How serious is this? No one really knows. Foreign nationals are prohibited from contributing to U.S. political campaigns, but naturalized citizens and resident aliens have every right to give. And the law on soft-money contributions is just what the term implies: squishy. As a result, Indogate so far is a matter of tracing connections that look unsavory. Still, the questions are serious enough to force Attorney General Janet Reno to order a formal review of possible criminality–the first step toward requesting the appointment of an independent counsel. They are serious enough to warrant an FBI investigation of James C. Wood Jr., director of the American Institute in Taiwan, for allegedly pressuring Taiwan businessmen for campaign contributions. (Wood denies wrongdoing.) And they are serious enough to make Bill Clinton, winding up his last campaign, dodge interviews. ““All we’re trying to do is get through Election Day,’’ a White House aide says.
So far, questions have been raised about the legitimacy of $1.1 million in recent contributions to the Democratic National Committee, including $450,000 from Indonesian associates of the Riady family, $250,000 from a Korean manufacturing company, $140,000 from a group of Chinese-American Buddhists and $325,000 from a distant relative of Mahatma Gandhi. Embarrassed DNC officials have already returned some of these contributions and asked the Feder- al Election Commission to investigate the rest. Last week a Taiwan political consult- ant named C. P. Chen told reporters for NEWSWEEK and other publications that he was present last year when a top official of the country’s ruling Kuomintang party offered a former White House aide $15 million toward Clinton’s re-election. Taiwan’s President Lee Teng-hui said no such contribution had been made, and the former Clinton aide, Mark Middleton, flatly denied soliciting contributions in Taiwan. But Chen said he had a ““secret witness’’ to back up his account, and he was able to produce a business card that Middleton, who is no longer on the White House staff, had handed out during visits to Taiwan. It bore a gold eagle and, under his name, the words SPECIAL ASSISTANT TO THE PRESIDENT AND DEPUTY TO THE COUNSELOR. It also bore a White House phone number.
The most serious concerns start with a 51-year-old Chinese-American banker turned Democratic Party functionary, John C. Huang, whose association with Bill Clinton dates back to his Little Rock days and who raised nearly $5 million for this year’s campaign. Huang, who was suspended from fund raising when the scandal broke, surfaced in Washington last week to answer questions about his work for the U.S. Commerce Department, where he was a deputy assistant secretary from July 1994 to December 1995. Department officials say Huang’s duties were mostly administrative. But insiders say the department was split between serious foreign-trade specialists and a coterie of political types that included Huang. In Huang’s case, the ethical lines get fuzzier still because, like many politically active businessmen, he seems to have been a relentless schmoozer–a human switchboard who, among other politically connected duties, kept in frequent touch with his old friends in Little Rock and with Asian businessmen as well.
Phone logs released last week by the Commerce Department show that Huang maintained contact with James Riady’s Los Angeles bank, which has a history of disputes with federal regulators. He had numerous calls from members of the Little Rock crowd, including Webster Hubbell and C. Joseph Giroir Jr., a former partner in the Rose Law Firm who had dealings with the Riady family. (Giroir said his conversations with Huang were merely friendly chats.) The logs also list numerous calls from senior White House officials. Secret Service records further show that Huang–despite the fact that he was only a midlevel official at Commerce–was a frequent visitor to the White House.
Huang held a top-secret security clearance and got weekly intelligence briefings during his tenure at Commerce. That meant he was almost certainly in the loop on sensitive details of U.S. trade policy. But he got his security clearance without anyone’s conducting background interviews overseas–which seems like very poor judgment. The obvious reason is Huang’s ties to the Riady family and the Lippo Group. On Nov. 7, 1992, four days after Clinton was elected president, a company called China Resources Holding began buying shares in the same Lippo-owned Hong Kong bank where Huang himself once worked. China Resources, which now owns 50 percent of the bank, is an arm of the trade ministry of the government of mainland China. Though such arrangements are commonplace in Asia, security experts say a better background check might have revealed this backdoor connection to Beijing. ““In hindsight, we could have said, “Go back to Hong Kong on this thing and get more detail’,’’ a Commerce Department security official, Paul Buskirk, said last week. (Neither Huang nor his lawyer would comment on any aspect of his activities last week.)
Huang’s phone logs also include calls from two Arkansas lawyers whose names have surfaced in connection with the Taiwan fund-raising scandal. One is Mark Grobmyer, whose wife is close to Al Gore’s family and who has sometimes been one of Clinton’s golfing buddies. White House sources say Grobmyer has periodically tried to get the support of Gore’s staff for various business ventures, and he has been involved with the Riadys as well. In 1993, he accompanied Huang and James Riady to an Oval Office meeting with Clinton himself. In 1993, Grobmyer got a rare interview with Indonesia’s President Suharto and, according to the Arkansas Gazette, passed out business cards identifying himself as a ““White House liaison.’’ Grobmyer’s office said he and Huang never discussed ““substantive policy issues’’ and insisted that his business cards were not an attempt to depict himself as a White House official. The cards, he said, identified him as White House liaison for the Center for the Study of the Presidency, a private research organization.
The other lawyer on Huang’s phone logs is Mark Middleton, now a central figure in the political uproar in Taiwan. Middleton, 34, served as special assistant to former White House chief of staff Thomas F. (Mack) McLarty until early 1995; later he joined a firm called Commerce Corp. International. C. P. Chen says Middleton flew to Taiwan in April 1995 hoping to win a public-relations contract with the Taiwan government–though Chen also said Middleton seemed to be raising funds for the Democratic Party as well. Chen pointed Middleton toward Liu Tai-ying, who heads the Kuomintang’s business arm, and their meeting took place on Aug. 1.
What happened next is hotly disputed, particularly by Liu. According to Chen, Middleton described various ways a political donor could get access to Clinton, and Liu said, ““We can support it.’’ When Middleton asked how much, Liu replied, ““Fifteen million.’’ ““How much, sir?’’ Middleton stammered, and Liu, according to Chen, repeated, ““Fifteen million. One-five.''
Liu and other Kuomintang officials say Chen made up the whole story, and the DNC says it didn’t get $15 million from anyone. But the questions about the Arkansas crowd’s adventures in Asia are getting deeper every day–and may take months, if not years, to resolve.
As questions about foreign contributions grow for the DNC, the roads of another potential scandal run to Little Rock. A look:
Joe Giroir: Once a Rose Law Firm partner, he is involved with the Riadys and others in deals in the Far East. Last year, with Huang and Riady, he met with Clinton.
Mark Grobmyer: Little Rock lawyer active in Asian business attended a White House meeting with James Riady. He later gained a rare audience with Indonesia’s president.
Webb Hubbell: Clinton’s former assistant A.G., got $150,000 for business development from Lippo and phoned Huang several times before heading to prison.
Mark Middleton: Former White House aide, left to head a trading firm active in Asia. On recent trip to Taiwan he allegedly sought funds for the DNC.
James Riady: Son of Mochtar Riady, patriarch of the Lippo empire, he worked as a banker in Little Rock and later visited Clinton in the White House.
