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More GOP Money Traced To Hong Kong Source

Two former GOP chairmen have conflicting accounts

By Brooks Jackson/CNN

WASHINGTON (June 9) -- Republicans have already given back more than $120,000 in illegal, overseas donations from a Hong Kong businessman, Ambrous Tung Young. But they continue to insist that another $1.6 million the Republican National Committee received just before the 1994 elections, courtesy of Young, was legal.

But newly revealed documents show that money also originated in Hong Kong.

Ambrous Young first transferred money from Hong Kong to his U.S. Company, Young Brothers USA. Young Brothers then transferred the money to Signet Bank in Virginia, as collateral on a $2.1 million loan.

The loan went to a nonprofit group called the National Policy Forum, headed at the time by Republican National Committee Chairman Haley Barbour.

The forum then paid $1.6 million of the loan proceeds to the RNC, which was financing the forum. The documents show RNC officials knew they would benefit from the money and even signed some of the documents that made the complex transaction possible.

The loan agreement itself states specifically, "$1,600,000 shall be used to repay amounts owed ... to the Republican National Committee."

The RNC got the money just in time for the 1994 elections, in which Republicans captured control of Congress. And the real purpose of the loan was to finance the GOP campaign, according to Young's lobbyist, Richard Richards.

In a letter to Barbour last year, Richards recalled the reason for the loan was, "to help pick up 60 targeted House seats." After the election, Barbour wrote to Young, "You're a champ. Thanks for everything."

Barbour isn't giving interviews. He still says the loan was perfectly legal, and says several things in Richards's letter are wrong.

In a statement, Barbour said: "I expect [Richards] will set the facts straight and clear up the inaccuracies when he talks to Senator Fred Thompson's Governmental Affairs Committee." Richardson didn't return calls.

If what Richards says is true, it means the Contract With America was partly financed in Hong Kong. And Richards is no fly-by-night Republican; he -- like Barbour -- was himself a chairman of the RNC, under Ronald Reagan.