Huang’s Security Status Raises New Questions

In John Huang’s strange odyssey into the heart of the Clinton administration and the Democratic Party, few things remain so shrouded in intrigue as the handling of his coveted security clearances and his access to U.S. government secrets.

The former Commerce Department official and Democratic fund-raiser has played a leading role in the campaign finance controversy since it erupted last fall. But now federal investigators are looking into more serious questions about whether Huang also, as a House committee chairman has charged, “committed economic espionage.”

If Huang was supplying sensitive U.S. government information to his Indonesia-based former employers or, more troubling, the Chinese government, then the Commerce Department may have been the perfect place for him to get it--because of the casual manner in which the department handled his access to top-secret materials and classified CIA briefings, according to Commerce Department records and extensive interviews.

Commerce Department officials have described Huang as a mid-level functionary cut off from policy action on Asia. But they are unable to explain why he had almost weekly one-on-one briefings from a CIA officer on the latest intelligence concerning China, Taiwan and Vietnam.

What’s more, a series of stunning security breaches at the Commerce Department allowed Huang to get and maintain a top-secret clearance for 18 months, both before and after he became a government employee--a period longer than the time he actually served.

Huang’s security status was of keen interest to at least one high-level Commerce Department official. Huang’s boss tried to ensure that Huang maintained his top-secret clearance even after he left the department for the Democratic National Committee.

But when Huang--in a marked departure from previous department practice--turned down an offer from his boss to be upgraded to the government’s highest security clearance, Commerce Department officials showed strangely little curiosity. An upgrade from “top secret” to “sensitive compartmented information,” or “code-word” clearance, which his two immediate predecessors had, would have required Huang to undergo a much more detailed investigation of his ties to foreign nationals, including his former employer, the Jakarta-based Lippo Group.

Former department officials and others now agree that Huang’s apparent reluctance to subject himself to the intense scrutiny required for code-word clearance should have raised questions.

Huang, who was let go by the Democratic National Committee late last year after allegations surfaced about his involvement in the campaign finance controversy, was unavailable for comment. The Glendale resident’s Washington attorneys have said they “have no doubt that he comported himself honestly at the Commerce Department.”

One of the lawyers, Ty Cobb, declined to comment on most questions concerning Huang’s security clearances and the classified information he received at the Commerce Department.

No Criminal Charges Filed

Huang, a naturalized U.S. citizen, has not been charged with any crime. And the Justice Department task force investigating the campaign finance controversy and the alleged covert scheme by the Chinese government to buy political influence in the United States has not publicly discussed its investigation of Huang.

But the congressional committees investigating fund-raising abuses are looking into how the Commerce Department handled Huang’s security clearances and his access to intelligence--and whether Huang exploited vulnerabilities in the government’s security-clearance procedures.

The content of the intelligence briefings Huang received on Taiwan, China and Vietnam could not be learned. But, in general, he was in a position to glean internal government information about U.S. trade practices, the business practices of foreign competitors, links between foreign governments and the private sector and corrupt business practices in those countries. Such information could have been of value to companies and individuals doing business in or wanting to invest in the region, including Lippo, Huang’s previous employer.

From the beginning, Commerce Department officials considered Huang a “White House hire” steered to the department because of his political connections. His former bosses at Lippo--founder Mochtar Riady and his son, James--told acquaintances that they placed Huang at the department. The Riadys, once part-owners of a bank in Little Rock, Ark., had developed close ties to President Clinton when he was governor of Arkansas.

In January 1994, Huang was approved for the job of principal deputy assistant secretary of commerce in the international economic policy office.

Although Huang did not plan to start until that July, the department awarded him an “interim top-secret” security clearance on Jan. 31, after a cursory one-day background check by the Office of Personnel Management. Security checks for permanent “top-secret” clearances normally take a month or more.

Commerce Department officials have defended Huang’s interim clearance, saying that he was expected to start his new job quickly. But Huang’s Feb. 28 personnel form indicated that his start date was set for July 18, 1994.

Officials stress that there is no evidence Huang attempted to use his security clearance while he was still working for Lippo in Los Angeles. They contend that his clearance remained inactive until he arrived at the Commerce Department.

But several former senior department officials said they found this troubling.

After Huang started work, the Commerce Department asked the Office of Personnel Management to conduct a full-field investigation of his background for a permanent top-secret clearance. Finding no problems, final approval was granted in October.

After Huang began work at Commerce, his boss--Charles Meissner, assistant secretary for international economic policy--sought to have him upgraded to code-word clearance. This would have given Huang access to the most sensitive materials the U.S. government has on matters such as trade negotiations with China, Taiwan and the rest of Asia.

Meissner told John Dickerson, an intelligence liaison officer at Commerce, that Huang needed the security upgrade to do his job properly. Dickerson then told Huang he would have to meet with the department’s Office of Security, fill out new paperwork and undergo additional scrutiny.

Dickerson said through a Commerce Department spokeswoman that he never heard from Huang again on the matter.

Later, Meissner approached Robert Gallagher, Dickerson’s boss, and asked about the status of Huang’s application for code-word clearance, Gallagher said through the spokeswoman. Gallagher in turn asked Huang if he had applied.

Huang said he had not and again asked Gallagher what was involved. When Gallagher told him it was a more extensive process than had been required for top-secret approval, Huang declined to apply, Gallagher said.

Interviews With Foreigners Required

Significantly, if Huang had applied, personnel management officials would have interviewed foreign nationals with whom he had been in business. Moreover, the entire background investigation would have been sent to the CIA’s Office of Security, which could have demanded a more detailed background check, agency officials said.

The security issues become starker given that Huang, who had hoped to help shape the administration’s international economic policy, found himself largely cut out of the action on Asia almost as soon as he arrived at the department.

Part of the problem was that, before either Huang or his boss arrived, Jeffrey E. Garten, chief of the International Trade Administration, already had assigned others to handle China and other large emerging markets. Garten also quickly determined that Huang was not up to speed for such work.

“Garten had an A Team, and Huang wasn’t even on the B Team,” said a Commerce Department official.

As a result, Taiwan was the only Asian country Huang had in his portfolio, and he accompanied Meissner there twice.

Nevertheless, he became an active consumer of U.S. intelligence on Asia. He received from a CIA officer 37 one-on-one, top-secret, Asia-related briefings--most concerning Taiwan or the People’s Republic of China--and he attended 109 meetings at which classified intelligence information may have been discussed, the Commerce Department acknowledges.

Huang also received at least one previously undisclosed CIA briefing on Vietnam that a senior Commerce official said he could not explain because Huang “had no policy role on Vietnam at all.” Huang did not have to inform anyone about the intelligence he got from the CIA, officials added.

Meanwhile, Huang maintained contact with his former employer. According to his phone logs, he called Lippo Bank in Los Angeles 70 times during his 17 months at Commerce. He also placed 49 calls to C. Joseph Giroir, a Little Rock attorney who works closely with the Riady family, records show.

The Lippo Group has extensive financial interests in China and minor holdings in Taiwan, and it has sought business opportunities in Vietnam.

By mid-1995, a frustrated Huang wanted to leave the Commerce Department. That Sept. 13, accompanied by James Riady and Giroir, Huang told Clinton during an Oval Office visit that he wanted to move to the Democratic National Committee to raise money for the president’s reelection effort.

Also present was senior White House advisor Bruce R. Lindsey, who subsequently met with Huang before sending him to Harold M. Ickes, the top White House aide overseeing the campaign. Ickes’ notes show that they discussed whether the administration might “retain [Huang] as an unpaid consultant” when he moved to the national committee.

Knowledgeable sources said that Huang requested the consultant post but did not mention his desire to retain a security clearance. Lanny J. Davis, a White House special counsel, said that, “as far as Bruce Lindsey recalls, the issue of Huang’s consulting status or security clearance did not come up in the White House and was not discussed between him and anybody else at Commerce.”

Nonetheless, by December 1995, as Huang was about to move to his party job, Meissner tried to help him obtain a consultant position. But Tim Hauser, a deputy undersecretary for administration, rejected the request because he thought it improper for a Democratic Party fund-raiser to be a Commerce consultant, department officials said.

Meissner persisted, sources said, and tried to make an “end run” by raising the issue with William Ginsberg, chief of staff for then-Commerce Secretary Ronald H. Brown. Ginsberg agreed with Hauser that the idea was “politically insensitive” and asked Meissner why Huang wanted to remain a Commerce consultant while working for the party, sources familiar with the conversation said. One reason, Meissner said, was so Huang could retain his security clearance.

Huang Kept His Security Clearance

Meissner failed to get Huang a consulting contract. But, in one of the saga’s most curious chapters, Huang did get the same top-secret security clearance given to the department’s contractors after Meissner had his secretary file the paperwork.

Without running a new background check on Huang or confirming that he had a consulting contract, the Pentagon’s Defense Industrial Security Clearance Office granted Huang a “consultant top-secret” clearance on Dec. 12, 1995, a spokeswoman for the office said. That was nine days after Huang left the Commerce Department and a week after he started at the national committee.

The clearance remained in effect for a year--while Huang raised millions of dollars for the Democratic Party--until Dec. 9, 1996, when embarrassed Commerce officials discovered it amid the fallout from the fund-raising controversy.

Commerce officials described the episode as a bureaucratic snafu and said they found no indications that Huang used his clearance after he left the department--or that he knew he had it.

But Meissner’s interest in helping Huang obtain a contractor’s security clearance remains a mystery. He died along with Brown and 32 others in a plane crash in Croatia in April 1996.

“Unfortunately, the people who were most involved in this are not here now,” observed Commerce Department Press Secretary Maria Cardona.

Times researcher John Beckham contributed to this story.