WASHINGTON -- Hillary Rodham Clinton's chief of staff accepted a $50,000 donation to the Democratic Party from a Chinese-American businessman on White House property in 1995, administration officials said last night.
Within days, the money was passed on to the Democratic National Committee. It is now being returned because of questions about its source.
The admission could call into question months of public assurances from President Clinton and his top aides that no campaign money had been solicited or raised by White House officials, or by anyone else, on White House grounds.
Federal officials are barred by the Hatch Act from engaging in political fund-raising. The acceptance of the $50,000 also could collide with a criminal law that bans fund raising on federal property.
Ann Lewis, the deputy White House communications director, asserted last night that because Mrs. Clinton's chief of staff, Margaret A. Williams, simply forwarded the money to the Democratic National Committee, she had not broken the law.
"The act of handling and forwarding the contribution does does not violate the Hatch Act," Lewis said. "Our position is that it was legal and appropriate."
Appearing on NBC News, which broke the story last night, Joseph DiGenova, a Republican former U.S. attorney in Washington, disagreed.
"The White House is completely wrong," DiGenova said. "It is totally improper. It is illegal to receive federal campaign funds on property at the White House or at the [Old] Executive Office Building."
But White House officials, citing regulations that took effect in 1994 and 1996, insisted that Williams' role in accepting the checks did not meet the legal definition of "receiving" a &r contribution.
"She followed procedures that were set up and passed it along," Lewis said.
Lewis' carefully worded statement about having "procedures" in place for such an occurrence raised the question of whether other such large donations had been received at the White House. Asked whether this was so, Lewis replied: "Checks do come into the White House, so procedures were set up to pass them along to the appropriate entities."
The Chinese-American businessman, Johnny Chung, was a frequent White House visitor who invariably dropped by the first lady's office when he was there.
On at least one occasion, Chung openly inquired of Williams how he could give money, Lewis confirmed. She said Williams told Chung that under federal election law, he could give large sums to the Democratic National Committee, but not directly to the Clinton campaign.
On the March 1995 visit when he gave Williams the check, Chung reportedly brought six clients, several of whom have been identified as Chinese nationals. They were allowed to attend a taping of Clinton's radio address and had their pictures taken with the president.
Chung, who was born in Taiwan, has been at the center of the growing scandal surrounding Democratic fund raising. Already, the party has returned about $1.5 million raised by him and two other Chinese-Americans, primarily because party officials suspect that the money came from overseas. Foreign donations are barred under federal election law.
Chung's visit -- and the identity of his guests -- caused alarm bells to go off inside the National Security Council, which had concerns about the access of Chinese government representatives to the White House.
After the visit, the National Security Council was asked whether the White House should provide a photo of the president, as Chung had requested. The subsequent NSC staff-produced report concluded that Chung's delegation "appeared to include bona fide present or former Chinese officials" but said that providing the photo would not cause "any lasting damage to foreign policy." At the same time, the report did raise the concern that Chung might have had business motives for the request.
L Last night's revelations raised several important questions.
Was the money Williams forwarded to the DNC actually Chung's, or did it come from his Chinese clients?
Was the $50,000 understood to be a payment for getting his guests into the radio address or for having their pictures taken with the president?
Did Williams' suggestion to Chung constitute a solicitation of a contribution?
Were the regulations cited by Lewis written specifically to minimize the legal risks to White House aides?
Why did White House aides such as Williams seemingly ignore the blunt advice of Abner V. Mikva, the White House counsel at the time? Just two weeks before Chung's visit, Mikva warned the entire White House staff not to raise political money.
Mikva went so far as to spell out prohibitions against letting contributors have their pictures taken by White House staff photographers with the president.
"Campaign fund-raising activities of any kind are prohibited in or from government buildings," Mikva wrote. "In addition, federal employees are prohibited from soliciting or accepting campaign contributions. This means that fund-raising events may not be held in the White House; also, no fund-raising phone calls or mail may emanate from the White House or any other federal building."
In another development yesterday, aides to Vice President Al Gore said he was mistaken when he said Monday that he had used a DNC credit card to make the long-distance phone solicitations. Instead, his office said, it was a card issued by the Clinton-Gore campaign. In raising money directly for the campaign, Gore would have been limited to asking for $1,000 or $5,000 contributions, not the $100,000 donations he requested be earmarked to the DNC.
Pub Date: 3/06/97