Wired Foreign Money Found Its Way Into Dnc Coffers

Senator Susan Collins, a Maine Republican, revealed Thursday that wire transfers from a Japan bank may have covered a California man’s $325,000 donation to the Democratic Party.

Yogesh Gandhi contributed the money at a fund-raiser attended by President Clinton and organized by John Huang in May 1996. It is illegal for political parties or candidates to accept foreign contributions.

Senator Fred Thompson, the chairman of the committee investigating campaign finance abuses, has charged that China tried to subvert American elections with illegal donations to further its own interests. Collins’ example, from Japan, may illustrate the Democrats’ shoddy screening procedures more than a foreign plot.

At the fund-raiser, held at the Sheraton Carlton Hotel in Washington, more than half of the money raised that night came from just one person, Gandhi. Collins noted that Gandhi had never made a political contribution before handing over the $325,000 to the Democratic National Committee.

Collins released copies of two wire transfers from businessman Yoshio Tanaka in Japan to Gandhi, who has residency status in the United States and is therefore eligible to donate money to political parties. Each wire transfer was worth $250,000. Tanaka sent the first one on May 20, 1996, and the second one on May 23, 1996.

Collins noted that before making his donation, Gandhi had long pressed administration officials to allow him to present a humanitarian award to Clinton at the White House. Gandhi is the great-grandnephew of Mohandas Gandhi and is the president of the Gandhi Memorial International Foundation.

“The White House turned him down flat, said that he couldn’t see the president, couldn’t present the award,” Collins said. “But then he contributed $325,000 to the DNC.”

At that point, Democratic officials arranged for Gandhi to present his award to the president in a separate room at the fund-raiser. Attorneys for the Senate committee have interviewed Gandhi, who spoke to them without his own lawyer present and promised to cooperate with a formal deposition. But by the time Senate panel lawyers flew to California last week, Gandhi had hired an attorney and declined to speak with them.

“Is this yet another example of the DNC failing to do a sufficient job to screen a very large contribution that’s coming in from a source that’s never contributed before?” Collins asked Richard Sullivan, the former DNC finance director who was testifying for the second day.

“Yes,” he replied.

Sullivan, however, said he did not know that Huang - who raised money from Gandhi - was soliciting contributions from foreigners. Sulivan said that if he had known, “I would have personally walked him to the elevator and out of the building.”

Collins also pointed out that just two months after making his substantial contribution to the Democrats, Gandhi testified in court that he had no money in this country and did not earn enough to file income tax returns. But Gandhi had told the Los Angeles Times last fall that he made the contribution to celebrate earning $500,000 in a business transaction.

Huang, who arranged the event that brought the Gandhi contribution, has said through his lawyer that he would like to testify about his role in raising money. But Huang has asked for limited immunity for violating election laws and may not appear before the panel.

Of the $3.4 million Huang raised for the 1996 election season, the DNC has returned about half, including the money from Gandhi. “We’ve already returned that money,” said Steve Langdon, a DNC spokesman. Langdon said the $325,000 was returned because the party was not able to substantiate the source of the funds. “We returned it, what more is there?” Langdon asked.

Also Thursday, Sen. Arlen Specter, R-Pa., said Democratic contributor Johnny Chung received a $150,000 wire transfer from the Bank of China just three days before giving Hillary Rodham Clinton’s chief of staff a $50,000 check.

Two days later, Chung brought five Chinese businessmen to the White House to watch Clinton deliver his weekly radio address. Chung had long wanted to watch the radio address but previously had been turned down by party officials.

“Now there is a solid connection between a Chinese source of money and a Democratic Party donation,” Specter told reporters.