Clinton calls for probe of donations Report of foreign gifts to president's party is 'very serious,' he says

February 14, 1997|By Mark Matthews | Mark Matthews,SUN NATIONAL STAFF

WASHINGTON -- President Clinton said yesterday that a report that the Chinese government tried to steer foreign campaign donations to the Democratic Party was "very serious" and should be thoroughly investigated by the Justice Department.

"Obviously, it would be a very serious matter for the United States if any country were to attempt to funnel funds to one of our political parties, for any reason whatever," Clinton said at a news conference with the visiting Israeli prime minister, Benjamin Netanyahu.

"So, I think we just have to let the investigation proceed. And we should all support it in every way we can. It has to be vigorous, and it has to be thorough," said the president.

The news conference dealt mostly with questions about the Middle East peace process. Clinton said the January Israeli-Palestinian deal in which Israeli troops largely withdrew from the volatile West Bank city of Hebron had created "a renewed sense of promise in the Middle East."

But neither Clinton nor Netanyahu offered any indication of significant progress soon on the overall peace process.

The allegation about China was first reported yesterday in the Washington Post. The report said the Justice Department had obtained intelligence that the Chinese Embassy in Washington was used to plan fund raising for the Democratic National Committee before the 1996 elections.

That disclosure opens an explosive new avenue in the Justice Department investigation of improper foreign contributions.

Until yesterday, no evidence had surfaced to link China or any other foreign government to the political money trail or to any effort to influence administration policy. The Democratic Party so far has returned more than $1 million of the $3.4 million in campaign contributions raised by one of its most successful fund-raisers, John Huang. The party says the donations came, or might have come, from foreign individuals or foreign corporations.

Noncitizens are allowed to contribute to American campaigns only if they are legal residents of the United States. Foreign corporations cannot donate to campaigns unless the money was earned by a subsidiary in the United States.

Neither the president nor the article in the Post offered details as to how the Chinese might have funneled the contributions into Democratic coffers. But previously released documents on Huang's activities show that he raised money from contributors with foreign ties and also had contacts with Chinese government officials.

The Chinese-born Huang was a longtime executive of the Indonesia-based Lippo financial and commercial conglomerate. Lippo has extensive business interests in China and Hong Kong, which will become part of China this year.

Huang raised money for the Clinton campaign in 1992. Later, he won a midlevel appointment at the Commerce Department, where he followed Asian trade issues and received top-secret intelligence briefings.

Lippo's owners, the Riady family, have known Clinton since his days as governor of Arkansas, and visited the president at the White House. Huang maintained frequent contact with Lippo while at Commerce and also had contacts with Chinese officials. dTC One document cited by the Post indicates at least one Huang visit to the Chinese ambassador's residence.

At his news conference, Clinton said he learned of the allegations Wednesday evening. He deferred to the Justice Department the question of whether the new disclosures warrant the appointment of an independent counsel.

Yesterday's visit here by Netanyahu marked the first of four by Middle East leaders whom Clinton has invited to explore future peace prospects after last month's landmark deal on the Israeli troop pullout in Hebron. The others are Yasser Arafat, chairman of the Palestinian Authority, President Hosni Mubarak of Egypt and King Hussein of Jordan.

Allowing Netanyahu to be the first visitor was seen as his reward for taking the political risk of completing the Hebron deal, which drew fire from some of his right-wing supporters.

Analysts see little reason, however, to be optimistic about prospects for Israeli-Syrian talks. Netanyahu has offered Syria only a territorial compromise on the Golan Heights, which Israel occupied in 1967, not the complete withdrawal that Syria insists upon.

Also, President Hafez el Assad of Syria, recovering from prostate surgery and coping with a series of unexplained explosions in Syria and Syrian-controlled portions of Lebanon, is viewed as unlikely to want to resume negotiations that offer little hope of success. "I don't see particularly good prospects [for talks between] Israel and Syria," said Richard Haass, director of foreign policy studies at the Brookings Institution.

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