Fong Returns $100,000 in Gifts

State Treasurer Matt Fong on Tuesday returned $100,000 in campaign contributions to an Indonesian businessman and a family-held company because of reports that the money may have originated in the People’s Republic of China.

Earlier, Gov. Pete Wilson delivered a spirited defense of Fong for accepting the money, arguing that his fellow Republican had no reason until this week to question whether the 1995 contributions were legitimate.

Fong said he acted quickly to return the money when the donors--Indonesian entrepreneur Ted Sioeng and Panda Estates Investment, run by Sioeng’s daughter--failed to respond to a request that they verify within 24 hours that the contributions were not from foreign sources.

“I want absolutely no cloud, no suspicion, no doubt about my campaign conduct or my performance in public office,” Fong said. “When my campaign accepted the contributions, we had no reason to believe they may have been improper in any way.”

He said that although there is no legal requirement that his campaign return the money, “there is certainly a moral obligation to do so.”

Federal law bars contributions from “foreign nationals” to all candidates for elected office, whether federal, state or local. The law makes an exception for legal residents of the United States. The law also bars contributions made in the name of another.

The decision followed a report in Newsweek that the FBI had tracked the movement of funds from sources in China through Southland bank accounts held by Sioeng’s family’s companies and to Fong’s campaign. The magazine acknowledged that the source of funds might have been legitimate, but the article had an immediate impact on Fong, one of the first Republicans to be touched by a widening campaign finance scandal.

Fong said his decision to return the donations was in sharp contrast to that of the Democratic National Committee, which last year received $250,000 from Sioeng’s daughter, Jessica Elnitiarta. After a review, the DNC concluded that the contribution was a proper one.

“Those of us in public service should set an example,” he said. “For this reason we’re returning the money immediately.”

Amy Weiss Tobe, spokeswoman for the Democratic National Committee, said the party decided not to return Elnitiarta’s money after determining that she is a legal U.S. resident. Tobe noted that the party had received no money from Sioeng, although he had attended a few party events as a guest of his daughter.

Tobe shrugged off Fong’s decision to return the $100,000. “It’s his call,” she said.

Fong, who is hoping to raise as much as $700,000 this week for a run for the U.S. Senate next year, was especially eager to put any questions about his state campaign fund-raising behind him. “There is a chance,” said Fong campaign consultant Ray McNally, “that there is absolutely nothing wrong about these contributions.”

Sioeng and Elnitiarta have not responded to requests for comment.

Wilson, speaking at a Capitol news conference, said Fong should not be blamed for taking the money and lamented that the national scandal over contributions had been hurtful to Asian American candidates and contributors.

“The law is clear: Foreign money is not acceptable,” Wilson said. “If from [Fong’s] standpoint it appeared to be simply someone with an Asian name, that is hardly reason for anybody to be suspicious.”

The governor bemoaned the impact of the continued attention to political contributions by Asians.

“It’s a terrible thing that Asian Americans, whom we have been trying to involve in the political system, are having this experience,” Wilson said. “I hope they will not turn away from participation, because more and more we want to see them as candidates. We want to see them participate in every way.”

The governor was less charitable toward President Clinton and Vice President Al Gore, who have been touched by the national campaign finance scandal that has led to investigations by Congress and the FBI.

Referring to Gore’s attendance at a Democratic National Committee fund-raiser at the Hsi Lai Buddhist temple in Hacienda Heights in April, Wilson said: “It’s a little harder when somebody goes to a temple that is manned by people who are sworn to a vow of poverty, and goes there for the purpose of a fund-raiser.”

The Democratic National Committee is returning $3 million in questionable contributions because of suspicions that the money came from foreign sources, the contributions were made in the name of another, or the donations were “determined to be inappropriate.” Included in the total are funds collected at the temple fund-raiser.

Fong’s advisors say that if the Sioeng contributions are shown by the FBI to originate in mainland China, he is planning to contribute to a pro-democracy group in Hong Kong. To demonstrate his independence of the Communist government, Fong’s campaign has distributed a letter sent to him by China’s consul general in Los Angeles. The letter takes Fong to task for greeting Taiwanese President Lee Teng-hui at a stopover at Los Angeles International Airport in 1995.

State law requires all contributors who make more than $10,000 in contributions in a calendar year to California candidates and campaign committees to file complete disclosures of all their contributions. Today, the secretary of state’s office plans to send Sioeng and his daughter’s company notices that they there are no such filings for their contributions in 1995. The penalty for failing to file is $10 a day.