Fund-Raising Probes Focus on State

The nationwide investigations of political fund-raising abuses are increasingly focusing on California, with the FBI beefing up a special Los Angeles task force and the Treasury Department looking for possible money laundering involving many individuals and financial institutions in the state.

The FBI has added 12 investigators to the 25-member task force it assigned to Los Angeles last November, and a source close to the investigation said: “We’ve got a lot of leads in California and a lot of people to interview.”

With cash transactions of hundreds of thousands of dollars involved in much of the questionable fund-raising, Treasury’s Financial Crimes Enforcement Network, at the request of congressional investigating committees, is checking for possible money laundering involving more than 60 individuals and institutions.

“A big batch of them,” said an informed source, “are in California.”

Several major figures in the inquiries--including John Huang, a former Democratic fund-raiser and Commerce Department official; James T. Riady, an Indonesian financier who owns Los Angeles’ LippoBank; and Yah Lin “Charlie” Trie, an international business consultant--have Los Angeles connections.

The new focus on California suggests that investigators are looking beyond these familiar figures to others in the state.

Some of the cash transactions under investigation originated in Asia and were reported to the Treasury Department by banks or other financial institutions in Los Angeles and San Francisco, sources said.

Financial Crimes Enforcement Network investigators also have traced large amounts of cash taken out of casinos in Las Vegas and Atlantic City by Asian Americans in California who are among those under investigation. A key investigator called the transactions “unusual from what we normally see, but not necessarily suspicious.”

Financial institutions, including casinos, must notify the Treasury Department of all cash or negotiable-instrument transactions totaling $10,000 or more. All such cash moving either into or out of the country requires a report to the government.

Among other things, the FBI and congressional investigators are trying to determine whether top Democratic Party or White House officials improperly solicited donations or gave donors improper rewards. And they are seeking evidence of whether the Chinese government tried to influence U.S. policy with political contributions.

Although the investigations began with extensive reports of improper and perhaps illegal fund-raising by the Democratic National Committee, the Justice Department inquiry now encompasses the presidential election campaigns of President Clinton and Republican nominee Bob Dole, as well as the campaigns of some congressional candidates of both parties.

“We’re taking everything that comes our way--congressional campaigns as well as presidential, and Republicans too,” said a Justice Department official, commenting on evidence being turned up by the mushrooming investigation. “Most of the contributors didn’t just give to the presidential campaigns or to just Democrats or just Republicans.”

The investigators already have found many instances in California where people listed as having made large contributions “obviously didn’t have the wherewithal to give the amount of money listed,” the official said.

LippoBank in Los Angeles has been a major target of the investigations, and sources said that a number of other Asian American banks in the Los Angeles area are being examined. Various other financial institutions in California are also under investigation.

Moreover, investigators said they are looking at a large number of contributions from ethnic sources other than Indonesians and Chinese Americans--including Thais, Pakistanis, Indians and Israelis--to determine if there is evidence of illegal contributions by foreign governments.

“It’s going to be interesting when we start looking at whether the Pakistanis or other foreign groups have contributed money to try to affect our political process,” said a Justice Department source.

The money laundering inquiries began after congressional investigating committees asked the Financial Crimes Enforcement Network last month for assistance in checking for possible large cash transactions by a number of individuals and institutions to determine if money was funneled or laundered through other parties to conceal the sources of political contributions.

A letter from the House Government Reform and Oversight Committee listed 46 individuals and institutions. An informed source said that the letter “asked for all records they might have relating to any of these people or institutions.”

The Senate Governmental Affairs Committee submitted 25 names. Sources said that about eight names appeared on both committees’ lists.

Treasury’s financial crimes unit has sent letters notifying both committees, as well as the Justice Department and Whitewater independent counsel Kenneth W. Starr, that the agency will be prepared to brief them on the status of its money laundering investigation by April 4.

Starr’s investigation has widened considerably beyond its original mandate to investigate the Arkansas Whitewater real estate ventures involving President Clinton and his wife, but there has been no indication that the office has the authority to investigate the fund-raising scandals.

However, when asked about the Treasury Department letter, John Bates, the outgoing deputy independent counsel, said through a spokesman that there is “no way” he could comment. Starr was unavailable.

Republican leaders have been pressing U.S. Atty. Gen. Janet Reno for weeks to call for the appointment of another independent counsel to look into the fund-raising controversy but she has insisted that the Justice Department’s investigation is sufficient and that there are no grounds for an independent counsel.

Times staff writers Alan C. Miller and David Willman contributed to this story.