1996 United States Campaign Finance Controversy

The 1996 United States campaign finance controversy, or uncommonly referred to as Chinagate, was an effort by the People's Republic of China to influence domestic American politics prior to and during the Clinton administration and also involved the fundraising practices of the administration itself.

While questions regarding the U.S. Democratic Party's fundraising activities first arose over a ''Los Angeles Times'' article published on September 21, 1996,Miller, Alan C.
"Democrats Return Illegal Contribution"
, ''Los Angeles Times'', September 21, 1996 China's role in the affair first gained public attention when Bob Woodward and Brian Duffy of ''The Washington Post'' published a story stating that a United States Department of Justice investigation into the fundraising activities had uncovered evidence that agents of China sought to direct contributions from foreign sources to the Democratic National Committee (DNC) before the 1996 presidential campaign. The journalists wrote that intelligence information had shown the Chinese embassy in Washington, D.C. was used for coordinating contributions to the DNCWoodward, Bob and Duffy, Brian
"Chinese Embassy Role In Contributions Probed"
, ''The Washington Post'', February 13, 1997 in violation of United States law forbidding non- American citizens or non-permanent residents from giving monetary donations to United States politicians and political parties. A Republican investigator of the controversy stated the Chinese plan targeted both presidential and congressional United States elections, while Democratic senators said the evidence showed the Chinese targeted only congressional elections. The government of the People's Republic of China denied all accusations.

Background

According to the U.S. Senate report, Chinese officials eventually developed a set of proposals to promote their interests with the United States government and to improve China's image with the American people. The proposals, dubbed the "China Plan", were prompted by the United States Congress's successful lobbying of President Bill Clinton to grant a visa to Taiwan President Lee Teng-hui. U.S. Secretary of State Warren Christopher had previously assured his Chinese counterpart Chinese Foreign Minister Qian Qichen that granting a visa would be "inconsistent with he United States'unofficial relationship ith TaiwanRoss, Robert S
"The 1995–1996 Taiwan Strait Confrontation: Coercion, Credibility, and Use of Force"
, '' International Security'', 25:2, pp. 87–123, Fall 2000, Retrieved: April 14, 2006 (PDF file) and the Clinton Administration's acquiescence to the Congressional resolutions led China to conclude that the influence of Congress over foreign policy was more significant than it had previously determined. When formulating the so-called plan, Chinese officials acknowledged that, compared to other countries, it had little knowledge of, or influence over, policy decisions made in Congress, which had a sizeable pro-Taiwan faction under the influence of a more established " China Lobby" run by the Kuomintang.Senate Committee on Governmental Affairs (1998). "Volume 4 of 6, Minority Views of Senators Glenn, Levin, Lieberman, Akaka, Durbin, Torricelli, and Cleland, Part 1. Foreign Influence, Chapter 2, The China Plan" in ''Investigation of Illegal or Improper Activities in Connection with 1996 Federal Election Campaigns, Final Report'' (Senate Report 105-167, March 10, 1998, 105th Congress, 2d Session), se

, an

, accessed 6 October 2015. Note, this is part of the full citation and an alternate web location of the WikiSource

, given above. The plan, according to the Senate report, instructed Chinese officials in the U.S. to improve their knowledge about members of Congress and increase contacts with its members, the public, and the media. The plan also suggested ways to Lobbying, lobby United States officials.

Over the years, China repeatedly denied that their lobbying efforts involved financial contributions of any kind, e.g., stating "some people and media in the United States speculated... about so-called participation by Chinese individuals in political donations during the U.S. elections. It is sheer fabrication and is intended to slander China. hinahas never, nor will we ever, use money to influence American politics"—a Chinese Foreign Ministry spokesperson, May 1998.Pomfret, John
"China Denies Contribution Charges"
, ''The Washington Post'', May 20, 1998

Major fund-raising figures

Yah-Lin "Charlie" Trie

The most significant activity by Yah-Lin "Charlie" Trie (崔亞琳) was a $450,000 attempted donation from him to Clinton's legal defense fund (for his impeachment trials) which Trie allegedly delivered in two envelopes each containing several checks and money orders. The fund immediately rejected $70,000 and deposited the remainder, but ordered an investigation of the source. The investigation found that some of the money orders were made out in different names but with the same handwriting, and sequentially numbered. The fund then rejected the donation entirely, and allegedly returned the deposited funds two months after the initial contribution.Campaign Finance Key Player: Yah Lin 'Charlie' Trie
Washington Post, March 4, 1998

Born in Taiwan, Trie emigrated to the U.S. in 1974. He eventually became an American citizen and co-owner of a restaurant in Little Rock, Arkansas. The 1997 special investigation describes Trie as having attempted to develop an international trading business (Daihatsu International Trading Corporation), having maintained or accessed accounts in Little Rock and Washington, D.C. into which Macau-based real estate businessman Ng Lap Seng wired >$1M USD from Macau and Hong Kong accounts, and as having never succeeded in the trading business (based on bank and tax records indicating substantive income only from Ng).Senate Committee on Governmental Affairs (1998). "Summary of Findings" (Chapter 3), "The China Connection: Summary of Committee's Findings Relating to the Effort of the People's Republic of China to Influence U.S. Policies and Elections" (Chapter 18), and "Charlie Trie's Contributions to the Presidential Legal Expense Trust (Chapter 20), in ''Investigation of Illegal or Improper Activities in Connection with 1996 Federal Election Campaigns, Final Report'' (Senate Report 105-167, March 10, 1998, 105th Congress, 2d Session), se





, an

, accessed 6 October 2015. Note, this is the full citation and an alternate web location of the WikiSource

, given above.

In Little Rock, Trie befriended Clinton, then List of Governors of Arkansas, Governor of Arkansas. In addition to the attempted donation to Clinton's defense fund, Trie and his immediate family donated $220,000 to the DNC which was also later returned. Immediately after the donation to Clinton's defense fund, Trie sent a letter to President Clinton that expressed concern about America's intervention in tensions arising from China's military exercises being conducted near Taiwan. Trie told the President in his letter that war with China was a possibility should U.S. intervention continue:

After Congressional investigations turned to Trie in late 1996, he left the country for China. Trie returned to the U.S. in 1998 and was convicted and sentenced to three years' probation and four months' home detention for violating federal campaign finance laws by making political contributions in someone else's name and for causing a false statement to be made to the Federal Election Commission (FEC).

Johnny Chung

Born in Taiwan, Johnny Chung went from being the owner of a "blastfaxing" business (an automated system that quickly sends out faxes to thousands of businesses) in California to being in the middle of the Washington, D.C. elite within a couple weeks of his first donations to the Democratic Party. Called a "hustler" by a U.S. National Security Council (NSC) aide,Jackson, David and Sun, Lena H.
"Liu's Deals With Chung: An Intercontinental Puzzle"
, ''The Washington Post'', May 24, 1998 Chung made forty-nine separate visits to the White House between February 1994 and February 1996. One of his purposes in making these trips was to obtain photographs of himself with the Clintons, which he believed would help him to get business in China by giving people the impression that he had connections and influence in Washington—he used a brochure that included at least ten photographs of himself with Hillary Clinton along with a personal note from her. During one of the U.S. Commerce Department trade missions to China, Chung befriended former Chinese Lt. Col. Liu Chaoying, then an executive at China Aerospace International Holdings (中國航天國際控股有限公司), which is the Hong Kong-based subsidiary of the government-controlled CASC (中國航天科技集團公司), China's premier satellite launching company. She is the daughter of former General Liu Huaqing.

Between 1994 and 1996, Chung donated $366,000 to the DNC. Once the truth of this situation was revealed to the public, all of the money was allegedly returned. Chung told federal investigators that $35,000 of the money he donated came from Liu Chaoying and, in turn, China's military intelligence.

Specifically, Chung testified under oath to the U.S. House Committee investigating the issue in May 1999 that he was introduced to Chinese Gen. Ji Shengde, then the head of Chinese military intelligence, by Liu Chaoying. Chung said that Ji told him: "We like your president very much. We would like to see him reelect. I will give you 300,000 U.S. dollars. You can give it to the president and the Democrat Party."Johnston, David
"Committee Told Of Beijing Cash For Democrats "
, ''The New York Times'', May 12, 1999 Both Liu and the Chinese government denied the claims.

Chung was eventually sentenced to five years' probation and community service following an agreement to plea guilty to bank fraud, tax evasion, and two misdemeanor counts of conspiring to violate election law."James Riady Pleads Guilty"
, Department of Justice, press release, January 11, 2001, Retrieved: April 14, 2006

John Huang and James Riady

John Huang (pronounced "Hwa g), was another major figure convicted. Born in 1945 in Nanping, Fujian, Huang and his father fled to Taiwan at the end of the Chinese Civil War before he eventually emigrated to the United States in 1969. A former employee of the Indonesian company Lippo Group's Lippo Bank and its owners Mochtar Riady and his son James (whom Huang first met along with Bill Clinton at a financial seminar in Little Rock, Arkansas, in 1980), Huang became a key fund-raiser within the DNC in 1995. While there, he raised $3.4 million for the party. Nearly half had to be returned when questions arose regarding their source during later investigations by Congress."Campaign Finance Key Player: John Huang"
, ''The Washington Post'', July 27, 1997

According to U.S. Secret Service logs, Huang visited the White House 78 times while working as a DNC fund-raiser."The Democratic Fund-Raising Flap: Timeline"
, ''CNN.com'', July 1, 1997 James Riady visited the White House 20 times (including six personal visits to President Clinton).
, ''CNN.com'', July 1, 1997

Immediately prior to joining the DNC, Huang worked in President Clinton's Commerce Department as deputy assistant secretary for international economic affairs. His position made him responsible for Asia-U.S. trade matters. He was appointed to the position by President Clinton in December 1993. His position at the Commerce Department gave him access to classified intelligence on China. While at the department, it was later learned, Huang met 9 times with Chinese embassy officials."Highlights of U.S. report on alleged China spying"
, ''CNN.com'', May 25, 1999

Huang eventually pleaded guilty to conspiring to reimburse Lippo Group employees' campaign contributions with corporate or foreign funds."Former Democratic fund-raiser John Huang pleads guilty"
, ''CNN.com'', Aug. 12, 1999 James Riady was later convicted of campaign finance violations relating to the same scheme as well, and was sentenced to pay a large fine. Shortly after Riady pledged $1 million in support of then-Governor Clinton's campaign for the presidency, contributions made by Huang had been reimbursed with funds wired from a foreign Lippo Group entity into an account Riady maintained at Lippo Bank and then distributed to Huang in cash. Also, contributions made by Lippo Group entities operating in the United States were reimbursed with wire transfers from foreign Lippo Group entities.

An unclassified U.S. Senate Committee on Governmental Affairs report issued in 1998 stated that both James Riady and his father Mochtar had "had a long-term relationship with a Chinese intelligence agency." According to journalist Bob Woodward, details of the relationship came from highly classified intelligence information supplied to the committee by both the CIA and Federal Bureau of Investigation (FBI).Woodward, Bob
"Findings Link Clinton Allies to Chinese Intelligence"
, ''The Washington Post'', Feb. 10, 1998

The most well-known of John Huang's fund-raisers involved Vice President Al Gore, Maria Hsia, and the Hsi Lai Buddhist Temple in California.

Maria Hsia

Taiwan-born Maria Hsia (pronounced "Shya"), a long time fund raiser for Al Gore, California immigration consultant, and business associate of John Huang and James Riady since 1988, facilitated $100,000 in illegal campaign contributions through her efforts at Hsi Lai Temple, a Chinese Buddhist temple associated with Taiwan in Hacienda Heights, California. This money went to the DNC, to the Clinton–Gore campaign, and to U.S. Representative Patrick Kennedy of Rhode Island. After a trial, Hsia was convicted in March 2000.
Eskenazi, Michael
"For both Gore and GOP, a guilty verdict to watch"
''CNN.com'', March 3, 2000

The Democratic National Committee eventually returned the money donated by the temple's monks and nuns. Twelve nuns and employees of the temple, including temple abbess Venerable Yi Kung (who resigned her post after being subpoenaed), refused to answer questions by pleading the Fifth Amendment when they were subpoenaed to testify before Congress.Abse, Nathan
"A Look at the 94 Who Aren't Talking"
, ''The Washington Post'', June 9, 1998 Two other Buddhist nuns admitted destroying lists of donors and other documents related to the controversy because they felt the information would embarrass the temple. A Temple-commissioned videotape of the fund raiser also went missing and the nuns' attorney claimed it may have been shipped off to Taiwan.

The temple event became particularly controversial because it was attended by Vice President Gore. In an interview on the January 24, 1997, edition of the ''Today'' show, Gore said:

In response, the U.S. Senate Governmental Affairs Committee that investigated the controversy said:

John Huang's memo to Vice President Gore's assistant Kimberly Tilley specifically mentioned that the temple meeting was a fundraising event. Gore later acknowledged that he had known the visit was "finance-related."Huang, John
"Memo for Kim Tilley"
, April 11, 1996

In the U.S., religious organizations enjoy a tax exempt status. Political activity is prohibited for such tax exempt entities.
The Senate Governmental Affairs Committee also said they learned that Hsia had served as an "agent" of the PRC government. Hsia denied the claim.

Ted Sioeng

Ted Sioeng, an Indonesian entrepreneur who donated money to both Democrats and Republicans, was the sixth individual whose donations were investigated by the Senate committee. Suspect contributions associated with Sioeng include $250,000 to the DNC and $100,000 to Republican California State Treasurer Matt Fong. Fong returned the money in April 1997.

Sieong sat with Bill Clinton or Al Gore at two fundraising events. Sioeng also joined Fong at a meeting with then Republican House Speaker Newt Gingrich in mid-1995. Gingrich called the meeting a "photo op

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