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After $150,000 arrived from China, $50,000 was given to Democrats

July 10, 1997

WASHINGTON (AP) _ Democratic donor Johnny Chung received a $150,000 transfer from the Bank of China three days before he handed Hillary Rodham Clinton’s chief of staff a $50,000 check, a Republican senator said Thursday at hearings into campaign financing irregularities.

Two days later, Chung escorted five Chinese businessmen to the White House to watch President Clinton deliver his weekly radio address, as he had repeatedly pressed to do.

``Now there is a solid connection between a Chinese source of money and a Democratic Party donation,″ Sen. Arlen Specter, R-Pa., told reporters.

But the Senate Governmental Affairs Committee’s senior Democrat, Ohio Sen. John Glenn, questioned whether the Republicans had actually proven there was wrongdoing. ``There are so many things being stated as fact based on broad assumptions that haven’t been proven at all,″ he said.

Republicans on the Senate Governmental Affairs Committee contend that China sought to influence the American political system with large infusions of cash.

In opening the hearings this week, Chairman Fred Thompson, R-Tenn., said, ``High-level Chinese government officials crafted a plan to increase China’s influence over the U.S. political process.″

China denied the charge Thursday.

``Some people in the United States, out of domestic political needs, are out of thin air once again slandering China,″ Foreign Ministry spokesman Tang Guoqiang said in Beijing.

The hearing’s witness again was Richard Sullivan, 33, finance chief for the Democratic National Committee during President Clinton’s re-election campaign. During his six hours of testimony, Republican questioning of him was more confrontational than before during his 5 1/2 hours before the panel.

Sullivan, however, held his ground. He continued to deny knowing anything about questionable contributions and maintained that the Democratic committee did a good overall job of ensuring that the donations the party received were legal.

And he made the point that there is no way for political fund-raisers to know whether people contributing money are later reimbursed by a third party.

But he acknowledged that the Democrats had been lax in screening sources of campaign contributions.

In a transaction that was a focus of testimony Thursday, $150,000 was wired on March 6, 1995, from the Bank of China to Chung’s account. On March 9, the California businessman took a $50,000 check made out to the Democratic National Committee and delivered it to Margaret Williams, the first lady’s chief of staff, at the White House.

``It is apparent that the source of the $50,000 to the DNC came from the funds that were deposited into his account from the transfer from the Bank of China,″ Specter said.

He noted that a picture of Chung, Clinton and the five Chinese businessmen was later used in an ad to sell Chinese beer.

Documents made public by the panel showed that another questionable Democratic donation was made a few days after $500,000 was wired to a contributor by a Japanese businessman.

Both donations were subsequently returned.

Republican senators disclosed that Californian Yogesh Gandhi received the $500,000 from Japanese businessman Yoshio Tanaka through Citibank in Japan. They said the payment arrived days after Gandhi wrote a $325,000 check to the Democratic National Committee in May 1996.

According to Senate aides, Gandhi told investigators that he asked a major figure in the campaign fund-raising controversy, former Little Rock, Ark., restaurateur Charlie Trie, to hold the donation for 10 days until Gandhi got money to cover the check. The Senate aides spoke on condition of anonymity.

Sen. Susan Collins, R-Maine, said that Gandhi, invoking his constitutional right to remain silent, is refusing to answer questions from the Senate committee.

Gandhi made his contribution, the largest the party received in 1996, during a Democratic fund-raiser at a Washington hotel May 13, at which he gave the president a peace award.

Gandhi had wanted to present the award to Clinton at the White House, and ``had been pushing hard″ for a meeting, Collins said. The White House ``turned him down flat,″ she said, but the DNC arranged for him to present the award at the fund-raiser. He reportedly gave Clinton a life-size bust of Mohandas Gandhi, the late spiritual leader of India to whom he says he’s distantly related.

Gandhi is president of the Gandhi Memorial International Foundation in Orinda, Calif. Phone calls to the foundation were not returned.

Gandhi told the Los Angeles Times last fall that he made the contribution to celebrate a successful business venture that netted him $500,000 in April 1996.

Collins said Gandhi testified in court in August 1996 that he had no funds in this country.

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