OT! / AWSJ: Riady to Pay an $8.6 Million Fine In Case on Campaign Financing
January 12, 2001
Politics & Policy - Riady to Pay an $8.6 Million Fine In Case on Campaign Financing
By DAVID S. CLOUD
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- Indonesian businessman James Riady agreed to pay a record $8.6 million fine and plead guilty to arranging more than $500,000 in illegal contributions benefiting President Clinton and other U.S. politicians.
The plea deal represents the biggest fine ever imposed for a campaign-finance violation, and it marks one of the final chapters in the long-running U.S. probe of foreign donations that arose from Mr. Clinton's 1996 re-election campaign.
Mr. Riady, a billionaire executive at Lippo Group who became friends with Mr. Clinton when they both lived in Arkansas, acknowledged that he reimbursed U.S. employees who made political contributions, almost entirely to the Democratic Party. The payments started in the late 1980s, and were made through Lippo executive John Huang, who became a top Democratic Party fund-raiser in 1996.
In a series of interviews with prosecutors since last August, Mr. Riady didn't implicate Mr. Clinton or other top White House officials in the improprieties, lawyers involved say.
Although the questioning of Mr. Riady was completed in late November, the negotiations between Mr. Riady's lawyers and prosecutor Dan O'Brien, lasted until this week -- just before Attorney General Janet Reno leaves office.
It requires him to plead guilty to obstructing the activities of the Federal Election Commission, a felony charge, in connection with contributions made between 1988 and 1994. Mr. Riady is now living in Indonesia, which has no extradition treaty with the U.S. He is expected to report to U.S. authorities for arraignment in Los Angeles on Tuesday. Prosecutors found no evidence he made illegal contributions in the 1996 election cycle, although that suspicion sparked the investigation.
Mr. Riady will face probation but no jail time, even though prosecutors could have asked for up to six months under sentencing guidelines, lawyers said. These lawyers said they doubted Mr. Riady would have agreed to the plea deal if it had included prison time.
Prosecutors said the deal was the best they could get given weak U.S. campaign finance laws. "There will be critics of the plea agreement, but I'm fully convinced that this is a major win," said Robert Conrad, head of the department's campaign fund-raising task force.
As part of the agreement, Mr. Riady will pay the $8.6 million fine imposed on LippoBank of California, the entity through which the illegal donations were funneled. He will also owe a $10,000 fine for the felony charge. And except to fulfill his plea agreement, which requires 400 hours of community service, he is barred from entering the U.S. for at least two years.
In the plea agreement, Mr. Riady acknowledged that during a 1992 limousine ride with Mr. Clinton, he promised support for his presidential bid. According to court papers, Mr. Riady "initially decided to contribute $1 million to the Clinton campaign. Defendant Riady also encouraged Huang to attend political events and make contributions in support of Clinton's candidacy."
The plea deal also requires Mr. Riady to testify before Congress and to answer questions in connection with other investigations.
In a statement, Mr. Riady's lawyers, Abbe Lowell and Earl Silbert, said, "After being accused in the press of being a Chinese spy, someone who gives hush money and a fugitive from justice, Mr. Riady is very pleased that the Department of Justice has been able to learn that none of these charges are true."
Write to David S. Cloud at david.cloud@wsj.com1
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