Clinton Fund Kept Suspect Gifts Secret

President Clinton’s legal defense fund kept secret until after last November’s election about $380,000 in suspicious donations it received in a plain manila envelope from Yah Lin “Charlie” Trie, a longtime Clinton friend from Little Rock, Ark.

Although the donations were rejected, the defense fund changed its accounting methods so the money would not show up on a public report, the fund’s director acknowledged Wednesday under questioning by a congressional committee investigating campaign finance abuses.

The witness, Michael H. Cardozo, also told the Senate Governmental Affairs Committee that he alerted First Lady Hillary Rodham Clinton and senior White House officials to Trie’s deliveries--including one batch of donations in a brown shopping bag.

Nonetheless, even after questions were raised about the Trie-related donations, he was allowed to enter the White House at least three times, and the Democratic National Committee still accepted about $400,000 he brought into the party’s coffers.

The committee is examining Trie’s donations to the legal trust fund because the onetime Little Rock restaurateur is a central figure in its investigation of whether political contributions from overseas were illegally funneled into the 1996 election campaign.

“You smelled a rat when you met Charlie Trie,” Sen. Robert F. Bennett (R-Utah) told Cardozo, but the White House “didn’t have the same . . . antenna that you had.”

But Cardozo said he and other fund trustees were not “driven by political considerations” to keep the donations secret. Instead, they were worried about offending Asian Americans, who made the bulk of the contributions.

Cardozo was Wednesday’s only witness, but after he wrapped up his testimony, committee Chairman Fred Thompson (R-Tenn.) angrily announced that the panel would be issuing a subpoena, perhaps as early as today, to the White House for a raft of documents it has sought for months.

Thompson was angered because the White House released information late Tuesday--after the committee had spent the day focused on the activities of Trie and his business associate, Ng Lap Seng, showing that Ng had visited the White House 10 times.

Investigators said earlier this week the source of at least some of Trie’s $220,000 in contributions to the Democrats was Ng, a wealthy Macao developer, who wired him at least $900,000 between 1994 and 1996.

Bennett, in remarks later denounced as insensitive by the DNC and an Asian American group, went so far as to call Trie “a very typical Asian agent acting on behalf of his sponsor.”

Cardozo told the committee Trie was a mystery figure to him and other fund directors, who include two former attorneys general. The legal defense fund was established in 1994 to help pay legal fees incurred by the president or the first lady in the Whitewater real estate matter and the sexual-harassment case brought by Paula Corbin Jones.

Cardozo said that out of the blue in March 1996, Trie called to arrange for a meeting at Cardozo’s office the following day. Trie had been referred by a DNC official.

Saying he was a friend of the president concerned about Clinton’s mounting legal bills, Trie pulled out a plain brown envelope containing $460,000, mostly in individual $1,000 checks and money orders collected by Trie from members from a Buddhist sect, Cardozo said.

A quick review of the money immediately disqualified about $70,000 that did not satisfy various trust fund guidelines, Cardozo said. The remaining $380,000 from 409 donors went into a lock box at NationsBank.

The trustees decided to put Trie’s checks in an interest-bearing account while they investigated them. Cardozo said they did not accept the money but merely held on to it during their review.

Meeting with Mrs. Clinton on April 4, Cardozo testified that the first lady was somber, having just returned from a memorial service for Commerce Secretary Ronald H. Brown, who died in a plane crash. To lighten the occasion, Cardozo said he told Clinton that he had good news and bad news. The bad news was that the first couple’s legal expenses were $1.5 million. The good news was that someone had just brought in $460,000 in checks to the defense fund.

Cardozo then asked Mrs. Clinton if she could guess who it was. She could not, and even when Cardozo mentioned Trie by name she needed prompting before she remembered him as the proprietor of a Little Rock restaurant where her husband often ate lunch when he was governor of Arkansas, Cardozo testified.

Some senators, however, found it difficult to believe that the first lady did not know Trie because of his regular White House visits, one of which had been scheduled--then canceled--with the first lady herself.

Later in April, Trie met with Cardozo again. This time he was carrying a large shopping bag.

“Oh, my God, he’s got a million dollars this time,” Cardozo recalled thinking. Trie told him it was actually $179,000 in checks and money orders. Included in the bag were novelty items from Asia that Trie wanted help in marketing.

Cardozo said he turned down the second batch of contributions. Trie would later return with $150,000 more for the fund, which officials also refused to accept.

On May 9, Cardozo briefed various White House aides about the money from Trie but did not solicit their advice.

By this time, the fund had also launched its own investigation of the donations delivered by Trie. But investigators were instructed not to interview Trie. “Mr. Trie represented himself as a friend of the president. I didn’t want to launch a full-scale background investigation on him,” Cardozo said.

Today the committee will hear the investigators’ account of their probe.

Cardozo said his group ultimately decided to reject all the Trie-related contributions because of the unique circumstances under which they were delivered. Fund officials had concerns that the funds had been raised through coercion at meetings of the Ching Hai Buddhist sect and had questions about whether some of the money had been advanced by the Buddhist group, which is based in Taiwan.

Not wanting to appear as if they were discriminating against Asian Americans or a particular religious group, trustees decided not to publicly disclose the rejection, said Cardozo.

After several more White House meetings after the election, officials of the legal defense fund announced last December that they had returned or rejected Trie’s donations because of concerns about the sources of the money.

Cardozo’s testimony elicited a number of questions from senators about what they regarded as curious aspects to Trie’s attempts to put money into the legal defense fund.

For instance, even as they returned the checks collected by Trie, the legal defense fund invited the donors to resubmit checks if they were U.S. citizens legally able to contribute.

The fund eventually received $122,000 in checks that were resubmitted by the individual donors. But suspicions about those donations eventually prompted the fund to return them as well.

Times staff writers Glenn Bunting and Alan C. Miller contributed to this story.