Arrow-right Camera
The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Cash Scandal May Haunt President

Robert A. Rankin Knight-Ridder

A money scandal suddenly threatens to engulf Bill Clinton.

It is unlikely to derail Clinton’s reelection next Tuesday, for its details are complex and much remains unknown - starting with whether anything illegal was done.

But enough is known now to suggest a smell of impropriety rising from more than $1 million of suspect campaign contributions raised by Clinton operatives from Asians.

Plenty of evidence suggests that the big foreign donors at least received special access to top government officials - including Clinton himself - and perhaps with official U.S. government policies being bent to the donors’ favor.

Enough is known now, in short, to fuel investigations that could dog a second Clinton administration much as the Whitewater controversy dogged his first.

Republicans already are demanding investigation by an independent counsel. Democrats deny all wrongdoing, but the Democratic National Committee’s abortive effort this week to avoid disclosing campaign finances for the first two weeks of October raised suspicions about what, if anything, the Democrats might be trying to hide.

A summary of key information about his mushrooming controversy follows. Most of it was disclosed by investigative reporting from The Los Angeles Times, The Wall Street Journal, The New York Times and Knight-Ridder Newspapers.

On June 30, 1995, the Chicago Sun-Times disclosed a DNC brochure that offered special favors to big contributors to the Democratic Party. For $100,000 a donor would get two meals with President Clinton, two more with Vice President Al Gore, two “policy retreats” with top officials, and favored treatment at the 1996 national convention in Chicago.

In addition, the brochure promised $100,000 donors that they would be “invited to participate in foreign trade missions, which affords opportunities to join party leaders in meeting with business leaders abroad.” The DNC later admitted that it was “inaccurate and inappropriate” to offer seats on trade missions to donors.

After two weeks of bad publicity about the DNC brochure, President Clinton asked the DNC to put all such offers of perks to big donors “on hold.” (Republicans offered similar access for big GOP donors to President Bush in 1992.)

The DNC brochure made clear that privileged access to top government officials - and more - was available for campaign donations. How far those privileges went appears to be illustrated best by the experience of an Asian-American named John Huang, who stands at the center of this intrigue.

Huang was an executive of Lippo Group USA, a subsidiary of the Lippo Group, an Indonesian-based banking and real-estate conglomerate. In 1994 Lippo paid Huang a $860,000 severance fee and he joined the Commerce Department as a midlevel official overseeing foreign trade.

On at least two occasions, Huang - who held top-secret clearance - attended top-level Commerce Department strategy sessions aimed at targeting Indonesian industries for increased U.S. investment. Such information obviously could be of high value to his former employer, the Lippo Group.

Connections between the Commerce Department and the DNC appear to be at the heart of the matter. Ron Brown, who was commerce secretary until he died in a plane crash on a trade mission to Bosnia last April, ran the DNC when Clinton won election.

Melinda Moss, a former top DNC fund-raiser, went with Brown to the Commerce Department, where she was put in charge of selecting which business executives accompanied Brown on foreign-trade missions. On those missions, Brown proved a master at brokering deals worth millions to U.S. businesses and their partners abroad.

One such 1994 trade mission to China featured 24 U.S. executives, 15 of whom had given donations to the Democratic Party. On that mission Entergy - parent of Arkansas Power & Light - won a $1.3 billion contract to build a power plant for the Chinese government, operating in partnership with Huang’s old firm, the Lippo Group.

A civil suit is under way in U.S. District Court here now challenging whether Huang and the Commerce Department improperly used such trade missions as fund-raising tools for the Democratic Party.

When Huang moved to the DNC in early 1995, he became vice chairman of its finance committee. He ran an aggressive effort to raise campaign money from Asian-Americans, collecting perhaps $5 million, according to reports filed with the Federal Election Commission.

U.S. campaign-finance law permits unlimited cash donations to political parties from U.S. citizens, resident foreign nationals, and money raised domestically by U.S. subsidiaries of foreign companies, but bars them from foreigners abroad.

Among Huang’s chief donors were Mochtar Riady, chairman of the Lippo Group, and his son James, who ran the firm’s U.S. operations. Since 1991, they have directed at least $475,000 in donations to the Democratic Party.

The Riadys have connections to President Clinton. In 1984 they bought an interest in Worthen Bank & Trust, the largest financial institution in Arkansas at the time. James Riady became Worthen’s co-president. He knew the Clintons well, sometimes picnicking with them.

In March 1993, Mochtar Riady flew from Indonesia to give $50,000 in the Clintons’ honor to the Little Rock banquet for the March of Dimes, which that year named Hillary its Arkansas Citizen of the Year. When Clinton’s friend Webster Hubbell resigned in disgrace from the Justice Department in 1994, Riady hired him for a time.

Over the last two years, on at least two occasions, President Clinton has met James Riady privately in the Oval Office- with Huang present too - but White House aides refuse to say what was discussed.

The Riadys may have sponsored a second, suspect donation to the Democratic Party of $450,000 from Arief and Soraya Wiriadinata.

Arief Wiriadinata and his wife lived in suburban Washington, D.C. His wife, Soraya, is the daughter of a major Lippo Group shareholder, who could easily have afforded the cash.

The Wiriadinatas were U.S. residents when their donations were made, so if it was their money, it was legal. But if the money was merely “laundered” through them and came in fact from Indonesia, as critics suspect, the donation was illegal. They have since moved back to Jakarta, where they live in the compound of Soraya’s late father, secluded from inquisitive outsiders by Lippo security guards.

It is unclear if any improper payoffs went to the Riadys, Lippo or Indonesia in return for their generosity to the Democrats. But at least one Clinton administration decision raises critics’ eyebrows.

In 1994, the administration abruptly canceled a review begun two years earlier over whether to cancel Indonesia’s trade preferences because of abusive labor policies.

Mickey Kantor, the U.S. trade representative at the time, said Jakarta had made enough progress to remove the shadow of potential sanctions from its trade; suspension of U.S. trade preferences would have slapped duties averaging 5.5 percent on $643 million of Indonesian exports to the United States, and could have deterred foreign investors from locating there.

Other donations

These are not the only donations inspiring questions.

In June, Taiwan business leaders complained that a Clinton-appointed representative, James C. Wood, was pressuring them for donations to Clinton’s re-election campaign. The State Department referred the complaint to the Justice Department’s criminal division, which is investigating.

Huang also solicited a donation from Yogesh K. Gandhi, who gave a check for $325,000 to the DNC on May 13. Gandhi told a small claims court in August that he is not a U.S. citizen, has no assets in the United States and is living off his brother’s credit card.

Huang also brokered a $250,000 contribution from a South Korean corporation that the DNC returned recently upon learning it was illegal. The DNC suspended Huang from fund-raising activities.

The DNC also reimbursed an illegal $5,000 Huang-driven donation obtained at a fund-raiser at a Buddhist temple in California, which Vice President Al Gore attended. Gore says he didn’t know it was a fund-raiser.

Earlier this month the DNC also returned a $20,000 contribution from Jorge Cabrera, a convicted drug trafficker. Gore met Cabrera at a Florida fund-raiser in December 1995, and later that month Cabrera attended a Christmas event at the White House.

The following month Cabrera was arrested in a Miami drug bust that netted nearly 6,000 pounds of cocaine. It was his third such arrest; Cabrera served terms of 42 months and one year in prison during the 1980s.