Donor Inquiry Finds Gingrich in Tough Spot

Besieged House Speaker Newt Gingrich managed to quell an uprising by his closest lieutenants last week, but his troubles are expected to build in the days ahead as Senate investigators set their sights on foreign contributions to the Republican Party.

After two weeks of scrutinizing the Democrats, the campaign fund-raising hearings now underway in the Senate Governmental Affairs Committee will switch gears when senators reconvene Wednesday and begin to look at the flow of overseas funds into the GOP.

So bitterly partisan is the whole inquiry into campaign fund-raising improprieties that it has virtually dissolved into two separate reviews. The Republicans used six hearing days this month to probe Democratic wrongdoing, and the Democrats will have three days this week to make their best case against the GOP.

At the top of the Democratic investigators’ agenda is the involvement of two Gingrich political advisors in setting up a $50,000 contribution to a GOP-connected group from Jessica Elnitiarta, whose father, Indonesian businessman Ted Sioeng, is suspected of being a conduit for Chinese money into U.S. campaigns.

Gingrich will not be the only top GOP leader to feel the heat. Another prime target of Democrats’ scrutiny will be former GOP Chairman Haley Barbour, who created an offshoot of the Republican Party--the National Policy Forum--that reportedly pursued money from overseas.

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Barbour, who will be called to testify at this week’s hearings, was deposed for most of the afternoon Saturday by Senate investigators. He may return to a small conference room in the Hart Senate Office Building for more closed-door questioning today.

“The money trail from Asia into the Republican Party . . . is direct and clear,” said Jim Jordan, the Democratic spokesman for the Senate panel. “And most of the evidence is connected personally to Haley Barbour. Gingrich’s connection to National Policy Forum fund-raising and his ties to Ted Sioeng give the story an interesting twist.”

By invoking the names of Gingrich and Barbour, two of the GOP’s most prominent figures, Democrats hope to dull the impact of recent revelations showing significant foreign-linked contributions flowing into Democratic coffers during the last presidential campaign.

For Gingrich, distracted by the aftermath of a failed attempt to oust him from the speakership, the scrutiny could not come at a worse time. The very cadre of leaders he counted on to run the House are now divided by mistrust.

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What intrigues investigators is that the name of Elnitiarta’s father and business partner, Sioeng, was picked up by U.S. intelligence while eavesdropping on a conversation between the Chinese government and its Washington embassy in which a plan to win influence in U.S. politics was reportedly outlined.

Democratic investigators hope to establish a relationship between Gingrich and Sioeng by showing photos of the two men together that appeared in Sioeng’s Chinese-language newspaper, and by providing evidence of meetings between them on both coasts. An article from Sioeng’s Monterey Park newspaper during a 1995 visit Gingrich made to Los Angeles says Gingrich had frequently mentioned Sioeng in speeches.

However, Gingrich spokeswoman Christina Martin said it is fantasy to suggest that the two men knew each other well. “Anyone who believes that Newt Gingrich was acquainted with Ted Sioeng is delusional enough to still believe in Santa Claus and the tooth fairy,” she said.

Interestingly, Elnitiarta originally surfaced as a figure in the controversy over tainted donations to the Democratic National Committee. Her $250,000 in contributions, arranged by former DNC fund-raiser John Huang, helped trigger investigations into possible influence-buying by the Chinese government.

But she has also created headaches for the GOP. Her $50,000 donation to the National Policy Forum in July 1995 came just days before Gingrich and Sioeng met at a Beverly Hills gathering of Asian American business leaders.

Shortly before that, California State Treasurer Matt Fong escorted Sioeng to Washington for a photo-opportunity meeting with Gingrich. Earlier this year, Fong returned $100,000 in donations from Sioeng and his family-held company because of reports that the money may have originated in China.

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Investigators have strong suspicions that the $50,000 donation to the Republicans came from overseas. The day before Elnitiarta wrote the check to the National Policy Forum an identical amount was wired from a still-undetermined source and location to the bank account of the family business, Panda Industries.

John Bolton, former president of the National Policy Forum, has told Senate investigators that he had questions about the $50,000 because he had never heard of Panda Industries. But Bolton said he was reassured by Joe Gaylord, Gingrich’s chief political advisor, that Panda was a legitimate Hollywood entertainment company, sources said.

Actually, Panda is a company founded by Sioeng and Elnitiarta to handle his export-import operations in the United States.

Gaylord, whom Bolton says handled the Elnitiarta contribution, worked with Steve Kinney, who did advance work for Gingrich in California. Kinney has told The Times that he approached Elnitiarta for the contribution but did not tie it to Gingrich’s appearance with her father and 20 other business leaders at the Peninsula Hotel in Beverly Hills.

Kinney, who had done advance work and fund-raising for Gingrich in California for six years, said Gaylord had urged him to raise money for the National Policy Forum. He said he knew Elnitiarta and Sioeng through Fong, another Kinney client, and decided to approach her for the funds himself.

“I said it was going to the National Policy Forum and it was helpful,” said Kinney, a former Republican National Committee operative who now does private polling. “It’s a think tank that Newt Gingrich had been supportive of and something that we’d like to have them contribute to.”