Probe of Donors Said to Include Taiwan Envoy

The Justice Department is investigating charges that James C. Wood, an Arkansan appointed by President Clinton to head the organization representing the U.S. government to Taiwan, has been soliciting political contributions for Clinton from Taiwanese businesses, sources said Monday.

Wood’s fund-raising efforts apparently coincided with the work of controversial Democratic Party fund-raiser John Huang, who went to Taiwan in May seeking contributions for Clinton’s reelection campaign. They also came in the midst of delicate U.S. policy maneuvers last spring involving the future of Taiwan and U.S. relations with mainland China.

Knowledgeable sources said that the State Department inspector general’s office asked the Justice Department in June to investigate accusations of fund-raising by Wood among Taiwan business executives. Justice Department sources confirmed that the matter was under investigation. Wood could not be reached for comment.

Meanwhile, two Taiwanese publications reported Monday that a former White House aide, Mark E. Middleton, had been pledged $15 million from Kuomintang, Taiwan’s ruling Party, in August 1995, although there is no evidence any money changed hands. The deal was said to have included a meeting arranged by Middleton on Sept. 27, 1995, between Clinton and Liu Tai-Ying, head of the party’s business arm.

At the White House, officials said they were searching records of the president’s meetings to determine if he had met with Liu. At the Democratic National Committee, officials denied authorizing any efforts by anyone to solicit money from the government of Taiwan or Taiwanese businesses.

Under law, U.S. political candidates are prohibited from accepting donations from foreign governments and foreign citizens, except those who reside legally in the United States.

In Washington, the DNC said it would not file a preelection report detailing contributions and expenditures during the first two weeks of October. Although the DNC routinely files such reports, party officials said that they were not required to do so this year because they did not make any expenditures directly on behalf of President Clinton or other federal candidates during that period.

However, Democratic Party officials said they would voluntarily make public later this week a list of contributions received during the first two weeks of October to satisfy public curiosity and dispel any suspicions that they were trying to hide something.

Wood was appointed in December 1995 to head the suburban Virginia office of the American Institute in Taiwan, a quasi-governmental organization that represents U.S. interests in Taipei. Because the United States does not have formal diplomatic relations with Taiwan, the institute was created to assist in U.S.-Taiwan diplomacy. It is supervised by the State Department, and has offices here and in Taipei.

Wood’s appointment to the sensitive job, which carries a salary of more than $110,000 a year, prompted outrage among China veterans in the U.S. foreign service, from whose ranks Wood’s predecessors had been chosen. Although Wood had once been a foreign service officer, he had been practicing international trade law in Washington before his appointment.

At the time, Wood was said to have been the choice of both White House senior advisor Thomas F. “Mack” McLarty and Richard M. Moose, then undersecretary of state. Moose, another Arkansan and a friend of Clinton, recently resigned.

Last summer, sources said, the State Department inspector general’s office received accusations that Wood had met with Taiwan business executives during his visits to the capital city of Taipei and suggested that they should contribute to the Clinton campaign to show their appreciation for administration policy toward Taiwan.

Concluding that the allegations went beyond the jurisdiction of the inspector general’s office, sources said, the State Department relayed the evidence to the Justice Department, where it remains under investigation.

U.S. officials said that Wood had visited Taiwan three times since joining the American Institute. He made his first visit in February, immediately before the crisis that occurred on the eve of Taiwan’s first presidential election on March 23.

Shortly before the Taiwan election, China conducted large-scale military exercises near the island and Clinton responded by sending a second aircraft-carrier battle group to the region to dissuade the Chinese from taking military action.

Thereafter, Wood was said by U.S. officials to have visited Taiwan twice, once in late April and early May and again in late May for the inauguration of President Lee Teng-Hui. Accompanying Wood on the later trip was Huang, a naturalized U.S. citizen from Taiwan who was working as a fund-raiser for the Democratic Party.

Amy Weiss Tobe, the party spokeswoman, has acknowledged that Huang sought contributions during his trip to Taiwan in May but she insisted that he contacted only U.S. citizens and resident immigrants--not citizens of Taiwan.

Middleton could not be reached for comment on reports about his alleged fund-raising activities that appeared in two Taiwan publications, Yazhou Zhoukan and United Daily News.

According to these reports, Middleton, once an aide to McLarty, visited Taiwan four times as a private citizen after leaving the White House in February and discussed the possible $15-million donation with Liu during one of those trips.

Liu flew to San Francisco to meet with Clinton the following month but White House officials said they were not certain whether he actually had met with the President.

Taiwanese interests have actively courted politicians of both political parties. The Washington Post reported Saturday, for example, that the government of Taiwan gave $225,000 to a foundation controlled by Sen. Jesse Helms (R-N.C.). Helms admitted receiving the contribution, noting that the law allows foreign interests to give money to foundations controlled by legislators.

Times staff writers Rone Tempest in Taipei and Jim Mann in Washington contributed to this story.

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BACKGROUND ON CONTRIBUTIONS

Charges of violations of U.S. election law governing foreign contributions are mounting. Foreign citizens may contribute only if they have green cards and permanent residence in the United States; foreign corporations may contribute only if the funds have been generated by U.S. subsidiaries. The Democratic National Committee has been forced to return a $250,000 contribution from a South Korean company with no U.S. subsidiary. Also under scrutiny are donations of $450,000 from an Indonesian couple, $325,000 from a great-grandnephew of Mahatma Gandhi and $140,000 from people who attended a fund-raiser at a Buddhist temple in Hacienda Heights.