FBI Notes Dispel ‘Evidence’ of Security Breach by Huang

A GOP congressman who said in 1997 that he had “evidence” former Democratic fund-raiser John Huang had passed classified information to an Indonesian company never received such reports, according to FBI documents made public Thursday.

Notes taken by FBI agents who investigated the case show that former Rep. Gerald B.H. Solomon (R-N.Y.), who headed the House Rules Committee when he made the charge, had based it on a casual remark by a Senate staff member, not on intelligence reports as he claimed at the time.

In 1997, amid heightened suspicions about Huang’s activities when he worked as a political appointee at the Commerce Department, Solomon said he had “received reports from government sources” saying there were “electronic intercepts which provide evidence confirming . . . that John Huang committed economic espionage and breached our national security by passing classified information to his former employer, the Lippo Group.”

Solomon’s charge, leveled in a statement issued by his office and in an interview on CBS television, escalated the scandal over the Clinton administration’s fund-raising activities among foreign and Asian-American contributors.

The accusation marked the first time that a prominent official publicly suggested intelligence sources had obtained evidence that Huang--who left Commerce to become a Democratic Party fund-raiser--had stolen government secrets. The next day, some of the nation’s leading newspapers, including The Times, carried stories about Solomon’s charge.

The Solomon allegation was raised Thursday by Rep. Henry A. Waxman (D-Los Angeles) during the second day of Huang’s testimony before the Government Reform Committee. Waxman called it a case of a lawmaker leveling a serious allegation with little or no substantiation.

Huang has pleaded guilty to violating campaign-financing laws but has consistently denied that he passed secrets to the Lippo Group or any other foreign entity.

Solomon, now retired from Congress and a partner in a Washington lobbying and consulting firm, did not return repeated telephone messages Thursday.

Waxman, the committee’s ranking Democrat, made public notes from FBI agents’ interviews with Solomon in August 1997 and the following February, in which the former New York lawmaker denied ever having received classified information from the Department of Commerce.

Rather, the documents say that Solomon told the FBI he had obtained the information from a comment by a Senate staff member at a Capitol Hill reception. The comment apparently did not mention Huang specifically. Solomon told the FBI that he “could not recall the staff member’s name but might recognize him if he saw him again.”

Waxman said the FBI notes showed that Solomon had been “basing his allegations on gossip.” He said neither Solomon nor anyone else involved in the incident had ever corrected the record publicly.

Huang told the Government Reform panel that he had been the victim of “people seeking publicity” who had “lied about me repeatedly in the press and even before this committee without consequence.”

“For example, a former member of this body, Mr. Solomon . . . accused me of ‘economic espionage’ on the basis of what I am advised was an anonymous source at a cocktail party who, it turned out, did not even mention my name.”

Meanwhile, committee Republicans made public a separate set of documents showing that FBI agents failed to ask President Clinton and Vice President Al Gore about the influx of illegal campaign contributions from abroad when they interviewed them at the height of the scandal.

Rep. Dan Burton (R-Ind.), the panel’s chairman, released a letter he had written to Atty. Gen. Janet Reno demanding an explanation. He said that the agents failed to ask Clinton any questions about Huang, Little Rock, Ark., fund-raiser Yah Lin “Charlie” Trie or Lippo vice chairman James T. Riady. All three had been friends of Clinton before he was elected president.

The documents also show that the FBI agents did not ask Gore about the controversial fund-raiser at the Hsi Lai Buddhist Temple in Hacienda Heights, Calif., which drew the vice president, who had spoken at the event, into the scandal.

In a prepared statement, Reno said Thursday: “The Department of Justice has conducted a vigorous investigation into allegations concerning campaign finance violations. In the past three years, it has prosecuted 22 individuals and obtained 15 pleas. That investigation continues.”

Reno said that interviews “have been conducted so as to focus on the matters then under review.” The FBI agents conducted the interviews as part of preliminary investigations of Clinton’s and Gore’s fund-raising activities to help Reno determine whether there was enough evidence to require the appointment of a special counsel.

Charles LaBella, the former head of the Justice Department’s campaign finance task force, said Thursday that, during the FBI’s November 1997 session with Clinton, “it was the attorney general’s decision that it would be a focused interview” limited to the fund-raising phone calls.

LaBella, who sat in on the interview along with Justice officials, said he “always figured we’d have other chances” to question the president about his relationship with key fund-raisers after developing cases against them. LaBella left the task force before a second FBI interview was done in late 1998.

But Burton was more critical. “What am I to think . . . of an investigation that has failed to ask key witnesses any questions about the most important subjects in what has allegedly been one of the largest investigations ever undertaken by the Department of Justice?”

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Times staff writer William C. Rempel in Los Angeles contributed to this story.