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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 Democratic Party.

Both Loral, based in New York, and Hughes, a Los Angeles-based subsidiary of General Motors Corp., have denied wrongdoing.

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 National Committee.

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 countries.

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 News Sunday."

"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.

In Other News

Sunday, May 17, 1998

Justice May Probe Links Between China Policy, Campaign Cash

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