Justice May Probe Links Between China Policy, Campaign Cash
Report: Firm tied to Chung gained from Clinton decision
WASHINGTON (AllPolitics, May 17) -- The Justice Department
may launch a criminal investigation into whether the Clinton
administration's decision to approve exports of satellite
technology to China in 1996 had any connection with campaign
contributions to the Democratic Party, CNN has learned.
At the request of Congress, the Justice Department is looking
at waivers Clinton granted to two companies in 1996 -- Loral
Space and Communications and Hughes Electronic Corp. -- that
allowed them to export the technology. Loral's chairman,
Bernard Schwartz, donated more than $600,000 to the
Both Loral, based in New York, and Hughes, a Los
Angeles-based subsidiary of General Motors Corp., have denied
In a related matter, The New York Times reported Sunday that
in March 1996, Clinton overruled both the State Department
and the Pentagon -- which wanted to keep sharp limits on
China's ability to launch American-made satellites using
Chinese rockets -- and turned oversight of granting
permission for such launches to the Commerce Department,
which was in favor of permitting them.
At the time, the Commerce Department was headed by the late
Ron Brown, who was previously chairman of the Democratic
One of the beneficiaries of that decision, according to the
Times, was China Aerospace, a state-run Chinese company that
employed Liu Chao-ying as an executive. CNN has previously
learned that one-time Democratic fund-raiser Johnny Chung has
told Justice Department investigators that he funneled
$100,000 in cash from Liu to the Democratic National
Committee during the 1996 presidential campaign.
Liu is a lieutenant colonel in the Chinese army, and the
daughter of a top Chinese government official.
Clinton says probe welcome
Speaking to reporters Sunday while on a visit to England,
President Clinton said he would welcome any Justice
Department investigation. He denied that campaign
contributions played any role in the conduct of American
policy toward China.
"All the foreign policy decisions we made were based on what
we believed ... were in the interests of the American
people," the president said.
As to whether the Chinese might have sought to influence the
process through campaign contributions, "that's a different
issue" that should be thoroughly investigated by the Justice
Department, the president said.
On Sunday, Clinton's national security adviser, Sandy Berger,
also strongly denied any quid quo pro with the Chinese.
"There certainly has been no influence in terms of campaign
contributions. These decisions have been made based on U.S.
national interests," he said on CNN's "This Week" program.
Berger also insisted that allowing commercial satellites to
be launched by Chinese rockets would not give the Chinese
access to any sensitive American military technology, as some
critics have alleged.
"When we sent these satellites ... they are put in a black
box under [Department of Defense] supervision. They're taken
to China. They're put on top of the missile, and they're
blown up in the sky," he said.
Christopher: launches compromised U.S. interests
However, The New York Times reported that during the time the
policy change was under consideration in late 1995 and early
1996, then-Secretary of State Warren Christopher, with the
backing of the Pentagon, argued that there were technological
secrets embedded in commercial satellites that could
jeopardize "significant military and intelligence interests."
Such launches were permitted during the Bush years but were
reined in by the Clinton administration after evidence
surfaced that China was shipping military technology to other
The Times reported that one of the strongest critics of the
Bush missile policy during the 1992 presidential campaign was
Vice President Al Gore, then a senator from Tennessee, who
called Bush "an incurable patsy for those dictators he sets
out to coddle."
Clinton's decision to shift the process of granting waivers
for Chinese satellite launches from the State Department to
the Commerce Department was made in March 1996, several
months before Liu's alleged donations to the Democrats
through Chung. But the Times reported that the actual change
in policy wasn't implemented until that fall.
Congressmen say any link would be serious
On the Sunday news shows, a number of members of Congress,
including some Democrats, said that any if link between
campaign contributions and the change in satellite policy is
proven, it would be a serious matter.
"If in fact there is any evidence that any political official
within the State Department or in the administration or
anywhere knew that there was a correlation ... it should be
ferreted out," said Sen. Joseph Biden, D-Del., ranking
Democrat on the Senate Foreign Relations Committee, on "Fox
"The person should be indicted and put in jail, no matter who
it is," he said.
"It is possible for anybody to be duped in a campaign about
where money comes from, but it is very clear that the Chinese
had some reason to give large amounts of money. They wanted
something for it. What was it the Chinese wanted?" said Rep.
Porter Goss, R-Fla., chairman of the House Intelligence
Committee, also on "Fox News Sunday."
In the wake of the latest allegations, Sen. Daniel Moynihan,
D-N.Y., renewed his call for the appointment of an
independent counsel to probe suspected 1996 campaign finance
irregularities, something Attorney General Janet Reno has so
far declined to do.
"Let's get it out and be done with it and see that it doesn't
happen again," Moynihan said on ABC's "This Week" program.
CNN Justice Department Correspondent Pierre Thomas
contributed to this report.