Campaign Fundraising Hearings: Connect The Dots

At the Donorgate hearings, a plot emerges: Johh Huang was in deeper -- and earlier -- than we knew

By Michael Weisskopf/Washington

With reporting by Viveca Novak/Washington

(TIME, July 28) -- The evidence tumbled out so haphazardly that it was easy to miss--even for the G.O.P. Senators who presented it. Introduced hours apart were three $15,000 checks to the Democratic Party, and a thank-you note to Al Gore's chief of staff for arranging a meeting with Gore--all signed by the infamous John Huang.

It added up to one of the most compelling connections yet between foreign cash and official favors in Washington. But hardly anyone noticed it. If the first week of the Senate campaign-finance hearings had devolved into political bombast, the second turned out to be a game of connect the dots. Nothing emerged to corroborate Fred Thompson's first-day claim that communist China had tried to "subvert" U.S. elections in 1996 with illegal campaign money, although Democrats confirmed that a classified briefing provided evidence to suggest China had at least tried to influence the congressional elections last year. But in its helter-skelter way, the committee began to construct a coherent tale. Asian money--specifically from Indonesia's Lippo Group and its onetime executive Huang--had infiltrated Democratic coffers longer, deeper and with more political strings attached than had previously been known.

While some Democrats blame the high cost of political advertising during the '96 race for the party's overseas chase of unrestricted "soft money," Lippo funds had started flowing four years earlier, according to checks produced at the hearings. After Clinton secured the nomination in 1992, the Riady family, which owns Lippo, contributed $480,000 to Democrats, most of it scattered quietly to state parties. The same year, Lippo provided an additional $50,000 to the national party. The money was sent in by a U.S. subsidiary controlled by Huang and identified as a political gift in his expense report to Lippo headquarters in Jakarta. That payment drew the first unequivocal link between a Democratic Party contribution and a foreign source.

Both parties claim to accept money from such subsidiaries only if it comes from profits earned in the U.S. Yet the $50,000 donation and the $45,000 in checks given a year later came from Lippo subsidiaries that had been running in the red. Their leader, Huang, was looking for political profit. His note to chief of staff Jack Quinn thanked him for receiving Huang and Chinese official Shen Jueren at the White House, and for delivering the Vice President three days later to a Los Angeles event. Democratic sources tell TIME that on Sept. 27, 1993, Gore dropped by an intimate gathering of Asian Americans organized by Huang. His guest of honor: Shen Jueren, the head of China Resources, a huge trading company wholly owned by the Chinese government, with intelligence-gathering functions and strong financial ties to Lippo.

In the crush of witnesses and documents, the committee overlooked the temporal link between these meetings and the $15,000 checks signed by Huang. Two of them were dated Sept. 23, 1993, a day before Quinn received Huang and Shen Jueren. The third was signed on the same day as Gore's Los Angeles gathering.

While the hearings did a good job of tracking Huang's money trail, they failed to fill out the portrait of a man who moved along his career track like a phantom. He left Lippo in 1994 for a mid-level job at the Commerce Department--one that his boss said he wasn't qualified for--and moved on, 18 months later, to the Democratic National Committee's finance office. How he engineered the moves has been a mystery--and remains one. Soon after Clinton's Inaugural, Democratic activist Maeley Tom, who worked as a Lippo consultant, wrote a letter pressing Administration officials to hire Huang, identifying him as the "top priority" of the Riadys and the "political power" who advises them on "where to make contributions." But the personnel official who made the hire claims to have done so only because of Huang's Asian background; call it ethnic patronage. Even so, Huang already had remarkable access to Clinton. At MTV's Inaugural Ball, Clinton met privately with Huang and Lippo's deputy chairman James Riady. The three met again in fall 1995 to finalize Huang's move to the D.N.C.

Thompson ended the week on a high note. "We've seen the influx of substantial amounts of money into the political process, much of it illegal, and much of the illegal part [is] of foreign origin," he told TIME. This week he will prod intelligence officials to make public more information about the mysterious Chinese plot to influence U.S. elections. And Democrats will get a chance to play prosecutor, describing the Republicans' own China connection: alleged money laundering by former G.O.P. chief Haley Barbour.