Chinese official sent money for Clinton bid, Chung says

Ex-fund-raiser testifies about Beijing's interest in president's re-election

April 04, 1999|By LOS ANGELES TIMES

WASHINGTON -- The chief of China's military intelligence secretly directed funds from Beijing to help re-elect President Clinton in 1996, former Democratic fund-raiser Johnny Chung has told federal investigators.

Chung says he met three times with the intelligence official, Gen. Ji Shengde, who ordered $300,000 deposited into the Torrance, Calif., businessman's bank account to subsidize campaign donations intended for Clinton, according to sources familiar with Chung's sealed statements to federal prosecutors.

During their initial meeting on Aug. 11, 1996, in Hong Kong, Ji conveyed to Chung the Chinese government's specific interest in supporting Clinton.

"We like your president," Ji said, according to sources familiar with Chung's grand jury testimony. Chung testified that he was introduced to the intelligence chief by the daughter of China's retired senior military officer.

Chung's testimony has apparently provided investigators with the first direct link between a senior Chinese government official and illicit foreign contributions that flowed into Clinton's 1996 re-election effort. It is the strongest evidence to emerge -- in two years of federal investigations -- that the highest levels of the Chinese government sought to influence the U.S. election process.

Key aspects of Chung's testimony, which has not been made public, have been corroborated by financial records in the United States and Hong Kong, according to law enforcement and other sources.

It is illegal for U.S. political parties or candidates to accept contributions from foreign sources.

A spokesman for China's embassy in Washington denied any involvement by China in the 1996 elections.

"We are very categoric in our denial of these allegations," said the spokesman, Yu Shuning. "All these allegations about so-called Chinese government officials' political contributions into U.S. campaigns are sheer fabrications."

On Friday, White House spokesman Jim Kennedy said the administration had no knowledge about the source of Chung's donations during the 1996 campaign and declined to comment on "allegations regarding intelligence matters."

Chung, 44, a Taiwan-born American citizen who resides near Los Angeles, was one of the most prominent figures in the 1996 campaign finance scandal. He contributed more than $400,000 to various Democratic campaigns and causes, visited the White House no fewer than 50 times, and brought numerous Chinese associates to events with the president and first lady Hillary Rodham Clinton.

He pleaded guilty last year to election law violations and became the first major figure in the scandal to cooperate with the Justice Department. That assistance earned him a strong recommendation for leniency, resulting in a sentence of probation and community service in December.

Ji, the Chinese intelligence chief, was named by Chung in sworn grand jury testimony and in statements to Justice Department investigators during extensive interviews from December 1997 through March 1998. Chung also turned over cartons of financial records.

Chung told investigators that he and Ji were brought together by Liu Chao-Ying, the daughter of retired Gen. Liu Huaqing. She was a Chung business partner as well as a lieutenant colonel in the People's Liberation Army.

Last spring, federal agents moved Chung and his family into protective custody, law enforcement sources told the Los Angeles Times.

The FBI feared for Chung's safety after he received veiled threats and bribe offers from individuals pressing him to keep silent about his China dealings. Those concerns grew after the FBI received undisclosed intelligence information from overseas indicating that Chung could be in danger.

FBI officials in Washington and Los Angeles declined to discuss the actions or security measures.

Justice Department spokesman Myron Marlin refused comment Friday because of "an ongoing investigation."

Law-enforcement officials said that the investigation remains highly sensitive but refused to provide details or discuss the prospect for indictments.

Chung declined to comment, except to say that he has "already told the whole truth to the grand jury."

However, interviews with knowledgeable sources and documents obtained by the Times also disclosed that:

* Soon after returning home from Hong Kong and his meeting with Ji, Chung hired the Chinese intelligence chief's son, then a University of California, Los Angeles student, to work at his Torrance fax business in late 1996.

* Chung began providing information to federal prosecutors earlier than previously known -- a full year before he had reached a plea bargain with the Justice Department in March 1998. Investigators were given access to Chung's Hong Kong bank records to help trace the origin of the $300,000 deposit. Most of the money never got to the Democratic Party.

* Chung has told investigators that Liu said she and Ji also were relying on others to funnel funds into Democratic campaigns.

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