Former Democratic Donor Defends His Contributions


Former Democratic Party donor Johnny Chung detailed for a congressional committee Tuesday his odyssey from obscure Torrance entrepreneur to middle man for contributions from the Chinese government, telling lawmakers, "please keep in mind that I didn't create this system, you did."

In testimony before the House Government Reform and Oversight Committee, Chung revealed that he received more than $2 million from 1994 to 1996 from various Chinese investors. He said he used less than 20% of the funds for political donations, which he considered part of his business expenses.

Chung called his trading of large contributions for access to the White House "the American way."

Testifying for nearly five hours before a rapt hearing room, the Taiwan native scolded House representatives for failing to reform a campaign finance system that invites exploitation by wealthy donors.

"It seems to me that the American people deserve an answer from you politicians who talk a lot about changing and improving the system," Chung said. "Yet, more than two years after this controversy erupted, you, the Congress, have done nothing to change the system."

Chung, 44, became the first figure in the 1996 campaign finance scandal to provide firsthand information about his dealings with Chinese officials and to acknowledge that some of the funds he brought into the U.S. election coffers originated with a top Chinese government official.

He recounted for the committee his mid-1996 encounters with Gen. Ji Shengde, the head of China's military intelligence, who gave him $300,000 through an associate--in part to make donations to help reelect President Clinton. Chung said he donated $35,000 of this money to the Democratic National Committee.

Chung, who gave more than $400,000 to Democratic campaigns and causes overall and visited the White House about 50 times, said he now has "mixed feelings" about the president and First Lady Hillary Rodham Clinton, whom he met on various occasions.

"I can't help but think that they used me as much as I used them," he said.

He said that DNC officials were not aware of his contacts with Ji or any money he received from the intelligence chief. But Chung said he was angry at how the Democratic Party that had so actively sought his money was so quick to attack him after the scandal broke.

Chung said that DNC leaders were "fully aware that I was doing a lot of business and cultivating friendships with people from the People's Republic of China." He also testified that he encouraged party officials to help him gain access to the president because it would help his company.

Republicans, who before Tuesday lacked such compelling evidence of a Chinese effort to influence the 1996 presidential campaign, treated the former Democratic Party benefactor with deference while Democrats on the panel approached his testimony with skepticism.

Rep. Henry A. Waxman (D-Los Angeles) questioned Chung's credibility, and Rep. Tom Lantos (D-San Mateo) called his story "a tiny sideshow" in current Sino-American relations.

Chung, who pleaded guilty in March 1998 to making illegal campaign contributions and tax violations, has been cooperating with the Justice Department for the last year in an ongoing federal investigation of campaign finance abuses.

In his one day of testimony, Chung said he was introduced to Ji by Liu Chao Ying, a Chinese aerospace executive who provided the $300,000 on the general's behalf. Chung added that Liu told him that the Beijing government was working with other politically connected individuals to advance China's interests in the U.S.

Chung also told of numerous encounters last year with a San Gabriel Valley man who urged Chung to remain silent about his dealings with Ji--offering money if he did so and making veiled threats against Chung and his family if he did not. Chung, who wore an FBI wire during the sessions, said the man indicated he was sent by Liu.

Chung also described his dealings with Charles Parish, a then-senior diplomat in Beijing who helped him get visas for dozens of Chinese. In turn, Chung said, he did various favors for Parish, including taking him to a 1995 DNC fund-raiser in Los Angeles featuring Clinton.

Chung also said that he was asked by an executive of a Chinese beer company "to give a shopping bag of money" in an apparent exchange for visas. Parish, who was removed from his post in Beijing in 1996, remains under investigation by the Justice Department. Parish has denied this allegation.

The Chinese government has insisted that it did not provide any funds to U.S. election campaigns. Liu has not been available for comment. White House officials say they were unaware of the source of Chung's funds at the time that he was contributing; the DNC subsequently returned all of his donations.

Chung traced his initiation into the world of political money to Clinton's 48th birthday party in August 1994, when he made his first donation. Chung said he soon saw that "attending these events and getting pictures with people like the president and vice president" helped business.

Word spread in China of Chung's access and, he said, his fax business evolved into helping Chinese associates obtain visas, escorting them around the U.S. and introducing them to business and government contacts.

After meeting Liu in Hong Kong in June 1996, Chung entered into a business relationship with her. In addition to her role in the state-owned aerospace company, Liu is the daughter of China's retired senior military officer.

Two months later, Chung recalled, Liu introduced him to Ji, who was using an alias, at a Hong Kong restaurant. At this session, Chung testified, Ji told him:

"We really like your president. We hope he will be reelected . . . I will give you $300,000 U.S. dollars. You can give it to . . . your president and Democrat Party."

Following a second meeting, Chung said he expressed concern to Liu about taking Ji's money.

Chung said Liu told him this was acceptable because others were already "involved in developing relationships and access to China."

Chung said he eventually gave $35,000 of the $300,000 from Ji to the DNC in August and September of 1996. Senate Intelligence Committee investigators said last week the FBI traced $20,000 to the DNC and "most of the remaining funds went for [Chung's] personal use, including mortgage payments."

One curious aspect of Chung's testimony revolved around a five-month undercover investigation by the FBI in which a Chinese American businessman portrayed himself as a messenger for the Beijing government.

In his testimony, Chung identified the suspected messenger as Robert Luu, a San Gabriel Valley businessman. Luu, a convicted software pirate, had been out of San Quentin State Prison only a short time before contacting Chung. FBI transcripts of secretly recorded meetings between Luu and Chung, obtained by The Times, show that the Vietnam-born Luu claimed to be sent by Liu, the Chinese official.

For several weeks, leading up to a presidential visit to China late last June, Luu urged Chung to keep silent and resist cooperating with the Justice Department. He said Chung had friends in China who would take care of him. And Chung said he regarded Luu's questions about his family as veiled threats. Luu, who denies any wrongdoing, has since repudiated his tape-recorded claims of working for Liu. He said his only goal was to get close to Chung. Waving a booklet filled with pictures of Chung at the White House, Luu said in an interview that he regarded Chung as "a most important man--look at these pictures with Clinton, with Chinese ministers, with very high people!"


Video of Johnny Chung's testimony before the House committee is available on The Times' Web site:

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