Senator Accuses China as Hearings on Donations Open

By MARC LACEY and MARK GLADSTONE

July 9, 1997 12 AM PT

TIMES STAFF WRITERS

WASHINGTON —

The Senate’s hearings on campaign fund-raising abuses opened dramatically Tuesday with the lawmaker heading the probe declaring flatly that China illegally funneled money into the U.S. political system, and with intriguing suggestions that key figure John Huang might agree to testify after all.

After weeks of lowering expectations, Sen. Fred Thompson (R-Tenn.) launched the Governmental Affairs Committee’s hearings with provocative remarks cleared by the FBI on one of the most serious allegations to surface during the months-long furor--that the Chinese government hatched a secret plan to make illegal contributions to U.S. campaigns.

Thompson said the committee “believes high-level Chinese government officials crafted a plan to increase China’s influence over the U.S. political process” and that the aim of the effort was “to subvert our election process.”

Thompson, who heads the panel, revealed no new details on the alleged plot, which federal officials acknowledged earlier this year that they are looking into. But he said that he had seen evidence supporting the charge, adding: “Our investigation suggests the plan continues today.”

However, Ohio Sen. John Glenn, who as the panel’s ranking Democrat has seen the same classified evidence, pointedly refused to endorse Thompson’s characterization of what it shows.

“I thought [Thompson] went a little farther than I would choose to go with what I know, and I think I know as much as anybody else,” Glenn said.

White House aides also reacted cautiously to Thompson’s comments, saying the federal investigation into the matter is ongoing and that no firm conclusions have yet been drawn.

Chinese officials have categorically denied the allegations.

Minutes after Thompson’s bold statements, Glenn made a startling announcement of his own: Huang, the controversial former Commerce Department official whose fund-raising for the Democratic National Committee will be a focus of much of the hearing, would be willing to testify before the committee if granted immunity from prosecution for certain, but not all, crimes.

Huang previously had said he would invoke his 5th Amendment right against self-incrimination if called before the committee.

Huang Said Anxious to Deny Allegations

According to Glenn, Huang is anxious to take the stand to deny allegations that he may have committed espionage by leaking classified government information when he worked at the Commerce Department, and would not demand immunity from any potential charges related to such accusations. But he would want immunity from charges that might arise from his fund-raising activities.

Immunity would also not apply, under the proposal, if Huang committed perjury in his testimony.

The late-breaking offer clearly stunned Thompson and his GOP colleagues. It came just hours before the hearings opened Tuesday morning after weeks of quiet talks between the committee’s Democratic lawyer, Alan I. Baron, and Huang attorney Ty Cobb.

After he left the Commerce Department in 1995, Huang collected $3.4 million for the Democratic Party. But in the wake of suspicions over its origins--such as whether it came from foreign sources, thereby violating U.S. election law--the party has returned nearly half the money.

“Having become a defenseless target for Asian-bashers,” Cobb wrote to Glenn, “Mr. Huang feels compelled to forgo the security of his constitutional protections and to attempt honorably to acknowledge whatever mistakes he may have made over time.”

The panel directed committee lawyers to continue talks with Cobb, but doubts persisted about whether Huang’s offer was legally possible.

Committee aides said the Justice Department previously has objected to offering immunity to Huang. And senators in both parties urged caution in cutting any deal with Huang--even though he is, as Sen. Joseph I. Lieberman (D-Conn.) put it, “the star witness that the committee has been looking for.”

The hearing’s first day marked the climax of months of behind-the-scenes work by investigators, who have interviewed scores of witnesses, subpoenaed thousands of documents and traveled the globe in search of leads.

Opening remarks offered by each of the 16 committee members--nine Republicans and seven Democrats--suggested just how differently senators on opposite sides of the aisle see the probe.

Democrats Stress Need for Reform

Republicans focused on the nuts and bolts of the 1996 Democratic money-raising machine and where it veered off track. Democrats, in contrast, emphasized the need for campaign reform and highlighted a Republican group, the National Policy Forum, that may have received overseas funds that then were funneled to GOP campaigns. The forum was headed by the then-Republican National Committee Chairman, Haley Barbour.

“I believe that the thirst for increasing amounts of political money and what people are willing to do to get it lies at the heart of this investigation,” Thompson declared in his opening. “However, we cannot let calls for campaign finance reform be used as a shield to prevent examination of the violations of existing law.”

The system is the real culprit, Democrat after Democrat asserted.

“I hope we will not overlook the larger fact that these foreign corrupters who thought they could purchase influence in American government would not have been emboldened to try to buy if they did not believe someone was ready to sell--if they did not think there was a ‘for sale’ sign hung out on America’s democracy,” Lieberman said. “For that, it is Americans, not foreigners, who are profoundly guilty.”

The panel’s lone Asian American member, Sen. Daniel Akaka (D-Hawaii), cautioned his colleagues to avoid smearing an entire ethnic group as they pursue wrongdoing.

“I strongly condemn illegal fund-raising activities but I do not hold all Asian Pacific Americans responsible for the alleged actions of a few,” said Akaka, whose great-grandfather emigrated from China to Hawaii. “Asian Pacific Americans should not be held to a higher standard than other citizens, nor should we believe that all Asian Pacific American political contributions are suspect.”

None of the other opening statements, however, took attention away from Thompson’s remarks on China and Glenn’s on Huang.

Thompson issued his statement on China after intelligence officials had repeatedly refused to testify publicly about their findings in their separate Justice Department probe into the fund-raising issue. Instead, Thompson worked out an agreement with Justice Department officials Monday on what he could tell the public--a general statement that raised as many questions as it answered.

The Chinese effort, Thompson said, involved both Chinese government officials and “individuals enlisted to assist the effort,” and was aimed at the local, state and federal level. The Beijing government hatched the plan because of concerns that Taiwan was growing too close to U.S. policy-makers, Thompson said.

What Thompson left unsaid was to what extent the Chinese government actually carried out its plan. “My comments provide only a broad outline of the Chinese plan,” Thompson said. “The great majority of information about this matter cannot be discussed further in open session.”

Last year, the FBI briefed members of Congress and White House National Security Council staff about the possibility of such a Chinese effort, and government sources in recent months have described mounting evidence of an illegal funding mechanism--estimated at $2 million--run out of the Chinese Embassy in Washington.

By making the assertion himself at the onset of the hearings, Thompson has raised the possibility that some of that evidence might come to light during his hearings.

In Glenn’s remarks, he referred to a “so-called Chinese plan” and suggested that China’s activities may have amounted to the same legal lobbying efforts engaged in by many nations. “We must be careful not to jump to conclusions that treason has been committed based on a partial story with ambiguous information,” Glenn said.

Meanwhile, Huang’s surprise offer to testify--which some saw as a public relations ploy--posed a thicket of legal problems for the committee.

Huang’s Offer Raises Issues, Suspicions

Lawyers questioned whether it was possible to grant immunity for some crimes and not others. “I was completely surprised by it and have a great deal of suspicion about it,” said Mike Madigan, the chief GOP counsel.

One White House official, who spoke on the condition of anonymity, welcomed the possibility that Huang, a resident of Glendale, would testify. “We’d be happy to have John Huang testify because we want all the facts to come out,” the official said.

Cobb said in his letter that Huang was motivated “by his passionate, even poignant, view that the interests of Asian Americans have suffered because of his inability, under the circumstances, to respond to the concededly legitimate questions which pertain to his conduct while with the Lippo Group, the United States Department of Commerce and the Democratic National Committee, including the unfounded and insensitive allegations of espionage.”

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The Panel at a Glance

Senate Governmental Affairs Committee that is investigating alleged campaign finance wrongdoing:

KEY PLAYERS

Chairman Fred Thompson (R-Tenn.)

Chief counsel to the Republicans on the Senate Watergate Committee two decades ago, he is most widely known for his subsequent acting career in such films as “The Hunt for Red October.” Although the hearings initially were considered a boon for the potential presidential candidate, Thompson has fought both Republicans and Democrats to get them off the ground.

John Glenn (D-Ohio)

Glenn, who chaired the Governmental Affairs Committee from 1986-1994, pushed hard for a broad investigation and has not backed away from confrontations with Thompson. The 22-year Marine veteran who was the first U.S. astronaut to orbit the earth, was elected to the Senate in 1974, just months after President Nixon resigned.

PANEL’S PARTY BREAKDOWN

GOP: 9 members

Democrats: 7 members

REPUBLICANS

Chairman Fred Thompson of Tennessee

Susan Collins of Maine

Sam Brownback of Kansas

Pete Domenici of New Mexico

Thad Cochran of Mississippi

Don Nickles of Oklahoma

Arlen Specter of Pennsylvania

Bob Smith of New Hampshire