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Former GOP chairman contradicts Barbour testimony

July 25, 1997

WASHINGTON (AP) _ Drawing another conflict with former Republican Party chairman Haley Barbour’s testimony, a lawyer who helped broker a Hong Kong loan agreement has told investigators that Barbour said the money was needed to help the GOP’s 1994 congressional elections.

Richard Richards, himself a former GOP chairman from the 1980s, testified that in the summer of 1994 Barbour asked him to approach a Hong Kong businessman to see if he would guarantee a loan for the nonprofit National Policy Forum that Barbour had formed.

Senate Democrats have been trying to show that Barbour sent most of the $2.1 million loan proceeds guaranteed by Hong Kong businessman Ambrous Tung Young to the Republican Party to repay an old debt and free up cash on the eve of the 1994 congressional election.

``We have an opportunity to pick up as many as 60 seats in the House of Representatives that we did not anticipate months back,″ Richards quoted Barbour as saying.

``We need the money to do that, and we find ourselves in the position that we at the RNC have loaned the National Policy Forum $3 million of hard money that we could use in those campaigns,″ Richards also quoted Barbour as saying.

Richards, who was expected to testify in Senate hearings today, said Barbour then asked him to approach Young ``to see whether he would loan us money for that purpose.″

At the time, Richards was working for the Florida subsidiary of Young’s Hong Kong company. The loan was made in October 1994.

On Thursday, Barbour testified flatly that none of the loan proceeds NPF sent to the GOP were used for campaigns. He also testified he did not know that the source of the money for the loan collateral had come from Hong Kong _ an assertion contradicted by one of his own fund-raisers.

Alternatively combative and folksy, Barbour insisted ``not a cent, not a red cent″ of the money was used for campaigns. Democrats had introduced documents suggesting both Barbour and the Hong Kong businessman who guaranteed the loan were told the transactions were needed to free money for the elections.

``The NPF did nothing illegal or inappropriate; there was no illegal foreign loan,″ Barbour said.

Following Barbour’s testimony, however, questions remained about how the Republican Party spent additional cash indirectly generated by the loan to the non-profit NPF.

Three days of hearings before the Senate Governmental Affairs Committee on Republican fund-raising abuses were to conclude today with Richards’ testimony and then details of the prosecution of the vice chairman of Bob Dole’s 1996 presidential finance committee for making illegal political donations.

Donald Stern, the U.S. attorney in Boston, was scheduled to testify about the case of businessman Simon Fireman, who pleaded guilty last October to funneling $120,000 from his swimsuit company to campaigns of Dole, the 1992 Bush-Quayle campaign and a group supporting Rep. Joseph P. Kennedy II, D-Mass.

During his appearance Thursday, Barbour was lectured about the propriety of the loan guarantee not only by Democrats but Sen. Fred Thompson, R-Tenn., chairman of the committee. Thompson was particularly bothered that Hong Kong businessman Ambrous Tung Young lost $800,000 when the NPF defaulted on the $2.1 million loan.

Even though the Republican National Committee agreed to pay Young $745,000 as partial reimbursement for the forfeited loan collateral, ``as far as I am concerned, that does not absolve the RNC of responsibility,″ Thompson said.

``Legalities aside, a deal is a deal,″ Thompson said. ``Don’t you think maybe you and I both ought to urge that thing be looked at again?″

Insisting the transaction was legal, Barbour denied that he knew the money to back the loan came from Young’s Hong Kong company instead of its U.S. subsidiary.

``It was not until this year that I became aware, had knowledge, that the money came from Hong Kong,″ Barbour said. But Barbour conceded that if he had known the money’s true source, he would have walked away from the deal.

Democrats were skeptical.

``I am just surprised you didn’t know at any point that the money was going to come from Hong Kong,″ said Sen. Joseph Lieberman, D-Conn.

Thompson joined Democrats in questioning the propriety of Barbour’s 1995 trip to Hong Kong to try to persuade Young to forgive the loan guarantee.

``When you were sitting on a boat in Hong Kong harbor talking to a gentlemen who is a resident of Hong Kong and a citizen of Taiwan, that does raise certain other potential implications in terms of appearances,″ Thompson said.

Barbour acknowledged that the bank loan to the NPF enabled the financially troubled think tank to repay the Republican National Committee $1.6 million two weeks before the 1994 elections.

But he was emphatic that no money was funneled into Republican congressional campaigns in 20 states.

He got into an exchange with Sen. Robert Torricelli, D-N.J., who told Barbour that with money generated by Young’s loan guarantee, ``the National Policy Forum carried the RNC into Election Day 1994.″

``You are wrong in fact and you are wrong in effect,″ said Barbour, who often jabbed his finger in the air to make a point.``None of this (money) could have gone into federal campaigns.″

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