1996 U.S. campaign finance scandal

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The 1996 United States campaign finance scandal refers to possible efforts by the People's Republic of China to change United States politics before and during the Clinton Administration as well as the fund-raising activities of President Clinton and the U.S. Democratic Party.

Questions about the Democratic Party's fund-raising activities began in October 1996. The people first learned about China's role in the scandal after the Washington Post newspaper wrote a story that said a U.S. Department of Justice investigation found evidence that spies for China tried to give Asian money to the Democratic National Committee (DNC) in 1996.^[1] It is a crime in the U.S. for people in other countries to give money to U.S. politicians.

Seventeen people were arrested later by the police and convicted by the courts. Some of the people arrested were friends of President Clinton and Vice President Al Gore.

Contents 1 Background 1.1 New China lobby 1.2 Taiwan problem and nuclear secrets 1.3 China plan 2 Important fund-raising people and groups 2.1 Yah Lin "Charlie" Trie and Wang Jun 2.2 Ron Brown and Bernard Schwartz 2.3 Johnny Chung and Liu Chaoying 3 References 4 External links 5 Books

[edit] Background

[edit] New China lobby

According to a U.S. Senate report, before 1995, China used diplomacy to promote itself in the United States. They occasionally met with top White House officials. In these meetings, Chinese officials often bargained with the U.S. government by using the appeal of their large commercial market.^[2]

U.S. companies were also known to lobby (to convince government people that what they want is good for everyone) the U.S. government about their deals with China. In the 1990s, the news media reported on U.S. companies lobbying for better trade laws with China and called this the "New China Lobby" (compared with the "old" China Lobby that worked for the Republic of China, also known as Taiwan). The group was made of businesses with investments in China such as AT&T, General Motors, and Boeing. Also, important Americans, including several former U.S. Secretaries of State, promoted increased economic relationships with China (these people included Henry Kissinger, George Shultz, Cyrus Vance, Lawrence Eagleburger Jr., Alexander Haig, and Brent Scowcroft). This "New China Lobby" urged U.S. officials to protect China's trade relationship with the United States because American exports to China were creating new American jobs.^[3][4]

The U.S. Senate report about the 1996 fund-raising scandal said that American exports to the China grew from $3 billion in 1980 to $38 billion in 1994.^[5] Between 1991 and 1996, U.S. exports to China increased 90.5 percent and the U.S. named China as one of the top ten "Big Emerging Markets". They said China offered the biggest possiblity for U.S. products in the future.^[6] Total trade between the two countries rose from $4.8 billion in 1980 to $63.5 billion in 1996. This made China the fourth largest U.S. trade partner at the time.^[2]

Because of this, critics questioned why China was still thought of as an enemy of the United States. One explanation, according to the Senate report, was the American public's negative attitude toward China's human rights history. They still remembered the Tiananmen Square events in 1989. Another reason from China's view, according to the report, was because an anti-China U.S. Congress came to power. According to the Senate Committee, information learned during its investigation showed that China was concerned that decisions by Congress would hurt the Chinese.^[2]

[edit] Taiwan problem and nuclear secrets

In early 1995, Taiwan's president, Lee Teng-hui, asked for a visa to go to the United States so he could attend his graduate school reunion at Cornell University in June 1995. By May of that year, Congress asked President Clinton to give a visa to President Lee. After the U.S. State Department gave Lee a visa, China protested and sent their ambassador to the United States back home to China.^[7] China considers Taiwan part of their country. On May 15, 1995, China tested a nuclear bomb underground.^[8] Almost at the same time, China's spy agency sent an agent to the U.S. Central Intelligence Agency (CIA) office in Taiwan. The agent gave a secret Chinese government document to the Americans. The document showed that China knew everything about America's nuclear weapons.^[9] The People's Liberation Army (PLA) then began missile tests in the water near Taiwan in July of that year.

[edit] China plan

After these events, according to the Senate report, Chinese officials created a plan to promote their interests with the U.S. government and to improve China's image with the American people. The "China Plan", was created because the U.S. Congress got President Clinton to give President Lee a visa. When making the plan, Chinese officials admitted that, compared to other countries, it knew very little about the U.S. Congress.^[2]

The plan, according the Senate report, told Chinese officials in the U.S. to improve their knowledge about members of Congress and to increase contacts with its members, the public, and the media. The plan also suggested ways to lobby U.S. officials.^[2] China repeatedly denied these activities involved money.

Though the amount of participation by the Chinese government in the scandal may never be completely known, investigations by the American media, the U.S. Justice Department, and the U.S. Congress, did prove individual people tried to influence American elections with Asian money before 1996.

[edit] Important fund-raising people and groups

[edit] Yah Lin "Charlie" Trie and Wang Jun

The biggest of the illegal foreign money donations was a $460,000 donated by Yah Lin "Charlie" Trie to President Bill Clinton's legal defense fund. The donation was made via 460 separate $1,000 money orders made out in different names but with all the same handwriting.^[10]

Born in Taiwan, Trie went to the U.S. in 1974. He eventually became an American citizen and co-owner of a restaurant in Little Rock, Arkansas where he became friends with then Governor Clinton. In addition to the donation to Clinton's defense fund, Trie and his family donated $220,000 to the DNC which was later returned.^[11]

Immediately after the donation to Clinton's defense fund, Tri sent a letter to President Clinton that told the president he risked war with China if the United States tried to interfere with China's military exercises near Taiwan^[12]

When Charlie Trie's fund-raising activities were questioned by the U.S. Congress in late 1996, he left the country for China.^[11] Trie returned to the U.S. in 1998 and was convicted and sentenced to three years probation and four months home imprisonment (the act of being in prison) for violating federal campaign finance laws.^[13]

In February 1996, Trie brought Wang Jun, leader of CITIC (the top investment company of the Chinese government) and Poly Technologies (a company that did business for the Chinese military" ^[14]that was later criminally charged with smuggling 2,000 AK-47 weapons into the U.S.), to a White House meeting with the president.^[15][16] President Clinton later admitted Wang's attendance at the White House was "inappropriate."^[17][18] According to Clinton, the event attended by Wang was a small group discussion.

"I'd talk for five or 10 minutes and then we'd ... go around the table and let people say whatever they wanted to say. I'm not sure that [Wang] ever said anything... I can tell you for sure nothing inappropriate came from it in terms of any... action on my part... We have to do a better job of screening (reviewing the history of) people who come in and out of here" — President Clinton, Dec. 20, 1996.^[19]

Four days before Wang's White House visit, President Clinton gave Wang Jun's company Poly Technologies permits that allowed them to send 100,000 semi-automatic guns and millions of rounds of ammunition (bullets) to a Detroit company (China Jiang An) that had connections to the Chinese military. Robert Sanders, a U.S. lawyer representing the Chinese, could not explain why the special permits were given to the company. "All of a sudden, there was a breakthrough," Sanders said. "I can't account for it." ^[20][21]

According to Wang, during a United Nations meeting on women's rights in Beijing in 1995, he received an invitation from First Lady Hillary Rodham Clinton to attend a personal meeting, but he was busy and could not meet with her. Wang has also met with Alexander Haig and Henry Kissinger (whom he calls "a good friend") in addition to former President George H. W. Bush in April 1996. During his two-day visit to Washington in 1996, Wang also held talks with Bill Clinton's Commerce Secretary, Ron Brown. Wang met Brown once before at a trade mission in Hong Kong.^[22]

[edit] Ron Brown and Bernard Schwartz

A close business partner of Ron Brown told a court in 1998 that Brown had told her Commerce Department trade missions were used for political fund-raising at the request of President Clinton and the First Lady. She said trade mission plane seats were sold to business people who gave at least $50,000 each to the DNC.^[23]

It was later reported that a Commerce Department official destroyed official government documents about the department's trade missions to China after a judge ordered they be given to Judicial Watch, a government watchdog group (watchdog groups make sure people are not violating the law or rules). According to the court: "No [good] explanation has been given as to why these documents were destroyed."^[24]

Some of the trade missions to Asia were attended by Bernard Schwartz, then the leader of Loral Space and Communications (an American maker of satellites). Schwartz donated over $600,000 to the DNC and President Clinton's 1996 reelection effort.^[25] Loral was fined $14 million U.S. dollars in 2002 for its involvement in illegally giving missile technology to China in 1996.^[26] The transfer of classified secrets occured in February 1996 during an investigation into the failed launch and explosion of a Long March rocket that was to carry a Loral satellite into space. President Clinton signed the special waivers that allowed China to launch the Loral satellite.^[27]

Brown, who was under investigation for fraud and bribery, died in a plane crash in Croatia in April 1996.^[28]

[edit] Johnny Chung and Liu Chaoying

Johnny Chung also attended some of Ron Brown's Commerce Department trade missions to Asia. Born in Taiwan, Chung made forty-nine separate visits to the White House between February 1994 and February 1996.^[29] During one of the Commerce Department trade missions to China, Chung became friends with former Chinese Lt. Col. Liu Chaoying, an employee of China Aerospace Holdings (China's main satellite company) and daughter of former Chinese General Liu Huaqing.

Between 1994 and 1996, Chung donated $366,000 U.S. dollars to the DNC. Eventually, all of the money was returned. Chung told U.S. government investigators that $35,000 of the money he donated came from Liu Chaoying and China's military.^[30]

Specifically, Chung told a U.S. House of Representatives Committee in May 1999 that he was introduced to Chinese Gen. Ji Shengde,^[31] then the head of Chinese military intelligence, by Liu Chaoying. Chung said that Ji told him: "We like your president very much. We would like to see him reelect [sic]. I will give you 300,000 U.S. dollars. You can give it to the president and the Democrat Party."^[32] Both Liu and the Chinese government denied the claims.^[33]

Chung was eventually convicted by a U.S. court for bank fraud, not paying his taxes, and violating election law.^[34]

[edit] References

[edit] External links

• 1997 (U.S. Senate) Special Investigation in Connection with 1996 Federal Election Campaigns: Final Report (PDF files)
• Central Intelligence Agency (CIA)
• Clinton Presidential Materials Project
• Copy of official Charles La Bella memo to Janet Reno
• Copy of official Louis Freeh memo to Janet Reno
• Democratic National Committee (DNC)
• Federal Bureau of Investigation (FBI)
• Federal Election Commission (FEC)
• Federation of American Scientists
• Open Secrets
• U. S. Department of Justice
• U.S House Committee on Government Reform
• U.S. Senate Committee on Homeland Security and Governmental Affairs
• Washington Post Special Report: Campaign Finance

[edit] Books

• Clinton, Bill (February 2000). The Clinton Foreign Policy Reader, M.E. Sharpe. ISBN 0765605848.
• Gertz, Bill (January 2002). The China Threat: How the People's Republic Targets America, Regnery Publishing. ISBN 0895261871.
• Timperlake, Edward; William Triplett (October 1998). Year of the Rat, Regnery Publishing. ISBN 0895263335.
• Vogel, Ezra F. (September 1997). Living With China, W. W. Norton & Company. ISBN 039331734X.