Indonesian Financier Sought Senators’ Favors

Indonesian financier James Riady, a central figure in the controversy over campaign donations supporting President Clinton’s reelection, sought direct business benefits from earlier fund-raising alliances with U.S. senators, according to documents obtained by The Times.

A memo by Riady in April 1988 outlined a plan to press senators to urge Taiwan to ease its banking rules and allow Asian American banks, “or at least [the Riady-owned] Bank of Trade,” to open a branch office there. The memo was prepared four days after Riady hosted a dinner for Asian American donors at his Brentwood home that raised $110,000 for the Democratic Senatorial Campaign Committee.

Riady, whose family controls the $12-billion Lippo Group conglomerate in the Far East, also expressed his desire that various federal agencies and an arm of the Democratic Party deposit funds into his and other Asian American banks. “Perhaps the DSCC could start by making a deposit at Bank of Trade,” Riady wrote.

The three-page memo, with a handwritten cover note on the Los Angeles-based Bank of Trade letterhead, was sent to Asian American fund-raiser Maria Hsia, an organizer of the controversial 1996 Democratic fund-raiser at a Buddhist temple in Hacienda Heights with Vice President Al Gore.

Riady asked Hsia to follow up with the senators “and let me know of progress” on those and other issues ranging from sponsoring the lawmakers’ travel to Asian capitals to enlisting their assistance on special immigration problems.

Attorneys for Riady and Hsia declined to comment on the document.

Massachusetts Sen. John F. Kerry, who was DSCC chairman in 1988, called it “a raw, graphic memo” reflecting the kind of special-interest agenda he said is “usually communicated discreetly and verbally, not in writing.” But he said he recalls no effort to lobby him on behalf of Riady’s financial interests.

The documents--from files of the now-defunct Pacific Leadership Council that Riady and Hsia formed to tap ethnic Asian donors--open a new chapter in the fund-raising saga, further indicating that foreign interests may have tried to buy influence not only in the White House but in Congress as well.

Moreover, the documents, containing many of the seeds of the 1996 campaign finance furor, could undercut White House claims that longtime friendship alone was behind the hundreds of thousands of dollars that the Riadys, their companies and employees have spent and raised to back Clinton.

“I can tell you categorically that there was no influence” on administration policy by the Riadys, Clinton said after his reelection in November.

Records show that the Riadys’ companies, their executives and close associates have contributed a total of $854,300 to the Democratic National Committee alone since 1991 and nearly $1 million more to various Democratic committees and candidates.

It appears that Riady and his colleagues were successful in obtaining at least some of the favors they expressly sought from Congress, beginning in the late 1980s.

For example, U.S. senators accompanied PLC members on at least two trips to Asia, including one in 1989 that featured then-Tennessee Sen. Al Gore. According to the minutes of a PLC planning meeting, the Asian visit was “a good chance to recruit new members overseas; and potentially to raise some money for PLC”--a problematic tactic because political contributions by non-U.S. legal residents are prohibited.

Immigration Matters

Other successes included help on special immigration matters by then-Sen. Paul Simon of Illinois. He interceded with State Department officials in response to Asian American donor requests to help reverse visa rejections.

Asked if fund-raising support prompted his involvement, Simon said: “The honest answer is that you are less than human if you don’t try to help people who try to help you.”

Three of the Democratic senators who were active raising money for the DSCC also recommended John Huang--the Riadys’ top banking executive in the United States and a founding member of the PLC--for an appointment in the new Clinton administration in 1993. One of those early Huang backers was Sen. Tom Daschle of South Dakota, who as minority leader has fought to expand the Senate probe of Clinton election fund-raising to include various Republican campaigns.

Huang was awarded a mid-level Commerce Department job in 1994 and later moved to the DNC as a fund-raiser, where he brought in $3.4 million in 10 months. His solicitation of illegal and suspect campaign funds triggered the ongoing controversy.

Federal investigators are examining whether campaign assistance from the Riadys and Huang had any impact on administration actions. In addition, they are probing whether the Riady family or Huang acted as conduits for illegal foreign money from China--where the family has invested heavily--or if Huang provided classified information to the Riadys or the Chinese government.

In recent interviews, senators and former staffers for the DSCC--on whose behalf Riady, Hsia and Huang were raising money in 1988--said they were stunned that Riady had formalized such a self-interested wish list. “It’s what we all say doesn’t happen,” said one former DSCC aide.

But former Sen. Timothy E. Wirth of Colorado, one of those named as a lobbying target, said the existence of such a list did not surprise him.

Wirth, now undersecretary of State for global affairs, recalled that Hsia and her associates were “very, very aggressive” in pushing for senators to do things “relating to [the donors’] economic interests.” He said he quickly decided to “duck out” of involvement with them because “certain things just didn’t feel right.”

Added Wirth: “You don’t give significant amounts of funding in American politics just because people are interested in truth, light and the American way.”

One original PLC member, speaking on condition of anonymity, acknowledged that the group’s political support “wasn’t altruistic at all.” The Riadys and others, he said, “wanted to know what kinds of appointments and what kinds of contracts we could get out of all this.”

Riady wrote a second memo in April 1988, directly to DSCC Executive Director Robert A. Chlopak. Without being specific, it noted that the “issues and concerns that were discussed [at the Riady fund-raiser] need to be followed up and actions need to be delivered.”

Insistent on Access

Ultimately, according to former DSCC staff members, Hsia and the group became so insistent on access to senators and other benefits that it led to a rift. The PLC then turned its allegiance from the DSCC to the Democratic National Committee, where its members were active into the early 1990s, when Huang began raising money for Clinton’s first presidential race.

“They became more and more unbearable,” recalled a onetime DSCC aide. Instead of seeking access as “interested donors,” he said, “they started doing it as dominant principals and making it clear they wanted to be giving orders rather than making requests.”

The Riadys failed to persuade the DSCC to change its banking practices, according to aides. However, documents show that Riady’s Bank of Trade (now Lippo Bank) did provide an account for the PLC, handling funds set aside for contributions, trade missions and fund-raising expenses. The account was administered by Riady’s personal secretary, PLC records show.

It is not clear from other available records or interviews whether the Riady interest in easing Taiwan banking rules resulted in any lobbying by U.S. senators or other government officials. To date, however, Riady’s conglomerate has failed to break into the Taiwan banking market.

John Muncy, executive vice president of the Lippo Group in Hong Kong, acknowledged Lippo’s aspirations for Taiwan. “We always would have liked to open there, but the regulations require a $400-million investment and limit the ownership to 20%. . . . That’s a lot of money to tie up.”

Riady, Huang and Hsia debuted on the national political stage on April 22, 1988. Not only did they put together an elegant and successful fund-raiser at the home of James and Aileen Riady, but they effectively launched an Asian fund-raising strategy that would eventually land the three major roles in the Democratic money chase during the 1996 presidential campaign.

McCarthy Campaign

Guests of honor were Sens. Daniel K. Inouye of Hawaii, Kent Conrad of North Dakota, Dennis DeConcini of Arizona, John Melcher of Montana, J. James Exon of Nebraska and Wirth. The admission price was a $5,000 contribution to the DSCC to aid the Senate campaign of then-Lt. Gov. Leo T. McCarthy of California.

Many donors that evening became the core of the PLC, which was established soon thereafter and strongly backed McCarthy.

The PLC and its members ultimately contributed about $500,000 through 1990, half of it to the DSCC, records show.

Just before the Riady fund-raiser, Hsia circulated a list of “Topics of Concern” to share with the senators and faxed a copy to DSCC headquarters. The topics included immigration reform, banking regulations, international trade issues and appointments of Asian Americans to federal posts.

After the party, Riady sent his detailed memo to Hsia.

Most urgent, it seems, was his desire for prominent allies to break down Taiwan banking restrictions. He wanted help from Wirth, a member of the Banking Committee, and other senators “to impress upon Taiwan to allow Asian American banks (or at least Bank of Trade) to be allowed to open a branch office in Taiwan in the very near future.”

Riady singled out senators for separate lobbying goals. He wanted to persuade Inouye to attend upcoming international meetings of Chinese bankers in Los Angeles and to visit Indonesia for a dinner hosted by his family.

A spokeswoman said the senator does not recall any contact with the PLC after the Riady fund-raiser.

Riady also wanted to arrange Asian trips for Conrad, Exon, Melcher and Daschle. It was his plan, according to the memo, to set up visits for U.S. senators “on an ongoing and regular basis to Indonesia, Hong Kong and Taiwan at our invitation or with us as host.”

Before year’s end, Conrad headed a Riady-sponsored trip billed as a North Dakota trade mission to Indonesia, Taiwan, Hong Kong and Tokyo. Conrad spokesman Jim Berard said he did not believe that the senator lobbied Taiwan officials on behalf of Riady’s banking interests. “They were speaking strictly about North Dakota” trade issues, Berard said.

Exon, who retired from the Senate this year, was scheduled to join another PLC-backed Asian tour in January 1989, but dropped out because his wife had a foot ailment.

“Hopefully, sometime in the future, we will be able to join you,” Exon wrote in a Dec. 8, 1988, letter to Hsia. In an interview, he said he did not recall accepting such an offer and never traveled to Asia on a Riady-sponsored trip.

Failure to Recruit

As the trip approached, PLC members became increasingly upset with the DSCC’s failure to recruit additional senators, former party aides recall.

In a Nov. 22, 1988, letter to Gore, Hsia wrote: “If you decide to join this trip, I will persuade all my colleagues in the future to play a leader role in your presidential race.”

Gore, who had run in the Democratic presidential primary that year and was expected to do so again, became the only senator to make the trip.

The vice president’s aides insist that no fund-raising was done on the trip, but records show that seven trip participants gave his campaign a total of $6,250 that year. And last year one of the trip’s sponsors, the Hsi Lai Buddhist temple, hosted the fund-raiser attended by Gore that later became a political embarrassment.

The event, which was organized by Huang and Hsia and raised $140,000, later was deemed improper by the DNC because it was held at a tax-exempt religious institution. Questions also arose about the legality of some of the contributions.

Another senator favored by the PLC was Simon, who sat on the Judiciary Committee--which handled immigration bills--and supported immigration reforms widely endorsed by Asian Americans. Simon also was available to Hsia and other PLC donors to assist friends or relatives who encountered difficulties in getting visas in Asia, records show.

When a Washington restaurateur--and major backer of the PLC--had trouble getting a group of Chinese chefs to his grand opening because of visa difficulty, Simon intervened and the problem was resolved.

Simon also wrote letters to the U.S. ambassador in Beijing and the consul general in Guangzhou when the niece of a supporter in Los Angeles was denied a tourist visa by American authorities. The case was reconsidered, but the visa was not granted, according to PLC files.

Appointment Urged

Later, Simon joined Daschle and Conrad in recommending Huang’s appointment to a Clinton administration post.

“I have known John Huang for four years, having worked with him on a number of economic development projects and participated with him in several issues conferences,” Daschle wrote to the Clinton transition team. “I can personally attest to John’s strong background in trade and Pacific Rim issues.”

Although Huang arranged a small fund-raiser for Daschle in Los Angeles in 1991 and participated in an Asian American forum sponsored by Daschle and Simon in 1988, Daschle’s spokeswoman said last week that the senator “actually does not know John Huang well at all.” She said the letter was written by an aide and that neither the aide nor the senator could explain the reference to joint efforts on economic development projects.

By 1989, following McCarthy’s defeat in the Senate race, the PLC had become disillusioned with the DSCC because, sources said, the committee had not been responsive enough to the donors. But PLC members forged a new alliance with Ronald H. Brown, then chairman of the Democratic National Committee, who was seeking to expand fund-raising among Asian Americans.

“They felt [that Brown] was going to pay them the appropriate homage,” said a former DSCC aide.

Brown soon appointed Hsia to the Democratic Convention Site Selection Committee.

Riady, Huang and Hsia continued to mobilize significant Asian American donations to the Democratic Party behind the Clinton-Gore ticket through the 1996 campaign.

Soon after Clinton’s inauguration in 1993, Mochtar Riady--the family patriarch and father of James Riady--urged the new president in a letter to pursue expanded trade ties with China, despite its human rights abuses, and to normalize relations with Vietnam.

In addition, the White House acknowledged that James Riady talked to Clinton about U.S. trade policy with China and Indonesia during separate visits in the Oval Office. Among other things, he encouraged Clinton to meet with Indonesian President Suharto at a summit of world leaders in Tokyo in 1993. Clinton later did so.

Rempel reported from Los Angeles, Miller from Washington. Times staff writer Maggie Farley in Hong Kong, special correspondent James Liu in Taiwan and researcher Janet Lundblad in Washington contributed to this story.

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A Fund-Raiser’s Agenda

The memo above, written by a central figure in the current campaign fundraising scandal, shows that as long ago as 1988 he had expected to derive benefits from political donations. Several days after raising money for Democratic Senate candidates, Indonesian Banker James Riady asked fund-raiser Maria Hsai to press his business agenda with help from U.S. senators. He indicated that he wanted the Democratic Senatorial Campaign Committee (DSCC) to open an account with his Bank of Trade and he wanted senators to pave the way to allow his bank and other Asian-American banks to open branches in Taiwan.