Barbour Stands His Ground

Senators spar over Freedom of Information Act request on Republican witness; Reno defends Justice Department probe

By Craig Staats/AllPolitics

WASHINGTON (July 24) -- Former Republican Chairman Haley Barbour, brushing aside Democratic accusations as "goofy," Thursday defended a Hong Kong businessman's loan guarantee for a GOP think tank as "legal and proper."

Barbour testified that the National Policy Forum was a policy-oriented think tank, and not, as some Democrats have suggested, a funnel to move illegal overseas money into the Republican National Committee.

In fact, Barbour said, given the now-defunct policy forum's struggle to raise money, the forum was a "siphon" draining money away from the GOP, not funneling dollars into it.

With many Democratic witnesses either out of the country or asserting their right against self-incrimination, Barbour was the biggest name yet to testify before the Senate Governmental Affairs Committee, which is looking at campaign finance abuses. The hearings are in their third week.

Barbour said as best he can recall, the first he learned that the loan guarantee was Hong Kong money was this year. He said he did not remember fund-raiser Fred Volcansek telling him in 1994 that the loan guarantee money originated in Hong Kong.

"Fred may be right, and I may not have heard it," Barbour said. "I do not recall his saying that."

'He screwed it up'

Under questioning about a memorandum over his name that described the policy forum as a "subsidiary" of the Republican National Committee, Barbour said that was written by his nephew, "but he screwed it up." Laughter rippled through the hearing room. Barbour said he didn't read the memo before it went out. (480K wav sound)

"Once you put something in the word processer, it never seems to die," said Barbour, who insisted the policy forum was separate in every way from the Republican party.

In his opening statement, Barbour went on the attack, saying he wanted to correct "infuriating," baseless accusations about the forum and the loan guarantee.

Earlier in the day, Volcansek defended the loan guarantee as "legal, ethical and proper in every respect."

Volcansek said some of the nation's best campaign finance lawyers reviewed the National Policy Forum transaction when it occurred in 1994 and said it violated no laws or regulations.

It is not illegal for independent tax-exempt organizations to accept funds from overseas sources.

At issue during the questioning of Barbour and Volcansek was a $2.1 million bail-out for the forum from Hong Kong businessman Ambrous Tung Young.

Young transferred money from his Hong Kong headquarters to his Florida subsidiary, Young Brothers USA. That company transferred the money to Signet Bank in Virginia, to back up a $2.1 million loan to the forum. The forum in turn paid $1.6 million it owed to the RNC, just as the party was pouring money into get-out-the-vote efforts for the 1994 elections.

Sen. Joseph Lieberman (D-Conn.) asked Volcansek why the forum didn't try to raise funds in the U.S. Volcansek said the group did, but didn't collect enough to meet its needs.

Lieberman said the larger problem was the relentless push for political cash. "Good people end up doing questionable, maybe illegal things, when they're under this pressure," he said.

The Edsel of think tanks

Sen. Robert Bennett, a Utah Republican, said the decision to create the National Policy Forum was a mistake, but that didn't make it improper.

Bennett likened it to the new Coke or Ford's ill-fated Edsel, products that the marketplace refused to support. "I don't see anything sinister about this at all," Bennett said.

Sen. Pete Domenici (R-N.M.) lambasted Democrats for trying to equate the deal to Democratic fund-raising abuses. "Thus far, if you're out there in Oilpatch, they've hit a dry hole," Domenici said. "They have no case."

But Sen. Robert Torricelli (D-N.J.) said by guaranteeing the loan and allowing the forum to repay money to the Republican National Committee, businessman Young had more impact on the 1994 elections than any American citizen who contributed legally. "Our national debate was changed," Torricelli said. "The point is, it wasn't right."

Barbour, though, disputed that the forum's repayment to the RNC had any effect on Republican spending in the 1994 elections, saying the party had more than enough funds on hand during the campaign's final weeks to cover its expenses.

In one of the day's most heated clashes, Torricelli and Barbour battled over just how much money the Republicans had on hand in the fall of 1994, including cash and an existing line of credit, and the impact of the forum's repayment.

When Torricelli suggested the repayment let the Republicans pump money into races in 21 states, Barbour sarcastically shot back, "I know that's your testimony, Senator Torricelli, but it is not accurate."

"Let's deal with each other honestly," Torricelli replied.

A Democratic fishing expedition?

In his opening statement, Volcansek accused Minority Counsel Alan Baron of probing his past tenure as a Commerce Department official, suggesting that Baron wanted to compare Volcansek to former Commerce official John Huang, one of the key figures in the fund-raising probe. "Everyone does not do it," Volcansek said, referring to illicit campaign fund-raising.

Volcansek said Baron submitted a wide-ranging Freedom of Information Act request to Commerce, seeking information on Volcansek's service there between 1989 and 1992.

The revelation drew an angry response from committee Chairman Sen. Fred Thompson, who said the committee "owes you an apology."

"I know of no accusations against you," said Thompson, who accused Democrats of "going back and rummaging around" in activities outside the scope of the panel's investigation.

But Sen. John Glenn, the committee's ranking Democrat, said there was nothing wrong with Baron's request for documents. "We don't owe Mr. Volcansek an apology of any kind," Glenn said. He suggested Republican subpoenas have been equally broad.

The day's tone was harsher than previous sessions, with Democrats on the committee going after two seasoned political operatives, and Republicans generally defending Barbour and Volcansek.

Reno rebuffs committee's criticism

Meanwhile, Attorney General Janet Reno today rebuffed criticism from Thompson and others on the committee that the Justice Department has obstructed the panel's work.

At her weekly news conference, Reno said: "What is important for us to do is figure out how we can work with them. We have already agreed to immunity for 11 witnesses. For nine others we've said at this point in time we cannot agree. That doesn't mean we might not ultimately agree, but it is really very important that we work together recognizing that we each have two separate roles and that we're each trying the best we can to perform those roles in the proper fashion. (288K wav sound)

"What I try to do is take the evidence and pursue it the best way I know how," Reno added. "I have been criticized in the past for immunizing people in my prosecutorial career. I've been told I've either made mistakes or did it for some ulterior motive. Again, we can't go into all the reasons because of grand jury testimony and the like, but it's important we do it in the right way. We will continue to work with the committee and all concerned. If there comes a point in time where the evidence triggers the independent counsel statute, as I have said, I will do so." (256K wav sound)