1996 United States campaign finance controversy
Encyclopedia
The 1996 United States campaign finance controversy, also known as Chinagate, was an alleged effort by the People's Republic of China
to influence domestic American politics
during the 1996 federal elections
.
The issue first received public attention in early 1997, with news that a Justice Department
investigation had uncovered evidence that agents of China sought to direct contributions to the Democratic National Committee
(DNC) in violation of U.S. laws
regarding foreign political contributions. The Chinese government
denied all accusations. Twenty-two people were eventually convicted of fraud
or for funneling Asian funds into the United States elections, and others fled U.S. jurisdiction. Several of these were associates of Bill Clinton
or Al Gore
.
, including summits and meetings with high-level White House
officials. In these meetings, Chinese officials often negotiated with the United States government by using the appeal of their huge commercial market.
Around 1995, according to the Senate report, Chinese officials developed a new approach to promote their interests with the United States government and to improve China's image with the American people. The proposals, dubbed the "China Plan", began when President Clinton succumbed to Congressional
pressure to grant Taiwan
President Lee Teng-Hui
a visa to attend a class reunion
at Cornell University
. United States Secretary of State
Warren Christopher
had previously assured his Chinese counterpart Qian Qichen
that granting a visa would be "inconsistent with [the United States'] unofficial relationship [with Taiwan]" and the Clinton Administration's acquiescence to the Congressional resolutions led China to conclude that the influence of Congress over foreign policy was more significant than it had previously determined. When formulating the so-called plan, Chinese officials acknowledged that, compared to other countries (such as Taiwan
or Israel
), it had little knowledge of, or influence over, policy decisions made in Congress.
The plan, according the Senate report, instructed Chinese officials in the U.S. to improve their knowledge about members of Congress and increase contacts with its members, the public, and the media. The plan also suggested ways to lobby United States officials.
Over the years, China has repeatedly denied these lobbying efforts involved financial contributions of any kind:
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 Clinton, then governor of Arkansas. In addition to the attempted donation to Clinton's defense fund, Trie and his immediate family donated $220,000 to the DNC which was also later returned.
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:
After Congressional investigations turned to Trie in late 1996, he left the country for China. 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).
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, Chung made forty-nine separate visits to the White House between February 1994 and February 1996. One of his purposes in making these trips was to obtain photographs of himself with the Clintons, which he believed would help him to get business in China by giving people the impression that he had connections and influence in Washington—he used a brochure that included at least ten photographs of himself with Hillary Clinton along with a personal note from her. During one of the Commerce Department trade missions to China, Chung befriended former Chinese Lt. Col. Liu Chaoying
, then an executive at China Aerospace International Holdings, Ltd. Hong Kong
(中國航天國際控股有限公司), which is the Hong Kong-based subsidiary of the government-controlled CASC
(中國航天科技集團公司), China's premier satellite launching company. She is the 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.
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
, 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." Both Liu and the Chinese government denied the claims.
Chung was eventually convicted of bank fraud, tax evasion, and two misdemeanor counts of conspiring to violate election law. 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.
, 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 Indonesia
n 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.
According to U.S. Secret Service
logs, Huang visited the White House 78 times while working as a DNC fund-raiser. James Riady visited the White House 20 times (including 6 personal visits to President Clinton).
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.
Huang eventually pleaded guilty to conspiring to reimburse Lippo Group employees' campaign contributions with corporate or foreign funds. James Riady was later convicted of campaign finance violations relating to the same scheme as well. Shortly after Riady pledged $1 million in support of then-Governor Clinton's campaign for the presidency, contributions made by Huang had been 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 transfer
s from foreign Lippo Group entities.
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).
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.
immigration
consultant, and business associate of John Huang and James Riady since 1988, facilitated $100,000 in illegal campaign contributions through her efforts at Hsi Lai Temple
, a Chinese Buddhist temple associated with Taiwan
in Hacienda Heights, California
. This money went to the DNC, to the Clinton - Gore campaign, and to Patrick Kennedy
. After a trial, she was convicted in March 2000.
The Democratic National Committee eventually returned the money donated by the Temple's monks and nuns. Twelve nuns and employees of the temple, including the temple's abbess, refused to answer questions by pleading the Fifth Amendment
when they were subpoena
ed to testify before Congress. Two other Buddhist nuns admitted destroying lists of donors and other documents related to the controversy because they felt the information would embarrass the Temple. A Temple-commissioned videotape of the fund raiser also went missing and the nuns' attorney claimed it may have been shipped off to Taiwan.
The Temple event became particularly controversial, because it was attended by the Vice President Gore. In an interview on the January 24, 1997 edition of the Today show, Gore said:
In response, the U.S. Senate Governmental Affairs Committee that investigated the controversy said:
John Huang's memo to Vice President Gore's assistant Kimberly Tilley specifically mentioned the Temple meeting was a fund-raising event. Mr. Gore later acknowledged he had known the visit was "finance-related."
In the U.S., religious organizations enjoy a tax exempt status. Political activity is prohibited for such tax exempt entities.
The Senate Governmental Affairs Committee also said they learned that Hsia had served as an "agent" of the PRC government. Hsia denied the claim.
, and $50,000 to a Republican think tank. All the money was eventually returned.
Sieong sat with Bill Clinton or Al Gore at three fund-raising events.
Sioeng also joined Fong at a meeting with then Republican House Speaker
Newt Gingrich
in mid-1995. Gingrich called the meeting a "photo-op". Gingrich was the guest of honor at a Sioeng-organized luncheon the day after a Sioeng family company gave
the $50,000 think-tank donation, solicited by a Gingrich adviser.
Attorney General
Janet Reno
and the directors of the FBI, CIA and National Security Agency
(NSA) told members of the Senate committee they had credible intelligence information indicating Sioeng acted on behalf of China. A spokesman for Sioeng denied the allegations.
In late 1996, the Justice Department opened a task force to investigate allegations of illegal donations to the Clinton/Gore re-election campaign and to Clinton's legal defense fund. Clinton announced in February 1997 that he thought there should be a "vigorous" and "thorough" investigation into reports that China tried to direct financial contributions from overseas sources to the DNC. "[O]bviously it would be a very serious matter for the United States if any country were to attempt to funnel funds to one of our parties for any reason whatever", Clinton said. Both FBI Director Louis Freeh
and Justice Department task force head Charles La Bella
unsuccessfully argued for appointment of an independent counsel
."
Ultimately, Justice Department prosecutors secured the conviction of several fund-raisers for various offenses. John Huang served 500 hours of community service and paid a $10,000 fine. Johnny Chung served 3000 hours of community service. Charlie Trie served four months of in-home detention. Maria Hsia served 90 days of home detention and paid a $5,300 fine. Indonesian billionare James Riady was fined $8.6 million. Ernest Green served three months home detention. Michael Brown served 150 hours of community service and paid a $5000 fine. In all, the Justice Department task force secured criminal convictions against 22 people by 2001.
A House
investigation, headed by Republican Dan Burton
, focused on allegations of campaign finance abuse, including the contributions channeled through Chung, Huang, and Trie. 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).
The Burton investigation itself was controversial. A New York Times editorial in March 1997 characterized the committee's investigation as a "travesty" and a "parody". A Washington Post editorial in March 1997 called the House investigation "its own cartoon, a joke, and a deserved embarrassment". 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."
The U.S. Senate Committee on Governmental Affairs also held public hearings into the campaign finance issues from July to October 1997. During the hearings, there was considerable acrimony between the chair Fred Thompson and the ranking minority member John Glenn
, reaching a level of public disagreement seldom seen between two leaders of a Senate Committee. The Thompson committee adopted a Republican written final report on a straight party-line 8-7 vote in March 1998. Thompson described the findings thus: "There's not any one real big thing. It's a lot of things strung together that paint a real ugly picture."
The Democrats on the Senate committee published a minority report dissenting with most of the conclusions of the final report, stating the evidence "does not support the conclusion that the China plan was aimed at, or affected, the 1996 presidential election." In particular, it stated,
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 against self incrimination, or left the country altogether.
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
to influence domestic American politics
Politics of the United States
The United States is a federal constitutional republic, in which the President of the United States , Congress, and judiciary share powers reserved to the national government, and the federal government shares sovereignty with the state governments.The executive branch is headed by the President...
during the 1996 federal elections
United States presidential election, 1996
The United States presidential election of 1996 was a contest between the Democratic national ticket of President Bill Clinton of Arkansas and Vice President Al Gore of Tennessee and the Republican national ticket of former Senator Bob Dole of Kansas for President and former Housing Secretary Jack...
.
The issue first received public attention in early 1997, with news that a Justice Department
United States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
investigation had uncovered evidence that agents of China sought to direct contributions to the Democratic National Committee
Democratic National Committee
The Democratic National Committee is the principal organization governing the United States Democratic Party on a day to day basis. While it is responsible for overseeing the process of writing a platform every four years, the DNC's central focus is on campaign and political activity in support...
(DNC) in violation of U.S. laws
Campaign finance in the United States
Campaign finance in the United States is the financing of electoral campaigns at the federal, state, and local levels.At the federal level, the primary source of campaign funds is individuals; political action committees are a distant second. Contributions from both are limited, and direct...
regarding foreign political contributions. The Chinese government
Government of the People's Republic of China
All power within the government of the People's Republic of China is divided among three bodies: the People's Republic of China, State Council, and the People's Liberation Army . This article is concerned with the formal structure of the state, its departments and their responsibilities...
denied all accusations. Twenty-two people were eventually convicted of fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
or for funneling Asian funds into the United States elections, and others fled U.S. jurisdiction. Several of these were associates of Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
or Al Gore
Al Gore
Albert Arnold "Al" Gore, Jr. served as the 45th Vice President of the United States , under President Bill Clinton. He was the Democratic Party's nominee for President in the 2000 U.S. presidential election....
.
Background
According to the United States Senate report Investigation of Illegal or Improper Activities in Connection with 1996 Federal Election Campaigns, prior to 1995 China's approach to promoting its interests in the United States was focused almost exclusively on diplomacyDiplomacy
Diplomacy is the art and practice of conducting negotiations between representatives of groups or states...
, including summits and meetings with high-level White House
White House
The White House is the official residence and principal workplace of the president of the United States. Located at 1600 Pennsylvania Avenue NW in Washington, D.C., the house was designed by Irish-born James Hoban, and built between 1792 and 1800 of white-painted Aquia sandstone in the Neoclassical...
officials. In these meetings, Chinese officials often negotiated with the United States government by using the appeal of their huge commercial market.
Around 1995, according to the Senate report, Chinese officials developed a new approach to promote their interests with the United States government and to improve China's image with the American people. The proposals, dubbed the "China Plan", began when President Clinton succumbed to Congressional
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
pressure to grant Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
President Lee Teng-Hui
Lee Teng-hui
Lee Teng-hui is a politician of the Republic of China . He was the 7th, 8th, and 9th-term President of the Republic of China and Chairman of the Kuomintang from 1988 to 2000. He presided over major advancements in democratic reforms including his own re-election which marked the first direct...
a visa to attend a class reunion
Class reunion
A class reunion is a meeting of former classmates, typically organized at or near their former school by one of the class on or around an anniversary of their graduation. Former teachers may be invited as well...
at Cornell University
Cornell University
Cornell University is an Ivy League university located in Ithaca, New York, United States. It is a private land-grant university, receiving annual funding from the State of New York for certain educational missions...
. United States Secretary of State
United States Secretary of State
The United States Secretary of State is the head of the United States Department of State, concerned with foreign affairs. The Secretary is a member of the Cabinet and the highest-ranking cabinet secretary both in line of succession and order of precedence...
Warren Christopher
Warren Christopher
Warren Minor Christopher was an American lawyer, diplomat and politician. During Bill Clinton's first term as President, Christopher served as the 63rd Secretary of State. He also served as Deputy Attorney General in the Lyndon Johnson administration, and as Deputy Secretary of State in the Jimmy...
had previously assured his Chinese counterpart Qian Qichen
Qian Qichen
Qian Qichen is a Chinese diplomat and communist political figure. He served as Chinese foreign minister from April 1988 to March 1998.-Biography:...
that granting a visa would be "inconsistent with [the United States'] unofficial relationship [with Taiwan]" and the Clinton Administration's acquiescence to the Congressional resolutions led China to conclude that the influence of Congress over foreign policy was more significant than it had previously determined. When formulating the so-called plan, Chinese officials acknowledged that, compared to other countries (such as Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
or Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...
), it had little knowledge of, or influence over, policy decisions made in Congress.
The plan, according the Senate report, instructed Chinese officials in the U.S. to improve their knowledge about members of Congress and increase contacts with its members, the public, and the media. The plan also suggested ways to lobby United States officials.
Over the years, China has repeatedly denied these lobbying efforts involved financial contributions of any kind:
Charlie Trie
The most significant activity by Trie was a $450,000 attempted donation by Yah Lin "Charlie" Trie to Clinton's legal defense fund, which Trie allegedly delivered in two envelopes each containing several checks and money orders. The fund immediately rejected $70,000 and deposited the remainder, but ordered an investigation of the source. The investigation found that some of the money orders were made out in different names but with the same handwriting, and sequentially numbered. The fund then rejected the donation entirely, and returned the deposited funds two months after the initial contribution.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
Little Rock, Arkansas
Little Rock is the capital and the largest city of the U.S. state of Arkansas. The Metropolitan Statistical Area had a population of 699,757 people in the 2010 census...
where he befriended Clinton, then governor of Arkansas. In addition to the attempted donation to Clinton's defense fund, Trie and his immediate family donated $220,000 to the DNC which was also later returned.
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:
After Congressional investigations turned to Trie in late 1996, he left the country for China. 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
Federal Election Commission
The Federal Election Commission is an independent regulatory agency that was founded in 1975 by the United States Congress to regulate the campaign finance legislation in the United States. It was created in a provision of the 1975 amendment to the Federal Election Campaign Act...
(FEC).
Johnny Chung
Born in Taiwan, Chung went from being the owner of a "blastfaxing"Junk fax
Junk faxes are a form of telemarketing where unsolicited advertisements are sent via fax transmission. Junk faxes are the faxed equivalent of spam or junk mail...
business (an automated system that quickly sends out faxes to thousands of businesses) in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
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
United States National Security Council
The White House National Security Council in the United States is the principal forum used by the President of the United States for considering national security and foreign policy matters with his senior national security advisors and Cabinet officials and is part of the Executive Office of the...
(NSC) aide, Chung made forty-nine separate visits to the White House between February 1994 and February 1996. One of his purposes in making these trips was to obtain photographs of himself with the Clintons, which he believed would help him to get business in China by giving people the impression that he had connections and influence in Washington—he used a brochure that included at least ten photographs of himself with Hillary Clinton along with a personal note from her. During one of the Commerce Department trade missions to China, Chung befriended former Chinese Lt. Col. Liu Chaoying
Liu Chaoying
Liu Chaoying , or Helen Liu, was an executive at China Aerospace International Holdings, Ltd. Hong Kong which is the Hong Kong subsidiary of China's premier satellite developer, China Aerospace Science and Technology Corporation . She was a Lt. Col. in the People's Liberation Army of China...
, then an executive at China Aerospace International Holdings, Ltd. Hong Kong
China Aerospace International Holdings, Ltd. Hong Kong
China Aerospace International Holdings Ltd. or China Aerospace International Holdings, Ltd. is the Hong Kong subsidiary of China's premier satellite developer, China Aerospace Science and Technology Corporation which is abbreviated as 航天控股 and listed on the Hong Kong Stock Exchange. The...
(中國航天國際控股有限公司), which is the Hong Kong-based subsidiary of the government-controlled CASC
China Aerospace Science and Technology Corporation
The China Aerospace Science and Technology Corporation is the main contractor for the Chinese space program. It is state-owned and has a number of subordinate entities which design, develop and manufacture a range of spacecraft, launch vehicles, strategic and tactical missile systems, and ground...
(中國航天科技集團公司), China's premier satellite launching company. She is the daughter of former General Liu Huaqing
Liu Huaqing
Liu Huaqing was the Commander of the Chinese People's Liberation Army Navy from 1982 through 1988, and is considered to been responsible for its modernization efforts....
.
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.
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
Ji Shengde
Ji Shengde was a major-general in charge of military intelligence in the People's Liberation Army of the People's Republic of China until June 1999 when he was removed from his post after being implicated in a smuggling scandal centered on the Fujian port of Xiamen...
, then the head of Chinese military intelligence
Military intelligence
Military intelligence is a military discipline that exploits a number of information collection and analysis approaches to provide guidance and direction to commanders in support of their decisions....
, 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." Both Liu and the Chinese government denied the claims.
Chung was eventually convicted of bank fraud, tax evasion, and two misdemeanor counts of conspiring to violate election law. 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.
John Huang and James Riady
John HuangJohn Huang
A major figure in the 1996 United States campaign finance controversy, John Huang worked for Lippo Bank in California, Worthen Bank in Arkansas, and as deputy assistant secretary for international economic affairs in U.S...
, was another major figure convicted. Born in 1945 in Nanping
Nanping
Nanping is a prefecture-level city in northwestern Fujian province, People's Republic of China. It borders Ningde City to the east, Sanming City to the south, and the provinces of Zhejiang and Jiangxi to the north and west respectively...
, Fujian
Fujian
' , formerly romanised as Fukien or Huguing or Foukien, is a province on the southeast coast of mainland China. Fujian is bordered by Zhejiang to the north, Jiangxi to the west, and Guangdong to the south. Taiwan lies to the east, across the Taiwan Strait...
, Huang and his father fled to Taiwan at the end of the Chinese Civil War
Chinese Civil War
The Chinese Civil War was a civil war fought between the Kuomintang , the governing party of the Republic of China, and the Communist Party of China , for the control of China which eventually led to China's division into two Chinas, Republic of China and People's Republic of...
before he eventually emigrated to the United States in 1969. A former employee of the Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
n company Lippo Group
Lippo Group
The Lippo Group is a major Indonesian conglomerate founded by Mochtar Riady. The Lippo Group began with Bank Lippo, later using this as a platform for regional property development projects. These projects, throughout Indonesia and China, are akin to Irvine, California's development...
's Lippo Bank
Lippo Bank
Lippo Bank was a bank from Indonesia until it merged with Bank CIMB Niaga in 2008.-History:Lippo Bank was Indonesia's 9th largest bank in Indonesia by the number of the assets. It was established in 1948 and controlled by ethnic Chinese Mochtar Riady together with the Lippo Group...
and its owners Mochtar Riady
Mochtar Riady
Mochtar Riady is an ethnic Chinese financial magnate in Southeast Asia. He is the founder and CEO of Lippo Group. He is also the chairman of the Asian Bankers Association. Born on 12 May 1929, in Malang, East Java, Mochtar is known to have a cold hand at transforming the fortunes of financial...
and his son James
James Riady
James Riady is the deputy chairman of the Lippo Group, a major Indonesian conglomerate. He is a Chinese Indonesian, and also the son of Mochtar Riady, founder of the group. The group has recently signed an agreement with Khazanah of Malaysia to relinquish its majority stake in Lippo Bank...
(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.
According to U.S. Secret Service
United States Secret Service
The United States Secret Service is a United States federal law enforcement agency that is part of the United States Department of Homeland Security. The sworn members are divided among the Special Agents and the Uniformed Division. Until March 1, 2003, the Service was part of the United States...
logs, Huang visited the White House 78 times while working as a DNC fund-raiser. James Riady visited the White House 20 times (including 6 personal visits to President Clinton).
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.
Huang eventually pleaded guilty to conspiring to reimburse Lippo Group employees' campaign contributions with corporate or foreign funds. James Riady was later convicted of campaign finance violations relating to the same scheme as well. Shortly after Riady pledged $1 million in support of then-Governor Clinton's campaign for the presidency, contributions made by Huang had been 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 transfer
Wire transfer
Wire transfer or credit transfer is a method of electronic funds transfer from one person or institution to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office...
s from foreign Lippo Group entities.
An unclassified U.S. Senate Committee on Governmental Affairs
United States Senate Committee on Homeland Security and Governmental Affairs
The United States Senate Committee on Homeland Security and Governmental Affairs has jurisdiction over matters related to the Department of Homeland Security and other homeland security concerns, as well as the functioning of the government itself, including the National Archives, budget and...
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
Journalist
A journalist collects and distributes news and other information. A journalist's work is referred to as journalism.A reporter is a type of journalist who researchs, writes, and reports on information to be presented in mass media, including print media , electronic media , and digital media A...
Bob Woodward
Bob Woodward
Robert Upshur Woodward is an American investigative journalist and non-fiction author. He has worked for The Washington Post since 1971 as a reporter, and is currently an associate editor of the Post....
, details of the relationship came from highly classified intelligence information supplied to the committee by both the CIA and Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
(FBI).
The most well-known of John Huang's fund-raisers involved Vice President
Vice President of the United States
The Vice President of the United States is the holder of a public office created by the United States Constitution. The Vice President, together with the President of the United States, is indirectly elected by the people, through the Electoral College, to a four-year term...
Al Gore
Al Gore
Albert Arnold "Al" Gore, Jr. served as the 45th Vice President of the United States , under President Bill Clinton. He was the Democratic Party's nominee for President in the 2000 U.S. presidential election....
, Maria Hsia
Maria Hsia
Maria Hsia was convicted of laundering donations to the Democratic National Committee by the Hsi Lai Buddhist Temple during the 1996 U.S. presidential election. She was sentenced to 90 days home detention, probation, a fine, and community service....
, and the Hsi Lai Buddhist Temple
Hsi Lai Temple
Fo Guang Shan Hsi Lai Temple is a traditional Chinese Buddhist mountain monastery in the United States. It is located on the foothill region of Hacienda Heights, California, USA, a suburb of Los Angeles County...
in California.
Maria Hsia
Taiwan-born Maria Hsia , a long time fund raiser for Al Gore, CaliforniaCalifornia
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
immigration
Immigration
Immigration is the act of foreigners passing or coming into a country for the purpose of permanent residence...
consultant, and business associate of John Huang and James Riady since 1988, facilitated $100,000 in illegal campaign contributions through her efforts at Hsi Lai Temple
Hsi Lai Temple
Fo Guang Shan Hsi Lai Temple is a traditional Chinese Buddhist mountain monastery in the United States. It is located on the foothill region of Hacienda Heights, California, USA, a suburb of Los Angeles County...
, a Chinese Buddhist temple associated with Taiwan
Republic of China
The Republic of China , commonly known as Taiwan , is a unitary sovereign state located in East Asia. Originally based in mainland China, the Republic of China currently governs the island of Taiwan , which forms over 99% of its current territory, as well as Penghu, Kinmen, Matsu and other minor...
in Hacienda Heights, California
Hacienda Heights, California
Hacienda Heights is an unincorporated census-designated place in and below the Puente Hills of the San Gabriel Valley, in Los Angeles County, California, United States...
. This money went to the DNC, to the Clinton - Gore campaign, and to Patrick Kennedy
Patrick J. Kennedy
Patrick Joseph Kennedy II is the former U.S. Representative for , serving from 1995 until 2011. He is a member of the Democratic Party. The district includes all of Bristol County and Newport County, and parts of Providence County. Kennedy did not seek re-election in 2010.A member of the Kennedy...
. After a trial, she was convicted in March 2000.
The Democratic National Committee eventually returned the money donated by the Temple's monks and nuns. Twelve nuns and employees of the temple, including the temple's abbess, refused to answer questions by pleading the Fifth Amendment
Fifth Amendment to the United States Constitution
The Fifth Amendment to the United States Constitution, which is part of the Bill of Rights, protects against abuse of government authority in a legal procedure. Its guarantees stem from English common law which traces back to the Magna Carta in 1215...
when they were subpoena
Subpoena
A subpoena is a writ by a government agency, most often a court, that has authority to compel testimony by a witness or production of evidence under a penalty for failure. There are two common types of subpoena:...
ed to testify before Congress. Two other Buddhist nuns admitted destroying lists of donors and other documents related to the controversy because they felt the information would embarrass the Temple. A Temple-commissioned videotape of the fund raiser also went missing and the nuns' attorney claimed it may have been shipped off to Taiwan.
The Temple event became particularly controversial, because it was attended by the Vice President Gore. In an interview on the January 24, 1997 edition of the Today show, Gore said:
In response, the U.S. Senate Governmental Affairs Committee that investigated the controversy said:
John Huang's memo to Vice President Gore's assistant Kimberly Tilley specifically mentioned the Temple meeting was a fund-raising event. Mr. Gore later acknowledged he had known the visit was "finance-related."
In the U.S., religious organizations enjoy a tax exempt status. Political activity is prohibited for such tax exempt entities.
The Senate Governmental Affairs Committee also said they learned that Hsia had served as an "agent" of the PRC government. Hsia denied the claim.
Ted Sioeng
Another notable figure involved in the affair was Ted Sioeng, an Indoenesian entrepreneur, who illegally donated money to both Democrats and Republicans. Suspect contributions associated with Sioeng include $250,000 to the DNC, $100,000 to Republican California State Treasurer Matt FongMatt Fong
Matthew Kipling Fong was a Republican who served as the 30th California State Treasurer and was also the adopted son of Democrat March Fong Eu, the 25th California Secretary of State....
, and $50,000 to a Republican think tank. All the money was eventually returned.
Sieong sat with Bill Clinton or Al Gore at three fund-raising events.
Sioeng also joined Fong at a meeting with then Republican House Speaker
Speaker of the United States House of Representatives
The Speaker of the United States House of Representatives, or Speaker of the House, is the presiding officer of the United States House of Representatives...
Newt Gingrich
Newt Gingrich
Newton Leroy "Newt" Gingrich is a U.S. Republican Party politician who served as the House Minority Whip from 1989 to 1995 and as the 58th Speaker of the U.S. House of Representatives from 1995 to 1999....
in mid-1995. Gingrich called the meeting a "photo-op". Gingrich was the guest of honor at a Sioeng-organized luncheon the day after a Sioeng family company gave
the $50,000 think-tank donation, solicited by a Gingrich adviser.
Attorney General
United States Attorney General
The United States Attorney General is the head of the United States Department of Justice concerned with legal affairs and is the chief law enforcement officer of the United States government. The attorney general is considered to be the chief lawyer of the U.S. government...
Janet Reno
Janet Reno
Janet Wood Reno is a former Attorney General of the United States . She was nominated by President Bill Clinton on February 11, 1993, and confirmed on March 11...
and the directors of the FBI, CIA and National Security Agency
National Security Agency
The National Security Agency/Central Security Service is a cryptologic intelligence agency of the United States Department of Defense responsible for the collection and analysis of foreign communications and foreign signals intelligence, as well as protecting U.S...
(NSA) told members of the Senate committee they had credible intelligence information indicating Sioeng acted on behalf of China. A spokesman for Sioeng denied the allegations.
Department of Justice investigation
Louis Freeh
Louis Joseph Freeh was the 5th Director of the Federal Bureau of Investigation, serving from September 1993 to June 2001....
and Justice Department task force head Charles La Bella
Charles La Bella
Charles La Bella is an American attorney and founding partner of La Bella & McNamara, LLP which specialized in civil litigation, internal corporate investigations, investigations and enforcement actions by regulatory agencies, corporate governance and compliance counseling, and white collar...
unsuccessfully argued for appointment of an independent counsel
United States Office of the Independent Counsel
United States Office of the Independent Counsel was an independent prosecutor — distinct from the Attorney General of the United States Department of Justice — that provided reports to the Congress under . The office was terminated in 1999 and replaced by the U.S...
."
Ultimately, Justice Department prosecutors secured the conviction of several fund-raisers for various offenses. John Huang served 500 hours of community service and paid a $10,000 fine. Johnny Chung served 3000 hours of community service. Charlie Trie served four months of in-home detention. Maria Hsia served 90 days of home detention and paid a $5,300 fine. Indonesian billionare James Riady was fined $8.6 million. Ernest Green served three months home detention. Michael Brown served 150 hours of community service and paid a $5000 fine. In all, the Justice Department task force secured criminal convictions against 22 people by 2001.
Congressional investigations
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
investigation, headed by Republican Dan Burton
Dan Burton
Danny "Dan" Lee Burton is the U.S. Representative for , and previously the , serving since 1983. He is a member of the Republican Party....
, focused on allegations of campaign finance abuse, including the contributions channeled through Chung, Huang, and Trie. 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
Watergate scandal
The Watergate scandal was a political scandal during the 1970s in the United States resulting from the break-in of the Democratic National Committee headquarters at the Watergate office complex in Washington, D.C., and the Nixon administration's attempted cover-up of its involvement...
investigation cost $7 million in 1998 dollars).
The Burton investigation itself was controversial. A New York Times editorial in March 1997 characterized the committee's investigation as a "travesty" and a "parody". A Washington Post editorial in March 1997 called the House investigation "its own cartoon, a joke, and a deserved embarrassment". Norman Ornstein, a Congressional expert at the American Enterprise Institute
American Enterprise Institute
The American Enterprise Institute for Public Policy Research is a conservative think tank founded in 1943. Its stated mission is "to defend the principles and improve the institutions of American freedom and democratic capitalism—limited government, private enterprise, individual liberty and...
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."
The U.S. Senate Committee on Governmental Affairs also held public hearings into the campaign finance issues from July to October 1997. During the hearings, there was considerable acrimony between the chair Fred Thompson and the ranking minority member John Glenn
John Glenn
John Herschel Glenn, Jr. is a former United States Marine Corps pilot, astronaut, and United States senator who was the first American to orbit the Earth and the third American in space. Glenn was a Marine Corps fighter pilot before joining NASA's Mercury program as a member of NASA's original...
, reaching a level of public disagreement seldom seen between two leaders of a Senate Committee. The Thompson committee adopted a Republican written final report on a straight party-line 8-7 vote in March 1998. Thompson described the findings thus: "There's not any one real big thing. It's a lot of things strung together that paint a real ugly picture."
The Democrats on the Senate committee published a minority report dissenting with most of the conclusions of the final report, stating the evidence "does not support the conclusion that the China plan was aimed at, or affected, the 1996 presidential election." In particular, it stated,
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 against self incrimination, or left the country altogether.
External links
- Senate Committee on Homeland Security and Governmental Affairs Report in full: 1997 Special Investigation in Connection with 1996 Federal Election Campaigns
- Washington Post overview of campaign finance
- Washington Post archives of campaign finance controversy stories, 1998-2002