A Picture Worth $325,000?

Click through the Internet Web site of Dr. Hogen Fukunaga (www.tensei.com) and the computer screen flashes a photograph of the tall, striking Japanese spiritual leader presenting a bust of Mohandas K. Gandhi to a smiling President Clinton.

In the background, squeezed between the two men, is Yogesh K. Gandhi, president of the Gandhi Memorial International Foundation, which sponsors the award and tapped Clinton as a recipient.

This image, taken in May during a Democratic fund-raiser at a Washington hotel, captures the essence of a political controversy that has rocked the Democratic Party on the eve of the presidential election.

It combines two of the most combustible elements in politics: people with money seeking influence and recognition, and people with power and influence raising money.

In this tableau, there is Fukunaga, a 51-year-old multimillionaire and leader of a sect that has its headquarters near Mt. Fuji, who preaches the Eastern faith of Tensei and claims to possess extraordinary spiritual powers. He boasts of curing the sick, including cancer patients, but faces lawsuits in Japan alleging that he bilked hundreds of followers. Over the past year, he has been avidly courting recognition and legitimacy around the world.

There is Clinton, holder of the world’s most powerful office and symbol of American democracy across the globe. He sits atop a national party in the throes of the most expensive election campaign in U.S. history. And he is the party’s premiere fund-raising attraction.

And there is Gandhi, the great-grandnephew of Mohandas Gandhi, who lives in the United States and bestows his foundation’s award periodically on someone judged to embody the humanitarian and pacifist ideals of the revered Indian figure. In this role, Gandhi was able to bring Fukunaga and Clinton together--as award presenter and recipient--for the cameras.

Months later, Fukunaga has an impressive photo display posted for computer viewing by his devotees and other curious parties around the world. Gandhi, apparently operating with few assets, has a prosperous financial ally. And the Democratic National Committee has a $325,000 donation in Gandhi’s name for its campaign.

The principals assert that these circumstances are not directly related. DNC officials insist there was no connection between its solicitation of the huge donation--one of the largest it received from any source--and Clinton’s role in the photo ceremony. Further, they stress that they had no reason to believe the money didn’t come from Gandhi, who has residency status in the United States and is a legal donor, as opposed to Fukunaga or his associates, who are not.

“The DNC didn’t see any harm in him presenting it to the president,” said committee spokeswoman Amy Weiss Tobe. She insisted that Gandhi’s request to present the award to Clinton came at the fund-raiser, and not in exchange for the contribution.

Review of Donation

However, in the wake of critical media reports, the party has launched an internal review of Gandhi’s donation and asked the Federal Election Commission to investigate it as part of an inquiry into a series of questionable contributions solicited by DNC fund-raiser John Huang.

And skeptics eyeing the Democrats’ list of large donations with foreign connections are raising the specter of a potentially deliberate effort to channel money from illegal or questionable foreign sources into the U.S. political process.

In the case of the Gandhi award, Yogesh Gandhi told The Times in an interview last month that he made the donation himself from the proceeds of a windfall from a business deal, which he declined to discuss in any detail. However, he acknowledged that his foundation has no money and that he himself is in debt. Gandhi has since declined to return phone calls or respond to questions.

Fukunaga, speaking through an interpreter, scoffed at the suggestion that he or his Japanese associates put up the money for the donation and thus paid for the Clinton session, which would be illegal, because individual donations to U.S. political parties must come from U.S. citizens or legal residents.

“None of it is true and I’m not going to respond,” he said after receiving a series of written questions.

However, Fukunaga and a wealthy Japanese colleague, who also attended the Clinton ceremony, have taken part in a series of similar high-profile events with well-known dignitaries before and after the White House meeting. Each involved arrangements made by Gandhi, each showcased Fukunaga prominently and each was funded largely by Fukunaga’s Japanese associate, records and interviews show.

These included meetings with Pope John Paul II at the Vatican and Mother Teresa in Bombay and participation in a major United Nations conference in Turkey this year.

It may be many months before the legality of the controversial Democratic contributions is resolved. In addition to the $325,000 the DNC received from Gandhi, questions have been raised about donations of $450,000 by an Indonesian couple with ties to an Indonesian financial empire and about money collected at a fund-raiser at a Buddhist temple in Hacienda Heights. The Democrats have returned $260,000 received from a South Korean industrialist and his company that turned out to be illegal.

“When you sell access to power this aggressively and this unabashedly, you are going to have disasters,” said Charles Lewis, executive director of the Center for Public Integrity, a nonpartisan watchdog group. “You’re going to have people you do not want to associate with coalesce around power the way bees coalesce around honey.”

In the case of Fukunaga, the question is whether his picture with the president was worth, not the proverbial thousand words, but $325,000. And who paid for it.

His route to a presidential photo opportunity was as circuitous and colorful as any could be.

Fukunaga built and then lost an electronics business in his native Japan before receiving what he said was a calling to the Tensei way of life in 1980. The faith involves a spiritual bonding with “a natural rhythm that exists throughout nature, the universe and also throughout mankind,” he explained in an interview.

Fukunaga’s organization now has 11 branches throughout Japan and an estimated 110,000 followers. He also is a best-selling author and has published 65 books, among them “How to Be a Billionaire” and “How to Heal Your Sickness and Disease.” His luxurious complex, Tensei Village, sits on a five-acre site surrounded by tea fields near Mt. Fuji. It has a marble-floored headquarters, restaurant, dormitory, training facility, shrine, guest house and a small bamboo forest.

But Fukunaga’s rise didn’t come without problems, primarily involving financial demands made on his followers.

The sect solicits large fees from prospective adherents. In January, about 400 people participated in a five-day training session with proceeds estimated at $8.7 million, according to the Monthly Gendai, a respected Japanese magazine that specializes in investigative reporting.

More than a thousand people have sought legal assistance regarding complaints about their treatment by the sect or its financial obligations, according to Katsumi Fujimori, an attorney in Japan who says he currently has 462 cases pending in court against Fukunaga. So far, Fujimori said, he has negotiated settlements for 51 clients.

Chiho Ogawa, a Fukunaga aide currently traveling in the United States, dismissed the raft of complaints as largely false and “void of any real content.”

Wealthy Ally

But as criticism and media attention mounted in his homeland, Fukunaga began searching last year for a way to expand into the United States and other countries and to boost his credibility worldwide.

Fukunaga had an ally: Yoshia Tanaka, a 64-year-old semi-retired Japanese importer of health-care-related products to the Far East.

Tanaka established the EarthAid International Foundation in New York earlier this year to focus on health care and the environment.

What Tanaka needed was a prominent figure to associate with the institute, as well as to provide substantial financial support. Fukunaga was his candidate. Tanaka even named the foundation after a Fukunaga company in Japan.

“We’d love to have [Fukunaga] give money,” said Barry Flint, executive secretary of Tanaka’s foundation. “Part of this whole deal is to try to get him to help fund our foundation.”

Together, Tanaka and Fukunaga set out to build up the cleric’s stature internationally, and in the process expand his following and clout.

Enter the 47-year-old Yogesh Gandhi, whom Tanaka had known previously. Gandhi’s pacifism foundation in Orinda, Calif., has no paid staff or assets. The family name, which Gandhi added after moving to this country in 1983, and the award have afforded him entree into powerful circles.

In the past, Gandhi has benefited by granting the foundation’s honor to a wealthy recipient who in turn contributed to the Gandhi-run organization. A Japanese company headed by billionaire Ryoichi Sasakawa, which generated a fortune by running legalized gambling on speedboat races, gave the Gandhi foundation $500,000 in 1988, a year after Sasakawa won the Gandhi peace award.

Special Events

Yogesh Gandhi and Tanaka succeeded in setting up a series of special audiences for Fukunaga over the last year in venues resonant with respectability and status.

In September 1995, they traveled to Rome for a meeting with the pope. The occasion, arranged by Gandhi, was the presentation of a limited edition of leather-bound newspaper volumes published by Mohandas Gandhi.

Five days later, the group went to Bombay, where Fukunaga met with Mother Teresa. Pictures of Fukunaga with the pope and Mother Teresa joined the Web page display.

Gandhi and Tanaka brought in a Santa Barbara publicist in February to “provide exposure and publicity” for the spiritualist in the United States and elsewhere, according to a copy of the contract he signed. Publicist John Danner said that Tanaka was to provide $1 million for the effort.

Danner said Tanaka paid him an initial fee of $150,000, but the contract was canceled before completion. Danner said he did help organize a February dinner in New York for Fukunaga to meet U.N. officials.

On April 2, Fukunaga addressed a reception for about 100 peace activists in Reykjavik, Iceland. The purpose was to introduce the Japanese spiritualist to this community.

In June, Fukunaga appeared in Istanbul to speak at a three-day seminar for world spiritual and religious leaders, funded by Tanaka.

The Arranger

The events generally followed a consistent pattern: Gandhi helped make the arrangements and furnished entree to important figures; Fukunaga played a starring role, and Tanaka provided most of the money. In at least one case, Fukunaga said, he picked up a share of the cost.

For the papal trip and Mother Teresa visit, according to Flint, Tanaka paid the expenses, including first-class air fare for Fukunaga and five personal aides, including his manager, translator and personal photographer.

For the Istanbul seminar, according to the organizers, $300,000 in payments came from Tanaka and the remaining $100,000 came from Gandhi. However, Flint said, Tanaka actually fronted Gandhi’s $100,000.

For these events, the nationality and residency status of donors was not an issue. But that would not be the case if the occasion were a political fund-raiser in the United States. On May 13, Fukunaga, Tanaka and Gandhi appeared at the DNC fund-raiser at the Sheraton Carlton Hotel for the crowning event on the Fukunaga promotion tour: the presentation of the Gandhi foundation’s award for advancing world peace to President Clinton.

Three months earlier, Gandhi had written to Clinton to tell him he had won the award--a life-size bust of Mohandas Gandhi and $100,000 in cash.

The White House wrote back that Clinton could not accept, citing his schedule. A senior White House official said that “the cash award raised some eyebrows. We knew [Clinton] could not accept that.”

But Gandhi said he learned through an acquaintance that DNC official Huang, who specialized in enlisting Asian American donors, was organizing the Sheraton fund-raiser. Gandhi decided to invite a large party of friends to attend, including his mother, Fukunaga and Tanaka, and paid $325,000, more than half the total raised that evening. It was his first political contribution.

DNC officials said they never agreed in advance to the presentation of an award to Clinton but that when Gandhi showed up with the bust, they hastily arranged a ceremony in a separate room.

Fukunaga and Gandhi tell a different story. Fukunaga said when he boarded a flight from Japan to Washington it was for the specific purpose of handing Clinton the award.

“I was excited and eager to take advantage of that opportunity,” Fukunaga said. “I was struck with the presence that the president had, with his personality as a whole.”

Gandhi said he did not get an advance commitment, but “we were talking to the White House a long time ago. They knew this was coming.”

An expert in campaign financing scoffed at the Democrats’ explanation.

“Whether it’s for self-promotional purposes or a more nefarious agenda, you certainly have the appearance of a personal favor by the president in exchange for campaign contributions,” said Ellen Miller, the executive director of the nonpartisan Center for Responsive Politics. “Ordinary citizens who don’t have $325,000 to give don’t get a personal audience with the president. If he hadn’t given the money, he wouldn’t have been there.”

Funding Source

Fukunaga quickly capitalized on the event. In addition to a prominent place on his Web page, the picture was published on the front page of his sect’s newspaper, Sakura Shimbun, with an article reporting that Clinton and Fukunaga pledged to continue their efforts to bring world peace. Fukunaga is now back in Japan at his Mt. Fuji headquarters.

As for the source of the money, Gandhi insists it was his--the proceeds of his unspecified business deal. But information available about Gandhi’s financial status has fueled suspicions.

Gandhi said he blew all his profits from the deal in about two months. He acknowledged that the foundation has been inactive. The Internal Revenue Service last year revoked its federal tax-exempt status.

Tanaka, the paymaster before and after the DNC event, could not be reached for comment. A man who identified himself as Tanaka’s son, contacted at the family residence in Japan, said that other Japanese news organizations had been asking questions about his father.

“Everyone wants to know why and what’s wrong with donating money?” the son said.

Bunting and Miller reported from Washington and Watanabe from Tokyo. Times staff writers Maura Dolan in Orinda and Miles Corwin in Los Angeles and researcher Robin Cochran in Washington contributed to this story.