions 
of money, felt the Democrats in the White House, they could not 
afford the expensive media campaign needed to save themselves 
from a similar defeat in 1996.241 With this very 
much in mind, Vice President Gore resigned himself to a long 
and arduous season of fundraising, concluding that ``we can 
raise the money--BUT ONLY IF--the President and I actually do 
the events, the calls, the coffees, etc. . . . And we will have 
to lose considerable time to the campaign trail to do all of 
this fundraising.'' 242
---------------------------------------------------------------------------
    \240\ Deposition of David Strauss, June 30, 1997, p. 254.
    \241\ According to one DNC Trustee, for example, the DNC 
established a special media fund because the ``the media campaign was 
going to be expensive.'' Deposition of Beth Dozoretz, Sept. 2, 1997, p. 
56. Ultimately, the DNC spent many millions of dollars on this 
campaign, which the President himself identified in videotaped comments 
produced to the Committee by the White House,
    \242\ Albert Gore, ``Points for Political Budget Meeting with 
President,'' undated, p. 4 (Ex. 154).
---------------------------------------------------------------------------
    The DNC's April fundraiser in Los Angeles was a direct 
result of the fundraising campaign that grew out of the 
perceived importance of financing the DNC's massive media 
campaign on behalf of the President's re-election. Since the 
beginning of 1996, in fact, DNC and White House officials had 
been planning a fundraiser for the Vice President in April of 
that year. In early January, for example, Ickes sent a 
memorandum to the Vice President outlining the DNC's proposed 
events for 1996. This memorandum outlined, among other things, 
a plan to hold a $200,000 fundraiser for Vice President Gore in 
Los Angeles in April; it was to be the Vice President's only 
one in the city that month.243
---------------------------------------------------------------------------
    \243\ This document also outlined the DNC's plan for another 
$200,000 April fundraiser for Gore in San Jose. This Ickes memorandum 
is the first planning document which the Committee has been able to 
locate the two April 29, 1996 fundraisers attended by the Vice 
President, Harold Ickes, memorandum to the President and Vice 
President, Jan 2, 1996, p. SCGA-00286 (Ex. 155) (identifying VPOTUS 
events in April listed as intended to raise ``$ AMOUNT[[s]'' of 200 K'' 
in Los Angeles and another ``200K'' in San Jose). This document is 
stamped ``THE PRESIDENT HAS SEEN,'' with a handwritten notation 
appearing next to this reading ``1/8/96.''
---------------------------------------------------------------------------
    This initial DNC proposal for Vice President Gore's only 
April 1996 event in Los Angeles became increasingly specific 
over time in additional Ickes memoranda forwarding fundraising 
targets to the Vice President. On February 9, for example, 
another Ickes memorandum raised the anticipated fundraising 
goal from Gore's planned April trip to Los Angeles to $250,000, 
and projected its likely expense as $25,000.244 At 
least by early March 1996, it appears, John Huang--now the 
DNC's top fundraiser among Asian-Americans--had been given 
responsibility for some of the upcoming events in 
California.245 By March 12, Vice President Gore's 
scheduling staff had begun specifically to discuss possible 
dates for the event, referring in internal memoranda to 
upcoming ``DNC fundraisers in San Jose & LA'' on ``April 27-
29.'' 246
---------------------------------------------------------------------------
    \244\ Harold Ickes, memorandum to the President and Vice President, 
Feb. 9, 1996, at EOP 041361 (Ex. 156). This document is marked to 
indicate that the President read it on February 22.
    \245\ On March 7, for example, the Vice President's deputy chief of 
staff, David Strauss, had a telephone conversation with Huang about 
``events in Cal[ifornia].'' David Strauss, telephone memorandum, March 
7, 1996 (Ex. 157).
    \246\ Lisa A. Berg, e-mail to Kimberly H. Tilley, March 12, 1996 
(Ex. 158) (discussing ``Up-coming travel of the Vice President'').
---------------------------------------------------------------------------
    No specific location was set or even discussed for the Vice 
President's April fundraiser in Los Angeles, however, for some 
time after the initial Ickes memorandum in January that 
outlined the need for such an event. The first connection of a 
specific location to the Los Angeles fundraising trip, as we 
have seen, apparently came from the Vice President himself when 
he met at the White House with Venerable Master Hsing Yun on 
March 15. Vice President Gore's reference during this meeting 
to an upcoming trip to Los Angeles, apparently in April, could 
only have been to the $250,000 fundraising trip of which Ickes 
had advised the Vice President in his January and February 
memoranda: he had no other trips to Los Angeles planned between 
March 15 and April 29. This meeting was therefore the first 
time anyone at the White House had discussed a specific 
location in connection with Vice President Gore's April visit 
to Los Angeles.
    Indeed, Huang and Hsia, at least, may even have intended 
the March 15 meeting with Hsing Yun to lay the groundwork for a 
Vice Presidential fundraiser at the Hsi Lai Temple. There is 
little other way, in fact, to explain the involvement of both 
Huang and Hsia in this meeting: Huang's job was to raise money 
for the DNC among Asian-Americans, and he and Hsia had been 
raising money together for Al Gore since 1989. Huang both 
requested and organized the Vice President's March 15 visit 
with Hsing Yun, and it was he who wrote the Vice President's 
briefing notes for the meeting. Furthermore, on March 13, two 
days before the White House meeting, the Vice President's 
deputy chief of staff, David Strauss, had a telephone 
conversation with Huang. Strauss claimed not to remember any 
specifics of this conversation, but he testified that it was 
related to the upcoming Hsing Yun visit at the White 
House.247 Significantly, his notes of this 
conversation include the notation ``John Huang . . . lead to a 
lot of $.'' 248
---------------------------------------------------------------------------
    \247\ Strauss deposition, June 30, 1997, pp. 56 & 59 (identifying 
telephone memorandum and adding that ``in my head . . . I have this 
linked with the Vice President's meeting with the Venerable Master.''); 
id., p. 68 (``[T]his is connected to the meeting with the Vice 
President. That's the linkage.''); see generally id., pp. 56-68.
    \248\ David Strauss, telephone memorandum, March 13, 1996 (Ex. 
159).
---------------------------------------------------------------------------
    Vice President Gore also clearly knew on March 15, 1996 
that the DNC hoped to have him attend a fundraiser in Los 
Angeles at the end of April. Just after his meeting with Hsing 
Yun, his scheduler Kim Tilley asked the Vice President in an e-
mail message about whether he would be interested in adding 
another stop on his April 29 itinerary on top of ``the two 
fundraiser[s] in San Joe [sic] and LA.'' In this same message, 
she informed the Vice President that ``[w]e've confirmed the 
fundraisers for Monday, April 29th.'' 249 The Vice 
President responded--also that afternoon, by this point still 
only some four hours after having discussed his upcoming trip 
to Los Angeles with Hsing Yun in accepting the Temple's 
invitation to visit--that ``if we have already booked the 
fundraisers, then we have to decline'' invitations to add 
additional stops on the trip.250
---------------------------------------------------------------------------
    \249\ Kimberly H. Tilley, e-mail message to Albert Gore, March 15, 
1996 (Ex. 160).
    \250\ Albert Gore, e-mail message to Kimberly Tilley, March 15, 
1996 (Ex. 160). Both Tilley and David Strauss have said that when the 
Vice President sent this e-mail, he understood the April 29 event to be 
a fundraiser. Strauss deposition, June 30, 1997, p. 83; Tilley 
deposition, pp. 147-48.
---------------------------------------------------------------------------
    The March 15 meeting at the White House thus set in motion 
the process of picking the Hsi Lai Temple as the location for 
Vice President Gore's April 29 fundraiser in Los Angeles. 
Within two weeks, the DNC had confirmed the Temple as the 
location and notified the Office of the Vice President of this 
fact: by April 3, Maura McManimon had already sent a memorandum 
to the White House that described the location of this event as 
``Hsi Lai Temple (Buddhist Temple presided over by Hsing Yun, 
whom the Vice President has met).'' 251
---------------------------------------------------------------------------
    \251\ Maura McManimon, memorandum to Jackie Dycke, April 3, 1996 
(Ex. 161) (outlining for White House luncheon in Los Angeles). The very 
next day, as we have seen, Hsia asked Gorman to open a file entitled 
``Vice President Gore Hsi Lai event April 29, 1996--DNC Fundraiser.'' 
See supra note 160.
---------------------------------------------------------------------------
    Although Vice President Gore had been sufficiently 
concerned about possible foreign policy embarrassments to call 
Hsia for reassurances before meeting Hsing Yun at the White 
House in March 1996, the Vice President appears to have pressed 
ahead with the April 29 Temple event despite the misgivings of 
the NSC and his own national security advisors. As the 
fundraiser approached, the NSC again urged ``great, great 
caution.'' 252 Because of these concerns, the 
Department of State was consulted; it suggested certain 
criteria to govern the event in the interest of preventing 
``political exploitation by people from Taiwan.'' According to 
these rules, the Temple event was not to be billed as a 
``Taiwan'' event but rather one ``for the Chinese community of 
Southern California.'' No ``Taiwan flags or KMT symbols or 
other signs that would be embarrassing for the VP'' could be 
displayed at the Hsi Lai Temple, and ``no Taiwan politician 
should be allowed to exploit the event.'' 253 
Despite the imposition of these criteria, however, the Vice 
President's own national security staff suspected that the 
event's DNC organizers would be unable to meet them. As one 
aide put it, ``I think it may be difficult for the sponsors to 
meet the three criteria suggested by State.'' 254 As 
one of Vice President Gore's national security aides, Bill 
Wise, warned in mid-April, ``I tend to seek the safer course in 
these situations, but I suspect the VP might opt to go ahead'' 
anyway.255
---------------------------------------------------------------------------
    \252\ Robert Suettinger, e-mail message to John Norris, April 19, 
1996 (Ex. 162) (``This is terra incognita to me. Certainly from the 
perspective of Taiwan/China balancing, this would be clearly a Taiwan 
event, and would be seen as such. I guess my reaction would be one of 
great, great, caution. They may have a hidden agenda.''). Gore's 
schedulers had consulted with the Vice President's national security 
staff in order ``to find out if there are any problems/ramifications 
with the use of the Hsi Lai Temple [sic] for the VP's DNC Lunch while 
in LA.'' Jackie Dycke, e-mail message to Tyler S. Beardsley, April 15, 
1996 (Ex. 163); see also Jackie Dycke, e-mail message to Kimberly 
Tilley, April 16, 1996 (Ex. 164) (``Did you ever hear back from Bill 
[Wise] on Hsi Lai Temple?'').
    \253\ John Norris, memorandum to Bill [Wise], April 16, 1996 (Ex. 
165).
    \254\ Bill Wise, handwritten addendum to John Norris memorandum of 
April 16, 1996 (Ex. 165).
    \255\ Id.
---------------------------------------------------------------------------
    It has been suggested--in accounts attributing this 
information to Hsia after stories about the Temple scandal 
began to appear in the press--that Huang had planned to hold 
his April 29 Vice Presidential fundraiser at the Harbor Village 
Restaurant in Monterey Park, California, but that this 
fundraiser was relocated to the Temple ``several days before 
Gore's trip.'' 256 Such claims of a ``last-minute'' 
switch in location are false. As the restaurant's management 
declared in a sworn statement given to the Committee, no one 
ever contacted the Harbor Village about holding an event there 
on April 29, 1996.257 Even had the event initially 
been planned for another site, in fact, no specific location 
for the April 29 fundraiser other than the Hsi Lai Temple was 
ever discussed by or with anyone at the White 
House.258
---------------------------------------------------------------------------
    \256\ See Rich Connell and Alan C. Miller, ``Principals Say Temple 
Event was Explicit Fund-raiser,'' Los Angeles Times, Nov. 3, 1996, p. 
A21 (recounting claims by ``Hsia and others'' that Harbor Village 
Restaurant fundraiser was changed to Temple ``several days before 
Gore's trip'').
    \257\ Diana So, letter to Special Agent Gayle Jacobs, May 20, 1997 
(Ex. 166) (``Per your request, we have looked into our reservation book 
back to the period between February 1996 and May 1996, [and] our record 
shows that there was not any party organized by John Huang, Maria Hsia 
or Matthew Gorman in our restaurant.''). A review conducted at the 
request of the Committee by the Vice Presidential Protective Division 
(VPPD) of the U.S. Secret Service also showed no ``records that would 
relate to a planned or actual visit by the Vice President to the Harbor 
Village Restaurant located in Monterey Park, California. No VPPD record 
reflects a planned or actual visit to that site.'' Ex. 122, p. 2.
    \258\ Hsia at one point apparently possessed a draft invitation on 
what appeared to be DNC letterhead for a DNC event on April 29 at the 
Harbor Village. Invitation to DNC APALC Event (Ex. 167). This document, 
however, was produced to the Committee only by Hsia & Associates, and 
apparently exists nowhere in the files of either the DNC or the White 
House (suggesting that no one beside Hsia ever saw it). Moreover, 
Gorman could not recall when he first saw this document. Indeed, Gorman 
admitted that he may only have seen it after the Gore fundraiser, and 
may indeed only have learned anything about the purported Harbor 
Village plan from Hsia herself--or from newspaper accounts quoting her 
that appeared after the Temple scandal had begun to break in the press. 
See Gorman deposition, pp. 187-90. No other document or testimony 
suggests any other specific location for the April 29 fundraiser apart 
from the Hsi Lai Temple itself, and there is no evidence that any such 
information was ever transmitted to the White House.
---------------------------------------------------------------------------
    It is clear, therefore, that the Hsi Lai Temple was the 
only specific location ever discussed with White House 
officials. Documentary evidence also makes clear that after DNC 
event coordinator Maura McManimon sent her April 3 memorandum 
to the White House specifically identifying the Temple as the 
location for the DNC luncheon, the White House knew that the 
purpose of the April 29 stop in Los Angeles was to raise money. 
On April 10, for example, Harold Ickes sent the Vice President 
another memorandum, advising him that the April 29 event would 
raise $250,000 and would be organized by John 
Huang.259 Ickes specified further that for this 
event, as well as for the event in San Jose that same day, 
``all proceeds [would go] to [the] DNC.'' 260
---------------------------------------------------------------------------
    \259\ Harold Ickes, memorandum to the President and the Vice 
President, April 10, 1996 (Ex. 168), p. EOP 040782 (identifying VPOTUS 
event in Los Angeles on ``29-Apr'' having ``Projected Revenue'' of 
$250,000 and ``Huang'' as the staff contact). Later, this same 
memorandum again listed events for April as including a $250,000 
fundraiser on April 29. Id., p. EOP 040791.
    \260\ Id., p. EOP 040808.
---------------------------------------------------------------------------
    Ickes sent the Vice President another memorandum on April 
25, 1996, once again describing the DNC as planning a 
fundraising event in Los Angeles on April 29--again listing 
John Huang as the organizer, but now describing it in more 
detail as a luncheon and raising its ``projected revenue'' to 
$325,000.261 Within 24 hours of receiving this 
memorandum, Vice President Gore was given briefing materials 
from the DNC informing him that the DNC luncheon he would 
attend on April 29 was at the Hsi Lai Temple.262 The 
conclusion could scarcely have been more obvious.263 
From these memoranda alone, it is clear that Vice President 
Gore understood the Temple event to be a DNC fundraiser.
---------------------------------------------------------------------------
    \261\ Harold Ickes, memorandum to the President and the Vice 
President, April 25, 1996 (Ex. 169), p. SCGA-01213 & -01223 (listing 
fundraiser in sections describing projected April events).
    \262\ DNC Finance, memorandum to Office of the Vice President, 
April 26, 1996 (Ex. 170) (briefing notes prepared by Richard Sullivan, 
John Huang, and Maura McManimon), pp. D 0000027-28 (last set of notes 
phrased in second person [i.e. ``you''] for Vice President Gore 
discussing DNC luncheon at Hsi Lai Temple).
    \163\ Nor is there any question that the Vice President received 
this and other memoranda from Ickes. As Gore's executive assistant 
Heather Marabetti testified, while the Vice President's staff generally 
culled his ``inbox'' in order to remove documents that were not of the 
utmost importance, Ickes' memoranda always ``stayed in the inbox'' so 
as to receive personal Vice Presidential attention. Deposition of 
Heather Marabeti, Sept. 3, 1997, pp. 66-67.
---------------------------------------------------------------------------
    The Vice President's staff also clearly understood that the 
April 29 event at the Temple was a fundraiser, as attested by 
the numerous internal messages and memoranda discussing the 
upcoming April 29 ``fundraiser'' in Los Angeles. On April 11, 
in fact, his staff held a meeting in Kimberly Tilley's office 
to discuss the upcoming ``fundraising events on April 29.'' 
264 Despite later White House claims that the Temple 
fundraiser was ``not a ticketed event,'' 265 at this 
April 11 meeting, Vice Presidential scheduler Jackie Dycke 
handed out copies of a document she had prepared showing that 
the upcoming April 29 luncheon at the Temple in Hacienda 
Heights had a ``ticket price'' of $1,000 to $5,000 a head. 
266 This document was prepared on the basis of 
information given her by the DNC. Throughout the rest of April, 
internal White House e-mail traffic continued to refer to the 
upcoming Los Angeles ``fundraiser,'' 267 the last of 
such references being on April 24, less than a week before the 
event was to occur. 268
---------------------------------------------------------------------------
    \264\ See, e.g., Jackie A. Dycke, e-mail to R. Martinex et al., 
April 10, 1996 (Ex. 171) (``As you know, the VP is going to San Jose 
and LA for DNC fundraising events on April 29. . . . We are going to 
have a meeting at 2:15 p.m. TOMORROW (Thursday) in Kim Tilley's office 
(Room 285) to discuss everything that is out there for this California 
trip.''). This e-mail was sent to no fewer than 11 people on Vice 
President Gore's staff: R. Martinez, John Emerson, Kim Tilley, Julie 
Payne, Karen Skelton, Ellen Ochs, Wendy Hartman, Caren Solomon, Dennis 
Alpert, David Thomas, and Kim Hopkins.
    \265\ See supra text accompanying note 238.
    \266\ Current Schedule for April 29, April 11, 1996 (Ex. 172), p. 
EOP 056497 (describing ``DNC Luncheon in LA/Hacienda Heights: 1000-5000 
head/150-200 people'' and ``Reception in San Jose 150-200 guests/ticket 
price working out''); Deposition of Jacqueline Dycke, Aug. 8, 1997, p. 
66.
    \267\ See, e.g., Ex. 162 (John Norris, e-mail message to Robert 
Suettinger, April 15, 1996) (``Hsing Yun has invited the VP to visit 
the Hsi Lai Temple in LA. Hsing Yun would host a fundraising lunch for 
about 150 people in the VP's honor.'').
    \268\ John B. Emerson, e-mail to Bill [Wise], April 24, 1996 (Ex. 
173) (listing Vice Presidential travel ``LA-- . . . DNC funder for 
lunch; then to San Jose for TV workshop event and funder'').
---------------------------------------------------------------------------
    Everyone on the Vice President's staff involved with the 
Temple event thus knew exactly what was to occur. Despite the 
Vice President's claim that the staffers who accompanied him 
did not know that the event was a fundraiser,269 
Gore staffer Caren Solomon, who accompanied him on this 
trip,270 had been sent an e-mail by scheduler Jackie 
Dycke discussing the upcoming ``fundraiser'' and inviting her 
to the meeting at which Dycke's ``ticket price'' memo had been 
distributed.271
---------------------------------------------------------------------------
    \269\ Albert Gore interview supra note 233 (``I did not know that 
at the time. The people with me did not.'').
    \270\ Schedule for the Vice President, April 29, 1996 (Ex. 174), at 
EOP 007195-96 (showing Solomon on manifest for Marine II, Air Force II, 
and Los Angeles motorcade).
    \271\ Ex. 171 (reference to ``LA . . . DNC fundraising event[ ] on 
April 29'' and invitation to meeting to discuss trip, sent to Solomon). 
The Minority has tried to argue that a line-by-line analysis of the 
briefing notes and the daily schedule given to the Vice President for 
the Temple event--and a comparison between these documents and those 
that accompanied certain other DNC events--would have suggested to him 
that it was not, in fact, a fundraiser. This reasoning is entirely 
spurious. As Deputy Chief of Staff David Strauss testified, the Vice 
President's briefing materials for fundraisers did not always include 
information indicating that they were fundraisers and did not always 
indicate the amount to be raised. See Deposition of David Strauss 
deposition, Aug. 14, 1997, p. 240. Gore scheduler Ladan Manteghi 
testified similarly, conceding that not all fundraisers were described 
as such on the Vice President's schedule and that this schedule would 
usually not include indication of monetary amounts to be collected at 
fundraising events. Deposition of Laden Manteghi, Aug. 26, 1997, p. 33.
---------------------------------------------------------------------------
    Moreover, Vice President Gore was apparently reminded that 
the April 29 luncheon was a fundraiser at the Temple itself. At 
least two of the guests who ate lunch with the Vice President 
in the Temple's dining hall on April 29 recall specifically 
that DNC fundraising was actually discussed from the podium 
after lunch. Daniel Hesse, for example--one of the two INS 
officials invited by Matthew Gorman as a non-paying ``VIP 
guest'' of Hsia--told the Committee that at some point during 
the Vice President's introductions by Don Fowler and Bob 
Matsui, ``one speaker commented that `they had raised X amount 
of dollars.' '' 272 More explicitly, Sherry Shaw, 
who sat at Table 8,273 recalls that one of the 
luncheon speakers took the podium and reassured the assembled 
guests that ``they'' had ``double-checked,'' and that it was 
``O.K. to give contributions at the Hsi Lai Temple.'' 
274 She said that the man who made this comment 
``had a Japanese last name.'' 275 Vice President 
Gore was thus reminded of the event's fundraising purpose at 
the event itself, by the very DNC official who introduced 
him.276
---------------------------------------------------------------------------
    \272\ Memorandum of Interview of Daniel Hesse, Aug. 5, 1997, p. 2.
    \273\ Ex. 132, p. 3. According to this list, Sherry Shaw's husband 
Gary sat at the head table with Vice President Gore. (Shaw is a 
naturalized U.S. citizen from the People's Republic of China, and gave 
$5,000 to the DNC at this Temple event.)
    \274\ Sherry Shaw, sworn statement submitted to the Governmental 
Affairs Committee, Aug. 21, 1997 (Ex. 175). This story of ``double-
checking is generally corroborated by several other sources, among them 
Man Ho, Yi Chu, and Man Ya Shih--who have stated that the Temple had 
been advised prior to the event that the DNC had indicated that the 
Temple could host the luncheon even and that the holding of the event 
would not jeopardize the Temple's tax-exempt status because it was not 
unprecedented to hold such activities at a religious venue.
    Joint Statement of Venerable Man-Ho Shih, Venerable Man-Ya Shih, 
and Venerable Yi-Chu on Behalf of Themselves and the Hsi Lai Temple/Fo 
Kuang Shan Order, Sept. 4, 1997, p. 10 (Ex. 176). According to Man Ho, 
furthermore, Maria Hsia told a press conference after the Vice 
President's visit on April 29, 1996 that the White House had 
specifically approved holding this sort of event at the Temple. See Man 
Ho deposition, pp. 182-83. This account of Hsia's comments at the press 
conference is also corroborated by contemporaneous Chinese-language 
press coverage. See ``Gore visits Hsi Lai Temple on the 20th'' April 
24, 1996 [translation of newspaper article by SA Becky Chan for the 
Governmental Affairs Committee], p. 1 (Ex. 177), (``After being 
briefed, the White House saw no conflict in Gore attending a fund 
raiser at a religious facility.''); Wong Mei, television news broadcast 
[translation and transcription from videotape produced by Hsi Lai 
Temple by SA Becky Chan for the Governmental Affairs Committee] (Ex. 
178) (``After being briefed, the White House saw no inappropriateness 
in a fundraiser held at a religious institution; therefore, the White 
House agreed on Gore's visit.''); see also Memorandum of Interview of 
Anonymous Chinese newspaper reporter, May 16, 1997, p. 2 (giving 
similar account).
    \275\ Ex. 175 (Noting that man who made comments had ``a Japanese 
name''). This presumably identifies the speaker as DNC Treasurer Robert 
Matsui, the only Japanese-American to address the assembled guests and 
the official who introduced Vice President Gore. Representative Matsui, 
however, citing ``constitutional'' considerations, has refused to 
discuss with the Committee any comments he may have made at any point. 
See Stanley Brand, letter to Paul Robinson, June 9, 1997 (Ex. 179).
    \276\ See April 29 Lunch: Event Procedures, undated (``Bob Matsui 
will introduce Vice President after Don Fowler's speach [sic].'') (Ex. 
180); Handwritten note from Hsia & Associates files, undated (Ex. 181) 
(``Order of speeches: (1) M Hsing Yun (2) Don Fallow [sic] (Chairman) 
(3) Bob Mats. (4) VP Gore''). These remarks at the Vice President's 
luncheon may help explain the mysterious disappearance of the videotape 
taken by King & I Productions of the of the April 29 event at the Hsi 
Lai Temple. As Man Ho explained in her testimony before the 
Governmental Affairs Committee, the videographers were told not to 
videotape the speeches after lunch but apparently exceeded their 
instructions. See Man Ho testimony, pp. 176-77. After the company did 
record the speeches however--apparently including the abovementioned 
discussions of DNC fundraising that clearly show the Vice President to 
have known the nature of the Temple event--the Temple may have found it 
necessary to conceal the tape.

           *       *       *       *       *       *       *

---------------------------------------------------------------------------
    In sum, it was or should have been obvious to everyone 
involved, including the Vice President, that the Hsi Lai Temple 
luncheon on April 29, 1996 was a DNC fundraiser. It is also now 
clear that most of the fundraising that occurred in connection 
with the Temple event was illegal--and that the donation-
laundering orchestrated by Maria Hsia and carried out by Temple 
officials in connection with the Vice President's visit was not 
an aberration. Rather, it was part of a longstanding pattern of 
illegality undertaken in support of Democratic candidates in 
national elections that was established at least as early as 
September 1993 with the laundering of donations to the DNC in 
connection with another Vice Presidential event organized by 
Hsia and John Huang. More broadly, the Temple donation-
laundering in 1996 was the culmination of a longstanding 
relationship of mutual assistance between Maria Hsia, John 
Huang, and the Vice President having its origins in the trip to 
Taiwan organized in late 1988 as part of James Riady's agenda 
for the Pacific Leadership Council.277
---------------------------------------------------------------------------
    \277\ This close relationship between Hsia and covered persons 
under the Independent Counsel Act creates a ``political conflict of 
interest'' for the Attorney General that warrants the seeking of the 
appointment of an independent counsel under 28 U.S.C. Sec. 591(c)(1). 
See the section of the report on Charlie Trie and Ng Lap Seng's illegal 
fundraising.





 The China Connection: Summary of the Committee's Findings Relating to 
 Efforts of the People's Republic of China to Influence U.S. Policies 
                             and Elections

                              Introduction

    From its earliest stages, the Committee's investigation 
uncovered instances of political contributions made with 
foreign money. Either contributing or soliciting this money 
have been individuals with business or political ties to the 
PRC, who have escorted PRC officials and businessmen to 
meetings with President Clinton and Vice President Gore, and 
who have otherwise facilitated efforts to shape United States 
policy towards China. The intelligence portion of the 
Committee's investigation sought to determine whether the 
foreign contributions and the PRC ties were mere coincidence, 
or if the PRC was in some way behind any foreign political 
contributions.
    What the Committee learned was derived not from cooperative 
witnesses or the PRC, but from gathering information from our 
law enforcement and intelligence agencies and open sources, and 
piecing it together. Although the Committee received and 
reviewed a vast amount of information, there are nevertheless 
gaps in what the Committee has gathered. And describing these 
gaps might lead to the inadvertent disclosure of certain 
sources and methods used to obtain information about Chinese 
efforts. Mindful of these gaps, the Committee has endeavored to 
report what it has learned faithfully and accurately.
    The Committee's investigation in this area of necessity 
proceeded behind closed doors. Virtually all of the information 
gathered by the Committee was classified, much of it at top 
secret and compartmented levels. The Committee took 
extraordinary steps to protect the information from disclosure, 
including limiting access to the information to Members and a 
very small number of appropriately cleared staff, using secured 
facilities to maintain materials and to hold briefings, 
meetings, and hearings, and acceding to numerous special 
restrictions placed by the intelligence agencies regarding the 
handling of the information. The Committee was also restricted 
as to what could be presented in public hearings because of the 
classified status of much of the relevant information. The same 
restrictions constrain what can be shared in this report.
    Although hampered by time constraints and spotty 
cooperation from some federal agencies, the Committee has 
gathered significant information. The Committee determined from 
U.S. law enforcement and intelligence agencies and open sources 
that the PRC government fashioned a plan before the 1996 
elections and that its goal was to influence our political 
process, ostensibly through stepped-up lobbying efforts and 
also funding from Beijing. Over time, the plan evolved and the 
PRC engaged in much more than simply ``lobbying.'' Indeed, 
discussions took place and actions were taken that suggest more 
than the original plan was being executed, and that a variety 
of PRC entities were acting to influence U.S. elections.
    What follows is a discussion of the Majority staff's work 
and the Committee's findings in this area. The discussion first 
provides context for why the Committee pursued this subject, by 
describing early media accounts of alleged foreign activities 
and briefings provided in 1996 by the FBI to Members of 
Congress and the White House. Next, it addresses in abbreviated 
form some of the significant connections between the campaign 
finance investigation and the Greater China area \1\, including 
the ties specific figures have to the PRC government. It then 
lays out what the Committee learned about the existence of a 
``China plan,'' and about other, possibly-related activities 
undertaken by the PRC government, as well as information 
regarding the implementation of the plan. Throughout the 
discussion, the Committee describes the significance it sees in 
all of this.
---------------------------------------------------------------------------
    \1\ For the purposes of this report, the term ``Greater China'' 
encompasses territories claimed or recently acquired by the PRC, 
including Hong Kong, Macao, and the Republic of China on Taiwan.
---------------------------------------------------------------------------
    Owing to the sensitivity of the subject, the Committee has 
been unable to share with the American people most of the 
documentary or testimonial evidence that supports the following 
discussion, nor can it do so now. Moreover, the Committee will 
be unable to address the subject matter publicly much beyond 
the precise wording of the discussion that follows. However, a 
longer, more detailed, and classified account of the 
Committee's findings has been prepared and will be maintained 
in secure environs.

 Initial Indications of Chinese Efforts to Influence the 1996 Campaigns

    During the investigation's earliest stages, several 
seemingly well-sourced press reports described the fund-raising 
efforts of overseas Chinese in this country and speculated on 
their possible relationships to the PRC. On February 13, 1997, 
the Washington Post first reported a link between foreign 
campaign money and the PRC government.\2\ Citing ``officials 
familiar with the inquiry,'' the article alleged, ``A Justice 
Department investigation into improper political fund-raising 
activities has uncovered evidence that representatives of the 
People's Republic of China sought to direct contributions from 
foreign sources to the Democratic National Committee before the 
1996 presidential campaign.'' The Post observed that criminal 
investigators ``suspected a Chinese connection to the current 
fund-raising scandal because several DNC contributors and major 
fund- raisers had ties to Beijing,'' and identified, in 
particular, Yah Lin ``Charlie'' Trie and John Huang.
---------------------------------------------------------------------------
    \2\ Bob Woodward and Brian Duffy, ``Chinese Embassy Role in 
Contributions Probed,'' Washington Post, February 13, 1997, p. A1.
---------------------------------------------------------------------------
    Other media stories preceding the start of the Committee's 
public hearings in July reported additional details on covert 
Chinese plans to fund political contributions in this country. 
The New York Times on March 13, 1997 wrote that 
``surreptitiously monitored'' conversations between Chinese 
officials here and in Beijing ``suggested that Beijing was 
prepared to take a drastic step: illegally funneling money to 
American politicians.'' \3\ Time reported in March that 
``provocative'' communications among Chinese officials picked 
up by American intelligence ``indicated that front companies 
for the Chinese government might try to funnel cash.'' \4\ Who 
might have directed this? According to the Washington Post, 
``top'' Chinese officials approved plans ``to attempt to buy 
influence with American politicians,'' and the plans continued 
through 1996 and to the present.\5\
---------------------------------------------------------------------------
    \3\ David Johnston, ``U.S. Agency Secretly Monitored Chinese in '96 
on Political Gifts,'' New York Times, March 13, 1997, p. A1.
    \4\ Richard Lacayo, ``What Did China Want?'', Time, March 24, 1997, 
p. 48.
    \5\ Bob Woodward, ``Top Chinese Linked to Plan to Buy Favor,'' 
Washington Post, April 25, 1997, p. A1.
---------------------------------------------------------------------------
    Additional stories indicated the FBI had commenced a 
foreign counterintelligence probe of the matter in 1996, 
briefing six Members of Congress regarding the Bureau's belief 
``that thegovernment of China may try to make contributions to 
Members of Congress through Asian donors.'' \6\ The Bureau later 
briefed a seventh Member in October 1996. The FBI also told the White 
House about the Chinese plan in June 1996, when FBI agents briefed two 
representatives of the National Security Council. The FBI briefings 
described illegal plans for the clandestine funding of American 
political campaigns.
---------------------------------------------------------------------------
    \6\ Brian Duffy and Bob Woodward, ``FBI Warned Six on Hill About 
China Money,'' Washington Post, March 9, 1997, p. A1. See also Lacayo, 
supra, p. 49.
---------------------------------------------------------------------------

    Initial Indications were Consistent with What the Committee was 
 Discovering About Foreign Money Being Funneled into the 1996 Elections

    Early in the investigation, Committee staff discovered a 
number of money trails that led from the DNC and other 
Democratic causes back overseas, and, particularly, to Greater 
China. The trails wend their way from foreign countries through 
one bank account after another, ending up mainly in DNC 
coffers. Committee staff traced some of these trails backwards 
as far as the transaction--generally a wire transfer--that 
brought into the United States funds eventually used to make 
political contributions.\7\
---------------------------------------------------------------------------
    \7\ Although in several cases Committee staff members identified a 
foreign account that served as the source of a contribution to the DNC, 
they could not continue back to the actual trailhead when it was 
located overseas since the Committee held no authority to compel 
production of foreign bank records. Hence, whether a contribution that 
entered the U.S. from an account in China, Hong Kong, Taiwan, Macao, 
Indonesia, or some other country was connected in some way to the PRC 
government could not be determined from an examination of the records.
---------------------------------------------------------------------------
    Committee staff identified several instances of foreign 
money donations connected to six individuals with ties to the 
PRC. As noted below, John Huang, Maria Hsia, Ted Sioeng, and 
James and Mochtar Riady each have been associated in some way 
with the Government of China. The sixth, Yah Lin ``Charlie'' 
Trie, is a business partner of Ng Lap Seng, a Macao businessman 
with alleged ties to the PRC. Trie, who recently was indicted 
and arrested, escorted Wang Jun, head of China's principal arms 
trading company, Polytechnologies, to a February 6, 1996 coffee 
with President Clinton and a meeting the same day with Commerce 
Secretary Ron Brown.
    In 1996, John Huang solicited some $3.4 million in 
contributions to the DNC. Nearly half this amount has been 
returned as the contributions were determined by the DNC to 
have been made with actual or suspected foreign funds. In 
September 1993, Huang wrote three checks to the DNC, each in 
the amount of $15,000, each paid with foreign money. The checks 
were drawn on the accounts of three Lippo Group subsidiaries--
Hip Hing Holdings, San Jose Holdings, and Toy Center Holdings. 
At the time the checks were written, all of the companies were 
losing money and operating in the red. Hearing testimony from a 
Huang coworker indicates the money for the three contribution 
checks came from Lippo accounts in Jakarta.\8\ In short, the 
1993 checks Huang signed were paid with foreign money.
---------------------------------------------------------------------------
    \8\ Testimony of Juliana Utomo, July 15, 1997.
---------------------------------------------------------------------------
    Huang's $45,000 in DNC contributions was made in close 
proximity to occasions when Huang may have arranged for Vice 
President Gore to meet Shen Jueren, the head of a commercial 
enterprise wholly owned and operated by the PRC's Ministry of 
Foreign Trade and Economic Cooperation. Called China Resources 
Holdings, Shen's company has been identified as a PRC 
intelligence-gathering operation; one with reported ties to the 
People's Liberation Army.\9\ On Friday, September 24, 1993--the 
day after Huang wrote the first two $15,000 checks to the DNC--
Huang escorted Shen Jueren to the White House, where Shen met 
with Gore's chief of staff, Jack Quinn, and may have met with 
Gore as well. The following Monday, September 27, 1993, Huang 
wrote another $15,000 check to the DNC. On the same day, at a 
Santa Monica event organized by Huang and Maria Hsia, Shen 
Jueren may have met again with Vice President Gore.
---------------------------------------------------------------------------
    \9\ Nicholas Eftimiades, Chinese Intelligence Operations, p. 80 
(1994). Eftimiades writes that China Resources traditionally has a PRC 
military officer installed as a vice president. It should be noted 
that, in 1993, China Resources purchased a 50% share of the Hong Kong 
Chinese Bank from the Lippo Group.
---------------------------------------------------------------------------
    The Riadys were Huang's patrons and supporters throughout 
his careers at Lippo and later the Department of Commerce and 
the DNC. In fact, James Riady attended a small meeting in the 
Oval Office on September 13, 1995, at which President Clinton 
was asked if he would help Huang move from Commerce to the DNC. 
President Clinton acceded to the request, and by the end of the 
year, Huang became the DNC's vice-chairman of finance, a 
position created especially for him. The Riadys were also for 
many years generous supporters of President Clinton and the 
DNC.
    Maria Hsia was involved in soliciting contributions to the 
DNC that were laundered through several Buddhist monks and may 
have derived from foreign sources. Once the figures had been 
tallied for the April 29, 1996 Hsi Lai Temple fund-raiser 
attended by Vice President Gore, it became apparent that the 
event had not generated the level of contributions expected by 
the DNC. As a result, DNC Finance Director Richard Sullivan 
asked Huang to ``get some California money in.'' \10\ Huang 
turned to Maria Hsia, who engineered a scheme whereby some 
$55,000 was contributed to the DNC by temple monastics who, in 
turn, were reimbursed out of the Temple's general expense 
account. The source of the Temple's money is believed to be 
Buddhist devotees and may derive from overseas.
---------------------------------------------------------------------------
    \10\ Deposition of Richard Sullivan, June 25, 1997, pp. 45-46.
---------------------------------------------------------------------------
    Ted Sioeng was one of the DNC's largest contributors during 
the 1996 federal election cycle. He is also distinguished as 
the DNC donor whose contributions are linked perhaps the most 
clearly to foreign sources. Sioeng, his family, and his 
business enterprises contributed $400,000 to the DNC in 1995 
and 1996. Through a review of bank records, the Committee has 
determined that at least half, or $200,000, of the DNC 
contributions was funded by transfers from overseas accounts. 
In each case, money was wired into a Sioeng family account in 
the U.S. from the account of a Hong Kong company. Although the 
Committee knows little about the foreign companies that funded 
Sioeng's operations in this country, one of the businesses, 
Mansion House Securities, is believed to be owned in part by 
the Chinese government.
    Yah Lin ``Charlie'' Trie also solicited large amounts of 
foreign money. In Trie's case, the cause was the Presidential 
Legal Expense Trust, set up to help satisfy the legal bills 
incurred by President and Mrs. Clinton. In March 1994, Trie 
brought nearly half a million dollars in small-denomination 
checks and money orders to the law office administering the 
Trust. The checks and money orders, it turned out, were written 
by followers of a Buddhist Sect called Suma Ching Hai. Many of 
the followers were reimbursed in the amount of their 
contributions. Ultimately, the reimbursement money came from 
accounts in Taiwan and Cambodia.
    None of the aforementioned individuals would speak to the 
Committee about their fund-raising activities. Sioeng left the 
country soon after the campaign finance scandal broke. The 
Riadys likewise have stayed out of the United States, and 
declined to meet with Committee staff working in Indonesia. 
Huang and Hsia have remained in this country but have both 
asserted their Fifth Amendment privilege against self-
incrimination. Trie initially left the country but recently 
returned and was arrested. He was indicted on January 28, 1998 
and charged on 15 counts, including conspiracy to defraud the 
DNC and the United States. The indictment charges Trie with 
participating in the conspiracy by, among other things, 
purchasing access to high level government officials through 
contributions made to the DNC.

                 Campaign Contributors' PRC Connections

    Information obtained by the Committee reveals close ties 
between the PRC and many of the individuals who produced or 
facilitated foreign campaign contributions. And these 
individuals--Ted Sioeng, Maria Hsia, John Huang, and James and 
Mochtar Riady--interacted with one-another with some frequency. 
Their paths appear to have crossed most often when they were 
engaged in fund- raising or contributing money to the 
Democratic National Committee.
    Ted Sioeng.\11\ The Committee has learned that Sioeng 
worked, and perhaps still works, on behalf of the Chinese 
government. Sioeng regularly communicated with PRC embassy and 
consular officials at various locations in the United States, 
and, before the campaign finance scandal broke, he traveled to 
Beijing frequently where he reported to and was briefed by 
Chinese communist party officials.
---------------------------------------------------------------------------
    \11\ See also chapter of report on Ted Sioeng.
---------------------------------------------------------------------------
    The Committee is aware of a handful of activities Sioeng 
undertook at the request of or with support from the PRC 
government. Perhaps the most significant of these activities 
was Sioeng's purchase in late 1995 of The International Daily 
News, a Chinese-language newspaper based in Los Angeles. Prior 
to Sioeng's purchase of a controlling interest in the paper, 
The International Daily News had a pro-Taiwan slant. Sioeng 
changed that by bringing in new people and altering the paper's 
ideology to conform with the views of the PRC government. After 
purchasing the paper, Sioeng subsidized it heavily, which was 
necessary due to its operating losses. Sioeng financed the 
purchase and subsidization of the paper through transfers of 
funds from Hong Kong accounts.
    Sioeng and his family and business interests played a large 
role in the 1996 elections. They spent over $550,000 on 
political campaigns and organizations in 1995 and 1996, 
including $400,000 on the Democratic National Committee and 
$50,000 on the National Policy Forum. As discussed in greater 
detail elsewhere,\12\ the Committee has subpoenaed and reviewed 
voluminous bank and business records relating to Sioeng, his 
family, and their businesses. The Committee has traced much of 
the money for these contributions to bank accounts in Hong Kong 
but no further. Hence, the Committee does not know whether 
these contributions derived from or were directed by the PRC 
government. Records reveal that the PRC consulate in Los 
Angeles paid Sioeng's Hollywood Metropolitan Hotel $3,000 by a 
check dated March 22, 1996.\13\ The Committee has concluded 
that the PRC consulate provided Sioeng the money for the 
purpose of making or reimbursing a political contribution to 
Dr. Daniel Wong, a Republican who ran for the California State 
Assembly. It appears that the PRC money was in fact used to 
make or reimburse a contribution to Wong in the amount of 
$5,000.\14\ Committee staff have no means to determine what 
other funds might have been provided to Sioeng by the PRC 
government through transfers among foreign accounts.
---------------------------------------------------------------------------
    \12\ Id.
    \13\ $3,000 Bank of China check from the Consulate General of the 
People's Republic of China to the Hollywood Metropolitan Hotel, March 
22, 1996. (Ex. 1).
    \14\ $5,000 Grand National Bank check from Sundari, Sandra, and 
Laureen Elnitiarta to Dr. Daniel Wong, February 15, 1996. (Ex. 2).
---------------------------------------------------------------------------
    Ted Sioeng controls a business empire estimated to be worth 
approximately $500 million. The Committee has learned that 
Sioeng considered spending a portion of his considerable wealth 
to support lobbying efforts approved by PRC officials.
    Maria Hsia.\15\ The Committee has learned that Hsia has 
been an agent of the Chinese government, that she has acted 
knowingly in support of it, and that she has attempted to 
conceal her relationship with the Chinese government. The 
Committee has also learned that Hsia has worked in direct 
support of a PRC diplomatic post in the U.S.
---------------------------------------------------------------------------
    \15\ See also chapter of report on Maria Hsia and the Hsi Lai 
Temple.
---------------------------------------------------------------------------
    As described elsewhere in the report, Hsia has been a 
significant figure in the Committee's investigation, and the 
Committee has conducted numerous interviews and depositions and 
examined voluminous records relating to her. Hsia first met 
Vice President Gore in the late 1980s, and organized a trip he 
attended to Taiwan in 1989. She has raised money for the 
Democratic Senatorial Congressional Committee (``DSCC''), and 
lobbied to have DSCC contributions earmarked for then-Senators 
Gore and Simon. On September 27 1993, she attended the Santa 
Monica, California event with John Huang where Shen Jueren may 
have met Vice President Gore. In connection with that meeting, 
Hsia contributed $5,000 in money illegally laundered through 
the Hsi Lai Temple.
    Hsia has a long standing relationship with the Hsi Lai 
temple. She, with Huang, organized the April 1996 fund-raiser 
held there and attended by Vice President Gore, and laundered 
thousands of dollars illegally through temple clerics in 
connection with the event. The Committee has identified over 
$130,000 in political contributions illegally laundered through 
temple monastics at Hsia's direction.
    The Committee has received information that Hsia worked 
with Ted Sioeng and John Huang to solicit contributions from 
Chinese nationals in the United States and abroad for 
Democratic causes. Hsia and Huang, in particular, worked 
together to identify non-U.S. citizens overseas who might 
contribute money to Democratic causes.
    John Huang.\16\ Since well before its hearings began, the 
Committee focused on John Huang. The goal was to understand why 
an executive at a small California bank (owned by a large 
Indonesian conglomerate), who raised money prolifically for the 
Democratic party and was rewarded with a political appointment 
at the Department of Commerce, was so often and well received 
by President Clinton and his staff. The Committee's interest 
was further piqued by the fact that to date, the DNC has 
returned half of the money Huang raised in 1996. The DNC has 
been unable to verify that these funds derived from a legal, 
domestic source.
---------------------------------------------------------------------------
    \16\ See also chapters of report on the Lippo Group, John Huang at 
the Department of Commerce, and Huang's hiring by the DNC.
---------------------------------------------------------------------------
    The Committee has examined in detail Huang's activities at 
Lippo, Commerce, and the DNC. A single piece of unverified 
information shared with the Committee indicates that Huang 
himself may possibly have had a direct financial relationship 
with the PRC government. The Committee's information is not 
corroborated, but nevertheless it adds to concerns regarding 
Huang's activities at Commerce, which were a focus of Committee 
hearings in July 1997 and are discussed elsewhere in this 
report.\17\
---------------------------------------------------------------------------
    \17\ See chapter of report on John Huang at the Department of 
Commerce.
---------------------------------------------------------------------------
    James and Mochtar Riady.\18\ The Committee has learned from 
recently-acquired information that James and Mochtar Riady have 
had a long-term relationship with a Chinese intelligence 
agency. The relationship is based on mutual benefit, with the 
Riadys receiving assistance in finding business opportunities 
in exchange for large sums of money and other help. Although 
the relationship appears based on business interests, the 
Committee understands that the Chinese intelligence agency 
seeks to locate and develop relationships with information 
collectors, particularly persons with close connections to the 
U.S. government.
---------------------------------------------------------------------------
    \18\ See also chapters of report on the Lippo Group, John Huang at 
the Department of Commerce, and Huang's hiring by the DNC.
---------------------------------------------------------------------------
    The Riadys are central figures in the campaign finance 
scandal for several reasons. First, they have close ties with 
President Clinton. James and Mochtar Riady have known President 
Clinton since the mid-1980s when they held a controlling 
interest in the Worthen Bank. The Riadys have visited Clinton 
in the White House on several occasions. Second, the Riadys 
were heavy contributors to the DNC and other Democratic causes. 
They made and solicited significant contributions directly in 
connection with the 1992 elections; subsequently, various Riady 
businesses, associates, and employees did likewise. Third, they 
were the employers of John Huang, whom they helped place at the 
Department of Commerce, then the DNC.

 The Committee Learns of a ``China Plan'' and Other, Possibly Related 
                                Efforts

    The foregoing indicates that large amounts of money were 
funneled from accounts in Greater China into the DNC by 
individuals who had close ties to the PRC. This activity takes 
on greater import when viewed in light of the fact that the PRC 
government had developed and implemented plans to influence the 
U.S. political process before most of the aforementioned 
contributions were made. The Committee first learned of these 
efforts early in the investigation.\19\
---------------------------------------------------------------------------
    \19\ Senator Thompson made a public statement on July 8, 1997, 
disclosing the existence of a China plan and related activities. The 
CIA and FBI edited the statement and authorized its public disclosure.
---------------------------------------------------------------------------
    To understand the plan one needs to appreciate the context 
from which it emerged. The plan is intertwined with the state 
of America's relationship in recent years with the PRC and the 
Republic of China on Taiwan. Although the United States 
maintains no official ties with the government on Taiwan, 
Taipei's views have long influenced U.S. diplomatic relations 
with the PRC. This is largely because Beijing considers Taiwan 
a rogue province and suspects it of seeking independence from 
the mainland.
    In May 1995, Lee Teng-hui, President of the Republic of 
China on Taiwan, was granted a visa to visit the United States. 
Caught off-guard, Beijing was quick to voice its outrage and to 
engage in a series of overt retaliatory measures. China 
suspended arms control talks with Washington, postponed cross-
Strait talks with Taiwan, canceled official visits to and from 
the United States, amassed troops along the coast facing 
Taiwan, and recalled its ambassador to the United States.
    But not all of China's reactions were overt. Secretly, 
Beijing worked to prevent similar diplomatic surprises from 
occurring in the future. After President Lee's visit, high-
level PRC government officials devised plans to increase 
China's influence over the U.S. political process and to be 
implemented by PRC diplomatic posts in the U.S.
    Some of Beijing's efforts appear relatively innocuous, 
involving learning more about Members of Congress, redoubling 
PRC lobbying efforts in the U.S., establishing closer contacts 
with the U.S. Congress, and funding from Beijing. But the 
Committee has learned that Beijing expected more than simply 
increased lobbying from its diplomatic posts in the U.S. 
Indeed, as the Committee examined the issue in greater detail, 
it found a broad array of Chinese efforts designed to influence 
U.S. policies and elections through, among other means, 
financing election campaigns.
    The Committee's understanding of the plan derives from U.S. 
law enforcement and intelligence agencies, open sources, and 
the Committee's own investigative efforts. It is important to 
understand that there is no consensus among the agencies 
concerning where the plan ends and other PRC activities in this 
country begin. The Committee has learned in sobering detail of 
a wide range of covert PRC efforts in the U.S. and overseas 
designed to influence elections in this country. Many of these 
activities may or may not have been part of a single, 
coordinated effort. Regardless, a coordinated approach may have 
evolved over time. Other efforts, though undertaken by PRC 
government entities, have been characterized as rogue 
activities. Such fine distinctions fall beyond the scope of 
this report.

 Evidence Emerges that the Plan Was Implemented and Other Efforts Were 
                         Undertaken by the PRC

    The Committee has identified specific steps taken in 
furtherance of the plan. Implementation of the plan has been 
handled by PRC government officials and individuals enlisted to 
assist in the effort. Activities in furtherance of the plan 
have occurred both inside and outside the United States.
    Through the plan and related efforts, the PRC government 
aimed to increase China's influence in the United States. Some 
of the efforts were typical, appropriate steps foreign 
governments take to communicate their views on United States 
policy. They included retaining lobbying firms, inviting more 
Congresspersons to visit China, and attempting to communicate 
Beijing's views through media channels in the United States. 
However, other efforts appear illegal under U.S. law. Although 
most discussion of PRC activities focused on Congress, the 
Committee's investigation suggests that China's efforts 
involved the 1996 Presidential race and state elections as 
well. The Committee has received information that the 
government of China may have allocated millions of dollars in 
1996 alone to achieve its objectives.
    The Committee has learned of several activities China 
undertook to influence our political processes during the 1996 
election cycle. Some of these include:
           A PRC government official devised a seeding 
        strategy, under which PRC officials would organize 
        Chinese communities in the U.S. to encourage them to 
        promote persons from their communities to run in 
        certain state and local elections. The intent behind 
        the seeding program was to develop viable candidates 
        sympathetic to the PRC for future federal elections;
           The Government of China established the 
        ``Central Leading Group for U.S. Congressional 
        Affairs'' to coordinate China's lobbying efforts in 
        this country. President Jiang Zemin approved the 
        Group's creation;
           A U.S. agency received fragmentary reporting 
        relating to China's efforts to influence the U.S. 
        Presidential election. The information is considered 
        part of a criminal investigation and cannot be 
        discussed with the Committee further;
           PRC intelligence officials discussed 
        increasing China's lobbying efforts in the United 
        States and planned to raise millions of dollars to 
        support those efforts. PRC officials met with one or 
        more Chinese businessmen residing outside of mainland 
        China to discuss raising the money and how it would be 
        spent;
           PRC officials discussed financing American 
        elections through covert means;
           A politically-sensitive transfer of funds 
        may have occurred to a PRC-controlled account in the 
        U.S.;
           A PRC official involved in a discussion 
        concerning Chinese lobbying efforts indicated an 
        awareness that money placed in U.S. banks can be traced 
        by U.S. law enforcement officials;
           A PRC official encouraged Chinese-Americans 
        to make political contributions and contact their 
        Congressmen; and
           Beijing was angered that its diplomatic 
        officials in the U.S. failed to forewarn the Mainland 
        about the burgeoning campaign finance scandal and that 
        those officials were not aware of Chinese who went to 
        Washington, D.C. for the purpose of lobbying or making 
        political contributions.
    These activities show that several different PRC government 
entities joined the effort to involve themselves in U.S. 
elections and that the PRC went well beyond lobbying to achieve 
its goals. Whether or not all of this was contemplated at the 
outset by high-ranking Chinese officials or simply evolved over 
time, it nevertheless happened, and in a clandestine manner.

                                Summary

    It is clear that illegal foreign contributions were made to 
the DNC and that these contributions were facilitated by 
individuals with extensive ties to the PRC. The original 
sources of many of these contributions were bank accounts in 
the Greater China area.
    It is also clear that well before the 1996 elections, 
officials at the highest levels of the Chinese government 
approved of efforts to increase the PRC's involvement in the 
U.S. political process. There are indications that the plan or 
parts of the plan and possibly-related PRC activities were 
implemented covertly in this country. The individuals who 
facilitated the contributions have either elected to take the 
Fifth Amendment or flee the country. Beijing has denied the 
Committee's request for assistance. Moreover, after its 
hearings concluded, the Committee learned that the Chinese 
leadership was pleased no PRC agencies have yet been implicated 
in the campaign finance scandal.
    While the Committee still cannot determine conclusively 
whether the PRC funded, directed, or encouraged the illegal 
contributions in question, all of the information related 
herein, taken together, constitutes strong circumstantial 
evidence that the PRC government was involved. In addition, 
there are indications that Chinese efforts in connection with 
the 1996 elections were undertaken or orchestrated, at least in 
part, by PRC intelligence agencies. It is likely that the PRC 
used intermediaries, particularly with regard to political 
contributions. This is so because only U.S. citizens or legal 
permanent residents can contribute lawfully to political 
parties and campaigns. Moreover, the use of businesses and 
individuals as intermediaries is increasingly common among 
Chinese intelligence and military organizations.\20\ Given the 
way the PRC exercises control over certain businesses and 
individuals, it hardly would be surprising to learn that the 
PRC directed overseas Chinese to contribute to particular 
parties or candidates. In addition to furthering the goals of 
the PRC plan, such actions would seem within the capabilities 
of a government able to implement private espionage and 
intelligence-gathering activities.
---------------------------------------------------------------------------
    \20\ Eftimiades, supra, pp. 27-43. It is also well-established that 
the PRC wields influence over a wide range of entities and individuals, 
many of whom conduct business directly with the PRC. One area in which 
the PRC employs businesses is economic espionage. State-owned or 
controlled companies--particularly those controlled by the People's 
Liberation Army--are used increasingly as part of a Chinese network to 
acquire Western technology in the United States and other countries. 
Jane's Defense Weekly, December 17, 1997, p. 1. Another area is 
intelligence-gathering, where the PRC government has attempted to 
cultivate members of the overseas Chinese community as information 
sources.
---------------------------------------------------------------------------
    Throughout its investigation, the Committee has firmly 
believed it is important for the American people to be made 
aware of as much of the information set forth in this section 
of the report as possible. Yet, getting to the bottom of such 
matters and also sharing the Committee's findings has been an 
extremely difficult process. The first difficulty derives from 
the nature of the information itself. Some of the information 
provided to the Committee requires the protection of sources 
and methods used to gather it, which has placed significant 
limits on the Committee's ability to discuss these matters 
publicly. That protection is a legitimate concern, but it has 
come at the cost of curtailing public knowledge and debate. The 
Justice Department for the most part would not reveal matters 
that were the subject of its ongoing criminal investigation. 
While Justice's concern is understandable, it limits 
Congressional oversight and makes it even more important that 
prosecutorial decisions be handled in a way that ensures public 
confidence.
    The second difficulty is more complex and, ultimately, more 
troublesome. The Committee dealt at length with various law 
enforcement and intelligence agencies in developing portions of 
the information set forth above and observed a recurring 
problem: the failure to share relevant, classified information. 
The failure meant that no one agency had a complete picture of 
all the relevant information in a particular area and, indeed, 
a given agency might be unaware of all the relevant information 
it held within its various sections or departments. The 
clearest example of this involved the FBI and the Justice 
Department. In two major instances FBI headquarters and Justice 
were unaware of crucial information located in FBI field office 
files, information months and sometimes years old. The 
information came to light only as a result of persistent 
Committee probing. These lapses are currently the subject of a 
Department of Justice Office of Inspector General (OIG) 
investigation. The Committee has cooperated with OIG 
investigators and will continue to monitor their progress. The 
inability of the Bureau to locate certain intelligence 
information denied the campaign finance criminal task force 
timely access to important classified materials. By the time 
the information was surfaced and passed along, some or all of 
it might have grown stale.
    It is the Committee's hope that, for the sake of future 
criminal investigations, steps are taken by intelligence and 
law enforcement agencies to ensure that such lapses do not 
reoccur. In that regard, the Committee intends to review any 
recommendations made by the OIG on improving how such 
information is shared.





  Charlie Trie's and Ng Lap Seng's Laundered Contributions to the DNC

                              Introduction

    Former Little Rock, Arkansas, restaurateur Yah Lin 
``Charlie'' Trie and Macau-based businessman Ng Lap Seng 
collaborated in a scheme to contribute hundreds of thousands of 
dollars in foreign funds to the DNC. Ng wired over one million 
dollars from accounts he maintains in Macau and Hong Kong to 
accounts maintained by or accessible to Trie in Little Rock and 
Washington, D.C. Although Trie held himself out as an 
international trader (and, in fact, actively sought to develop 
an international trading business he called Daihatsu 
International Trading Corporation), he was never successful. 
Trie's bank records and tax returns reveal that he received 
little or no income from sources other than Ng Lap Seng.
    Although he failed to establish a successful, income-
generating international trading business, Trie, his wife and 
his businesses managed to contribute a total of $220,000 to the 
DNC between 1994 and 1996. Trie and Ng also reimbursed the 
contributions made by a number of other DNC contributors who 
were recruited by Trie in order to further disguise the 
ultimate source of the contributions. As Trie earned little 
money through his own business activities, the Committee 
concludes that Trie used the foreign-source funds wired from Ng 
to make his (and his wife's and businesses') DNC contributions 
and to reimburse the conduit contributors. The Justice 
Department indicted Trie for these illegal activities on 
January 28, 1998.1
---------------------------------------------------------------------------
    \1\ Indictment, United States v. Yah Lin ``Charlie'' Trie & Yuan 
Pei ``Antonio'' Pan, Criminal No. 98-0029 (D.D.C.), Jan. 28, 1998; see 
also Roberto Suro & Toni Locy, ``Indictment Returned in Fund Probe; 
`Charlie' Trie Charged With Funneling Foreign Money to Democrats,'' 
Washington Post, Jan. 29, 1998, p. A1.
    After the Committee prepared its report, Trie returned to the 
United States to surrender to FBI agents on February 3, 1998. He was 
subsequently arraigned in federal district court.
---------------------------------------------------------------------------
    Trie's contributions purchased access for himself and Ng to 
the highest levels of our government. Documents produced by the 
White House and DNC reveal that both Trie and Ng attended DNC-
sponsored events with President Clinton and made a number of 
visits to the White House. The Committee also concludes that 
Trie's contributions and fundraising purchased his otherwise 
unwarranted appointment in 1996 to the Commission on U.S.-
Pacific Trade and Investment Policy.
    While a review of subpoenaed records of Trie's businesses 
and bank accounts, interviews with individuals familiar with 
Trie and his businesses, and testimony of two conduit 
contributors have revealed much about the activities of Trie 
and Ng, but since the Committee's subpoena power ``stops at the 
Pacific Ocean line,'' it is possible that this information 
merely scratches the surface and further details remain 
undiscovered.2
---------------------------------------------------------------------------
    \2\ Testimony of Jerry Campane, July 29, 1997, p. 28.
---------------------------------------------------------------------------
    Moreover, virtually all key witnesses have been unavailable 
to Committee investigators. Trie himself fled the country and, 
in an interview with NBC News in June 1997, boasted that 
Congressional investigators would ``never find me.'' 
3 Committee investigators traveling in Asia 
successfully reached Ng through a surprise call to his cellular 
phone, but Ng refused to meet with or answer the investigators' 
questions, and instead simply referred them to his attorney. A 
number of individuals with knowledge of Trie and Ng's 
activities have also asserted their Fifth Amendment right not 
to testify without immunity. For instance, Trie's Arkansas-
based secretary/bookkeeper, Maria Mapili, who made handwritten 
explanatory notes on the statements of a bank account 
maintained by Trie's company, Daihatsu International Trading 
Corporation,4 asserted the Fifth Amendment and 
refused to decipher her notes for the Committee. On July 23, 
1997, the Committee voted to immunize Keshi Zhan, Ng's 
Washington-based bookkeeper, and soon thereafter called her for 
deposition. However, because Zhan demonstrated an unwillingness 
to testify with any reasonable degree of candor (even with 
respect to the relatively noncontroversial issues on which she 
was questioned), the Committee elected to terminate her 
deposition and allow the Department of Justice to proceed with 
its investigation and possible criminal prosecution of 
Zhan.5
---------------------------------------------------------------------------
    \3\ See Leslie Wayne, ``State Department Asks China to Help Find 
Former Fund-Raiser,'' New York Times, July 24, 1997, p. A21. The 
government of the People's Republic of China also prohibited Committee 
investigators traveling in Asia from entering the country to find Trie.
    \4\ See Maria Mapili's explanatory notes on Daihatsu International 
Trading Corporation's First Commercial Bank statements (Ex. 1); see 
also Memorandum of Interview of Charlotte Duncan, July 9, 1997, p. 1 
(``Mapili would write where each deposit came from and what each 
payment was for.'').
    \5\ In order to avoid any conceivable ``taint'' on a future 
prosecution of Zhan, the Committee (1) terminated Zhan's deposition 
before questioning her about those subjects that would most likely be 
the subject of any possible future Department of Justice prosecution 
and (2) directed the court reporter not to even transcribe her 
testimony.
---------------------------------------------------------------------------
    Finally, among the fifteen counts in the Justice 
Department's January 28, 1998 indictment of Trie was a count 
alleging that Trie obstructed the Committee's investigation by 
instructing unnamed individuals to ``alter, destroy, mutilate, 
conceal and otherwise fail to produce documents responsive to a 
subpoena issued by the United States Senate Committee on 
Governmental Affairs.'' 6 These allegations suggest 
that Trie's employees withheld documents responsive to the 
Committee's February 13, 1997 subpoena to Daihatsu 
International Trading Corporation that could have furthered the 
Committee's investigation of Trie and Ng's 
activities.7
---------------------------------------------------------------------------
    \6\ Indictment, United States v. Yah Lin ``Charlie'' Trie & Yuan 
Pei ``Antonio'' Pan, Criminal No. 98-0029 (D.D.C.), Jan. 28, 1998, p. 
36.
    \7\ FBI agents acting at the direction of federal prosecutors 
investigating Trie's activities executed search warrants at Trie's 
Watergate office and Trie's home and office in Little Rock and 
discovered documents that had not previously been produced to the 
Committee.
---------------------------------------------------------------------------

                 Background on Yah Lin ``Charlie'' Trie

    Yah Lin ``Charlie'' Trie was born August 15, 1949, in 
Taiwan.8 Trie is a United States 
citizen.9 He is married to Wang Mei Trie and has one 
daughter.10
---------------------------------------------------------------------------
    \8\ See ``Biographic Information'' form submitted by Trie to the 
Immigration and Naturalization Service (Ex. 2).
    \9\ See Trie's United States Passport (Ex. 3).
    \10\ See ``Bio-Data of Yah Lin Trie'' (Ex. 4); Ex. 2.
---------------------------------------------------------------------------
    Trie immigrated to the United States, and in the late 
1970's settled in Little Rock, Arkansas, where his older 
sister, Dailin Outlaw, ran a number of Chinese 
restaurants.11 Trie worked with his sister until 
1984, when she left Little Rock and turned over to Trie control 
of a restaurant she called (and Trie subsequently continued to 
call) Fu Lin.12
---------------------------------------------------------------------------
    \11\ See Kevin Sack, ``From Restaurateur to Intimate at the White 
House,'' New York Times, Jan. 27, 1997, p. A8.
    \12\ See Memorandum of Interview of Dewey Glasscock, July 1, 1997, 
p. 2.
---------------------------------------------------------------------------
    Fu Lin flourished during the latter half of the 1980's, 
when it became a popular gathering place for local political 
officials.13 Local patrons described Trie as a 
gracious host who befriended many important customers and 
assisted favored political candidates by hosting fundraisers at 
his restaurant.14
---------------------------------------------------------------------------
    \13\ See Memorandum of Interview of James Dailey, June 10, 1997, p. 
1.
    \14\ See Memorandum of Interview of Julia Hughes Jones, June 19, 
1997, p. 2; Memorandum of Interview of Martha Shaffner, June 10, 1997, 
p. 1; Dailey interview, p. 4; Kevin Sack, ``From Restaurateur to 
Intimate at the White House,'' New York Times, Jan. 27, 1997, p. A8.
---------------------------------------------------------------------------
    Among the politicians who frequented Fu Lin and became 
friends with Trie was then-governor Bill Clinton. Trie was a 
strong and vocal Clinton political supporter throughout the 
President's years as governor,15 and Trie was 
extremely proud when his friend Bill Clinton became President 
of the United States.16
---------------------------------------------------------------------------
    \15\ See Trie's contributions to Clinton's 1982 Arkansas Governor's 
race and related correspondence (Ex. 5); Shaffner interview, p. 3; 
Dailey interview, p. 4.
    \16\ See Shaffner interview, p. 3.
---------------------------------------------------------------------------
    By the early 1990's, Trie began to tire of the restaurant 
business and considered exploring international trading 
opportunities with China.17 Trie mentioned his ideas 
to Governor Clinton who told Trie that he thought that Trie's 
idea was a good one because China was evolving politically and 
would soon be expanding its markets.18 Clinton 
encouraged Trie to get in on the ground floor and develop a 
Chinese-American trading business.19 Trie then sold 
Fu Lin and focused exclusively on cultivating various trading 
opportunities.20
---------------------------------------------------------------------------
    \17\ See Memorandum of Interview of Julia Hughes Jones, June 19, 
1997, pp. 2-3 ; Memorandum of Interview of Jody Webb, June 20, 1997, p. 
2.
    \18\ See Webb interview, p. 2.
    \19\ See id.
    \20\ See id.
---------------------------------------------------------------------------
    Trie formalized his new Asian trading efforts by 
incorporating a company he called Daihatsu International 
Trading Corporation.21 In early November 1992, Trie 
received from newly elected President Bill Clinton a letter of 
congratulations and encouragement for Trie's new 
company.22 Daihatsu, however, never developed into a 
successful international trading operation. In one of 
Daihatsu`s earliest business ventures, Trie sought to 
coordinate the Chinese manufacture of a unique wrench and the 
subsequent sale of that wrench to American chain stores such as 
Wal-Mart.23 This venture ultimately proved 
unsuccessful, and Trie lost his investment--the better part of 
the profits from the sale of Fu Lin.24 Trie later 
pursued trading opportunities involving products as varied as 
safe deposit boxes and chickens, but few, if any, of these 
ventures ever developed into successful business 
deals.25 Trie`s most profitable export venture 
(selling cotton to a manufacturing plant in China) brought Trie 
a broker's commission of only $30,000.26
---------------------------------------------------------------------------
    \21\ See Daihatsu information summary (Ex. 6).
    \22\ Letter from Bill Clinton to Yah Lin ``Charlie'' Trie, November 
10, 1992 (Ex. 7).
    \23\ See Memorandum of Interview of Lorin Fleming, May 30, 1997, p. 
1.
    \24\ See id., pp. 1-3; Glasscock interview, p. 3.
    \25\ See id.
    \26\ See Webb interview, p. 2.
---------------------------------------------------------------------------
    Trie also incurred ``extraordinary'' expenses promoting 
these ultimately unsuccessful international trading 
efforts.27 For instance, on a number of occasions, 
Trie escorted delegations of Little Rock businesses and 
governmental officials to various cities in China in an effort 
to establish business ties that would benefit 
Daihatsu.28 Those traveling with Trie on these trips 
explained to the Committee that Trie, who insisted on staying 
in expensive hotels and eating at the best restaurants, paid 
for all expenses associated with the trips except air 
fare.29 Trie's expenses are reflected in his monthly 
credit card payments of often close to $20,000.30 
Trie also routinely withdrew thousands of dollars--in cash--
from his personal and business bank accounts.31
---------------------------------------------------------------------------
    \27\ Testimony of Jerry Campane, July 29, 1997, p. 33.
    \28\ See, e.g., Letter from Julia Hughes Jones to Charlie Trie, 
October 12, 1992, thanking Trie for including her in the ``Arkansas 
delegation'' on a recent China trip (Ex. 8).
    \29\ See Jones interview, p. 2; Fleming interview, p. 1.
    \30\ See Memorandum of Interview of Charlotte Duncan, July 9, 1997, 
p. 2; see also, e.g., Daihatsu expense reports indicating substantial 
payments to a number of credit cards (Ex. 9).
    \31\ Testimony of Jerry Campane, July 29, 1997, p. 34.
---------------------------------------------------------------------------
    The combination of Trie's significant expenses and his 
inability to complete successful international trading deals 
meant that ``Daihatsu made little or no money at any time.'' 
32 Daihatsu's corporate tax returns for 1992 through 
1995 indicate that its gross income was never more than 
$250,000, its net income was negligible, and Trie's income as 
president of the company was approximately $30,000 per 
year.33 The Committee also determined that ``Trie 
and his wife had very little income from other sources.'' 
34
---------------------------------------------------------------------------
    \32\ Id., p. 12.
    \33\ See Daihatsu's tax returns, 1992-95 (Ex. 10); Duncan 
interview, p. 2.
    \34\ Testimony of Jerry Campane, July 29, 1997, p. 12.
---------------------------------------------------------------------------
    In early 1994, Trie submitted an ultimately unsuccessful 
bid on behalf of himself and two partners to buy and refurbish 
the dilapidated Camelot Hotel in downtown Little 
Rock.35 Trie's partners were Mana Han Xiao, owner of 
the Haili Restaurant in the Capitol Hotel in Beijing (and, one 
witness believed, a relative of Trie 36), and Ng Lap 
Seng.37 None of the Little Rock residents 
interviewed by the Committee who were involved in the 
preparation of Trie's bid knew specifically how or why Ng 
became involved in the Camelot project.38 The 
Committee has also been unable to uncover any evidence of prior 
business dealings between Trie and Ng or of when and how Trie 
and Ng first met.
---------------------------------------------------------------------------
    \35\ See Cover to ``Rebirth of the Camelot--A Proposed Four Star 
Hotel'' submitted in the name of Daihatsu International by Trie and his 
partners (Ex. 11).
    \36\ See Webb interview, p. 3.
    \37\ See Ex. 11.
    \38\ See Webb interview, p. 3.
---------------------------------------------------------------------------
    In September 1994, Trie opened a branch office of Daihatsu 
in Washington, D.C., in a leased residential cooperative 
apartment at the Watergate.39 Although Trie was 
advised that the Watergate rent was more than his business 
could afford, appearance was important to Trie and he believed 
a Watergate address gave him a certain stature as a 
businessman.40 He used his Watergate venue to host 
delegations of visiting Chinese businessmen who gathered for 
receptions and parties with Trie's local friends and political 
contacts.41 Ng Lap Seng, Ng's bookkeeper Keshi Zhan, 
and former Lippo Group executive and Trie business associate 
Antonio Pan 42 also used the Watergate Office while 
in Washington.43
---------------------------------------------------------------------------
    \39\ See Shaffner interview, p. 2; Lease Agreement for Watergate 
South apartment, August 15, 1994 (Ex. 12).
    \40\ See Shaffner interview, p. 2.
    \41\ See Lena H. Sun, ``Pacific Trade Commission Appointee Was 
Considered a White House `Must'; Trie, a Longtime Democratic Fund-
Raiser, Says He Didn't Seek Post,'' Washington Post, Dec. 18, 1996, p. 
A20; Memorandum of Interview of Charles Chiang, July 21, 1997, p. 2.
    \42\ See Business Card identifying Antonio Pan as Senior Vice 
President of Tati Group--China division of the Lippo Group (Ex. 13); 
Business Card identifying Antonio Pan as Chief Executive Officer of 
Daihatsu International Trading, Inc. (Ex. 14); Business Card 
identifying Antonio Pan as Executive Director of America-Asia Trade 
Center Inc. (Ex. 15); Deposition of David Mercer, May 14, 1997, pp. 20-
21.
    \43\ See Memorandum of Interview of Sam Chang, July 11, 1997, pp. 
2-3.
---------------------------------------------------------------------------
    In addition to Daihatsu International Trading Corp., Trie 
was also responsible for the incorporation of additional 
businesses in Little Rock and Washington. In October 1994, Trie 
incorporated a company in Little Rock for Ng Lap Seng called 
San Kin Yip International Trading Corp.44 Trie 
explained to the Washington Post that San Kin Yip International 
Trading Corp., which possessed the same mailing address as 
Daihatsu, was related to Ng's Macau-based real estate 
development and investment companies called the San Kin Yip 
Group.45 The Washington Post also reported that San 
Kin Yip International Trading Corp. was created to ``import 
textiles and other goods and export chemicals, machinery and 
advanced technology.'' 46 Subpoenaed San Kin Yip 
International Trading Corp.'s bank records, however, revealed 
``neither earnings nor any genuine business activity.'' 
47
---------------------------------------------------------------------------
    \44\ See Letter from Daihatsu employee ``Jennifer'' to Ng employee 
``Miss Chen,'' Oct. 11, 1994 (Ex. 16).
    \45\ Lena H. Sun, ``DNC Donor Admits `Mistake'; Fund-Raiser's Own 
Company Contributed Foreign Generated Money,'' Washington Post, Dec. 7, 
1996, p. A11.
    \46\ Lena H. Sun & Dan Morgan, ``Asian Firm's First U.S. Ties 
Included DNC; Contribution Followed 10 Days in Arkansas,'' Washington 
Post, Dec. 1, 1996, p. A1.
    \47\ Testimony of Jerry Campane, July 29, 1997, pp. 11-12.
---------------------------------------------------------------------------
    After relocating to Washington, D.C., Trie incorporated a 
second San Kin Yip entity called San Kin Yip (U.S.A.) 
Inc.48 After reviewing San Kin Yip (U.S.A.) Inc.'s 
bank records, however, the Committee concluded that (like San 
Kin Yip's Little Rock branch) San Kin Yip (U.S.A.) Inc. neither 
made money nor engaged in any actual business 
activity.49
---------------------------------------------------------------------------
    \48\ See Chang interview, p. 1.
    \49\ Testimony of Jerry Campane, July 29, 1997, pp. 11-12.
---------------------------------------------------------------------------
    Finally, Trie incorporated American Asia Trade Center in 
Washington in 1996, intending to purchase a building a few 
blocks from the White House that would house a Chinese 
restaurant on the first floor and offices of companies engaging 
in Asian trade on the remaining floors.50 Trie, 
however, never actually bought the property and never opened 
the restaurant.51 Thus, American Asia Trade Center, 
like the two San Kin Yip entities incorporated by Trie, also 
never made money.52
---------------------------------------------------------------------------
    \50\ See Chang interview, p. 2.
    \51\ See id.
    \52\ Testimony of Jerry Campane, July 29, 1997, pp. 11-12.
---------------------------------------------------------------------------

                       Background on Ng Lap Seng

    In 1979, Ng Lap Seng (who is often referred to by the name 
``Mr. Wu,'' the Mandarin pronunciation of his name) bribed a 
police officer on the Chinese border with the Portuguese 
enclave of Macau in 1979, and entered Macau with virtually no 
money to his name.53 Today, Ng, who travels under a 
Portuguese passport, 54 is chairman of the Macau-
based San Kin Yip Group, a commercial and residential 
development conglomerate.55 Ng reported in the bid 
submission for the Camelot Hotel renovation project that his 
conglomerate's annual gross sales are $250 
million.56
---------------------------------------------------------------------------
    \53\ See Lena H. Sun & John Pomfret, ``The Curious Cast of Asian 
Donors; Some Sought Access to Clinton, Others' Motives' Remain Murky,'' 
Washington Post, Jan. 27, 1997, p. A1.
    \54\ See Ng Lap Seng's Portuguese Passport (Ex. 17).
    \55\ See Lena H. Sun & Dan Morgan, ``Asian Firm's First U.S. Ties 
Included DNC; Contribution Followed 10 Days in Arkansas,'' Washington 
Post, Dec. 1, 1996, p. A1; see also Ng's business card (Ex. 18).
    \56\ See Summary of Ng's business activities included in Camelot 
Hotel submission (Ex. 19).
---------------------------------------------------------------------------
    Press reports have tied Ng to both the government of the 
People's Republic of China and to criminal activity in Macau. 
According to the Washington Post, a directory of Chinese 
government officials and press reports identifies Ng as a 
member of the Chinese People's Political Consultative 
Conference, an advisory board for the Chinese government and 
ruling Communist Party.57 Newsweek also reported 
that Ng was convicted in Macau in 1991 for relabeling Chinese-
made clothing in order to circumvent U.S. import quotas on 
Chinese products.58
---------------------------------------------------------------------------
    \57\ Lena H. Sun & John Pomfret, ``China Adviser's Gift to DNC 
Under Review; After Audit, Party Will Return More Donations,'' 
Washington Post, Feb. 25, 1997 p. A1.
    \58\ C.K. Binswanger, ``Tracking `Mr. Wu's' Fortune,'' Newsweek, 
Aug. 11, 1997 p. 6.
---------------------------------------------------------------------------

                     Trie's Political Contributions

    In spite of Trie's lack of success as an international 
trader (and the significant expenses associated with his 
unsuccessful ventures), Trie, his family, and businesses still 
managed to contribute a total of $220,000 to the DNC between 
1994 and 1996.
    The contributions are specifically identified in the 
following chart:

------------------------------------------------------------------------
                                                             Amount in  
               Date                      Contributor          dollars   
------------------------------------------------------------------------
 5/14/94..........................  Charlie Trie........    \59\ $20,000
\59\ $20,000 check to ``D.N.C.''                                        
 drawn on First Commercial Bank                                         
 account maintained by Yah Lin or                                       
 Wang Mei Trie, May 14, 1994 (Ex.                                       
 20).                                                                   
 5/14/94..........................  Charlie Trie........     \60\ 60,000
\60\ $60,000 check to ``D.N.C.''                                        
 drawn on First Commercial Bank                                         
 account maintained by Yah Lin or                                       
 Wang Mei Trie, May 14, 1994 (Ex.                                       
 21).                                                                   
 5/25/94..........................  Wang Mei Trie.......     \61\ 20,000
\61\ $20,000 check to ``D.N.C.                                          
 (Non Federal)'' drawn on First                                         
 Commercial Bank account                                                
 maintained by Yah Lin or Wang Mei                                      
 Trie, May 25, 1994 (Ex. 22).                                           
 6/21/94..........................  Daihatsu............      \62\ 7,500
\62\ $7,500 check to ``D.N.C.''                                         
 drawn on First Commercial Bank                                         
 account maintained by Daihatsu                                         
 International Trading Corp., June                                      
 21, 1994 (Ex. 23).                                                     
 8/1/94...........................  Yah Lin Trie........     \63\ 20,000
\63\ $20,000 check to ``D.N.C.''                                        
 drawn on First Commercial Bank                                         
 account maintained by Yah Lin or                                       
 Wang Mei Trie, August 1, 1994                                          
 (Ex. 24).                                                              
10/20/94..........................  San Kin Yip.........     \64\ 15,000
\64\ $15,000 check to ``D.N.C.''                                        
 drawn on First Commercial Bank                                         
 account maintained by San Kin Yip                                      
 International Trading Co., Oct.                                        
 20, 1994 (Ex. 25).                                                     
 6/21/95..........................  Daihatsu............     \65\ 50,000
\65\ $50,000 check to ``D.N.C.''                                        
 drawn on First Commercial Bank                                         
 account maintained by Daihatsu                                         
 International Trading Corp., June                                      
 21, 1995 (Ex. 26).                                                     
 2/29/96..........................  Daihatsu............     \66\ 12,500
\66\ $12,500 check to ``Democratic                                      
 National Committee'' drawn on                                          
 First Commercial Bank account                                          
 maintained by Daihatsu                                                 
 International Trading Corp., Feb.                                      
 29, 1996 (Ex. 27).                                                     
 5/12/96..........................  Yah Lin Trie........     \67\ 10,000
\67\ $10,000 check to ``D.N.C.''                                        
 drawn on First Commercial Bank                                         
 account maintained by Yah Lin                                          
 Trie or Wang Mei Trie, May 12,                                         
 1996 (Ex. 28).                                                         
 7/31/96..........................  American Asia Trade       \68\ 3,000
                                     Center.                            
\68\ $3,000 check to ``D.N.C.''                                         
 drawn on Riggs National Bank                                           
 account maintained by American                                         
 Asia Trade Center, Inc., July 31,                                      
 1996 (Ex. 29).                                                         
 9/28/96..........................  Yah Lin Trie........      \69\ 2,000
                                   -------------------------------------
\69\ $2,000 check to ``Victory                                          
 '96'' drawn on Riggs National                                          
 Bank account maintained by Yah                                         
 Lin Trie, Sept. 28, 1996 (Ex.                                          
 30).                                                                   
                                    Total...............        $220,000
------------------------------------------------------------------------

The DNC allocated the first $20,000 in contributions made 
personally by both Trie and his wife in May 1994 to its 
``federal'' or ``hard money'' account.70 The DNC has 
since returned the entire $220,000.71
---------------------------------------------------------------------------
    \70\ See DNC Finance ``Executive Summary'' of Trie's 1994 
contributions identifying that Trie's $20,000 contribution in May 1994 
was allocated to the DNC's federal (i.e., ``hard money'') account, and 
that his $60,000 May 1994 contribution was allocated to the DNC's non-
federal (i.e., ``soft money'') account (Ex. 31); DNC Finance 
``Executive Summary'' of Wang Mei Trie's contribution identifying that 
her $20,000 contribution was also allocated to the DNC's federal 
account (Ex. 32). See also Deposition of Joseph E. Sandler, Aug. 22, 
1997, p. 16 (``Q: . . . [W]hat does the code F01 refer to? A: Federal 
account.''). Although Wang Mei Trie's $20,000 check expressly states 
that it is a contribution to the DNC's ``Non-Federal'' account (Ex. 
22), the DNC obtained her certification that she ``inadvertently 
designated'' her contribution and that it was her ``intention that 
[the] contribution of $20,000 was to be deposited into the DNC's 
federal account.'' See Letter from Neil Reiff to Wang Mei Trie, June 3, 
1994 (Ex. 33).
    \71\ See ``Contributions Refunded 6/27/97'' (Ex. 34).
---------------------------------------------------------------------------

         the source of funds used by trie for his contributions

    Given the failure of Trie's businesses to make money in an 
amount that could have permitted Trie to contribute $220,000, 
the Committee concludes that Trie used ``foreign-source money 
that he obtained primarily from [Ng Lap Seng]'' to fund all of 
his DNC contributions.72
---------------------------------------------------------------------------
    \72\ Testimony of Jerry Campane, July 29, 1997, p. 36.
---------------------------------------------------------------------------
    Between 1994 and 1996, Trie and his businesses received a 
total of approximately $1.5 million by wire transfer from 
foreign sources.73 Trie received over $1.1 million 
of this $1.5 million from Ng Lap Seng.74 Ng wired 
this money from accounts he maintained at branches of the Bank 
of China in Hong Kong and Macau and an account with Hong Kong 
Shanghai Banking to three domestic accounts maintained by or 
accessible to Trie.75 Trie then shuffled the money 
among a total of six domestic accounts, four of which 
ultimately served as the source of a contribution to the 
DNC.76
---------------------------------------------------------------------------
    \73\  See ``Foreign Source Wire Transfers to Trie and Trie-related 
Entities'' (Ex. 35).
    \74\  Jerry Campane (a FBI supervisory special agent on detail to 
the Committee for this investigation) testified on July 29, 1997 that 
Trie received $905,000 in wire transfers from Ng. Testimony of Jerry 
Campane, July 29, 1997, pp. 12-13. Campane also noted, however, that 
``our records show an August 7, 1996, transfer of $200,000 from the 
Bank of China, Macau from an account held in the name of a trading 
company with a name very similar to some of [Ng's] companies. However, 
because we were not able to definitively establish that this particular 
company was indeed controlled by [Ng], I have not included this 
transfer in the total . . . .'' Id., p. 13. Since then the Committee 
has confirmed that this company, Cia de Investimento e Fomento Predial 
Goodwill Lda, is associated with Ng. See Facsimile from Liz Wheeless to 
Theodore Kavowras attaching corporate information on Compania de 
Investimento e Fomento Predial Goodwill, Limitada'' (Ex. 36). This 
confirmation increases the total wired from Ng to Trie to $1.105 
million. See ``Ng Lap Seng's Wire Transfers to Charlie Trie (1994-
1996)'' (Ex. 37).
    \75\  See ``Flow of Funds from Ng Lap Seng Among Accounts 
Associated with Charlie Trie'' (Ex. 38). Although Trie does not 
maintain signature authority over San Kin Yip's First Commercial Bank 
account (an account identified in the center column of Ex. 38), Trie's 
secretary/bookkeeper, Maria Mapili, does possess such authority. See 
Testimony of Jerry Campane, July 29, 1997, pp. 30-31. It is also clear 
that Trie understood that he possessed authority over the funds in the 
account, regardless of his technical lack of authority to sign checks 
drawn on the account. When questions arose as to the source of San Kin 
Yip's $15,000 contribution to the DNC, Trie told the Washington Post 
that he was uncertain whether he, his wife or his secretary was 
responsible for signing San Kin Yip's check to the DNC. Lena H. Sun, 
``DNC Donor Admits `Mistake'; Fund-Raiser's Own Company Contributed 
Foreign-Generated Money,'' Washington Post, Dec. 7, 1996, p. A11.
    \76\  See Ex. 38.
---------------------------------------------------------------------------
    Because Trie appears to have earned little or no money from 
his international trading businesses, the Committee has 
concluded generally that all of Trie's contributions were made 
with foreign funds received by wire transfer from Ng Lap Seng 
and other foreign sources. The following specific contributions 
to the DNC (a total of $135,000), however, can be definitively 
traced to particular wire transfers of foreign funds.

Yah Lin and Wang Mei Trie's May 1994 Contributions Totaling $100,000

    On May 6, 1994, a Hong Kong-based company (in this case, 
apparently not affiliated with Ng Lap Seng) named Lucky Port 
Investments, Limited, wired $100,000 to an account maintained 
by Trie and his wife at First Commercial Bank in Little 
Rock.77 LippoBank Los Angeles served as an 
intermediary for the transaction.78
---------------------------------------------------------------------------
    \77\  See Confirmation of the wire transfer of $100,000 from Lucky 
Port Investments Ltd.'s account at the Hong Kong Chinese Bank Ltd. to 
Yah Lin Trie's account at First Commercial Bank in Little Rock, May 6, 
1994 (Ex. 39).
    \78\  See ``Advice of Transfer of Funds'' confirming transfer of 
$99,985 from Lippo Bank, Los Angeles to Yah Lin Trie's account at First 
Commercial Bank in Little Rock, May 6, 1994 (Ex. 40).
---------------------------------------------------------------------------
    Prior to receipt of the $100,000 from Lucky Port, the 
balance in Trie's First Commercial account was only 
$3,759.79 In the weeks following receipt of the wire 
transfer from Lucky Port Investments, Trie and his wife 
contributed a total of $100,000 to the DNC. Trie wrote checks 
of $60,000 and $20,000 on May 14,80 and his wife, 
Wang Mei Trie, wrote a $20,000 check on May 25.81
---------------------------------------------------------------------------
    \79\  See May 24, 1994 bank statement for account maintained by Yah 
Lin Trie or Wang Mei Trie indicating an account balance on May 4, 1996 
(prior to the $100,000 wire transfer) of $3,759.64 (Ex. 41); see also 
June 23, 1994 bank statement for the same account (Ex. 42). While these 
bank statements reveal that approximately $8,500 was deposited into the 
account after the May 6, 1994 wire transfer from Lucky Port 
Investments, but before Trie's three contribution checks had cleared, 
this $8,500 was insufficient to cover any of the three contribution 
checks. Trie and his wife therefore could not have made their $100,000 
in contributions without receipt of the wire transfer from Lucky Port 
Investments.
    \80\  Ex's 20 & 21.
    \81\  Ex. 22.
---------------------------------------------------------------------------
    As Lucky Port is based in Hong Kong and not independently 
incorporated in the United States,82 the Committee 
has discovered only that it maintains a telephone number in 
Hong Kong 83 and that former Lippo Group executive 
and Trie business associate Antonio Pan served as a director of 
the company at the time that the wire transfer was 
made.84
---------------------------------------------------------------------------
    \82\  See Testimony of Jerry Campane, July 29, 1997, p. 39.
    \83\  See Facsimile from Phillip Layton to Liz Wheeless, July 28, 
1997 (Ex. 43).
    \84\  See ``Notice of change of directors . . .'' submitted to the 
Hong Kong Registrar of Companies, Oct. 4, 1993 (Ex. 44).
---------------------------------------------------------------------------

 Yah Lin Trie's August 1, 1994 Contribution of $20,000

    On August 1, 1994, Trie wrote another $20,000 check to the 
DNC.85 The ultimate source of this contribution was 
a $100,000 wire transfer on July 26, 1994 from an account 
maintained at the Bank of China, Macau branch, by Ng Lap Seng 
to Daihatsu International Trading Corp.'s account at First 
Commercial Bank in Little Rock.86 The balance in 
Daihatsu's account at the time it received the wire transfer 
was only $472.87 One day after Ng wired the money to 
Daihatsu, Wang Mei Trie wrote a $25,500 check on Daihatsu's 
account to Yah Lin Trie.88 Before the deposit of the 
$25,500 check, the balance in Trie's account was only 
$414.89 Trie deposited the check into his First 
Commercial account and, four days later, on August 1, 1994, 
made his $20,000 contribution to the DNC.
---------------------------------------------------------------------------
    \85\  Ex. 24.
    \86\  See ``Advice of Transfer of Funds'' confirming a $99,985 wire 
transfer from Ng Lap Seng's account at the Bank of China, Macau branch, 
to Daihatsu's account at First Commercial Bank in Little Rock (Ex. 45).
    \87\  See July 29, 1994 bank statement for account maintained by 
Daihatsu International Trading Corp. indicating a balance in the 
account on July 25, 1994 (prior to receipt of the $99,985 wire 
transfer) of $472.03 (Ex. 46).
    \88\  See $25,500 check to ``Yah Lin Trie'' drawn on First 
Commercial Bank account maintained by Daihatsu International Trading 
Corp., July 27, 1994 (Ex. 47).
    \89\  See Aug. 24, 1994 bank statement for account maintained by 
Yah Lin Trie indicating a ``beginning balance as of 7-26-94'' (prior to 
receipt of the $25,500 check from Daihatsu) of $414.64 (Ex. 48).
---------------------------------------------------------------------------

 San Kin Yip International Trading Corporation's October 21, 1994 
        Contribution of $15,000

    On October 11, 1994, Trie had an account opened at First 
Commercial Bank in Little Rock in the name of San Kin Yip 
International Trading Corp.90 The account was opened 
with a $500 deposit.91 On October 20, 1994, Ng Lap 
Seng wired $100,000 from his Bank of China, Macau branch, 
account into the newly opened San Kin Yip account in Little 
Rock.92 One day later, on October 21, 1994, a 
$15,000 check with an unidentifiable signature was written from 
San Kin Yip to the DNC.93 Trie himself has admitted 
to the press that this contribution was made with Ng's funds 
wired from abroad.94
---------------------------------------------------------------------------
    \90\  Ex. 16.
    \91\  See id.; see also Oct. 31, 1994 bank statement for account 
maintained by San Kin Yip International Trading Co. indicating a 
``beginning balance as of 10-10-94'' of ``.00'' and a $500 deposit on 
October 11, 1994 (Ex. 49).
    \92\  See confirmation of $99,985 wire transfer from Ng Lap Seng's 
Bank of China, Macau Branch account to San Kin Yip International 
Trading Corp.'s First Commercial Bank account, Oct. 20, 1994 (Ex. 50).
    \93\  Ex. 25.
    \94\  See Lena H. Sun & John Pomfret, ``The Curious Cast of Asian 
Donors; Some Sought Access to Clinton, Others' Motives' Remain Murky,'' 
Washington Post, Jan. 27, 1997, p. A1.
---------------------------------------------------------------------------

                           Trie's Fundraising

    In addition to contributing personally (and through his 
family and businesses) to the DNC, Trie was also involved in 
raising funds for the party.95 In 1996 alone, Trie 
made a commitment to the DNC to raise $350,000.96
---------------------------------------------------------------------------
    \95\  Trie was also responsible for the solicitation of almost 
$700,000 in illegal contributions to the Presidential Legal Expense 
Trust (``PLET''). See the section of this report on Trie's fundraising 
for the PLET.
    \96\  See Letter from Marvin Rosen to Charlie Trie, Feb. 21, 1996 
(Ex. 51).
---------------------------------------------------------------------------
    Trie's adoption of the role as fundraiser in addition to 
that of donor did not mean a significant change in tactics. 
Where Trie relied on Ng's wire transfers to make his own 
contributions, funds wired from Ng were used to reimburse third 
parties from whom contributions were solicited. These third 
parties simply served as alternate conduits for the flow of 
Ng's foreign-source funds to the DNC.
    The Committee received the only first-hand account of these 
tactics from two women, Yue Chu and Xiping Wang, who testified 
that their political contributions were reimbursed by Ng's 
bookkeeper, Keshi Zhan. Further conduit contributors, including 
Zhan, have been identified only through a review of bank 
records.
    Yue Chu and Xiping Wang each emigrated from China in the 
past ten years 97 and both are presently resident 
aliens (i.e., green-card holders) in the United 
States.98 Yue Chu is married to Ming Chen, who 
manages a Beijing restaurant that is owned by Ng Lap 
Seng.99 Yue Chu is a close personal friend of 
Zhan.100 Xiping Wang is married to Zhengwei Cheng, a 
cousin of Ming Chen.101
---------------------------------------------------------------------------
    \97\  Testimony of Yue Chu, July 29, 1997, p. 126; Testimony of 
Xiping Wang, July 29, 1997, p. 140.
    \98\  Yue Chu testimony, p. 150; Xiping Wang testimony, p. 150.
    \99\  Yue Chu testimony, pp. 126-28.
    \100\  Id., p. 128.
    \101\  Xiping Wang testimony, pp. 140-41.
---------------------------------------------------------------------------
    Yue Chu testified that on November 14, 1995, Zhan came to 
her home and asked Yue Chu for a $3,000 loan.102 Yue 
Chu agreed without either asking for or receiving any 
explanation for Zhan's request.103 Zhan then 
directed Yue Chu to make out a $2,000 check to the DSCC and a 
$1,000 check to Zhan.104 Yue Chu testified that she 
did not know what DSCC stood for.105
---------------------------------------------------------------------------
    \102\  Yue Chu testimony, p. 131.
    \103\  Id., p. 132.
    \104\  Id., pp. 131-32; see $2,000 check to ``DSCC'' drawn on Ming 
Chen and Yue F. Chu's Chevy Chase Bank account, Nov. 14, 1995 (Ex. 52); 
$1,000 check to Keshi Zhan drawn on Ming Chen and Yue F. Chu's Chevy 
Chase Bank account, Nov. 14, 1995 (Ex. 53).
    \105\  Yue Chu testimony, p. 132.
---------------------------------------------------------------------------
    Yue Chu further testified that Zhan immediately reimbursed 
her by providing her with a $3,000 check payable to her 
husband, Ming Chen, drawn on a Riggs National Bank account 
maintained jointly by Ng Lap Seng and Charlie 
Trie.106 Zhan possessed signature authority over the 
joint Ng/Trie account.107 The memo line on the check 
states ``consulting.'' Yue Chu testified that she does not 
speak or read English and therefore did not understand the 
notation.108
---------------------------------------------------------------------------
    \106\  Id., pp. 132-33; see $3,000 check to ``Ming Chen'' drawn on 
Ng Lap Seng and Charlie Trie's Riggs National Bank account, Nov. 14, 
1995 (Ex. 54).
    \107\  See ``Power of Attorney (Durable),'' Dec. 20, 1994 (Ex. 55).
    \108\  Yue Chu testimony, p. 133.
---------------------------------------------------------------------------
    Yue Chu further testified that in February 1996 her 
husband, Ming Chen, told her that his boss, Ng Lap Seng, 
requested a $25,000 loan so that he could buy a ticket and 
``pass the gate'' to a political function.109 Yue 
Chu testified that she understood the ``gate'' to be the gate 
to the White House.110 Because Yue Chu and Ming Chen 
possessed only a combined total of $20,000 in their two bank 
accounts at that time, they decided to provide the $20,000 and 
to call on Ming Chen's cousin, Zhengwei Cheng, for the 
remaining $5,000.111
---------------------------------------------------------------------------
    \109\  Id., pp. 133-34.
    \110\  Id., p. 134.
    \111\  Id., p. 135; see $12,500 check to ``DNC'' from Yuefang Chu's 
Bank-Fund Staff Federal Credit Union account, Feb. 19, 1996 (Ex. 56); 
$7,500 check to ``DNC'' from Ming Chen & Yue F. Chu's Chevy Chase Bank 
account, Feb. 19, 1996 (Ex. 57).
---------------------------------------------------------------------------
    On February 19, 1996, Zhan again came to Yue Chu to collect 
Yue Chu's portion of the funds requested by Ng. Zhan directed 
Yue Chu to sign a check from each of Yue Chu's two accounts, 
and Zhan then filled in the payee and the amounts ($12,500 and 
$7,500).112 Yue Chu testified that she did not pay 
any attention to the payee--the DNC--designated by 
Zhan.113 Zhan then provided Yue Chu with two checks 
written on the account maintained jointly by Ng and 
Trie.114 Yue Chu testified that the DNC reimbursed 
her for her $20,000 contribution.115 She has not, 
however, returned the $20,000 to Ng Lap Seng.116
---------------------------------------------------------------------------
    \112\  Yue Chu testimony, pp. 135-36.
    \113\  Id., p. 137.
    \114\  Id., pp. 138-40; see $12,500 and $7,500 checks to ``Ming 
Chen'' drawn on Ng Lap Seng and Charlie Trie's Riggs National Bank 
account, Feb. 19, 1996 (Ex. 58).
    \115\  Yue Chu testimony, p. 140.
    \116\  Id., p. 148.
---------------------------------------------------------------------------
    Yue Chu's husband, Ming Chen, then went to his cousin's 
(Zhengwei Cheng's) house and asked for a $5,000 loan from 
Xiping Wang, his cousin's wife.117 Xiping Wang 
testified that Ming Chen explained that he needed the money in 
order to help his boss (Ng Lap Seng) ``pass a gate'' to the 
White House.118 Xiping Wang complied and wrote a 
$5,000 check to the DNC.119 At the time that she 
wrote the check, however, her account did not contain 
sufficient funds to cover the amount of the 
check.120 Her husband therefore called Ming Chen the 
next day, and asked Ming Chen for reimbursement.121 
Xiping Wang testified that Ming Chen personally deposited a 
$5,000 check drawn on Trie and Ng's joint account (and signed 
by Zhan) into their bank account.122 Xiping Wang 
testified that she has not been reimbursed by the DNC for her 
contribution.123
---------------------------------------------------------------------------
    \117\  Xiping Wang testimony, pp. 140-41.
    \118\  Id., p. 141.
    \119\  Id.; see $5,000 check to ``DNC'' drawn on Zhengwei Cheng's 
and Xiping Wang's Bank-Fund Staff Federal Credit Union account, Feb. 
19, 1996 (Ex. 59).
    \120\  Xiping Wang testimony, p. 142.
    \121\  Id.
    \122\  Id.; see $5,000 check to ``Zhengwei Cheng'' drawn on Ng Lap 
Seng and Charlie Trie's Riggs National Bank account, Feb. 19, 1996 (Ex. 
58).
    \123\  Xiping Wang testimony, p. 148.
---------------------------------------------------------------------------
    The bank records for Trie and Ng's joint Riggs account 
indicates that Zhan could not have reimbursed Yue Chu and 
Xiping Wang without funds provided by wire transfer from Ng. On 
February 14, 1996, five days before Yue Chu and Xiping Wang 
made their contributions to the DNC, Ng wired $150,000 from an 
account maintained in the name of San Kin Yip Holdings Co. Ltd. 
at the Bank of China, Hong Kong branch, to the Riggs National 
Bank account maintained jointly by Ng and Trie.\124\ The 
balance in that account prior to the wire transfer was 
$10,459.55, significantly less than the $25,000 in reimbursed 
contributions.\125\
---------------------------------------------------------------------------
    \124\ See confirmation of $149,985 wire transfer from San Kin Yip 
Holdings Co. Ltd.'s Bank of China, Hong Kong branch, account to Ng Lap 
Seng and Charlie Trie's Riggs National Bank account, Feb. 14, 1996 (Ex. 
60).
    \125\ See March 5, 1996 bank statement for account maintained by Ng 
Lap Seng and Charlie Trie indicating a balance on Feb. 13, 1996 (prior 
to receipt of the $149,985 wire transfer) of $10,459.55 (Ex. 61).
---------------------------------------------------------------------------
    Yue Chu testified to the Committee that she had no 
knowledge of the overseas source of the funds used to reimburse 
her for her contributions.\126\ Xiping Wang testified that she 
knew ``even less.'' \127\
---------------------------------------------------------------------------
    \126\ Yue Chu testimony, p. 145.
    \127\ Xiping Wang testimony, p. 145.
---------------------------------------------------------------------------
    Yue Chu also testified to a third reimbursed contribution, 
this one for $1,000 to the ``Gephardt Congress Committee'' on 
June 15, 1996.\128\ She testified that on that day, Zhan came 
to her house and asked for a $1,000 loan.\129\ Again, Zhan did 
not tell Yue Chu the purpose of the loan.\130\ Yue Chu wrote 
the check as directed by Zhan and immediately received a $1,000 
reimbursement, this time from Zhan's own account.\131\ Yue Chu 
testified that the Gephardt Congress Committee returned her 
contribution in March 1997, but that she had not yet repaid 
Zhan.\132\
---------------------------------------------------------------------------
    \128\ See $1,000 check to ``Gephardt Congress Committee'' drawn on 
Ming Chen and Yue F. Chu's Chevy Chase Bank account, June 15, 1996 (Ex. 
62).
    \129\ Yue Chu testimony, pp. 148-49.
    \130\ Id., p. 149.
    \131\ Id.; see $1,000 check to ``Chen Ming'' drawn on Keshi Zhan's 
Bank-Fund Staff Federal Credit Union account, June 15, 1996 (Ex. 63).
    \132\ Yue Chu testimony, p. 150.
---------------------------------------------------------------------------
    On July 23, 1997, the Committee voted to immunize Zhan, the 
bookkeeper for Ng Lap Seng who possessed signature authority 
over the account maintained jointly by Ng and Trie.\133\ As 
discussed above, Zhan used this authority to sign checks on Ng 
and Trie's account reimbursing Yue Chu and Xiping Wang for 
their contributions to the DNC and Representative Gephardt's 
campaign committee.
---------------------------------------------------------------------------
    \133\ Eric Schmitt, ``In a Rebuff to Justice Dept., Senate Inquiry 
Immunizes 5,'' New York Times, July 24, 1997, p. A1.
---------------------------------------------------------------------------
    Pursuant to the use immunity provided by the Committee's 
July 23, 1997 vote and a July 30, 1997 order of Chief Judge 
Norma Holloway Johnson of the United States District Court for 
the District of Columbia,\134\ Zhan appeared for deposition on 
August 14 and 15, 1997. However, in spite of her immunity (and 
contrary to the proffer on which the Committee's decision to 
immunize her was based), Zhan proved from the beginning of her 
deposition to be an entirely uncooperative witness. The 
Committee therefore decided to terminate her deposition before 
reaching several critical areas of inquiry.\135\ The Department 
of Justice was notified of the Committee's decision.
---------------------------------------------------------------------------
    \134\ Order of Chief United States District Judge Norma Holloway 
Johnson in case captioned Senate Committee on Governmental Affairs, 
Misc. No. 97-226 (D.D.C.), July 30, 1997 (Ex. 64).
    \135\ In order to avoid any possible taint on a possible future 
criminal prosecution of Zhan, the Committee also directed the court 
reporter not to prepare a transcript of her deposition.
---------------------------------------------------------------------------
    The following information about Zhan's conduit contribution 
is derived entirely from bank records independently obtained by 
the Committee pursuant to subpoenas directed to the banks at 
which the relevant accounts are maintained.
    On February 19, 1996, Zhan not only collected contribution 
checks from Yue Chu and Xiping Wang, she also wrote a $12,500 
check on her own account,\136\ and reimbursed herself with a 
check drawn on Ng and Trie's joint Riggs account.\137\ Zhan's 
bank statement for February 1996 indicates that she possessed 
sufficient personal funds to make the $12,500 contribution 
without reimbursement.\138\ However, in light of the identical 
Yue Chu and Xiping Wang transactions on the same day, the 
Committee concludes that this is another example of the 
laundering of Ng's foreign funds to make a contribution to the 
DNC.\139\
---------------------------------------------------------------------------
    \136\ See $12,500 check to ``DNC'' drawn on Zhan's Bank-Fund Staff 
Federal Credit Union account, Feb. 19, 1996 (Ex. 65).
    \137\ See $12,500 check to ``Keshi Zhan'' drawn on Ng Lap Seng and 
Charlie Trie's Riggs National Bank account, Feb. 19, 1996 (Ex. 66).
    \138\ See Feb. 29, 1996 bank statement for account maintained by 
Keshi Zhan indicating a balance on Feb. 16, 1996 (prior to receipt of 
the $12,500 check) of $15,229.82 (Ex. 67).
    \139\ Testimony of Jerry Campane, July 29, 1997, pp. 17-18; see 
also id., p. 72 (``Senator Smith: Does that sound like money laundering 
to you? Mr. Campane: That is what we call in the business a slam-dunk, 
Senator.'').
---------------------------------------------------------------------------
    Manlin Foung, a sister of Trie, also made a DNC 
contribution after receiving funds originating from one of Ng's 
overseas bank accounts. On August 15, 1996, Foung received 
$10,000 by wire transfer from a Riggs National Bank account 
maintained by San Kin Yip International Trading Company.\140\ 
Prior to receipt of the wire transfer, Foungs account had a 
balance of almost $5,379.\141\ Foung used the check to make a 
$10,000 contribution to the DNC in the name of the ``Birthday 
Victory Fund.'' \142\
---------------------------------------------------------------------------
    \140\ See confirmation of $10,000 wire transfer from San Kin Yip 
International Trading Corporation's Riggs National Bank account to 
Manlin Foung's Travis Federal Credit Union account, Aug. 15, 1996 (Ex. 
68).
    \141\ See Aug. 31, 1996 bank statement for account maintained by 
Manlin Foung indicating a balance on Aug. 15, 1996 (prior to receipt of 
the $10,000 wire) of $5,378.95 (Ex. 69).
    \142\ See $10,000 check to ``Birthday Victory Fund'' drawn on 
Manlin Foung's Travis Federal Credit Union account, August 15, 1996 
(Ex. 70). Foung testified to this and another conduit contribution in 
an October 5, 1997 hearing before the House Government Reform and 
Oversight Committee. ``Three Witnesses Say That They Helped to Launder 
Contributions to Democrats,'' Wall Street Journal, Oct. 6, 1997, p. A4. 
Foung's other DNC contribution, $12,500 on February 18, 1996 (Ex. 71), 
was reimbursed by Amerasia Bank cashier's checks (Ex. 72) purchased in 
cash by former Lippo Group executive and Trie associate Antonio Pan 
(Ex. 73). The Committee has been unable to determine the source of the 
cash used by Pan for the purchase of the cashier's checks.
---------------------------------------------------------------------------
    The ultimate source of the funds used by San Kin Yip for 
its wire transfer to Foung was a $200,000 wire transfer on 
August 7, 1996, from the Bank of China, Macau branch account of 
Cia de Investimento e Fomento Predial Goodwill Limitada, an Ng-
affiliated company, to Trie and Ng's joint account at Riggs 
National Bank.\143\ The balance in Trie and Ng's joint account 
prior to the wire transfer was only $1,118.\144\ $90,000 was 
then transferred, in two installments, from Trie and Ng's 
account to San Kin Yip's account.\145\ The balance in San Kin 
Yip's account before the deposit of $90,000 was only 
$1,029,\146\ obviously insufficient to cover the $10,000 wire 
transfer to Foung.
---------------------------------------------------------------------------
    \143\ See confirmation of $200,000 wire transfer from Cia de 
Investimento e Fomento Predial Goodwill Lda's Bank of China, Macau 
branch, account to Ng Lap Seng and Charlie Trie's Riggs National Bank 
account, Aug. 7, 1996 (Ex. 74); see also discussion of the Committee's 
confirmation of a connection between Cia de Investimento e Fomento 
Predial Goodwill Lda and Ng Lap Seng, supra, footnote 74.
    \144\ See Sept. 5, 1996 bank statement for account maintained by Ng 
Lap Seng and Charlie Trie indicating a balance on Aug. 5, 1996 (prior 
to receipt of the $200,000 wire) of $1,118.32 (Ex. 75).
    \145\ See confirmation of $40,000 transfer from Ng and Trie's Riggs 
National Bank account to San Kin Yip International Trading 
Corporation's Riggs National Bank account, Aug. 7, 1996 (Ex. 76); 
confirmation of $50,000 transfer from Ng and Trie's Riggs National Bank 
account to San Kin Yip International Trading Corporation's Riggs 
National Bank account, Aug. 15, 1996 (Ex. 77); see also Aug. 31, 1996 
bank statement for account maintained by San Kin Yip International 
Trading Corporation indicating deposits of $40,000 on Aug. 7, 1996 and 
$50,000 on Aug. 15, 1996 (Ex. 78).
    \146\ Ex. 78.
---------------------------------------------------------------------------

       Attempts to Convert Political Connections to Personal Gain

    According to the Little Rock residents interviewed by the 
Committee, Trie's contributions and fundraising were motivated 
by his expectation that important political connections would 
ultimately prove of financial benefit.\147\
---------------------------------------------------------------------------
    \147\ See Webb interview, p. 1; Shaffner interview, p. 2.
---------------------------------------------------------------------------
    Trie's efforts appear to have established at least the 
important political connections that he sought. White House 
WAVES records indicate that Trie visited the White House at 
least twenty-two times from the period 1993 to 1996 \148\ and 
that Ng Lap Seng also visited the White House ten times between 
1994 and 1996.\149\
---------------------------------------------------------------------------
    \148\ See White House WAVES records for Charlie Trie's White House 
visits, 1993-1996 (Ex. 79).
    \149\ See White House WAVES records for Ng Lap Seng's White House 
visits, 1994-1996 (Ex. 80). Although the Committee requested White 
House WAVES records for Ng on May 21, 1997, the White House delayed 
production of this information until the afternoon of July 29, 1997, 
after the completion of testimony relating to the Ng-funded DNC 
contributions made by Trie. See section of this Report on the 
uncooperative and manipulative tactics adopted by the White House in 
its production of documents to the Committee.
---------------------------------------------------------------------------
    Trie contributions and fundraising made him a DNC Managing 
Trustee \150\ and member of the DNC's National Finance Board of 
Directors,\151\ and afforded him VIP treatment at DNC 
events.\152\ His contributions also purchased admission to a 
number of fundraising events attended by President Clinton. His 
May 1994 contribution of $100,000, for instance, purchased two 
tables at a June 1994 DNC dinner and fundraiser at the 
Mayflower Hotel in Washington.\153\ Ng Lap Seng and a number of 
Chinese and Taiwanese businessmen and their spouses attended 
the event as Trie's guests.\154\ Trie also co-chaired a 
Presidential Birthday Celebration at the Sumner Wells Estate in 
August 1994,\155\ and attended a February 1996 presidential 
fundraiser at the Hay-Adams Hotel in Washington.\156\ Finally, 
Trie and Ng organized an October 18, 1995 reception for former 
Commerce Secretary Ron Brown and several prominent Asian 
businessmen at the Shangri-La Hotel in Hong Kong.\157\
---------------------------------------------------------------------------
    \150\ See Letter from Ari Swiller to Charlie Trie welcoming Trie to 
the DNC's Trustee Program, June 30, 1994 (Ex. 81).
    \151\ See Letter from Terry McAuliffe to Yah Lin Trie inviting Trie 
to become a member of the National Finance Board of Directors, 
September 21, 1994 (Ex. 82).
    \152\ See Memorandum from David Mercer to John O'Hanlon summarizing 
requests from VIPs such as Yah Lin Trie, June 18, 1994 (Ex. 83).
    \153\ See Memorandum from Charlie Trie/Jody Webb to David Mercer 
identifying Trie's invitees to next day's dinner, June 21, 1994 (Ex. 
84).
    \154\ See id.
    \155\ See Letter from Bill Clinton to Yah Lin ``Charlie'' Trie, 
October 3, 1994 (Ex. 85).
    \156\ See Letter from Vanessa Weaver to Yah Lin Trie, February 21, 
1996 (Ex. 86).
    \157\ See, e.g., Memorandum of Interview of Edmund Ho, July 27, 
1997, p. 2. Press reports have suggested that Trie solicited 
contributions for the DNC at the reception. See, e.g., Kevin Sack, 
``From Restaurateur to Intimate at the White House,'' New York Times, 
Jan. 4, 1997, p. A8. The Committee, however, interviewed several of the 
individuals who attended the reception, and none reported that they had 
been solicited for a contribution. The event simply offered Trie and Ng 
an opportunity to demonstrate to prominent Asian business associates an 
intimate level of access to the Clinton Administration.
---------------------------------------------------------------------------
    After establishing political connections through 
contributions and fundraising, Trie sought to convert those 
connections to personal gain.\158\ Trie sought to use his 
political connections to secure financing for a real estate 
development project planned by Ng in Macau. The Committee also 
believes that Trie's efforts led to his otherwise unwarranted 
appointment by the President to the Commission on United 
States-Pacific Trade and Investment Policy.
---------------------------------------------------------------------------
    \158\ To the extent that the political connections established 
through Trie's contributions and fundraising motivated Ng to continue 
his financial support of Trie, this would appear to be Trie's most 
successful conversion of political access to personal financial gain. 
Cf. Hearing Transcript, July 29, 1997, pp. 88-89 (``Senator Bennett: . 
. . I think Mr. Wu got what he paid for here. He was not particularly 
interested in making money in Little Rock. He was interested in 
establishing his own credentials or the credentials of his man in the 
United States, if Mr. Trie would be so characterized, as having very 
high-level contacts. It has been my personal experience that this is 
very valuable. It can open a lot of doors in a lot of places in ways 
that American business people simply do not understand because we do 
not do business that way in the United States. I can understand why Mr. 
Wu was willing to put that much money into Mr. Trie's hands, and I can 
clearly understand why Mr. Wu was perfectly willing to allow Mr. Trie 
to use that money to make a series of political contributions in order 
to keep the invitations to the White House open.'').
---------------------------------------------------------------------------
    On April 22, 1996, President Clinton announced the 
appointment of sixteen individuals to the newly created 
Commission on the United States-Pacific Trade and Investment 
Policy (``the Commission'').\159\ Among the sixteen individuals 
was Charlie Trie.\160\ Several circumstances surrounding Trie's 
appointment to and involvement with the Commission, however, 
indicate that Trie's political contributions and fundraising 
were critical factors in the Administration's decision.\161\ As 
discussed below, after Trie expressed his interest in joining 
the Commission, even the existence of an already full slate of 
candidates, a disqualifying financial interest in the business 
of the Commission, and (according to several Commission members 
interviewed by Committee investigators) a lack of substantive 
merit did not prevent Trie from participating.
---------------------------------------------------------------------------
    \159\ See List of Commission Appointees, April 22, 1996 (Ex. 87).
    \160\ Id.
    \161\ At the time of Trie's appointment to the Commission, he had 
contributed a total of $205,000 to the DNC. (Trie contributed an 
additional $15,000 to the DNC between his appointment to the Commission 
and the November 1996 federal elections.) See supra, footnotes 59-69 
and accompanying chart. The announcement of Trie's appointment to the 
Commission also fell only one month after Trie delivered his first 
installment of contributions (a delivery totaling $460,000) to the 
Presidential Legal Expense Trust (``PLET''). The Committee believes 
that Trie's successful solicitation of contributions for the PLET may 
also have played a prominent role in Trie's appointment to the 
Commission. See section of this Report on Trie's involvement as a 
fundraiser for the PLET.
---------------------------------------------------------------------------
    The 15-member Commission on United States-Pacific Trade and 
Investment Policy was created on June 21, 1995, when President 
Clinton issued Executive Order 12964 \162\ and fulfilled a 
promise made to Senator Jeff Bingaman who insisted on the 
formation of the Commission in return for his support of the 
creation of the World Trade Organization.\163\ The purpose of 
the Commission was to prepare a report that would advise the 
President ``on the steps the United States should take to 
achieve a significant opening of Japan, China and other Asian 
and Pacific markets to U.S. business.'' \164\
---------------------------------------------------------------------------
    \162\ 31 Weekly Comp. Pres. Doc. 1095.
    \163\ Id.; see also Memorandum of Interview of Clyde Prestowitz, 
Jr., June 13, 1997, p. 1. Prestowitz, president of Washington's 
Economic Strategy Institute, told the Committee that he recommended to 
Senator Bingaman the idea of insisting on the creation of the 
Commission in return for his vote in favor of the Uruguay Round GATT 
agreement.
    \164\ Executive Order 12964, Section 2, 31 Weekly Comp. Pres. Doc. 
1095.
---------------------------------------------------------------------------
    In the months following the creation of the Commission, the 
White House selected a group of chief executives, academics and 
Asian specialists to fill the fifteen available slots.\165\ 
Trie's name, however, was not included among the individuals 
initially considered for appointment.\166\ Rather, Trie's name 
was added in the fall of 1995 only after he expressed an 
interest in participating, and only after White House officials 
made it clear that Trie's selection was a priority.\167\ Trie's 
appointment also carried with it the endorsement of the 
DNC,\168\ to which Trie and his businesses had contributed 
$192,500 in 1994 and 1995.\169\
---------------------------------------------------------------------------
    \165\ Glenn F. Bunting, ``White House Helped Boost Trie onto Asia 
Trade Panel; Donations: Clinton Friend Won New Spot with a Padded 
Resume. Subject of Fund-raising Inquiry Now in China,'' Los Angeles 
Times, July 20, 1997, p. A1.
    \166\ Id.; see also Memorandum from Ira S. Shapiro to Mickey 
Kantor, January 20, 1995 (Ex. 88).
    \167\ Id.; see also Memorandum from Phyllis Jones to Mickey Kantor 
attaching list of appointees to the Commission, November 21, 1995 (Ex. 
89).
    \168\ See Electronic Mail Message from Phyllis Jones to Jennifer 
Hillman, September 21, 1995 (Ex. 90).
    \169\ Trie and his businesses contributed an additional $27,500 to 
the DNC in 1996. See supra, footnotes 66-69 and accompanying chart.
---------------------------------------------------------------------------
    In order to accommodate the White House's interest in the 
inclusion of Trie without eliminating any of the fifteen 
individuals originally selected for appointment to the 
Commission, the President issued Executive Order 12987 on 
January 31, 1996, expanding the membership of the Commission to 
``up to 20.'' \170\
---------------------------------------------------------------------------
    \170\ 32 Weekly Comp. Pres. Doc. 134.
---------------------------------------------------------------------------
    After completion of a preliminary background check on each 
of the individuals considered for appointment to the 
Commission,\171\ the appointees were asked to submit a 
financial disclosure report in order to identify potential 
conflicts with the Commission's work.\172\ Trie's financial 
disclosure report revealed that he received a total annual 
salary of $97,500 from his Little Rock-based international 
trading company, Daihatsu International Trading, and from Ng 
Lap Seng's San Kin Yip International.\173\ Trie also reported 
ownership of $22,000 worth of stock in Walmart.\174\ Officials 
of the United States Trade Representative's office who reviewed 
Trie's disclosure report found that Trie's position on the 
Commission could have a ``direct and predictable effect'' on 
his interests in Daihatsu, San Kin Yip, and Walmart and that he 
thus possessed ``a disqualifying financial interest.'' \175\
---------------------------------------------------------------------------
    \171\ See Memorandum from Winston Allen to Marvin Krislov 
requesting a preliminary background investigation of Trie, December 15, 
1995 (Ex. 91). The FBI's investigation of Trie (a ``name check'' of 
criminal and intelligence databases) did not uncover any information to 
cause the White House to reconsider Trie's appointment. See Memorandum 
from Marvin Krislov to Bob Nash announcing completion of Trie's 
background investigation, February 5, 1996 (Ex. 92).
    \172\ See Confidential Financial Disclosure Report of Yah Lin Trie, 
March 11, 1996 (Ex. 93). USTR Assistant General Counsel Barbara 
Fredericks noted Trie's failure to sign the report and promised to 
correct the deficiency. See Letter from Barbara Fredericks to Laura 
Sherman, April 17, 1996 (Ex. 94). A signed version of the report, 
however, has not been produced to the Committee.
    \173\ Id.; see the discussion of these companies above.
    \174\ Id.
    \175\ See Letter from Laura Sherman to Charlene Barshefsky, May 9, 
1996 (Ex. 95); see also 18 U.S.C. Sec. 208(a) (prohibiting Government 
employees from rendering advice with respect to issues in which they 
have a financial interest).
---------------------------------------------------------------------------
    U.S. Trade Representative Charlene Barshefsky, however, 
possessed the authority to waive Trie's conflict upon a finding 
that the ``need for [Trie's] services outweigh[ed] the 
potential for a conflict of interest created by the financial 
interest involved.'' 176 USTR officials therefore 
drafted a waiver memo for Barshefsky's signature stating that 
Trie ``possesse[d] special expertise vital to the work of the 
Commission,'' and that his participation was ``essential to the 
United States.'' 177
---------------------------------------------------------------------------
    \176\ 18 U.S.C. Sec. 208(b)(3).
    \177\ Ex. 95.
---------------------------------------------------------------------------
    Although Barshefsky refused to sign the memo waiving Trie's 
conflict, Trie was ultimately permitted to participate as a 
member of the Commission without a waiver (or other resolution 
of the potential conflict).178 According to the Los 
Angeles Times, a USTR official explained that the paperwork on 
Trie simply ``fell through the cracks.'' 179
---------------------------------------------------------------------------
    \178\  Glenn F. Bunting, ``White House Helped Boost Trie onto Asia 
Trade Panel; Donations: Clinton Friend Won New Spot with a Padded 
Resume. Subject of Fund-raising Inquiry Now in China,'' Los Angeles 
Times, July 20, 1997 p. A1.
    \179\ Id.
---------------------------------------------------------------------------
    Trie attended most of the early Commission meetings and 
traveled with Commission members on a member-funded, 10-day 
trip to Asia in September 1996.180 While Commission 
members acknowledged that Trie's contacts in and familiarity 
with many of the Asian cities they visited made him a valuable 
addition to their fact-finding trip,181 most were 
far less complimentary of Trie's substantive input to the work 
of the Commission.182 Trie submitted a report to the 
Commission containing his own recommendations 183 
that members dismissed as superficial, grammatically deficient, 
and generally unhelpful.184
---------------------------------------------------------------------------
    \180\ See Memorandum of Interview of Dr. Meredith Woo-Cummings, 
June 25, 1997, pp. 1-2.
    \181\ See, e.g., Prestowitz interview, p. 2.
    \182\ See Woo-Cummings interview, p. 1 (Trie was ``clearly [in] 
`over his head' on the Commission''); Memorandum of Interview of Bruce 
Stokes, June 30, 1997, p. 2 (``Trie did not contribute very much to the 
Commission's efforts.''); Memorandum of Interview of Jason S. Berman, 
p. 2 (``Trie was not involved in any way in drafting the final 
report.'').
    \183\ See ``Recommendations for what we can do in U.S.-Asia Trade 
Policy Formulation,'' August 1, 1996 (Ex. 96). As the face of Trie's 
report reflects, the report was actually drafted by Chu Lei, not by 
Trie himself. Chu Lei is an American citizen currently residing in 
Taiwan. In addition to assisting Trie with his report to the 
Commission, Chu also introduced Trie to Master Suma Ching Hai, the 
leader of the Buddhist sect that was the source of the almost $700,000 
in contributions that Trie brought to the PLET. See Memorandum of 
Interview of Chu Lei, July 8, 1997, pp. 1-2; see also section of this 
Report on Trie's involvement as a fundraiser for the PLET.
    \184\ See, e.g., Woo-Cummings interview, p. 2 (describing Trie's 
report as ``completely incomprehensible'').
---------------------------------------------------------------------------
    Trie's active participation on the Commission ended in late 
1996 when his name surfaced in connection with campaign 
fundraising improprieties.185 After Trie fled the 
United States for China, he sent a letter to the Commission 
apologizing for the impact of the scandal on the Commission's 
work and expressly stating that he would no longer be 
participating in Commission activities.186 However, 
in spite of the well-publicized allegations about Trie's 
fundraising improprieties and his withdrawal from participation 
on the Commission, the Administration never formally revoked 
Trie's appointment, and he remained a member until the 
Commission submitted its final report in April 1997.
---------------------------------------------------------------------------
    \185\ See Glenn F. Bunting, ``White House Helped Boost Trie onto 
Asia Trade Panel; Donations: Clinton Friend Won New Spot with a Padded 
Resume. Subject of Fund-raising Inquiry Now in China,'' Los Angeles 
Times, July 20, 1997 p. A1.
    \186\ See id.
---------------------------------------------------------------------------
    Finally, Trie sought to use his DNC contributions to 
benefit Ng financially. In a letter to Ng dated June 4, 1995, 
Trie expressly stated his belief that his involvement in the 
DNC could ``assist in the development and success'' of a real 
estate development project planned by Ng in 
Macau.187 Trie's DNC contacts, in fact, worked 
precisely as Trie envisioned. DNC Deputy Finance Chairman David 
Mercer and Department of Commerce employee Jude Kearney 
introduced Trie to Ernest Green of Lehman 
Brothers,188 and Trie later discussed with Green 
Lehman Brothers'' interest in financing a development project 
planned by Ng in Macau.189 In early 1995, Mercer 
again sought to assist Trie with further potential investment 
banking connections.190 While Trie's lack of 
business success indicates that he was ultimately unable to use 
these connections to his financial advantage, he did try.
---------------------------------------------------------------------------
    \187\  See Letter from Yah Lin ``Charlie'' Trie to Ng Lap Seng, 
June 4, 1995 (Ex. 97).
    \188\  See Deposition of Ernest Green, June 18, 1997, pp. 11-13.
    \189\  See id., pp. 17-18.
    \190\  See Memorandum from David Mercer to Charlie Trie, January 
30, 1995 (Ex. 98). Mercer testified that he provided this sort of 
personal assistance to Trie because Trie was a DNC ``supporter,'' and 
that to be an effective fundraiser for the DNC, he always sought to be 
``responsive'' to supporters. Deposition of David Mercer, May 14, 1997, 
pp. 23-24. Mercer also testified that he attended social events with 
Trie, including a party at Trie's Watergate apartment celebrating the 
opening of the 1996 Olympics. Id., pp. 43, 45.
---------------------------------------------------------------------------

                    Need for an Independent Counsel

    Three individuals have now been indicted on charges based 
wholly or in part on their dealings with this Committee or from 
evidence revealed by this Committee. At least two of these 
individuals, Yah Lin ``Charlie'' Trie and Maria Hsia, have 
close ties to covered persons under the Independent Counsel 
Act. As noted above, Trie contributed $220,000 to the DNC and 
reimbursed the contributions of other contributors Trie 
recruited to disguise the original source of the contributions, 
and he did the same with respect to the Presidential Legal 
Expense Trust. Trie visited the White House twenty-two times. 
Trie also attended numerous fundraisers at which the President 
or Vice President were present, access purchased through his 
sizeable contributions and used to further his personal 
business. This access seeking formed one of the bases for the 
Justice Department's indictment of Trie on conspiracy charges.
    Maria Hsia was a personal friend and political supporter 
and fundraiser for the Vice President since 1988. Hsia was 
instrumental in inviting then-Senator Gore on a trip to Taiwan 
through the partial auspices of the Fo Kuang Shan Order. Hsia 
raised tens of thousands of dollars for Gore's 1990 Senate 
reelection campaign. Hsia also used the ``tally'' system to 
direct DNC funds to Gore's Senate reelection campaign. After 
Gore became Vice President, Hsia laundered funds through Hsi 
Lai Temple monastics to arrange for Vice President Gore's chief 
of staff to meet with the head of China Resources. In 1996, 
Hsia was a prominent arranger of the DNC fundraiser that Vice 
President Gore attended at the Hsi Lai Temple. The Justice 
Department's indictment lists as part of Hsia's conspiracy to 
defraud the Federal Election Commission Hsia's money laundering 
at that event, as well as other events attended by Vice 
President Gore or President Clinton.
    Both Hsia and Trie have close relationships with the 
Chinese government and/or intelligence agencies, according to 
the United States intelligence or investigative agencies.
    Based upon the record before this Committee, we can only 
assume that many more indictments will be forthcoming. These 
indictments of people with close ties to the Administration 
illuminate an inherent problem that the Justice Department has 
in trying to pursue these cases--a problem that has come into 
fruition. These cases present an inherent conflict of interest 
and an appearance of a conflict of interest that the Department 
of Justice cannot escape.
    In these cases, the Justice Department will be faced with 
the following considerations, considerations that are present 
in all federal criminal prosecutions;
    --deciding whether to enter into plea bargaining 
negotiations and whether to accept a plea bargain;
    --deciding whether the defendant is cooperating fully and 
fulfilling the plea bargain, and specifically, deciding whether 
the defendant is telling all that he or she knows;
    --deciding whether to grant immunity and, if so, deciding 
whether or not the defendant is telling all that he or she 
knows pursuant to that immunity agreement.
    In any such case, when the citizens of this country have 
returned an indictment, it is the prosecutor's obligation to be 
fair to the defendant but to be tough in representing the 
public interest. For example, in any such case where any deal 
has been struck, the prosecutor must ask the defendant tough 
questions and use appropriate prosecutorial resources to 
determine whether the defendant is cooperating fully. If the 
defendant's superior or close associate is the subject of 
accusations or well-placed suspicions, the prosecutor must be 
aggressive in determining whether or not the defendant has any 
information about such an individual. And the prosecutor cannot 
usually accept a simple denial without further inquiry. Should 
the individual about whom the defendant may have information be 
a public official, the above process is even more important. 
This is true whether the public official in question is a 
mayor, a governor, a member of Congress or the President. That 
fact forms the basis for the existence of a ``public integrity 
section'' in the Justice Department.
    The problem in these cases is that the Attorney General 
works for the President. This is the very kind of situation 
that is addressed in the ``political conflict'' provision of 
the Independent Counsel Act. 28 U.S.C. Sec. 591(c)(1). As the 
public sees these defendants processed and sees any deals 
worked out by the Justice Department and the defendants, the 
Justice Department will bear a very heavy burden in convincing 
the American people that the decisions the Department made were 
appropriate and fully protective of the interest of justice.
    For this reason, an independent counsel should be appointed 
to remove the Department of Justice from this clear ``political 
conflict of interest'' which burdens the Justice Department and 
for which Congress provided a solution.

                               conclusion

    As a result of generous contributions and successful 
fundraising, Charlie Trie established himself as a key player 
in the DNC's finance operation, opened the doors of the White 
House for himself and Ng Lap Seng, and secured for himself an 
appointment to the Commission on U.S.-Pacific Trade and 
Investment Policy.\191\ The Committee has concluded, however, 
that Trie's unsuccessful international trading business could 
not support the contributions that allowed him the access that 
he obtained. Rather, Trie relied on a continuous stream of 
illegal funds that he received by wire transfer from Ng Lap 
Seng's bank accounts in Hong Kong and Macau. The source of Ng's 
funds and what he or those behind him hoped to gain through 
Trie remain unknown.
---------------------------------------------------------------------------
    \191\ See section of this Report on Trie's involvement as a 
fundraiser for the PLET.





  Charlie Trie's Contributions to the Presidential Legal Expense Trust

                            I. INTRODUCTION

    Charlie Trie's contributions to the Presidential Legal 
Expense Trust (the ``Trust'') further illustrate the manner in 
which Trie raised foreign money, as well as his close ties to 
the White House and the President. Unlike contributions to the 
Clinton/Gore campaign or the DNC, contributions to the Trust 
inured directly to the personal financial benefit of President 
Clinton and the First Lady. The money was used to pay their 
personal legal bills. Because such contributions are even more 
susceptible to abuse than ordinary campaign contributions, the 
Committee looked closely at Trie's activities with respect to 
the Trust and the White House's knowledge of and response to 
those activities.
    In March 1996, Trie personally delivered almost one half 
million dollars in checks and money orders to the Trust. Trust 
representatives and White House officials recognized almost 
immediately that the donations were highly questionable and 
appeared, at least in part, to have been coerced from members 
of a controversial Buddhist sect. However, rather than simply 
returning the suspect donations and publicly reporting such 
returns--which had been the Trust's historical practice--the 
Trust, in consultation with senior White House officials, hid 
the returned donations by changing the format of the Trust's 
bi-annual public disclosure form. This avoided public 
disclosure of any information concerning the Trie donations 
prior to the 1996 presidential election.
    Moreover, when the Trust finally sent the donations back to 
the Trie-related contributors, it did so with a twist. It 
invited these contributors to recontribute their money, 
notwithstanding the fact that they knew a substantial amount of 
the money had been coerced from these very donors in the first 
place. Not surprisingly, once Charlie Trie's close association 
with James Riady, John Huang and the entire DNC fundraising 
matter became public through press reports in October 1996, the 
Trust and White House senior officials quickly determined that 
the ``recontributions'' should also be returned--this time with 
no strings attached. However, neither the White House nor the 
Trust publicly disclosed the Trie/Trust connection or the 
strange origin of the donations until after the election and 
even then only because they were forced to do so by a 
threatened press story.
    These questionable facts alone were cause for concern by 
the Committee, but the Committee also found other equally 
disturbing facts concerning Trie's relation to the Trust and 
the White House. For example, despite the fact that the Trust, 
with White House permission, had hired a private investigative 
firm to investigate the Trie donations, the one person the 
investigative firm was instructed not to speak with was Charlie 
Trie. This, despite the fact that Trie was obviously the 
central figure, and his office and the private investigative 
firm were located only blocks apart in Washington, DC, making 
an interview with him a simple matter. Likewise, even though 
they were well aware of the suspicious nature of his 
fundraising for the Trust, no one at the White House took any 
action prior to the election to inquire about Trie's 
simultaneous fundraising for the DNC.\1\ This despite the fact 
that (a) Trie was known to be a major DNC donor (a Managing 
Trustee); (b) he had told Trust representatives in his first 
visit that he was organizing a major DNC fundraiser; and (c) he 
was a frequent guest at the White House. This was particularly 
strange with respect to Deputy White House Chief of Staff 
Harold Ickes who helped manage the DNC on a daily basis, knew 
Trie was involved in raising money for the Democratic party and 
was one of the first to know about Trie's involvement with the 
Trust.
---------------------------------------------------------------------------
    \1\ The DNC ultimately returned $645,000 either contributed or 
raised by Charlie Trie.
---------------------------------------------------------------------------
    Perhaps most alarming was the fact that the senior White 
House officials who were being consulted about Trie's 
involvement with the Trust claimed to know little or nothing 
about Trie, while at the very same time Trie was receiving 
several favors from the White House and socializing with the 
President. For example, in February 1996, just weeks before 
Trie collected the Trust donations from the Buddhist sect, he 
was successful in gaining admission to a White House coffee 
with the President for Wang Jun, a Chinese arms merchant. The 
President subsequently admitted his meeting with Wang Jun was 
highly improper. Likewise, during this same time frame, Trie 
was being considered for a Presidential appointment to the 
Commission on U.S. Pacific Trade and Investment Policy. In 
fact, he was named to the Commission within four weeks after he 
delivered the first batch of donations to the Trust. Finally, 
on the very same day that he delivered the first batch of 
donations to the Trust, a letter authored by Trie was sent by 
former White House aide Mark Middleton to the President 
expressing Trie's concern and advice regarding Taiwan/China 
relations. The letter sparked a flurry of activity at the 
National Security Council and eventually resulted in a detailed 
written response signed by the President. This was particularly 
curious given the fact that Middleton apparently was the person 
who directed Trie to the Trust in the first place. Middleton 
has asserted his Fifth Amendment rights and has refused to 
cooperate with the Committee.

          II. The Presidential Legal Expense Trust--Background

    The Trust was established on June 28, 1994 to raise funds 
to help the President and First Lady pay personal legal bills 
arising from lawsuits and investigations initiated after Mr. 
Clinton became President.\2\ The Trust was governed by a number 
of guidelines concerning the source and types of contributions 
that could be accepted. The guidelines generally followed 
Federal Election Commission rules governing donations to 
federal candidates. The following is a list of some of the 
requirements regarding donations to the Trust as included in 
the February 22, 1996 bi-annual report of the Trust:
---------------------------------------------------------------------------
    \2\ July 1996 Bi-annual Report of the Trust, August 13, 1996 (Ex. 
1). On December 31, 1997 the Trust ceased operations as a result of a 
lack of contributions sufficient to cover its expenses.
---------------------------------------------------------------------------
          1. Contributions are accepted only from individual 
        U.S. citizens, other than federal employees or 
        registered lobbyists. Each person must make his or her 
        own contribution using personal funds. Each 
        contribution must be made voluntarily.
          2. Contributions are not accepted from corporations, 
        labor unions, partnerships, political committees or 
        other entities.
          3. Individual contributions are limited to a maximum 
        of $1,000 per eligible individual per calendar year.
          4. Anonymous contributions will not be accepted.
          5. Each contributor should provide his or her name, 
        address and telephone number. In addition, a donor 
        contributing $200 or more should provide his or her 
        occupation and employer's name.
          6. The Trust will acknowledge contributions and make 
        periodic public reports of the Trust contributors.\3\
---------------------------------------------------------------------------
    \3\ January 1996 Bi-annual Report of the Trust, February 22, 1996 
(Ex. 2).
---------------------------------------------------------------------------
    Once the Trust was established, a distinguished group of 
trustees was chosen to administer the Trust. The individuals 
named as Co-Chairs of the Trust were Rev. Theodore M. Hesburgh, 
President Emeritus of Notre Dame University, and former 
Attorney General Nicholas deB. Katzenbach. The other Trustees 
named were John Brademas, former Indiana Congressman and 
President EmeritusNew York University; Barbara Jordan, former 
Texas Congresswoman; Ronald L. Olson, Los Angeles lawyer; Elliot L. 
Richardson, former Attorney General, Secretary of Defense and Secretary 
of Health, Education and Welfare; Michael Sovern, President Emeritus of 
Columbia University; and John C. Whitehead, former Deputy Secretary of 
State.
    Michael Cardozo was named Executive Director of the Trust 
in June, 1994 after being contacted by White House counsel 
Lloyd Cutler and meeting with the President to discuss the job. 
Cardozo had been active in Democratic politics for many years. 
He was a former Deputy White House Counsel under President 
Carter, served on the Credentials Committee of the 1972 
Democratic Convention, and was Vice-Chair of the Clinton-Gore 
Inaugural Committee in 1993 and again in 1997. Currently he is 
the managing director of G. William Miller & Co., an investment 
banking firm. 4
---------------------------------------------------------------------------
    \4\ Deposition of Michael Cardozo, May 7, 1997, pp. 5-7.
---------------------------------------------------------------------------
    Cardozo's role was primarily to assist in the submission of 
quarterly and bi-annual reports to the President and First 
Lady, oversee the public release of the bi-annual report, keep 
the Trustees informed of the activities of the Trust, act as a 
liaison between the Trust and the White House, and oversee the 
day-to day work of the Trust, most of which was delegated to 
the Administrative Assistant, Sally Schwartz. 5 
Schwartz's responsibilities primarily consisted of reviewing 
contributions, maintaining a data base, sending out 
acknowledgments, preparing reports both for the Trustees and 
the Executive Director and also for the public briefings. 
6
---------------------------------------------------------------------------
    \5\ Ms. Schwartz served as Administrative Assistant from August 
1995 until the Trust was closed. The Administrative Assistant was the 
only full time, paid employee of the Trust. Deposition of Sally 
Schwartz, May 6, 1997, p. 11.
    \6\ Id.
---------------------------------------------------------------------------
     As of the period ending December 31, 1995, the Trust had 
received a total of $993,476 in donations since its inception 
and had paid a total of $541,134.24 of the President's legal 
expenses. As of that time $1,360,063.95 in legal expenses 
remained outstanding. 7
---------------------------------------------------------------------------
    \7\ See Ex. 2.
---------------------------------------------------------------------------

         III. Charlie Trie's March 21, 1996 Visit to the Trust

    Trie's first visit to the Trust on March 21, 1996 is 
important in several respects. The amount of donations Trie 
delivered, nearly half a million dollars, represented almost 
fifty percent (50%) of the money raised by the Trust since its 
inception and, thus, as Cardozo acknowledged was an 
``enormous'' event in the life of the Trust. Additionally, in 
the first meeting Trie represented that he was an acquaintance 
of the President from Little Rock, was organizing a DNC 
fundraiser expecting to raise $1 million, and was also in the 
process of being appointed to a federal commission by the 
President. Trie also repeatedly insisted on confidentiality 
concerning his role in delivering the donations.
    According to Cardozo's testimony, Trie first called Cardozo 
on March 20, 1996 at his business office to set up the initial 
meeting. 8 Cardozo informed Trie that he could 
answer any questions about the Trust over the telephone, but 
Trie insisted that they meet in person. The two met the next 
day at Cardozo's office at G. William Miller & Co., which was 
located across the street from the offices of the Trust. Trie 
began their meeting by telling Cardozo about his personal 
background and the fact that he had owned a Chinese restaurant 
in Little Rock that was frequented by then-Governor Clinton. 
Trie told Cardozo that he had heard about Mr. Clinton's 
mounting legal bills and had set about trying to help. Trie 
then retrieved a manilla envelope from beside his chair, turned 
it up over the table, and according to Cardozo, ``out came a 
mound of checks and money orders.'' 9 According to 
Trie the total amount of the checks and money orders was 
$460,000. 10
---------------------------------------------------------------------------
    \8\ Trie's background and connection to the DNC are discussed above 
in the section on Charlie Trie's fundraising for the DNC.
    \9\ Deposition of Michael Cardozo, May 7, 1997, p. 34.
    \10\ Id.
---------------------------------------------------------------------------
    After seeing the ``mound'' of checks and money orders, 
Cardozo called Ms. Schwartz at the Trust's offices and asked 
her to come to the meeting so that he could have another 
witness. At Cardozo's request, Ms. Schwartz brought with her a 
fact sheet, a sample of the Trust's bi-annual publication of 
donors and several other documents which reflected how the 
Trust reported donations. 11 Cardozo wanted to show 
these documents to Trie to impress upon him that the donations 
would be made public. 12
---------------------------------------------------------------------------
    \11\ Id. at p. 35.
    \12\ Id. at pp. 38-39.
---------------------------------------------------------------------------
    Schwartz arrived at the meeting in less than five minutes. 
During the meeting, Trie told Cardozo and Schwartz that he was 
helping to organize a major fund raiser for the DNC which would 
raise $1 million. 13 Trie told Cardozo and Schwartz 
that he had a lunch appointment at the Palm Restaurant next 
door and that he would return after the lunch. Cardozo and 
Schwartz used this period of time to review the checks and 
money orders more closely. 14
---------------------------------------------------------------------------
    \13\ Id. at pp. 43-44.
    \14\ Id. at p. 38.
---------------------------------------------------------------------------
    While Trie was at lunch, Cardozo conducted a conference 
call with Mr. Katzenbach, co-chair for the Trust, and Bernard 
Aidenoff, counsel to the Trust. The three decided that if the 
checks appeared to be valid on their face they should be 
deposited into the Trust's bank account. 15 Cardozo 
and Schwartz studied the checks and money orders and determined 
that approximately $70,000 were deficient. For example, some of 
the checks were missing names, addresses, or were for an amount 
in excess of the Trust's guidelines. 16
---------------------------------------------------------------------------
    \15\ Id. at p.48.
    \16\ Id. at p.54-55; Deposition of Sally Schwartz, May 6, 1997, 
p.40.
---------------------------------------------------------------------------
    Upon Trie's return from his lunch at the Palm, Cardozo and 
Schwartz returned the deficient checks to him. Trie appeared 
confident that he could cure the deficiencies. 17 
During this discussion, Trie stated that he did not want his 
name mentioned in connection with the contributions. Trie told 
them that he was going to be appointed to a federal commission 
and was not sure that he was eligible to make a donation. 
18 Trie even balked at the idea of mailing the valid 
checks and money orders to the bank because he did not want to 
put his name and return address on the envelope. Accordingly, 
Trie and Schwartz personally delivered the contributions to the 
Trust's lock box at NationsBank. 19 After depositing 
the funds in the Trust's lock box, the Trust decided to put 
them into an interest bearing money market account, commingled 
with other contributions. The donations were listed as 
``unrestricted'' on internal Trust accounting documents, and 
were deemed accepted according to the Trust's own accounting 
procedures. 20
---------------------------------------------------------------------------
    \17\ Deposition of Michael Cardozo, May 7, 1997, pp. 54-55.
    \18\ Id. at pp. 41-42.
    \19\ Deposition of Sally Schwartz, May 6, 1997, pp. 41-42.
    \20\ Deposition of Michael Cardozo, May 7, 1997, pp. 241-245; 
Profit and Loss Statement for the Trust, June 12, 1996 (Ex. 3).
---------------------------------------------------------------------------

A. The Role of Mark Middleton/White House favors for Trie

    At some point during the March 21st meeting, Trie stated 
that he had gotten Cardozo's name from Susan Levine and had 
been directed to Levine by Mark Middleton.21 Susan 
Levine is an acquaintance of Cardozo's, and has worked at both 
the DNC and the White House during the Clinton 
Administration.22  Middleton formerly worked at the 
White House as an advisor to former White House Chief of Staff 
Thomas ``Mack'' McLarty. After leaving the White House, 
Middleton formed Commerce Corp., International, a company 
focused on international trade with Asia. Middleton is 
currently under investigation regarding his business 
transactions in Asia, his fund raising for the Clinton 
Birthplace Foundation and his connections to Trie. It has been 
widely reported in the press that Middleton and Trie were very 
close and traveled together to Taiwan.23
---------------------------------------------------------------------------
    \21\ Deposition of Loren Berger, June 23, 1997, pp. 44-45.
    \22\ Deposition of Michael Cardozo, May 7, 1997, pp. 30-31.
    \23\ ``Mark Middleton; White House Staff,'' USA Today, February 27, 
1997, p. 6A.
---------------------------------------------------------------------------
    It is unknown whether Middleton knew--at the time he 
directed Trie to the Trust--of the questionable nature of the 
donations Trie would deliver. He has asserted his Fifth 
Amendment rights and refused to talk with Committee 
investigators. However, if he did know of the questionable 
origin of the contributions, it would explain why he directed 
Trie to the Trust as opposed to Clinton/Gore '96, or the DNC, 
where the contributions would have received much greater 
scrutiny and been subject to FEC guidelines.
    In addition to steering Trie to the Trust, Middleton also 
helped Trie communicate with the President concerning China/
Taiwan policy. Although Trie did not tell Cardozo or Schwartz 
with whom he was having lunch at the Palm on March 21st, 
National Security Council documents obtained by the Committee 
indicate that his appointment was almost certainly with 
Middleton.24 Trie's lunch appointment at the Palm 
was at noon. Middleton's office is across the street from the 
Palm. At 1:14 pm on the 21st--minutes after Trie's lunch 
ended--Middleton faxed a letter from Trie addressed to the 
President to Maureen Lewis at the White House who handles the 
President's personal correspondence. The letter was faxed from 
Middleton's office. These facts suggest that the letter was 
passed from Trie to Middleton at the Palm. The cover sheet of 
the fax stated in part, ``Dear Maureen: As you likely know, 
Charlie is a personal friend of the president from LR. He is 
also a major supporter. The president sat beside Charlie at the 
big Asian function several weeks ago.'' 25
---------------------------------------------------------------------------
    \24\ Letter from Charlie Trie to the President with fax cover sheet 
from Mark Middleton, March 21, 1996 (Ex. 4).
    \25\ Id. at p. 1.
---------------------------------------------------------------------------
    In the letter, Trie expressed concern over U.S. 
intervention in tensions arising from military exercises being 
conducted by China near the coast of Taiwan. Trie told the 
President in his letter that war with China was a possibility 
should U.S. intervention continue,

        .  .  . once the hard parties of the Chinese military 
        incline to grasp U.S. involvement as foreign 
        intervention, is U.S. ready to face such challenge . . 
        . 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.26
---------------------------------------------------------------------------
    \26\ Id. at pp. 2-3.

    The National Security Council prepared a draft response to 
Trie's letter which was personally reviewed by National 
Security Advisor Anthony Lake and forwarded to the President 
for his signature. In his response letter, the President 
explained the U.S. objectives in the area and tried to ease 
Trie's concerns about the situation.27
---------------------------------------------------------------------------
    \27\ Letter from the President to Charlie Trie and supporting 
memoranda, April 22, 1996 (Ex. 5).
---------------------------------------------------------------------------
    While thousands of people write the President and receive 
reply letters carrying his signature, few people write letters 
that receive the kind of activity and attention within the NSC 
that Trie received. Without the testimony of Trie and 
Middleton, however, the Committee cannot determine whether the 
letter had any connection to the donations to the Trust and/or, 
more importantly, whether Trie was acting at someone else's 
direction when he wrote the letter to the President.
    In addition to this exchange on China/Taiwan policy, Trie 
also received two other favors from the White House at or about 
the time of his donations to the Trust. First, as discussed in 
more detail above in the section on Charlie Trie, Trie was 
appointed by the President to the Commission on U.S. Pacific 
Trade and Investment Policy--an act which required the 
President to expand the Commission's size by signing an 
executive order. Trie was appointed to the Commission despite 
the fact that his qualifications did not remotely match those 
of the other members named to the Commission.28 
Trie's appointment was also not made official until four weeks 
after his delivery of the donations to the Trust.
---------------------------------------------------------------------------
    \28\ List of names and occupations of members of the Commission, 
November 8, 1995 (Ex. 6).
---------------------------------------------------------------------------
    Additionally, and as discussed more fully above, Trie was 
also successful in gaining admission to a White House coffee 
with the President for Chinese arms dealer Wang 
Jun.29 The coffee took place on February 6, 1996, 
just weeks before Trie began gathering the donations from the 
Buddhist sect that he would eventually deliver to the Trust. 
When it was revealed that the President had entertained Wang, 
who also serves as an advisor to the Chinese government, the 
President admitted that the meeting was ``clearly 
inappropriate.'' 30 Without the cooperation of Trie 
or Wang Jun the Committee cannot determine whether Trie's 
fundraising for the Trust was connected in any way to Wang 
Jun's visit.
---------------------------------------------------------------------------
    \29\ See previous portion of the section regarding Charlie Trie's 
fundraising for the DNC.
    \30\ ``Sen. Thompson to Subpoena Delayed White House Files,'' The 
Washington Post, July 31, 1997.
---------------------------------------------------------------------------

 IV. April 4, 1996 White House Meeting with the First Lady and Harold 
                                 Ickes

    Following Trie's first visit on March 21, 1996, Cardozo and 
the Co-chairs of the Trust decided that the President and First 
Lady should be informed of the visit in order to notify them of 
the contributions as well as to see if they knew Trie.\31\ 
Accordingly, Cardozo scheduled a meeting on April 4 with Harold 
Ickes, White House Deputy Chief of Staff and the White House 
supervisor of the President's re-election effort, and Mrs. 
Clinton to discuss the Trie-related contributions to the Trust. 
Cardozo began the meeting by telling the First Lady that 
someone from Arkansas had delivered a large number of checks to 
the Trust and asked her to guess who it was. When she failed to 
do so, Cardozo mentioned the name Charlie Trie. Mrs. Clinton 
hesitated, then recalled him as the owner of a restaurant in 
Little Rock frequented by then Governor Clinton. Cardozo 
explained that the donations were primarily from Asian-
Americans and that the co-chairs had decided to deposit the 
money and determine whether or not the checks and money orders 
were indeed eligible. Mrs. Clinton agreed that the Trust should 
be diligent in determining the eligibility of the 
contributions.\32\ In this regard, Cardozo mentioned that he 
had learned through his experiences during Watergate to be wary 
of individuals carrying bags of money in Washington,
---------------------------------------------------------------------------
    \31\ Id. at p. 50.
    \32\ Deposition of Michael Cardozo, May 7, 1997, p. 102.

          . . . when people drop large sums of money off in 
        manila envelopes in Washington, D.C., you've got to be 
        very careful about how you handle those funds.\33\
---------------------------------------------------------------------------
    \33\ Id. at p. 73.

Both he and Mrs. Clinton discussed their Watergate experiences 
during this April 4 meeting.\34\
---------------------------------------------------------------------------
    \34\ Id. at pp. 73, 75.
---------------------------------------------------------------------------
    Cardozo testified that he probably took a copy of the 
Trust's bi-annual report to the meeting.\35\ He concluded this, 
in part, because Harold Ickes' notes of the April 4th meeting 
include the notation ``Total contributions Less ineligible.'' 
\36\ The bi-annual report which the Trust released to the press 
every six months contained the following reporting line:
---------------------------------------------------------------------------
    \35\ Id. at p. 78.
    \36\ Handwritten notes of Harold Ickes, April 4, 1996 (Ex. 7).
---------------------------------------------------------------------------

                 Statement of Receipts and Expenditures

                     July 1, 1995-December 31, 1995

Receipts:
        Total Contributions...................................  $107,739
        Less Ineligible Receipts..............................   (2,202)
                    --------------------------------------------------------------
                    ____________________________________________________

            Net Receipts......................................   105,537

This entry noted the total contributions received in the six 
month reporting period as well as the contributions which were 
ineligible and, thus, returned. The existence of that 
particular language in the Ickes' notes is important because it 
likely indicates that at the April 4 meeting Ickes, Cardozo and 
Mrs. Clinton discussed the fact that even if the Trie-related 
contributions were returned, their existence would be easy to 
ascertain from the bi-annual report scheduled to be released in 
July 1996. Cardozo admitted that the returned contributions, if 
publicly disclosed, would have been a major press story.\37\ As 
discussed more fully below, the Trust, with White House 
knowledge, subsequently changed its reporting format to omit 
any disclosure of returned contributions.
---------------------------------------------------------------------------
    \37\ Deposition of Michael Cardozo, May 7, 1997, pp. 141-142.
---------------------------------------------------------------------------
    Cardozo could offer few other details about the April 4 
White House meeting. He testified that he did not tell Ickes or 
the First Lady about Trie's Presidential appointment to the 
federal commission or his involvement in organizing the DNC 
fundraiser because he did not think they were important.\38\ 
Significantly, at the meeting Ickes apparently did not indicate 
any knowledge of Trie despite the fact that by most accounts 
Ickes ran the DNC from the White House and Trie was a DNC 
Managing Trustee.\39\
---------------------------------------------------------------------------
    \38\ Testimony of Cardozo, July 30, 1997, p. 28.
    \39\ Meaning that he raised or contributed at least $100,000; see 
section of the report regarding White House control of the DNC.
---------------------------------------------------------------------------

              V. The Trust Investigates the Trie Donations

    In the weeks following Trie's initial visit and Cardozo's 
April 4 meeting at the White House, Sally Schwartz reviewed the 
checks and money orders more closely to determine whether they 
met the Trust's guidelines. She found that some of the money 
orders were sequentially numbered (meaning they had been 
purchased at one location), but were filled out by people from 
different parts of the country. In addition, a number of the 
checks had the same misspelling of the word ``presidential,''--
spelled instead ``presidencial.'' She also found that some of 
the checks were written by one person on behalf of another in 
violation of the Trust's guidelines.\40\
---------------------------------------------------------------------------
    \40\ Deposition of Sally Schwartz, May 6, 1997, pp. 66-67.
---------------------------------------------------------------------------
    Schwartz telephoned some of the donors directly to 
determine whether they had in fact given their own money. She 
was told about large meetings at which the contributions were 
gathered. Eventually she learned about a Buddhist organization, 
Ching Hai, which had hosted the meetings, and she became 
concerned that some of the donors may have been coerced into 
making donations.\41\ The more Schwartz looked into the Trie-
related donations, the more it became apparent that the Trust 
needed outside help to investigate the matter.
---------------------------------------------------------------------------
    \41\ Id. at p. 137.
---------------------------------------------------------------------------

A. The Trust Hires Investigative Group Inc.

    As a result of Schwartz's internal investigation, Cardozo 
determined that the Trust should hire the Investigative 
Group,Inc. (IGI), a private investigative firm, to investigate the 
donations. On April 22, 1996, Cardozo held a conference call with the 
Trustees to gain their consent to hire IGI. The Trustees consented, but 
also raised a number of concerns. Elliott Richardson, former U.S. 
Attorney General, observed that,

        from a political point of view that we have a 
        relatively desultory fund with only a trickle of money 
        coming in and suddenly a big wave of Asian-American 
        money comes in, in the wake of a number of fairly 
        visible administration actions involving Asia in 
        general and Taiwan in particular.\42\
---------------------------------------------------------------------------
    \42\ Transcript of Trustees' conference call, April 22, 1996, p. 2 
(Ex. 8).

Similarly, John Brademus, former Congressman from Indiana, 
---------------------------------------------------------------------------
raised the following concern:

          One question . . . I would raise, but I hope Terry 
        Lenzner [of IGI] could look into is . . . do [the 
        donors] have a common position or can we find if there 
        is some leader of a group . . . that has views on let's 
        say continuation of MFN [Most Favored Nation status] or 
        termination of MFN . . . some political agenda behind 
        what they are doing? \43\
---------------------------------------------------------------------------
    \43\ Id. at p. 4. Mr. Cardozo responded, ``Well I think we can ask 
the Investigative Group to do that and I think at some point we can ask 
Mr. Trie to come to a meeting and share with him some of our concerns . 
. .'' Id.

Ronald Olson, an attorney from Los Angeles, suggested that 
``someone in the California Asian community and I would think 
the Taiwanese would be very, very prominent in this . . . I 
think I would try to get beyond Mr. Trie.'' \44\ Yet, despite 
the fact that these legitimate questions and concerns were 
raised by the Trustees, IGI was never requested to look into 
any of these matters.
---------------------------------------------------------------------------
    \44\ Id. at p. 1.
---------------------------------------------------------------------------
    Following the April 22 Trustee conference call, Cardozo and 
Darryl Libow, counsel for the Trust, met with Terry Lenzner and 
Garrick Tsui of IGI. Cardozo explained the events that had 
transpired at the Trust and asked IGI to investigate the Trie-
related contributions.\45\ However, the one person Cardozo 
specifically instructed IGI not to talk to was Charlie 
Trie.\46\ Cardozo explained that one reason for this 
instruction was that the Trust was limited to a $5,000 
investigation budget.\47\ However, he acknowledged that Trie's 
office in Washington, D.C. was only blocks from IGI and, thus, 
a visit by an IGI investigator would have cost very little,
---------------------------------------------------------------------------
    \45\ Deposition of Terry F. Lenzner, June 23, 1997, pp. 13-14.
    \46\ Id. at p. 14.
    \47\ Deposition of Michael Cardozo, May 7, 1997, pp. 98, 104.

          Mr. Tipps: And on the matter of cost--by the way, Mr. 
        Trie's office was at the Watergate office building, 
        right?
          Mr. Cardozo: That's what his business card said.
          Mr. Tipps: Right. And IGI--I am not from Washington, 
        but I believe it is on Connecticut Avenue?
          Mr. Cardozo: That's correct.
          Mr. Tipps: And that is about a $5 cab ride?
          Mr. Cardozo: That's correct.\48\
---------------------------------------------------------------------------
    \48\ Cardozo testimony, p. 36.

He also expressed a reluctance to talk with Trie because he was 
a friend of the Clintons.\49\ Whatever the reason, the failure 
of those investigating the Trie-related donations to sit down 
with Trie and ask him directly about the donations--and 
specifically their origin and whether he was receiving anything 
in return--is one of the more curious and troubling facts 
related to this entire episode.
---------------------------------------------------------------------------
    \49\ Deposition of Michael Cardozo, May 7, 1997, p. 104.
---------------------------------------------------------------------------
    Another strange, and as-yet-unexplained fact, uncovered by 
the IGI investigation was the possible role of longtime Clinton 
friend and Lippo Group associate Joe Giroir in the Trust 
matter. Loren Berger, an IGI investigator, interviewed Sally 
Schwartz as part of the IGI investigation. Berger's notes of 
the meeting indicate that at some point in the discussion about 
the Trie donations the name ``Joe Giroir'' was mentioned. The 
name appears in Berger's notes along with the name Mark 
Middleton.\50\ However, when deposed by Committee attorneys, 
neither Schwartz nor Berger could remember anything about 
Giroir or even the context in which his name was mentioned. 
Giroir is an attorney in Little Rock, Arkansas and a former 
partner of the First Lady with the Rose Law Firm. His company, 
Arkansas International Development Corp., is closely associated 
with the Lippo Group and the Riady family, and Giroir was 
active in trying to place John Huang at the DNC. The 
Committee's complete findings regarding Giroir are included 
elsewhere in this report.
---------------------------------------------------------------------------
    \50\ Handwritten notes from Loren Berger, undated (Ex. 9).
---------------------------------------------------------------------------

B. The Rose of the Ching Hai Buddhist Sect

    During its investigation, IGI conducted extensive computer 
information searches, interviewed numerous donors 
telephonically, and contacted several experts on cults and 
religious sects. Based on these efforts, IGI determined that 
Trie likely laundered some or all of the funds through members 
of the Ching Hai Buddhist sect to the Trust and that many sect 
members were, in fact, coerced into making the donations.
    The Ching Hai Buddhist organization is headed by the 
Supreme Master Suma Ching Hai. According to IGI's findings and 
other published information, the Supreme Master studied 
Buddhism in Taiwan, where she maintains her headquarters. Aside 
from leading the sect, she also designs her own line of clothes 
and conducts fashion shows.\51\ She encourages her followers to 
make donations to and purchase items from Ching Hai. 
Notwithstanding her teachings to her followers to focus on the 
spiritual and not the material, IGI found that Suma Ching Hai 
generally travels and lives in an opulent style. Indeed, IGI 
reported that she is considered a fraud by many other Buddhist 
groups.\52\ IGI also reported on certain unconventional 
practices within the sect, such as the sale of the Supreme 
Master's bathwater to her followers (which she apparently 
claims has curative properties).\53\
---------------------------------------------------------------------------
    \51\ Final report of IGI, stamped ``Draft,'' May 15, 1996, p. 5 
(Ex. 10).
    \52\ Id. at p. 4.
    \53\ Id.
---------------------------------------------------------------------------
    As a result of its interviews with experts who had studied 
the Ching Hai sect extensively, IGI learned that its 
membersoften donate sums to the organization greater than they can 
afford.54 IGI concluded that it was highly likely that the 
funds donated by members of Ching Hai to the Trust were not given 
voluntarily.55
---------------------------------------------------------------------------
    \54\ Berger deposition, p. 24.
    \55\ Ex. 10.
---------------------------------------------------------------------------
    IGI also discovered that the donors to the Trust were 
solicited by the Supreme Master at large meetings in Los 
Angeles, Houston and New York. Many of the members IGI 
interviewed said they did not have check books or sufficient 
funds with them at the meetings, so in some cases fellow 
members wrote checks on their behalf, and in other cases money 
orders were provided and people simply filled them out with 
their addresses and social security numbers.56
---------------------------------------------------------------------------
    \56\ Berger deposition, p. 24.
---------------------------------------------------------------------------
    For obvious reasons, the Committee looked closely at 
whether the Ching Hai members reimbursed the sect for the money 
orders they had filled out or whether the sect simply funneled 
its funds through its members to Trie and ultimately the Trust. 
The organizer of the Ching Hai meeting in New York, Zhi Hua 
Dong, addressed this issue when he testified before the 
Committee on July 31, 1997.

C. Testimony of Zhi Hua Dong

    Zhi Hua Dong is a computer systems administrator in the 
physics department at Columbia University. He served as the New 
York contact member for Ching Hai and was one of the organizers 
of a March 16, 1996 meeting of the group in New York. Dong 
testified before the Committee and explained how the donations 
were gathered at that meeting. A couple of days prior to March 
16, Dong was contacted by one of the Supreme Master's 
assistants and told to purchase $20,000 in money orders and was 
assured that he would be reimbursed for the purchase. He was 
not told why the money was needed. Later the same day he 
received another call from the same individual and was told to 
purchase as many money orders as he could. After contacting a 
few other members from the New York area, Dong was able to 
purchase $70,000 in money orders.57
---------------------------------------------------------------------------
    \57\ Testimony of Zhi Hua Dong, July 31, 1997, p. 151.
---------------------------------------------------------------------------
    Dong testified that he and his wife met the Supreme Master 
Suma Ching Hai at Kennedy International Airport along with 
other sect members.58 Dong's wife, Tracy Hui, drove 
Charlie Trie and the Supreme Master into Manhattan. Dong 
followed in another vehicle. Upon arriving at the Ritz Carlton 
Hotel in midtown, Dong went up to the Supreme Master's room 
where he delivered the money orders he had been asked to 
purchase. At that time the Supreme Master explained to him that 
they were helping President Clinton raise funds for his 
personal legal expenses. Trie, who was to be initiated into the 
sect at the meeting, was also in the room and wrote down the 
full name of the Trust so that people would be able to spell it 
correctly on their money orders and checks. Before leaving, 
Dong observed the Master removing $20,000-25,000 from the stack 
of money orders for sect-related expenses.59
---------------------------------------------------------------------------
    \58\ Deposition of Zhi Hua Dong, June 17, 1997, p. 49.
    \59\ Dong testimony, p. 153.
---------------------------------------------------------------------------
    During the meeting that night, which was held at the Inn at 
57th Street, the Supreme Master addressed about 150 new 
initiates, all U.S. citizens, and told them that President 
Clinton was a good person and needed their help. After 
requesting them to contribute to the Trust, the Master turned 
to leave the room and to go downstairs to a private meeting. 
When some of the new initiates tried to follow her, she turned 
and in an angry tone told them to stay put and attend to 
business.60 When one of the followers tried to ask a 
``spiritual question,'' she angrily told him that it was not 
the time for spiritual questions.61 According to 
Dong, her tone made some of the members uncomfortable,
---------------------------------------------------------------------------
    \60\ Dong Deposition, p. 79-80.
    \61\ Dong testimony, p. 170.

          The voice was very strong, very strong, you know, 
        from my perspective, I feel some energy coming out, and 
        her tone, you know, could make people uncomfortable . . 
        . there is one person stand up, after Master talked, 
        stand up, asked a spiritual question regarding the 
        practice. Master was very angry . . . It's a very 
        strong voice. That could irritate people.62
---------------------------------------------------------------------------
    \62\ Dong deposition, p. 112.

    Immediately following the event, Dong went back to the 
Master's room at the Ritz-Carlton and helped count the funds 
that had been raised. Between sixty and one hundred of the 
blank money orders had been filled out by individuals who did 
not pay for them.63 The Master added a number of 
checks and money orders from another meeting, and, according to 
Dong, the total amount finally given to Trie could have been 
more than $400,000.64
---------------------------------------------------------------------------
    \63\ Dong testimony, p. 158.
    \64\ Id. at p. 161.
---------------------------------------------------------------------------
    Dong had never met Trie prior to the New York meeting, and 
he testified that from the way Trie talked, he was under the 
impression that he worked directly for President 
Clinton.65 This was the only time Dong was aware of 
the Supreme Master ever asking for support for a political 
figure.66 Four days after this New York meeting--on 
March 20--Trie called Cardozo to set up their initial 
meeting.67
---------------------------------------------------------------------------
    \65\ Id. at p.163-164.
    \66\ Dong deposition, p. 114.
    \67\ Id. at p. 24.
---------------------------------------------------------------------------
    Dong testified that in May, 1996, Trie called him and asked 
him if they could meet at the airport while Trie was changing 
planes in New York. At this meeting Trie was very upset because 
the Trust was investigating the source of the contributions. He 
told Dong that the Trust was being ``very cautious'' because it 
was ``an election year.'' 68
---------------------------------------------------------------------------
    \68\ Dong testimony, p.163.
---------------------------------------------------------------------------
    Several weeks after the event, Dong contacted the Ching Hai 
headquarters in Taiwan requesting that he and his fellow 
membersbe reimbursed for the $70,000 in money orders that they 
had purchased with their own money. Dong testified that up to this 
point he had received little or no reimbursement from the individual 
members. Dong and the other members who had advanced funds for the 
money orders were eventually reimbursed by the sect in three wire 
transfers, one for $20,000 from Taiwan, one for $30,000 from Cambodia 
where the sect had a chapter, and the balance in a wire transfer from 
Los Angeles chapter.69
---------------------------------------------------------------------------
    \69\ Id. at p.165.
---------------------------------------------------------------------------

                  VI. May 9, 1996 White House Meeting

    After receiving the initial investigative report from IGI, 
including information about the Ching Hai Buddhist group, 
Cardozo scheduled another meeting at the White House for May 9, 
1996 to again discuss the Trie donations.70 The 
meeting was attended by Cardozo, Schwartz and Libow on behalf 
of the Trust, and Harold Ickes, Jack Quinn, White House 
Counsel, Bruce Lindsey, Deputy White House Counsel, Cheryl 
Mills, Deputy White House Counsel, Evelyn Lieberman, Deputy 
Chief of Staff, and Maggie Williams, Chief of staff to the 
First Lady, on behalf of the White House. Cardozo did not know 
why it was necessary to meet with so many senior members of the 
White House staff, especially in light of his insistence that 
the Trust operated independent of the White House.71 
The White House apparently made the decision as to which staff 
members would attend.
---------------------------------------------------------------------------
    \70\ On April 24, 1996, Trie visited the Trust for the second time. 
He met with Cardozo and Schwartz and brought a shopping bag with him. 
Cardozo testified that when he saw Trie approach he thought to himself 
``Oh my God, he's got a million dollars.'' In fact, Trie had an 
additional $179,000 for the Trust. Because the Trust was investigating 
the first batch of donations, Cardozo refused to accept the donations. 
Because IGI had been specifically instructed by Cardozo not to 
interview Trie, they had instead prepared a list of questions to be 
asked of Trie at the April 24 meeting in order to gain a better 
understanding of the source of the donations. However, neither Cardozo 
nor Schwartz asked any of IGI's questions at the meeting. Deposition of 
Michael Cardozo, May 7, 1997, pp. 129-130.
    \71\ Id. at p. 115.
---------------------------------------------------------------------------
    During the May 9 meeting, Cardozo explained the key facts 
surrounding Trie's donations to the Trust, and called upon 
Libow, the Trust's attorney, to provide the group with a 
summary of IGI's findings regarding Ching Hai and its leader, 
Suma Ching Hai. Libow described IGI's findings in great detail 
including their conclusion that at least some of the donations 
may have been coerced.72
---------------------------------------------------------------------------
    \72\ Id. at pp. 155-156. IGI's conclusion was ultimately proven 
correct when in July Cardozo received a letter from Ching Hai member 
David Lawrence. Cardozo circulated the letter to all of the people who 
had attended the May 9 meeting, as well as Mrs. Clinton. The Lawrence 
letter confirmed that in fact many of the donors did not contribute 
their own funds:

        Unfortunately as you suspected, the funds were raised by 
      the efforts of a concerned party who was unaware of some of 
      the terms mentioned in your letter. In particular, none of 
      those in the private association involved in the fund 
      raising knew that the individual U.S. citizen donors were 
      required to use only their own funds. In my case, $500 
      given by money order was advanced by the association or its 
      leader and not reimbursed by me. We were led to believe 
      that reimbursement was optional. I am sure that none of the 
      members or leadership of the association knew otherwise. In 
      addition, I was not made aware of the other terms mentioned 
      in your letter. I was not aware that the Trust ``will make 
---------------------------------------------------------------------------
      periodic public reports of fund contributors.''

Letter from David Lawrence to the Trust, July 5, 1996, p. 2 (Ex. 11).
    The group discussed the pros and cons of returning the 
donations and the type of press coverage such a story would 
generate.73 Mills raised the question of whether 
returning the money would be seen as some sort of 
discriminatory act against Asian-Americans, but in the end the 
group supported the Trustees preliminary recommendation to 
return the money.74
---------------------------------------------------------------------------
    \73\ Deposition of Michael Cardozo, May 7, 1997, p. 161-163.
    \74\ Id. at p. 155.
---------------------------------------------------------------------------
    Significantly, Cardozo testified that soon after the 
meeting started Bruce Lindsey entered the room, heard Trie's 
name mentioned, and commented that he knew Trie from Little 
Rock and that he knew Trie was ``involved with the Democratic 
Party.'' 75 Ickes was present when the comment was 
made, but said nothing in response.76 Furthermore, 
despite the fact that Ickes was supervising the President's re-
election effort from the White House, he apparently failed to 
make any inquiry into Trie's fundraising activities with the 
DNC.
---------------------------------------------------------------------------
    \75\ Id. at p. 175.
    \76\ Id.
---------------------------------------------------------------------------
A. Ickes' Failure to Notify the DNC
    Lindsey was correct on May 9th that Trie was ``involved'' 
with the Democratic Party. In fact, he was a Managing Trustee 
of the DNC (meaning he contributed or raised at least 
$100,000). Ickes' was also involved with the DNC. In fact, 
according to some witnesses, Ickes was calling the shots on a 
day to day basis at the DNC.77 Yet, despite his 
leading role with the DNC, Ickes failed to notify anyone at the 
DNC that a major DNC donor and fund raiser was involved in 
highly questionable fund raising for the Trust. According to 
DNC Chairman Don Fowler, ``If we had known about the problems 
with Trie earlier, we could have done something. I wish that I 
had known that.'' 78 Instead, the DNC was ultimately 
forced to return $645,000 in funds contributed or raised by 
Trie.79 Indeed, the first time Ickes mentioned the 
issue to anyone at the DNC was during a telephone conversation 
with B.J. Thornberry, Executive Director at the DNC, in 
October, 1996--after the fundraising controversy had broken in 
the press. Ms. Thornberry raised questions with Ickes regarding 
whether John Huang had been truthful with the DNC.80 
Ickes responded by telling her that if she had those concerns 
she should also check out Charlie Trie and talk to Bruce 
Lindsey about him.
---------------------------------------------------------------------------
    \77\ Deposition of Donald Fowler, May 21, 1997 pp. 61-62. A 
complete discussion of Ickes' role in the DNC can be found in the 
section of this report on White House control of the DNC.
    \78\ ``What Clinton Knew,'' Los Angeles Times, December 21, 1997, 
Sec. A, p. 1.
    \79\ Deposition of David Mercer, May 14, 1997, p. 240.
    \80\ Deposition of B.J. Thornberry, May 20, 1997, p. 114.

          Q: What did Mr. Ickes say to you?
          A: Mr. Ickes said two things to me. He said that if I 
        had concerns about John Huang that I also might want to 
        check out contributions from Charlie Trie, and he said 
        also that I might want to have the same conversation 
        with Bruce Lindsey.81
---------------------------------------------------------------------------
    \81\ Id. at p. 114.

    Mr. Ickes was not alone in his failure to follow up on 
Trie's actions with regard to the Trust. White House personnel, 
including the President, not only failed to notify the DNC of 
Trie's questionable fundraising practices with the Trust, but 
continued to have contact with him. Only four days after the 
May 9 White House meeting, the President sat next to Trie at 
the head table of a $5,000 per person dinner in 
Washington.82 In August, 1996, two months after the 
Trust decided to return the Trie-related donations, the 
President accepted $110,000 from Trie at an event celebrating 
the President's 50th birthday.83 In addition, as 
noted above, the President proceeded to appoint Trie to a 
federal trade commission and had the NSC prepare a personal 
response to foreign policy questions raised by Trie, both after 
Cardozo informed the White House and the First Lady about the 
questionable Trust donations.
---------------------------------------------------------------------------
    \82\ ``What Clinton Knew,'' Los Angeles Times, December 21, 1997, 
Sec. A, p. 1.
    \83\ Id.
---------------------------------------------------------------------------
                vii. trie's final meeting with the trust
    On May 17, 1996, Trie visited the Trust for the third and 
final time. Cardozo asked Schwartz to meet with Trie alone 
because Cardozo no longer wished to have any dealings with 
him.84 During the meeting, Trie acknowledged that he 
was indeed a member of the Ching Hai sect and that he had 
encouraged the Supreme Master to help him raise money for the 
Trust.85 Trie also had additional donations which he 
said totaled $150,000--bringing the total to $789,000--that he 
wished to deliver, but Schwartz refused to accept them because 
by the Trust had yet to make a determination regarding the 
first delivery of funds.86
---------------------------------------------------------------------------
    \84\ Deposition of Michael Cardozo, May 7, 1997, p. 190-192.
    \85\ Deposition of Sally Schwartz, May 6, 1997, p. 211.
    \86\ Id. at p. 210.
---------------------------------------------------------------------------
           viii. the trie-related contributions are returned
    The decision to return the Trie-related contributions was 
finalized in June, 1996, and the Trust began mailing 
contributions back to the contributors.87 However, 
it did so with a twist. Notwithstanding IGI's findings about 
the involvement of the Ching Hai sect and the likely coercion 
exercised on sect members, the Trust sent a cover letter along 
with the returned contributions instructing the donors that 
they could re-submit their contributions if they met the 
Trust's guidelines.88 In other words, despite the 
fact that the Trust knew the donations had been, at least in 
part, coerced, it was still willing to accept the same money 
from the same donors.
---------------------------------------------------------------------------
    \87\ Return letter from the Trust to a contributor, June 26, 1996 
(Ex. 12); The White House was informed of this decision as the option 
had been discussed at the May 9 White House meeting.
    \88\ Id.; Deposition of Michael Cardozo, May 7, 1997, p. 212; 
Exhibit no. 12.
---------------------------------------------------------------------------
    Loren Berger, the IGI investigator who authored the IGI 
report, testified before the Committee that she had a theory as 
to why the Trust sought to have the donations recontributed in 
this manner. She knew that any contributions accepted in the 
first six months of 1996 would be made public in the bi-annual 
report filed in July 1996, prior to the election. However, if 
the donations were returned and the donors then re-submitted 
their contributions during the second half of 1996, the 
``recontributions'' would not be made public until the next 
reporting period--January 1997, after the election. Berger 
theorized that by returning the contributions and allowing them 
to be re-submitted after the first reporting period of 1996 had 
passed, the Trust could effectively receive the funds and avoid 
making them public until after the election.89 The 
only flaw in Ms. Berger's theory was that the bi-annual report 
had historically disclosed not just contributions, but returned 
contributions as well, which would mean the story would have 
become public prior to the election anyway. However, as 
discussed below, the Trust changed its public reporting method 
to avoid disclosing the return of the Trie-related 
contributions.
---------------------------------------------------------------------------
    \89\ Berger Deposition, pp. 84-85. Cardozo denied any such plan, 
although he was unable to offer any logical explanation for why the 
Trust would agree to accept tainted funds from the original donors, 
knowing that the donations had been coerced in the first place.
---------------------------------------------------------------------------
 ix. the bi-annual report is changed to keep the trie donations secret
    Work on the mid-1996 bi-annual report began in the first 
week of July 1996. The purpose of the report was to record the 
activities of the Trust for the first half of 1996 and to make 
them public at a press conference held in August. All previous 
bi-annual reports submitted by the Trust since its inception 
had listed ``total contributions'' received by the Trust during 
the six month period and subtracted ``ineligible 
contributions'' that had been returned during that same 
period.90 However, in mid-1996 the Trust changed the 
format of the bi-annual report so that only ``contributions 
accepted'' by the Trust were listed. The Trust eliminated the 
return line and rationalized that any contributions received 
and returned within the six month period were never 
``accepted'' and, thus, need not be disclosed. This was a 
marked departure from the way returns had been accounted for 
historically.91
---------------------------------------------------------------------------
    \90\ Ex. 2.
    \91\ Ex. 1.





    Cardozo and Schwartz both admitted that the reason for the 
deletion of the return line in the mid-1996 bi-annual report 
was to keep the Trie-related donations from becoming 
public.92 The net effect of this accounting change 
was to treat the Trie-related contributions as if they had 
never occurred.93
---------------------------------------------------------------------------
    \92\ Testimony of Michael Cardozo, July 31, 1997, pp. 47-48; 
Deposition of Sally Schwartz, May 6, 1997, p.283.
    \93\ Even though Cardozo admitted the effect of the change was to 
hide the existence of the Trie-related donations, he testified that the 
real reason for the change was to clarify the Trust's accounting 
procedures. Schwartz, however, admitted the reason for the change was 
the Trie-related contributors. Deposition of Michael Cardozo, May 7, 
1997 p. 246; Deposition of Sally Schwartz, May 6, 1997, p.283.
---------------------------------------------------------------------------
    On August 14, 1996, the Trust held a press conference to 
release the bi-annual report. Cardozo was specifically asked by 
a reporter whether there were any contributions returned 
because they came from someone who was ``unsavory or anything 
like that.'' Cardozo said, ``No.'' 94 Cardozo 
testified that he gave this answer to protect the privacy of 
the donors and the credibility of the Trust.95 In 
other words, if he had answered yes, the Trie-related matter 
would have become public at that time.
---------------------------------------------------------------------------
    \94\ Transcript of August 14, 1996 press briefing, p. 19 (Ex. 13).
    \95\ Deposition of Michael Cardozo, May 8, 1997, p. 10.
---------------------------------------------------------------------------
    In addition to the accounting change in the bi-annual 
report, the Trust also revised the Quarterly Report that was 
routinely sent to the President and which contained the names 
of the donors to the Trust for the previous three months. On 
April 25,the President received a list which included the Trie-
related donors. 96 Three months later that report was 
``superseded'' by a subsequent report which omitted the names of those 
donors. 97 The President, therefore, was not only aware of 
the original Trie-related donors, but was also aware that their 
donations had been returned.
---------------------------------------------------------------------------
    \96\ Original Quarterly Report sent April 25, 1996 (Ex. 14).
    \97\ Supplemental Quarterly Report omitting the names of the Trie-
related donors sent June 26, 1996 (Ex. 15).
---------------------------------------------------------------------------
    That the White House knew of the accounting change in the 
bi-annual report is also beyond dispute. First, a simple 
comparison between the mid-1996 bi-annual report and all 
previous bi-annual reports would have disclosed the change. 
Moreover, it is inconceivable that the matter was not discussed 
at one of the White House meetings concerning the Trie 
contributions. In fact, Harold Ickes' notes from both the April 
4th and May 9th White House meetings suggest that the matter of 
how to report the returned contributions was discussed. 
98 Additionally, as addressed below, notes taken by 
Cardozo the day after the Trie contributions were finally made 
public suggest that White House counsel had approved of the 
manner of disclosure in the mid-1996 bi-annual report, and 
wanted to avoid any public disclosure of the Trie matter until 
at least after the election.
---------------------------------------------------------------------------
    \98\ Ex. 7.
---------------------------------------------------------------------------

 X. The Resubmitted Contributions are Returned/Trie's Growing Notoriety

    During the period of August through October 1996, the Trust 
began receiving ``recontributions'' from the original Trie-
related donors. Cardozo and Schwartz noticed that the 
occupations of many of the donors were inconsistent with the 
amounts they were giving. Students, hairstylists and others 
were making $1,000 donations which once again raised the 
question of whether they were contributing their own funds. 
99
---------------------------------------------------------------------------
    \99\ Deposition of Michael Cardozo, May 7, 1997, p. 320-321.
---------------------------------------------------------------------------
    On November 8, 1996, Cardozo conducted a conference call 
with the Trust's Co-Chairs regarding the re-submitted 
contributions. They discussed the questions raised by the 
donors' occupations, the letter from David Lawrence which 
confirmed that Ching Hai members had signed checks and money 
orders using someone else's money, and Trie's recent notoriety 
in the press in connection with John Huang and the growing DNC 
fundraising controversy. The group decided to re-engage IGI to 
investigate the resubmitted contributions to determine whether 
they too should be returned. However, there was no discussion 
of making Trie's relationship to the Trust public during the 
conference call. 100
---------------------------------------------------------------------------
    \100\ Deposition of Michael Cardozo, May 7, 1997, pp.320-321.
---------------------------------------------------------------------------
    On November 14, 1996, Cardozo, Schwartz and Libow once 
again met at the White House with senior White House aides Jack 
Quinn, Cheryl Mills, Evelyn Lieberman and Bruce Lindsey. 
Cardozo informed them that IGI had once again been retained to 
examine the re-submitted contributions and that questions had 
been raised about the donors' occupations, as well as Trie's 
involvement with John Huang the DNC. Cardozo informed them that 
the Trust was inclined to return these contributions as well. 
101
---------------------------------------------------------------------------
    \101\ Deposition of Michael Cardozo, May 8, 1997, pp.77-78.
---------------------------------------------------------------------------
    While Cardozo testified that the impetus for returning the 
resubmitted contributions was the information about the donors' 
occupations, this does not square with the other evidence 
presented to the Committee. 102 First, information 
regarding the occupations of the donors who were resubmitting 
contributions had surfaced as early as July. 103 
Second, IGI investigator Loren Berger testified that there was 
no new information about the donors that the Trust did not have 
when it decided to return the first round of contributions in 
June 1996. 104 The real reason the Trust returned 
the ``recontributions'' appears instead to be the public 
notoriety Trie was receiving in the Fall of 1996 for his 
involvement in the DNC fundraising controversy and his 
relationship to John Huang and the Riady family. Yet, 
notwithstanding Trie's growing role in the fundraising matter, 
neither the White House nor the Trust, prior to the 1996 
election, publicly disclosed the White House's substantial 
involvement with Trie or Trie's attempt to deliver over 
$700,000 in laundered contributions to the Trust. Indeed, from 
handwritten notes taken by Cardozo subsequent to the election, 
it appears likely that the White House Counsel's office made a 
concerted effort to prevent any public disclosure of the Trie 
matter until after the election.
---------------------------------------------------------------------------
    \102\ Id. at p. 30.
    \103\ Id. at p. 14.
    \104\ Berger Deposition, pp. 88-89.
---------------------------------------------------------------------------

                    XI. Cardozo's Handwritten Notes

    As discussed more fully below, the Trust eventually was 
forced to disclose the Trie contributions at a press conference 
on December 16, 1996. On the following day, Cardozo received 
several telephone calls from the press and others which were 
reflected on call sheets provided to the Committee. 
105 It is apparent from the call sheets and 
Cardozo's testimony that the press was questioning him about 
why Trie's relationship with the Trust had not been disclosed 
in mid-1996 with the bi-annual report. Cardozo's handwritten 
notes appear on some of the call sheets. In most instances the 
notes are written in the narrative form and contain lines drawn 
to a specific reporter. They look and sound like notes of a 
question being posed to Cardozo during a phone conversation. 
However, in one margin Cardozo wrote, ``In June never came up. 
Investigation wasn't complete. WH Counsel: agreed w/ 
disclosure. Jack, Bruce, Cheryl--not disclose info until after 
election. Opposed disclosure.'' 106
---------------------------------------------------------------------------
    \105\ Cardozo's handwritten notes on his telephone log, December 
17, 1996, p. 5 (Ex. 16).
    \106\ Id. at p. 5.





    During his testimony at deposition and before the Committee 
at public hearing, Cardozo speculated that the notes must have 
referred to some question posed by one of the reporters on that 
page. However, when pressed on the issue, he could not confirm 
this:

    Q. Is it your testimony under oath, Mr. Cardozo, that this 
is a question posed to you by a reporter?
    A. I don't know precisely what it refers to. 107
---------------------------------------------------------------------------
    \107\ Testimony of Michael Cardozo, July 31, 1997, p. 109.

           *         *         *         *         *

---------------------------------------------------------------------------
    Mr. Tipps: Mr. Cardozo, you and I talked about these notes 
in your deposition. Do you recall that?
    Mr. Cardozo: Yes, I do.
    Mr. Tipps: And you said here today that this was a 
reporter. Can you tell us which reporter on that exhibit asked 
you this?
          Mr. Cardozo. No, I cannot be certain which reporter 
        it was.108
---------------------------------------------------------------------------
    \108\ Id. at p. 108.

While Cardozo's speculation might be accurate, it appears from 
the evidence, taken as a whole, that a much more likely 
interpretation is that Cardozo was simply talking with someone 
from the White House and lamenting all the questions he was 
being bombarded with from the press concerning the timing of 
the disclosure about Trie. The White House aide, in turn, was 
simply stating what he or she knew about that issue and Cardozo 
wrote it down. The notes are not written as though it is a 
question being posed to him from a reporter. Moreover, the 
notes are not connected with any particular reporter but are, 
instead, bracketed or walled off in a manner that suggests 
their separateness from the list of reporters. Additionally the 
notes themselves do in fact explain what was going on at the 
White House in the pre-election time frame. The phrase ``In 
June never came up'' likely refers to the fact that in June 
1996 Trie had not become a public figure connected to the DNC 
fundraising controversy. The phrase ``W.H. counsel: agreed on 
disclosure'' likely refers to the fact that the White House 
counsel's office (many of whom were at the May 9 White House 
meeting) agreed with the method of disclosure used in the mid-
1996 bi-annual report which omitted any reference to returned 
contributions. Finally, the phrase ``Jack, Bruce, Cheryl--not 
disclose info until after election'' speaks for itself. Cardozo 
admitted that this note referred to Jack Quinn, Bruce Lindsey 
and Cheryl Mills--all White House Counsel and all attendees at 
the May 9 White House meeting. Indeed, at the bottom of the 
this page of notes, also in Cardozo's handwriting, are the 
names Mike McCurry and Lanny Davis, both senior White House 
aides who would have been privy to this information. Cardozo 
admitted during public hearing that he spoke to both of 
them.109
---------------------------------------------------------------------------
    \109\ Id. at p. 110. Furthermore, this interpretation of Cardozo's 
notes is consistent with subsequent press reports indicating that the 
Trie-related contributions were kept away from key White House 
personnel for fear that they might make the story public. The Los 
Angeles Times has reported that Trie's relationship with the Trust was 
intentionally kept from Jane Sherburne, former Special Counsel to the 
President, and Mark Fabiani, former White House counsel in charge of 
press inquiries about Whitewater, until at least after the election 
because they were known to be advocates of disclosing negative stories 
rather than trying to hide them. Jane Sherburne was interviewed by the 
Committee and confirmed that she was not notified about the Trie-
related contributions until after Trie's name surfaced in the press. 
Memorandum of interview of Jane Sherburne, September 19, 1997, p. 13.
---------------------------------------------------------------------------

         XII. Trie's Relationship with the Trust is Made Public

    The Trust and the White House kept the Trie story private 
until after the election, but their hopes of keeping it out of 
the public completely ended with a phone call in December from 
a reporter working on a story for NBC News. Once Cardozo 
realized the story was going to become public, he worked 
closely with the White House to make sure that it was released 
on their terms and with their spin.

A. Cardozo's Call From John Mattes

     On December 2, while on a business trip to Los Angeles, 
Cardozo was informed by his office that he had received a 
telephone call from John Mattes. When Cardozo called him back, 
Mattes informed him that he was working on a story for NBC News 
regarding a large number of contributions from Asian-Americans 
to the Trust which had been returned. He also told Cardozo that 
the producer he was working with was a Mr. Oetgen. He was aware 
of the donors' association with Ching Hai, but gave no 
indication that he was aware of Charlie Trie's 
involvement.110
---------------------------------------------------------------------------
    \110\ Deposition of Michael Cardozo, May 8, 1997, p.52.
---------------------------------------------------------------------------
    Cardozo told Mattes that he was in conference and would 
have to contact him later. Cardozo immediately called Cheryl 
Mills, Deputy White House counsel, and set up a meeting the 
next day at the White House to discuss the 
matter.111
---------------------------------------------------------------------------
    \111\ Id. at p. 49.
---------------------------------------------------------------------------

B. The December White House Meetings

    On December 4, and December 11, Cardozo, Schwartz and Libow 
once again met at the White House with senior White House aides 
Quinn, Lindsey, Mills, Lieberman and Williams. The group 
discussed the telephone call from Mattes and logistically how 
the Trust should go about making the story public. In the 
December 4 meeting, Cardozo told the the White House employees 
about his call from Mattes and expressed his concern that if 
the story was to go public he wanted to make sure that the 
Trust was able to tell the story from its perspective. Mills 
advised Cardozo to call Oetgen to see if Mattes was ``for 
real'' before making any arrangements to make the story public. 
This was the first meeting at which making the story public was 
discussed or even contemplated.112
---------------------------------------------------------------------------
    \112\ Id. at p. 57.
---------------------------------------------------------------------------
    Following the December 4 meeting, Cardozo called Oetgen and 
found out that Mattes was indeed working on a story for NBC. 
Both Cardozo and Oetgen were planning to be out of town in the 
near future, so they agreed that Oetgen would call back the 
next week to follow-up on the story. Oetgen, however, failed to 
call the next week.113 Nonetheless, as a result of 
the call from NBC, Cardozo, with help from the White House, 
proceeded with plans to make the Trie story 
public.114
---------------------------------------------------------------------------
    \113\ Id. at p. 56.
    \114\ Id. at p. 57.
---------------------------------------------------------------------------
    Having determined that Mattes was ``for real,'' another 
meeting was held at the White House on December 11 to decide 
how to disclose the story publicly. The White House aides 
determined that the best method was a press conference and they 
suggested that Cardozo contact Mark Fabiani, a former White 
House counsel who had handled press inquiries regarding 
Whitewater, for help in making logistical 
decisions.115
---------------------------------------------------------------------------
    \115\ Id. at p. 67.
---------------------------------------------------------------------------
    Following the meeting, Cardozo called Fabiani on two 
occasions and took notes of the conversations. Included in 
thenotes is a reference to NBC which reveals that the call from Mattes 
was indeed the impetus behind the decision to go public--``NBC changes 
everything, could come back with a lot more info.'' 116 
Another portion of Cardozo's notes states, ``Trie is a big-time player, 
Daschle, Congress.'' 117
---------------------------------------------------------------------------
    \116\ Cardozo's handwritten notes of conversation with Fabiani, 
December 12, 1996, p. 1 (Ex. 17).
    \117\ Cardozo's handwritten notes of conversation with Fabiani, 
December 11, 1996, p. 2 (Ex. 18).





    When asked what this meant, Cardozo said that Fabiani was 
aware that Trie was well known on Capitol Hill and had raised 
money for several Democratic members of Congress.118 
Cardozo and Fabiani also discussed whether NBC should be 
contacted prior to the press conference since they were 
preparing a story, however NBC was not contacted.119
---------------------------------------------------------------------------
    \118\ Deposition of Michael Cardozo, May 8, 1997, p. 100.
    \119\ Id. at p. 88; Ex. 17.
---------------------------------------------------------------------------

C. The December 16, 1996 Press Conference

    Cardozo scheduled the press conference for December 16, 
1996, less than two weeks after first speaking with 
Mattes.120 With regard to the NBC story, the 
following exchange of questions and answers took place:
---------------------------------------------------------------------------
    \120\ Id. at pp. 66, 69-70.

          A Participant. Are you aware, sir, of a story being 
        prepared at this moment, prior to this calling of this 
        conference today?
          Mr. Cardozo. No.
          A Participant. In other words, are you trying to head 
        off a story that was thought to be----
          Mr. Cardozo. No.121
---------------------------------------------------------------------------
    \121\ Transcript of December 16, 1996 press conference (Ex. 19) p. 
38.

Cardozo did not explain to the press that the impetus for the 
press conference was the call from Mattes or that there had 
been no discussion and no intention whatsoever of making the 
donations public prior to that call. Cardozo later testified 
before the Committee that at the time this question was posed 
he did not think NBC was working on the story since Oetgen had 
not called him back.
    Although Cardozo was aware from press accounts that Trie's 
fundraising activities were being investigated by the Justice 
Department, he made no attempt to notify them of Trie's 
activities concerning the Trust until two days prior to the 
press conference.122
---------------------------------------------------------------------------
    \122\ Deposition of Michael Cardozo, May 8, 1997, p. 164.
---------------------------------------------------------------------------

                            XIII. CONCLUSION

    As a result of its investigation into Trie's activities 
with the Trust, the Committee gained further insight into 
Trie's close relationship with the White House, and how, as a 
major fundraiser, Trie raised and laundered contributions for 
the benefit of the President and First Lady. The evidence 
uncovered by the Trust's own investigators reveals that the 
donations were laundered through members of a controversial 
Buddhist sect, many of whom were coerced into making the 
donations. The evidence also reveals that senior members of the 
White House staff were informed of this disturbing fact, yet 
still acquiesced in a plan to have the donations returned to 
the contributors, and then resubmitted to the Trust. This plan 
soon became untenable because of Trie's sudden notoriety over 
his relationship with John Huang and the growing DNC 
fundraising controversy. Rather than publicly disclosing Trie's 
involvement with the Trust, however, the White House sought to 
keep the matter secret until after the presidential election. 
Moreover, despite all of the warning signs they were given, 
these same White House aides, particularly Harold Ickes and 
Bruce Lindsey, made no effort whatsoever to alert the DNC that 
a major DNC fundraiser was involved in money laundering with 
the Trust.
    The investigation also demonstrated that Trie was granted 
several special favors by the White House at or about the same 
time that he was raising and delivering the questionable funds 
to the Trust. One question which remains unanswered is whether 
these favors--the appointment of Trie to the trade commission, 
Wang Jun's invitation to meet personally with the President, or 
the personal reply letter from the President prepared by the 
NSC explaining U.S. foreign policy--were linked in any way to 
the Trust donations. These same types of questions were raised 
by the Trustees in their initial meetings concerning Trie. 
Inexplicably, neither the Trust nor the White House ever made 
any attempt to investigate these matters. Because Trie had fled 
to China during the course of the Committee's investigation and 
did not return until early February 1998, and Mark Middleton 
has asserted his Fifth Amendment privilege against self-
incrimination, the Committee could not conclusively answer 
these questions.





                        The Saga of Roger Tamraz

    The testimony of Roger Tamraz provided the Committee with 
the chance to hear from an unrepentant access-purchaser. The 
hearing at which he appeared revealed efforts by officials of 
the DNC to reverse National Security Council (NSC) policy 
regarding Tamraz's access to the President and pressure NSC 
officials to change their position on the merits of Tamraz's 
Caspian Sea pipeline scheme.
    The Tamraz affair also stands out as one which produced a 
genuine hero--or, to be more precise, a genuine heroine. For 
despite the ugly window it provides upon high-level venality, 
the Tamraz story is also the story of Sheila Heslin, a 
courageous NSC staff member who resisted inappropriate and 
possibly unlawful attempts by senior officials to change U.S. 
Government policy in pursuit of Tamraz's money. This episode 
also provides a reminder that despite all such wrongdoing, 
there are decent people in government with noble ideals of 
public service.

                               BACKGROUND

    Roger Tamraz, an international financier and entrepreneur 
in the oil business, is presently wanted by police in at least 
two countries. A naturalized American citizen, he has been 
ordered by a French court to pay the equivalent of some $ 57 
million in connection with the collapse of a French bank and 
faces an Interpol arrest warrant for allegedly embezzling 
between $154 and $200 million from the failed Al Mashreq Bank 
in Lebanon, of which he had been the chairman. In June 1995, 
Tamraz--who had left Lebanon in 1989 with the assistance of 
Syrian authorities--was also sentenced in absentia to 15 years 
in prison by a military court in Lebanon.1 Tamraz 
has also been closely involved in business dealings with 
Libya's state-controlled National Oil Company, to which he sold 
or with which he merged his own Tamoil company.2
---------------------------------------------------------------------------
    \1\ Transcribed Interview of Roger Tamraz, May 13, 1997, pp. 4 & 8-
10.
    \2\ Alejandra Y. Castillo, memorandum to Donald Fowler, July 12, 
1995, p. 2 (Ex. 1).
---------------------------------------------------------------------------
    Tamraz acknowledges his various continuing legal problems, 
admitting that ``if anyone puts my name in NEXIS-LEXIS, you get 
a lot of horror stories.'' 3 Nevertheless, he 
maintains that he is entirely innocent of wrongdoing, having 
been unfairly persecuted by his enemies because of his efforts 
on behalf of ``the U.S. and peace'' and because he was 
``portrayed as a Jew, a dirty word in the context in which it 
was used.'' 4
---------------------------------------------------------------------------
    \3\ Tamraz interview, p. 6.
    \4\ Testimony of Roger E. Tamraz, September 18, 1997, pp. 4-6. 
According to researchers at the DNC, Tamraz's claimed ``kidnapping'' 
and ``torture'' in Lebanon--see, e.g., Id. at p. 4--may have arisen out 
of the failure of the Al-Mashreq Bank when a commander of a Christian 
militia group in Lebanon held Tamraz hostage pending repayment of some 
$3 million allegedly lost by that commander when the bank collapsed 
because Tamraz used its funds to bankroll his private business 
projects. Tamraz had apparently denied paying the $3 million ransom 
reportedly demanded of him. See Ex. 1, p. 2.
---------------------------------------------------------------------------
    Among Tamraz's business interests is a company called Oil 
Capital Limited, which seeks to develop oil pipeline 
concessions in the Caucasus. After the collapse of the Soviet 
Union, extraordinary possibilities for oil production had 
opened up for the huge reserves of the Caspian Sea region. 
While governments such as that of the United States worked to 
speed this oil to Western markets, to lessen the dependence of 
the oil-rich countries of the region upon Russia, and to break 
Russia's monopoly upon pipeline transit routes out of the 
Caspian,5 international financiers and oil 
companies--Oil Capital Limited among them--scrambled to take 
advantage of the commercial opportunities presented by a 
variety of proposed new pipeline projects.
---------------------------------------------------------------------------
    \5\ Testimony of Sheila Heslin, Sept. 17, 1997, p. 4.
---------------------------------------------------------------------------
    In mid-1995, negotiations were underway for an ``early'' 
oil pipeline deal for Caspian oil by the terms of which small 
new pipelines would be built--or old ones refurbished--in order 
to provide an interim solution to the problem of how to bring 
this oil to Western markets. Also underway was a longer-term 
project to find a ``final'' pipeline route for Caspian crude 
oil. Both the ``early'' and the ``final'' oil projects involved 
much debate over optimal pipeline routings; vast potential 
profits hung in the balance.6
---------------------------------------------------------------------------
    \6\ See generally Memorandum of Interview of Sheila Heslin, May 28, 
1997 [redacted and declassified version], pp. 2-3.
---------------------------------------------------------------------------
    Unfortunately, the Caucasus also remained a politically and 
militarily unstable area, nowhere more so than with respect to 
the long-simmering conflict between Armenia and Azerbaijan over 
the ethnically-Armenian enclave of Nagorno-Karabakh within 
Azerbaijan, a territory over which a bloody war had been fought 
between 1990 and 1994. As a result, it became an important 
objective of U.S. policy in the region both to facilitate oil 
development and to do so in ways that preserved and enhanced 
regional stability. Moreover, because certain prior oil 
concessions in the Caspian region had been arranged and 
executed in part through bribery and corruption--and because 
this ``was beginning to destabilize governments in the region 
because they were having no money come into their countries'' 
on account of such illicit diversions 7--it was also 
an important objective to ensure that future deals complied 
with ``international commercial standards.'' 8
---------------------------------------------------------------------------
    \7\ Heslin testimony, p. 10.
    \8\ See generally Heslin interview, p. 3; Hesline testimony, p. 10.
---------------------------------------------------------------------------
    Tamraz had ambitious plans, however, for his own Caucasian 
pipeline. As he put it in a letter to President Gaidar Aliyev 
of Azerbaijan, Tamraz proposed a ``tentative agreement which 
could be negotiated with Nagorno Karabakh'' by the terms of 
which ``[o]il and gas pipelines will be built by Oil Capital 
[Limited] from [the Azeri coastal city of] Baku to the 
Mediterranean, passing through Nagorno Karabakh, Armenia, 
Nakhichivan and Turkey.'' These pipelines would be ``paid for, 
owned and constructed by Oil Capital Ltd., Inc,'' and his 
company would have the right to purchase five percent of the 
resulting consortium.9 In Tamraz's depiction, this 
pipeline would help bring peace to Nagorno-Karabakh, in part 
through being accompanied by the creation of a demilitarized 
``liberated territory'' joined by a corridor to 
Armenia.10 Furthermore--and perhaps more 
importantly--this plan would make Tamraz very rich: his share 
of the proposed Caspian Pipeline Consortium would have been at 
least $125 million, and possibly much more.11 As 
described below, U.S. foreign policy officials regarded his 
plan as unworkable, undesirable, and perhaps even dangerous. It 
is clear, however, that the stakes for Tamraz were quite high.
---------------------------------------------------------------------------
    \9\ Roger Tamraz, letter to Harry Gilmore, U.S. Ambassador to 
Armenia, attaching a May 3, 1995 letter to President Gaidar Aleyev, May 
10, 1995, pp. 3-4 (Ex. 2).
    \10\ Id., p. 4.
    \11\ Heslin interview, p. 3 (giving $125 million figure); Tamraz 
testimony, p. 94 (stating that he would have owned ``[m]uch more than 5 
percent'' of Caspian pipeline deal).
---------------------------------------------------------------------------
    It should be noted in this regard that Tamraz had long 
aspired to playing a role in the formulation of United States 
foreign policy in areas of the world in which he had business 
interests--and had long sought to use political fundraising as 
the means by which to do so. As he saw it, political 
contributions were a time-tested means to high office in the 
United States:

          [A] lot of our Cabinet ministers and a lot of our 
        ambassadors have spent just that amount of money for 
        just [this] reason . . . . You know, we have got Felix 
        Rohatyn, who is ambassador in Paris. We have got a Mr. 
        Rubin who is a Cabinet minister, and they have all 
        given much more than I have.12
---------------------------------------------------------------------------
    \12\ Tamraz testimony, pp. 81-82.

``Usually,'' he explained, ``you don't pick up Madeleine 
Albright from her kitchen and make her into Secretary of 
State.'' 13 For Tamraz, financial contributions to 
political parties lay at the core of the U.S. political 
process. Never bothering to vote since becoming an American 
citizen in 1989, Tamraz believed himself to possess ``more than 
a vote'' by virtue of his campaign contributions.14 
Thus did he hope to advance himself and his business interests.
---------------------------------------------------------------------------
    \13\ Id., p. 62.
    \14\ Id., p. 158-159.
---------------------------------------------------------------------------
    In the mid-1980s--with Ronald Reagan in the White House--
Tamraz's hopes of purchasing such a role in U.S. policy 
entailed donations to Republican causes. Despite giving enough 
money to become a ``Republican Eagle,'' Tamraz received no 
response to his overtures from the Reagan Administration; he 
could not even gain access to the Reagan White 
House.15 Accordingly, Tamraz put his plans 
aside.16 At that point, at least, access to U.S. 
officials and policy concessions were not for 
sale.17
---------------------------------------------------------------------------
    \15\ Id., p. 150-51.
    \16\ Tamraz interview, pp. 36-37.
    \17\ The Minority has tried to make much out of a June 1985 letter 
recommending Tamraz for some presidentially-appointed board or 
commission ostensibly signed by RNC Chairman Frank Fahrenkopf, Jr. This 
letter, however, was not written, authorized or signed by Fahrenkopf. 
See Frank Fahrenkopf, letter to Senator John Glenn, Sept. 16, 1997 (Ex. 
3).
---------------------------------------------------------------------------
    In 1994 and 1995, however, Tamraz received unsolicited 
letters from the DNC, asking for money.18 The timing 
of these solicitations was perfect: Bill Clinton and Al Gore 
now occupied the White House for the Democratic Party, and oil 
issues were moving to the top of the Clinton Administration's 
foreign policy agenda for the Caspian even as Tamraz put the 
finishing touches on his own pipeline proposal in early 1995. 
Hoping to promote his pipeline project--and finally to be able 
to ``play a role which I aspire to'' in U.S. policy making 
19--Tamraz contacted the DNC. As a result, Tamraz 
had an initial meeting with the DNC's Ari Swiller in July 1995; 
at a subsequent meeting, Swiller introduced him to DNC Chairman 
Donald Fowler.20 Significantly, it was no 
coincidence that Tamraz's decision to respond to the DNC's 
fundraising solicitations should come in July 1995: it was at 
this point that Tamraz first ran into opposition from U.S. 
officials who viewed him as disreputable and who regarded his 
Caspian schemes as a disruptive ``pipe dream.''
---------------------------------------------------------------------------
    \18\ Tamraz interview, p. 37.
    \19\ Id. at p. 38.
    \20\ Id.
---------------------------------------------------------------------------

                          rejection and return

    In mid-1995, Sheila Heslin was a staff member of the NSC. 
Her duties as the NSC's Director of Russian, Ukrainian, and 
Eurasian Affairs 21 made her responsible for 
coordinating policy with regard to the States of the South 
Caucasus in Central Asia and with regard to oil and gas issues 
throughout the former Soviet Union, with a particular focus on 
pipeline issues.22
---------------------------------------------------------------------------
    \21\ As such, she reported to Coit (``Chip'') Blacker, the NSC's 
Senior Director for Russian, Ukrainian, and Eurasian Affairs.
    \22\ Heslin testimony, p. 3.
---------------------------------------------------------------------------
    Heslin was deeply involved in U.S. efforts to negotiate the 
Caspian ``early'' oil pipeline agreement, and she chaired an 
interagency working group--the ``Caspian energy working group'' 
23--that dealt with this and related 
issues.24 These responsibilities made her the 
natural object of Tamraz's attentions.
---------------------------------------------------------------------------
    \23\ This group included representatives from the NSC, the 
Department of Energy, the Department of State, the Department of 
Commerce, the Overseas Private Investment Corporation (OPIC), the Trade 
& Development Agency, the Department of the Treasury, and the Export-
Import Bank. See Heslin interview, p. 5.
    \24\ Heslin testimony, pp. 4-5.
---------------------------------------------------------------------------
    With the help of Ed Pechous, a former CIA official then in 
Tamraz's employ,25 Tamraz arranged to meet with 
Heslin on June 2, 1995 to discuss his own pipeline plan for the 
region. Even before this meeting, however, Tamraz had raised 
Heslin's suspicions--and those of the other members of her 
Caspian energy working group. Before the June 2 meeting with 
Heslin, Tamraz had been meeting with various U.S. officials in 
the Departments of State, Energy,26 and 
Commerce.27 At these meetings, Tamraz represented 
that his plan had the support of ``various entities and 
governments,'' among them a number of major American oil 
companies. It soon became apparent that these representations 
were false: representatives of several oil companies, for 
example, telephoned Energy Department officials and Heslin to 
complain that they did not, in fact, support Tamraz's proposed 
pipeline.28 Moreover,
---------------------------------------------------------------------------
    \25\ Tamraz testimony, p. 45; Tamraz interview, pp. 22-23 & 121; 
Heslin interview, p. 7.
    \26\ One of these meetings took place with Energy Department 
official Jack Carter, who met with Tamraz in the company of Carter's 
colleague Theresa Beman, a lawyer from Philadelphia, and with Tim Denna 
of Bethlehem Steel--a company which wished to sell Tamraz the steel 
with which to build his pipeline. See Deposition of John Carter, June 
23, 1997, pp. 30-32; Deposition of Charles Kyle Simpson, June 25, 1997, 
p. 36; Tamraz interview, pp. 29-30.
    \27\ Tamraz interview, p. 26; Heslin testimony, p. 8; Heslin 
interview, p. 7.
    \28\ Indeed, they apparently described him as a ``flake,'' and 
resented his representations of their endorsement. See Heslin 
testimony, p. 8; Heslin interview, p. 7.

        we got reporting from embassies suggesting that, in 
        fact, Roger Tamraz had not had the level of access, the 
        Presidential level of access in Armenia or Azerbaijan 
        [he had claimed] . . . and that in fact, Azerbaijan had 
        been hostile to him, and then open source information, 
        which the State Department collected, indicated that he 
        had a highly controversial history, and then the 
        agency, the CIA, also provided some information which 
        indicated--well, a very controversial 
        past.29
---------------------------------------------------------------------------
    \29\ Heslin testimony, pp. 8-9.

On top of Tamraz's ``controversial past'' and his 
misrepresentation of support, it was the assessment of the 
working group that ``his commercial proposal [did] not have a 
lot of potential.'' 30
---------------------------------------------------------------------------
    \30\ Id. at p. 8.
---------------------------------------------------------------------------
    Nevertheless, Heslin agreed to meet with Tamraz on June 2 
in order to ``clear up . . . whether, in fact, there was 
something there or whether these problems that had cropped up, 
were, in fact,correct.'' \31\ During their meeting, Tamraz 
sought to persuade Heslin that the U.S. Government should endorse this 
proposal--or at least announce that Washington did not object to it. 
Heslin, however, did not think his plan realistic; she posed ``tough 
questions'' to Tamraz about his proposal, ``and didn't get very 
satisfactory answers.'' \32\ She made it clear to Tamraz that ``we were 
not going to be able to--the U.S. Government--endorse him in any way.'' 
\33\
---------------------------------------------------------------------------
    \31\ Id. at p. 9.
    \32\ Id. at p. 9-10.
    \33\ Id. at p. 11.
---------------------------------------------------------------------------
    The next day, the interagency Caspian energy working group 
determined that Tamraz's pipeline should not be given support 
and that he should be denied high-level U.S. Government access: 
the group agreed that there were too many ``holes'' in the 
commercial aspects of his plan, and that its other aspects were 
unacceptably weak.\34\ The official position of the U.S. 
government, therefore, was that Tamraz's pipeline should not be 
supported and that Tamraz should be given no further access to 
senior U.S. officials.
---------------------------------------------------------------------------
    \34\ Heslin interview, p. 8; see also Heslin testimony, pp. 12-13.
---------------------------------------------------------------------------
    Tamraz first began to promote his pipeline idea to Heslin 
through certain contacts of his in the CIA even before his June 
2, 1995 meeting with Heslin. After Jim Collins, a State 
Department official, first suggested in May 1995 that she meet 
with Tamraz, Heslin had inquired about Tamraz with a friend of 
hers at the CIA's Directorate of Intelligence (DI).\35\ As a 
result of this inquiry, Heslin received a report on Tamraz from 
the DI. She also, however, received a separate report on Tamraz 
from the Agency's Directorate of Operations (DO), which the DO 
had undertaken to provide to her on its own initiative. 
According to Heslin, these two reports were quite different: 
the DI report was ``more direct'' in recounting information 
unflattering to Tamraz, whereas the DO report contained little 
adverse information--referring only vaguely to certain 
``unsubstantiated allegations'' against him.\36\
---------------------------------------------------------------------------
    \35\ The CIA's DI performs the Agency's analytical functions and is 
responsible for providing ``finished'' intelligence information to 
national policymakers. Its Directorate of Operations (``DO'') is the 
Agency's clandestine division, with responsibility for such things as 
covert ``spying'' abroad.
    \36\ Heslin interview, pp. 6-7.
---------------------------------------------------------------------------
    After Heslin's rebuff in early June 1995, however, Tamraz's 
lobbying efforts through the CIA moved into higher gear. 
Shortly after Heslin's meeting with Tamraz on June 2, Heslin 
received a telephone call from a CIA officer named ``Bob,'' 
\37\ who said that he wished to speak with her about the report 
on Tamraz recently sent her from the DO. According to Bob, the 
DO's report had been incomplete: it left out certain favorable 
information about Tamraz. As Heslin recounted it, the CIA 
officer ``went on, you know, at some length'' with ``real 
reverence in his voice'' about Tamraz's virtues and 
accomplishments.\38\ Bob said that his superior, William 
Lofgren, had requested that he contact Heslin to supply 
information that had not found its way into the earlier DO 
report.\39\ Heslin found this a ``strange call'' because the 
CIA man ``definitely called me right after'' her meeting with 
Tamraz--so quickly, in fact, that ``[i]t surprised me: how 
would he know my meeting [with Tamraz] went badly [for 
Tamraz]?'' \40\
---------------------------------------------------------------------------
    \37\ Bob's last name--known both to Heslin and to the Committee, 
and confirmed by the CIA--is classified on account of his involvement 
in clandestine CIA activities with the DO.
    \38\ Heslin interview, pp. 8-9.
    \39\ Heslin testimony, p. 12.
    \40\ Heslin interview, p. 9; see also Heslin testimony, p. 12 (``He 
went on to almost seem to rebut every tough question that I had in my 
own meetings [with Tamraz]. So he seemed to be aware of what happened 
in my meeting, which was strange.'').
---------------------------------------------------------------------------
    On at least two, and perhaps three, occasions thereafter, 
Heslin received additional calls from Bob at the CIA. Each call 
was quite similar: ``it was always in this lobbying effort . . 
. [i]t was just like a lobbyist. . . . It sounded like he was 
representing Tamraz. . . . He was basically telling Tamraz's 
story.'' \41\ Bob's efforts on behalf of Tamraz in this regard, 
however, came to naught: Heslin refused to reconsider the 
Tamraz issue, sticking by the official U.S. position adopted by 
the interagency working group in June 1995.
---------------------------------------------------------------------------
    \41\ Heslin interview, p. 10 (emphasis in original).
---------------------------------------------------------------------------
    Heslin's rebuff of Tamraz's advances in June 1995 helps put 
into perspective Tamraz's July 1995 overtures to Ari Swiller at 
the DNC: he had a very concrete problem to overcome, and 
apparently had very concrete ideas as to how to overcome it. On 
July 11, 1995, Tamraz met with Don Fowler and Ari Swiller in 
Fowler's office at the DNC. As the DNC briefing notes for this 
meeting put it, the chairman of Oil Capital Limited, Matt 
Steckel, had ``spoke[n] with Don [Fowler] about contributing 
$250,000 to the DNC.'' Accordingly, at this meeting Fowler was 
to ``ask Mr. Tamraz to contribute $250,000 to the DNC.'' \42\ 
This request was apparently a resounding success: another 
internal DNC memorandum, written the day after Fowler's meeting 
with Tamraz, recounted that ``[i]n a conversation held with Ari 
Swiller yesterday, Mr. Tamraz expressed his desire to 
contribute $300,000 to the DNC.'' \43\
---------------------------------------------------------------------------
    \42\ Briefing notes for Don Fowler and Ari Swiller on ``Private 
Meeting w/Roger Tamraz,'' July 11, 1995 (Ex. 4).
    \43\ Ex. 1, p. 3. Castillo's memorandum also advised Fowler that 
``[i]f Mr. Tamraz is able to commit to $250,000, then you may extend an 
invitation to attend the NY Managing Trustee dinner this evening.''
---------------------------------------------------------------------------
    As Tamraz himself has noted, even a cursory search of 
LEXIS-NEXIS news databases uncovers ``horror stories'' about 
him.\44\ To the DNC's credit, its staffers did not overlook 
this. Alejandra Castillo, for example, sent a memorandum to 
Fowler on the day after his July 11 meeting with Tamraz. In it, 
she warned that
---------------------------------------------------------------------------
    \44\ See supra note 3.

    As a potential Managing Trustee member, Mr. Tamraz's 
business dealing may potentially, if not definite[ly], [raise] 
political and ethical implications on the DNC fundraising 
operations. I have had several conversations with Carol Khare 
and Ari Swiller regarding Mr. Tamraz's background. . . .

           *         *         *         *         *

    . . . [Tamraz's] contribution is greatly appreciated and 
highly needed, however, his past involvement in shaky 
international business and para-military organizations may 
generate considerable problems for the DNC. Mr. Tamraz seeks 
political leverage to secure his oil ventures in the Russian 
Republics (Caspian Oil Project).
    . . . His business background has proved to be full of 
significant financial and ethical troubles. Pay attention to 
these warning signals!\45\
---------------------------------------------------------------------------
    \45\ Ex. 1, pp. 1-3.

To the DNC's discredit, however, these warnings were ignored by 
the party's senior leadership. Indeed, DNC officials not only 
accepted Tamraz's money but also went to great lengths in an 
attempt to provide Tamraz the ``political leverage'' he sought 
in his Caspian ventures.
    Over the next few months, Tamraz directly contributed or 
helped solicit great sums of money to the DNC and to various 
state Democratic parties at Fowler's direction. As Tamraz 
testified, the ``only reason'' he made these donations was in 
order to secure him the White House access he desired in order 
to promote his pipeline plan to the President.\46\ The first 
installment of these payments--totaling $90,000--occurred just 
over a week after Tamraz's meeting at the DNC with Fowler and 
Swiller: on July 19, 1995 Tamraz wrote a $20,000 check to the 
DNC, a $25,000 check to the Virginia Democratic Party, a 
$20,000 check to Richard Molpus' campaign for governor of 
Mississippi, and a $25,000 check to the Louisiana Democratic 
Party. The DNC tracking form for Tamraz's DNC contribution 
listed Swiller as the DNC staff contact and Fowler as having 
solicited the donation.\47\
---------------------------------------------------------------------------
    \46\ Tamraz testimony, p. 63 (``Senator Levin: . . . Was one of the 
reasons that you made these contributions because you believed it might 
get you access? That is my question. / Mr. Tamraz: Senator, I'm going 
even further. It's the only reason--to get access. . . .'').
    \47\ Ex. 5 (Roger Tamraz check #1021 to Richard Molpus for Governor 
on July 19, 1995; Roger Tamraz check #1022 to DNC on July 19, 1995, 
with associated DNC tracking form; Roger Tamraz check #1023 to Virginia 
Democratic Party on July 19, 1995; Roger Tamraz check #1024 to 
Louisiana Democratic Party on July 19, 1995).
---------------------------------------------------------------------------
    Fowler subsequently forwarded another $5,000 check from 
Tamraz to the Molpus campaign,\48\ and another $75,000 check to 
the Virginia Democratic Party.\49\ Tamraz helped solicit an 
additional $60,000 for the DNC from four of his friends,\50\ 
and himself gave the DNC an additional $50,000 on September 10, 
1995.\51\ All in all, according to internal DNC memoranda, by 
the end of March 1996 Tamraz had made contributions totaling 
$100,000 to the Virginia Democratic Party, $25,000 to the 
Virginia Legislative Conference, $20,000 to the Molpus 
campaign,\52\ $25,000 to the Louisiana Democratic Party, and 
$130,000 to the DNC.\53\ Tamraz apparently also gave ``either a 
thousand or two'' to the Presidential Legal Expense Trust 
(PLET).\54\ Buoyed by their success in winning such large sums 
from Tamraz, DNC Finance Director Richard Sullivan recounted, 
``all of us were continually asking him for money through the 
course of the year''--perhaps ``every six weeks'' during 
1996.\55\ These figures, and the DNC's eagerness to solicit 
further contributions from Tamraz, make clear why Alejandra 
Castillo's warnings went entirely unheeded.
---------------------------------------------------------------------------
    \48\ Ex. 6 (Roger Tamraz check #1501 for $5,000 to Richard Molpus 
for Governor and accompanying note from Don Fowler reading ``Here's a 
little more help for your campaign.'').
    \49\ Virginia Democratic Party campaign contribution records, Oct. 
26, 1995 (Ex. 7) (indicating $75,000 contribution on October 19, 1995). 
This contribution was made in the name of Tamoil, Inc. rather than in 
Tamraz's own name. As Matthew Steckel of Tamoil explained in a 
subsequent letter, ``Tamoil, Inc. is 100% owned by Mr. Tamraz.'' 
Matthew Steckel, letter to Richard Newcomb, Nov. 6, 1995 (Ex. 8).
    \50\ See Richard Sullivan and Ari Swiller, Memorandum for Roger 
Tamraz, March 28, 1996 (Ex. 9) (indicating $20,000 solicitation from 
Elias and Norma Haddad on July 29, 1995 and $20,000 each from Gil and 
Marcia Sireni on September 1, 1995).
    \51\ DNC Check Tracking Form for Roger Tamraz check #0086, Sept. 
10, 1995 (Ex. 10). In November 1995, Fowler also helped put Tamraz in 
touch with Kevin Mack of the Democratic Leadership Campaign Committee 
(DLCC); Tamraz was reportedly ``inclined to support'' the DLCC, and 
Mack hoped to ask him for $100,000. See Kevin Mack, memorandum to 
Donald Fowler, Nov. 14, 1995 (Ex. 11).
    \52\ As indicated by the figures above, this DNC summary apparently 
neglected to record the second check--for $5,000--Tamraz gave to the 
Molpus campaign.
    \53\ Richard Sullivan and Ari Swiller, Memorandum for Roger Tamraz, 
March 28, 1996 (Ex. 12).
    \54\ Tamraz interview, p. 128.
    \55\ Deposition of Richard Sullivan, June 25, 1997, pp. 75-76.
---------------------------------------------------------------------------
    Both the extent of the NSC's opposition to allowing Tamraz 
high-level U.S. government access and Tamraz's success in 
circumventing this opposition through his campaign 
contributions may be seen in what Sheila Heslin later termed 
``the VP thing.'' \56\ At some point in August or early 
September 1995, at a White House coffee or a DNC breakfast, 
``the Vice President met with a friend of Tamraz's named Haroun 
[or, variously, Harut] Sassounian.'' \57\ After Vice President 
Gore expressed interest in Tamraz's pipeline and ``requested 
that Harut Sassounian set up a meeting'' about the 
proposal,\58\ Sassounian reportedly ``said he would be sending 
a letter and seeking an appointment through normal channels'' 
so that the Vice President could discuss the issue with Tamraz 
personally.\59\ As a result, Tamraz was invited to a breakfast 
with the Vice President scheduled for October 5, 1995.\60\
---------------------------------------------------------------------------
    \56\ Heslin interview, p. 10.
    \57\ Richard Grimes, e-mail message to Leon Fuerth, Sept. 6, 1995 
(Ex. 13); cf. Scott Pastrick, memorandum to Kimberly Tilley, undated 
(Ex. 14) (giving September 7, 1995 as date); Leon Fuerth, memorandum to 
Albert Gore, Sept. 11, 1995 (Ex. 15) (giving date as August 8, 1995); 
Leon Fuerth, Memorandum for the Vice President, Sept. 13, 1995 (Ex. 16) 
(later copy of same document).
    \58\ Ex. 14.
    \59\ Ex. 13.
    \60\ See DNC memorandum re: ``Vice Chair Breakfast w/Vice President 
Gore,'' Oct. 5, 1995, p. 3 (Ex. 17) (listing Tamraz as guest).
---------------------------------------------------------------------------
    Heslin learned from one of the Vice President's national 
security aides, Rick Grimes, that Tamraz was seeking an 
appointment with the Vice President through a ``political 
link'' or ``political channels.'' She related to Grimes her 
concerns about Tamraz and his business dealings, and told 
Grimes that she felt ``very strong[ly]'' that Tamraz should get 
no high-level access to U.S. officials.\61\ Grimes apparently 
notified his superior, Leon Fuerth, who sent a memorandum to 
Vice President Gore on September 13 warning him that Tamraz had 
a ``shady and untrustworthy reputation'' and that his pipeline 
proposal was ``commercially questionable at best.'' Fuerth also 
warned the Vice President that
---------------------------------------------------------------------------
    \61\ Heslin interview, p. 11.

          Tamraz's penchant for making false claims is now 
        impacting on the US Government . . . . The NSC has 
        advised that senior US Government officials not meet 
        with Mr. Tamraz should he or his associates seek 
        appointments. I concur with that recommendation. . . . 
        We just must be certain not to give his project even 
        the appearance of US Government support.\62\
---------------------------------------------------------------------------
    \62\ Ex. 16.

As a result of Fuerth's memorandum, Tamraz's invitation to 
breakfast with the Vice President was rescinded shortly before 
October 5.\63\ Heslin's effort to stop Tamraz's access to Vice 
President Gore worked--or so it seemed.
---------------------------------------------------------------------------
    \63\ Tamraz testimony, p. 16.
---------------------------------------------------------------------------
    In fact, however, Tamraz's ``political channels'' contained 
a great deal of redundancy. As Tamraz described it later, he 
was not unhappy to lose his invitation to the October 5 meeting 
with the Vice President because he had other options: ``if they 
kicked me from the door, I will comethrough the window.'' 
64 This ``window'' was opened for Tamraz by his DNC 
contacts, on the strength of which he was invited to a private 
fundraising dinner on October 2, 1995 for Senator Edward Kennedy at the 
Senator's house in Virginia--a dinner at which Tamraz was seated at the 
head table with Senator Kennedy and Vice President Gore.65 
As Tamraz recalled it, his attendance had been arranged by ``somebody 
from the Democratic Party'' after he had started making contributions 
to the DNC and after he had donated ``10 [or] 20'' thousand dollars 
either to Senator Kennedy's campaign or to the Massachusetts Democratic 
Party.66
---------------------------------------------------------------------------
    \64\ Id. at p. 66.
    \65\ Briefing notes for Vice President's dinner event, Oct. 2, 
1995, p. 11 (Ex. 18); see also Tamraz testimony, p. 66.
    \66\ The Vice President's briefing notes for this dinner described 
Tamraz as being ``very involved with the DNC.'' See Ex. 18, p. 10.
---------------------------------------------------------------------------
    Indeed, this dinner with the Vice President on October 2, 
also promised to open further opportunities for Tamraz. Also at 
the head table with Tamraz sat DNC Finance Chairman Marvin 
Rosen, who in addition to his voluntary DNC duties obtained his 
principal livelihood as a partner in the Miami-based law firm 
of Greenberg, Traurig. At the recommendation at this dinner of 
Senator Kennedy's wife Vicki, who was also at the time a 
partner at Rosen's firm, Tamraz subsequently retained 
Greenberg, Traurig to do work for his company.67 The 
choice of a firm the profits of which flowed in part to the 
DNC's finance chairman may have added an additional layer of 
redundancy to Tamraz's political lobbying campaign: Richard 
Sullivan later claimed to have heard from DNC Treasurer Scott 
Pastrick that Tamraz was no longer contributing to the DNC 
because he ``had employed Marvin's law firm and . . . was kind 
of getting taken care of by Marvin's law firm.'' 68
---------------------------------------------------------------------------
    \67\ Tamraz interview, pp. 89-90; see also Tamraz testimony, p. 
143.
    \68\ Deposition of Richard Sullivan, June 25, 1997, pp. 76-77. 
Tamraz, however, has claimed that efforts to attribute his slowing of 
DNC contributions to the Rosen connection were merely an attempt to 
escape blame for the failures of Sullivan and Pastrick as fundraisers. 
See Tamraz testimony, pp. 43-46. In fact, neither of these accounts is 
probably accurate: Tamraz most likely stopped giving money to the DNC 
in 1996 after it became clear that his contributions were not going to 
reverse the U.S. Government's policy on Caspian energy issues.
---------------------------------------------------------------------------
    Leaving no stone unturned, however, Tamraz apparently never 
gave up hope of winning Heslin and her interagency Caspian 
energy working group to his cause. To this end, he enlisted the 
help of both the DNC and Bob of the CIA. On the afternoon of 
October 6, 1995, Tamraz met with Fowler and Sullivan at 
Fowler's office.69 The subject of this meeting was 
Tamraz's ``disinvitation'' from the Vice Presidential breakfast 
the day before: Fowler told Tamraz that ``there was 
resistance'' to Tamraz attending White House social events, and 
that the White House ``want[ed] more information about you 
before you can attend these events.'' 70
---------------------------------------------------------------------------
    \69\ Schedule for National Chair Donald L. Fowler, Oct. 6, 1995, p. 
3 (Ex. 19) (showing meeting at 3:00 p.m. with Tamraz and Sullivan). The 
notation indicating Fowler's appointment with Tamraz is handwritten, 
suggesting that the meeting was arranged at the last minute--which 
would be entirely in keeping with Tamraz's recollection that this 
meeting had been called to discuss Tamraz's ``disinvitation'' to the 
Gore event only the day before.
    \70\ Tamraz interview, pp. 31-35 & 46.
---------------------------------------------------------------------------
    According to Tamraz, upon being told that the White House 
``needed information'' about him,

           I told them that they should go and get information 
        from Government departments. . . . I told [Fowler] he 
        could go to any department, including the CIA. . . . I 
        told him to tell the people who were requesting from 
        him information to tell the people to go to any 
        department, including the CIA. . . . I may have given a 
        name of a person at the CIA to contact, just to check 
        if information was, in fact, sent.71
---------------------------------------------------------------------------
    \71\ Id. at pp. 51-53.

Indeed, Tamraz gave Fowler and Sullivan the name of his friend 
Bob at the CIA--the same DO official who had been ``lobbying'' 
Heslin on Tamraz's behalf since June 1995--and the CIA 
officer's classified office telephone number.72 
Handwritten notes taken by both Fowler and Sullivan bear this 
out, indicating their intention to call Bob about Tamraz and 
making clear Bob's CIA affiliation.73
---------------------------------------------------------------------------
    \72\ See Tamraz interview, pp. 51-53, 59 & 71. Providing classified 
information to individuals without a security clearance is illegal. See 
18 U.S.C. Sec. 793(d) (prohibiting disclosure ``to any person not 
entitled to receive it'' of lawfully-possessed information which ``the 
possessor has reason to believe could be used to the injury of the 
United States or to the advantage of any foreign nation'').
    \73\ Handwritten notes by Don Fowler (Ex. 20) (reading ``Roger 
Tamraz 6 Oct 95 . . . Leon Fuerth--go to CIA Bob . . . Sheila Heslin at 
NSC''); Handwritten notes by Richard Sullivan (Ex. 21) (reading ``CIA--
> Bob'').
---------------------------------------------------------------------------
    Tamraz also met subsequently with Sullivan and Rosen later 
in October 1995 to discuss ``the lack of information about me 
in order to go to the [White House] functions.'' 74 
The DNC officials, he said, were ``embarrassed . . . for a 
donor to be disinvited,'' 75 and ``wanted to excuse 
themselves that I was disinvited, and they hoped that if more 
information would be available that somebody would review again 
my status.'' 76 Tamraz repeated his suggestion that 
if more information about his bona fides were needed, the CIA 
should be able to provide it.77
---------------------------------------------------------------------------
    \74\ Tamraz interview, p. 56.
    \75\ Id. at pp. 87 & 91.
    \76\ Id. at p. 57.
    \77\ Id. at pp. 87-88 & 127.
---------------------------------------------------------------------------
    On October 18, 1995, Tamraz called Bob at the CIA in order 
``to say that he had given [Bob's] name to Fowler as a 
reference.'' The next day, as Bob recorded it in an internal 
CIA memorandum,

          Don Fowler called me at the request of . . . Roger 
        Tamraz. . . . During the conversation, Fowler said that 
        he understood that I was in contact with the Vice 
        President's office concerning Tamraz. Fowler said he 
        was attempting to arrange a meeting between the Vice 
        President and Tamraz concerning Tamraz's oil pipeline 
        from Ceyhan, Turkey to Baku, Azerbaijan, but was aware 
        that there was opposition in the White House . . . . 
        Fowler queried whether I could provide him a copy of 
        any correspondence on Tamraz I might prepare for the 
        Vice President.78
---------------------------------------------------------------------------
    \78\ Bob of the CIA, Memorandum for the Record, Oct. 20, 1995 (Ex. 
22) [redacted and declassified].

    At some point in October 1995, Heslin received another 
telephone call from Bob at the CIA, who continued, she said, 
``plying his lobbying methods'' on behalf of Tamraz's pipeline 
scheme.79
---------------------------------------------------------------------------
    \79\ Heslin interview, p. 12.
---------------------------------------------------------------------------
    By now, however, Heslin was being ``really careful with 
[Bob],'' having concluded that ``he was a lobbyist'' for 
Tamraz.80 Accordingly, Fowler apparently decided to 
try again. As indicated by Fowler's DNC telephone records, he 
tried to telephone Bob at the CIA officer's classified work 
telephone number on December 11 and 12, 1995.81 On 
December 13, Fowler finally reached Bob at the Central Eurasia 
(CE) Division of the DO.82 According to an internal 
CIA memorandum later prepared by Bob, ``Don Fowler called CE 
Division to ask if it could provide a letter on Tamraz to clear 
Tamraz's name with the President.'' 83
---------------------------------------------------------------------------
    \80\ Id.; see also Bob of the CIA, Memorandum for the Record, Dec. 
28, 1995, p. 2 (Ex. 23) (``Based on conversation with Sheila Heslin at 
the NSC, it is our understanding that the NSC would like to deny Tamraz 
access to the President and the Vice President.'').
    \81\ Donald Fowler, telephone log, Dec. 11, 1995 (Ex. 24) (listing 
Bob with telephone number); Don Fowler, telephone log, Dec. 12, 1995 
(Ex. 25) (same).
    \82\ Also on December 13, Fowler and Richard Sullivan met again 
with Roger Tamraz at Fowler's DNC office. Schedule for National Chair 
Donald L. Fowler, Dec. 13, 1995, p. 2 (Ex. 26) (indicating meeting at 
11:30 a.m. ``per DLF's phone conversation w/Tamraz'').
    \83\ Ex. 23, p. 2.
---------------------------------------------------------------------------
    Fowler has been less than candid in his recollection of 
these events. In March 1997, he issued a press release in which 
he asserted flatly that

          In spite of the fact that my memory is imprecise on 
        some of the details associated with this sequence of 
        events, on one point I am clear and certain: I did not 
        in this situation, or in any other, call or contact the 
        CIA to ask them to supply information to Ms. Heslin, 
        Dr. Soderberg [sic] or anyone else, nor did I direct 
        anyone else to do so.84
---------------------------------------------------------------------------
    \84\ Donald Fowler, press release, March 18, 1997 (Ex. 27). 
According to her comments when interviewed by the Committee, Soderberg 
has not received a Ph.D. See Memorandum of Interview of Nancy 
Soderberg, May 29, 1997, p. 1 (recounting finishing graduate school 
with Master's degree in International Relations).

As noted above, this assertion was false. When confronted with 
evidence of his calls to Bob--evidence of which he was unaware 
until shown it by Senator Thompson on September 9, 1997 at the 
public hearings 85 Fowler changed his story. Having 
discovered that the Committee possessed Bob's memoranda 
recounting the CIA officer's discussions with him, Fowler then 
testified under oath that he had ``no memory'' of having ever 
called anyone at the CIA. He said, in fact, that he had been 
``flabbergasted'' to read reports to this effect in the media; 
``I have at midnight, at noontime, and almost every other 
minute of the day plumbed my memory in every way that I can, 
and I have no memory of ever having talked to anybody at the 
CIA.'' 86 When probed more specifically about his 
contacts with Bob, Fowler said that he did not know who the man 
was; 87 Fowler also claimed not to recall Tamraz 
ever asking him to contact the CIA.88
---------------------------------------------------------------------------
    \85\ See Testimony of Donald Fowler, Sept. 9, 1997, p. 51 
(remarking, when shown memorandum of conversation by Bob of the CIA, 
that ``this is the first time I have ever seen that document'').
    \86\ Deposition of Donald Fowler, May 21, 1997, p. 242; see also 
Fowler testimony, pp. 47-48; see also id. p. 53 (affirming lack of 
recollection).
    \87\ Fowler deposition, p. 244.
    \88\ Fowler testimony, p. 53.
---------------------------------------------------------------------------
    It is likely that Fowler's September 9, 1997 claim of ``no 
memory'' is as false as his March 1997 press release absolutely 
denying any CIA contacts. The evidence makes clear that Fowler 
was closely engaged in efforts to contact Bob at the CIA. As 
mentioned above, Fowler's own handwritten notes indicate his 
intention to call a CIA officer named Bob; these notes also 
make clear that Fowler understood the man's CIA 
affiliation.89 Fowler's telephone records document 
his efforts to reach Bob at his work telephone 
number.90 Moreover, as described in more detail 
below, Fowler mentioned ``Bob . . . of the CIA'' both in a call 
to Heslin, 91 and in a conversation he had with 
Deputy National Security Advisor Nancy Soderberg about 
Tamraz.92 Because Fowler twice talked to Bob, 
recorded Bob's full name and CIA affiliation in his notes, and 
told at least two other people of his contacts with the CIA 
officer, it is extremely unlikely that Fowler genuinely did not 
recall his contacts with the CIA.
---------------------------------------------------------------------------
    \89\ Ex. 20 (handwritten notes by Fowler reading ``Roger Tamraz . . 
. Leon Fuerth--go to CIA/Bob [last name redacted]/Sheila Heslin at 
NSC''). It is clear from these notes and from Fowler's discussions of 
``Bob of the CIA'' with Heslin and Soderberg, see infra text 
accompanying notes 91 & 92, that even if Fowler never discussed Bob's 
CIA affiliation, Fowler already knew it. Cf. Bob of the CIA, redacted 
and declassified deposition, pp. 67, 93 & 95 (recounting that Fowler 
and Bob did not discuss Bob's CIA affiliation). (The CIA officer did, 
however, make it clear to Fowler that he was part of some government 
agency, id. p. 94, and suggested that Fowler seemed already to know of 
his CIA affiliation, id., p. 97 (``If Tamraz has told him I'm CIA, 
there's not much I can do about it at that point.'').
    \90\ See supra note 81.
    \91\ Heslin testimony, p. 23; see also Heslin interview, p. 13.
    \92\ Nancy Soderberg, handwritten notes (Ex. 28) (``Bob [last name 
redacted] friend in CIA/memo to Sheila.''); see also Soderberg 
interview, p. 5 (identifying notes as pertaining to conversation with 
Fowler).
---------------------------------------------------------------------------
    After Bob refused Fowler's request that he provide a letter 
to ``clear Tamraz's name with the President,'' 93 
Fowler contacted Heslin himself. According to Fowler's DNC 
telephone records, he left a message for Heslin at her NSC 
office on December 14.94 Uneasy with having received 
a message from the chairman of the DNC, Heslin sent an e-mail 
message to Soderberg.95 In this e-mail, Heslin 
stated that
---------------------------------------------------------------------------
    \93\ Ex. 23, p. 2.
    \94\ Donald Fowler, telephone log, Dec. 14, 1995 (Ex. 29) (showing 
``message'' left for Heslin at 3:45 p.m.).
    \95\ Heslin testimony, p. 22.

          Don Fowler, DNC Chairman[,] has a call in to me 
        (subject unclear). I wanted to check with you about 
        whether to refer this call to you or more generally, if 
        I should follow a particular procedure in returning the 
---------------------------------------------------------------------------
        call.96

    \96\ Sheila Heslin, e-mail message to Nancy Soderberg, Dec. 14, 
1995 (Ex. 30). Heslin apparently returned Fowler's call on December 14, 
but did not reach him. See Donald Fowler, telephone message slip, 
apparently Dec. 14, 1995 (Ex. 31).

Four days later, NSC legal advisor Alan Kreczko sent an e-mail 
to Heslin by e-mail, advising her that ``[y]ou can always 
return a call. But anything beyond that you would need to check 
with us.'' 97
---------------------------------------------------------------------------
    \97\ Alan Kreczko, e-mail message to Sheila Heslin, Dec. 18, 1995 
(Ex. 30).
---------------------------------------------------------------------------
    Also on December 18, Kenneth Baldwin, Nancy Soderberg's 
assistant, contacted Heslin with a response from Soderberg 
saying ``Sheila: I'll call him.'' 98 Accordingly, 
Soderberg called Fowler that afternoon; Fowler returned her 
call on the morning of December 19.99 Soderberg's 
handwritten notes from her talk with Fowler make clear that the 
subject of their conversation was Tamraz, and suggest that 
Soderberg was aware of the efforts of Fowler and Tamraz to 
enlist the CIA's assistance in changing Heslin's mind about 
permitting Tamraz to attend events or make appointments to 
visit officials at the White House. Under the heading ``Roger 
Tamraz'' and ``Don Fowler,'' Soderberg wrote in her notebook 
that ``WH event/appt. . . . Bob [last name redacted] friend in 
CIA ) memo to Sheila.'' 100
---------------------------------------------------------------------------
    \98\ Kenneth Baldwin, e-mail message to Sheila Heslin, Dec. 18, 
1995 (Ex. 30). Soderberg had known Fowler for many years from working 
together for various prior political campaigns. See Soderberg 
interview, p. 2.
    \99\ See Nancy Soderberg appointment schedule, Dec. 18, 1995 (Ex. 
32) (showing ``Dan [sic] Fowler'' call at 4:00 p.m.); Donald Fowler, 
telephone log, Dec. 19, 1995, p. 2 (Ex. 33) (showing call to ``Nancy 
Soderberg for Sheila Heslin'' as ``DONE'' at 10:15 a.m.).
    \100\ Ex. 28. Soderberg claimed later to have agreed with Heslin 
about Tamraz, and to have communicated this view to Fowler in their 
conversations on the subject. Soderberg interview, pp. 5-6. In any 
event, Soderberg admitted that Fowler told her that his friend Bob at 
the CIA had sent (or would send) information about Tamraz to Heslin. 
See Soderberg interview, p. 6. As suggested by her own handwritten 
notations upon her copy of one of the CIA reports given to Heslin, 
Nancy Soderberg also spoke with DNC Finance Chairman Marvin Rosen about 
the Tamraz issue. See Soderberg interview, p. 7 (declaring that 
``[o]bviously Rosen did call me because his name appears right there,'' 
but claiming to have no specific recollection of any such 
conversation).
---------------------------------------------------------------------------
    That same day, Fowler telephoned Heslin. As Heslin 
recounted it, this conversation was ``very short'':

          He said hello. I answer[ed], ``NSC, Sheila Heslin,'' 
        and he said ``Hello, Sheila''--``Hello, Ms. Heslin. 
        This is Don Fowler of the DNC, and I'm calling to 
        inform you that Bob''--using his full name --``of the 
        CIA will be sending you a report on Roger Tamraz, so 
        that . . . you will understand everything about his 
        background, and you won't have any further concerns 
        about having him go into the White House.'' 
        101
---------------------------------------------------------------------------
    \101\  Heslin testimony, p. 23.

Alarmed by this call, Heslin called her contact at the CIA's DI 
to complain about this message, asking this official: ``What 
the hell is your agency doing? You won't believe the phone call 
I just got from Don Fowler of the DNC!'' Heslin expressed her 
outrage at the apparent involvement of officers from the DO 
with the DNC. ``I totally didn't trust [the DO] on this 
issue,'' Heslin recalled later, adding that ``I just couldn't 
understand what they were doing.'' 102
---------------------------------------------------------------------------
    \102\  Heslin interview, p. 13; see also Heslin testimony, p. 22 
(``I actually also called the Directorate of Intelligence at the CIA 
and I said `What the hell is going on? . . . [W]hy are your people 
working with Fowler?' '').
---------------------------------------------------------------------------
    Heslin also telephoned Soderberg to complain about Fowler's 
call. Soderberg was ``adamant that she'd take care of Fowler,'' 
but also seemed interested in seeing if there were some way 
that Tamraz could attend a White House function. Soderberg 
inquired of Heslin, for example, whether Tamraz might be able 
to meet the President in a small group, or if that were not 
possible, whether he could visit as part of a large group. 
103 Heslin did not question Soderberg's motives, 
104 but she sent Soderberg a memorandum the next day 
rearguing the point that Tamraz should be denied high-level 
U.S. government access; Heslin attached to this message the 
text of Leon Fuerth's September 1995 memorandum to Vice 
President Gore about Tamraz. 105 In her message to 
Soderberg, Heslin warned that
---------------------------------------------------------------------------
    \103\  Heslin interview, p. 13.
    \104\  Heslin claims to have simply assumed at that point that 
Soderberg was accumulating information with which to rebut possible 
counter-arguments by Donald Fowler. See id.
    \105\  Sheila Heslin, e-mail message to Nancy Soderberg, Dec. 20, 
1995 (Ex. 34).

          Tamraz desperately needs the mantle of the President 
        to advance his goal. He will use any meeting with the 
        President . . . to the potential detriment of our 
        policy goals in the Caucasus region. 106
---------------------------------------------------------------------------
    \106\  Id.

In response to Heslin's call and e-mail message, Soderberg 
asked Randy Beers, the NSC's senior director for intelligence 
matters, to look into the Tamraz issue. 107
---------------------------------------------------------------------------
    \107\  See Heslin interview, p. 13; see also Nancy Soderberg, e-
mail message to R. Rand Beers, Dec. 20, 1995 (Ex. 34) (forwarding 
Heslin's message to Beers).
---------------------------------------------------------------------------
    Just as Fowler had indicated would occur, at some point in 
December, Heslin received, through Beers' office, another 
report on Tamraz from the CIA's DO. Heslin found this entirely 
unsolicited report ``pretty dismaying'' and wholly inadequate. 
Indeed, it was ``even worse than the last DO report'': while 
the earlier report from the DO had at least contained veiled 
references to ``unsubstantiated allegations'' against Tamraz, 
this one contained no adverse information whatsoever. She felt 
this DO report to be ``wholly divorced from the reality of what 
the guy was about.'' 108
---------------------------------------------------------------------------
    \108\  Heslin interview, pp. 14-15.
---------------------------------------------------------------------------
    Heslin's determination to deny Tamraz access to top 
officials and to prevent giving him even an apparent U.S. 
endorsement of his pipeline project remained adamant throughout 
these efforts by Roger Tamraz, his friend Bob at the CIA, and 
Fowler at the DNC. Indeed, at the suggestion of Jamuna 
Broadway, an assistant to Heslin's immediate superior, Chip 
Blacker, Heslin tried to arrange for Tamraz's name to be put on 
what Broadway described as a list that would ensure that he was 
denied access to the White House. 109 All of 
Heslin's efforts, however, were in vain.
---------------------------------------------------------------------------
    \109\  Heslin interview, pp. 11-12. According to Heslin, when 
Broadway suggested to her that ``a friend'' could arrange for Tamraz to 
be thus listed, Heslin replied ``great!'' Broadway later told Heslin 
that this matter had been ``taken care of,'' and that Tamraz would now 
be unable to get into the White House ``through some social event.'' 
Id. No such list was ever produced to the Committee, but Heslin was 
given the impression that this had occurred. See also Ex. 23, p. 2 (Bob 
of CIA recounting that ``Heslin told [the DO's Central Eurasia 
Division] that Tamraz's name had been put on a White House watch list 
to prevent him from seeing senior officials.'').
---------------------------------------------------------------------------
    Through his DNC and other DNC-coordinated Democratic Party 
donations, Tamraz was able to attend events with President 
Clinton on no fewer than six occasions from September 1995 
through June 1996: (1) a reception for the DNC's Business 
Leadership Forum on September 11, 1995; (2) a DNC dinner on 
September 15, 1995; (3) the DNC Chairman's holiday reception on 
December 13, 1995; (4) a DNC Trustee's dinner on March 27, 
1996; (5) a Presidential coffee on April 1, 1996; and (6) a 
buffet dinner and private screening of the film Independence 
Day on June 22, 1996. 110 Once again, after being 
denied access through the ``door,'' Roger Tamraz had found his 
way in through a ``window.''
---------------------------------------------------------------------------
    \110\  WhoDB Contact Manager Information database printout re: 
Roger Tamraz, undated (Ex. 35).
---------------------------------------------------------------------------

                 TAMRAZ ATTEMPTS TO CHANGE U.S. POLICY

    For Roger Tamraz, however, purchasing access to the White 
House was not enough. Despite the NSC's objections, he had 
little trouble getting into the White House, having succeeded 
in doing so three times in 1995 alone. In 1996, however, what 
Tamraz still lacked--and as Heslin put it, what he 
``desperately need[ed]'' 111--was the U.S. 
Government's actual or apparent endorsement of his pipeline 
deal. Ideally, Tamraz would have preferred that the President 
promote his pipeline deal to the governments of the Caspian 
region, hoping that the White House would endorse his deal as 
part of its efforts to promote U.S. business interests 
overseas. 112 Failing this, Tamraz recalled, ``I was 
looking for somebody to say, `We have no objection.' '' 
113
---------------------------------------------------------------------------
    \111\  Ex. 34.
    \112\ See, e.g., Tamraz testimony, p. 166 (``Chairman Thompson: . . 
. Do you think you have a constitutional right to have your business 
deal personally considered by the President of the United States? / Mr. 
Tamraz: Well, the President picked up the phone once and called King 
Fahd [of Saudi Arabia] and told him, `I would like you to buy Boeings 
instead of Airbus [airliners],' and another time, he called up and he 
said, `I want you to buy AT&T instead of Ericsson.' '').
    \113\ Id. at p. 139.
---------------------------------------------------------------------------
    As described above, however, United States policy, 
established by the Caspian energy working group chaired by 
Heslin, remained firm in ruling out precisely what Tamraz 
wanted. As set by this interagency group, U.S. policy held that 
Tamraz's pipeline should get neither actual support nor any 
mere ``non-objection.'' In the spring of 1996, therefore, 
Tamraz directed his energies toward turning the Presidential 
access he had purchased through Fowler and the DNC into real 
policy change.`
    Arranging through the DNC to attend a dinner with the 
President for ``top supporters of the [Democratic] party'' on 
March 27, 1996, 114 Tamraz used his victory in the 
``guerilla fight to get close to the President'' 115 
in order to promote his pipeline proposal. President Clinton 
expressed interest, and assured Tamraz that he would look into 
the issue. As White House Social Secretary Ann Stock summarized 
their talk in a memorandum to Clinton the next day,
---------------------------------------------------------------------------
    \114\ See Richard Sullivan, memorandum regarding March 27 dinner 
(Ex. 36) (describing dinner); Marvin Rosen & Richard Sullivan, 
memorandum to Karen Hancox, Feb. 28, 1996 (Ex. 37) (forwarding list of 
names for March 27 dinner--including that of Roger Tamraz--to White 
House); Ann Stock, memorandum to the President on March 27 dinner (Ex. 
38) (briefing President on DNC dinner).
    \115\ As Tamraz colorfully described it,

      You think you get into the White House so you've won. It's 
      only the fight begins when you get into the White House. 
      Then there's a guerrilla fight to get close to the 
      President . . . First the President is surrounded by the 
      ladies because they swoon around him . . . Secondly, you 
      have his bodyguards, and thirdly you have the handlers, the 
      same handlers that get you into the White House are sure 
      once you get in, that you don't get the chance to get what 
      you want. They act like a basketball team professionally 
      around the President and anyone getting too close to the 
---------------------------------------------------------------------------
      President is waltzed away.

Tamraz testimony, p. 58.
          Roger Tamraz . . . wanted to discuss the pipeline 
        that will go from the Caspian Sea to Turkey. You told 
        him that someone would follow-up with him. 
        116

    \116\  Ann Stock, memorandum to the President, March 28, 1997 (Ex. 
39).
---------------------------------------------------------------------------
So interested was President Clinton, in fact, that he made a 
handwritten notation on Stock's memorandum asking about the 
likely reaction of the government of Azerbaijan and suggesting 
that a copy of this document be forwarded to Counselor to the 
President Thomas F. (``Mack'') McLarty. 117
---------------------------------------------------------------------------
    \117\ Id. (handwritten additions). A handwritten note on this 
document indicates that a copy was to be forwarded to Nancy Soderberg 
as well, while another note reads ``Make copies as noted.'' (The 
President's notations on this document appear as typewritten 
substitutions; it is White House policy to avoid releasing samples of 
the President's handwriting.)
---------------------------------------------------------------------------
    McLarty also spoke with Tamraz about his pipeline at this 
dinner. As McLarty recalled it,

          [he] did talk about his oil pipeline in the Caspian 
        Sea and the importance of it. As I remember, I related 
        to him that we had constructed a major pipeline in the 
        midcontinent, and I understood how important bringing 
        reserves to market were [sic], and we discussed, as I 
        remember it, kind of the importance of lessening 
theU.S. dependence on the Middle East for energy supplies, something 
that I have felt very strongly about for a number of years . . . 
.118
---------------------------------------------------------------------------
    \118\ Deposition of Thomas F. McLarty, June 30, 1997, pp. 28-30.

McLarty admitted that it was ``possible'' that Tamraz gave him 
some document or documents that evening, but he said they had 
not discussed Tamraz's political contributions.119 
At some point after this dinner, in keeping with the Stock 
memorandum about Presidential ``follow-up,'' McLarty learned 
that
---------------------------------------------------------------------------
    \119\ Id. at p. 38.

        the President wanted more information about the 
        pipeline and for someone to follow up with Mr. Tamraz, 
        and I think I learned that I was to do that, and I 
        proceeded to do so. 120
---------------------------------------------------------------------------
    \120\ Id. at pp. 33-35.

    As these accounts of the March 27 dinner make clear, 
Tamraz's focus was no longer upon access to U.S. officials: by 
the time he was able personally to convey his views to 
President Clinton and McLarty, of course, such access was a 
foregone conclusion.121 Rather, Tamraz now focused 
upon the substantive merits of his pipeline project. He sought 
to change U.S. Government policy with regard to Caspian energy 
issues.
---------------------------------------------------------------------------
    \121\ Indeed, according to Tamraz, there was never any real chance 
for anyone at the NSC to bar major campaign contribution from meeting 
President Clinton. ``If we wanted an appointment,'' Tamraz said, ``[the 
President] would have told me, `Come tomorrow for a golf game.' It 
could have been expensive, but we could have done it.'' Tamraz 
testimony. p. 51.
---------------------------------------------------------------------------
    On March 28, 1996, the day after Tamraz's discussion with 
the President about the pipeline and the same day that Ann 
Stock memorialized the President's desire to ``follow-up'' on 
the Tamraz pipeline issue, Sullivan and Swiller at the DNC 
prepared two memoranda summarizing Tamraz's various political 
contributions and the fundraising solicitations he had 
undertaken. One memorandum listed a total of $205,000 in 
various contributions and fundraising 
solicitations,122 while the other listed $300,000 in 
contributions to various Democratic institutions.123 
As will be discussed below, the figures given by this first 
memorandum correspond closely to sums apparently recounted to 
Jack Carter at the Department of Energy by his colleague 
Charles Kyle Simpson.
---------------------------------------------------------------------------
    \122\ Ex. 9.
    \123\ Ex. 12.
---------------------------------------------------------------------------
    McLarty dealt frequently with energy issues for President 
Clinton, and for this purpose often worked with Associate 
Deputy Secretary for Energy Kyle Simpson.124 Simpson 
was himself a longtime political supporter of the President, 
having been active in Democratic politics in his native Texas 
and having served both as an advisor to the Clinton/Gore 
campaign and as a member of the President's transition team. 
125 It was natural, therefore, for McLarty to 
contact Simpson in order further to delegate President 
Clinton's request to ``follow-up'' with regard to the 
substantive merits of Tamraz's pipeline idea.
---------------------------------------------------------------------------
    \124\ See McLarty deposition, p. 6.
    \125\ See Simpson deposition, pp. 9-14.
---------------------------------------------------------------------------
    Indeed, on March 29--the day after the President asked 
McLarty to ``follow-up'' with the Tamraz issue and DNC 
officials prepared their $205,000 and $300,000 memoranda 
listing Tamraz's political contributions--McLarty inquired of 
Simpson about a certain ``list.'' In a telephone message slip 
produced to the Committee in response to its request for 
Tamraz-related documents, McLarty's secretary informed him that 
Simpson had called ``re: List--I told him you found out what 
you needed to know from someone else so he could disregard it 
for now.'' 126
---------------------------------------------------------------------------
    \126\ Thomas F. McLarty, telephone message slip, March 29, 1996 
(Ex. 40).
---------------------------------------------------------------------------
    On April 1, Tamraz attended another event with President 
Clinton, this time a DNC-sponsored coffee in honor of ``the top 
supporters of the DNC.'' 127 The briefing materials 
for this event listed Tamraz as ``pursuing the possibility of 
building an oil pipeline,'' 128 and he indeed took 
advantage of this opportunity to promote his project to 
McLarty, who later recalled meeting Tamraz at this coffee, but 
claimed to remember nothing of their 
conversation.129 In a memorandum prepared the next 
day, however, McLarty advised the President that
---------------------------------------------------------------------------
    \127\ Richard Sullivan, memorandum on April 1, 1996 coffee, March 
29, 1996 (Ex. 41).
    \128\ List of ``POTUS April 1 Coffee Attendees,'' p. 3 (Ex. 42).
    \129\ McLarty deposition, p. 44.

        [p]er your direction, I had a good visit with Roger 
        Tamraz, President of Oil Capital Ltd., at the Monday 
        morning coffee. Roger was pleased with your interest, 
        and we will follow-up in a supportive but prudent and 
        appropriate way.130
---------------------------------------------------------------------------
    \130\ Mack McLarty, memorandum to William J. Clinton, April 2, 1996 
(Ex. 43).

Tamraz also apparently gave McLarty an Oil Capital brochure and 
a copy of his business card, which McLarty duly forwarded to 
Kyle Simpson, with a copy also being sent to President 
Clinton.131 Indeed, McLarty appears by that point 
already to have faxed Simpson information relating to Tamraz. 
In his April 2 note forwarding Simpson the business card and 
brochure, McLarty noted that this information ``[r]elates to 
the fax I sent you last week.'' 132 Neither McLarty 
nor Simpson claim to remember any such fax or ``list.'' 
133
---------------------------------------------------------------------------
    \131\ Mack McLarty, letter to Kyle Simpson, April 2, 1996 (Ex. 44) 
(forwarding attachments to Simpson for discussion and including 
handwritten notation ``bcc: The President''). Although he apparently 
did not speak with Tamraz about the pipeline after the March 27 dinner, 
President Clinton remained quite interested in Tamraz's idea. According 
to McLarty, after the April 1 coffee, the President ``again mentioned 
to me his interest in learning more about the matter.'' Statement of 
Thomas F. (``Mack'') McLarty, III, Sept. 17, 1997, p. 1 (Ex. 45).
    \132\ Ex. 44 (forwarding attachments and noting ``Please review and 
let's discuss the attached. (Related to the fax I sent you last 
week.)'').
    \133\ See, e.g., Simpson deposition, pp. 39-42; McLarty deposition, 
pp. 38-39, 41 & 46. In October 1996, when the Clinton Administration's 
campaign-finance scandals began to emerge in the press, McLarty's staff 
tried, apparently unsuccessfully, to find the ``fax'' in question. One 
telephone message given to McLarty ``Just FYI,'' for example, refers to 
his April 2, 1996 ``Memo to POTUS'' and recounts that the author had 
been ``asked if we have the fax mentioned in the note--I don't.'' 
Telephone message slip, Oct. 24, 1996 (Ex. 46).
---------------------------------------------------------------------------
    At some point, most likely after the April 1 coffee, 
McLarty contacted Simpson about Tamraz. According to McLarty, 
he asked Simpson for

        additional information about the [Tamraz pipeline] 
        project. I asked what he knew about it and for him to 
        provide me additional information, and I believe that I 
        told him that the President had given me this 
        task.134
---------------------------------------------------------------------------
    \134\ McLarty deposition, pp. 53-58.

---------------------------------------------------------------------------
Simpson recalls their conversation similarly. According to him,

        [McLarty] said the President had met with Mr. Tamraz 
        and Mr. Tamraz had talked about his pipeline proposal 
        and . . . he asked Mr. McLarty to find out if there was 
        anything we needed to do about it if it was important.
          And McLarty was calling me to find out if there was 
        anything unique about this pipeline because it is the 
        policy, the importance, the strategic and economic 
        importance of getting a pipeline built from that region 
        [that] is very . . . critical.
          So he wanted to know if this was one [project] that 
        had unique characteristics that we should be supporting 
        . . . . As I understood it, he wanted me to find out if 
        there was anything about this pipeline proposal that 
        was important enough, unique enough, different enough 
        that would cause it to rise above other proposals that 
        were in play in the Caspian. That's what he wanted to 
        know.135
---------------------------------------------------------------------------
    \135\ Simpson deposition, pp. 43 & 47-48; see also Charles Kyle 
Simpson, letter to Senators Fred Thompson and John Glenn, Sept. 17, 
1997 (Ex. 47) (recounting that McLarty asked ``whether there was 
anything unique about this pipeline proposal'').

As this account shows, the emphasis at this point was clearly 
upon whether the U.S. Government should support Tamraz's 
pipeline proposal.
    Having received this request from McLarty, Simpson passed 
it along to his Energy Department colleague Jack Carter--a 
former Clinton/Gore fundraiser from Texas who was perhaps 
particularly eager to assist because he had been seeking a job 
at the White House working for McLarty.136 Simpson 
mentioned McLarty's message and asked Carter to
---------------------------------------------------------------------------
    \136\ See Carter deposition, p. 21; McLarty deposition, pp. 12-14.

        [f]ind out what he could about this pipeline proposal, 
        and learn if there is anything, then tell me if there 
        was anything different about this one or unique about 
        this one that would cause us to be more interested in 
        it than in any others. . . .137
---------------------------------------------------------------------------
    \137\ Simpson deposition, pp. 53-57; see also Ex. 47, p. 2 (Simpson 
recounting that he asked Carter to ``find out what he could about Mr. 
Tamraz' pipeline proposal and report to me whether there was anything 
unique about it that would cause the United States to be interested in 
it.'').

    Significantly, as noted above, the purpose of the 
President's inquiry and the efforts to ``follow-up'' upon the 
President's talk with Tamraz was entirely substantive, relating 
to the merits or demerits of Tamraz's pipeline project and 
whether any reason could be found for the U.S. Government to 
support it. Indeed, McLarty himself insisted that the issue of 
a Presidential meeting with Tamraz ``never came up in my 
discussions with Mr. Simpson. I just simply asked for 
information about the pipeline and the region. . . . Meetings 
were never discussed with Mr.Simpson.'' 138 Mere 
access, in other words, had nothing to do with it.139 As 
Simpson's account makes clear, Tamraz had actually persuaded President 
Clinton, McLarty, and Simpson to begin looking for reasons to support 
Oil Capital's pipeline proposal.
---------------------------------------------------------------------------
    \138\ McLarty deposition, pp. 60 & 71.
    \139\ Interestingly, Fowler's contacts with Bob of the CIA also 
appear to have been more about substantive policy change than about 
access. As Bob recalled later, Fowler complained to him over the 
telephone that ``big oil companies were muscling out [Fowler's] friend 
here Roger Tamraz, and that he intended to give this guy a fair hearing 
. . . .'' Fowler told Bob that Sheila Heslin ``was keeping 
consideration of Tamraz's pipeline from being fairly considered or 
something like that.'' Bob deposition, pp. 93 & 95.
---------------------------------------------------------------------------
    The key to understanding why these officials found the idea 
of endorsing Tamraz's pipeline to be so attractive five months 
before the presidential election may lie in Simpson's 
communications to Carter and in Carter's own subsequent 
communication with Heslin. By this point, after all, Heslin was 
the principal obstacle that remained for Tamraz. Buying access 
to U.S. Government officials had been comparatively easy, but 
the interagency working group headed by Heslin remained opposed 
to offering the official support Tamraz ``desperately 
need[ed].'' 140 After receiving his instructions 
from Simpson, therefore, it was not surprising that Carter 
should continue to ``follow-up'' on the Tamraz issue by 
contacting her at the NSC. What is particularly significant 
about this contact, however, is the degree to which the two 
Energy officials apparently understood this ``follow-up'' to 
revolve around Tamraz's campaign contributions.
---------------------------------------------------------------------------
    \140\ Ex. 34.
---------------------------------------------------------------------------
    Carter's meeting with Simpson--at which Simpson asked his 
colleague to find out ``if there was anything different'' about 
Tamraz's pipeline which might justify supporting it--apparently 
came at the end of another meeting on an unrelated subject. As 
Carter left this meeting, he remembers, he noticed a notepad of 
Simpson's that contained the words ``Oil Capital or Tamraz or 
both'' and ``some numbers'' apparently in Simpson's 
handwriting. Recognizing these names from his own work with the 
interagency Caspian energy working group, Carter asked Simpson 
about them, and their discussion ensued. The figures, Carter 
said, included the number 200,000 and the number 400,000; 
Simpson ``probably'' explained to him that Tamraz had given 
$200,000 to the Democratic Party and might yet give another 
$400,000.141
---------------------------------------------------------------------------
    \141\ Carter deposition, pp. 49-50.

          Kyle told me that McLarty had called and [that] they 
        wanted to find out something about the guy and whether 
        the President should meet with him. . . . Kyle either 
        on the pad or mentioned that the fellow [Tamraz] had 
        made a contribution, was going to make more 
        contributions apparently to somebody, political 
        contributions.142
---------------------------------------------------------------------------
    \142\ Id. at p. 45; see also Testimony of John Carter, Sept. 18, 
1997, pp. 29-30.

    Carter's handwritten notes of his encounter with Simpson 
corroborate that they discussed Tamraz and suggest also that 
Simpson made clear President Clinton's interest in the 
matter.143
---------------------------------------------------------------------------
    \143\ John Carter, notes of meeting, undated (Ex. 48) (recording 
name ``Oil Capital'' and phrase ``do background on Tamraz/consider 
distance--memo to Prez'').
---------------------------------------------------------------------------
    Simpson denies having discussed Tamraz's campaign 
contributions with Carter, denies ever possessing any list of 
such donations, and claims to have no memory of receiving any 
such information from McLarty or anyone else.144 
Significantly, however, Simpson admits that after the Tamraz 
story broke in the press, he called McLarty to discuss these 
issues. At that point, apparently on March 17 or 18, 1997, 
McLarty had ``refreshed'' Simpson's memory of these crucial 
events: ``[he] told me that he had called me because the 
President had met with Tamraz and he wanted to know--he was 
following up on a request from the President to get more 
information.'' 145 Simpson admits having had a poor 
memory of his dealings with relation to Tamraz.146 
He apparently bases his present account, therefore, in large 
part upon this memory ``refreshment'' given him in March 1997 
by McLarty in response to reporters' discovery of the Tamraz 
affair.147
---------------------------------------------------------------------------
    \144\ Simpson deposition, pp. 40-42, 54-55, & 74-75.
    \145\ Id. at pp. 81-84.
    \146\ See id. at pp. 91-92 (claiming that he had mistakenly given a 
factually incorrect account to Wall Street Journal reporter).
    \147\ Simpson's credibility is also called somewhat into doubt by 
his testimony under oath before the Committee that he was never 
involved in any fundraising for the Democratic Party during the 1995-96 
election cycle, see Charles Kyle Simpson testimony, Sept. 18, 1997, p. 
101--testimony which is inconsistent with a document prepared by the 
DNC in connection with a June 21, 1996 presidential reception which 
includes Simpson's name on a list of people ``each raising $10,000 for 
the gala.'' See Doug Sosnik and David Wofford, Memorandum on 
``Democratic National Committee Presidential Reception and Gala 
Celebration,'' June 21, 1996 (Ex. 49). (It is a potential Hatch Act 
violation for a government employee to raise money for a political 
campaign. See 5 U.S.C. Sec. 7323(a)(2).)
---------------------------------------------------------------------------
    Interestingly, Carter seems to have misunderstood Simpson's 
objectives. As noted above, the request from President Clinton 
and McLarty through Simpson was exclusively concerned with the 
substantive merits of Tamraz's pipeline--i.e., whether or not 
some reason could be found for the Administration to reverse 
the interagency working group's determination that the scheme 
did not deserve U.S. support. As his testimony shows, however, 
Carter seems to have understood Simpson to be asking ``whether 
Mr. Tamraz should have a meeting with the President.'' 
148 This was clearly not the case: the request from 
McLarty and Simpson only occurred because Tamraz had already 
met with President Clinton. Nevertheless, aware of Tamraz's 
significance to the Democratic Party and of the interest of 
McLarty and the President in this matter, Carter called Heslin 
on April 4, 1996.
---------------------------------------------------------------------------
    \148\ Carter testimony, p. 30.
---------------------------------------------------------------------------
    As Heslin recalls it, this talk with Carter was the most 
uncomfortable conversation of her entire government career.

          Jack called me . . . and he said that he wanted to 
        speak to me about Roger Tamraz; that he--that he was 
        calling basically at the behest of Mack McLarty who had 
        recently met with Roger Tamraz and really liked his 
        pipeline proposal.149
---------------------------------------------------------------------------
    \149\ Heslin testimony, p. 29.

Heslin reminded Carter of the interagency working group's 
determination that there was ``nothing there'' in Tamraz's 
pipeline scheme to justify U.S. support. Carter, however, 
---------------------------------------------------------------------------
responded that

          well, Mack McLarty really likes [Tamraz] and he wants 
        him to have a meeting with the President . . . . Jack 
        said this could mean a lot--this would mean a lot of 
        money for the DNC, and I said to Jack, well, I don't 
        really care about $100,000, and he said this is not 
        100,000, this is five or six times that amount, and I 
        said, well, what do you mean, and he said, well, he's 
        already given 200,000, and if he got a meeting with the 
        President, he would give the DNC another 
        $400,000.150
---------------------------------------------------------------------------
    \150\ Id. at pp. 29-30.

Not caring how much money Tamraz might give to the DNC, Heslin 
repeated her opposition to the idea, telling Carter that she 
would ``go to [National Security Advisor] Tony Lake to block 
this if such a meeting were scheduled.'' Carter, however, 
---------------------------------------------------------------------------
continued ``pressuring me.''

          [H]e wasn't very gentlemanly during that talk, and he 
        said, that--he said that Mack [McLarty] was also 
        representing this because the President wanted him to 
        do this . . . and he said, well, Mack can push this 
        through . . . .151
---------------------------------------------------------------------------
    \151\ Id. at p. 30.

Indeed, Heslin recalled, Carter threatened her by saying that 
``it was something that Mack really wanted'' and telling her 
that McLarty might be the next Secretary of Energy; if McLarty 
got this position, Carter suggested, it would be difficult for 
Heslin to work on oil and gas issues if McLarty were displeased 
with her.152
---------------------------------------------------------------------------
    \152\ Heslin interview, p. 16.
---------------------------------------------------------------------------
    Heslin's handwritten notes of this conversation corroborate 
Carter's recitation of the $200,000 and $400,000 figures and 
his reference to President Clinton and McLarty.153 
In fact, Carter himself admitted in his sworn deposition that 
he had ``probably'' mentioned the $200,000 and $400,000 figures 
to Heslin and that he must have said ``something to the effect 
that there has been contributions made by Tamraz and more 
contributions are considered by Tamraz, political 
contributions.'' 154
---------------------------------------------------------------------------
    \153\ Sheila Heslin, handwritten notes, April 4, 1996 (Ex. 50) 
(bearing notation ``Oil Capital / Roger Tamraz--DNC / $400,000--
$200,000 ) $600,000 / Pres. want / Mack McLarty''). (The words ``Mack 
McLarty'' are circled and underlined twice.)
    \154\ Carter deposition, p. 61.

          I would have been telling her that did she know that 
        there had been contributions made by Tamraz and that he 
        was--that he was thinking about making more 
        contributions to 200 and 400. . . . I understood from 
        others that he was thinking about making a 
        contribution, more further contributions, and the 
        question to us was, was there any reason that the 
        President should meet with Tamraz.155
---------------------------------------------------------------------------
    \155\ Id. at pp. 62-63.

Carter also admitted that he might have mentioned the DNC in 
his discussion with Heslin, and that ``I indicated to her that 
McLarty had asked the question, that I understood Mack 
[McLarty] had made the inquiry about whether the President 
should take a meeting with Tamraz.'' 156 Heslin, who 
had no idea that Tamraz had already met with President Clinton, 
apparently shared Carter's misunderstanding that the matter at 
issue was simply one of access, rather than whether the U.S. 
should endorse the Oil Capital plan.
---------------------------------------------------------------------------
    \156\  Id. at p. 63.
---------------------------------------------------------------------------
    Despite Carter's pressure and his crude exhortation ``that 
[she] shouldn't be such a Girl Scout,'' 157 Heslin 
refused to back down. Indeed, Heslin had the impression that
---------------------------------------------------------------------------
    \157\ Heslin testimony, p. 30.

          Jack himself didn't really believe [that Tamraz 
        should be accommodated]. He was--Jack knew our policy, 
        and he had promoted it in the region. He had fought for 
        it. I think Jack was acting at the behest of someone 
        else, and he knew dates when Mack McLarty had met [with 
        Tamraz]. He knew dollar figures, and he never spoke to 
        me again like that before [or] after . . . I'm just 
        very sorry that that conversation took 
        place.158
---------------------------------------------------------------------------
    \158\ Id. at p. 31.

In the end, she said, Carter retreated, acknowledging that he 
clearly understood ``what your position is.'' 159
---------------------------------------------------------------------------
    \159\ Id.
---------------------------------------------------------------------------
    By now thoroughly alarmed, Heslin quickly contacted Nancy 
Soderberg. As Heslin recalls it, Soderberg, upon being told of 
Carter's telephone call and references to McLarty, said ``Oh 
myGod, Mack shouldn't be doing that, he should know better, that's 
illegal.'' 160 Soderberg does not recall making this 
comment, but remembers that Heslin recounted being pressured by an 
Energy Department official for ``political reasons'' to change her 
position on Tamraz. Soderberg does recall, however, that McLarty's name 
somehow came up in her conversation with Heslin. Soderberg says she 
told Heslin that the Energy official was ``acting inappropriately.'' 
161
---------------------------------------------------------------------------
    \160\  Id. at p. 32; see also Heslin interview, p. 16.
    \161\  Soderberg interview, pp. 10-11.
---------------------------------------------------------------------------
    According to Heslin, Soderberg then recommended that Heslin 
draft a letter for McLarty to send to Tamraz, phrased in such a 
way that ``we could issue [it] to deflate'' any subsequent 
claims by Tamraz that the U.S. Government supported his 
project.162 Heslin also remembers a second 
conversation with Soderberg on this subject, in which Soderberg 
asked about her progress in drafting the letter.163 
Soderberg does not recall anything about such a letter, 
164 but Heslin remembers trying to work out suitable 
language with the help of a friend of hers at the State 
Department 165 and the White House provided the 
Committee with a draft of this letter.166 The letter 
was, however, never sent.167
---------------------------------------------------------------------------
    \162\  Heslin interview, p. 16; see also Heslin testimony, pp. 32-
33.
    \163\  Heslin testimony, pp. 33-34.
    \164\  Soderberg interview, p. 12.
    \165\  Heslin interview, pp. 16-17.
    \166\  Draft letter from Mack McLarty to Roger Tamraz, April 15, 
1996 (Ex. 51).
    \167\  See Heslin testimony, p. 33; Heslin interview, pp. 16-17.
---------------------------------------------------------------------------
    With one exception, this ended Heslin's dealings with 
Tamraz during her time at the NSC. In July 1996, Heslin 
received a telephone call from Dan Riordan of the Overseas 
Private Investment Corporation (OPIC). Riordan informed her 
that Tamraz was trying to meet with OPIC's president, Ruth 
Harkin and that ``Ruth was under enormous pressure'' to meet 
with Tamraz.168 Heslin told Riordan that Harkin 
should refuse to meet Tamraz.169 It was, therefore, 
perhaps not by coincidence that in November 1996, Tamraz both 
contributed $35,000 to the Iowa Democratic Party at the request 
of Ruth Harkin's husband, Senator Tom Harkin of 
Iowa,170 and Tamraz's representative met with mid-
level OPIC officials in Washington, D.C.171 
Nevertheless, he still did not obtain an official meeting with 
Ruth Harkin about his pipeline.
---------------------------------------------------------------------------
    \168\  Heslin testimony, pp. 92-93; see also Heslin interview, p. 
19.
    \169\  See Heslin testimony, p. 93; see also Heslin interview, p. 
19 (recommending that if anyone at OPIC were to meet with Tamraz, this 
should occur at lowest possible level).
    \170\  See Tamraz testimony, pp. 114-15; Iowa Democratic Party 
itemized receipts (Ex. 52) (indicating $5,000 and $25,000 contributions 
by Roger Tamraz and $5,000 from Joelle Tamraz at same address); see 
also Tamraz testimony, p. 114; Jane Norman, ``Iowa parties argue about 
fundraising,'' Des Moines Register, June 17, 1997, p. 2.
    \171\  See Jane Norman, ``Iowa Republicans Charge ''Severe'' Law 
Violations by Harkin,'' Des Moines Register, Sept. 27, 1997, p. 3.
---------------------------------------------------------------------------

                               conclusion

    The implications of the Tamraz affair are disturbing. 
President Clinton was clearly aware that Tamraz was a major DNC 
contributor, having met him at an event for the DNC's ``top 
supporters'' and having written to thank Tamraz for his support 
for the DNC on the day after McLarty notified Clinton of his 
``good visit with Roger'' pursuant to Clinton's 
``direction[s].'' As the President wrote in this April 3, 1996 
letter to Tamraz,

          Your support of the Democratic National Committee and 
        of my Administration has been critical to our efforts 
        and will be increasingly important in the coming 
        months. Thank you for being there when you are asked to 
        help.172
---------------------------------------------------------------------------
    \172\  William J. Clinton, letter to Roger Tamraz, April 3, 1996 
(Ex. 53).

    After discussing Oil Capital's pipeline scheme with Tamraz 
at their March 27, 1996 meeting, the President promptly ordered 
McLarty to ``follow-up'' on this issue and report back to him. 
For McLarty, this ``follow-up'' involved delegating the matter 
to Simpson, who in turn enlisted Carter to the cause. For his 
part, Carter's understanding of the financial benefits to the 
DNC of endorsing Tamraz's proposal, an understanding he says he 
acquired from Simpson, could hardly have been clearer. 
Moreover, the $200,000 figure Carter quoted to Heslin closely 
corresponds to the $205,000 total sum recounted on one of the 
memoranda compiled for Tamraz by the DNC within 24 hours of 
Tamraz's meeting with President Clinton, a memorandum which may 
itself have been the mysterious Tamraz-related ``fax'' or 
``list'' that passed between McLarty and Simpson at that time. 
It is difficult not to conclude that Carter's pressure upon 
Heslin to change U.S. government policy on the basis of 
Tamraz's DNC contributions had its origins in the White House 
itself, with uncertain but potentially serious legal 
implications for the various officials involved.173
---------------------------------------------------------------------------
    \173\  It is, for example, a felony if a ``public official . . . 
directly or indirectly, corruptly demands, seeks, receives, accepts, or 
agrees to receive or accept anything of value personally or for any 
other person or entity'' in return for ``being influenced in the 
performance of any official act.'' 18 U.S.C. Sec. 201(b)(2). This 
bribery statute defines ``official act'' quite broadly, and nowhere 
suggests that the actor must actually succeed in changing government 
policy in pursuit of such value in order to fall within this criminal 
prohibition.
---------------------------------------------------------------------------
    Fortunately, despite his significant financial 
contributions to the Democratic Party and his success in 
enlisting both Fowler and at least one CIA official in a 
lobbying campaign on his behalf,Tamraz did not succeed in 
persuading the U.S. Government to support his pipeline schemes in the 
Caucasus. Through his ties to the DNC, however, Tamraz did succeed in 
subverting the policy of the U.S. Government, as established by the 
interagency Caspian energy working group, to deny him access to high-
level U.S. officials. Despite the working group's firm position against 
such access, Tamraz found access to the President of the United States 
to be available for a price through Donald Fowler and the DNC.
    More ominously, Tamraz also succeeded through his political 
contributions, and apparently the promise of additional 
donations, in enlisting senior United States officials in his 
attempt to change the working group's policy on Caspian energy 
issues. The access he purchased through the DNC allowed him the 
opportunity to lobby for U.S. support for his pipeline scheme; 
this lobbying, in turn, persuaded White House and Energy 
Department officials to begin searching for excuses to support 
the project, applying significant pressure to a member of the 
NSC staff in the process.
    Thanks to the determination of Sheila Heslin to resist such 
pressures and her refusal to compromise what she understood to 
be in the national interests of the United States, this attempt 
to change government policy did not succeed. Tamraz himself, 
for example, professed disappointment--though he remained 
unrepentant, suggesting that he had simply not given enough 
money to achieve his goals: ``I think next time, I'll give 
600,000 [dollars].'' 174 Heslin's steadfastness in 
the face of considerable pressure from Administration officials 
swayed by Tamraz's campaign contributions led members of the 
Committee from both political parties to describe her as a 
``hero.'' 175
---------------------------------------------------------------------------
    \174\ Tamraz testimony, p. 86.
    \175\ See Hearing Testimony, Sept. 17, 1997, at 66 (remarks of 
Senator Collins) (``This investigation has been bereft of heroes and I 
think you are a real hero.''); see also id. at 73 (remarks of Senator 
Lieberman) (``The earlier session ended with Senator Collins calling 
you a hero and I agree with that. I think you are one of the points of 
light, if I may borrow a bipartisan phrase, in an otherwise relatively 
dark firmament.''). Despite having been urged to do so by Senators 
Thompson and Collins, however, the Department of Justice has so far 
refused to reimburse Heslin for the legal expenses she incurred during 
investigations into the Tamraz affair. See Eva Plaza, letter to Richard 
Janis, May 13, 1997 (Ex. 54) (denying Heslin request for 
representation); Donald Remy, letter to Richard Janis, Oct. 9, 1997 
(Ex. 55) (refusing to make final decision on Heslin reimbursement until 
``the conclusion of all relevant investigations''). The Committee 
believes that Heslin is entitled to have the U.S. Government reimburse 
her for the legal expenses she incurred in connection with the Tamraz 
matter.
---------------------------------------------------------------------------
    Apart from Heslin, however, the Tamraz story has no heroes. 
That Tamraz's effort to purchase access to the President and 
policy concessions from senior U.S. Government officials 
proceeded as far as it did, in fact, speaks volumes about the 
party and the Administration whose officials were involved. In 
pursuit of his Caspian pipeline deal, Tamraz's methodology of 
choice was to use political contributions to buy policy 
concessions, having reportedly offered $100 million to the 
reelection campaign of Russian President Boris Yeltsin in 1995 
in exchange for Moscow's endorsement of the pipeline 
project.176 Any such proposal to Yeltsin, however, 
apparently went no further than a mere offer. It is ironic 
indeed that Tamraz seems to have come closer to purchasing 
policy concessions in the United States of America than he did 
in the unstable and corrupt new democracy of post-communist 
Russia.
---------------------------------------------------------------------------
    \176\ According to press accounts, Tamraz met in Milan on November 
30 and December 1, 1995, with two senior Russian officials, 
Presidential Security Chief Alexander Korzhakov and presidential 
advisor Pavel Borodin. Yeltsin was then in the final stages of his 
hard-fought presidential race, and Tamraz reportedly offered $100 
million to the campaign in exchange for Russia's support for his 
proposed Caspian Sea pipeline. See James Risen & Alan C. Miller, ``DNC 
Donor's Officer of Funds to Yeltsin Told,'' Los Angeles Times, Sept. 
10, 1997. If built, Tamraz's pipeline would bypass existing pipeline 
links through Russia in favor of a corridor from Azerbaijan through 
Armenia to Turkey--and would thus otherwise be expected to face Russian 
resistance. Russian support would also have been important to securing 
the new pipeline's acceptance by the other states in the region, since 
Russia remains highly influential in the former Soviet republics of the 
region.





       DNC Efforts to Raise Money in the Indian Gaming Community

                              Introduction

    The Committee examined in depth two different DNC fund-
raising stories relating to Native Americans: the Hudson, 
Wisconsin casino, and the Cheyenne/Arapaho tribes. To provide 
context to these stories, what follows first is an introduction 
to DNC efforts generally to raise money from Indian tribes. 
Although, in the case of the Cheyenne/Arapaho tribes of 
Oklahoma, the DNC was certainly not adverse to accepting money 
from the impoverished tribes, naturally the DNC's labors 
focused on wealthy tribes.
    Wealthy tribes--tribes able to make large political 
contributions--are all tribes with successful gambling casinos. 
In examining DNC fund-raising in this area, is it important to 
bear in mind an increasing reality of Indian country. The 
advent of gambling (also called ``gaming'' somewhat 
euphemistically) facilities owned by tribes, which the federal 
government permits as a means of tribal economic self-
sufficiency, has made a few tribes very wealthy, while leaving 
the poverty of most tribes untouched. If a tribe lives in a 
state that allows tribes to operate gambling casinos, possesses 
land located near a decent-sized city, and receives permission 
to run a casino, such a tribe is virtually guaranteed wealth.
    The transformation that obtaining a successful gaming 
facility has wrought for the few fortunate tribes is staggering 
and in that sense, the law that created this, the Indian Gaming 
Regulatory Act, 1 has worked successfully. However, 
the law has also created a perfect recipe for the solicitation 
of political contributions because the federal government is a 
sine qua non participant in Indian gambling. Tribes frequently 
need federal government action to open new casinos or expand 
existing ones. Moreover, tribes with existing gaming operations 
possess what amount to franchises, and the federal government, 
by accepting or rejecting applications for new casinos from 
potential competitors, can protect or harm those franchises. In 
addition, by its authority to impose a tax on gaming revenues 
(there is no gaming tax now) or alter the provisions of the 
Gaming Act, the government controls such gaming completely.
---------------------------------------------------------------------------
    \1\ 25 U.S.C. section 2701 et seq.
---------------------------------------------------------------------------
    Documents received by the Committee reveal just how heavily 
the DNC focused on raising money in the Indian gaming 
community. Since many of the documents were received after the 
Committee completed its depositions of DNC personnel, 
2 the Committee has limited testimony on the 
subject. Nevertheless, the documents speak for themselves. They 
show a concentrated effort on behalf of certain wealthy tribes, 
and an overall effort to assist the Indian gaming community. 
There is also a clear recognition that assistance to the gaming 
tribes would result in increased contributions to the DNC. 
Moreover, several of the largest contributors to the DNC 
received favorable action from the Department of the Interior. 
While the Committee was unable to investigate fully these 
decisions to see if there was any connection between the 
financial support to the Democratic Party and the Interior 
decisions, the circumstances, at a minimum, provide troubling 
coincidences.
---------------------------------------------------------------------------
    \2\ See the section of the report on DNC document production.
---------------------------------------------------------------------------

                        The Mashantucket Pequots

    Since the federal government formally recognized the Pequot 
tribe in 1983, the Pequots have steadily increased their 
economic standing. The tribe currently operates the Foxwoods 
Resort casino in Ledyard, Connecticut. Foxwoods is the one of 
the world's largest casinos, with approximately 50,000 
customers per day and estimated annual revenues of $1 
billion.3 In the fall of 1993, the Pequots, led by 
their chairman Richard ``Skip'' Hayward, donated $100,000 to 
the DNC. According to a DNC memo, ``this contribution marked 
the [Pequot] Nation's commitment to get involved.'' 
4 Though unstated in the memorandum, the 
contribution also marked the DNC's involvement in working on 
behalf of Pequot issues. In February 1994, for instance, the 
Pequots asked for help from the DNC on an issue at the 
Department of Health and Human Services.5 The tribe 
also asked for a meeting with then-DNC Chairman David 
Wilhelm.6 Wilhelm apparently met with the tribe, as 
handwritten notes on his letterhead stationery describe a 
variety of Pequot issues, including what appears to be some 
land acquisition matters.7
---------------------------------------------------------------------------
    \3\ Lyn Bixby, ``Baccarat, Blackjack and Luxury,'' The Hartford 
Courant, Nov. 23, 1997, p. E2; Robert Hamilton, ``East Side, West Side: 
Casino on the Thames,'' New York Times, June 18, 1995, Section 13CN, p. 
1.
    \4\ Briefing Paper for David Wilhelm and handwritten notes, undated 
(Ex. 1).
    \5\ Memorandum from Bob Kearney to Laura Hartigan, Feb. 18, 1994 
(Ex. 2).
    \6\ Id.
    \7\ Ex. 1.
---------------------------------------------------------------------------
    President Clinton took a personal interest in the Pequots. 
In October 1994, DNC Finance officials included Hayward on a 
call sheet for President Clinton. The call sheet noted that 
Hayward had already contributed $650,000 to the DNC that 
year.8 While never admitting that President Clinton 
actually spoke to Hayward, the White House has confirmed that 
on October 18, 1994, there was a call made from the White House 
Residence to Hayward's office.9 According to White 
House telephone records, the call to Mystic, Connecticut lasted 
13 minutes.10 Hayward's attorney confirmed that 
Hayward had been called by the President in October 1994 but 
stated that the President did not specifically ask for 
contributions to the DNC, and instead talked about his health 
care initiative.11 FEC records indicate that the 
Pequots made three separate $50,000 contributions to the DNC 
around the time of the President's call--on October 17, 
November 4, and November 21 of 1994. Hayward's attorney offered 
no explanation for those contributions.12
---------------------------------------------------------------------------
    \8\ Memorandum from Terrance McAuliffe to Harold Ickes, Oct. 18, 
1994 (Ex. 3).
    \9\ Letter from Charles Ruff to Michael Madigan, Oct. 21, 1997 
(with attachments)(Ex. 4).
    \10\ Id.
    \11\ Staff interview of Jackson King, Nov. 1997.
    \12\ Id.
---------------------------------------------------------------------------
    The Pequots' generosity to the Democratic party assured 
them special attention from the DNC. According to a DNC memo, 
then-DNC head Don Fowler was scheduled to meet with Hayward, 
the Pequot chairman, on November 13, 1995. In a briefing 
memorandum for the meeting, Fowler was encouraged by DNC staff 
to ask the Pequots to contribute ``at least'' $250,000 to the 
DNC.13 The memo notes that an issue of special 
significance for the Pequots was a provision in the 1995 budget 
bill that proposed a 35% tax on Indian gaming revenues. 
Inasmuch as the Foxwoods Resort casino has yearly revenues of 
approximately $1 billion, such a tax would have had a huge 
impact on the tribe. The provision was removed, and, according 
to the memo, Fowler ``played an active role in expressing'' 
tribal opposition regarding the tax to the Administration and 
Congress.14 The memo exhorts Fowler to ``take 
credit'' for that and other pro-tribal 
achievements.15
---------------------------------------------------------------------------
    \13\ Memorandum from Alejandra Castillo to Don Fowler, Nov. 13, 
1995 (Ex. 5).
    \14\ Id.
    \15\ Id.
---------------------------------------------------------------------------
    The Pequots applied to the Interior Department on two 
occasions for permission to take land into trust in order to 
expand their Foxwood resort. Since at least 1993, residents of 
three neighboring towns had ``bitterly opposed'' the expansion 
of the casino.16 Nevertheless, Interior approved one 
of the Pequot applications in May 1995 and reapproved the other 
in August 1996. It is unknown if the DNC assisted the Pequots 
in convincing Interior to rule in their favor. Between 1993 and 
1996, the Pequots donated at least $475,000 to the DNC and 
other Democratic campaigns.17
---------------------------------------------------------------------------
    \16\ Robert Hamilton, ``East Side, West Side: Casino on the 
Thames,'' New York Times, June 18, 1995, Section 13CN, p. 1. See also 
David Lightman and Hilary Waldham, ``U.S. Approves Pequots' Bid to 
Annex Land,'' The Hartford Courant, May 2, 1995, p. A1.
    \17\ Printout from FEC Data Access Program, Jan. 16, 1998 (Ex. 6). 
FEC records do not capture all of the possible donations. Thus, a DNC 
memorandum indicates that by October 1994, the Pequots had already 
contributed nearly $200,000 more than the $475,000 total reflected in 
FEC records for all of 1993-96. See Ex. 3, p. 5.
---------------------------------------------------------------------------

                the Sault Ste. Marie Tribe of Chippewas

    The Sault Ste. Marie Chippewa tribe is located in northern 
Michigan. In August 1993, they applied to the Interior 
Department for permission to open a casino in the Greektown 
area of downtown Detroit. One year later, in August 1994, 
Interior approved the application and, pursuant to Section 20 
of the Indian Gaming Regulatory Act, forwarded the application 
to the Governor of Michigan for his concurrence. However, 
because Governor Engler of Michigan exercised his veto power, 
the casino never opened.
    During the 1996 election cycle, the Sault Ste. Marie 
Chippewas made large contributions to the Democratic Party. The 
contributions were coordinated by the DNC, although the actual 
contributions went to a variety of Democratic state parties. 
Mark Thomann, a DNC finance staffer, testified that the tribe 
made a $250,000 commitment to the DNC, but then gave much of 
the money to various states because of ``privacy'' 
concerns.18 Thomann explained that the tribe 
participated on both the Republican and Democratic sides, and 
``by giving too much to one side may upset their friends on the 
other side.'' 19 According to a DNC document, the 
Sault Ste. Marie Chippewas contributed a total of $282,500 to 
twelve different state Democratic parties.20 The 
largest contribution, which was for $71,500, went to Tennessee. 
Other significant contributions were $60,000 to Illinois, 
$44,000 to Oregon, and $30,000 to Maine.21
---------------------------------------------------------------------------
    \18\ Deposition of Mark Thomann, September 23, 1997, pp. 118-120.
    \19\ Id. at 119.
    \20\ List of DDD Contributions [title derived], undated (Ex. 7). 
The document is captioned ``DDD,'' a likely reference to the DNC's 
directed donor program.
    \21\ Id.
---------------------------------------------------------------------------
    It is clear that the St. Sault Marie Chippewas believed 
their close ties to the DNC would bring them access to 
government officials. Thomann testified that in April or May 
1996 the tribe asked him to contact someone in the 
administration on their behalf. He was hazy on the specifics, 
though he recalled that the tribe ``needed help with some sort 
of--I don't know what you'd call it--trust or--it's an issue 
involving Native Americans.'' 22 Thomann explained 
that he relayed the request to Sullivan and was not involved 
further.23
---------------------------------------------------------------------------
    \22\ Thomann deposition, p. 115.
    \23\ Id., pp. 115, 118.
---------------------------------------------------------------------------

                 june 1995 meetings at the white house

    In mid-1995, finance officials at the DNC and Clinton Gore 
were targeting various Indian tribes for contributions. For 
instance, DNC staffer Adam Crain wrote a May 24, 1995 
memorandum requesting that Chairman Fowler solicit Mark 
Nichols, the chief financial officer of the Cabazon Tribe of 
Mission Indians.24 Crain also sent the memo to the 
leadership of the DNC finance division--Richard Sullivan, Ari 
Swiller, and David Mercer. After noting Nichols had already 
committed to raise $100,000 for the Clinton/Gore campaign, 
Crain suggested that Fowler ask him to contribute $100,000 and 
become a DNC Managing Trustee. The memorandum confirms the 
close ties between the Interior Department and the DNC. Crain 
wrote that Nichols is ``close to [then-nominee to be Interior 
Deputy Secretary] John Garamendi,'' and that ``Garamendi 
suggested . . . that we reach out to Mark [Nichols].'' 
25 FEC records indicate that the Cabazons donated 
approximately $125,000 to the DNC and other federal Democratic 
campaigns in 1995-96.26 Nichols became a DNC trustee 
later in 1995.
---------------------------------------------------------------------------
    \24\ Memorandum from Adam Crain to Chairman Fowler, et al, May 24, 
1995 (Ex. 8).
    \25\ Id.
    \26\ Printout from FEC Data Access Program, Jan. 13, 1998 (Ex. 9).
---------------------------------------------------------------------------
    Crain reported further in his memo, ``In his conversation 
with John Garamendi's assistant Pam Neifert, Mark was receptive 
to the DNC Trustee/Managing Trustee Councils.'' 27 
Garamendi, who is now the Deputy Secretary of the Interior, at 
the time had been nominated but not yet confirmed for his 
Interior position. According to an Interior official, Garamendi 
ran unsuccessfully for governor of California in 1994, and was 
in the process during 1995 of retiring his gubernatorial 
campaign debt.28 He was being assisted in that 
regard by Pam Neifert. Although neither Neifert nor Garamendi 
were Interior Department officials at the time, and thus the 
Hatch Act's prohibitions on soliciting political contributions 
would have been inapplicable, the Committee finds unseemly 
Garamendi's apparent participation in fund-raising, 
particularly since it involved a group--an Indian tribe--over 
whom he would soon exert enormous power in his new position.
---------------------------------------------------------------------------
    \27\ Ex. 8.
    \28\ Staff conversations with Melanie Beller, Director of 
Legislative Affairs, Department of the Interior, Jan. 13-14, 1998.
---------------------------------------------------------------------------
    On May 26, 1995, Richard Sullivan, DNC Finance Director, 
asked Harold Ickes to meet with various Indian leaders coming 
to Washington D.C.29 The meeting was set for June 
21, 1995.30 Demonstrating the important role that 
the finance staffs of the DNC and Clinton/Gore '96 had in 
coordinating the meeting, a list of tribal leaders expected to 
attend was sent to Sullivan and Terry McAuliffe, Clinton/Gore 
Finance Director.31 Mark Nichols of the Cabazon and 
Skip Hayward of the Pequots are among the listed attendees. 
Coincidentally, another listed attendee is Marge Anderson, 
Chair of the Mille Lacs Tribe, one of the tribes that opposed 
the Hudson casino application.32
---------------------------------------------------------------------------
    \29\ Memorandum from Richard Sullivan to Harold Ickes, May 26, 1995 
(Ex. 10).
    \30\ Memorandum from Bonnie McNair to Terry McAuliffe, et al, June 
13, 1995 (Ex. 11).
    \31\ Id.
    \32\ Id. The DNC produced this document to the Committee on October 
31, 1997, one day after the Committee conducted a hearing on the Hudson 
matter.
---------------------------------------------------------------------------
    A memorandum to White House political directors from 
lawyers representing Indian interests suggested that the 
administration needed to start treating its Indian supporters 
more favorably.33 In advising the White House about 
the meeting with Indian leaders, the lawyers offered, ``When it 
comes to politics, though, you should embrace your friends and 
keep your adversaries at a distance. Your 1992 supporters have 
yet to be singled out for special attention by the President or 
anyone else.'' 34 Later on, they pointed out that 
``there is a lot of money in Indian country,'' and ``the tribes 
have poured hundreds of thousands of dollars into the DNC and 
Democratic campaigns in the last four years.'' 35 
The co-author of this rather blunt political appraisal? Kevin 
Gover, who was sworn in as the Assistant Secretary for Indian 
Affairs in November 1997.
---------------------------------------------------------------------------
    \33\ Memorandum from Kevin Gover and Cate Stetson to Craig Smith 
and Judy DeAtley, June 19, 1995 (Ex. 12).
    \34\ Id., at p. 2 (emphasis in original).
    \35\ Id., at pp. 2 & 5.
---------------------------------------------------------------------------

                   DNC Activities in the Fall of 1995

    Documentary evidence shows that DNC officials, especially 
Chairman Fowler, were active on behalf of Indian tribes in the 
fall of 1995. Adam Crain, from the Finance staff, apparently 
took the lead as the liaison between the tribes and the DNC. 
Besides acting as an advocate for the tribal issues and setting 
up meetings for the tribes, the DNC solicited the tribes for 
contributions.
    By memorandum dated August 28, 1995, for instance, Crain 
reported to Fowler about developments at the Native Indian 
Gaming Association (NIGA) Convention in Milwaukee.\36\ A few 
weeks later, in early September, Fowler met twice with tribal 
leaders. A briefing memorandum prepared for Fowler before a 
September 7, 1995 meeting noted that ``in the last two weeks, 
working with Adam Crane [sic], the Native Americans have raised 
$100,000 for the DNC.'' \37\ The memorandum also notes that 
possible attendees at the September 7th meeting included Debra 
Doxtator and Marjorie Anderson, both of whom represented tribes 
that successfully defeated the Hudson application.\38\ In a 
September 9, 1995 memorandum, Crain indicated the specific 
Indian constituency the DNC was targeting when he wrote that 
Fowler would be attending an upcoming Vice-Presidential dinner 
with ``seven Indian gaming tribal leaders.'' \39\ Fowler also 
met with Indian leaders on September 12, 1995. At that meeting, 
according to a memo from Crain, the tribal leaders expressed 
their opposition to cuts in the Bureau of Indian Affairs budget 
and to amendments to the Indian Gaming Regulatory Act, which 
would have increased the ability of states to limit Indian 
gaming.\40\ Crain also summarized that the Indian leaders had 
asked that calls be made to Ickes and White House Chief of 
Staff Leon Panetta, and that ``the political and financial 
stakes be emphasized.'' \41\
---------------------------------------------------------------------------
    \36\ Memorandum from Adam Crain to Chairman Fowler, Aug. 28, 1995 
(Ex. 13).
    \37\ Memorandum from Judy DeAtley to Chairman Fowler, Sept. 7, 1995 
(Ex. 14).
    \38\ Id.
    \39\ Memorandum from Adam Crain to Chairman Fowler, Sept. 9, 1995 
(emphasis added) (Ex. 15). The memo warns that unless President Clinton 
threatened to veto a cut in BIA funding, Democrats would lose 
``significant pledges of support for the Committee to Re-elect and the 
DNC.''
    \40\ Memorandum from Adam Crain to Chairman Fowler, Sept. 15, 1995 
(Ex. 16).
    \41\ Id.
---------------------------------------------------------------------------
    The DNC was already well aware of the financial stakes. In 
another memorandum, Crain briefed Fowler on an upcoming 
meeting, apparently the one held on September 12, 1995.\42\ 
After imploring Fowler to read the memo before the meeting, 
Crain declares, ``You should ask them to commit $250k together 
as a type of `PAC' to the DNC.'' \43\ Crain then explained what 
the tribes wanted in return, foremost of which was opposition 
to the proposed tax on Indian gaming. The leaders requested a 
meeting with Senator Moynihan to talk about the tax provision 
and also requested a public statement from the White House 
opposing the tax.\44\ Finally, Crain noted that the leaders are 
``big supporters of John Garamendi, who is currently Deputy 
Secretary at Interior.'' \45\
---------------------------------------------------------------------------
    \42\ Memorandum from Adam Crain to Chairman Fowler, undated (Ex. 
17).
    \43\ Id.
    \44\ Id.
    \45\ Id.
---------------------------------------------------------------------------
    Meanwhile, Crain continued to keep Deputy Secretary 
Garamendi informed about what was happening with the Indian 
leaders. In a September 7, 1995 memorandum to Garamendi and his 
fund-raising assistant, Neifert, Crain listed the schedule of 
meetings between the tribal leaders and administration 
officials, including Garamendi.\46\ Two of the listed attendees 
for a Vice-Presidential dinner on September 11 were leaders of 
the Oneida and Mille Lacs, tribes that opposed the Hudson 
application. At the end of his memo, Crain explained that 
certain tribal leaders were ``contemplating writing 30K'' and 
that a call from Neifert ``asking them to write more would be 
very helpful.'' \47\
---------------------------------------------------------------------------
    \46\ Memorandum from Adam Crain to John Garamendi and Pam Neifert, 
Sept. 7, 1995 (Ex. 18).
    \47\ Id.
---------------------------------------------------------------------------
    The fact that Garamendi received a memo from a DNC official 
requesting Garamendi's attendance at an event and asking 
Garamendi's former fund-raising assistant to solicit 
contributions from a tribal representatives is, at a minimum, 
questionable. Garamendi was a high ranking Interior official at 
the time, and the Hatch Act barred him from soliciting 
political contributions. Although the memorandum stops short of 
asking Garamendi directly to violate the Hatch Act, it places 
him squarely in the path of the DNC, Garamendi's fund-raising 
assistant, and a proposed solicitation. It raises concerns 
about Garamendi's involvement in fund-raising at Interior.
    In any event, the DNC followed through on the Indian 
requests, contacting the White House and Congress. According to 
a Crain memorandum dated October 11, 1995, Fowler had already 
called Senator Moynihan's office and had a discussion with 
Bruce Lindsey at the White House.\48\ A few days later, Fowler 
followed up his conversation with Lindsey with a memorandum 
specifically setting forth the Indian tribes' ``highest 
priority concerns.'' \49\ Fowler also wanted the Indian leaders 
to know what he had done. Accordingly, Crain drafted a 
memorandum from Fowler to the tribes. After declaring that 
Fowler had communicated the tribal concerns to the President, 
the memorandum concluded:
---------------------------------------------------------------------------
    \48\ Memorandum from Adam Crain to Chairman Fowler, Oct. 11, 1995 
(Ex. 19).
    \49\ Memorandum from Donald Fowler to Bruce Lindsey, Oct. 16, 1995 
(Ex. 20).

          My staff at the Democratic National Committee and I 
        will continue to closely monitor these situations and 
        will continue to communicate your concerns to both the 
        Administration and the Congress. It is also important 
        that we continue our dialogue. Please do not hesitate 
        to call my office at any time.\50\
---------------------------------------------------------------------------
    \50\ See Ex. 19.

    Any doubt that one of the DNC's motives in working with the 
tribes was securing contributions is put to rest by another 
memorandum from Crain to Fowler.\51\ On November 9, 1995, after 
this flurry of activity on behalf of the Indian gaming tribes, 
Crain informed Fowler of the DNC's take. Crain wrote that over 
the last three months, the DNC had received $110,000 from 
certain tribes. In listing the contributors, Crain explained 
that ``there are several tribes that are currently considering 
supporting the DNC.'' \52\
---------------------------------------------------------------------------
    \51\ Memorandum from Adam Crain to Chairman Fowler, Nov. 9, 1995 
(Ex. 21). Three contributing tribes listed--the Minnesota Mille Lacs, 
Wisconsin Oneida, and Wisconsin St. Croix--all lobbied successfully 
against the Hudson casino earlier in 1995.
    \52\ Id.
---------------------------------------------------------------------------
    In April 1996, Fowler weighed in on behalf of Indian tribes 
regarding a pension matter. In a letter to Treasury Secretary 
Robert Rubin, Fowler asked Treasury to examine what Fowler 
characterized as a recent Treasury ruling that employees of 
Indian tribes were not eligible to participate in Section 
401(k) pension programs.\53\ After claiming that the ruling 
would impose ``unfair costs'' on American Indians, Fowler 
concluded, ``Please take appropriate action to ensure that 
Indian tribes are treated fairly . . . .'' \54\
---------------------------------------------------------------------------
    \53\ Letter from Donald Fowler to The Honorable Robert Rubin, Apr. 
8, 1996 (Ex. 22).
    \54\ Id.
---------------------------------------------------------------------------
    Fowler's letter caused a stir at Treasury. The Acting 
Assistant Secretary for Tax Policy wrote to Secretary Rubin 
that the pension plan issue was already under consideration by 
Treasury: ``Given that the issue is currently under review as 
it affects a particular Indian tribe, we do not recommend that 
the response address Mr. Fowler's request for administrative 
action allowing Indian tribes to sponsor 401(k) plans. Because 
of Mr. Fowler's position, and the FOIA disclosure of a 
response, we believe it would be more appropriate for someone 
other that the Secretary of Treasury to sign the response.'' 
\55\ At the same time, Treasury General Counsel Edward Knight 
communicated his concern about this letter (and about another 
letter from Fowler) to DNC General Counsel Joe Sandler. Knight 
told Committee staff that he told Sandler that the letters were 
``inappropriate'' and that he ``wanted them to stop.'' \56\ 
According to Knight, Sandler agreed with him.\57\
---------------------------------------------------------------------------
    \55\ Memorandum from Donald Lubick to Secretary Rubin, June 20, 
1996 (Ex. 23). Treasury Chief of Staff Sylvia Mathews responded to 
Fowler on July 24, 1996. Letter from Sylvia Mathews to Donald Fowler, 
July 24, 1996 (Ex. 24).
    \56\ Memorandum of Interview of Edward Knight, May 2, 1997.
    \57\ Id.
---------------------------------------------------------------------------

                               Conclusion

    It is clear that access to the DNC resulted in increased 
access to administration officials for tribes. And the way to 
get access to the DNC was to make political contributions. This 
is demonstrated not only by memoranda giving updates of tribal 
contributions, but by the simple fact that the liaison to the 
tribes was someone from the DNC's Finance Division. The tribes 
with greater resources had many more doors opened to them. DNC 
officials were eager to advocate the interests of wealthy donor 
tribes before government agencies and the White House, even to 
the point of making administration officials uneasy, as 
demonstrated by the episode involving pension funds and the 
Treasury Department.
    But not all tribes were afforded the luxury of guaranteed 
access. George Newago, Chairman of the Red Cliff Band of 
Chippewas, one of the impoverished Wisconsin tribes that lost 
out in the Hudson application, explained the distinction to the 
Committee. In contrast to the leaders of wealthy tribes who are 
stroked by the DNC and the Clinton administration, Newago 
observed that the city of Washington D.C. doesn't see Indians 
like him--``that the people there don't even know we exist.'' 
\58\ 
---------------------------------------------------------------------------
    \58\ Staff Interview of George Newago, Oct. 24, 1997.





                 The Hudson, Wisconsin Casino Proposal

                              Introduction

    This chapter of the report focuses on the events 
surrounding the application by three impoverished bands of 
Wisconsin Indian tribes to open a casino in Hudson, Wisconsin. 
After being approved in November 1994 by the regional office of 
the Department of Interior's Bureau of Indian Affairs (BIA), 
the application was forwarded to Washington D.C. for final 
review. On July 14, 1995, the Department reversed course and 
formally rejected the tribes' application.\1\
---------------------------------------------------------------------------
    \1\ Letter from Michael Anderson to Honorable Rose M. Gurnoe, et 
al., July 14, 1995 (Ex. 1).
---------------------------------------------------------------------------
    Prompted by allegations that the Interior decision was 
dictated by political and fundraising considerations, the 
Committee initiated an investigation into the circumstances 
surrounding the rejection. As part of the investigation, the 
Committee deposed various White House and DNC officials, as 
well a number of current or former officials at Department of 
Interior. The Committee also subpoenaed documents from a 
variety of sources, including the White House and DNC. 
Moreover, the Committee received relevant documents and sworn 
testimony from federal and state lawsuits relating to this 
application.
    On October 30, 1997, the Committee held public hearings on 
this issue. While the hearing covered some of the background to 
the Hudson application, its focused primarily on a private 
meeting between Secretary of Interior Bruce Babbitt and Paul 
Eckstein, a lawyer representing the applicant tribes, and 
Secretary Babbitt's varying recollections of the meeting.
    During the meeting, held on July 14, 1995, the same day 
Interior announced the rejection, Secretary Babbitt made 
comments suggesting that Interior had come under political 
pressure to deny the application. Specifically, according to 
Eckstein, Babbitt said that Harold Ickes had directed Babbitt 
to make a decision on the matter quickly, and Babbitt also 
alluded to sizeable contributions to Democrats from gaming 
tribes. Later, when asked about the July 14 meeting, Secretary 
Babbitt provided the Senate with contradictory accounts of what 
occurred.
    In many ways, the Hudson casino story confirms the public's 
worst suspicions about how things seem to work in Washington. 
The BIA area office approved the casino application in November 
1994 over the objections of the wealthy, neighboring tribes 
whose nearby gambling casinos would face competition from a new 
casino of the applicants. At the same time the area office 
decision was sent to Washington for final approval, on a 
separate track began a full-tilt lobbying effort against the 
decision, which involved the DNC and the White House.
    Interior's reversal of the area office recommendation, when 
viewed in the context of the lobbying effort and through the 
prism of Secretary Babbitt's comments to Eckstein, raises 
questions regarding whether the final decision was made for the 
right reasons and by the right people. There is strong 
circumstantial evidence that the Interior Department's decision 
to deny the Hudson application was caused in large part by 
improper political considerations, including the promise of 
political contributions from opposition tribes. At a minimum, 
it is clear that the opposition tribes and their lobbyists 
activated the DNC and, to some extent, the White House, to take 
action on their behalf. Financial support--both past and 
future--was crucial to this effort.
    The following discussion describes some background on the 
casino application and the lobbying effort put on by the 
opposition tribes. It addresses the July 14, 1995 Babbitt/
Eckstein conversation, and Babbitt's subsequent representations 
about it. Finally, it sets forth what can be gleaned about the 
actual decision-making process at Interior, noting the 
inconsistencies and other troubling aspects of it.

                    THE EVENTS LEADING TO THE DENIAL

    In late 1993, three small, poor \2\ bands of Wisconsin 
Chippewa Indians--the Sokaogon Chippewa Community, the Lac 
Courte Oreille Band of Lake Superior Chippewa Indians, and the 
Red Cliff Band of Lake Superior Chippewa Indians--applied to 
have the Department of Interior take land in Hudson, Wisconsin 
into trust for gaming purposes.\3\ The applicant tribes planned 
to convert a failing dog track into a casino.
---------------------------------------------------------------------------
    \2\ According to George Newago, the Chairman of the Red Cliff 
Chippewas, the unemployment rate for his tribe is over 50 percent, and 
the average household income is approximately $5,300 per year.
    \3\ Section 20 of IGRA creates the mechanism for such ``off 
reservation'' trust acquisitions. See 25 U.S.C. section 2719.
---------------------------------------------------------------------------
    Concerned about losing their market share, other tribes 
with nearby lucrative casinos lined up against the Hudson 
application. The opposition tribes included most notably the 
Shakopee Mdewakanton Sioux, the Mille Lacs, the St. Croix 
Chippewas, and the Oneida.
    Following the standard practice, the applicant tribes 
submitted their application to the Minneapolis Area Office of 
BIA. In November 1994, after an exhaustive review, including 
consultation with local officials and the opposition tribes, 
the area office recommended approval of the application in a 32 
page memorandum.\4\ The area office found that the application 
met both standards imposed by Section 20 of IGRA: (1) the 
proposed casino was in the best interests of the applicant 
tribes; and (2) it was not detrimental to the surrounding 
community. Along with four volumes of documentary support, the 
area office transmitted its analysis to Washington D.C. in 
accordance with Interior Department procedures for a final 
decision.
---------------------------------------------------------------------------
    \4\ Memorandum from Department of Interior Area Office to Assistant 
Secretary--Indian Affairs, Nov. 15, 1994 (Ex. 2).
---------------------------------------------------------------------------
The Pressure Builds
    Once the application arrived in Washington D.C., the 
political pressure started. In early 1995, the opposition 
tribes hired Patrick O'Connor, a prominent lobbyist as well as 
a former DNC Treasurer. O'Connor was a partner in the 
Minneapolis based law firm of O'Connor & Hannan. As will be 
described below, O'Connor and his lobbying partners became a 
persistent presence in this story, blanketing the DNC, White 
House, and Interior.
    On February 8, 1995, O'Connor arranged a meeting between 
the opposition tribes, members of the Minnesota congressional 
delegation, and two Interior officials. Interior was 
represented at the meeting by John Duffy, Counselor to 
Secretary Babbitt, and George Skibine, head of the Indian 
Gaming Management Staff. Skibine was the top career official 
who dealt with Indian gaming; Duffy, a high ranking political 
appointee, and Secretary Babbitt's point man for the Hudson 
application. While Duffy testified in his deposition that he 
did not have a ``clear recollection of the [February 8] 
meeting,'' he believed that Department of Interior Chief of 
Staff Tom Collier had asked him to go, probably because 
Secretary Babbitt had been asked to attend and could not.\5\ 
Skibine, who had been head of the Indian gaming office only a 
few days at the time of the meeting, said that his role as head 
of the Indian gaming office was simply to accompany Duffy and 
take notes.\6\ As for what happened at the meeting, Skibine 
testified that the opposition tribes complained that they had 
not been adequately consulted by the area office, and Duffy 
agreed to allow them to supplement the record.\7\
---------------------------------------------------------------------------
    \5\ Deposition of John Duffy, Sept. 29, 1997, pp. 11-13.
    \6\ Deposition of George Skibine, Nov. 17, 1997, p. 15.
    \7\ Id., pp. 17-18.
---------------------------------------------------------------------------
    Reopening the administrative record was an unusual step. 
The opposition tribes had already been permitted many months to 
comment on the application and submit materials for the record. 
No Interior official with whom the Committee spoke with could 
recall another instance where such a record had been reopened.
    O'Connor came to the realization that he could leverage the 
DNC to help persuade Interior and the White House to support 
his clients' position. On March 15, 1995, O'Connor had David 
Mercer, the Deputy Finance Director of the DNC, arrange a 
meeting with Don Fowler, the DNC chairman. O'Connor brought his 
partner and fellow lobbyist, Larry Kitto.8 According 
to O'Connor's date book, Fowler was accompanied by DNC Finance 
Chair Truman Arnold.9 As for the purpose of the 
meeting, Mercer explained in a memorandum to Fowler that 
O'Connor and Kitto would be coming from a meeting with Tom 
Collier and that the lobbyists' ``issue'' had to do with Hudson 
casino proposal.10 Collier recalls that he, not 
Duffy, made the determination to reopen the administrative 
record. Moreover, Collier remembers reopening the record after 
the meeting with O'Connor.11
---------------------------------------------------------------------------
    \8\ Memorandum from David Mercer to Chairman Fowler, Mar. 15, 1997 
(Ex. 3).
    \9\ Excerpts of Patrick O'Connor's 1995 Date book (Ex. 4).
    \10\ Ex. 3.
    \11\ Deposition of Thomas Collier, Sept. 29, 1997, p.13.
---------------------------------------------------------------------------
    Shortly after his meetings with DNC officials and Collier, 
O'Connor began trying to contact officials at the White House. 
In April 1995, O'Connor left numerous phone messages at the 
White House for Loretta Avent, a member of Harold Ickes's staff 
who handled Indian issues. Avent ducked O'Connor's initial 
calls, consistent with the standing advice of counsel that 
White House staffers should not speak to lawyers or lobbyists 
on Indian issues.12 Undeterred, O'Connor faxed Avent 
a memorandum, asking to talk to her about intervening on the 
Hudson application.13
---------------------------------------------------------------------------
    \12\ Memorandum from Loretta Avent to Harold Ickes, Apr. 24, 1995 
(Ex. 5).
    \13\ E-mail from Michael Schmidt to Cheryl Mills, Apr. 24, 1995 
(Ex. 6).
---------------------------------------------------------------------------
    Meanwhile, on Monday, April 24, 1995, during a Presidential 
visit to Minneapolis, O'Connor was able to go right to the top. 
At a small reception, O'Connor brought up the Hudson 
application with President Clinton. In his state court 
deposition, O'Connor described the situation:

          When he [the President] got to me, I said, ``Mr. 
        President, the Indian tribes that I represent are 
        concerned about a possible casino going in near Hudson, 
        Wisconsin, which is across the river.'' And that's what 
        I said. At that juncture, he said, ``Bruce.'' And Bruce 
        [Lindsey] came over. . . . [The President] said, 
        ``Bruce, talk to O'Connor here about his concerns about 
        tribes that he represents.'' That was it.14
---------------------------------------------------------------------------
    \14\ Excerpts of State Court Deposition of Patrick O'Connor, Apr. 
29, 1997, p. 61 (Ex. 7).

    O'Connor explained to Lindsey that the proposed casino 
would have a serious economic impact on his clients. After 
O'Connor indicated he wanted to make sure this view got 
communicated to Interior, Lindsey said that he would have 
someone call O'Connor. When O'Connor commented that he ``hadn't 
been able to get anywhere with Loretta [Avent]'', Lindsey 
simply repeated he would have someone call 
O'Connor.15
---------------------------------------------------------------------------
    \15\ A White House memo described the O'Connor conversation with 
the President as follows: ``Pat bumped into the President today in 
Minneapolis and mentioned to him that Loretta never returned his 
calls.'' Ex. 6. See also Ex. 7, p. 62.
---------------------------------------------------------------------------
    Lindsey quickly followed through. The same day, he called 
Avent from Air Force One to check into the Hudson 
matter.16 Avent agreed to call O'Connor, but only 
after cautioning that White House counsel had advised her not 
to speak directly to lobbyists on Indian issues.17
---------------------------------------------------------------------------
    \16\ Ex. 6.
    \17\ Ex. 5.
---------------------------------------------------------------------------
    Before calling O'Connor, Avent also wrote a strongly worded 
memo to Ickes.18 In the memo, Avent described her 
reluctance to get involved in the Hudson matter: ``This is such 
a hot potato . . . too hot to touch. The legal and political 
implications of our involvement would be disastrous.'' Avent 
then cautioned that some tribal leaders have ``already gone 
ballistic about other tribal governments who have greater 
access to the Administration because of their ability topay 
hired guns (as they call them) and their belief that this 
unfairly gets things to happen.'' \19\
---------------------------------------------------------------------------
    \18\ Id. Even before the Committee received the memoranda attached 
as Exhibits 5 and 6, Avent's name had surfaced. Accordingly, Committee 
staff contacted Avent by telephone in early October 1997 and asked her 
about her involvement with the Hudson matter. Avent explained that she 
really could not remember anything about it. Interview of Loretta 
Avent, Oct. 14, 1997.
    \19\ Ex. 5 Undeterred by Avent's April 24 memo, Ickes telephoned 
O'Connor on April 25 and 26, leaving messages both times. O'Connor 
apparently returned the calls and spoke to an assistant in Ickes' 
office.  Ickes could not explain why he called O'Connor on those dates. 
In response to questions, Ickes testified at his deposition that he 
could not recall any discussion with Lindsey or the President about 
this issue and that he ``doubted'' that he had a discussion with either 
one.  Deposition of Harold Ickes, Sept. 22, 1997, pp. 31-32.
---------------------------------------------------------------------------
    Avent also called O'Connor on April 24. According to a 
memorandum of the conversation, O'Connor was agitated that 
Avent still resisted meeting with him on the Hudson matter. 
Before abruptly hanging up, O'Connor warned Avent that he would 
discuss her resistance later in the week when he met with Don 
Fowler at the DNC. 20
---------------------------------------------------------------------------
    \20\ Ex. 6.
---------------------------------------------------------------------------

The opposition tribes activate the DNC

    On April 28, 1995, O'Connor, along with other lobbyists and 
opposition tribal leaders, met with Don Fowler at DNC 
headquarters. The purpose of the meeting, succinctly stated in 
a lobbyist's memo, was ``to discuss our position on the [Hudson 
application] with influential Democrats in Washington. The 
people we will be meeting with are very close to President 
Clinton and can get the job done.'' 21
---------------------------------------------------------------------------
    \21\ Memorandum from John McCarthy to All Tribal Leaders, Apr. 25, 
1995 (Ex. 8).
---------------------------------------------------------------------------
    If, as the saying goes, time is money, Fowler judged this 
meeting to be important. He spent two hours with the lobbyists 
and their tribal clients. The lobbyists, impressed by how much 
time Fowler gave them, thanked Mercer after the meeting: 
``Thank you for your note regarding our recent meeting with 
Chairman Fowler on the Indian gaming issue. I was amazed and 
pleased that he would devote so much of his time to the 
issue.'' 22
---------------------------------------------------------------------------
    \22\ Letter from Franklin Ducheneaux to David Mercer, May 4, 1995 
(Ex. 9).
---------------------------------------------------------------------------
    According to one meeting participant, money was a topic of 
the meeting. Lewis Taylor, the head of the St. Croix tribe, has 
testified in a state court deposition that he discussed making 
contributions to the DNC. Asked whether he ``specifically 
recollect[ed] discussing campaign contributions during that 
[April 28] meeting with Don Fowler,'' Taylor recounted, ``I 
believe I did.'' 23 Taylor also testified that he 
told Fowler, ``We support our friends. St. Croix supports their 
friends'' and ``[The St. Croix] have got a number of heavy duty 
issues that we needed help on and our friends are the Democrats 
and therefore I think we should donate to assist in some of 
these causes.'' 24 When Fowler testified before the 
Committee, he did not rule out the possibility that 
contributions were discussed but repaired to the defense of 
``no memory'' when asked directly: ``If such a comment was 
made, I do not remember it.'' 25
---------------------------------------------------------------------------
    \23\ State Court Deposition of Lewis Taylor, Dec. 17, 1996, pp. 75-
76 (Ex. 10).
    \24\ Id. at pp. 69-71.
    \25\ Testimony of Don Fowler, Sept. 9, 1997 p. 108. Fowler said in 
his deposition, ``I'm aware that some of them [the opposition tribes] 
contributed. I was not aware that they had contributed when I talked 
with them, nor was I concerned with the possibility that they would or 
would not contribute.'' Deposition of Don Fowler, May 21, 1997 p. 266.
---------------------------------------------------------------------------
    Memoranda about the April 28 meeting illuminate its purpose 
quite clearly. Larry Kitto explained in a memorandum that ``the 
purpose of the meeting was to request the DNC and the Committee 
to re-elect the President, to help communicate with the White 
House and the President about why the Department of the 
Interior should not approve [the Hudsonapplication].'' 
26 Kitto also wrote about what he and his clients told 
Fowler: ``The message was quite simple: all of the people against this 
project, both Indian and non-Indian are Democrats who have 
substantially large blocks of votes and who contribute heavily to the 
Democratic party. In contrast, all of the people for this project are 
Republican.'' 27 Another memo summed up Fowler's demeanor 
during the meeting: ``He [Fowler] listened. He took notes. He asked 
questions. He got the message: ``It's politics and the Democrats are 
against it and the people for it are Republicans.'' 28
---------------------------------------------------------------------------
    \26\ Minnesota Legislative Update [lobbying report prepared by 
Larry Kitto], April 24-28, 1995 (Ex. 11). The report mistakenly dates 
the Fowler meeting as April 18, 1995.
    \27\ Ex. 11 (emphasis added).
    \28\ Memorandum from Tom Krajewski to JoAnn Jones, May 3, 1995 (Ex. 
12).
---------------------------------------------------------------------------
    According to a lobbyist's report, ``Fowler assured the 
group that he would take this issue up with high ranking 
officials in the White House and, if necessary, would arrange a 
meeting with Tribal officials and the White House, and that he 
would do this in a very timely manner.'' 29 Fowler 
may have been even more specific in whom he would contact. One 
opposition lobbyist summarized in a memo, ``Mr. Fowler stated 
that he would speak with the President's assistant, Harold 
Ickes. He would urge Mr. Ickes to urge Secretary Babbitt to 
make a closer examination of impact of the proposed 
operation.'' 30
---------------------------------------------------------------------------
    \29\ Ex. 11.
    \30\ Memorandum from Carl Artman to Scott Dacey, May 1, 1995 (Ex. 
13).
---------------------------------------------------------------------------
    Fowler was true to his word. Within days, Fowler called 
Ickes and someone at the Department of Interior. Fowler 
testified, ``I called Mr. Ickes, explained to him the nature of 
the situation, and I called someone at the Department of 
Interior. I do not recall the name of the person with whom I 
spoke at the Department of the Interior. I just simply don't 
recall that person's name. I simply asked that situation and 
the facts in that situation be reviewed.'' 31 The 
Committee was never able to identify who precisely Fowler 
called at the Interior.32 Fowler followed his phone 
call to Ickes with a memorandum describing the opposition 
tribes as ``our supporters,'' and soliciting Ickes's advice on 
``how we might proceed.'' 33
---------------------------------------------------------------------------
    \31\ Fowler testimony, p. 107.
    \32\ In Committee depositions, no current or former Interior 
official admitted to speaking with Fowler. However, Tom Collier, former 
Interior Chief of Staff, indicated that he would have been the most 
likely person for Fowler to call, and that is ``absolutely possible 
that he may have called me and I don't remember.'' Collier deposition, 
p. 25.
    \33\ Memorandum from Don Fowler to Harold Ickes, May 5, 1995 
(Ex.14).
---------------------------------------------------------------------------
    After Fowler contacted Ickes, O'Connor followed up with 
Ickes directly.34 In a May 8, 1995 letter, O'Connor 
described the Hudson application, including the fact that he 
had already discussed the issue with President Clinton, 
Lindsey, and Fowler. O'Connor then wrote candidly about ``the 
politics involved in this situation.'' O'Connor explained, 
``all of the representatives of the tribes that met with 
Chairman Fowler are Democrats and have been so for years. I can 
testify to their previous financial support to the DNC and the 
1992 Clinton/Gore Campaign Committee.'' 35
---------------------------------------------------------------------------
    \34\ Letter from Patrick O'Connor to Harold Ickes, May 8, 1995 (Ex. 
15).
    \35\ Id.
---------------------------------------------------------------------------
    During this same time period, O'Connor and his partner 
Kitto were having numerous conversations with fund-raising 
officials of the DNC and the Clinton/Gore Campaign that related 
to the Hudson matter. According to relevant excerpts from their 
date books, O'Connor and Kitto met or spoke frequently with 
Fowler, David Mercer, the DNC Deputy Finance Director, and 
Terry McAuliffe, the Finance Chair of the Clinton/Gore 
Campaign.36 Most of the entries, which begin in 
early 1995 and continue through the date of the Interior 
decision, simply show meetings or conversations between the 
lobbyists and the fund-raisers.
---------------------------------------------------------------------------
    \36\  See Ex. 4 and Excerpts of Larry Kitto 1995 Date book (Ex.16).
---------------------------------------------------------------------------
    However, some of the entries are more telling. In somewhat 
cryptic notes, for example, Kitto wrote, ``25 people at $1,000 
each'' and also ``DNC, Committee to Reelect--50 grand.'' 
37 O'Connor had a similar entry. According to his 
date book, on May 24, 1995, O'Connor also mentioned the Hudson 
matter to Peter Knight, Chairman of the Clinton/Gore Campaign, 
and David Strauss, Vice-President Gore's Deputy Chief of 
Staff.38 On June 19, 1995, O'Connor wrote, 
``Disc[ussion] re support to be given to Committee to Reelect 
and DNC.'' 39
---------------------------------------------------------------------------
    \37\  See Ex. 16.
    \38\ See Ex. 4.
    \39\ Id.
---------------------------------------------------------------------------
    It is clear that these conversations and meetings were 
related to the Hudson matter. O'Connor and Kitto were permitted 
to redact unrelated entries from the date books they were 
required to produce during litigation. Even more importantly, 
O'Connor billed the opposition tribes for all of the above-
referenced contacts.40
---------------------------------------------------------------------------
    \40\ Letters from Thomas Corcoran to Lewis Taylor, May 9, June 27, 
July 11, Sept. 15, and Oct. 18, 1995 (enclosing O'Connor and Hannan 
bills) (Ex. 17).
---------------------------------------------------------------------------
    Meanwhile, on May 14, 1995, another of O'Connor's partners, 
Tom Schneider, ran into Ickes at a Democratic fund-raising 
event, and asked Ickes about the Hudson casino matter. Ickes 
acknowledged that he told O'Connor that he would look into the 
Hudson matter.41 When Schneider reiterated the 
importance of Ickes's direct involvement in the matter, Ickes 
confirmed to Schneider, ``I'll follow through on it.'' 
Schneider explained, ``[Harold Ickes and I] had a relationship 
that if he said he was going to do something he'd do it.'' 
42
---------------------------------------------------------------------------
    \41\ State Court Deposition of Thomas J. Schneider, Sept. 8, 1997, 
p. 17 (Ex. 18). In his deposition testimony, Ickes said he could not 
recall talking to O'Connor. Ickes testified, ``I don't recall ever 
talking to O'Connor about this. Again, I'm not saying I did, but as a 
deputy chief of staff, I talk to a lot of people in the course of a 
day, week, months and years. So I have no specific recollection. I may 
have, but I don't have any recollection, a specific conversation with 
him.'' Deposition of Harold Ickes, Sept. 22, 1997, p. 31.
    \42\ Ex. 18, p. 25.
---------------------------------------------------------------------------
    On May 16, 1995 O'Connor wrote Ickes again, and forwarded 
some materials favorable to the opposition tribes.43 
Sometime in the next 24 to 48 hours, there is the first 
documented contact between Ickes' staff and Secretary Babbitt's 
staff at Interior about the Hudson matter.
---------------------------------------------------------------------------
    \43\ Facsimile from Patrick O'Connor to Harold Ickes and John 
Sutton, May 16, 1995 (Ex. 19).
---------------------------------------------------------------------------

The White House contacts Interior

    On May 18, 1995, Jennifer O'Connor, an assistant to Ickes 
(and no relation to lobbyist Patrick O'Connor), wrote Ickes a 
memorandum about the Hudson matter.44 After 
referencing Patrick O'Connor's interest in the matter, Jennifer 
O'Connor provided an update. She wrote that the Interior staff 
had met ``last night'' and had come up with a preliminary 
decision to deny the application. After cautioning that the 
information was not yet public, Jennifer O'Connor listed some 
reasons for the rejection, including opposition from the local 
community. She then wrote, ``some [Interior] Department staff 
think the bottom line here is the Minnesota and Wisconsin 
tribes who are benefiting enormously from gaming don't want the 
competition, and are able to hire bigger lobbyists than the 
three very poor tribes who want the casino.'' 45
---------------------------------------------------------------------------
    \44\ Memorandum from Jennifer O'Connor to Harold Ickes, May 18, 
1995 (Ex. 20).
    \45\ Id.
---------------------------------------------------------------------------
    Without being able to cite a precise date, Jennifer 
O'Connor testified that she first became involved in the Hudson 
matter when Ickes handed her a letter from Patrick O'Connor and 
asked her to find out the status.46
---------------------------------------------------------------------------
    \46\ Deposition of Jennifer O'Connor, Oct. 6, 1997, p. 37. In both 
his hearing and deposition testimony, Ickes stated that he could not 
recall much about the Hudson application. Ickes testified at the 
hearing, ``I recall--as I stated in my deposition, I was not--to the 
best of my recollection, I was very peripherally involved in that. I 
think that Jennifer O'Connor on my staff was the primary point person 
on it. I recall having one discussion. I think it was a telephone 
discussion with Don Fowler--he and I talked constantly so it is hard to 
separate all of this out--in which he raised the issue. I told him I 
would check on it, and I think I had Ms. O'Connor check on it, on the 
status of it.'' Testimony of Harold Ickes, Oct. 8, 1997, pp. 46-47.
    Later in his testimony, when asked if he recalled talking to 
Secretary Babbitt or any other political appointees at Interior about 
this issue, Ickes again responded that he could not recall. He stated, 
``No. As I said before, I don't have any recollection of it, and of 
talking to Interior about this. I think that this--I had given this to 
Jennifer O'Connor to check on the status.'' Ickes testimony, p. 55.
---------------------------------------------------------------------------
    She testified that in response to Ickes'' request, she 
called officials at Interior. She said that she may have spoken 
to Collier or John Duffy, but if so, she was quickly pointed in 
the direction of Secretary Babbitt's special assistant, Heather 
Sibbison.47 Much like Avent, Jennifer O'Connor 
apparently recognized the implications of White House 
involvement in agency decisions. Asked what she and Sibbison 
talked about, O'Connor volunteered that she began their 
conversation with a disclaimer--that she was only looking for a 
status and that she did not want to influence anything or learn 
anything that she was ``not supposed to know.'' 48
---------------------------------------------------------------------------
    \47\ Jennifer O'Connor deposition, p. 39.
    \48\ Id., pp. 40-41.
---------------------------------------------------------------------------
    Documents reflect additional contacts between Ickes'' staff 
and Interior during the next few weeks. Jennifer O'Connor 
continued to call Duffy. According to Duffy's phone logs, 
Jennifer O'Connor called him on May 25, 1995, and left a 
message. Duffy or someone from his office apparently called 
O'Connor back again, because on May 31, there is another 
message from Jennifer O'Connor to Duffy, with the notation, 
``returned your call.'' Duffy likely called O'Connor back 
because the same telephone log records the disposition as 
``done.'' 49 Duffy was shown these telephone logs 
and asked if they helped him remember whether he spoke to her 
about the Hudson matter. Duffy replied, ``It does not. I don't 
have any recollection of talking to Jennifer about the Hudson 
casino. But I can't tell you I never talked to her because I 
just don't recall one way or the other.'' 50
---------------------------------------------------------------------------
    \49\ Interior Department Telephone log, May 25, 1995 (Ex. 21).
    \50\ Duffy deposition, p. 60.
---------------------------------------------------------------------------
    In early June, Ickes's office again telephoned Interior. It 
is unclear what prompted this contact, though the record shows 
that on June 1, 1995, Patrick O'Connor faxed another note to 
Ickes.51 In any event, Jennifer O'Connor testified 
that she asked an intern, David Meyers, to see if Interior had 
already announced its decision.52 Meyers followed 
through and spoke to Sibbison. According to a June 6, 1995 
memorandum of his conversation, which preceded Interior's 
announcement of the rejection by five weeks, Sibbison told 
Meyers that it is ``95% certain that the application will be 
turned down'' and that Interior will make a decision in the 
next two weeks.53 Sibbison also described Interior's 
reasoning to Meyers and indicated Interior was aware of the 
intense lobbying by the opposition tribes. ``She [Sibbison] 
explained that there is significant local opposition. Much of 
the opposition, however, is a by-product of wealthier tribes 
lobbying against the application. . . . Nonetheless, she stated 
that they will probably decline, without offering much 
explanation, because of their `discretion' in this matter.'' 
54 Besides cautioning that this information was not 
yet public, Sibbison apparently solicited the views of the 
White House. Meyers wrote to Jennifer O'Connor, ``She asked 
that if you have any feedback please call her with your 
thoughts.'' 55
---------------------------------------------------------------------------
    \51\ Facsimile from Patrick O'Connor to Harold Ickes and John 
Sutton, June 1, 1995 (Ex. 22).
    \52\ Jennifer O'Connor deposition, p. 53.
    \53\ Memorandum from David Meyers to Jennifer O'Connor, June 6, 
1995 ( Ex. 23).
    \54\ Id.
    \55\ Id.
---------------------------------------------------------------------------
    In her deposition, Sibbison acknowledged speaking to Meyers 
but took issue with his characterization of her comments. As 
for the local opposition, she testified, ``we were hearing 
those rumors, and I must have told this guy that, and he's 
written it as if it's fact instead of rumor.'' 56 As 
for the feedback comment, Sibbison denied that she ever asked 
for Jennifer O'Connor's opinion nor was she concerned with 
Jennifer O'Connor's views on the application.57
---------------------------------------------------------------------------
    \56\ Deposition of Heather Sibbison, Sept. 26, 1997, p. 94. 
Regardless of whether the claim of manufactured local opposition is 
characterized as rumor or fact, it appears that Interior officials did 
not take any steps to inquire further. Sibbison testified that no one 
at Interior conducted any further exploration into the issue of 
lobbyists generating local opposition. Sibbison deposition, pp. 97-98. 
Moreover, Michael Anderson, the Interior official who signed the denial 
letter, testified in his deposition that ``if someone ginned that [the 
local opposition] up by wealthier tribes lobbying, I didn't look behind 
that.'' Anderson deposition, Sept. 19, 1997, pp. 82-83.
    \57\ Sibbison deposition, p. 99.
---------------------------------------------------------------------------
    At some point in time, Jennifer O'Connor reported to Fowler 
about what she had learned. Jennifer O'Connor testified:

          A: Mr. Fowler called me. He said roughly--this is, 
        again, it's vague and hazy in my memory, but he said 
        something along the lines of can you tell me what the 
        status is of this issue because I really want to be 
        able to get back to some people when it's finished.
          And I said to him--I can't remember exactly when he 
        called, but the Department had not yet finished its 
        deliberations, and I said, here's the status, they're 
        not done yet. There's nothing we can tell anybody. All 
        you can say to whoever it is you're talking to--I don't 
        think he told me who he was talking to--but I said to 
        him the only thing he could say to them was that 
        Interior was moving along and would have a decision at 
        some point soon.
          And I made clear to him he couldn't tell them 
        anything other than that. So--
          Q: So, Mr. Fowler called you, he merely inquired into 
        the status of the pending application?
          A: Yes. My recollection of the conversation was that 
        he was very interested in being able to be responsive 
        to some set of people who wanted to know when the 
        decision was going to be made.
          Q: Did you understand that set of people were donors 
        to the Democratic National Committee or prospective 
        donors to the DNC?
          A: He never told me who they were.58
---------------------------------------------------------------------------
    \58\ Jennifer O'Connor deposition, pp. 62-63.

    It is unclear whether Fowler or anyone else reported back 
to Patrick O'Connor or his opposition tribe clients. 
Nevertheless, a June 12, 1995 entry in O'Connor's date book 
shows that he received a report on White House ``new 
developments.'' 59
---------------------------------------------------------------------------
    \59\ Ex. 4.
---------------------------------------------------------------------------

The Formal Decision

    Against the backdrop of this full tilt lobbying push, the 
decision process at Interior moved forward. Briefly, the 
process unfolded as follows: On June 8, 1995, Tom Hartman, a 
career BIA employee with the Indian Gaming Management Staff, 
wrote a 17-page analysis, in which he recommended finding the 
necessary predicate for approving the application.60 
Apparently sometime after Skibine received Hartman's memo, a 
longer version of the memo, again favoring approval of the 
application, was prepared. Skibine is the author listed; the 
final decision maker listed is the Assistant Secretary for 
Indian Affairs.61
---------------------------------------------------------------------------
    \60\ Memorandum from Indian Gaming Management Staff [signed by Tom 
Hartman] to Director, Indian Gaming Management Staff, June 8, 1995, 
(Ex. 24).
    \61\ Memorandum from George Skibine to the Assistant Secretary--
Indian Affairs, undated (Ex. 25).
---------------------------------------------------------------------------
    Despite these detailed staff analyses approving the 
application, Skibine testified that he prepared a draft letter 
rejecting the application, readied for Assistant Secretary Ada 
Deer's signature, on June 29, 1995.62 During the 
next two weeks, the Secretary's office at Interior coordinated 
the review and revisions of Skibine's June 29 draft letter. 
Somewhere in the process Assistant Secretary Deer quietly 
recused herself from the decision. On July 14, 1995, Michael 
Anderson, Deer's deputy, Michael Anderson, signed the denial 
letter and Interior formally issued its decision.
---------------------------------------------------------------------------
    \62\ Skibine deposition, p. 65.
---------------------------------------------------------------------------

The payback?

    On July 14, 1995--the day of Interior's decision and the 
meeting between Babbitt and Eckstein--O'Connor and Kitto 
discussed fund-raising. This conversation, for which the 
opposition tribes were billed, is described in O'Connor's date 
book as follows: ``Disc[ussion] re[garding] necessity to follow 
up with Harold Ickes at the White House, Fowler at the DNC and 
Terry Mac [McAuliffe] at the Committee to Reelect outlining 
fund-raising strategies.'' 63
---------------------------------------------------------------------------
    \63\ Ex. 4.
---------------------------------------------------------------------------
    The fund-raising strategies alluded to by O'Connor 
certainly worked well. According to FEC records, during the 
next four months, the DNC and the Democratic Senatorial 
Campaign Committee (DSCC) collected about $53,000 from the 
opposition tribes. FEC records show that those same tribes 
contributed an additional $230,000 to the DNC and DSCC during 
1996. In addition, many of the same tribes contributed a total 
of over $50,000 to the Minnesota Democratic Farmer Labor Party. 
These numbers do not include any contributions made by the 
lobbyists or individual tribal members to the Clinton/Gore 
campaign or donations to other state parties that might have 
been directed by the DNC.
    After the July 14 decision, the opposition tribes and 
lobbyists showed who they thought was responsible for tilting 
the decision in their favor. Fowler received at least three 
thank you notes from opposition tribes and lobbyists. In a 
letter dated August 3, 1995, JoAnn Jones,the President of the 
Ho-Chunk Nation, wrote, ``I want to thank you for your help in the 
successful effort to defeat the Hudson casino. Numerous people 
contributed to the Department of Interior decision. You were 
particularly instrumental in helping the Department understand the 
significance and importance of their decision.'' 64 David 
Mercer at the DNC also received at least one note from a lobbyist. 
Franklin Ducheneaux wrote to Mercer on July 27, 1995, ``The Minnesota 
Tribes are very grateful to you and the Chairman for your assistance in 
advising the President and the Secretary on this matter.'' 
65 JoAnn Jones of the Ho-Chunks even wrote to President 
Clinton, thanking him for his help in defeating the Hudson 
application.66
---------------------------------------------------------------------------
    \64\ Letter from JoAnn Jones to Don Fowler, Aug. 3, 1995; Letter 
from Dallas Ross to Don Fowler, July 24, 1995; Letter from Franklin 
Ducheneaux to David Mercer, July 27, 1995; and Letter from Stanley 
Crooks to Don Fowler, July 27, 1995 (Ex. 26).
    \65\ Id.
    \66\ Letter from JoAnn Jones to President Clinton, Aug. 3, 1995 
(Ex. 27).
---------------------------------------------------------------------------
    O'Connor and Kitto also stated their belief that the White 
House had assisted the opposition tribes. In a September 14, 
1995 fund-raising invitation for the Clinton/Gore Campaign, the 
two lobbyists wrote, ``As witnessed in the fight to stop the 
Hudson Dog Track proposal, the Office of the President can and 
will work on our behalf when asked to do so.'' 67
---------------------------------------------------------------------------
    \67\ Fund-raising invitation letter, Sept. 14, 1995 (Ex. 28).
---------------------------------------------------------------------------

Paul Eckstein and Bruce Babbitt

    By early July 1995, nine months after the area office's 
approval, the Secretary's office at the Department of Interior 
had still not formally acted on the application. At that time, 
according to Eckstein, ``there were a lot of rumors flying 
around'' that a decision was imminent.68 Concerned 
because wealthy tribes with competing casinos had mounted an 
intense lobbying campaign against their application, the 
applicant tribes retained Paul Eckstein to ``find out what 
[was] happening.'' 69 Eckstein was retained in April 
1995. Shortly after being hired, Eckstein secured a commitment 
from Secretary Babbitt that if the Department was going to deny 
the application, Babbitt would first have a face-to-face 
meeting with leaders of the applicant tribes.70
---------------------------------------------------------------------------
    \68\ Testimony of Paul Eckstein, Oct. 30, 1997, p. 18.
    \69\ Id. Eckstein is a prominent Phoenix, Arizona lawyer, and a 
partner in the firm of Brown and Bain. During his 32 years of law 
practice, Eckstein has handled a wide variety of matters, including 
various issues on behalf of Indian tribes. Id., p. 11-12. Eckstein is 
also a long time friend of Secretary Babbitt, as the two of them met at 
Harvard Law School in 1962. After law school, the two men took the 
Arizona bar exam together and then in 1967, Babbitt was hired by the 
same Phoenix law firm that Eckstein had joined two years earlier. At 
that time, the firm had less than 10 lawyers. Eckstein and Babbitt 
practiced law together through 1974, when Babbitt was elected Arizona 
Attorney General. Id., p. 13.
    As Babbitt moved from Attorney General to Governor of Arizona in 
1978, Eckstein continued to have regular contact with Babbitt. 
Eckstein, in fact, was a member of what was known at the time as then-
Governor Babbitt's ``kitchen cabinet.'' Id., p. 14. In 1982, Eckstein 
ran Secretary Babbitt's reelection campaign for Governor. Eckstein, 
moreover, once represented then-Governor Babbitt in a defamation 
lawsuit. Id. Asked whether he considered Secretary Babbitt a friend, 
Eckstein responded simply, ``yes.'' Id.
    \70\ Deposition of Paul Eckstein, Sept. 30, 1997, pp 29-30.
---------------------------------------------------------------------------
    Tasked with determining the status of the pending 
application, Eckstein called Secretary Babbitt on July 11, 
1995. During their conversation, Secretary Babbitt directed 
Eckstein to meet with Babbitt's counselor, John Duffy, 
indicating that Duffy and would call him.71 Duffy 
was the Secretary's point man on this application. Duffy called 
Eckstein that day from a plane, telling him that if Eckstein 
wanted a meeting, he needed to get to Washington D.C. 
immediately. When Eckstein asked to have the meeting the 
following Monday, Duffy said, ``Well it's got to be this week, 
you've got to get here.'' 72 Accordingly, they set 
the meeting for the morning of Friday, July 14.
---------------------------------------------------------------------------
    \71\ Eckstein testimony, p. 19.
    \72\ Id.
---------------------------------------------------------------------------
    The Friday morning meeting between Eckstein and Duffy 
lasted about 45 minutes. Eckstein described the meeting as 
follows:

          We . . . began making the arguments in favor of 
        granting the application, and thought that Mr. Duffy 
        was agreeing with us. The nods seemed to be at the 
        appropriate times, and rather abruptly, well into the 
        presentation, a half-hour, 40 minutes into the 
        presentation, he says, Wait a minute. He said the 
        application is going to be denied. The decision of 
        denial is going to be issued today, and the reasons are 
        that the St. Croix Chippewas will be injured and their 
        Turtle Lake facility will be hurt if they grant this 
        application, and the local opposition that exists in 
        the Hudson area. And we questioned him a little about 
        that, and then left . . . .73
---------------------------------------------------------------------------
    \73\ Id., p. 20.

    Shortly after finishing with Duffy, Eckstein called Babbitt 
and asked for a meeting. Babbitt agreed and the two men met 
alone later that afternoon in Babbitt's office at Interior. 
According to Eckstein, their meeting lasted for ``a half-hour, 
conceivably 45 minutes.'' 74 Eckstein testified, ``I 
went in and explained that we had just heard from Counselor 
Duffy that the decision was going to be issued that day and 
that it was going to be a denial, and reminded him of the 
commitment that had been made to make a presentation to him 
with my clients. And his response was that Harold Ickes had 
directed him to issue a decision that day.'' 75 
Eckstein remembers clearly that this comment from Secretary 
Babbitt took place at the beginning of their 
meeting.76
---------------------------------------------------------------------------
    \74\ Id., p. 21.
    \75\ Id.
    \76\ Eckstein deposition, pp. 52-54.
---------------------------------------------------------------------------
    Their meeting continued with Eckstein arguing the merits of 
the Hudson application. After ten or fifteen minutes of 
Eckstein addressing the merits without any feedback, Secretary 
Babbitt stood up from the sofa. Eckstein also stood up. At that 
point, Eckstein brought up the May 8, 1995 letter that Patrick 
O'Connor had written to Ickes. The letter said of opposition 
tribes, ``I can testify to their previous financial support to 
the DNC and the 1992 Clinton/Gore Campaign Committee.'' 
77
---------------------------------------------------------------------------
    \77\ Ex. 15.
---------------------------------------------------------------------------
    Although Eckstein had seen the O'Connor letter a few months 
earlier, this was the first time he had mentioned it to any 
Department of Interior officials. He explained that until the 
Babbitt meeting he had considered it ``so crude'' and ``so much 
in error'' that he saw no need to dignify it with a 
response.78 Asked what prompted him to bring it up 
then, Eckstein explained that hearing Babbitt mention Ickes may 
have triggered his reference.79
---------------------------------------------------------------------------
    \78\ Eckstein deposition, p. 59.
    \79\ Id.
---------------------------------------------------------------------------
    Eckstein perceived Secretary Babbitt to be aware of the 
O'Connor letter, notwithstanding the fact that the letter was 
not addressed to Babbitt: 80 ``Well, he certainly to 
me, he--did. He didn't say what letter, what are you talking 
about. He seemed to nod when I mentioned it. To me--and this is 
my interpretation--the signs were that he had familiarity with 
it.'' 81 Eckstein also stated, ``I was watching him 
pretty carefully, and it seemed to me just reading his eyes and 
his body language that he was aware of it.'' 82
---------------------------------------------------------------------------
    \80\ Id., p. 57.
    \81\ Eckstein testimony, pp. 27-28.
    \82\ Eckstein deposition, p. 57.
---------------------------------------------------------------------------
    After explaining his clients were upset by the O'Connor 
letter, Eckstein addressed the letter's various points. 
Eckstein recalled talking about the letter's characterization 
of an applicant tribe's chairman as a Republican and its 
description of the opposition tribes as significant supporters 
of President Clinton.83 At that point, Babbitt 
brought up the topic of political contributions. Eckstein 
testified, ``The Secretary asked me, Do you have any idea how 
much these Indians, Indians with gaming contracts--it wasn't 
exactly clear what Indians he was referring to, but Indians 
were certainly used--have given to Democrats. I said I don't 
have the slightest idea, and he said, Half a million dollars.'' 
84
---------------------------------------------------------------------------
    \83\ Eckstein testimony, p. 22.
    \84\ Id.
---------------------------------------------------------------------------
    Eckstein acknowledged that he is unclear whether Secretary 
Babbitt referred to ``these tribes,'' ``Indian tribes,'' or 
``Indian tribes with gaming facilities.'' 85 
Nevertheless, he testified, there is no doubt in his mind that 
Babbitt made the comment.86 Eckstein explained, 
``But the rest of it, the rhetorical nature of the question, 
the fact that it was Indian tribes, the fact that they have 
given to Democrats, the fact that it was half a million 
dollars, all of that is absolutely clear to me.'' 87
---------------------------------------------------------------------------
    \85\ Eckstein deposition, pp. 61-62.
    \86\ Id.., p. 55.
    \87\ Id., p. 61.
---------------------------------------------------------------------------
    After this comment from Secretary Babbitt, their meeting 
ended and Eckstein left the Interior Department. Disappointed, 
Eckstein recounted the substance of his conversation, including 
both the Ickes comment and the political contributions comment, 
to his colleagues immediately after it occurred.\88\
---------------------------------------------------------------------------
    \88\ Eckstein testimony, pp. 67, 104-105.
---------------------------------------------------------------------------

The aftermath--Eckstein's affidavit and Secretary Babbitt's letters to 
        the Senate

    Shortly after Interior's denial of the Hudson application, 
the losing tribes filed a lawsuit in Wisconsin federal court 
against Babbitt and the Department of Interior. The lawsuit 
alleged improper political interference in the decision making 
process. As part of that litigation, Eckstein swore out an 
affidavit on January 8, 1996, in which he specifically 
recounted the Ickes comment Secretary Babbitt made to him on 
July 14, 1995: ``Secretary Babbitt said that the decision could 
not be delayed because Presidential Deputy Chief of Staff 
Harold Ickes had called the Secretary and told him that the 
decision had to be issued that day.'' \89\
---------------------------------------------------------------------------
    \89\ Affidavit of Paul Eckstein, Jan. 8, 1996 (Ex. 29).
---------------------------------------------------------------------------
    However, Eckstein's affidavit did not include Secretary 
Babbitt's additional comments about political contributions. 
Asked why he did not include that comment, Eckstein responded 
that he made the decision partly because of the nature of the 
comment, and partly because he knew that whatever he put in his 
affidavit would become public information. Eckstein testified:

          Well, first and foremost, I didn't want to put it in 
        the affidavit. The affidavit was in support of a motion 
        for discovery in an action, and I thought those points, 
        the points that I made in the affidavit, were 
        sufficient to obtain that request.
          Secondly, it was a question. It was a rhetorical 
        question, and I didn't know how to interpret it.
          Thirdly, I saw the potential for more embarrassment 
        [for Babbitt], and I didn't want to--didn't want to put 
        it in.\90\
---------------------------------------------------------------------------
    \90\ Eckstein testimony, pp. 29-30. Eckstein further explained that 
the affidavit never purported to be a recollection of everything--or 
even everything important--that was said during his July 14 meeting 
with Secretary Babbitt. Id., p. 107.


    In July 1996, the Wall Street Journal printed an article 
summarizing the allegations of political influence regarding 
the Hudson decision.\91\ The Journal article cited Eckstein's 
sworn statement, specifically Babbitt's comment about Ickes 
directing him to issue a decision that day.
---------------------------------------------------------------------------
    \91\ Jill Abramson and Glenn Simpson, ``Top Democratic Lobbyist 
Helped Kill Hudson Casino,'' Wall Street Journal, July 12, 1996, p. A1.
---------------------------------------------------------------------------
    In response to the Journal story, Senator John McCain, at 
that time the Chairman of the Senate Committee on Indian 
Affairs, wrote to Secretary Babbitt on July 19, 1996 and asked 
for an explanation about the Hudson application.\92\ After 
recounting the reported statements in Eckstein's affidavit 
about the Ickes' comment, McCain asked Secretary Babbitt 
directly, ``Is this true?'' \93\
---------------------------------------------------------------------------
    \92\ Letter from Senator John McCain to Secretary Babbitt, July 19, 
1996 (Ex. 30).
    \93\ Id.
---------------------------------------------------------------------------
    On August 30, 1996, Secretary Babbitt responded to Senator 
McCain.\94\ After claiming that the Journal article ``falsely 
insinuated that this Department has allowed campaign 
contributions to dictate Indian policy,'' Babbitt turned to his 
meeting with Eckstein. Babbitt wrote:
---------------------------------------------------------------------------
    \94\ Letter from Secretary Babbitt to Senator McCain, Aug. 30, 1996 
(Ex. 31).

          I met with Paul Eckstein, an attorney for the three 
        tribes applying for the trust land acquisition, shortly 
        before a decision was made on the application. 
        Following this conversation, I instructed my staff to 
        give Mr. Eckstein the opportunity to discuss the matter 
        with John Duffy. I must regretfully dispute Mr. 
        Eckstein's assertion that I told him that Mr. Ickes 
        instructed me to issue a decision in this matter 
        without delay. I never discussed the matter with Mr. 
        Ickes; he never gave me any instructions as to what 
        this Department's decision should be, nor when it 
        should be made.\95\
---------------------------------------------------------------------------
    \95\ Id. (emphasis added)

    Secretary Babbitt concluded his letter to Senator McCain 
with a somewhat indignant paragraph: ``Over the years, you and 
I have worked together on a wide variety of issues affecting 
Native Americans . . . I regret that, relying solely on a 
newspaper article, you have chosen to so publicly call into 
question the integrity of our decision making on this matter. I 
am pleased to have the opportunity to set the record 
straight.'' \96\
---------------------------------------------------------------------------
    \96\ Id. Senator McCain acknowledged Secretary Babbitt's letter, 
apologized for questioning Secretary Babbitt's integrity, and the 
matter went no further.
---------------------------------------------------------------------------
    Meanwhile, in the ongoing federal lawsuit, the United 
States Attorney's Office used Secretary Babbitt's letter to 
Senator McCain to defend the position of the Department of 
Interior against the charges of improper political influence. 
In filing Babbitt's letter with the court, the government 
argued, ``Thus, Secretary Babbitt conclusively lays to rest any 
claim that the Department bowed to improper influence when it 
denied the plaintiff Tribes' application to take St. Croix 
Meadows in trust.'' \97\
---------------------------------------------------------------------------
    \97\ Defendant's Motion to Supplement the Record, Oct. 15, 1997 
(Ex. 32).
---------------------------------------------------------------------------
    Secretary Babbitt's recollection of the Eckstein 
conversation would soon change drastically, however. In October 
1997, after the Committee deposed Eckstein and heard Babbitt's 
comment about Ickes and Babbitt's additional comment regarding 
campaign contributions, the Committee sought to interview 
Secretary Babbitt. The Committee made an informal request 
through the Interior's Office of Congressional and Legislative 
Affairs. When Interior indicated preliminarily that Secretary 
Babbitt would not appear for a voluntary interview or 
deposition, the Committee wrote to Interior, seeking written 
confirmation.\98\
---------------------------------------------------------------------------
    \98\ Letter from U.S. Senate Governmental Affairs Committee to 
Secretary Babbitt, Oct. 9, 1997 (Ex. 33).
---------------------------------------------------------------------------
    Interior's response came from Secretary Babbitt himself, 
who wrote Chairman Thompson directly on October 9, 1997. 
Babbitt confirmed that he would not submit to a private 
interview, but stated that he would agree to answer questions 
in public. Secretary Babbitt then admitted that he may have 
said something to Eckstein about Ickes wanting a decision:

          [W]hile I did meet with Mr. Eckstein on this matter 
        shortly before the Department made a decision on the 
        application, I have never discussed the matter with Mr. 
        Ickes or anyone else in the White House. Mr. Ickes 
        never gave me instructions as to what this Department's 
        decision should be, or when it should be made.
          I do believe that Mr. Eckstein's recollection that I 
        said something to the effect that Mr. Ickes wanted a 
        decision is correct. Mr. Eckstein was extremely 
        persistent in our meeting, and I used this phrase 
        simply as a means of terminating the discussion and 
        getting him out the door. It is not the first time that 
        I have dealt with lobbyists by stating that the 
        Administration expects me to use my good judgment to 
        resolve controversial matters in a timely fashion, nor 
        do I expect it to be the last.\99\
---------------------------------------------------------------------------
    \99\ Letter from Secretary Babbitt to Senator Thompson, Oct. 10, 
1997 (Ex. 34) (emphasis added).

Babbitt did not address the political contributions comment 
Eckstein attributed to him.\100\
---------------------------------------------------------------------------
    \100\ By letter dated Oct. 15, 1997, Chairman Thompson responded to 
Secretary Babbitt, asking Babbitt to reconsider his refusal to appear 
for a voluntary interview with the Committee. Letter from Senator 
Thompson to Secretary Babbitt, Oct. 15, 1997 (Ex. 35). Chairman 
Thompson explained, ``I firmly believe that as a Cabinet officer, you 
have an obligation to cooperate with Congress.'' A week later, Babbitt 
again confirmed that he would not agree to a deposition or private 
interview. Letter from Melanie Beller to Senator Thompson, Oct. 22, 
1997 (Ex. 36).
---------------------------------------------------------------------------
    The Committee called Secretary Babbitt to testify publicly 
on October 30, 1997. In his opening statement, Secretary 
Babbitt stated that the Hudson application was decided solely 
on the merits and that there was no improper White House or DNC 
influence.\101\ After admitting that his letters to Senator 
McCain and Senator Thompson ``muddied the waters somewhat,'' 
Secretary Babbitt then described his version of what happened 
during the July 14 meeting with Eckstein:
---------------------------------------------------------------------------
    \101\ Testimony of Bruce Babbitt, Oct. 30, 1997, p. 123.

          On July 14th of 1995, Mr. Eckstein was visiting other 
        offices at the Department to urge the Department to 
        delay a decision in the Hudson case, which was ready to 
        be made and released that day.
          Mr. Eckstein then asked to meet with me. Against my 
        better judgment, I acceded to that request. When he 
        persistently pressed for a delay in the decision, I 
        sought to terminate the meeting. I don't recall exactly 
        what was said, but on reflection, I probably said that 
        Mr. Ickes, the Department's point of contact on many 
        Interior matters, wanted the Department or expected the 
        Department to decide the matter promptly. If I said 
        that, it was an awkward effort to terminate an 
        uncomfortable meeting on a personally sympatheticnote, 
but as I have said here today, I had no such communication with Mr. 
Ickes or anyone else from the White House.
          It has been reported that Mr. Eckstein recently made 
        the additional assertion that I also mentioned campaign 
        contributions from Indian tribes in this context. I 
        have no recollection of doing so or of discussing any 
        such contributions with anyone from the White House, 
        the DNC, or anyone else.
          If my letters to Senator McCain and Senator Thompson 
        have caused confusion, then I must and do apologize to 
        them and to the Committee. I certainly had no intention 
        of misleading anyone in either letter. My best 
        recollection of the facts are as I have just stated 
        them.\102\
---------------------------------------------------------------------------
    \102\ Id., pp. 123-124.

    Under questioning from Senator Thompson, Secretary Babbitt 
testified that while he may have told Eckstein that Ickes 
``wants'' or ``expects'' a decision, he ``definitely'' did not 
tell Eckstein that Ickes wanted a decision that same day. 
Therefore, Secretary Babbitt testified, his statement in the 
McCain letter--``I must regretfully dispute Mr. Eckstein's 
assertion that I told him to issue a decision in this matter 
without delay''--was still accurate.\103\ Apparently focusing 
on the words ``without delay,'' Secretary Babbitt claimed that 
he did not misrepresent anything in his letter to Senator 
McCain.\104\ He explained, ``Senator, I believe those 
statements are consistent. They both reflect my best 
recollection about what I said and what I didn't say.'' \105\ 
He attempted to square the differences when questioned about 
them:
---------------------------------------------------------------------------
    \103\ Id., p. 137.
    \104\ Id. pp. 130-131.
    \105\ Id., p. 139.

          Secretary Babbitt. I told--to the best of my 
        recollection, I said something to Mr. Eckstein to the 
        effect that Mr. Ickes expected or wanted a decision.
          Chairman Thompson. Well, certainly that meant 
        something more than just carrying out your duties. I 
        mean, clearly, everybody--I mean, a decision had to be 
        made. I mean, clearly you were stating something more 
        than just what the law required you to do as a----
          Secretary Babbitt. No. That's really all I was 
        stating.
          Chairman Thompson. Did Mr.----
          Secretary Babbitt. That's the whole point.
          Chairman Thompson. In effect, Mr. Ickes wanted you to 
        do your job?
          Secretary Babbitt. That is correct. That is exactly 
        correct.
          Chairman Thompson. Kind of like saying Mr. Ickes 
        wanted you to pay your Federal income taxes by April 
        15th.
          Secretary Babbitt. Yeah.\106\
---------------------------------------------------------------------------
    \106\ Id., pp. 137-138.

    Later in his hearing testimony, Secretary Babbitt made a 
further distinction in an attempt to buttress his claim that he 
did not mislead Senator McCain, explaining that his McCain 
letter is ``precise and correct.'' \107\ Secretary Babbitt 
explained his interpretation: ``I think Senator McCain was 
asking in that letter . . . was there a communication between 
you and Ickes, and my response was, unequivocally, no, there 
was not.'' \108\
---------------------------------------------------------------------------
    \107\ Id., p. 182.
    \108\ Id., p. 183.
---------------------------------------------------------------------------
    Secretary Babbitt's contention that he did not mislead 
Senator McCain is belied by his actions. Sometime before his 
testimony, Secretary Babbitt spoke to Senator McCain, telling 
him, ``To the extent [the letter] could be construed as 
misleading, I certainly owe you an apology.'' \109\
---------------------------------------------------------------------------
    \109\ Id., p. 136.
---------------------------------------------------------------------------
    During his hearing testimony, Secretary Babbitt continued 
to repeat that he never actually spoke to Ickes on the Hudson 
matter. At the same time, however, he also maintained that his 
reference to Ickes during his discussion with Eckstein was not 
misleading, even to Eckstein. In his October 10, 1997 letter to 
Senator Thompson, Secretary Babbitt wrote that he used the 
Ickes phrase ``simply as a means of terminating our discussion 
and getting him [Eckstein] out the door.'' \110\ Nevertheless, 
in his hearing testimony, Secretary Babbitt would not concede 
that he deceived Eckstein. Asked by Senator Thompson whether he 
misled his old friend as a way to get him out of the office, 
Secretary Babbitt replied, ``On the spur of the moment, I made 
that statement with the hope that I could end the discussion, 
express in a way some sympathy toward his point of view, and 
suggest that this decision had to be made.'' \111\ The 
following exchange then occurred between Senator Thompson and 
Secretary Babbitt:
---------------------------------------------------------------------------
    \110\ Ex. 34.
    \111\ Babbitt testimony, p. 140.

    Chairman Thompson. So you misled him?
    Secretary Babbitt. Well, Senator, I suspect that almost all 
of us here at one time or another have terminated a discussion 
by saying somebody is waiting for me on the telephone when 
maybe in not every single case there was somebody waiting on 
the other line.
    Chairman Thompson. I think you are getting in awfully deep 
water here, but that is up to you. Did you mislead him?
    Secretary Babbitt. I don't think so.
    Chairman Thompson. Did you tell him the truth about that?
    Secretary Babbitt. Well, we've been through that before. I 
think it's fair to say that my superiors expect me to make 
decisions.
    Chairman Thompson. But did Mr. Ickes tell you to make the 
decision?
    Secretary Babbitt. He did not.

           *         *         *         *         *

    Chairman Thompson. And you told Mr. Eckstein that he told 
you to make the decision?
    Secretary Babbitt. I did not.
    Chairman Thompson. What did you tell him?
    Secretary Babbitt. Well, I've repeated that several times. 
I said I believe--what I believe I've said is that Mr. Ickes 
expects me or Mr. Ickes wants me to make a decision.\112\
---------------------------------------------------------------------------
    \112\ Id., pp. 140-142.

    Despite his specific recollection about the Ickes comment, 
Secretary Babbitt said that he had no memory of making any 
statement to Eckstein about political contributions from 
Indians. Babbitt, moreover, did ``not recall any reference to 
or discussion of'' the May 8, 1995 O'Connor letter to 
Ickes.\113\ When pressed, Babbitt testified as follows:
---------------------------------------------------------------------------
    \113\ Id., p. 133.

          Chairman Thompson. Well, is it possible that you 
        could have talked about contributions in that 
        conversation by the Indians?
          Secretary Babbitt. Senator, I simply have no 
        recollection of any conversation to that effect.
          Chairman Thompson. Are you stating under oath, 
        definitely, that you did not have such a conversation?
          Secretary Babbitt. I am stating under oath that I 
        have no recollection of any conversation of that 
        kind.114
---------------------------------------------------------------------------
    \114\ Id., pp. 133-134.

    Besides testifying regarding his meeting with Eckstein, 
Secretary Babbitt tried to explain the rationale for the 
Interior decision on the Hudson application. In his opening 
statement, Secretary Babbitt stated that the Department based 
its decision solely on the ``criteria set forth in . . . the 
Indian Gaming Regulatory Act.'' 115 He explained 
that ``the Department and this administration has adhered to a 
policy that off-reservation gaming will not be imposed on 
communities that do not want it,'' and, therefore, ``this 
virtually unanimous opposition of local governments, including 
the nearby St. Croix Tribe, required the Department to reject 
the application.'' 116
---------------------------------------------------------------------------
    \115\ Id., p. 120.
    \116\ Id., pp. 120-122.
---------------------------------------------------------------------------
    According to Secretary Babbitt, the Interior decision was 
clear cut and not influenced by any outside factors. Babbitt 
said it was made in the first instance by George Skibine, a 
career official, ``on a record that virtually compelled that 
decision and that Mr. Skibine . . . made the correct decision 
entirely uninfluenced by any external considerations . . . and 
[the decision] could not have been made in any other way.'' 
117 Later in his testimony, Secretary Babbitt 
explained that while the political appointees at Interior are 
the ones vested with final decision-making authority, one of 
the ways to keep politics out of a decision is to ``put a heavy 
burden on them [the political appointees] to defer to the civil 
servants, and that is, in fact, what happened here.'' 
118
---------------------------------------------------------------------------
    \117\ Id., p. 165.
    \118\ Id., p. 198.
---------------------------------------------------------------------------
    Secretary Babbitt also testified that he did not personally 
make the decision to deny the application, nor did he 
participate in any deliberations about the 
application.119 He declared that he did not have any 
contact with anyone at the DNC or the White House about the 
application.120 While conceding that he could not 
know for sure whether any of his subordinates were in touch 
with the White House or DNC, Secretary Babbitt maintained that 
the record spoke for itself and that there was no inappropriate 
pressure on Interior. Asked by Senator Domenici, ``Mr. 
Secretary, is it your position now before the Committee that 
politics had nothing to do with the denial of the . . . permit 
to the three poor Indian tribes?'' Secretary Babbitt replied, 
``Senator, that is my position.'' 121
---------------------------------------------------------------------------
    \119\ Id., pp. 120, 143.
    \120\ Id., pp. 119-120.
    \121\ Id., p. 229.
---------------------------------------------------------------------------
    Despite Secretary Babbitt's assurances, and the blanket 
assertions by other Interior officials that the Hudson 
application was not influenced by politics, the events leading 
to the denial of the application raise a number of troubling 
questions. In tracing the chronology of the application, it is 
clear that the opposition tribes used the DNC and the White 
House in an attempt to influence the Department's decision.

        THE DECISION PROCESS AT INTERIOR--WHAT REALLY HAPPENED?

The career officials

    In his opening statement and hearing testimony, Secretary 
Babbitt attempted to draw a clear line between the career 
officials, including Skibine, and the activities of the 
Interior political appointees. Secretary Babbitt suggested that 
Skibine's decision to reject the Hudson application was not 
only obvious and clear cut, but that Skibine and the career 
officials made it entirely on their own, unaffected by any 
other views. The facts do not support Secretary Babbitt's 
testimony.
    First, it is apparent that from early on, the two career 
Interior employees most involved--George Skibine and Tom 
Hartman--favored granting the Hudson application. For example, 
Skibine attended the February 1995 meeting with the Minnesota 
Congressional delegation, which argued that the Hudson 
application might harm the existing gambling operations of the 
wealthy opposition tribes, several of which were located in 
Minnesota. When Skibine noted the arguments made by the 
Minnesota delegation during the February meeting, Hartman 
refuted each of the arguments point-by-point in a memorandum 
written to Skibine.122
---------------------------------------------------------------------------
    \122\ Notes to files re: February 8, 1995 meeting, undated, p. 3 
(Ex. 37).
---------------------------------------------------------------------------
    Later, Hartman's June 8, 1995 memorandum established in 
detail the predicate for approving the casino. After 
considering the arguments of the opposition tribes and economic 
impact study they had commissioned, Hartman concluded that 
there was no actual detriment to the surrounding community. 
While not explicitly arguing that the opposition was the 
product of high-powered lobbyists, Hartman made it clear that 
Interior needed to ensure that they accounted for naked 
political pressure. He wrote,

          Detriment is determined from a factual analysis of 
        evidence, not from opinion, political pressure, 
        economic interest, or simple disagreement. In a 
        political setting where real, imagined, economic, and 
        moral impacts are focused in letters of opposition and 
        pressure from elected officials, it is important to 
        focus on an accurate analysis of facts. . . Allowing 
        local opposition, not grounded in factual evidence of 
        detriment, to obstruct Indian economic development sets 
        a precedent for extensive interference, compromised 
        sovereignty, and circumvention of the intent of 
        IGRA.123
---------------------------------------------------------------------------
    \123\ See Ex. 24, p. 15.


    Despite Hartman's detailed analysis, it appears that many 
of the political appointees at Interior never saw it. Duffy 
said that he did not know who Hartman was and could not recall 
seeing the memo.124 Sibbison testified that she did 
not remember reading it or even knowing that Hartman wrote a 
memo.125 Michael Anderson also stated that he had 
never seen the Hartman memo before.126
---------------------------------------------------------------------------
    \124\ Duffy deposition, pp. 21, 27.
    \125\ Sibbison deposition, p. 19.
    \126\ Anderson deposition, Sept. 19, 1997, p. 14.
---------------------------------------------------------------------------
    One person who did acknowledge receiving and reviewing 
Hartman's memo was Hartman's superior, Skibine. In his 
deposition, Skibine testified about what he did after receiving 
the memo. He stated, ``Well, I took, I read the records, the 
record initially, and I read the recommendation from the 
Minneapolis area. I read the Hartman memo. I read essentially 
all of the record. And I formulated my views and then looked at 
the supplementary documentation that was provided between 
February 8th and April 30th, and I essentially made my 
decisionwhich I put down in writing by June 29th, 1995.'' 
127 Later in his deposition, Skibine testified that the June 
29 draft letter was his recommendation, and that he produced no other 
written memoranda or analysis of the Hudson application.128
---------------------------------------------------------------------------
    \127\ Letter from Ada Deer to Rose Gurnoe, June 29, 1995 (Ex. 38); 
Skibine deposition, p. 65.
    \128\ Skibine deposition, p. 112.
---------------------------------------------------------------------------
    Documentary evidence casts doubt on Skibine's assertions. 
After Skibine was deposed, the Committee located an undated 
version of the Hartman memorandum that contained a few 
substantive additions but still favored granting the Hudson 
application.129 The memorandum lists Skibine as the 
author. The memorandum thus puts Skibine squarely beside 
Hartman in favor of granting the application. Other documents 
show that Skibine was leaning towards agreement with Hartman. 
In a June 30, 1995 E-mail, Skibine wrote about the Hartman 
draft to other Interior officials. Skibine wrote, ``Our 
tentative conclusion is that the record permits us to make a 
finding that a gaming establishment at that location will not 
be detrimental to the surrounding community. We have not 
finalized the document, and I have not determined whether it 
should be signed or simply stay in draft form.'' 130 
Skibine sent this email one day after he purported to reach his 
final conclusion in the Hudson matter.
---------------------------------------------------------------------------
    \129\ Ex. 25.
    \130\ E-mail from George Skibine to Heather Sibbison, June 30, 1995 
(Ex. 39).
---------------------------------------------------------------------------
    Finally, putting aside the inconsistencies between the 
paper record and Babbitt's recitation of how the decision 
occurred, not even Skibine agrees with Secretary Babbitt that 
the record made the denial decision clear. In his deposition, 
Skibine acknowledged that the decision on the application was 
not indisputable. He testified that there were merits on both 
sides and that it was ``a close call'' for him.131
---------------------------------------------------------------------------
    \131\ Skibine deposition, p. 156. In his deposition, Michael 
Anderson confirmed that Skibine was on the fence. He testified about 
Skibine, ``I don't really remember Mr. Skibine articulating a final 
recommendation. Because it was an interactive process, I didn't detect 
that he had a strong view either way.'' Anderson deposition, Sept. 19, 
1997, p. 35.
---------------------------------------------------------------------------

The role of the political appointees

    It is clear that the political appointees at Interior were 
confident that the final decision would be a denial well before 
June 29, 1995, when Skibine prepared a first draft of the final 
decision letter for Assistant Secretary Deer's signature. As 
demonstrated in the May 18 and June 6, 1995 memoranda, by mid-
May the political appointees were telling the White House that 
the application would be denied. Furthermore, on June 27, two 
days before Skibine issued his recommendations in the form of a 
draft letter, Sibbison prepared and sent to the White House two 
draft letters about the application.132 In her cover 
note to the letters, which were alternative responses to an 
inquiry from the Minnesota congressional delegation, Sibbison 
made clear that for all practical purposes the decision to 
reject had already been reached. She observed, ``Please note 
that I anticipate that the Department's decision to decline . . 
. may be made public later this week.'' 133
---------------------------------------------------------------------------
    \132\ Fax from Heather Sibbison to Jennifer O'Connor, June 27, 1995 
(Ex. 40).
    \133\ Id.
---------------------------------------------------------------------------
    Not only was Sibbison's note written before Skibine 
prepared the first denial draft on June 29, but Michael 
Anderson, who actually signed the final decision letter, stated 
he was unaware that Sibbison had sent such letters to the White 
House.134 Anderson also testified that Sibbison 
never consulted with him, and that he had no idea that the 
Interior position had ever been communicated to the White 
House.135
---------------------------------------------------------------------------
    \134\ Anderson deposition, Sept. 26, 1997, p. 29.
    \135\ Id., pp. 29-31.
---------------------------------------------------------------------------
    It is also clear that the Secretary's office coordinated 
and revised Skibine's June 29 draft letter before it was 
presented to Anderson for final signature. Anderson, for 
instance, stated that Skibine's draft was ``edited by Mr. Duffy 
and substantially changed.'' Anderson later clarified that 
changes were made by someone from Duffy's office, and stated 
that there were only ``two possibilities''--Duffy or 
Sibbison.136 Sibbison did not talk about her role in 
editing the letter, but stated that she was sure that Duffy 
``messed with it because he messes with everything that sat on 
his desk.'' 137 Skibine testified that he was in 
Denver with Anderson during the week of July 10, and that they 
received via fax an updated draft of his letter.138 
In response to questions about who edited or sent the revised 
draft, Skibine testified that he did not know if it came from 
Duffy or from the Secretary's office.139
---------------------------------------------------------------------------
    \136\ Anderson deposition, Sept. 19, 1997, p. 18.
    \137\ Sibbison deposition, p. 71.
    \138\ Skibine deposition, p. 139.
    \139\ Id., pp. 140-141.
---------------------------------------------------------------------------
    Documents received after the Committee completed its 
depositions of Interior officials show that Sibbison and Duffy 
were an integral part of the revision process. It appears that 
Sibbison made extensive changes to Skibine's draft, and then 
forwarded it to Duffy with the note ``John: Please review asap 
and call me back. H.'' 140 On June 30, 1995, 
Sibbison informed Skibine that she was faxing the letter to 
Duffy and was waiting for him to 
respond.141According to an E-mail describing a 
meeting on July 5, 1995 between Duffy, Sibbison, and Interior 
lawyers, Duffy directed that the decision letter be rewritten 
to include an additional rationale.142
---------------------------------------------------------------------------
    \140\ Letter from Michael Anderson to Rose Gurnoe, et al., June 29, 
1995, with handwritten revisions (Ex. 41).
    \141\ E-mail from Heather Sibbison to George Skibine et al., June 
30, 1995 (Ex. 42).
    \142\ E-mail from Troy Woodward to George Skibine, et al., July 6, 
1995 (Ex. 43).
---------------------------------------------------------------------------
    Sibbison's June 30, 1995 E-mail is interesting for two 
additional reasons. First, it mentions the involvement of Tom 
Collier, Secretary Babbitt's Chief of Staff. Sibbison wrote, 
``I agree with Collier's uneasiness about some tribes getting 
all of the goodies at the expense of other tribes--
theoretically they should all have equal opportunities.'' 
143 Second, it indicates Sibbison's belief that 
``Ada [Deer] should sign the letter.'' 144 It is 
clear that as of June 30, 1995, Sibbison was unaware that Deer 
had recused herself. Deer's recusal is discussed further below.
---------------------------------------------------------------------------
    \143\ Ex. 42.
    \144\ Id.
---------------------------------------------------------------------------
    Other documents confirm that Skibine coordinated revisions 
of the letter with Duffy and Sibbison. In an E-mail dated July 
8, 1995, Skibine wrote his staff, ``I have left on Tona's desk 
the redrafted version of the Hudson letter, per Duffy and 
Heather's instructions . . . Please make sure it is put in 
final form and brought up to Heather first thing on Monday.'' 
145
---------------------------------------------------------------------------
    \145\ Ex. 44.
---------------------------------------------------------------------------
    In light of so much ``hands on'' involvement by the 
political appointees in the Secretary's office, did Skibine in 
fact feel no pressure from the political appointees, as Babbitt 
testified? Even in his guarded deposition testimony, Skibine 
was not so confident that he made his recommendation in a 
vacuum. He explained, for instance, that he was aware of other 
views, and that they may have come into consideration. He 
testified:

          Yes. You know, I've got to say that in formulating my 
        own views, I look at the record. But I looked also at 
        all the input from others, and I know that in one 
        interview with the press they asked me, well, what 
        percentage of your decision is based on Mr. Duffy's 
        view, and I can't really answer that. You know, I'd 
        like to think that this was my own decision in terms of 
        what I would recommend to the Secretary based on the 
        record and on everything that I had heard. But I 
        certainly considered everyone's views.146
---------------------------------------------------------------------------
    \146\ Skibine deposition, p. 122.

    Later in his deposition, Skibine again talked about the 
fact that it is difficult to formulate a decision without 
---------------------------------------------------------------------------
considering the viewpoints that he heard. He testified:

          Yes, sure. This part of the decision making process, 
        I don't know exactly what influenced me or who 
        influenced me, but any oral communication that is made, 
        it's in your head. That's it. I mean, you can't say one 
        way or the other whether you consider them or not. It 
        is part of--then it really becomes a part of what you 
        know.
          As an aside can I--I sat on the jury last week or two 
        weeks ago. The counsels and witnesses both made 
        statements and there were objections and the judge said 
        disregard the statement. You know, that's a fallacy. 
        It's what is supposed to be, but how can you disregard 
        something that you hear? When we went back for 
        deliberations, all of the jurors said that. What does 
        he mean disregard? I mean, I heard that.
          You know, once something is said, it stays with you, 
        I guess.147
---------------------------------------------------------------------------
    \147\ Skibine deposition, pp. 142-143.

    Although Interior contends that the actual decision maker 
was Michael Anderson, the deputy assistant secretary who signed 
the final decision letter, the reality is that he played hardly 
any role in the Department's deliberations. He testified that 
he suggested some changes in the denial draft before signing 
the final version.148 Beyond that, the evidence 
shows that he was hardly involved. He conceded that he only 
spent four to five hours total on the application; he did not 
even bother to read the November 1994 area office report that 
recommended granting the application.149 There are 
other indications that Anderson was simply a figurehead. He did 
not attend the meetings where the decision letter was 
discussed, and the documents do not mention his name. In a 
handwritten note, dated July 10, 1995, on one of the recently 
produced Interior documents, Sibbison demonstrated her view of 
Anderson's importance in the matter. Sibbison wrote to an 
administrative assistant, ``Please let me know as soon as the 
letters are signed. . . Also, I know Mike Anderson is out, so 
we'll need to have it signed by whoever is acting for him.'' 
150
---------------------------------------------------------------------------
    \148\ Anderson deposition, Sept. 19, 1997, pp. 18-19.
    \149\ Anderson deposition, Sept. 26, 1997, pp. 66-67.
    \150\ BIA routing slip [title derived], July 8, 1995 (Ex. 45).
---------------------------------------------------------------------------
    Anderson also played no role in deciding when the denial 
letter should be issued. Anderson testified that on July 14, 
Michael Chapman, a special assistant at Interior, brought him 
the letter to sign. Anderson ``assum[ed] it [the letter] came 
from Mr. Duffy's office.'' 151 Chapman also directed 
Anderson that the decision had to be signed and go out on the 
14th.152 Asked if Chapman indicated why the urgency, 
Anderson responded, ``No, he didn't. He just said that it 
needed to be done.'' 153 Anderson testified that he 
did not ask Chapman why, and that he simply ``assumed there was 
a reason why the Secretary's office wanted to get it out.'' 
154 Anderson summarized, ``I'm not sure what the 
rationale was for the urgency.'' 155
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    \151\ Anderson deposition, Sept. 19, 1997, p. 59.
    \152\ Id., p. 58.
    \153\ Id.
    \154\ Id., p. 60.
    \155\ Id., p. 63.
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The curious recusal of Ada Deer

    Another murky aspect of the Hudson matter is the role of 
Ada Deer. As the Assistant Secretary of Indian Affairs, Deer 
was the proper official to sign the final Hudson decision. 
However, she never signed the denial, delegating the 
responsibility to Anderson, her deputy. Deer told the Committee 
that the reason she recused herself was because in December 
1994, she had contributed $250 to the political campaign of 
Gaiashkibos, one of the leaders of the applicant tribes. Her 
contention is that she divorced herself from the Hudson 
application very soon after learning that Gaiashkibos' tribe 
(Lac Courte Oreilles) was one of the applicants.156 
She indicated learning of the Hudson matter ``through my 
general knowledge of the issue, which one gets through various 
sources; Indian Country Today is a newspaper that I read 
regularly, and, of course, there are various clips that come 
from the papers across the country. . . . [and] through the 
general discussions that go on.'' 157
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    \156\ Deer deposition, pp. 19-23.
    \157\ Id., p. 22.
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    Even without parsing what might have been the true motives 
behind Deer's recusal, the timing and mechanics of her decision 
are troubling. She testified to recusing herself in June 1995, 
shortly after she became aware of the Hudson application. When 
pressed for how long it was between the time she heard about 
the application and her recusal, Deer testified, ``It would 
be--it would be awhile; no, it wouldn't be a day. It was 
probably, you know, several weeks. Again I'm not 100 percent 
certain of the exact time.'' 158
---------------------------------------------------------------------------
    \158\ Id., p. 19.
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    Deer's testimony about the timing of her recusal is simply 
not credible. First, it is clear that by February 1995, both 
political and career appointees at Interior were actively 
considering the Hudson application. It is difficult to conceive 
how Deer, who oversaw BIA, would be unaware of its existence 
until June. Second, it is clear that on April 8, 1995, Deer 
accompanied Babbitt to a ``contentious'' meeting in Wisconsin 
where the Hudson issue was ``extensively debated'' among 
Wisconsin tribes.159
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    \159\ Anderson deposition, Sept. 19, 1997, pp. 24-25.
---------------------------------------------------------------------------
    The Committee received a transcript of the April 8, 1995 
Wisconsin meeting 160 several weeks after Deer's 
deposition. There is no question that Deer attended and 
participated in the Wisconsin meeting, as the transcript 
reveals that Deer introduced Secretary Babbitt, made comments 
throughout the session, and closed the meeting with a final 
statement. Further, the transcript confirms that the Hudson 
application was debated by the participants and that everyone 
present knew the Hudson matter was then pending before the 
Department. It is evident that the meeting participants knew 
beforehand the Hudson matter would be a prime topic for 
discussion. Tribal leaders on both sides of the issue described 
their positions to Babbitt and Deer, and urged Secretary 
Babbitt to act in accordance with their wishes.161 
Gaiashkibos attended the meeting.
---------------------------------------------------------------------------
    \160\ Excepts of Wisconsin Tribal Dialogue with Secretary Babbitt, 
Apr. 8, 1995 (Ex. 46).
    \161\ Id.
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    Deer failed to mention the April 8 meeting during her 
deposition. It strains the Committee's credulity for Deer to 
say that she was primarily made ``aware'' of Hudson through 
newspaper articles and ``general discussions'' (a term she 
could not define) and that soon after she discovered 
Gaisakibos' involvement, she bowed out. At a minimum, Deer must 
have been aware of the Hudson application, and Gaisakibos' 
role, by April 8. Inasmuch as Deer is a Menominee Indian from 
Wisconsin, the Committee finds it hard not to believe she knew 
precisely what Hudson involved far earlier than April.
    Quite apart from the timing of her recusal, there is 
confusion regarding how Deer reached and communicated the 
decision. Her testimony on the subject is vague. She testified 
as follows:

          Q: Did you recuse yourself in writing?
          A: I don't think so. I think I just told Michael 
        Anderson.
          Q: And how come you didn't write anything down?
          A: Because I'm not a lawyer. I know that people do 
        this, but no, I just didn't. Generally, I try not to 
        write things.
          Q: Did you have discussions with anyone before you 
        decided to recuse yourself?
          A: Yes, I think I talked with him about it. I'm not 
        sure if I talked with anybody else about it. He's the 
        principal deputy, and it seemed, you know, that was the 
        appropriate thing to do.
          Q: Did you speak to anyone else in the Department 
        about it?
          A: I don't think so. You mean about my recusal?
          Q: About your decision to recuse yourself.
          A: I might have mentioned it to Mr. Duffy. He was the 
        Counselor to the Secretary at that time.162
---------------------------------------------------------------------------
    \162\ Deer deposition, pp. 24-25.

    Anderson, however, disputed Deer's account that she 
discussed her recusal with him. Anderson said that he was told 
about the recusal by a special assistant, Michael 
Chapman.163 Anderson stated that despite the fact 
that his office was next door to Deer's, he never spoke to her 
about the recusal or about the Hudson issue.164
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    \163\ Anderson deposition, Sept. 19, 1997, p. 29.
    \164\ Id., pp. 27-30.
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    Other important Department of Interior officials were also 
unaware of Deer's recusal. During a meeting on June 16, 1995, 
Duffy told an opposition lobbyist that Deer had ``not yet 
reached a decision on the matter.'' 165 Duffy 
testified that he did not learn of Deer's recusal until after 
the Interior decision was announced on July 14, 
1995.166 Moreover, on June 29, 1995, Skibine 
prepared a draft letter for Deer's signature. Skibine testified 
that he is not sure when he learned about Deer's recusal, but 
that it was certainly after June 29, 1995.167 
Because of questions surrounding the timing and mechanics of 
Deer's recusal, it has been suggested that Deer may not have 
wanted to sign off on a decision she knew was dictated by 
political considerations, particularly since it harmed 
impoverished tribes in her home state. The judge in the federal 
litigation wrote in a March 1997 opinion:
---------------------------------------------------------------------------
    \165\ Memorandum from Scott Dacey to Debbie Doxtator, June 16, 1995 
(Ex. 47).
    \166\ Duffy deposition, pp. 22-23.
    \167\ Skibine deposition, p. 124. The various e-mails referenced 
above, in which Interior officials discuss the Hudson application, 
demonstrate that even in early July, Interior officials assumed Deer 
would be signing the denial letter.


          ``I [have] remarked . . . that Deer's late recusal 
        was `odd' but refrained from questioning her motives. I 
        now find it necessary to consider the flip side of the 
        `odd' recusal: that Deer may have wanted to back out 
        once she understood that higher level officials in the 
        department wanted plaintiff's application rejected for 
        political purposes. It is reasonable to infer that Deer 
        backed out because she supported plaintiff's 
        application and did not want to be responsible for 
        denying it. If that were not the case, one might 
        surmise that Deer would have recused herself from the 
        process earlier.'' 168
---------------------------------------------------------------------------
    \168\ Opinion and Order, U.S. District Court for the Western 
District of Wisconsin, March 19, 1997, pp. 17-18 (Ex. 48).

    When asked whether the judge's comments were accurate, Deer 
had difficulty providing a direct answer, as the following 
---------------------------------------------------------------------------
exchange reveals:

          A: That's [the judge's] opinion. She's entitled to 
        her opinion.
          Q: Well, I'm asking you if there is any truth at all 
        to what she wrote.
          A: Well, I told you my point on this, and that's the 
        basic information.
          Q: She writes it's reasonable to infer that Deer 
        backed out because she supported plaintiff's 
        application and did not want to be responsible for 
        denying it; is that true in any way?
          A: No, my--that's her opinion.
          Q: I understand it's her opinion.
          A: And I stand on the statements that I have given 
        you.
          Q: I'm asking you for your reaction to that sentence. 
        Is there any kernel of truth at all to that particular 
        sentence?
          A: That's her opinion, and that's her decision she 
        wants to make on that, you know?
          Q: Well, let me ask you a direct question, then: did 
        you recuse yourself because you supported the tribes' 
        application and did not want to be responsible for 
        denying it?
          A: No, that's not the reason I recused myself. I have 
        stated several times now why I recused myself. So, 
        that's my statement.
          Q: Did you support plaintiff's application--I'm 
        sorry, I keep saying plaintiff.
          A: Yes.
          Q: Did you support the tribes' application and not 
        want to be responsible for denying it?
          A: I have stated why I recused myself. I have given 
        you my philosophical bent of approach, that I like to 
        help, and I want the Department to support, the tribes' 
        economic initiatives, and I can't add anything more 
        than what I've already said about why I recused myself, 
        and people can draw their own conclusions, as the Judge 
        has.169
---------------------------------------------------------------------------
    \169\ Deer deposition, pp. 88-89.
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                               CONCLUSION

    The December 31, 1997 cut-off date for the Committee's 
investigation prevented it from fully exploring all of the 
issues surrounding Interior's decision to deny the Hudson 
application. Even as this report was being completed, in 
January 1998, Interior was producing additional relevant 
documents.
    Nevertheless, what emerged from the Committee's 
investigation is the outline of a story that shows the power of 
political contributions. Wealthy lobbyists from the opposition 
tribes activated the DNC to work on their behalf. As is clear 
from the evidence, this was neither unusual nor difficult, as 
the DNC basically acted as a lobbying arm for tribes with 
gaming interests. The White House also became involved on 
behalf of the opposition tribes. Patrick O'Connor, the chief 
lobbyist for the opposition tribes, spoke directly to President 
Clinton--and received an immediate response. Financial support, 
past, present, and future, was integral to this effort. From 
all the circumstances, there appears to be a direct 
relationship between the activities of the Department of the 
Interior and contributions received by the DNC and DSCC from 
the opposition tribes.
    The Committee's investigation also established that 
Secretary Babbitt had both Harold Ickes and political 
contributions on his mind on the day of the decision. 
Eckstein's sworn testimony, both in his deposition and hearing 
appearance, was credible and persuasive.
    Eckstein's testimony should be compared to the troubling 
shifts in Secretary Babbitt's own description of the July 14 
conversation. Secretary Babbitt first told Senator McCain that 
he never made the Ickes comment. Then, Secretary Babbitt told 
Chairman Thompson that Eckstein was right, and that he may have 
made the comment, but only as a ruse to get his old friend out 
of his office. Finally, Secretary Babbitt testified under oath 
that his two statements were consistent, and that he did not 
mislead Senator McCain. If Secretary Babbitt saw it that way, 
he may be the only one who did. Also, it is curious that of all 
the names Secretary Babbitt would have made up to get rid of 
Eckstein, he selected Ickes, the White House official most 
heavily connected to the President's fund-raising operation and 
to the very transaction at issue.170
---------------------------------------------------------------------------
    \170\ Secretary Babbitt's counsel has written the Committee to 
explain why Babbitt's statements were consistent and are not 
misleading. Letter from Lloyd N. Cutler to Senators Thompson and Glenn, 
Jan. 13, 1998 (Ex. 49).
---------------------------------------------------------------------------
    Moreover, at the end of the day, Secretary Babbitt has 
still never denied telling Eckstein that Indian tribes with 
gaming interests donated half a million dollars to the DNC.
    Because of the evidence uncovered and presented by the 
Committee, on February 11, 1998 the Attorney General applied 
for the appointment of an independent counsel to examine 
Secretary Babbitt's representations to Congress and, more 
broadly, the events leading up to the Hudson decision. It is 
the Committee's hope that the court appoints such a counsel so 
that the matter can be investigated and resolved appropriately.





                         
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