A Partisan Tangle Over China-Linked Donors

The assertions are alarming:

* Democratic fund-raiser Maria Hsia was “an agent of the Chinese government.”

* The Chinese Consulate in Los Angeles was the source of $3,000 donated by the family of pro-Beijing entrepreneur Ted Sioeng to boost the campaign of a California Assembly candidate.

* Mochtar and James T. Riady, Indonesian financiers and longtime supporters of President Clinton, had a long-term relationship with a Chinese intelligence agency.

If China had launched an ambitious effort to participate illegally in the U.S. political process, these might have been among the signs of the plot at work. At least that is the conclusion of congressional investigators, who made these assertions after examining a Chinese operation initially uncovered by U.S. intelligence intercepts.

Yet a year after the Chinese plan was disclosed, there remains intense disagreement about whether China ever did anything illegal. The inquiry has produced an assortment of evidence on the extent and nature of a Chinese initiative--and also a debate about how to interpret it.

And still unsettled is whether Hsia, Sioeng, the Riadys and others did Beijing’s bidding. Did the Chinese government sponsor and orchestrate any activities by these individuals, or any of their campaign contributions? Or did they merely pursue their own transpacific business interests, personal ties or ideological leanings?

Even the Senate Governmental Affairs Committee, which “found a broad array of Chinese efforts designed to influence U.S. policies and elections through, among other means, financing election campaigns,” acknowledged that it could not prove that the Chinese government “funded, directed or encouraged” illegal contributions to U.S. election campaigns. Rather, it said, it found “strong circumstantial evidence.”

In part, this may reflect the challenge of investigating actions hatched in a country where the government and the Communist Party are so deeply enmeshed in private industry.

For the public, evaluating the China connection is all but impossible. Much of the support for the most sensitive assertions by the Senate panel is shrouded in official secrecy.

“I don’t know of anything definitive” regarding evidence of a link between Democratic fund-raisers and Chinese intelligence, said an individual who has seen at least summaries of the classified material. “There is a lot of smoke but no fire.”

In addition, all the major fund-raising figures with ties to China have refused to cooperate with federal investigators.

Moreover, a Justice Department campaign-financing task force--which is looking into fund-raising allegations involving Hsia, Sioeng and others and could uncover further evidence of illegal Chinese actions--has not shared its information with congressional investigators.

The Chinese government, which also declined to assist federal investigators, has denied any effort to illegally influence U.S. elections.

A Chinese Push for More Influence in U.S.

This much is not in dispute:

In 1995, Congress passed a resolution advocating a U.S. visa for Taiwan’s president, Lee Teng-hui, who received it over the strenuous objections of the government in Beijing. Determined not to be outmaneuvered again, senior Beijing officials devised plans to increase China’s influence in the U.S. political process.

They approved such legal steps as increasing diplomatic contacts with the American public and the media, lobbying Congress and establishing cultural exchanges with Chinese Americans.

U.S. law enforcement and intelligence agencies learned that the Chinese plans also included illegally funneling contributions to congressional candidates. And they developed evidence that the Chinese might have engaged in illegal activities at the state level.

Whether these efforts ever reached the presidential level or ever involved significant sums remains a matter of partisan disagreement.

The Republican majority on the Senate Governmental Affairs Committee, led by Sen. Fred Thompson of Tennessee, said its investigation “suggests that China’s effort involved the 1996 presidential race” and that “the government of China may have allocated millions of dollars in 1996 alone to achieve its objectives.”

In contrast, the Democratic minority, which had access to the same classified material, concluded: “There was insufficient information presented to the committee that the China plan resulted in illegal activity by the Chinese government in relation to the 1996 federal elections.”

Much appears to hinge on the culpability of the China-connected fund-raisers and donors.

Fund-Raiser Accused of Being Chinese Agent

The most serious characterization concerns Hsia, a Los Angeles immigration consultant who was indicted last week for allegedly conspiring with the Hsi Lai Buddhist Temple in Hacienda Heights to make illegal contributions through conduits to the Democratic National Committee and various political candidates. She has pleaded not guilty.

“The committee has learned that Hsia has been an agent of the Chinese government, that she has acted knowingly in support of it and that she has attempted to conceal her relationship with the Chinese government,” the Senate committee majority said in its 13-page report summing up its findings on Chinese efforts to influence U.S. policies and elections.

It also said that “Hsia has worked in direct support of a [Chinese] diplomatic post in the U.S.”

Sources familiar with the classified information on the Taiwan-born Hsia said the reference to her as an agent does not involve political fund-raising. Rather, it concerns her immigration work, including a 1995 incident that was investigated at the time, with no action being taken.

The sources said the incident involved a restaurant owner and naturalized U.S. citizen from Taiwan living in Southern California whose employees Hsia had assisted on immigration matters. Calling from France, where he was traveling, the businessman asked her to arrange emergency housing for him. Hsia did so. The FBI believes that the man was a clandestine Chinese agent, the sources said.

Nancy Luque, Hsia’s attorney, said Hsia first learned about such suspicions in November when FBI agents interviewed her for two days, at her insistence, after news accounts alleged that Hsia herself was a Chinese agent. “She was stunned,” Luque said.

“It’s ludicrous to suggest that, because you gave assistance to someone others believe may be an agent, that you are an agent,” Luque said. “The only kind of agent Maria was in this case was a travel agent.”

Hsia’s immigration business focused on Taiwan until the early 1990s, when she began to represent more clients in China and to make regular trips to the mainland, Luque said. Hsia also has frequent contact with the Chinese Consulate in Los Angeles through her work.

But Luque said: “There’s no evidence to support the allegations and there is nothing in Ms. Hsia’s character, background or conduct that supports these allegations.” She called the Senate report “slanderous.”

The FBI, which reviewed the Senate report to protect sensitive sources and methods as well as to ensure that it accurately summed up material provided by the agency, did not object to the report’s wording on Hsia. But a source familiar with the matter cautioned that the word “agent” did not necessarily mean spy. There are “gradations of agent,” this source said.

Other sources who deal with classified material said the term could apply to anyone who furthered the goals of a foreign country, even through legitimate means.

A Justice Department source said that, if any evidence had been uncovered that Hsia was working for China and had failed to register as a foreign agent, she probably would have been charged with that violation. But there was no indication of that in Hsia’s indictment.

Panel Majority Accuses Indonesian Magnate

Sioeng, a wealthy Indonesian whose family owns businesses throughout China, elsewhere in Asia and in Southern California, has been identified in news accounts for the last nine months as under investigation as a suspected agent for the Chinese government.

Sioeng’s daughter, Jessica Elnitiarta, and her company contributed $250,000 to the Democratic Party in 1996, and Sioeng flew in from Asia to sit next to Clinton at three fund-raisers. Investigators said they had traced to Hong Kong bank accounts more than half of $400,000 given by Sioeng’s family, companies and associates to the Democrats.

Sioeng and his family also gave more than $150,000 to Republican candidates and causes.

“The committee has learned that Sioeng worked, and perhaps still works, on behalf of the Chinese government,” the Senate committee majority said. “Sioeng regularly communicated with [Chinese] Embassy and consular officials at various locations in the United States and, before the campaign finance scandal broke, he traveled to Beijing frequently where he reported to and was briefed by Chinese Communist Party officials.”

The investigators said that among “a handful of activities that Sioeng undertook at the request of or with support from the [Chinese] government” was the purchase of the International Daily News in 1995. He turned the publication’s slant from pro-Taiwan to strongly pro-Beijing.

The investigators said they concluded that a $3,000 check from the Chinese Consulate in Los Angeles on March 22, 1996, to the Hollywood Metropolitan Hotel, which is owned by Elnitiarta, was “for the purpose of reimbursing a political contribution to Daniel Wong, a Republican who ran for the California state Assembly.” Sioeng’s wife gave Wong a $5,000 donation on Feb. 15, 1996.

The report does not provide the basis for that conclusion.

Wong, a former Cerritos city councilman who lost in the GOP Assembly primary, said he understood the contribution to be from the Sioeng family, not from the consulate.

Sioeng’s attorneys, who emphatically denied that their client has ever worked on behalf of the Chinese government in any capacity, said the contribution to Wong came solely from Sioeng’s wife, a legal resident.

Attorneys Mark J. MacDougall and Steven R. Ross said the check covered expenses of a Chinese government television crew that stayed at the hotel in early 1996. They supplied hotel billing records to verify the hotel charges.

They said Sioeng’s contacts in China are almost exclusively with provincial Chinese officials through his various manufacturing and investment businesses there. Sioeng, who is active in the Chinese American community, was also friends with a recent Chinese consul general in Los Angeles.

But MacDougall said: “We categorically deny that anyone in the Chinese government ever asked him to do anything,” including buying the Chinese-language newspaper, or that he was briefed by officials in Beijing.

The attorney said all the campaign contributions from Elnitiarta, a Los Angeles businesswoman and legal resident, and her company were made by her and were lawful. He said the money from Hong Kong accounts was part of the millions of dollars of business and personal funds that the Sioeng family routinely transfers to the United States.

Longtime Friends, Backers of Clinton

The Riadys, Indonesian billionaires whose relationship with Clinton dates to his tenure as governor of Arkansas, have raised hundreds of thousands of dollars to support his campaigns. James T. Riady, Mochtar’s son, sat next to Clinton at two 1996 Democratic fund-raisers.

The Riadys control the Lippo Group, an Indonesian-based conglomerate that has invested heavily in China in recent years. Both James and Mochtar Riady visited Clinton in the White House after his election. Each urged him to extend trade privileges to China.

The Senate majority report says: “The committee has learned from recently acquired information that James and Mochtar Riady have had a long-term relationship with a Chinese intelligence agency. The relationship is based on mutual benefit, with the Riadys receiving assistance in finding business opportunities in exchange for large sums of money and other help.”

This struck a nerve with the Riadys, who had refrained from responding to previous allegations. A statement issued Friday by the Lippo Group said: “Our business ventures with our international partners are commercial in nature and do not involve the gathering of classified information or intelligence operations.

“We have never sought classified U.S. government intelligence. We have never received any information we were told was classified by the U.S. government. We have never passed any information that was classified . . . to any Chinese agency or any other person or entity.”

The Riadys were also instrumental in placing John Huang, Lippo’s top U.S. representative, in a middle-level Commerce Department job after Clinton’s election and in subsequently enlisting Clinton’s support for moving him to the Democratic National Committee. As a party fund-raiser, Huang raised $3.4 million to support Clinton’s reelection, nearly half of which was later returned as illegal or suspect. Much of it was foreign-linked.

The Senate committee, which investigated Huang intensively, found that he received considerable classified information on China while at Commerce and was in frequent contact with Lippo and Lippo associates. But it “found no direct evidence that Huang passed any such information to his former employers or anyone else.”

The Senate majority’s China report has little to say about Huang, and its newest assertion is extraordinarily equivocal: “A single piece of unverified information shared with the committee indicates that Huang himself may have had a direct financial relationship with the [Chinese] government.”

Ty Cobb, Huang’s lawyer, denied that his client did anything illegal at the Commerce Department or the national committee. He said of the report’s reference to Huang and China: “It is a disservice to Congress and a disservice to the investigative function entrusted to Congress. I think it is nothing more than slanderous.”

Times staff writers Ronald J. Ostrow and Glenn F. Bunting in Washington and researcher Janet Lundblad in Los Angeles contributed to this story.