FEC Issues Record Fines In Democrats' Scandals
Commission Faults Players in 1996 Foreign Fundraising
washingtonpost.com
By Thomas B. Edsall and Edward Walsh
Washington Post Staff Writers
Saturday, September 21, 2002; Page A05
The Federal Election Commission disclosed yesterday it has imposed a record-setting $719,000 in fines against participants in the 1996 Democratic Party fundraising scandals involving contributions from China, Korea and other foreign sources.
The FEC documents describe Democratic fundraisers who set specific prices for foreign nationals to make illegal campaign contributions in return for meetings with then-President Bill Clinton and Vice President Al Gore. A Democratic finance vice chair, for example, said organizers would have to contribute $100,000 in return for Gore's appearance at a Buddhist temple in Los Angeles.
Those penalized included the Democratic National Committee, the Clinton-Gore campaign, the Buddhist temple and nearly two dozen people and corporations acting as conduits for illegal contributions. All have agreed to pay, according to the documents.
The total in fines would have been significantly higher except that some of the corporations have folded and others were dummy operations, with no assets, set up as conduits for money from China, Venezuela, Canada and other countries. Foreign individuals and organizations are barred from contributing to federal elections. In some cases, foreigners who would have been subject to fines could not be located and served with papers. In other cases, the individuals pleaded guilty in criminal cases and are bankrupt.
The DNC was fined $115,000, the Clinton-Gore campaign $2,000, and the Buddhist Progress Society $120,000. In the conciliation signed by DNC lawyer Joseph Sandler, the party agreed to pay the fine and to "disgorge [another] $128,000" to the U.S. Treasury, representing illegal contributions that were not returned to donors.
In a separate document, the FEC said it decided to drop cases against contributors of more than $3 million in illegal DNC contributions because the respondents either are "out of the country and beyond our reach, or corporations that are defunct."
In more than 400 pages of documents, the FEC detailed a variety of illegal fundraising schemes in the 1996 Clinton reelection organization.
In some respects, the 1996 fundraising efforts by the Clinton White House and DNC were a Democratic counterpart to the Republican Watergate scandals of 1972. Just as Watergate was followed by the campaign finance laws of 1974 and 1976, disclosures of the 1996 activities played a crucial role in prompting Congress to enact the McCain-Feingold campaign finance bill this year.
The FEC describes how John Huang, a DNC finance vice chair in 1996, "set a goal of raising $7 million from the Asian-American community." This effort included the luncheon with Gore at the Buddhist temple, as well as a "coffee" at the White House and a "birthday dinner for President Clinton" at the Waldorf-Astoria Hotel in New York.
Huang, a central figure in the fundraising controversy, pleaded guilty in 1999 to conspiracy to defraud the FEC. He was sentenced to one year's probation and fined $10,000. The FEC documents detail several illegal contributions stemming from Huang's efforts, including:
• $250,000 from Cheong Am America Inc., a subsidiary of a Korean firm, Ateck Co. "On April 8, 1996, Cheong Am officials met briefly with President Clinton and gave John Huang . . . an envelope with a corporate check for $250,000 made out to the DNC," according to the FEC. The amount represented $50,000 for each of five company officials who met with Clinton.
• Huang received $40,000 from Indonesian nationals Arief and Soroya Wiriadinata that was deposited in the DNC's federal account in June 1996.
• Huang accepted $327,500 from Pauline Kanchanalak of Thailand, who attended "a White House 'coffee' with President Clinton on June 18, 1996." The FEC said Kanchanalak "paid a total of $277,500 for the coffee in installments" made out to state parties in order "to satisfy Pauline Kanchanalak's desire to avoid media attention."
The FEC documents indicate that Huang has agreed to pay a $95,000 fine.
The documents also describe how Robert S. Lee, a California developer, negotiated the price of a meeting between President Clinton and several executives of II Sung Construction, a Korean company. The documents say Lee met Larry Wallace, an Arkansas lawyer with DNC ties, to seek the meeting. Wallace told Lee "that he could arrange the meeting at a DNC fundraiser, but a donation would have to be made to the DNC." Wallace and Lee "agreed on a figure of $150,000."
The FEC fined Lee $250, noting that the penalty would normally be 200 percent of the violation, or $300,000, but Lee is $850,000 in debt and has already been sentenced to three years' probation on a misdemeanor.
The FEC documents are rich in detail on the behind-the-scenes world of political fundraising. They describe how Chien Chuen "Johnny" Chung brought 20 guests to a $1,000-per-person Clinton-Gore fundraising dinner in Los Angeles in 1995. Chung tried to pay with a $25,000 check, but it was refused by Karen Sternfeld, the campaign's deputy finance director for Southern California. She told Chung she needed 20 checks of $1,000 each from his guests.
The next day, Sternfeld asked Irene Wu, an employee of Chung's company, about the 20 checks, but was told the guests had scattered and the checks could not be obtained. According to the documents, Sternfeld said the checks did not have to be from the people who attended the dinner, and directed Wu to meet her at a restaurant later that day to deliver the money.
The documents said Wu and others then collected 20 checks of $1,000 each from "conduits," who were promised they would be reimbursed, and Chung later withdrew $20,000 in cash from his bank accounts to repay the conduit contributors.
Staff writer Susan Schmidt and researchers Alice Crites and Lucy Shackelford contributed to this report.
© 2002 The Washington Post Company
Democrats Are Fined $243,000 for Fund-Raising Violations
September 21, 2002
By RICHARD A. OPPEL Jr.The New York Times
WASHINGTON, Sept. 20 — The Democratic National Committee has agreed to pay civil fines and turn over to the Treasury a total of $243,000 to settle accusations that it took more than $1 million in illegal foreign contributions in 1995 and 1996, according to Federal Election Commission records released today.
The documents also state that the election commission's general counsel found in 1999 that there was "reason to believe" that the People's Republic of China "knowingly and willfully" violated federal election law. But the heavily redacted documents also state that the commission voted unanimously to "take no action at this time" on the general counsel's recommendation.
The documents detail efforts by the Democratic Party and the Clinton-Gore campaign to build their war chest with help from wealthy Asian donors before the 1996 election. In all, the election commission disclosed $719,500 in fines today.
The largest fine, $120,000, was paid by the International Buddhist Progress Society, which operates the Hsi Lai Temple in California, the site of an April 1996 luncheon attended by Vice President Al Gore. The national committee paid a $115,000 fine and agreed to turn over to the Treasury $128,000 it had received in illegal contributions. The Clinton/Gore '96 Primary Committee paid a $2,000 fine, the records also show.
John Huang and Yah Lin Trie, two Democratic fund-raisers who pleaded guilty to violating federal laws, agreed to pay fines respectively of $95,000 and $7,000.
The commission also found "probable cause" to believe that Hogan & Hartson, a Washington law firm, violated election laws in the handling of $50,000 in donations that a client of the firm made to the national committee in summer 1996. Two officials at the firm who were involved in the handling of the donations have agreed to pay a total of $67,500.
Representatives of the national committee and for former President Bill Clinton declined to comment. Officials at Hogan & Hartson did not reply to a phone message.
After the fund-raising scandal broke in late 1996, the Democratic Party returned $3 million in questionable or improper contributions, much of it from money donated or solicited by Mr. Huang or Mr. Trie.
Kent Cooper, a former election commission official who is now at PoliticalMoneyLine.com, which tracks money in politics, said some fines disclosed today appear surprisingly low. The election commission, he said, limited the fines assessed to some people based on their claims that they could not afford to pay more. "Some people will look at this and say the F.E.C. should have fined them more," Mr. Cooper said.
He noted, for example, that the election commission waived fines against a company called Global Resource Management based on the assertions by the company's president about its "present financial circumstances," the documents show.
The election commission found that the company, which was formed in Ohio in 1996 to resolve a "construction-related contractual matter" in Saudi Arabia, decided to make a $100,000 contribution to a national committee fund-raiser in New York on Aug. 18, 1996. The event was also billed as a 50th birthday celebration for Mr. Clinton. The company's officers made the contribution in order to meet with Ray Mabus, the former Mississippi governor and ambassador to Saudi Arabia, who helped plan the event, the election commission found.
But the money used to make the contribution was provided by Sheik Mohammed Oboud Al-Amoudi, a Saudi citizen, who wired $150,000 to the company. The company used this money for the donation "even though its officers had been informed that foreign national contributions are illegal," the election commission found.
Mr. Cooper said the documents provided further evidence of the tactics Democratic operatives used to raise money before the 1996 elections.
"Here, we're dealing with wire transfers and shuffling money to accounts," he said. "What is going on here is warning bells are going off all over the place."
Copyright 2002 The New York Times Company
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