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Donor Enjoyed Broad Access to White House

TIMES STAFF WRITERS

The White House was aglitter with holiday finery in December of 1994 when Johnny Chung escorted a Beijing businessman to the exclusive dining room for lunch before dropping by the offices of First Lady Hillary Rodham Clinton and Vice President Al Gore.

Chung, an entrepreneur from Torrance, Calif., introduced White House aides to Chen Shizeng, the chairman of a Chinese beer company who was seeking to export his brew into the United States. Toting two Haomen six-packs--one full and one empty--the visitors snapped photos as they made their rounds. Two days later, Chung, dapper in a double-breasted jacket, presented Chen to President and Mrs. Clinton at a formal White House Christmas party.

“Starting from the White House, I want to establish an American market for Haomen beer,” Chen, whose brewery ranks among China’s 10 largest, told a Chinese reporter during his White House visit.

For Chung, a gregarious Taiwanese American, this account perfectly reflects his extraordinary access to the president, the first lady and numerous administration officials--and his eagerness to use that access for commercial gain. In all, Chung made at least 49 visits to the White House--often accompanied by prominent Chinese guests--between early 1994 and June of this year, according to Secret Service records.

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White House spokesman Mike McCurry said Wednesday that Chung “most likely entertained business associates during the times he was in the White House” and “may have attempted to portray himself as someone who had greater influence than the facts would allow.”

Unlike many of the first family’s friends, Chung was neither a college classmate nor an Arkansas acquaintance of the Clintons. However, Chung and his company have donated a whopping $366,000 to the Democratic National Committee since August 1994, when he served as co-chairman of a presidential birthday fund-raising bash.

DNC officials, who recently have returned nearly $1.5 million in large, foreign-linked contributions because of apparent illegalities or improprieties, insist that Chung’s donations are both legal and proper.

But senior administration officials acknowledge that Chung received various invitations to the White House and often talked his way into the mansion by informing staffers that he was a big-time Democratic donor. These officials said there was nothing wrong with granting Chung himself frequent entrance, but they were uneasy that he may have used the White House visits and photos to promote his business affairs.

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“The White House is concerned when anyone misportrays their relationship with the White House or when they use their access to the White House for their own private commercial purposes, which is what we believe may have happened here,” McCurry said.

In the annals of unconventional donors to emerge from the controversy over large contributions to the DNC, Johnny Chien Chuen Chung stands out. Few donated so much after previously giving nothing at all, or so aggressively sought to bask in the limelight of the presidency and the trappings of White House power.

And Chung has not been shy about exploiting his contacts with the Clintons to enhance the prospects for his business, a fax broadcast system and the financial interests of his friends.

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His sales pitch to potential clients includes a thick portfolio filled with color photographs of himself and a smiling Clinton together at the president’s 48th birthday party and inside the Oval Office, according to interviews with people who have witnessed Chung in action. A copy of his brochure, obtained by The Times, contains no fewer than 10 photos of Chung with Hillary Rodham Clinton and a personal handwritten note from the first lady thanking him “for your support and friendship.”

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Chung paid $40,000 to hear Mrs. Clinton speak at a Los Angeles luncheon shortly before the 1994 White House Christmas reception and $125,000 in April 1995 to attend a fund-raiser with the president at the Pacific Palisades home of filmmaker Steven Spielberg.

In his appearance, Chung hardly fits the profile of a top-dollar Democratic donor. The 41-year-old, onetime engineering student resides in a middle-class Artesia neighborhood and his business ventures appear to have enjoyed only modest success after leaving a trail of closed companies, creditors and lawsuits in recent years. Yet his partisan largess to the national party ranks him above such high rollers as Hollywood moguls Lew Wasserman and David Geffen.

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Chung declined numerous requests for an interview but said in a prepared statement: “While I am honored and privileged to have met the president and various officials, neither I nor my company have received any preferential treatment from the White House or any government official--merely occasional words of encouragement.”

Elected officials in Washington routinely grant special access to their biggest financial donors, and for years Republican administrations have offered well-heeled donors photo opportunities and receptions with Presidents Bush and Reagan.

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But Chung’s story raises questions about how far the Clinton administration went in using the allure of the presidency to attract political cash.

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“It’s not a legal violation, but it looks crass and cheapens the White House,” said Herbert E. Alexander, a USC political science professor who specializes in the financing of politics. “You can’t exploit the presidency unless the president is willing to be exploited.”

The president and the Democrats came under intense criticism last year after it was revealed that the DNC had offered to sell private dinners with Clinton and Gore, seats on foreign trade missions and other forms of coveted face-time with senior officials to donors willing to ante up $100,000.

Public interest groups accused the White House of auctioning off the president. Clinton, who had vowed in 1992 to end “cliques of $100,000 donors,” ordered DNC officials to stop peddling private presidential dinners and other benefits.

DNC spokeswoman Amy Weiss Tobe said this week: “We no longer offer a menu of activities or perks for donors. That program no longer exists.”

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The suspension of this program apparently did not prevent Chung, whose hefty donations earned him the honorary title of DNC “managing trustee,” from receiving exclusive access to the White House, numerous photo opportunities with the president, vice president, first lady and Cabinet officers and assistance from DNC staff members on personal requests.

Chung’s company, Automated Intelligent Systems Inc., donated $91,000 to the DNC in late 1994, and he gave $175,000 in 1995 and $100,000 through September of this year--a total of $366,000 in just two years, according to a review of federal election records by the independent Campaign Study Group.

“I have made varying contributions to the DNC for various reasons--all of which are perfectly proper--including some deeply personal feelings which I wish to remain private,” Chung said in his written statement. “Let me just say that, as an immigrant, I would never have dreamed that I would have the opportunity to meet the president of the United States, the first lady or any other high-ranking public official.”

Chung, whom acquaintances describe as “outgoing” and “flamboyant,” tells a remarkable tale of his big break. He was broke in 1992, having invested years and $2 million in a computer that could send a single fax to thousands of locations simultaneously, according to a 1994 Los Angeles Business Journal profile. Chung said his wife told him to forget his machine and “get a job,” the paper reported.

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But Chung said he was inspired during the 1992 presidential debate between Bush and Clinton, realizing that political and governmental offices were ideal customers for his struggling fax service. He traveled to Arkansas, banged on the door of the governor’s mansion and spoke to Mrs. Clinton, said his business manager, Irene Wu.

The first lady “remembers coming in contact with him at some point in Little Rock and that he had an idea for a business that he was trying to promote and she remembers being encouraging,” said a senior White House official, who recently discussed Chung with Mrs. Clinton at The Times’ request.

Mrs. Clinton added that Chung “kept popping up,” the official said.

Subsequently, Chung received an April 26, 1993, letter on White House stationery from the first lady indicating that his business seemed to be “on the right track” and wishing him luck “with your innovative system.”

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From there, Chung appears to have established a rapport of sorts with the Clintons, particularly the first lady. In the summer of 1994--at the same time he donated an initial $10,000 to the DNC--Chung began receiving regular access to the White House.

Of the 49 recorded visits on Secret Service logs, Chung was cleared into the White House on 21 occasions by aides on Mrs. Clinton’s staff and 14 times by the White House political affairs office, which coordinates DNC events for the president and first lady.

Chung enjoyed flashing photos of himself with the Clintons, according to interviews with his acquaintances, colleagues and business associates. He also boasted to investors that Mrs. Clinton had visited his Los Angeles area home. One picture is signed, “To Johnny Chung with best wishes and appreciation--Hillary Rodham Clinton.”

Chung’s album also features pictures of him with South African President Nelson Mandela at a state luncheon, DNC Chairman Donald L. Fowler, White House Chief of Staff Leon E. Panetta, former Commerce Secretary Ronald H. Brown on a trade mission to China, House Speaker Newt Gingrich, former Senate Majority Leader Bob Dole and California Gov. Pete Wilson.

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The photos conveyed an exaggerated sense of Chung’s importance, particularly to Asians, according to interviews with three associates who have known him since the late 1980s.

“People in China can’t imagine getting a picture taken with leaders like Deng Xiaoping,” one Chung acquaintance said. “So when Johnny shows a picture of him with the president of the United States, they’re impressed. . . . They don’t know that in America, you can get pictures taken with even the president of the United States if you give money.”

Chung traveled extensively to Taiwan and Hong Kong to recruit investors for his fax business, said Art Liang, a former managing director of Chung’s fax business. Chung opened offices in Washington, Beijing and Hong Kong. All since have closed.

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During his foreign travels, Chung arranged to bring overseas visitors--mostly from China--to the White House.

On March 9 of last year, Chung set up a photo opportunity for himself and a delegation of Chinese entrepreneurs with Mrs. Clinton in the White House map room. Two days later, Chung and five Chinese associates attended Clinton’s live weekly radio address in the Oval Office, where they presented a piece of carved jade to Clinton on behalf of Chung.

In December 1994, Chung flew to Washington from Taiwan to arrange a meeting between Clinton and Chen, the head of the Haomen Brewery. Chung’s entourage was guided around the White House by Reta Lewis, a former special assistant to the president in the political affairs office.

“After lunch, we posed for pictures with Ms. Lewis outside the dining room,” reported China correspondent Chang-yin Xu, who accompanied the group. “The most important things in the picture are the two six-packs of beer we were carrying. We wanted to give a six-pack to Ms. Lewis. She said she could not accept any more than one bottle.”

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Lewis said she declined the gift. “I do remember them trying to take pictures [in the White House] and I do remember saying that was not appropriate,” she said.

Chung also pitched Lewis on using his fax service “to assist the White House” in spreading its message on health care reform, she said. Administration and Clinton-Gore campaign officials said that Chung unsuccessfully solicited them on his fax business.

That afternoon, Chung, Chen and Chen’s aide met with Commerce Department officials, where they discussed help in finding U.S. partners for Haomen, according to a Chinese news account. That evening, the group was introduced to Gore at a DNC fund-raising dinner, where Chen’s assistant placed bottles of Haomen beer on each table. Chung paid $40,000 for the event.

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Two days later, Chung, Chen and others in their entourage were among about 200 select invitees at a festive White House Christmas Party. There was a formal receiving line, with photos taken of each guest with the president and first lady.

The holiday party was one of six visits during which Chung saw the Clintons, according to White House records. On three other occasions, Chung took advantage of his credentials as a DNC donor to arrange private White House tours, officials said.

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Chung also used his access to the White House to impress potential U.S. investors and drum up business for his fax service. The sales pitch apparently worked; Chung claims to have recruited clients in 48 government offices.

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Gov. Wilson’s press secretary, Sean Walsh, said the office has used Chung’s service for about three years, with monthly bills ranging from several hundred dollars to $5,000. Walsh called the service provided by Chung’s company “generally very good.” When they met, Chung “showed me pictures [with] politicians, including the president. He’s a very friendly man, very gregarious,” Walsh said.

Automated Intelligent Systems, Chung’s company, is not considered a significant player in the fax broadcast business, according to industry analysts and competitors.

At the Torrance headquarters, a small sign announces the firm. Only a few employees work in the small, spartan office, located in the corner of a brown brick building shared with several other small businesses. Chung’s attorney, George Chuang, said the fax service is Chung’s primary business.

One of Chung’s previous companies, a retail computer firm called Iris Data Inc., filed for bankruptcy in 1988 and left hundreds of thousands of dollars in unpaid claims, court records show. In addition, small investors, who put up tens of thousands of dollars to open branch stores through Iris Data, claimed they lost money.

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“I was completely defrauded by bankrupt,” reads a broken-English plea for relief filed in court records by one Asian investor, Theresa K. Chang. She claimed to have pumped $50,000 into the company days before Chung filed bankruptcy.

Linda Yang, a Pasadena businesswoman who claims her family lost a $30,000 investment in Chung’s business, said the pictures Chung showed of himself with the Clintons were persuasive.

“Chinese people are very trusting,” Yang said. “People said, ‘Oh, this guy must be very powerful. How [else] can he talk with Mrs. Clinton?’ ”

Times staff writer K. Connie Kang in Los Angeles and researcher Anthony Kuhn in Beijing also contributed to this article. Bunting and Miller reported from Washington and Connell from Los Angeles.

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