1996 United States campaign finance controversy
Don't let the Corrupt Crooked Clintons and their Cronies back in the WH!
President Clinton with convicted fund-raiser Charlie Trie
The 1996 United States campaign finance controversy was an alleged effort by the People's Republic of China (PRC) to influence domestic American politics prior to and during the Clinton administration and also involved the fund-raising practices of the administration itself.
While questions regarding the U.S. Democratic Party's fund-raising activities first arose over a Los Angeles Times article published on September 21, 1996,[1] the PRC's alleged role in the affair first gained public attention when Bob Woodward and Brian Duffy of The Washington Post published a story stating that a United States Department of Justice investigation into the fund-raising activities had uncovered evidence that agents of the PRC sought to direct contributions from foreign sources to the Democratic National Committee (DNC) before the 1996 presidential campaign. The journalists wrote that intelligence information had shown the PRC Embassy in Washington, D.C. was used for coordinating contributions to the DNC[2] in violation of United States law forbidding non-American citizens or non-permanent residents from giving monetary donations to United States politicians and political parties. A Republican investigator of the controversy stated the Chinese plan targeted both presidential and congressional United States elections, while Democratic Senators said the evidence showed the PRC targeted only congressional elections. The Chinese government denied all accusations.
Twenty-two people were eventually convicted for fraud or for funneling Asian funds into the United States elections. A number of the convictions came against longtime Clinton-Gore friends and political appointees.
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The most significant one-time illegal foreign contribution was a $460,000 donation by Yah Lin "Charlie" Trie to President Bill Clinton's legal defense fund. The donation was made by delivery of an envelope containing $460,000 in $1,000 contributions, some on sequentially numbered money orders made out in different names but with the same handwriting.[9]
Born in Taiwan, Trie emigrated to the U.S. in 1974. He eventually became an American citizen and co-owner of a restaurant in Little Rock, Arkansas where he befriended then Governor Clinton. In addition to the donation to Clinton's defense fund, Trie and his immediate family donated $220,000 to the DNC which was later returned.[10]
Immediately after the donation to Clinton's defense fund, Trie sent a letter to President Clinton that expressed concern about America's intervention in tensions arising from China's military exercises being conducted near Taiwan. Trie told the President in his letter that war with China was a possibility should U.S. intervention continue:
“ ...[O]nce the hard parties of the Chinese military incline to grasp U.S. involvement as foreign intervention, is [sic] U.S. ready to face such [a] challenge[?]... [I]t is highly possible for China to launch [sic] real war based on its past behavior in [sic] Sino-Vietnam war and Zhen Bao Tao war with Russia — Charlie Trie in a letter to President Clinton, March 21, 1996[11]
”
After questions arose regarding Charlie Trie's fund-raising activities during Congressional investigations in late 1996, he left the country for the PRC.[10] Trie returned to the U.S. in 1998 and was convicted and sentenced to three years probation and four months home detention for violating federal campaign finance laws by making political contributions in someone else's name and for causing a false statement to be made to the Federal Election Commission (FEC).[12]
In February 1996, Trie brought Wang Jun, chairman of CITIC, the chief investment arm of the PRC, and Poly Technologies (a "front company for the PRC military"[13][14] that was later charged with smuggling 2,000 AK-47s into the U.S.), to a White House "coffee"N-[2] with the president.[15][16] President Clinton later admitted Wang's attendance at the White House was "clearly inappropriate."[17][18
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Four days prior to Wang Jun's White House visit, the Clinton Administration granted Poly Technologies import permits that would allow the shipment of over 100,000 semi-automatic weapons and millions of rounds of ammunition to a Detroit company (China Jiang An) that had ties to the Chinese military. Robert Sanders, a U.S. lawyer representing the company, could not explain why the special permits were granted. "All of a sudden, there was a breakthrough," Sanders said. "I can't account for it."[20][21]
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In 2007, the Wall Street Journal reported a similar controversy with campaign financing for Hillary Clinton allegedly coming from a businessman, Mr. Hsu possibly being funneled through Chinese Californians to skirt the individual campaign contribution limits.
[edit] Ron Brown and the Department of Commerce
Commerce Secretary Ron Brown
A close business associate of Ron Brown testified in court in 1998 that Brown had told her that Commerce Department trade missions were used for partisan political fund-raising at the behest of President Clinton and the First Lady. Specifically, she said trade mission plane seats were sold to business people who gave at least $50,000 each to the DNC.[23]
A Commerce Department official reportedly threw away official government documents concerning the department's trade missions to China after a judge ordered they be turned over to Judicial WatchN-,[3] a conservative government watchdog group. According to the court: "No adequate explanation has been given as to why these documents were destroyed." Furthermore, the judge said: "[the Department's] misconduct in this case is so egregious and so extensive that... the agency [should be held] fully accountable for the serious violations that it appears to have deliberately committed".[24]
Ron Brown, who had been under investigation for fraud and bribery allegations, died in a plane crash in Croatia in April 1996.[25]
[edit] Johnny Chung, Liu Chaoying and General Ji
Johnny Chung (far left) with the Clintons
Johnny Chung also attended some of Ron Brown's Commerce Department trade missions to Asia. Born in Taiwan, Chung went from being the owner of a "blastfaxing" business (an automated system that quickly sends out faxes to thousands of businesses) in California to being in the middle of the Washington, D.C. elite within a couple weeks of his first donations to the Democratic Party. Called a "hustler" by a U.S. National Security Council (NSC) aide,[26] Chung made forty-nine separate visits to the White House between February 1994 and February 1996.[27] During one of the Commerce Department trade missions to China, Chung befriended former Chinese Lt. Col. Liu Chaoying, then an executive at China Aerospace Holdings (China's main satellite launching company) and daughter of former General Liu Huaqing.
Between 1994 and 1996, Chung donated $366,000 to the DNC. Eventually, all of the money was returned. Chung told federal investigators that $35,000 of the money he donated came from Liu Chaoying and, in turn, China's military intelligence.[26]
Specifically, Chung testified under oath to the U.S. House Committee investigating the issue in May 1999 that he was introduced to Chinese Gen. Ji Shengde,N-[4] then the head of Chinese military intelligence, by Liu Chaoying. Chung said that Ji told him: "We like your president very much. We would like to see him reelect [sic]. I will give you 300,000 U.S. dollars. You can give it to the president and the Democrat Party."[28] Both Liu and the Chinese government denied the claims.[29]
Chung was eventually convicted of bank fraud, tax evasion, and two misdemeanor counts of conspiring to violate election law.[30] Chung asserts that, after his guilty plea, the Chinese government attempted to assassinate him with "hit squads" three times, but the efforts were foiled by the FBI.[31]
John Huang, James Riady and Lippo Group
John Huang (center) with Bill Clinton, James Riady (right), and Clinton aide Mark Middleton (with back to camera) in the Oval Office
John Huang (pronounced "Hwä[ng]"), was another major figure convicted. Born in 1945 in Nanping, Fujian, Huang and his father fled to Taiwan at the end of the Chinese Civil War before he eventually emigrated to the United States in 1969. A former employee of the Indonesian company Lippo Group's Lippo Bank and its owners Mochtar Riady and his son James (whom Huang first met along with Bill Clinton at a financial seminar in Little Rock, Arkansas in 1980), Huang became a key fund-raiser within the DNC in 1995. While there, he raised $3.4 million for the party. Nearly half had to be returned when questions arose regarding their source during later investigations by Congress.[32]
According to U.S. Secret Service logs, Huang visited the White House 78 times while working as a DNC fund-raiser.[33] James Riady visited the White House 20 times (including 6 personal visits to President Clinton).[34]
Immediately prior to joining the DNC, Huang worked in President Clinton's Commerce Department as deputy assistant secretary for international economic affairs. His position made him responsible for Asia-U.S. trade matters. He was appointed to the position by President Clinton in December 1993. His position at the Commerce Department gave him access to classified intelligence on China. While at the department, it was later learned, Huang met 9 times with Chinese embassy officials in Washington D.C. The reasons for the meetings were never learned.[16]
Some DNC records suggested Huang started fund-raising before he left his government job which would have been a violation of the U.S. law known as the Hatch Act, though no charges regarding this issue were ever brought.[32] Huang eventually pleaded guilty to conspiring to reimburse Lippo Group employees' campaign contributions with corporate or foreign funds.[35] James Riady was later convicted of campaign finance violations relating to the same scheme as well.
“ Your honor, mistakes have been made, which I regret. I did not have to come back here [to the United States] but I wanted to own up to what I did and put this all behind me. I am grateful for the opportunity to be here today — James Riady, March 19, 2001.[36]
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According to the Justice Department, some of those "mistakes" included reimbursing contributions made by Huang and various employees of Lippo Bank with funds wired from a foreign Lippo Group entity into an account maintained by John Huang at a bank in Hong Kong. Shortly after Riady pledged $1 million in support of then-Governor Clinton's campaign for the presidency, contributions made by Huang were reimbursed with funds wired from a foreign Lippo Group entity into an account Riady maintained at Lippo Bank and then distributed to Huang in cash. Also, contributions made by Lippo Group entities operating in the United States were reimbursed with wire transfers from foreign Lippo Group entities.[30]
An unclassified U.S. Senate Committee on Governmental Affairs report issued in 1998 stated that both James Riady and his father Mochtar had "had a long-term relationship with a Chinese intelligence agency." According to journalist Bob Woodward, details of the relationship came from highly classified intelligence information supplied to the committee by both the CIA and Federal Bureau of Investigation (FBI).[37]
The most well-known of John Huang's fund-raisers involved Vice President Al Gore, Maria Hsia, and the Hsi Lai Buddhist Temple in California.
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[edit] Notable convictions
Including the convictions against John Huang, Johnny Chung, Charlie Trie, Maria Hsia, and James Riady (who was fined $8.6 million – the largest fine ever levied against an individual in a campaign finance related matter), the Justice Department task force secured criminal convictions against 22 people by 2001.[52]
[edit] Calls for an independent counsel
FBI Director Louis Freeh
President Clinton's FBI Director Louis Freeh wrote in a 22-page memorandum to then Attorney General Janet Reno in November 1997 that "It is difficult to imagine a more compelling situation for appointing an independent counsel."[53]
In July 1998, the Justice Department's campaign finance task force head, Charles La Bella, sent a report to Janet Reno also recommending she seek an independent counsel to investigate alleged fund-raising abuses by Democratic party officials.[54] The media reported that La Bella believed there was clearly an appearance of a conflict of interest by Reno.[55] In his report to Reno he wrote: " [A] pattern [of events] suggests a level of knowledge within the White House—including the President's and First Lady's offices—concerning the injection of foreign funds into the reelection effort."[56] Additionally, La Bella stated: "If these allegations involved anyone other than the president, vice president, senior White House or DNC and Clinton-Gore '96 officials, an appropriate investigation would have commenced months ago without hesitation."[57]
Robert Conrad, Jr., who later became head of the task force, called on Reno in Spring 2000 to appoint an independent counsel to look into the fund-raising practices of Vice President Gore.[58]
Janet Reno declined all requests:
“ I try to do one thing: what's right. I am trying to follow the independent counsel statute as it has been framed by Congress. If you had a lower threshold, then any time somebody said 'boo' about a covered person, you'd trigger the independent counsel statute — Janet Reno, December 4, 1997.[59]
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A CNN/TIME poll taken in May 1998 found 58 percent of Americans felt an independent counsel should have been appointed to investigate the controversy. Thirty-three percent were opposed. The same poll found that 47 percent of Americans believed a quid pro quo existed between the Clinton administration and the PRC government.[60]
[edit] Criticism of investigation
In addition to partisian complaints from Republicans, columnists Charles Krauthammer, William Safire, and Morton Kondracke, as well as a number of FBI agents, suggested the investigations into the fund-raising controversies (which some dubbed Chinagate) were willfully impeded.[61][62][63]
FBI agent Ivian Smith wrote a letter to FBI Director Freeh that expressed "a lack of confidence" in the Justice Department's attorneys regarding the fund-raising investigation. He wrote: "I am convinced the team at... [the Department of Justice] leading this investigation is, at best, simply not up to the task... The impression left is the emphasis on how not to prosecute matters, not how to aggressively conduct investigations leading to prosecutions." Smith and three other FBI agents later testified before Congress in late 1999 that Justice Department prosecutors impeded their inquiry. FBI agent Daniel Wehr told Congress that the first head U.S. attorney in the investigation, Laura Ingersoll, told the agents they should "not pursue any matter related to solicitation of funds for access to the president. The reason given was, 'That's the way the American political process works.' I was scandalized by that," Wehr said. The four FBI agents also said that Ingersoll prevented them from executing search warrants to stop destruction of evidence and micromanaged the case beyond all reason.[64]
FBI agents were also denied the opportunity to ask President Clinton and Vice President Gore questions during Justice Department interviews in 1997 and 1998 and were only allowed to take notes. During the interviews, neither Clinton nor Gore were asked any questions about fund-raisers John Huang, James Riady, nor the Hsi Lai Buddhist Temple fund-raising event led by Maria Hsia and attended by John Huang and Ted Sioeng.[65]
Congressional investigations
[edit] Senate Committee on Governmental Affairs
Senator Fred Thompson (Republican-Tennessee)
On July 8, 1997, the U.S. Senate Committee on Governmental Affairs began its public hearings into the campaign finance scandal, chaired by Senator Fred Thompson (R-TN).
Opening statements of public hearings from Senate Committee Chairman Senator Fred Thompson:
“ I would like to turn our attention to one of the most troublesome areas of this investigation. I speak of allegations concerning a plan... by the Chinese government and designed to pour illegal money into American political campaigns. The plan had a goal: to buy access and influence in furtherance of Chinese government interests... The committee believes that... Chinese government officials crafted a plan to increase China's influence over the U.S. political process. The committee has identified specific steps taken in furtherance of the plan. Implementation of the plan has been handled by Chinese government officials and individuals enlisted to assist in the effort... Our investigation suggests that the plan continues today. Although most discussions of the plan focuses on Congress, our investigation suggests it affected the 1996 presidential race and state elections as well. The government of China is believed to have allocated substantial sums of money to achieve its objectives. Another aspect of the plan is remarkable because it shows that the PRC is interested in developing long-term relationships with... up and coming government... officials at state and local levels. The intent is to establish relations that can be cultivated as the officials rise through the ranks to higher office.[66]
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Senator John Glenn (Democrat-Ohio)
Opening comments from the Committee's Minority Leader, Senator John Glenn (a Democrat from Ohio):
“ According to the press the Chinese government intended to use a relatively modest amount of money to gain influence in the Washington lobbying game, and it intended to do this by focusing on the legislative branch of government. Now, I mention these reports here because I am greatly concerned about how the reports are sometimes discussed by individuals in this body and in the press. I've heard language like infiltration, foreign spies, foreigners, as we're jeopardizing our national security. Well, on this issue the committee should go just as far as the facts take us, recognizing that it's the FBI that's in a much better position to do an espionage investigation. Now, let's be careful, however, not to jump to conclusions that treason has been committed based on a partial story with ambiguous information. But wherever the trail leads let's look at it.[66]
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Thomspon suspended the public hearings on October 31, 1997. The Committee's final report was released to the public on March 5, 1998.
[edit] House Government Reform and Oversight Committee
Representative Dan Burton (Republican-Indiana)
A United States House of Representatives investigation, headed by Republican Dan Burton, also focused on allegations of campaign finance abuse, including the contributions channeled through Chung, Huang, Trie, et al.
The investigation was lengthy, spanning both the 105th and 106th Congresses, and according to a Democratic report had cost over $7.4 million as of August 31, 1998, making it the most expensive Congressional investigation ever (the Senate Watergate investigation cost $7 million in 1998 dollars).[67]
The investigation itself was controversial, attracting criticism from partisans and moderates. A New York Times editorial in March 1997 characterized the committee's investigation as a "travesty" and a "parody".[68] A Washington Post editorial in April 1997 called the House investigation "its own cartoon, a joke, and a deserved embarrassment".[69] Norman Ornstein, a Congressional expert at the American Enterprise Institute said in May 1998, "Barring some dramatic change, I think the Burton investigation is going to be remembered as a case study in how not to do a congressional investigation and as a prime example of investigation as farce."[70] In a May 5, 1998 letter to other Republicans on the committee, Burton admitted that "mistakes and omissions were made" in tape transcripts released to the public of phone calls made by Webster Hubbell. A committee investigator who was an advocate of releasing the tapes resigned at Burton's request.[71]
[edit] Lack of cooperation
Congressional investigators said that the investigations were hamstrung due to lack of co-operation of witnesses. Ninety-four people either refused to be questioned, pled the Fifth Amendment, or left the country altogether.[40][72]
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