Democrats Return $253,500 to Thai Businesswoman

The Democratic National Committee on Wednesday returned $253,500 in contributions to a prominent Thai businesswoman who party officials said withheld the true source of the money.

The refund brings to more than $1 million the total of political donations that the DNC has been forced to give back as part of a growing controversy over foreign-linked and other questionable contributions.

Of that, about $730,000--including contributions from the Thai donor, Pauline Kanchanalak--was solicited by John Huang, the former DNC finance vice chairman and Commerce Department administrator whose various political and government activities are under investigation by three federal agencies.

Kanchanalak told The Times in a series of interviews last week that she had never donated a dime to the Democratic Party. But federal election records showed Kanchanalak making seven five-figure donations since 1994, including $85,000 in June and $50,000 in July.

Kanchanalak claimed that the funds came instead from her wealthy mother-in-law, Praitun Kanchanalak. Pauline Kanchanalak said the checks were written to the Democratic Party under the name “P. Kanchanalak,” which was meant to reflect Praitun, not Pauline. She blamed the DNC for a “horrendous” bookkeeping error in attributing the contributions to her.

But Kanchanalak said in the interviews that she had attended some Democratic fund-raisers at Huang’s invitation, including a glitzy dinner featuring President Clinton at the Hay-Adams Hotel in Washington. The event last February for Asian American donors was organized by Huang and raised $1 million for the DNC.

Moreover, DNC officials said that Kanchanalak was an active participant in committee affairs, including serving on the executive board of the DNC’s Women’s Leadership Forum and as a member of the Democratic Business Council for donors who gave a minimum $10,000.

“We were under the impression that Pauline was the donor,” said DNC spokeswoman Amy Weiss Tobe. “We certainly didn’t know otherwise until it was reported in the Los Angeles Times last week.”

When the DNC then reviewed the source of the donations, it was unable to substantiate Pauline Kanchanalak’s status as the original donor, Tobe said. It is illegal to make such donations without disclosing the true identity of the source.

From her office in Bangkok, Pauline Kanchanalak declined Wednesday to discuss the DNC’s action, referring all calls to Washington attorney William Hou, who represents her company.

“We have agreed to take back all the contributions” made by Praitun Kanchanalak, Hou said. “We’re just trying to avoid any further controversy.”

He added that the issue involved in most of the suspect contributions to the DNC--the residency status of the donor--was not an issue with this donation. Praitun Kanchanalak “is a permanent [U.S.] resident and therefore her contributions are perfectly legal,” he said.

In all, the Democratic National Committee has returned a total of $1,036,800 in illegal or suspect contributions. Among the refunded donations solicited by Huang were $135,000 from Kanchanalak, $250,000 from a South Korean company whose U.S. subsidiary has yet to earn any revenue and $325,000 from a Northern California entrepreneur and green-card holder who subsequently testified in court that he had no U.S. assets.

Pauline Kanchanalak, president of Ban Chang International, was among a small group of donors listed in federal election records who gave large amounts to the Democratic Party shortly after talking with Huang while he worked at the Commerce Department as a principal deputy assistant secretary for international economic policy.

As such, the episode appears to represent another instance of Huang mixing government service at Commerce with political fund-raising in the Asian American community. Federal law prohibits government employees from soliciting or receiving political contributions of any kind. The DNC maintains that Huang did not raise any money while he was at Commerce.

On Oct. 20, 1994--two days after she met with Huang at the Commerce Department--Pauline Kanchanalak donated $32,500 to the DNC, according to Huang’s appointment calendar and federal election records. The contribution came after Huang, apparently acting on Kanchanalak’s behalf, pressed a top Commerce official to support a White House ceremony between Clinton and the prime minister of Thailand.

Telephone records show that Kanchanalak left a message for Huang on the same day he wrote a memo to an assistant commerce undersecretary urging that Clinton participate in an inauguration ceremony for a U.S.-Thailand business council.

Huang left Commerce in December of last year to become a full-time fund-raiser for the DNC. Last week, the DNC laid him off.

The Justice Department, the Federal Election Commission and the Commerce Department’s inspector general all are looking into various aspects of Huang’s activities.

The DNC on Wednesday refunded $1,000 to the New York bank account of a donor named Jao Yi Lu, for whom the party was unable to find an address. The committee also returned a $300 contribution from Ban Chang International after learning that Pauline Kanchanalak’s company is actually a U.S. representative office of a foreign corporation. Foreign companies are prohibited from donating to U.S. elections.

Kanchanalak said that she and Huang were acquaintances but insisted that Huang never solicited a contribution from her.

But Tobe said Wednesday the DNC credited Huang with raising $135,000 in Kanchanalak money while working for the DNC this year.

Times staff writer Alan C. Miller contributed to this story.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Donations Returned

Contributions the Democratic National Committee says it has refunded as part of an ongoing review of allegations of questionable fund-raising.

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Donor Amount Refund Date Cheong Am America $250,000 9/20/96 John H.K. Lee $10,000 10/16/96 Man Ya Shih $5,000 10/21/96 Jorge Cabrera $20,000 10/16/96 Gulf Canada Resources $10,000 10/28/96 Onex Corp. $2,000 10/28/96 Richard Tienken $25,000 10/29/96 Interactive Wireless $50,000 10/31/96 Carolina PCS $15,000 10/29/96 Yogesh Gandhi $325,000 11/7/96 Psaltis Corp. $50,000 11/5/96 Hsi Lai Temple $15,000 11/3/96 Chia Hui Ho $5,000 11/18/96 Pauline Kanchanalak $253,500 11/20/96

Donor Reason Cheong Am America Foreign John H.K. Lee Foreign Man Ya Shih Not Real Donor Jorge Cabrera Inappropriate Gulf Canada Resources Foreign Onex Corp. Foreign Richard Tienken Inappropriate Interactive Wireless Inappropriate Carolina PCS Inappropriate Yogesh Gandhi Source Unsubstantiated Psaltis Corp. Foreign Hsi Lai Temple Religious organization are generally prohibited from holding fund-raising events Chia Hui Ho Her legal residency status is still pending Pauline Kanchanalak Concealed source of funds

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Source: Associated Press