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The power of The purse

&quotAt some point," White House press secretary Mike McCurry told reporters last month, &quotour goal here obviously is to dump all this stuff, flush the toilet, and say it's all one big argument for campaign finance reform." The &quotstuff"

Not until the few weeks prior to the November 5 election did the fundraising story begin to emerge, largely thanks to the persistence of The Los Angeles Times and The Wall Street Journal. The story has many parts, some bordering on the bizarre and unbelievable. While Asians and Asian-Americans are found in each, the central figure is the president.

In the wake of the 1994 elections that gave the GOP control of Congress, Mr. Clinton believed that to ensure his reelection he would have to scare off any Democratic primary rivals while also seeding public doubts about Republican policies. Toward this end, he ordered a heavy television advertising campaign beginning in 1995. It was, according to his political advisers, the earliest, most sustained such effort by an incumbent president.

To finance this campaign, Mr. Clinton chose not to tap his own campaign treasury. Instead, he turned to the Democratic National Committee. The DNC executed a massive fundraising program of unprecedented scope in which the president and also Vice President Al Gore were extensively used. Donors (and potential donors) got to shake hands or have coffee or dinner with one or the other. Some were invited to State Dinners. A few got to play golf with Mr. Clinton, and a select few even spent the night in the Lincoln Bedroom.

Heavy solicitation of Asian-Americans, the nation's fasting growing minority, was part of the DNC's effort. Indeed, it was given a name: the &quotNational Asian Pacific American Campaign Plan." DNC documents show that the party hoped to raise an unprecedented $7 million from Asian-Americans. The DNC eyed Asian-Americans because (1) many are increasingly prosperous and (2), unfortunately for the Democratic Party, too Republican. In 1992, Mr. Clinton got only a third of the Asian-American vote.

Mr. Clinton was game for the Asian-American strategy. He had many Asian-American friends--most notably, James T. Riady, son of Mochtar Riady, the Indonesian billionaire whose Lippo Group has offices in the United States. The president came to know the Riadys after James Riady moved in 1977 to Little Rock, where he joined an investment firm. Over the years family members and Lippo associates have given heavily to Mr. Clinton and the Democratic Party. In 1993, one Lippo employee, John Huang, left the company to join the Clinton administration. Taking with him a severance payment of almost $900,000, Mr. Huang was appointed to the Commerce Department.

While with Lippo, Mr. Huang had raised money for the Democratic Party in Asian-American circles, and he wanted to do it again, as a full-time job. In the fall of 1995, he and Mr. Riady had an Oval Office meeting with Mr. Clinton during which Mr. Huang told Mr. Clinton he would like to leave Commerce and raise money for both the party and the president's reelection campaign. A month later Mr. Huang was at the DNC. His new title--one never before held by a staff fundraiser--was DNC &quotfinance vice chairman."

Mr. Huang proved an extraordinary fundraiser as often huge contributions rolled in from donors with business affiliations in Indonesia, Taiwan, Korea, Vietnam, and mainland China. Mr. Huang himself raised at least $3.4 million from these sources.

These contributions, like those made to the DNC by other parties, fell into the category known as &quotsoft money&quot--money that is not given to a specific candidate for federal office but to a political party, for general use. The question raised by the Democrats' Asian soft money is whether it involved violations of federal law.

Here are some recent fundraising episodes that threaten to further beleaguer the White House and the DNC:

**red_square** In the fall of 1995, while still at the Commerce Department, Mr. Huang made a bedside hospital visit to Hashin Ning, a Riady business partner who had fallen sick while on travel to the United States. At Mr. Riady's request, Mr. Clinton sent Mr. Ning a get-well note. Mr. Ning's daughter and son-in-law, Soraya and Arief Wiriadinata, advised Mr. Huang of their interest in supporting the Democratic Party and President Clinton. Mr. Huang suggested making contributions to the DNC. The Wiriadinatas, then permanent residents living in Arlington, gave $30,000--their first-ever American political contribution. Later, upon returning to Indonesia, they sent in $420,000 more. Because federal law permits donations from foreigners who are permanent residents, the $30,000 and perhaps also the additional $420,000 were legal contributions. The DNC nonetheless returned the money because it was unable to verify whether the couple had filed 1995 tax returns.

That information would have been relevant to deciding whether the Wiriadinatas contributed their own money or someone else's. It is a crime for one person to knowingly make a contribution using someone else's money. And if any of the money the Wiriadinatas gave came from overseas, that could be a crime. While federal law clearly prohibits foreigners from contributing to specific candidates, it is uncertain whether the law also outlaws foreign contributions to political parties. A Justice Department spokesman confirms that there has never been a prosecution in a case of foreign soft money.

**red_square** Mr. Huang and Maria Hsia, a Taiwanese-American businesswoman in Los Angeles, organized a fundraiser at Hsi Lai Buddhist temple held last April in the Hacienda Heights neighborhood of Los Angeles. Vice President Al Gore was the featured speaker at the lunch, and DNC chairman Don Fowler was in the audience that consisted of monks and nuns. Notwithstanding vows of poverty and stipends of $40 a month, this Buddhist assemblage contributed $140,000. In October, one of the nuns, Man Ya Shih, told The Wall Street Journal that the $5,000 she gave belonged to someone else who did not wish to be identified. Later, in a submission to the Federal Election Commission, she said the money was hers, explaining that because she was nervous and wanted to end her conversation with the Journal reporter, she offered the most innocent explanation she could think of. The DNC returned &quother" money but has not returned any of the other contributions. As recently as last week, Mr. Gore continued to deny that he knew the event was a fundraiser. It is as illegal to raise funds for a political party in a Buddhist temple as in a Baptist church.

**red_square** In May 1996, a fundraising dinner organized by Mr. Huang was held at the Sheraton Carlton Hotel in Washington, D.C. Yogesh Gandhi, a distant relative of Mahatma Gandhi, paid for his ticket and that of a friend, Dr. Hogen Fukunaga, with a $325,000 contribution. (At the dinner, Mr. Gandhi and Mr. Fukunaga presented Mr. Clinton the 1996 &quotMahatma Gandhi World Peace Award.") Mr. Fukunaga, leader of a Japanese religious sect known as Ho no Hana Sanpogyo, is a multimillionaire, while Mr. Gandhi, a naturalized American, is a man of little means, indeed a &quotpauper," according to papers filed in his recent divorce case. After The Los Angeles Times reported in October the details of Mr. Gandhi's lowly economic status, the DNC concluded that the $325,000 he had donated probably never belonged to him and returned &quothis" money.

**red_square** During Mr. Clinton's first term, Pauline Kanchanalak, a Thai businesswoman who is a permanent resident, visited the White House at least 26 times, often to attend lunches, dinners, and coffees for major donors. On June 18, 1996, Ms. Kanchanalak, who gave a total of $253,000 to the DNC, all of which the committee returned after she said the money belonged to her mother-in-law, brought five of her associates to meet with Mr. Clinton. They included officials from the U.S.-Thai Business Counsel and the Charoen Pokaphand Group, a Thai-based conglomerate said to be the largest foreign investor in China. The DNC's Mr. Fowler and the ever-present Mr. Huang also attended, as did Marvin Rosen, the DNC's finance chairman and head of the soft-money fundraising effort. Though DNC officials now deny it, the committee's records identify the meeting as a fundraiser.

The same day as this meeting, Ms. Kanchanalak contributed the bulk of the amount she gave the DNC that was later returned--$185,000. According to The Wall Street Journal, the topic of the meeting was &quotU.S. policy toward China." While there is no evidence that U.S. policy toward China was affected by the meeting, Common Cause has asked the Justice Department to investigate whether an illegal &quotsale of a meeting" with the president occurred.

The premise of the Common Cause request is that the meeting itself might have been of value to the foreigners who participated in it, since a picture with the president of the United States is a business asset back home. According to Common Cause, it was the value of the photograph, if nothing else, that should be enough to interest the Justice Department.

The Democratic National Committee has had to return $1.5 million of the funds it raised. Nor is it the only entity close to the president that has had to do that. The president's legal defense fund returned $639,000 to Charlie Yah Lin Trie, whom Mr. Clinton first knew when he ran a restaurant in Little Rock. The money came in the form of checks and money orders that had sequential serial numbers and were filled out by the same hand.

Attorney General Janet Reno has already rejected requests for the appointment of an independent counsel to probe the fundraising matters. The task force within the Justice Department to which she instead gave the assignment has blanketed the White House and the DNC with subpoenas that are now in the process of being answered. Through its hearings this winter and spring the Congress may unearth new information. As could a snarling press: In late December The Los Angeles Times published an unusual story criticizing the White House for misleading reporters and declining to release important details before the election.

Apart from any election law violations and the fate of John Huang, the big questions now asked in Washington are (1) whether government policy was altered because of the fundraising in question and (2) whether any foreign governments--many of the wealthy Asians and Asian-Americans have ties to Asian heads of state--sought to produce change in policy by laundering money through Asian businessmen giving sums to Asian-Americans who in turn contributed to the Democratic Party and thus to Mr. Clinton.

At some point Ms. Reno may be compelled to ask for an independent counsel. It would be the fifth assigned to investigate the Clinton administration.

Incidentally, in the 1996 election 49 percent of Asian-Americans voted for Bob Dole, and 42 percent for Mr. Clinton. In congressional races, 53 percent voted for the Republican candidate, 42 percent for the Democratic candidate. As in the presidential race, Asian-Americans voted more Republican than did whites.