Reno Adds Staff to Donor Probe; Hearing Delayed

Indicating both the gravity of alleged campaign fund-raising abuses and the difficulties associated with investigating them, the Justice Department Tuesday took steps to beef up its probe while a House panel, succumbing to disarray and controversy, canceled its plans to open public hearings today.

In the Senate, meanwhile, Republicans met with limited success in their efforts to prove that White House coffee klatches attended by President Clinton in 1995 and 1996 were in fact fund-raisers.

Atty. Gen. Janet Reno announced a shake-up in her Justice Department task force that has been investigating possible criminal violations in the fund-raising case for nearly a year.

Reno was unhappy with the pace of the probe, sources said, as well as its failure to uncover information that surfaced first in press reports. The task force will get new leadership and additional attorneys and investigators, officials said.

The new chief prosecutor will be Charles La Bella, first assistant U.S. Atty. in San Diego, a 16-year veteran who specializes in white-collar crime. He will replace Laura Ingersoll, a lawyer in the department’s public integrity section.

In addition, James DeSarno, a supervisor at FBI headquarters, will join the task force to direct FBI agents assigned to the probe.

The shake-up comes at a critical point in the investigation, as the department is conducting a 30-day review to determine if a court-appointed independent counsel should examine Vice President Al Gore’s solicitation of campaign contributions from his White House office.

Reno ordered that review 13 days ago after learning from the Washington Post that thousands of dollars Gore solicited had gone into the party’s so-called “hard money” account, which is subject to regulation under federal election laws.

Reno previously had rejected Republican calls for an independent counsel largely on grounds that substantial donations received by Democrats were part of an unregulated “soft money” pool used for party building, voter drives and issue-oriented television ads.

Sources cautioned, however, that the shake-up did not signal Reno was either more or less likely to recommend an outside counsel.

Sen. Arlen Specter (R-Pa.) had taken to the Senate floor Tuesday to denounce the task force for failing to discover alleged ties between Ted Sioeng, an Indonesian entrepreneur in Southern California, and the Chinese government. Chinese officials are suspected of having tried to influence the 1996 congressional and presidential elections.

Although Specter did not mention Sioeng by name, he said the FBI was not alerted to information in its files about the businessman’s donations until months after The Times and other news organizations had written about him.

Sioeng has denied through his attorney that he has ever acted on behalf of a foreign government.

The indefinite delay in the House investigation came after three witnesses who had been called to testify abruptly refused to cooperate without legal immunity. The witnesses, who did not have lawyers when they were quizzed by committee investigators, retained attorneys earlier this week and were immediately advised not to testify without immunity from prosecution.

House Democrats suggested Tuesday that the Republicans running the investigation had bungled the process by employing heavy-handed tactics.

One witness had asked GOP investigators if he should hire a lawyer and was told that he was not in trouble, said a Democratic investigator. Another witness had been interviewed by investigators waiting outside her home, also without an attorney present, Democrats said.

“This would be comical but it’s serious when you trample on people’s privacy and constitutional rights,” said Rep. Henry A. Waxman of Los Angeles, the committee’s ranking Democrat. “This is an investigation that has been . . . in disarray, with a Keystone Kops atmosphere.”

A committee spokesman vehemently defended the investigators’ actions.

The scheduled witnesses were Manlin Foung, a sister of Democratic fund-raiser Yah Lin “Charlie” Trie; Joseph R. Landon, a Trie family friend; and David Wang, a DNC donor. All three were reimbursed by Trie after making campaign contributions in their own names.

House Republicans intend to begin the process of granting immunity to the three this week, but they face an uphill fight. To win the two-thirds vote necessary to confer immunity, the committee’s GOP members need the support of at least seven Democrats.

Waxman indicated he wants to consult with the Justice Department and the separate Senate investigation before proceeding with grants of immunity.

The Senate Governmental Affairs Committee, meanwhile, heard testimony from three witnesses who had attended a White House coffee. A Republican businessman said that John Huang, the controversial former DNC fund-raiser, told participants at a June 18, 1996, coffee that “elections cost money--lots and lots of money,” and asked them to support the president.

However, the other two witnesses said they could not recall Huang making such explicit remarks. At the same time, committee investigators introduced subpoenaed DNC documents that referred to a “projected revenue” of $400,000 from that coffee and similar amounts from several other White House sessions.

“This was a money-related event,” committee chairman Fred Thompson (R-Tenn.) said.

White House officials have stressed that no one who attended any of the 103 coffees over a two-year period was solicited in advance for a political donation, and that there was no “quid pro quo” for attending these intimate receptions.

Federal Election Commission records, however, show that many participants gave large donations in the weeks before or after the coffees.

Karl Jackson, president of the U.S.-Thailand Business Council and a former aide to Vice President Dan Quayle, said he thought the coffee he attended was to be devoted to a discussion of U.S.-China policy, and was “astonished” that Huang spoke about the need for election funds.

He said then-DNC General Chairman Donald L. Fowler welcomed the reception’s nine guests, telling them that the 1996 election would be “the most important one since the election that brought Abraham Lincoln into this house.” But Fowler, unlike Huang, did not make a pitch for funds, Jackson said.

Clarke Wallace, who described himself as the nonpartisan executive director of the U.S.-Thai council, testified that he assumed from Huang’s remarks that the event “was one element of the fund-raising process for major supporters” of Clinton, but he could not recall Huang explicitly mentioning money.

A third witness, Beth Dozoretz, a friend of the Clinton family who estimated she has raised more than $2 million for Democrats in the last three years, said: “I honestly do not remember his [Huang’s] saying anything of substance whatever.” If Huang had mentioned money “I would remember it,” she said.

All three witnesses said the event revolved around Pauline Kanchanalak, a Thai businesswoman and major Democratic donor who had arranged the guest list and sat alongside Clinton.

FEC records show Kanchanalak contributed $50,000 that day, $85,000 the next day and a third major sum at a later point. The DNC last year returned $253,000 to her because the funds were of questionable foreign origin.

Senate Republicans pointed out that Huang and Kanchanalak, whose activities are under scrutiny by the Justice Department, have refused to testify before the committee on grounds of possible self-incrimination.