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GOP Chairman Must Explain Loan

April 29, 1998

WASHINGTON (AP) _ Republican Party chairman Jim Nicholson was summoned to appear today before a federal grand jury investigating campaign fund-raising practices under his predecessor.

Nicholson said prosecutors wanted to question him about a loan arrangement in 1994 between the GOP under then-chairman Haley Barbour and a tax-exempt group that Barbour was running at the time called the National Policy Forum.

During Senate hearings last year into fund-raising abuses, Democratic investigators extensively reviewed the loan arrangement and alleged that it allowed foreign money to benefit the party on the eve of crucial elections that put Congress under Republican control.

``I look forward to giving whatever assistance I can to the investigators and the members of the grand jury so this matter can be resolved as expeditiously as possible,″ Nicholson said in a statement. He went to the courthouse at about 1:30 p.m. EDT.

Government sources have said previously that Justice Department prosecutors are considering whether to seek an indictment of Barbour.

The department’s campaign finance task force is investigating whether Barbour violated federal election law when he negotiated a $2.1 million loan guarantee in 1994 from a Hong Kong businessman for the NPF.

Also at issue is whether Barbour, now a lobbyist, lied to a Senate committee last July when he said that he thought the money was from a U.S. subsidiary of the Hong Kong business.

Barbour also insisted that the money was not used to help Republican congressional candidates. It was simply used to repay a loan the National Policy Forum owed the RNC, he said.

Barbour’s testimony was contradicted by several witnesses, notably by another former GOP chairman, Richard Richards, who represented Hong Kong businessman Ambrous Tung Young, in the transaction.

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