1996 United States campaign finance controversy

Presidents Jiang Zemin of China and Bill Clinton of the U.S.

The 1996 United States campaign finance scandal, also known as Chinagate, was an alleged effort by the People's Republic of China (PRC) to influence domestic American politics prior to and during the Clinton administration as well as the fund-raising practices of the administration itself.

While questions regarding the U.S. Democratic Party's fund-raising activities first arose over a Los Angeles Times article published on September 21 1996, the PRC's alleged role in the affair first gained public attention when Bob Woodward and Brian Duffy of The Washington Post published a story stating that a United States Department of Justice investigation into the fund-raising activities had uncovered evidence that agents of the PRC sought to direct contributions from foreign sources to the Democratic National Committee (DNC) before the 1996 presidential campaign. The journalists wrote that intelligence information had shown the PRC Embassy in Washington, D.C. was used for coordinating contributions to the DNC in violation of United States law forbidding non-American citizens from giving monetary donations to United States politicians and political parties. The PRC government denied the accusations.

Seventeen people were eventually convicted for fraud or for funneling Asian funds into the United States elections. A number of the convictions came against longtime Clinton-Gore friends and political appointees.

Background

New China lobby

According to the United States Senate report Investigation of Illegal or Improper Activities in Connection with 1996 Federal Election Campaigns, prior to 1995 the PRC's approach to promoting its interests in the United States was focused almost exclusively on diplomacy, including summits and meetings with high-level White House officials. In these meetings, Chinese officials often negotiated with the United States government by using the appeal of their huge commercial market.

United States companies were also known to lobby the U.S. government on various issues involving the companies and the PRC. In the 1990s, the news media reported on the phenomenon of U.S. companies lobbying for favorable trade policies regarding PRC and labeled this activity as the "New China Lobby", which was contrasted with the "old" China Lobby that worked for the Republic of China. The group consisted of representatives of businesses with trade and investment interests in the PRC such as AT&T, General Motors, and Boeing. In addition, prominent Americans, including several former United States Secretaries of State, were reported to be involved in promoting increased economic relationships with the PRC, including Henry Kissinger as well as George Shultz, Cyrus Vance, Lawrence Eagleburger, Alexander Haig, and Brent Scowcroft. This "New China Lobby" urged United States officials to protect China's trade relationship with the United States because American exports to mainland China were rapidly increasing and creating new American jobs.

Growing economic ties between the United States and China are one factor influencing the diplomatic and political relationship between the two nations

The U.S. Senate report about the 1996 fund-raising investigation noted that American exports to the PRC grew from $3 billion in 1980 to $38 billion in 1994. Between 1991 and 1996, United States exports to mainland China increased by 90.5 percent, and the United States designated the PRC as one of the top ten "Big Emerging Markets" offering the largest potential for United States goods in future years. Total trade between the two countries had risen from $4.8 billion in 1980 to $63.5 billion in 1996, making China the fourth largest U.S. trading partner at the time.

Given the increase in trade, critics questioned whether China should still be seen as a geopolitical rival of the United States. One explanation, according to the Senate report, was the American public's negative attitude toward China's human rights record, still marked by the PRC government's suppression of democratic movements, such as the crackdown on anti-government protesters in Tiananmen Square in 1989. Another reason, from the PRC government's perspective, according to the report, was that "the coming to power of a China-bashing U.S. Congress [was] perceived as part of an increas[ed] anti-Chinese atmosphere in Washington." According to the Senate Committee, information discovered during its investigation supported the conclusion that the PRC government, beginning in 1994, was concerned that decisions by Congress, including its stance toward the issue of Taiwan, would harm Chinese interests.

Taiwan and nuclear designs

Main article: [[:Third Taiwan Strait Crisis and Cox Report]]

In early 1995, President of the Republic of China Lee Teng-hui requested a visa to enter the United States to attend events associated with his graduate school reunion at Cornell University scheduled to be held in June 1995. By May of that year, Congress passed a resolution calling on President Clinton to grant a visa to President Lee. After the State Department granted Lee's visa, the PRC government immediately protested the decision and, working through traditional diplomatic channels, suspended ongoing treaty negotiations and recalled its ambassador to the United States. The PRC government considers Taiwan a rogue province of the country. On May 15, 1995, China conducted the first in a series of underground nuclear tests. Around the same time, PRC intelligence services had a walk-in agent approach the United States Central Intelligence Agency (CIA) office in Taiwan. The "walk-in" provided an official PRC document classified "Secret" that contained design information of all America's nuclear warheads. The People's Liberation Army (PLA) then began conducting a series of missile tests in the waters near Taiwan in July of that year.

China plan

After these crises, according to the Senate report, Chinese officials eventually developed a set of proposals to promote their interests with the United States government and to improve China's image with the American people. The proposals, dubbed the "China Plan", were prompted by the United States Congress's successful lobbying of the president to grant the visa to President Lee. United States Secretary of State Warren Christopher had previously assured his Chinese counterpart Qian Qichen that granting a visa would be "inconsistent with [the United States'] unofficial relationship [with Taiwan]" and the Clinton Administration's acquiescence to the Congressional resolutions led the PRC to conclude that the influence of Congress over foreign policy was more significant than it had previously determined. When formulating the so-called plan, Chinese officials acknowledged that, compared to other countries, it had little knowledge of, or influence over, policy decisions made in Congress, which had a sizeable pro-Taiwan faction under the influence of a more established "China Lobby" run by the Kuomintang.

The plan, according the Senate report, instructed Chinese officials in the U.S. to improve their knowledge about members of Congress and increase contacts with its members, the public, and the media. The plan also allegedly suggested ways to lobby United States officials.

Over the years, the PRC repeatedly denied these lobbying efforts involved financial contributions of any kind:

[S]ome people and media in the United States speculated… about so-called participation by Chinese individuals in political donations during the U.S. elections. It is sheer fabrication and is intended to slander China. [ Beijing ] has never, nor will we ever, use money to influence American politics — China's Foreign Ministry spokesman, May 1998.

Though the ultimate level of participation or non-participation by the PRC government in the fund-raising schemes may never be fully known, investigations by the American media, the U.S. Justice Department, and the U.S. Congress, did prove there was a conspiracy by individuals to influence American elections with Asian funds prior to 1996.

Major fund-raising figures and groups

Yah Lin "Charlie" Trie and Wang Jun

Clinton with Wang Jun at the White House in 1996

The most significant of the illegal foreign contributions was a $460,000 donation by Yah Lin "Charlie" Trie to President Bill Clinton's legal defense fund. The donation was made by delivery of an envelope containing $460,000 in $1,000 contributions, some on sequentially numbered money orders made out in different names but with the same handwriting.

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

Immediately after the donation to Clinton's defense fund, Trie sent a letter to President Clinton that expressed concern about America's intervention in tensions arising from China's military exercises being conducted near Taiwan. Trie told the President in his letter that war with China was a possibility should U.S. intervention continue:

...[O]nce the hard parties of the Chinese military incline to grasp U.S. involvement as foreign intervention, is [sic] U.S. ready to face such [a] challenge[?]... [I]t is highly possible for China to launch [sic] real war based on its past behavior in [sic] Sino-Vietnam war and Zhen Bao Tao war with Russia — Charlie Trie in a letter to President Clinton, March 21, 1996

After questions arose regarding Charlie Trie's fund-raising activities during Congressional investigations in late 1996, he left the country for the PRC. Trie returned to the U.S. in 1998 and was convicted and sentenced to three years probation and four months home detention for violating federal campaign finance laws by making political contributions in someone else's name and for causing a false statement to be made to the Federal Election Commission (FEC).

In February 1996, Trie brought Wang Jun, chairman of CITIC, the chief investment arm of the government of the People's Republic of China, and Poly Technologies (a "front company for the Chinese military" that was later charged with smuggling 2,000 AK-47 automatic rifles into the U.S.), to a White House "coffee" with the president. President Clinton later admitted Wang's attendance at the White House was "clearly inappropriate." According to Clinton, the event attended by Wang was a small group discussion with people from "different walks of life."

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 governmental action on my part... We have to do a better job of screening people who come in and out of here — President Clinton, Dec. 20, 1996.

Four days prior to Wang's White House visit, President Clinton granted Wang Jun's company Poly Technologies import permits that would allow the shipment of over 100,000 semi-automatic weapons and millions of rounds of ammunition to a Detroit company (China Jiang An) that had ties to the Chinese military. Robert Sanders, a U.S. lawyer representing the Chinese, could not explain why the special permits were granted. "All of a sudden, there was a breakthrough," Sanders said. "I can't account for it."

According to Wang, during a United Nations conference on women's rights in Beijing in 1995, he received an invitation from First Lady Hillary Rodham Clinton to attend a reception, but his schedule was fully booked. 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 after he left office. During his two-day visit to Washington in 1996, Wang also held talks with Bill Clinton's Commerce Secretary, Ron Brown, whom he had met once before at a trade mission in Hong Kong.

Ron Brown and Bernard Schwartz

Commerce Secretary Ron Brown

A close business associate of Ron Brown testified in court in 1998 that Brown had told her that Commerce Department trade missions were used for partisan political fund-raising at the behest of President Clinton and the First Lady. Specifically, she said trade mission plane seats were sold to business people who gave at least $50,000 each to the DNC.

A Commerce Department official reportedly threw away official government documents concerning the department's trade missions to China after a judge ordered they be turned over to Judicial Watch, a conservative government watchdog group. According to the court: "No adequate explanation has been given as to why these documents were destroyed."

Some of the trade missions to Asia were attended by Bernard Schwartz, then CEO 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. Loral was fined $14 million in 2002 for its involvement in illegally transferring missile technology to China in 1996. The transfer of classified secrets occurred 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.

Brown, who had been under investigation for fraud and bribery allegations, died in a plane crash in Croatia in April 1996.

Johnny Chung and Liu Chaoying

File:Clinton-chung.jpg

Johnny Chung (far left) with the Clintons

Johnny Chung also attended some of Ron Brown's Commerce Department trade missions to Asia. Born in Taiwan, Chung went from being the owner of a "blastfaxing" business (an automated system that quickly sends out faxes to thousands of businesses) in California to being in the middle of the Washington, D.C. elite within a couple weeks of his first donations to the Democratic Party. Called a "hustler" by a U.S. National Security Council (NSC) aide, Chung made forty-nine separate visits to the White House between February 1994 and February 1996. During one of the Commerce Department trade missions to China, Chung befriended former Chinese Lt. Col. Liu Chaoying, then an executive at China Aerospace Holdings (China's main satellite company) and daughter of former General Liu Huaqing.

Between 1994 and 1996, Chung donated $366,000 to the DNC. Eventually, all of the money was returned. Chung told federal investigators that $35,000 of the money he donated came from Liu Chaoying and, in turn, China's military intelligence.

Specifically, Chung testified under oath to the U.S. House Committee investigating the issue in May 1999 that he was introduced to Chinese Gen. Ji Shengde, 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." Both Liu and the Chinese government denied the claims.

Chung was eventually convicted of bank fraud, tax evasion, and two misdemeanor counts of conspiring to violate election law.

John Huang and James Riady

File:Clinton-riady-huang.jpg

John Huang (center) with Bill Clinton, James Riady (right), and Clinton aide Mark Middleton (with back to camera) in the Oval Office

John Huang (pronounced "Hwä[ng]"), was another major figure convicted. Born in 1945 in Nanping, Fujian, Huang and his father fled to Taiwan at the end of the Chinese Civil War before he eventually emigrated to the United States in 1969. A former employee of the Indonesian company Lippo Group's Lippo Bank and its owners Mochtar Riady and his son James (whom Huang first met along with Bill Clinton at a financial seminar in Little Rock, Arkansas in 1980), Huang became a key fund-raiser within the DNC in 1995. While there, he raised $3.4 million for the party. Nearly half had to be returned when questions arose regarding their source during later investigations by Congress.

According to U.S. Secret Service logs, Huang visited the White House 78 times while working as a DNC fund-raiser. James Riady visited the White House 20 times (including 6 personal visits to President Clinton).

Immediately prior to joining the DNC, Huang worked in President Clinton's Commerce Department as deputy assistant secretary for international economic affairs. His position made him responsible for Asia-U.S. trade matters. He was appointed to the position by President Clinton in December 1993. His position at the Commerce Department gave him access to classified intelligence on China. While at the department, it was later learned, Huang met 9 times with Chinese embassy officials in Washington D.C. The reasons for the meetings were never learned.

Some DNC records suggested Huang started fund-raising before he left his government job which would have been a violation of the U.S. law known as the Hatch Act, though no charges regarding this issue were ever brought. Huang eventually pleaded guilty to conspiring to reimburse Lippo Group employees' campaign contributions with corporate or foreign funds. James Riady was later convicted of campaign finance violations relating to the same scheme as well.

Your honor, mistakes have been made, which I regret. I did not have to come back here [to the United States] but I wanted to own up to what I did and put this all behind me. I am grateful for the opportunity to be here today — James Riady, March 19, 2001.

According to the Justice Department some of those "mistakes" included reimbursing contributions made by Huang and various employees of Lippo Bank with funds wired from a foreign Lippo Group entity into an account maintained by John Huang at a bank in Hong Kong. Shortly after Riady pledged $1 million in support of then-Governor Clinton's campaign for the presidency, contributions made by Huang were reimbursed with funds wired from a foreign Lippo Group entity into an account Riady maintained at Lippo Bank and then distributed to Huang in cash. Also, contributions made by Lippo Group entities operating in the United States were reimbursed with wire transfers from foreign Lippo Group entities.

An unclassified U.S. Senate Committee on Governmental Affairs report issued in 1998 stated that both James Riady and his father Mochtar had "had a long-term relationship with a Chinese intelligence agency." According to a story by journalist Bob Woodward, "the report was drawn from highly classified intelligence information supplied by both the CIA and Federal Bureau of Investigation (FBI) that was not revealed during several months of public committee hearings the [previous] year."

The most well-known of John Huang's fund-raisers involved Vice President Al Gore, Maria Hsia, and the Hsi Lai Buddhist Temple in California.

Maria Hsia and the Hsi Lai Buddhist Temple

File:Gore-hsia.jpg

Vice President Al Gore with Venerable Master Hsing Yun (Fo Guang Shan's Founder) Maria Hsia (left of Master Hsing Yun), Ted Sioeng (right), and John Huang (2nd from right in background)

A close business associate of John Huang and James Riady since 1988, Taiwan-born Maria Hsia (pronounced "shyä") began her association with Al Gore the same year as well. The association began after Hsia sent the then-senator a letter inviting him to come visit Taiwan: "If you decide to join this trip, I will persuade all my colleagues in the future to play a leader [sic] role in your presidential race..."

Gore went, and the two began an eight-year relationship. Gore said his dealings with Hsia were strictly business in nature, but, at least at one point, Gore sent a letter to Hsia and Howard Hom (a business partner of Hsia) referring to them as "special friends" for support during a serious injury of Gore's son, Albert.

Regardless, their relationship came to an end when she was charged with money-laundering in early 1998. The Justice Department alleged Hsia facilitated $100,000 in illegal contributions to the 1996 Clinton-Gore reelection campaign through her efforts at the Hsi Lai Buddhist Temple in California. Hsia was eventually convicted by a jury in March 2000. The Democratic National Committee eventually returned the money donated by the Temple's monks and nuns. Twelve nuns and employees of the Temple refused to answer questions by pleading the Fifth Amendment when they were subpoenaed to testify before Congress. Vice President Gore said he had no idea the Temple meeting was financial in nature:

I did not know that it was a fund-raiser. But I knew it was a political event, and I knew there were finance people that were going to be present, and so that alone should have told me, 'This is inappropriate and this is a mistake; don't do this.' And I take responsibility for that. It was a mistake — Vice President Al Gore on NBC TV's Today show, Jan. 24, 1997.

The Hsi Lai Temple in Hacienda Heights, California

In response, the U.S. Senate Governmental Affairs Committee that investigated the controversy said:

The Vice President's staff... knew that the Temple event was a fundraiser. In March 1996, Deputy Chief of Staff David Strauss had helped arrange a meeting in the White House with the head of the Temple, Master Hsing Yun – a meeting which Strauss believed would 'lead to a lot of $.' The White House staff repeatedly referred to the event as a 'fundraiser' in internal correspondence, and assigned to it a 'ticket price' of '1000-5000 [dollars per] head'.

Additionally, a memo written by John Huang to Vice President Gore's assistant Kimberly Tilley specifically mentioned the Temple meeting was a fund-raising event. It is illegal for religious organizations to hold political fund-raising events in the U.S. due to their tax-exempt status.

The Senate Governmental Affairs Committee also said they learned that Hsia had served as an "agent" of the PRC government. Hsia denied the claim.

Ted Sioeng

Another notable figure involved in the affair was Ted Sioeng (pictured above with Vice President Gore) who illegally donated money to both Democrats and Republicans. Sioeng, who could not speak English, found himself invited to sit side-by-side with President Clinton or Vice President Gore at three different fund-raising events. According to the U.S. Senate Committee on Governmental Affairs, $200,000 of the $400,000 that Sioeng and his family gave to Democrats was "funded by transfer from overseas accounts." All the money was eventually returned.

Also, from their report:

[I]n late July 1997... [t]he Committee learned that Chinese government officials... were aware of, and possibly encouraged, [Ted] Sioeng's purchase of a Los Angeles-based newspaper... in 1995 and succeeded in having the paper report from a pro-Beijing perspective. There was also information suggesting that Sioeng met with Chinese officials in 1995 and 1996.

File:MFong.jpg

Matt Fong

Furthermore,

Sioeng also may have been involved in directing or funding contributions to American political entities and campaigns. The public information obtained by the Committee suggests that Sioeng personally directed contributions to Republican California officials in 1995. According to public information, Sioeng was involved in these contributions, but the source of the contributions is difficult to determine. The non-public information suggests that approximately half of the just over $100,000 used for these contributions may have come from unknown sources in China. According to public information, one of the officials, Republican California State Treasurer, Matt Fong, has returned the $100,000 he received from Sioeng.

Attorney General Janet Reno and the directors of the FBI, CIA and National Security Agency (NSA) told members of the Senate committee they had credible intelligence information indicating Sioeng acted on behalf of China.

Department of Justice investigation

File:Janetrenoportrait.jpg

Attorney General Janet Reno

The Justice Department opened a task force in late 1996 to begin investigating allegations of campaign fund-raising abuses by the Clinton/Gore re-election campaign. It expanded its internal investigation to include activities related to President Bill Clinton's legal defense fund in December 1997.

President Clinton announced in February 1997 that he thought there should be a "vigorous" and "thorough" investigation into reports that the People's Republic of China tried to direct financial contributions from overseas sources to the Democratic National Committee. The president stopped short of calling for an independent prosecutor, saying that was the decision of the Justice Department.

"[O]bviously it would be a very serious matter for the United States if any country were to attempt to funnel funds to one of our parties for any reason whatever," President Clinton said.

By July 1997, the administration determined that no evidence of any such thing had yet been proven.

"We have received the relevant [FBI] briefings," White House Press Secretary Mike McCurry said. "We believe there's no basis for any change in our policy toward China, which is one of engagement."

"I do not know whether it is true or not," President Clinton stated. "Therefore, since I don't know, it can't... and shouldn't affect the larger long-term strategic interests of the American people in our foreign policy."

Members of Congress of both parties reached opposite conclusions. According to the Washington Post: "Sen[ator] Fred D. Thompson (a Republican from Tennessee), chairman of the committee investigating allegations of illegal 1996 campaign fund-raising, has said he believes the Chinese plan targeted presidential and congressional elections. [While Democratic Senators Joseph] Lieberman and [John] Glenn sa[id] they believe the evidence show[ed] the Chinese targeted only congressional elections."

Calls for an independent counsel

FBI Director Louis Freeh

President Clinton's FBI Director Louis Freeh wrote in a 22-page memorandum to then Attorney General Janet Reno in November 1997 that "It is difficult to imagine a more compelling situation for appointing an independent counsel."

In July 1998, the Justice Department's campaign finance task force head, Charles La Bella, sent a report to Janet Reno also recommending she seek an independent counsel to investigate alleged fund-raising abuses by Democratic party officials. The media reported that LaBella believed there was clearly an appearance of a conflict of interest by Reno. In his report to Reno he wrote: " [A] pattern [of events] suggests a level of knowledge within the White House -- including the President's and First Lady's offices -- concerning the injection of foreign funds into the reelection effort." Additionally, La Bella stated: "If these allegations involved anyone other than the president, vice president, senior White House or DNC and Clinton-Gore '96 officials, an appropriate investigation would have commenced months ago without hesitation."

Robert Conrad, Jr., who later became head of the task force, called on Reno in Spring 2000 to appoint an independent counsel to look into the fund-raising practices of Vice President Gore.

Janet Reno rejected all of these requests:

I try to do one thing: what's right. I am trying to follow the independent counsel statute as it has been framed by Congress. If you had a lower threshold, then any time somebody said 'boo' about a covered person, you'd trigger the independent counsel statute — Janet Reno, Dec. 4, 1997.

Six weeks after this statement, Attorney General Reno agreed to Whitewater independent counsel Kenneth Starr's request to look into allegations that President Clinton had committed perjury and obstruction of justice relating to the sexual harassment lawsuit brought against him by Paula Jones (a former Arkansas state employee during Clinton's governorship there).

Critics such as columnists Charles Krauthammer and Morton Kondracke, as well as a number of FBI agents, suggested that the investigations into the improper fund-raising allegations were impeded as part of a cover-up.

Notable convictions secured

Even without an appointment of an independent counsel, the Justice Department's internal investigation was fruitful. The task force created to investigate campaign fund-raising irregularities during the 1996 U.S. elections secured criminal convictions against 17 people by 2001.

In addition to the convictions against John Huang, Johnny Chung, Charlie Trie, Maria Hsia, and James Riady (who was fined $8.6 million – the largest fine ever levied against an individual), Clinton friend Ernest Green, a former member of the Little Rock Nine, pleaded guilty in 2001 to failure to declare and pay taxes on $30,000 in income which he received in 1995 from Charlie Trie for a planned business venture between the two.

File:T000317.jpg

Senator Robert Torricelli (Democrat-New Jersey)

Donors to former Democratic Senator Robert Torricelli (a member of the Senate Government Affairs Committee during the time its investigations took place) were particularly affected by the criminal investigations. David Chang, a member of the 1996 Torricelli Campaign Finance Committee, pled guilty to violating federal election law by making illegal contributions to Torricelli's campaign. Chang also pled guilty to witness tampering in connection with the campaign financing task force investigation. Chang's co-defendant, Audrey Yu, pled guilty to obstruction of justice under the same superseding indictment. Lawrence Penna, the former president of a now-defunct New Jersey securities firm, was charged with violating election laws by funneling illegal campaign contributions to the 1996 federal election campaigns of both President Clinton and Senator Torricelli. Cha-Kuek Koo, a New Jersey businessman, pled guilty to violating federal election law by making illegal contributions to the Torricelli campaign. Koo admitted to assisting David Chang in making conduit contributions using Koo's employees at LG Group. Berek Don, a former Republican party leader in Bergen County, New Jersey, pleaded guilty to another conduit contribution scheme to the Senator's campaign. Carmine Alampi, a Bergen County New Jersey attorney, pleaded guilty to the same scheme.

Senator Torricelli announced on October 1, 2002 he would not stand for re-election as a result of the controversy.

The Justice Department did not bring criminal charges against the Democratic National Committee, but in 2002 the Federal Election Commission fined the DNC $115,000 for its role in illegal fund-raising during the 1996 U.S. election campaigns. The FEC's general counsel recommended more severe penalties, but the three Democratic election commissioners on the committee blocked the recommendation on a 3-3 tie vote.

Congressional investigations

Senate Committee on Governmental Affairs

Senator Fred Thompson (R-Tenn.)

On July 8 1997, the U.S. Senate Committee on Governmental Affairs began its public hearings into the campaign finance scandal. Chairman Fred Thompson suspended the public hearings on October 31 of that year. The Committee's final report was released to the public on March 5 1998.

Opening statements of public hearings from Senate Committee Chairman Senator Fred Thompson:

I would like to turn our attention to one of the most troublesome areas of this investigation. I speak of allegations concerning a plan... by the Chinese government and designed to pour illegal money into American political campaigns. The plan had a goal: to buy access and influence in furtherance of Chinese government interests... The committee believes that... Chinese government officials crafted a plan to increase China's influence over the U.S. political process. The committee has identified specific steps taken in furtherance of the plan. Implementation of the plan has been handled by Chinese government officials and individuals enlisted to assist in the effort... Our investigation suggests that the plan continues today. Although most discussions of the plan focuses on Congress, our investigation suggests it affected the 1996 presidential race and state elections as well. The government of China is believed to have allocated substantial sums of money to achieve its objectives. Another aspect of the plan is remarkable because it shows that the PRC is interested in developing long-term relationships with... up and coming government... officials at state and local levels. The intent is to establish relations that can be cultivated as the officials rise through the ranks to higher office.

Senator John Glenn (D-Ohio)

Opening comments from the Committee's Minority Leader, Senator John Glenn (a Democrat from Ohio):

According to the press the Chinese government intended to use a relatively modest amount of money to gain influence in the Washington lobbying game, and it intended to do this by focusing on the legislative branch of government. Now, I mention these reports here because I am greatly concerned about how the reports are sometimes discussed by individuals in this body and in the press. I've heard language like infiltration, foreign spies, foreigners, as we're jeopardizing our national security. Well, on this issue the committee should go just as far as the facts take us, recognizing that it's the FBI that's in a much better position to do an espionage investigation. Now, let's be careful, however, not to jump to conclusions that treason has been committed based on a partial story with ambiguous information. But wherever the trail leads let's look at it.

House Government Reform and Oversight Committee

Representative Dan Burton (R-Ind.)

A United States House of Representatives investigation, headed by Republican Dan Burton, also focused on allegations of campaign finance abuse, including the contributions channeled through Chung, Huang, Trie, et al.

The investigation was lengthy, spanning both the 105th and 106th Congresses, and according to a Democratic report had cost over $7.4 million as of August 31 1998, making it the most expensive Congressional investigation ever (the Senate Watergate investigation cost $7 million in 1998 dollars).

The investigation itself was controversial, attracting criticism from partisans and moderates. Norman Ornstein, a Congressional expert at the American Enterprise Institute said in May 1998, "Barring some dramatic change, I think the Burton investigation is going to be remembered as a case study in how not to do a congressional investigation and as a prime example of investigation as farce." A New York Times editorial characterized the committee's investigation as a "travesty" and a "parody". A Washington Post editorial called the House investigation "its own cartoon, a joke, and a deserved embarrassment".

Investigators, however, complained the investigation took so long due to the unprecedented lack of co-operation of witnesses. Ninety-four people either refused to be questioned, pled the Fifth Amendment, or left the country altogether.

See also

• Campaign finance reform
• Clinton/China timeline

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

Bibliography

• Clinton, Bill (2000). The Clinton Foreign Policy Reader. M.E. Sharpe. ISBN 0765605848.
• Gertz, Bill (2002). The China Threat: How the People's Republic Targets America. Regnery Publishing. ISBN 0895261871.
• Timperlake, Edward (1998). Year of the Rat. Regnery Publishing. ISBN 0895263335. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
• Vogel, Ezra F. (1997). Living With China. W. W. Norton & Company. ISBN 039331734X.