Sources: Chung Says He Funneled Chinese Funds To Democrats
White House says it didn't know source of Chung's money
WASHINGTON (AllPolitics, May 15) -- Democratic fund-raiser Johnny Chung has told Justice Department investigators he funneled illegal campaign contributions from a Chinese military officer to Democrats during the 1996 campaign cycle, congressional sources familiar with the case said Friday.
Congressional members and some staff received classified FBI briefings on Chung's contributions Thursday night, according to sources.
In all, Chung gave $100,000 to the Democrats in 1996. Confirming a Friday New York Times story, sources said Chung told investigators much of those contributions came from the People's Liberation Army via a Chinese lieutenant colonel.
U.S. campaign law does not allow overseas governments to contribute to political campaigns.
Chung arranged for Liu Chao-ying, the Chinese officer, to have her photograph taken with President Bill Clinton.
Jim Kennedy, a White House advisor, told the Times that when the donations were made, "We had no knowledge about the source of Chung's money or the background of his guest. In hindsight it was clearly not appropriate for Chung to bring her to see the president."
Liu is an executive of an aerospace company and the daughter of General Liu Huaqing, a leader of the Communist Party and then China's top military commander.
It is not clear what Liu or the Chinese military sought to gain via the alleged payments. In 1996, however, Clinton facilitated the launch of American civilian communication satellites by Chinese rockets. This action benefited Liu's employer, China Aerospace International Holdings, which sells missiles for the military.
Sen. Fred Thompson (R-Tenn.) announced at the onset of last year's campaign finance hearings he had information from intelligence officials of a Chinese plan to influence the 1996 elections.
"What we have here is apparently hard evidence of the execution
of the China plan," the Tennessee Republican said Friday.
"Everybody acknowledged and agreed there was a plan," Thompson said. "The big debate was whether it was executed and whether it involved the presidential campaign. That debate is now over."
Thompson said Chung's statements "may be the tip of the iceberg, because a half-dozen other intermediaries were bringing money from China and other places."
Sen. Arlen Specter ( R-Pa.) called the revelations "explosive."
Specter said he has started new talks with Senate Majority Leader Trent Lott and others about a renewed push for an independent counsel to be appointed in the Justice Department's campaign finance probe.
Democrats raised a total of $194 million in 1996, of which Chung's contributions were only a small portion. Chung's money was returned when questions were raised about the legality of the contributions.
Chung has been cooperating with investigators since pleading guilty in March to campaign-related bank and tax fraud.
Brian A. Sun, Chung's attorney, told the Times he was shocked the Justice Department would attribute such comments to Chung, who has maintained he is not an agent for the Chinese government.
Sun said his client never lobbied the U.S. government on any issue.
A spokesman for the Chinese embassy also denied Beijing was behind the alleged contributions.
Chung pleaded guilty to charges of funneling $20,000 in illegal contributions to the president's re-election campaign; charges involving $8,000 in donations to the campaign of Democratic Sen. John Kerry of Massachusetts; tax evasion; and fraud in relation to a $157,500 loan he obtained on his home.
Chung is scheduled to be sentenced in July.
The Associated Press contributed to this report.
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