Gandhi Award to Clinton Linked to $325,000 Gift

As election day neared in 1996, a drumbeat of news accounts about suspicious foreign donations began to worry President Clinton’s reelection team and Democratic Party leaders.

In particular, White House officials feared additional embarrassing disclosures regarding Yogesh K. Gandhi, a California entrepreneur who had donated a whopping $325,000 to attend a fund-raising dinner at which he gave Clinton a bust of his relative, Mohandas K. Gandhi, in an unusual presentation with foreign visitors.

Seeking to tamp down inquiries about the event, White House and Democratic officials denied any connection between the large donation and the presidential ceremony. But newly obtained documents and interviews indicate that those statements were false and that key officials knew before the Nov. 5 election that Gandhi had offered the money directly in exchange for arranging the presentation.

Although The Times previously reported considerable details about Gandhi’s donation and the ceremony, the records reveal for the first time how administration and party officials gave misleading accounts that helped deflect criticism of Clinton within days of the election. The information also offers a detailed portrait of one of the most unsavory chapters of the 1996 campaign, an episode still under investigation by the Justice Department and other agencies.

The documents shed new light on a debate within the White House and the Democratic National Committee over whether to return Gandhi’s donation after news accounts that he had testified in court that he had no U.S. assets and owed California $10,000 in back taxes.

The DNC cut a refund check for $325,000 to Gandhi on Oct. 25, 1996. But it did not give back his contribution until Nov. 6--the day after Clinton was reelected.

Only two weeks before the election, then-White House Special Counsel Mark D. Fabiani said in an interview that the Gandhi award and the $325,000 donation were not connected. “I don’t think there’s any relationship at all that we’ve seen,” he said.

At the same time, a Democratic Party spokeswoman said Gandhi unexpectedly brought the life-sized bust to a May 13, 1996, fund-raiser and arranged the ceremony with Clinton on the spot.

“He talked to no one about the presentation in advance,” the DNC’s Amy Weiss Tobe told The Times on Oct. 24, 1996. “The first the DNC knew of him wanting to present this to the president was at the dinner.”

In fact, DNC fund-raisers John Huang and Yah Lin “Charlie” Trie knew days in advance that Gandhi was coming to Washington to orchestrate the award ceremony to Clinton, according to Senate testimony and interviews. And by mid-October, at least one top DNC official knew Gandhi had made his intentions clear to Huang when they first discussed a political donation.

DNC general counsel Joseph Sandler acknowledged to Senate investigators last year that Huang had told him in mid-October 1996 that “Gandhi [had] expressed an interest in attending an event with the president and that he wanted to contribute to the Democratic Party. . . . He told me that if Mr. Gandhi did attend an event with the president, that Mr. Gandhi had requested an opportunity to present this bust of Gandhi to the president.”

Huang confirms Sandler’s testimony, said Ty Cobb, Huang’s Washington attorney. “The purpose of the contribution clearly” was the presentation of the bust, Cobb said. “John would have to acknowledge there was always linkage to these two things.”

Democratic officials still insist there was no effort to deceive the public. “The information the DNC put out was the best information that we had at the time,” said Tobe, now a deputy White House press secretary.

DNC press secretary Steve Langdon said it is important to draw a distinction between the DNC’s motivation in soliciting the donation and Gandhi’s reason for contributing. “There was no connection between the solicitation of the contribution and the presentation of the award from the DNC’s perspective,” Langdon said.

Records and interviews show that Gandhi initially spoke to Trie, a longtime friend of Clinton’s who helped Huang raise large sums for the Democratic Party in 1996. Huang and Trie arranged the May 1996 dinner for Asian American donors at Washington’s Sheraton-Carlton Hotel; it raised about $600,000, including Gandhi’s $325,000.

Trie pleaded not guilty last week to charges of conspiracy, mail fraud and election-code violations in the campaign fund-raising scandal. Huang remains under investigation by the Justice Department; both men have refused to testify about their fund-raising activities.

In a previously undisclosed account provided to Senate investigators as part of a failed bid for immunity, Gandhi said Trie had assured him in advance that it would be “no problem” to give Clinton the award at the May 13 dinner if he donated a large sum to the DNC.

Trie, Gandhi said, demanded $700,000 before the amount was negotiated to $325,000. Peter Coleridge, Gandhi’s attorney, declined to comment, as did Reid H. Weingarten, Trie’s attorney.

Gandhi, a native of India and the great-grandnephew of Mohandas K. Gandhi, is the founder of the nonprofit Gandhi Memorial International Foundation in Orinda. Its ostensible purpose is to further Gandhi’s philosophy of nonviolence. Previous recipients of the Gandhi World Peace Award include President Reagan, former Russian President Mikhail S. Gorbachev and Mother Teresa.

Gandhi first wrote to the White House in February 1996 seeking to present the award to Clinton in the White House. He also offered $100,000 with the prize.

Initially, Clinton aides were intrigued by the offer.

But the White House office of public liaison found that Gandhi’s foundation was “not a reputable organization,” that Gandhi “made a living” from it and that Gandhi would “take advantage” of a meeting with the president, who would be damaged by the association. In addition, a National Security Council aide told the White House he learned from an FBI contact that Gandhi was considered “a fraud,” according to an internal document and interviews.

On April 17, 1996, the administration rejected Gandhi’s request.

But Gandhi was determined to get to the president. He had a lucrative business deal to showcase Hogen Fukunaga--a Japanese multimillionaire who preaches the Eastern faith of Tensei and claims to possess extraordinary spiritual powers--in events with world dignitaries.

Gandhi told Senate investigators he asked DNC staffers if he could present the award to Clinton in exchange for a large donation. He said he was then contacted by Trie.

Gandhi arrived with Fukunaga and others for the May 13 fund-raiser. Senior DNC officials, including those at the event, say they did not know any presentation would take place.

Throughout the dinner, Gandhi said, he hounded Trie about keeping his word. After Clinton spoke, Trie grabbed the president’s arm and persuaded him to accept the award, Gandhi said.

Gandhi’s bank statement showed a balance well below the amount of his donation. He told investigators he asked Trie not to cash his $325,000 check for 10 days. Bank records show that during this time, Yoshio Tanaka, Gandhi’s partner in showcasing Fukunaga, made two $250,000 transfers from Japan to Gandhi’s account. Gandhi maintains the funds were his own.

In October 1996, amid other disclosures about DNC fund-raising, questions arose about the Gandhi donation. White House and DNC officials began to confer about whether to return it.

On Oct. 23, The Times reported that Gandhi had testified in court proceedings in August that he had no U.S. assets and that he owed the state of California $10,000 in taxes.

Sandler said in his Senate deposition that the DNC refund check dated Oct. 25 was prepared “basically to set the money aside and make sure it was ready to go” while party officials sought to determine whether the donation had come from Gandhi.

The bust remained in Clinton’s private study in the White House residence among other treasured items. It was removed last year at the recommendation of a White House advisor.

“Clinton liked the bust,” an aide said. “I don’t think he cared who gave it to him.”

Times staff writer Ronald J. Ostrow contributed to this story.