Democrats Give Back More Disputed Money

The Democratic National Committee’s travails over illegal campaign contributions intensified Friday as the party announced that it was returning $450,000--one of its largest donations--to an Indonesian couple with close ties to an Asian financial empire.

The DNC said it had decided to refund the money to Arief and Soraya Wiriadinata because they had failed to file U.S. income tax returns for 1995. The couple lived in Virginia at the time they started giving to the DNC last November and were legal residents, but they moved back to Indonesia nearly a year ago.

“This failure, in our view, is fundamentally inconsistent with the obligations of permanent residency, as it is with U.S. citizenship,” said DNC spokeswoman Amy Weiss Tobe.

The refund represents the Democrats’ latest effort to cut their losses in the donations debacle, but it is far from certain that the party has rid itself of all its tainted money. Earlier this week, the party sent back $253,500 to a Thai businesswoman who DNC officials said concealed the actual source of the money. The party also disclosed that it was reviewing additional donors in the wake of press accounts.

To date, the party has returned a total of nearly $1.5 million--sending back illegal or suspect donations to companies and individuals from South Korea, Greece and Canada as well as Thailand and Indonesia. The $450,000 refund is the largest yet.

The Wiriadinatas’ donation, which was made through a series of separate checks over nine months, was solicited by John Huang, the former DNC finance vice chairman who brought in nearly $1.2 million of the total that has been refunded. This is nearly half of the $2.5 million the DNC says he raised.

Only two weeks ago, DNC Chairman Don Fowler declared at a news conference that the Wiriadinatas’ controversial contributions had been checked, were legal and would not be returned.

Questions arose about the huge sum because the couple apparently had lived modestly in northern Virginia, where Arief Wiriadinata worked as a landscape architect. In addition, the Wiriadinatas had never donated to a U.S. political campaign previously, and had given most of the money after they returned to Indonesia.

In a related development, top Justice Department officials have decided that FBI agents should be dispatched to interview contributors to the DNC, the Washington Post reported.

According to senior officials, the Justice Department is particularly interested in allegations that donors illegally made contributions using other people’s money. Allegations of potential misconduct by Huang likely will be vigorously pursued, the officials said.

Although Atty. Gen. Janet Reno will make the decisions on whether to begin steps to seek an independent counsel or whether the FBI agents will be sent out, senior department officials have concluded “that some of the allegations need to be investigated more fully,” a department official said Friday night.

If they are dispatched, the agents would be used in support of a Justice Department task force already reviewing media and congressional allegations about the fund-raising controversy.

Meanwhile, the DNC said Friday that the refund of the Wiriadinatas’ contribution was evidence of progress in its own internal investigation.

The committee said it had uncovered the Wiriadinatas’ tax situation during an internal review of their donations last month. Tobe said the Wiriadinatas had told Huang in mid-October that they would file a late return, including all interest and penalties they owed, and relocate to the U.S. to resume residency here.

But party officials said they had been unable to contact the Indonesian couple to confirm that the Wiriadinatas had filed their tax returns and still planned to move back to the U.S. Tobe said Huang had been told through his attorneys that the DNC needed this confirmation, but the party had not received it from him.

“Given our inability to confirm otherwise, we believe that we must proceed today on the assumption that they have not filed a tax return for 1995,” Tobe said. “Therefore, the DNC believes it is inappropriate to retain the contributions.”

Tobe said the DNC has prepared checks to send to the Wiriadinatas but does not yet have an address for them. If the party is unable to obtain one, she said it will attempt to return the money for deposit to the U.S. bank on which the funds were drawn. If the bank is unable to accept the funds, the money will turned over to the U.S. Treasury, she said.

Paying income taxes is not a requirement for legal residency in this country, a U.S. Immigration and Naturalization Service official said. Nor would failure to pay taxes be the basis for revoking residency. But when Congress acted two decades ago to allow legal residents to make campaign contributions, lawmakers noted that legal residents do pay taxes even though they are not U.S. citizens.

The donation is tied more closely to President Clinton than any of the previous contributions the party has returned.

Soraya Wiriadinata’s father, Hashim Ning, was a business partner of Mochtar Riady, the Indonesian billionaire whose family has backed Clinton for years. The Riadys befriended Clinton when he was governor of Arkansas, at a time when they were investors in a bank there.

Huang, who previously worked for Riady enterprises in Los Angeles, said he met the Wiriadinatas when Ning suffered a heart attack while visiting the U.S. in June 1995. Ning himself was the wealthy founder of a group of Indonesian companies.

At the request of Mochtar Riady’s son, James, the White House sent the hospitalized Ning a letter expressing concern about his health. It was signed by Clinton. Ning responded with a note indicating that he had recuperated sufficiently to return to Indonesia, and the White House then sent another letter from Clinton.

Ning died last December. Fowler said the Wiriadinatas contributed out of appreciation for Clinton’s letters.

The Justice Department and Federal Election Commission are reviewing the DNC’s fund-raising, and the inspector general of the Commerce Department, where Huang worked before joining the DNC, is investigating his activities. Numerous congressional committees are also looking into the Democrats’ fund-raising.