Chung Links '96 Campaign Funds to Beijing
Money Came From China's Military Intelligence Chief,
Former Fund-Raiser Testifies
By William C. Rempel, Henry Weinstein and Alan C. Miller
Los Angeles Times
Sunday, April 4, 1999; Page A10
The chief of China's military intelligence secretly directed funds from Beijing to help reelect President Clinton in 1996, former Democratic fund-raiser Johnny Chung has told federal investigators.
Chung says he met three times with the intelligence official, Gen. Ji
Shengde, who ordered $300,000 deposited into the Torrance, Calif., businessman's bank account to subsidize campaign donations intended for Clinton, according to sources familiar with Chung's sealed statements to federal prosecutors.
"We like your president," Ji said, according to sources familiar with
Chung's grand jury testimony. Chung testified that he was introduced to the intelligence chief by the daughter of China's retired senior military officer.
Chung's testimony has provided investigators the first direct link between a senior Chinese government official and illicit foreign contributions that flowed into Clinton's 1996 reelection effort. It is the strongest evidence to emerge -- in two years of federal investigations -- that the highest levels of the Chinese government sought to influence the U.S. election process. It is illegal for U.S. political parties or candidates to accept contributions from foreign sources.
Key aspects of Chung's testimony, which has not been made public, have
been corroborated by financial records in the United States and Hong
Kong, according to law enforcement and other sources.
Chung, 44, a Taiwan-born American citizen who resides in Artesia,
southeast of downtown Los Angeles, was one of the most prominent
figures in the 1996 campaign finance scandal. He contributed more than
$400,000 to various Democratic campaigns and causes, visited the White
House no fewer than 50 times and brought numerous Chinese associates
to events with the president and first lady Hillary Rodham Clinton.
He pleaded guilty last year to election law violations and became the first
major figure in the scandal to cooperate with the Justice Department. That
assistance earned him a strong recommendation for leniency, resulting in a
sentence of probation and community service in December.
Ji, the Chinese intelligence chief, was named by Chung in sworn grand jury
testimony and in statements made to Justice Department investigators
during extensive interviews from December 1997 through March 1998.
Chung also turned over cartons of financial records.
Chung told investigators that he and Ji were brought together by Liu
Chaoying, the daughter of retired Gen. Liu Huaqing. At the time, she was a
Chung business partner as well as a lieutenant colonel in the People's
Liberation Army.
According to sources familiar with Chung's testimony, Chung was
introduced to Ji by Liu on Aug. 11, 1996, in Hong Kong. Chung told
investigators that Ji's rank and government affiliation were not immediately
apparent and that the general used a false name during that initial
encounter.
During this meeting Ji talked about providing money to help the Clinton
campaign, Chung told investigators. Ji said he was going to provide some
funds for Liu to give to Chung, sources familiar with Chung's grand jury
testimony said.
Chung told federal investigators that he tried to tell Liu outside the meeting
that he didn't want Ji's money. Liu, in turn, attempted to reassure Chung by
telling him that they were engaged in similar transactions with others serving
as conduits for Chinese funds to support Clinton's reelection.
Within a couple of days, Liu moved $300,000 into Chung's Hong Kong
bank account. She told him it was from Ji. By that time, Chung was aware
of Ji's position and decided he could not refuse the money, according to his
account to investigators.
After Ji's initial meeting with Chung, the two men joined Liu on another
occasion. Details from that session could not be obtained.
A third encounter took place in Beijing in late September 1996. Chung
carried a congratulatory letter to a Beijing University student from
Education Secretary Richard W. Riley and sought Liu's help in locating the
student. Liu arrived at Chung's hotel with Ji. No further details about that
meeting were available.
This week, Chinese Prime Minister Zhu Rongji is scheduled to meet
Clinton in Washington and attend a state dinner in his honor at the White
House. On Friday, White House spokesman Jim Kennedy said the
administration had no knowledge about the source of Chung's donations
during the 1996 campaign and declined to comment on "allegations
regarding intelligence matters."
Justice Department spokesman Myron Marlin refused to comment Friday
because of "an ongoing investigation."
Chung declined to comment except to say that he has "already told the
whole truth to the grand jury." His attorney, Brian Sun, who also declined
to be interviewed, added that Chung has "fulfilled his obligations to provide
complete and accurate information" to investigators.
However, interviews with knowledgeable sources and documents obtained
by the Times also disclosed that:
Soon after returning home from Hong Kong and his meeting with Ji, Chung
hired the Chinese intelligence chief's son, then a University of California at
Los Angeles student, to work at his Torrance fax business in late 1996.
Chung began providing information to federal prosecutors earlier than
previously known -- a full year before he had reached a plea bargain with
the Justice Department in March 1998. Investigators were given access to
Chung's Hong Kong bank records to help trace the origin of the $300,000
deposit. Most of the money never got to the Democratic Party on Clinton's
behalf.
Chung has told investigators that Liu said she and Ji also were relying on
others to funnel funds into Democratic campaigns.
© Copyright 1999 The Washington Post Company
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