A prominent Republican lawyer sharply contradicted former Republican Party chairman Haley Barbour Friday, testifying that Barbour asked him to secure a $2.1 million loan from a Hong Kong businessman to help fund the 1994 GOP congressional campaign.
Richard Richards, who preceded Barbour in the 1980s as chairman of the Republican National Committee, told the Senate committee investigating campaign finance irregularities that Barbour sought the foreign loan so he could shift the money from his nonprofit National Policy Forum to ease the RNC’s cash woes.
Barbour testified on Wednesday that the RNC suffered no funding shortfall at the time he sought the loan. Barbour also denied that any of the loan proceeds that were moved from the National Policy Forum to the RNC were used for election campaigns. He also said that until this year, he was unaware the money came from Hong Kong.
But Richards said Barbour told him in a 1994 telephone conversation: “I understand you represent a well-to-do Chinese fellow in Hong Kong who has previously been a beneficiary to the Republican Party. Would you be willing to ask him about loaning us $3 million?”
Richards said Barbour indicated he urgently needed the money as he tried to help Republicans gain control of the U.S. House in the 1994 election, an effort that proved successful.
“We at the national committee have loaned the forum $3.3 million that we can use in the campaign, but we’ve got a problem,” Richards said Barbour told him just before the election. “We need to be able to take it out of the forum for our purposes, and we can’t take it out unless we replace it with something.”
When Richards was reminded that Barbour had said the RNC had no desperate financial needs at the time he sought the loan from Hong Kong businessman Ambrous Tung Young, Richards replied: “If we thought they were flush with money, we probably would not have entered into the discussion.”
Richards noted a letter of caution he wrote to Barbour last Oct. 16 as the Republicans were accusing President Clinton of accepting illegal foreign donations in 1996.
“I think we stand the same risk of some very adverse publicity,” Richards wrote in rebuffing Barbour’s proposal, after the loan deal was completed, that it should be forgiven with Young taking a financial loss.
Richards’ testimony prompted Sen. Robert F. Bennett, a Utah Republican, to ask Richards if he believed Barbour had committed perjury before the committee.
Richards said he did not believe so, but did not elaborate.
Senate Democrats stopped short of charging Barbour with wrongdoing. But they cast doubt on his veracity, highlighting the stark differences in accounts of the circumstances surrounding the 1994 loan.
Sen. John Glenn of Ohio, the committee’s highest ranking Democrat, said his staff had interviewed four other people who supported substantial parts of Richards’ recollection of the loan deal, particularly Barbour’s direct knowledge of the Hong Kong connection.
“We have some very significant contradictions,” said Sen. Carl Levin, a Michigan Democrat.
Added Glenn: “It’s just very difficult to reconcile that kind of inconsistency.”
Sen. Fred Thompson of Tennessee, chairman of the Senate Governmental Affairs Committee, praised Barbour as “a great chairman of the party.” But Thompson said he had “problems with some of the things” in Barbour’s testimony. “Senator Glenn makes some very valid points in terms of inconsistencies.”