The G.O.P.'s Own China Connection
A Hong Kong mogul rescued Republicans during two campaigns
By Michael Weisskopf and Michael Duffy/Washington
(TIME, May 5) -- The eight-page subpoena opened with the word Greeting, but there was nothing friendly about it. Coming from the Senate committee investigating the campaign fund-raising scandal, it directed what's left of the Dole campaign to hand over all documents connected to a familiar cast of 46 political donors and suitors. As the subpoena was faxed around Washington last week, it set off a minor panic among lobbyists and fund raisers worried about who might be called to testify. But their fretting was misplaced: the name of the G.O.P.'s most generous foreign benefactor wasn't even on the list.
For months snapshots of a Democratic White House desperately grubbing for campaign dollars have focused on Asian Americans with strong business ties to their native lands. Now Republicans tell Time the G.O.P. has profited from an Asian money connection as well. Twice in two years Hong Kong businessman Ambrous Tung Young bailed out the party at crucial moments: first freeing up as much as $2 million in the final days before the G.O.P.'s 1994 sweep of Congress; then eating $500,000 in bad debts, rescuing Republicans in the last weeks of the 1996 contest. The conduit for the money was a U.S. firm with little income and few assets, but quietly backed by an aviation-services and real estate-investment company controlled by Hong Kong and Taiwanese businessmen. The money passed through a Republican think tank that granted big donors more influence over party policy in return for more money. For Young, the arrangement also opened diplomatic doors. In Washington, Young met face to face with the lions of the G.O.P. just as they were taking over Congress. In Beijing a year later, he escorted G.O.P. chairman Haley Barbour in a meeting with Qian Qichen, Foreign Minister for the People's Republic of China.
The discovery of a financial channel running from Taiwan to Hong Kong to Republican national headquarters may well change the terms of Washington's latest money mess. Until now Democrats have taken the hit for fund-raising excesses, providing grist for investigations by the Justice Department and 11 congressional committees and prompting calls for an independent counsel. But as Young's secret role shows, the lure of easy foreign money is bipartisan. Young's business depends in large part on Western access to Chinese markets and a secure Taiwan, objectives pushed by Republicans and the think tank he backed. That agenda, the Young case shows, has been successfully promoted by Asian interests who contributed big money to both major parties.
How a Chinese businessman came to prop up the G.O.P. is a story that began in 1993, right after Bill Clinton's election. Barbour had just taken over as G.O.P. chairman and created a think tank to generate new ideas. He called his group the National Policy Forum, and although its operations were two blocks and a few legal documents removed from Republican headquarters, it was just an extension of the party. Barbour was chairman of the forum; G.O.P. officials set its $4 million annual budget and coordinated fund raising. The forum circulated 600,000 questionnaires to identify the hot-button issues that were later assembled into the Contract with America.
The forum had a hidden purpose: to tap into a new stream of cash from corporations. G.O.P. fund raisers discovered in 1992 that there was only so much soft money available; most donors had given all the money they could to campaigns. But because corporations set aside other tax-deductible money for research, Barbour's idea was to create a nonprofit think tank that could attract that cash.
Instead the think tank started to cost the party money. Corporate America turned out not to be very interested in the forum, so by the summer of 1994 it was heavily in debt, largely to the R.N.C., which had loaned the forum several million dollars to get started. With the pivotal midterm elections bearing down, the party needed money to attract voters to the polls with a burst of TV ads.
Enter Ambrous Tung Young. In the early fall of 1994 his U.S.-based arm, Young Bros. Development-USA, offered to guarantee a loan to the forum. Exactly who first thought of this arrangement remains a mystery. A top R.N.C. official said a Houston businessman named Fred Volcansek, who worked on trade issues under former President Bush, knew Young and informed the forum's president of Young's interest in helping. Young lived in Hong Kong, but his sons had become U.S. citizens and dabbled in G.O.P. politics.
Even then Barbour knew the political risks of the proposed loan arrangement. Although Young was willing and legally able, the R.N.C. chief wanted to avoid any criticism of using overseas cash to pay for political activity--even policy research. Barbour received general assurances that Young Bros. Development-USA was a domestic firm. On that basis he had the company put up $2.2 million in certificates of deposit--funds transferred earlier from the parent company in Hong Kong--as collateral for a loan from Signet Bank.
But if Barbour was looking to be bailed out by an American business, it's not clear that Young Bros. Development-USA was either American or a business. It turns out that the company's only U.S. asset is a Georgetown apartment, and its only revenue is its rental income from that property, officials said. As for its pedigree, incorporation records in Florida list only two officers: onetime G.O.P. chairman Richard Richards and Benton Becker, who was President Ford's counsel. And the firm's actual owner? According to Becker, the principal stockholder is Young Bros. Development of Hong Kong. Records in the British colony list Young as managing director and several others from Taiwan and Hong Kong as investors.
Whatever the country of origin, the loan guarantee was a political godsend. With much of its proceeds sent immediately to the R.N.C., the loan provided last-minute cash for tight House races. In November, Republicans took control of Congress for the first time in 40 years. Not long after, Barbour personally escorted Young around Washington, introducing him to Bob Dole and House Speaker Newt Gingrich. Young returned the hospitality in August 1995, as host at a dinner for a visiting Barbour on his posh yacht, the Ambrousia.
But by mid-1996 the forum was strapped again. The last thing the party wanted that summer was to bail out a think tank just when the campaigns for Congress were heating up. So Barbour decided that the forum would simply stop repaying the Signet loan. He tried instead to get Young Bros. to foot the bill. Through its lawyers, the company refused.
And then Signet called in the loan. At first Barbour refused to pay the $1 million balance due. When the Youngs' lawyers threatened a lawsuit, the forum paid up $500,000, but that still left an angry Young with a $500,000 loss--sparing the R.N.C. from having to dip into campaign finds to pay off the rest of the debt.
Barbour told TIME last week that the guarantee and settlement were "perfectly legal and totally appropriate." He was less charitable when describing the Democrats' foreign fund raising last fall. Two weeks before the election, Barbour criticized the Clinton White House for trying to "cover up this well-organized scheme of foreign contributions and influence peddling."
Yet with everyone scrounging for money in those last frantic weeks, no one was asking a lot of questions. Which is why the beneficiaries don't know much about their donor's background. Raised in Taiwan, Young joined the Taiwan navy as a supply officer, studied engineering in England and returned to Taipei, where he started an aerospace consulting firm. He later moved to Hong Kong, where he keeps a picture of himself with Ronald Reagan hanging on his office wall. Young served as the Asian agent for several aviation companies, including Pratt & Whitney and, more informally, British Aerospace. Over the years he has had a financial interest in preserving American trade links to China, the world's largest customer of commercial aircraft, and in maintaining a militarily strong Taiwan. In 1992 Taiwan bought 150 F-16s, all powered by Pratt & Whitney engines.
Young, who is said to be in his 60s, is extremely private by the standards of Hong Kong tycoons. He has an office in Taipei and sits on the board of an aerospace company close to the ruling Nationalist government. He is known as "the man to see" if you want to get a hearing in Asian aerospace circles. Little else about him is publicly available--at least not yet. Last Friday, Haley Barbour received a new subpoena, this one asking for all records relating to the National Policy Forum. With Washington's investigations widening to include Republican backers, the well-guarded anonymity of Ambrous Tung Young may be coming to an end.
--With reporting by Sandra Burton/Hong Kong and Donald Shapiro/Taipei
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