Gavel To Gavel

Gavel To Gavel: Fund-Raising Hearings


Updated 9-17-97

What started out as a flap over political donations from non-U.S. citizens has mushroomed into a far-reaching imbroglio over Democratic and Republican fund-raising practices, with a daily stream of revelations prompting questions whether national security was jeopardized, whether government officials mixed politics with policy and whether President Bill Clinton traded access to the White House for campaign funds.

Reports surfaced in October 1996 of large, questionable donations to the Democratic National Committee (DNC) from non-U.S. citizens and businesses, and from unverifiable sources. Since then, the DNC has returned about $3 million in questionable contributions.


Ratcheting up the seriousness have been national security concerns related to China. Though Clinton said he only learned of it through news reports early this year, the FBI suspected as early as 1995 that the Chinese government sanctioned some $2 million to buy influence with U.S. politicians.

Also raising temperatures are reports the White House ignored National Security Council warnings that DNC donors' trips to Beijing might jeopardize foreign policy.

At the center of the controversy is former DNC fund-raiser John Huang, who raised much of the money the DNC has promised to return from sources tied to the Lippo Group, an Indonesian business conglomerate with extensive ties in China. Born in China, Huang is now an American citizen. After being employed by Lippo, Huang worked at the Commerce Department before going to the DNC where he retained top security clearance. In October, Huang defied a judge's order to appear for testimony. More recently, he has refused to cooperate with congressional investigators.


Meanwhile, critics have accused the president and Democratic officials of using the trappings of the presidency, to an unprecedented extent, to woo Democratic contributors.

Clinton acknowledged that he had personally approved overnight stays at the White House Lincoln bedroom for Democratic donors, a group that collectively gave $5.4 million to the DNC. Documents have showed a strategy to reward donors with perks, and possibly even government jobs. And documents show that Clinton personally raised some $500,000, though he says he doesn't recall making any calls from the Oval Office.

The vice president's aggressive fund-raising earned him the nickname "Solicitor-in-Chief," and his willingness to make calls from his White House office has raised eyebrows as did the creation of a government-funded computer database that tracked thousands of persons who contributed money to the Democratic party and Clinton's political campaigns.


Gore's veracity has been tested by continuing revelations surrounding an April 1996 fund-raiser at a Buddhist temple in suburban Los Angeles. It's illegal to hold fund-raisers at religious sites, and Gore originally claimed he didn't know the event was a fund-raiser. As more details emerged, Gore acknowledged knowing that political operatives would be attending.

Other revelations of the White House's frenetic fund-raising continued to trouble and titilate.

Attendees at more than 100 White House coffees arranged by the DNC donated $27 million to the Democratic Party. Initially defended as policy sessions, the events, documents later established, were each projected to raise $400,000. One, attended by the president, included bank executives and Comptroller of the Currency Eugene Ludwig, the government's top financial regulator. Another White House coffee attended by Clinton included a Chinese arms dealer. More serious, perhaps, were revelations the DNC contacted the CIA in an effort to gain White House clearance for a controversial donor.

What About The GOP?


Perhaps the Democrats' most consistent defense of their fund-raising embarrassments has been the refrain, "Republicans are equally guilty." Whether that's true remains to be seen, but it's clear that Republicans have problems as well.

In April, California state treasurer Matt Fong returned $100,000 donated by Panda Estates, a company owned by Los Angeles businessman Ted Sioeng, who as emerged as an espionage suspect in the FBI's probe of campaign finance.

Then in early May, GOP officials announced they would return $122,400 in improper donations to a Hong Kong company, and the Republican National Committee pledged to review all contributions of $5,000 or more received in the last 3 1/2 years to ensure that they were legal.


The $122,400 was given illegally by a Hong Kong corporation, Young Brothers Development U.S.A., to the party through a U.S. subsidiary in 1991, 1992, 1993 and 1994. Young Brothers of Florida is 100 percent owned by a Hong Kong corporation that supplied all the money in question.

GOP officials insist that a $1.6 million loan repayment from a GOP think tank to the Republican National Committee, made possible by a loan guarantee from Hong Kong businessman Abrous Young of Young Brothers just before the 1994 elections, was legal. Democrats say the arrangement, even if not illegal, was evidence foreign money influenced U.S. elections.

Move Over, Whitewater


Justice Department attorneys and an FBI task force have been investigating the fund-raising controversies since early 1997. Congressional lawmakers (mostly Republicans) have expressed considerable displeasure with Attorney General Janet Reno's continued refusal to seek an independent counsel to investigate allegations about the president and other top White House officials, despite FBI Director Louis Freeh's recommendation to do so.

However, recent revelations that the vice president raised so-called "hard money" donations from his office prompted Reno to order a prelimary investigation into the need for a special prosecutor. And in mid-September, Reno announced she was shaking up her Justice probe, installing a seasoned FBI investigator at the helm.

Even some Democrats have called for an independent investigation, including Sen. Daniel Patrick Moynihan (D-N.Y.), Sen. Russell Feingold (D-Wis.) and Rep. Henry Waxman (D-Calif.).


Tennessee Republican Sen. Fred Thompson has $4.35 million to spend on an investigation which by law must be completed by the end of the year. Public hearings began in early July. The House's investigation is led by Indiana Republican Rep. Dan Burton, who currently has $3.8 million to spend. Burton's hearings, set to begin in late September, are under the auspices of the House Government Reform and Oversight Committee.

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