Donor Speaks Out on Clinton Group

Prominent Democratic campaign donor Johnny Chien Chuen Chung contributed $25,000 last year to a private committee that publicly defended the president and Hillary Rodham Clinton against Whitewater-related ethics attacks after the first lady’s chief of staff referred the head of the committee to Chung, Chung’s attorney said this week.

Lynn Cutler, chairwoman and co-founder of the Back to Business Committee, solicited Chung’s donation and later arranged a private meeting for the Southern California entrepreneur with Ambassador James R. Sasser in China, according to Chung’s attorney and documents obtained by The Times. Cutler also arranged a meeting for Chung with a Commerce Department official in Washington.

By Chung’s account, provided through Santa Monica attorney Brian Sun, the businessman was approached after attending a White House Christmas party in December 1995. Chung quoted Cutler as saying that she contacted him at the suggestion of Margaret Williams, then the first lady’s chief of staff, because she said he was a friend of the first lady who may be willing to help.

“Maggie was the magic word. My client didn’t know Lynn Cutler, had never heard of her, but agreed to meet with her because she was referred by Maggie Williams,” said Sun in his first public comments about the episode.

Chung’s account of the White House referral and subsequent governmental favors for him raise questions about the Back to Business group’s relationship with the Clinton administration and could renew pressure on the now-defunct organization to release the names of its other contributors. Back to Business, which arranged for a network of volunteer speakers to counter Clinton critics and disseminate pro-Clinton information through the media, was active between 1994 and the summer of 1996.

The Chung story also is likely to fan controversy surrounding Williams. Less than a year before the referral, Williams accepted a $50,000 campaign donation check from Chung in the White House, which he said the aide solicited. Williams denied any role in seeking the $50,000 from Chung, who had frequently offered to assist the Clintons.

Williams attorney Edward S.G. Dennis Jr. referred to the White House all questions regarding any role that Williams may have played in bringing Chung and Cutler together.

Special White House Counsel Lanny J. Davis said that “when Ms. Williams was asked by others how they could be supportive of the first lady, she might have included the committee as one of several entities that were supportive of the president and the first lady.”

However, he said, “Ms. Williams did not solicit on behalf of the committee.”

White House officials confirmed that Cutler arranged a meeting for Chung with a Commerce Department official but declined to comment on any role Cutler may have played in facilitating Chung’s session in Beijing with Sasser.

A State Department official said U.S. embassies do not keep records of private citizens’ visits and that any meeting between Chung and the ambassador would be a private matter.

Davis said White House involvement with Back to Business, which he said included “frequent contact,” was absolutely appropriate because “it supported the goals of this administration and worked to ensure that the public receive accurate information about issues concerning the president and first lady.”

Davis, then a private Washington attorney, was one of the volunteers Back to Business helped place on television shows as an advocate for the Clintons.

Cutler and her Back to Business partner, Ann Lewis, who are now White House aides, could not be reached Friday.

But a source close to Cutler said that “she learned of Mr. Chung and his potential interest in helping from a number of different places as a result of her involvement with the Democratic Party.”

Cutler was vice chairwoman of the Democratic National Committee from 1981 through 1992 and currently is deputy White House director of intergovernmental affairs. Lewis, also a longtime party activist, served as deputy manager of the Clinton-Gore campaign in 1996 and is now White House communications director.

Congressional investigators have sought to question Chung, who is a focus of Justice Department and Senate investigations into possible campaign law violations. Chung is unwilling to testify before a Senate committee probing the fund-raising controversy without a grant of immunity from prosecution. There have been preliminary discussions with both Justice Department and Senate investigators regarding possible immunity.

“If the purpose of these hearings is to get to the truth and find what needs to be done to reform campaign finance practices, then the Senate ought to issue immunity to Johnny Chung and get him in front of the country,” Sun said. “The problem, of course, is politics. He exposes as baseless the ‘foreign conduit’ claims of the Republicans, but he also embarrasses the Democrats.”

Chung’s story provides the first glimpse inside fund-raising efforts of the little-known Back to Business Committee, one of several private groups established to finance a range of personal and political causes associated with the Clintons. Many have refused to divulge donor lists on grounds they are private and not subject to public disclosure rules.

Ellen Miller, executive director of Public Campaign, a nonpartisan group advocating campaign finance reform, is troubled by the proliferation of such groups and supports full disclosure.

“Beneath the campaign finance system is a series of subterranean passageways and rooms into which interested supporters can help out the president and first lady,” Miller said. “It operates well beneath the public radar screen, but there is the potential for unlimited private money designed to buy access and influence.

“There are no guidelines, there are no rules, there is no disclosure. This is a no-holds-barred fund-raising opportunity,” she said.

Back to Business operated with a budget of $15,000 to $20,000 a month for office support staff, mail and other costs, according to news accounts. One story in April 1996 reported that the committee had been financed with less than $100,000 over two years.

One former associate said Cutler, who at the time worked for a prominent public relations firm where Back to Business was headquartered, was invariably “fretting about keeping the group afloat.”

While the White House provided Back to Business with the names of individuals, at least some officials thought that the administration should avoid helping to raise money for the private committee.

“We stayed a million miles away from it,” said one former White House official familiar with Back to Business. “We wanted to maintain their independence and ours.”

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According to the documents reviewed by The Times and interviews with Chung’s attorney and others, this is the story behind Chung’s $25,000 donation to the Back to the Business Committee:

Chung was in Washington on Dec. 8, 1995, to attend a White House Christmas party as a guest of the DNC, to which he was a major donor.

(Records show he visited the White House 49 times and gave the DNC $366,000 between 1994 and 1996, all of which was returned this year because the party said an internal audit could not confirm that the funds actually came from Chung).

Chung brought along a guest of his own, a Chinese artist friend living in Vancouver, Canada, whom Chung photographed with President Clinton.

The next morning Chung received a phone call at his Washington apartment from Cutler who, by his account, introduced herself as a friend of the first lady who was referred to him by Williams. Based on the Williams referral, he agreed to meet Cutler a day later.

That wintry Sunday morning, Cutler joined Chung at the J.W. Marriott Hotel near the White House. She arrived in casual clothes, carrying a manila folder stuffed with newspaper clippings under her arm. The meeting lasted about two hours.

Seated at a window table in the closed and otherwise deserted hotel bar, Cutler spread out copies of stories about Whitewater and the ongoing Senate hearings into the controversy chaired by Alfonse M. D’Amato (R-N.Y.). She said the Back to Business Committee had been set up to defend the first lady and the president, that the group planned to attack D’Amato through the media, and that Chung’s financial help was needed.

During the conversation, according to the account, Cutler asked for $20,000. She also talked about her friendships with various government leaders. Chung asked if she knew the new ambassador to China, the former Tennessee senator Sasser.

“I know him very well,” she reportedly said and offered to introduce them someday.

Chung, a Taiwan-born American citizen with various business interests in China and an international fax service in Torrance, knew virtually nothing about the Whitewater matter. Nonetheless, he agreed to contribute $25,000.

Cutler told Chung to call if he ever needed anything in Washington.

But Chung hesitated writing the check. He wanted to know more about Cutler. According to the account, Chung turned to DNC Finance Director Richard Sullivan and the first lady’s office. Everywhere he was assured she was “a friend.”

Back in Los Angeles, where Cutler reportedly called him several times to inquire about when the check would be sent, Chung saw her appear on the CNN program “Crossfire,” identified as a Democratic consultant and former vice chairwoman of the DNC.

On Feb. 2, 1996, Chung wrote a $25,000 check on one of his personal bank accounts to “Beck Business Committee” and sent it to Washington. The fractured title was no obstacle; the sum was deposited into a Riggs National Bank branch at 20th and L Streets three days later.

A month later, Chung called in his first favor, according to his account.

In March 1996, business dealings with the Haoman beer-makers in Beijing brought Chung to China. He called on the U.S. Embassy to request an appointment with Ambassador Sasser. He was politely told that the ambassador’s schedule was too crowded.

Chung faxed a letter to Washington, asking Cutler if she could help, then left Beijing for three days to travel in southern China. During his absence, Cutler faxed a letter to Sasser and the ambassador apparently put his staff to work immediately trying to locate Chung to arrange that appointment.

When Chung returned to his Beijing hotel suite, he found copies of the Cutler and Sasser faxes on the floor, slipped under his door.

The Cutler note to the ambassador identified Chung as an American businessman, a friend and a supporter of the DNC.

Sasser’s March 8 response said: “Dear Lynn, Mr. John Chung did come to the Embassy and left a portfolio with my secretary. . . . We have called several of the major hotels in Beijing but have not located him. . . . Please have him call us so an appointment can be arranged.”

The next morning Chung and Sasser met for about 30 minutes, discussed the state of Sino-Taiwan relations, posed for a picture together and, in Chung’s view, developed a relationship. It was, by his account, nothing more than a social call, but it was significant.

To a businessman in China, access to the U.S. ambassador in Beijing was very important. It “put powder on my face,” he would tell his attorneys; that is, it made Chung look good to his Chinese business associates.

Within a month Chung turned to Cutler for another favor. He faced a business decision about a possible opportunity in the oil-refining business and wanted the advice of a Commerce Department official. Cutler arranged the meeting. It lasted 20 minutes and left Chung persuaded to steer clear of this unfamiliar terrain.

“There was nothing sinister about these meetings,” attorney Sun said. “Others can speculate about whether these donations influenced Cutler’s willingness to assist Johnny.”

Chung did make additional efforts to seek Cutler’s help. But she did not return his subsequent calls.

Rempel reported from Los Angeles, Miller from Washington. Times researcher Janet Lundblad contributed to this story.

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The $25,000 Check

Johnny Chien Chuen Chung, through his attorney, says a former Democratic National Committee vice chairwoman solicited this $25,000 contribution for a pro-Clinton support group after he attended a White House Christmas party (invitation below).