John Huang's Bamboo Network The fall guy in the Indonesia scandal was merely the errand boy of billioniare Asian interests with longstanding ties to the Clinton Crowd. _________________________________________________________________ By James Ring Adams Maybe it isn't really fair to judge Clinton's Indonesian contributors by the American company they keep. The Riady family, the focus of the campaign financing scandal, were rags to riches successes in a milieu which historically operated by bribery, influence-peddling, and profit-sharing with the relatives of the ruling generals. By South Asian standards, they are solid, indeed, conservative businessmen and models of the ethnic Chinese work ethic. Their misfortune was to enter the American market through a state whose business and political ethics more closely resembled Indonesia than the USA. The crux of the Indonesian money scandal isn't that foreigners were trying to buy influence in American politics. That has always been the case and will be happening more and more as decisions in Washington shape the world economy. The real scandal is that American politicians, led by Bill Clinton, were so eager to invite them in. The Indo-money affair is cut from the same cloth as the scandal of the Bank of Credit and Commerce International, which earlier this decade led to the bank fraud indictment of former Defense Secretary and presidential adviser Clark Clifford. (The federal and New York State case against Clifford was later dropped because of his advanced age and the acquittal of his associate Robert Altman on similar charges.) The BCCI was trying to buy hidden control of American banks to build its global empire and also to wield influence for its Arab patrons. The Riadys and their allies had in addition the motive of sheer survival. They have been investing in Bill Clinton for twelve years, and one can understand why they would disregard American campaign law in the effort to preserve their stake. Where things get shocking was in the arrogant response of the White House and the Democratic National Committee when the scandal erupted. In quantity and quality the Indo-money case dwarfs any influence-peddling scandal in memory, even for those who recall the worst of the Nixon years. When the slumbering press awoke to the story (about a year after TAS put it on our cover), it discovered that the Riadys had managed to place a former senior employee of their Lippo Group inside the Clinton administration, with extraordinary access both to the Oval Office and to Asian contributors. But John Huang, with his $4 million in DNC fund-raising and fifty visits to the White House, was a relatively small player in a network that included the richest men of South Asia. Even the Riadys were only one of several conduits in a political penetration that may have shaped human rights and trade policy and even diplomatic relations with a number of countries along the Pacific Rim, including the most sensitive one of all, the People's Republic of China. Who Are These Riadys? The first thing to understand about the Indonesian billionaire Mochtar Riady and his three sons James, Andrew, and Stephen is that they belong to the elite but vulnerable Chinese minority. Mochtar's family name was Li or Lie; although he was born in Indonesia in 1929, his ancestral home is in Fujian, China, the southern coastal province where many of the richest overseas Chinese businessmen originated. Mochtar started his career in the 1940's in a Jakarta bicycle shop. His fortunes improved drastically when he went to work in the Bank Central Asia for the godfather of the Indonesian Chinese businessmen, Liem Sioe Liong. In the '60s, with Liem's help, Riady founded his own Lippo family of financial companies, now holding $12 billion in assets. Although Riady barely turned billionaire last year, Liem, 80, has long been one of the richest men in Asia. The background of the publicity-shy Liem remains shrouded. It wasn't known for a long time whether he was born in Java or Fujian, China. (The preferred version now is Java.) His dominant role in the Chinese business clique, however, is undisputed. Known locally as the Chairman, he was a business partner and mentor of five Indonesian families (including the Riadys) who became billionaires in 1995. The Liem and Riady connections extend well beyond Jakarta. The 55 million overseas Chinese, widely considered the world's hardest working entrepreneurs, are the engine of the "Tiger Economies" of South Asia, transforming Taiwan, Hong Kong, Singapore, and even Thailand and Malaysia. In the bustle of international business deals, says one local financial writer, every key player knows all the others. Lippo is a rising power in Hong Kong, for instance, where it recently sold half of its Hong Kong Chinese Bank to a corporation controlled by the People's Republic of China. (In the mid-80's, Riady owned the bank jointly with Little Rock's Jackson Stephens.) Liem has a partnership in Hong Kong with the Malaysian-Chinese developer Robert Kuok, who was named by Peking to the local committee overseeing the transition of the territory to Chinese control. The business and family connections of the "Bamboo Network" extend from Taiwan to Thailand. But it's not simply ethnic ties and hard work that make figures like Liem so successful. The Chinese word for the secret is guanxi, influence with government officials. Liem's ties with the Indonesian generals began when he smuggled food, medicine, and possibly arms to their troops in the late 1940's war for independence. In the '60's he was quartermaster for a commander in central Java named Suharto, who was temporarily suspended because higher-ups questioned his extensive business dealings. As Suharto's business manager then and now, Liem is careful to make a place in his deals for the general's relatives. Liem's fortunes rocketed after October 1965, when Suharto emerged as leader of a military putsch. But the 1965 putsch, a reaction to an alleged coup attempt by the powerful Indonesian Communist party, underscored the dangers facing a wealthy Chinese minority. For months afterward, peasants across the archipelago slaughtered suspected Communists, often settling scores with Chinese small shopkeepers. As many as a million Indonesians and Chinese might have died. Suharto's New Order urged his Chinese allies to take Islamic sounding names. Liem now operates under the name Soedono Salim. After more than thirty years of relative stability and economic growth under Suharto, ethnic tensions are flaring again. Unpredictable Peking politics make Hong Kong an uncertain haven. So the overseas Chinese are looking increasingly to the United States. A year ago, we wrote about the Riadys' 1985 bailout of Little Rock's Worthen Bank, which put then-governor Bill Clinton permanently in their debt. But other conduits are pouring Bamboo Network money into the U.S. and giving the Clinton administration an unprecedented slush fund. The Bamboo Pipeline Even after the Worthen deal came undone, the Riadys kept up their American investments, and their contacts with Arkansas businessmen. Through their multi-layered Lippo corporate structure, they bought Southern California's Bank of Trade, renaming it Lippobank and developing clientele among several Asian-American communities. Their Hong Kong bank struck up a partnership with First Union Bank of North Carolina. Arkansas firms like Entergy and Wal-Mart made Asian deals with Lippo, often working through Little Rock lawyer C. Joseph Giroir, Jr., the former lead partner of the Rose Law Firm who helped hire Hillary Rodham Clinton in 1977. (Wal-Mart last year opened its first store in the high potential Indonesian market in a Riady development called Lippo Village.) The Indonesian state of Jakarta made a "sister state" compact with Arkansas, and, according to the files of the Arkansas Industrial Development Commission (AIDC), former Governor Jim Guy Tucker wrote his counterpart to propose using an Arkansas parking-meter company to set up a parking system there. According to the Arkansas Democrat-Gazette, the Riady-Lippo file at the AIDC was more than five inches thick, containing hundreds of letters between James Riady and former Gov. Bill Clinton. The multi-billionaire Liem took a bath in the Worthen debacle, ultimately paying $3 million to the Federal Savings and Loan Insurance Corporation to settle a suit against his agent Giroir. But Liem/Salim has found other footholds in the U.S. Another of his front companies, Hong Kong-based First Pacific Holdings, in 1982 bought the Hibernia Bank in San Francisco (previously famous for being robbed by Patty Hearst and the Symbionese Liberation Army). Hibernia developed problems and Liem sold it to Security Pacific Corp. in 1988. But in the meantime he brought his own flagship (and Riady's training ground), the Bank Central Asia, into the U.S.; it now does business in New York and Los Angeles. Other outposts of the Bamboo Network show up in surprising places. The 300 members of the Mashantucket Pequot Indian tribe in eastern Connecticut are famous for running the world's most profitable casino, grossing nearly around $600 million last year. Less well known is that their Foxwoods Management Co. is partly owned by the Malaysian Chinese gambling tycoon Lim Goh Tong. Lim put up the $55 million seed money for the Foxwoods casino when no one else would touch the project. He currently is said to have $250 million invested in the rapidly expanding company. A common feature of the Bamboo investors is their generosity in making campaign contributions. The Foxwoods Casino is one of the three largest patrons of the Democratic National Committee, giving around $400,000 in the 1993-94 election cycle and ensuring tribal leaders ready access at the White House. But nothing approaches the operation run by the former Lippo employee and mid-level Commerce Department official John Huang. John Huang's Career In the weeks before the election, the mild-mannered Huang emerged as a poster boy for the DNC's alien fundraising scandal. He carried a public endorsement from President Clinton himself, who had praised Huang's "aggressive" soliciting at a July banquet in Los Angeles. ("Frankly, he's been so effective, I was amazed that you were all cheering for him tonight," Clinton told the gathering of Asian-American businessmen.) At the end of October, his whereabouts became the subject of a daily soap opera, as DNC officials toyed with the idea of keeping him in hiding until after the election. But the focus on Huang obscured one central conclusion; he was more of an errand boy than a prime mover. The question for coming investigations will be to whom he really answered in his career at the Commerce Department and the DNC. Huang, 51, is a native of Taiwan who came to the United States in 1969 as a graduate student in business administration at the University of Connecticut. Naturalized in 1976, he worked for several American banks before joining the Lippo Group in 1985. (He did a stint at the First National Bank of Louisville which might deserve some attention, because of that bank's important role in the scandal-prone southern Democratic fund-raising complex.) He worked for Lippo in Hong Kong in 1985 as head of its World Banking Unit, a job which included acting as Far Eastern representative for Little Rock's Worthen Bank and director of international banking for the Hong Kong Chinese Bank Ltd., jointly owned by the Riadys and Jackson Stephens. After the collapse of the Riadys' Little Rock venture, Huang returned to the U.S. to manage their California acquisition, The Bank of Trade (later renamed Lippo Bank California). Huang's subsequent career raises the question for whom he really worked. In 1989 he left Los Angeles for New York to become general manager of the Bank Central Asia. Although Mochtar Riady made his name at BCA and still served on its board, it is owned by Liem Sioe Liong's Salim Group. In the same year, Huang switched back to Lippo Bank California, where he stayed until taking a posting to the Commerce Department in 1994. The confusion about Huang's employment shows up in his extensive list of personal political contributions from 1989 on. Through 1989, Huang identified himself as an employee of Bank Central Asia in his heavy schedule of campaign giving. (His donations as a BCA employee included $10,000 to the Democratic Senatorial Campaign Committee and $2,000 to Pamela Harriman's Democrats for the 90's, as well as $1,000 chunks for Albert Gore Jr., Alan Cranston, and North Dakota's Kent Conrad, and two $250 donations to Massachusetts Congressman Joseph Kennedy.) From 1990 on, Huang mainly called himself an executive of Lippobank or Bank of Trade. Yet as late as 1993 he appears as an agent for Bank Central Asia. Was Huang still working for both Riady and Liem, or were the empires of the two tycoons as separate as they were telling American bank regulators? Investigators will also ask where Huang got the money for his campaign giving. Since 1989, he and his wife Jane donated about $280,000, all but $2,750 to Democrats. Jane Huang, identified as a Glendale, California, homemaker, even made this year's Mother Jones list of the 400 largest Democratic donors at number 262. The mismatch between this largesse and the Huangs' estimated annual income reminds one of the case which kicked off this scandal -- that of Indonesian "landscape architect" Arief Wiriadinata, who with his wife gave the Democrats $425,000. Huang's Hidden Hand? If Huang served two masters before joining the government, at Commerce he may have served three or more. He was already a prodigious fundraiser while at Lippo, receiving a seat on the Democratic National Committee even though, as he told reporters, he was registered as an independent. To what extent did he mingle political fundraising with his official duties at Commerce? Was he involved in policy decisions that affected his former employers? These are questions that might also have been asked of the late Ron Brown, who may also have blurred the boundaries in his transition from Democratic National Committee chairman to Commerce Secretary. The Huang trail may lead investigators to the cache of files removed from the Commerce Department after Secretary Brown's death and stored in a safe at the Small Business Administration. Clinton administration spokesmen have been at pains to minimize Huang's duties at Commerce. In spite of his title as Principal Deputy Assistant Secretary for International Economic Policy, they say his job was strictly routine. "His principal duties were administrative, managerial, handling budget, personnel and routine briefing materials," Anne Luzzato of Commerce told the Washington Post. Huang has said that he recused himself from Indonesian issues. Yet during his year and a half at Commerce, from July 1994 to December 1995, he had the clearance to make or monitor policy on a range of issues intensely interesting to Lippo and other potential donors. Indonesia itself faced a labor-rights inquiry under U. S. trade laws into allegations of sweatshop conditions in factories making Nike, Reebok, and L.A. Gear sneakers. A finding of persistent violations of labor rights could have caused the withdrawal of Indonesian trade breaks under the Generalized System of Preferences. The deadline for a finding under the GSP was February 15, 1994. The Washington trade bureaucracy postponed the issue for another six months, and then it disappeared. (Last summer, reports New York Times columnist Bob Herbert, an Indonesian labor activist named Cicih Sukaesih came to Arlington, Virginia, hoping to address a Labor Department-sponsored forum on fashion-industry sweatshops. She and 23 other workers had been fired from a factory making Nikes for demanding to be paid the minimum wage. The office of Labor Secretary Robert Reich refused to give her time to speak. When she showed up as an attendee, security guards escorted her from the site.) Clinton has also downplayed the human-rights issue in East Timor, a territory brutally incorporated into the archipelago nation by the Indonesian army. James Riady and an Arkansas lawyer named Mark Grobmyer toured the area in 1993 and visited Clinton to discuss it. In spite of lip service to the issue, Clinton didn't let it interfere with his Pacific region economic summit in Jakarta in November 1994. By embarrassing coincidence, two East Timor activists received the Nobel Peace Prize this October just as the Indonesian money scandal was breaking. But the biggest issues for the Riadys didn't concern Indonesia. Mochtar Riady has personally taken the lead in opening trade with Vietnam. In September 1993, as chairman of the Asian Bankers Association he led a delegation to Vietnam co-hosted by the Vietnam State Bank. Lippo also opened a fashionable business center in Saigon, now called Ho Chi Minh City. In addition to the political sensitivity for Clinton, Commerce Secretary Brown had weathered charges in 1993 that the Vietnam government had paid him $700,000 to help lift the U.S. trade embargo. Nevertheless, the U. S. moved apace in 1995 to exchange ambassadors and end the embargo. Controversies over troubled relations with Peking claimed the top of the agenda, however. The Clinton Administration decided to continue China's Most Favored Nation trade status in spite of a range of issues raised in Clinton's 1992 campaign. The White House blinked at a crackdown on veterans of the Tiananmen Square protests, and more dangerously, it turned a blind eye to Chinese help for Pakistan's attempt to build nuclear bombs and ballistic missiles. If these were major issues for the U.S., they meant billions in business for the Bamboo Network, and even the future of their way of life. Huang had the security clearance to be a strategic listening post well worth millions in campaign contributions. Even the circumstances of his leaving Commerce underscore his importance. According to the Washington Post, he decided to resign after a September 1995 Oval Office meeting between James Riady, himself, and Clinton. As it happens, The American Spectator had just published a cover story describing the Riadys as an influence on Clinton, and Huang as their man in Commerce. Huang on the Lam Whatever Huang may have done for the Bamboo Network, he continued to have support from American politicians. If the overseas Chinese billionaires wanted to buy influence in the U.S., plenty of people around Bill Clinton were more than willing to sell it. Huang went from Commerce to the Democratic National Committee as vice chairman for fundraising. The Lippo scandal broke in October largely as a result of his exploits in raising $4 million. Only later, and as slowly as the White House could manage, did it emerge how closely he worked with Clinton's people. Secret Service logs, leaked by someone hostile to Clinton, showed that Huang visited the Executive Mansion fifty or so times during the first nine months of 1996, sometimes staying for two or three hours. The White House has refused to divulge who had authorized his visits. This level of access by any fundraiser may violate federal election law, but in the case of Huang it suggests that White House aides were his willing abettors. As the scandal broke, the extent of this complicity showed starkly in the attempts to shield Huang from the press. In mid-October, as reporters clamored to interview Huang, DNC co-chair Christopher Dodd, the Democratic U.S. Senator from Connecticut, said he might make his employee available "some time later." This type of damage control ran into trouble, however, when it encountered a federal judge willing to use a contempt of court citation. A public interest ethics group called Judicial Watch has had the Commerce Department in federal court for nearly two years on a Freedom of Information suit for records the group thinks will show that Ron Brown's export promotion trips were fundraising tools for President Clinton. In mid-October, Judge Royce Lamberth ordered Huang and another former Commerce aide, Melinda Yee, to give depositions. But Judicial Watch ran into a stone wall in subpoenaing Huang. The DNC refused to give out his address. Assistant U.S. Attorney Bruce Hegyi told the judge that his office didn't have the time to find Huang. Even Huang's lawyer, John C. Keeney Jr., dropped out of sight. (Keeney is the son of the head of the Justice Department Criminal Fraud Division, profiled in the March 1996 TAS for his role in giving the run-around to the RTC's original criminal referrals on Madison Guaranty and James McDougal.) On October 24, an exasperated Judge Lamberth told Keeney to produce his client within 23 hours and ordered U.S. marshals to search for Huang at the DNC headquarters. By the end of Friday, October 25, Keeney got the message, and arranged to produce Huang the following week. Just the Beginning Huang's deposition is surely just the beginning of months of congressional probes and possibly another Independent Counsel criminal investigation. By the vagaries of election law, Huang the fundraiser is in far deeper trouble than the politicians who took his money, and there are already signs that if he decides to talk he can cut a wide swathe through Clinton's associates. For just one example, White House aide Bruce Lindsey may already have committed perjury in an attempt to cover up Clinton's involvement with the Riadys. The setting was the November 1994 Asian Pacific Economic Council summit in Jakarta, attended by Bill Clinton, the heads of state of the Pacific Rim countries, and a delegation of Arkansas notables. In a deposition to the Senate Whitewater Committee, Lindsey said that Clinton was scheduled to meet the Arkansans in Jakarta, but was told it was "a bad idea" and decided not to go. An independent source traveling with the Arkansas group has told TAS however that the meeting did occur, in the aftermath of a large reception on the day after the summit meeting. (The group was led by University of Arkansas president Alan Sugg, not Webb Hubbell as the Senate investigators thought. Its expenses were paid by the Lippo Group, which also provided an official motorcade.) It's not clear why the White House would deny it, unless to obscure yet another tie between Clinton and the Riadys. A prime mover in the delegation was the Little Rock lawyer Mark Grobmyer, long a personal friend of both Bill Clinton and Albert Gore Jr. and a consultant to the Lippo Group. (footnote 1) Grobmyer's international connections have Little Rock roots. He has brokered business through the MidSouth International Trade Association, a Little Rock entity represented by his law firm Arnold, Grobmyer & Haley. The other name partner, John H. Haley, is the former husband of Maria Haley, now a director of the Export-Import Bank, which has provided $900,000 in letters of credit for Lippo deals. Haley is also a co-defendant with former Arkansas Governor Jim Guy Tucker in an upcoming trial arising from Tucker's cable company financing. An even stranger story emerged in late October in a Chinese language newsweekly published in Hong Kong. The cover story in Yazhou Zhoukan reported on fund-raising visits to Taiwan by former White House aide Mark Middleton and former Little Rock restaurateur Charles Trie. Quoting an anonymous source who has since gone public, the magazine said that a financial officer of Taiwan's ruling Kuomintang Party offered to donate $15 million to the Democratic Party. The source, a Chinese journalist, said he was present at the August 1, 1995 meeting where the offer allegedly occurred; the other participants deny it. The article has turned attention to an intrusion of Arkansas fundraisers into Taiwanese relations. The current head of the American Institute in Taiwan, the de facto American ambassador, is a former Arkansas lawyer and friend of Huang named James C. Wood. Appointed in late 1995 over the objections of professional diplomats, he is now the focus of Justice Department and State Department Inspector General inquiries into whether he used his position to drum up campaign contributions for Clinton. The Taiwan visits by Middleton and Trie also open new trails. Middleton worked in the White House for thenÐChief of Staff Thomas (Mack) McLarty III before joining a Washington investment broker called CommerceCorp International. Trie, well known in Little Rock as proprietor of Fu Lin's restaurant, one of Clinton's favorites, now runs the Daihatsu International Trading Company, Inc., with offices in Little Rock and Peking. He has contributed $137,000 to the DNC. Connections like these will provide grist for hearings well into Clinton's second term. A number of congressional committees are already staking a piece of the action. The International Relations Committee wants a look at any influence on foreign policy. House Banking is examining why regulators put a disciplinary Cease and Desist order on the Lippo Bank California and then took it off within a year. The International Finance Subcommittee of Senate Banking is asking about Ex-Im Bank financing of Lippo. As the inquiries progress they will undoubtedly find that the infamous John Huang was little more than an errand boy. It may well turn out that the Bamboo Network was less a corrupter of American politics than an equal partner with homegrown venality. In principle, we would extend a welcome to this loose affiliation of millionaires and billionaires. They obviously have the talent and business virtues to make a great contribution to the economy. The question is whether they will play by American rules when they come. And so far their American friends have given them exactly the wrong message. _________________________________________________________________ 1. Grobmyer, 46, will likely receive intense scrutiny in coming months. A Little Rock native, he is said to have met Clinton in 1975 at the University of Arkansas Law School. The story goes that Grobmyer was managing editor of the Arkansas Law Review and was asked to vacate his office to make room for Clinton, who had just been hired as a professor. Grobmyer's wife is a close friend of Tipper Gore, and Grobmyer has said that he persuaded Clinton to choose Gore as his running mate in 1992. (go back to footnote in story) _________________________________________________________________ James Ring Adams is a TAS investigative writer. _________________________________________________________________ Find out how to Subscribe to The American Spectator. Return to this month's Table of Contents. Return to The American Spectator. Articles may not be reprinted or redistributed without the prior authorization of The American Spectator. © 1996 The American Spectator. All rights reserved. 1230 Thursday, December 26, 1996 Main Clinton notes Asian view on scandal Los Angeles Times Service BEIJING - "One thing we know," President Clinton said, explaining why he hadn't been more critical of two Taiwanese-American friends at the center of the ongoing illegal-campaign-contributions scandal, "is that the culture out of which they come doesn't draw the same bright lines between politics, government and business that we do." Clinton's comments in an Oval Office interview Friday reflected a view common here and in other Asian capitals. Much as President Nixon's ordeal with Watergate caused more puzzlement here than outrage, the reaction to the Asian campaign money issue in Asia itself has been mostly a big "so what?" Paying large sums to pose for photographs with senior leaders? Buddhist cult masters urging the faithful to direct their worldly goods to a needy candidate? Using money to lobby for a good seat at a political banquet? In most of Asia, this is just business - and politics - as usual. Even here in the People's Republic, where power still flows from the Communist Party Central Committee, the viability of a business venture often is judged by the status of the most senior official whose photograph or whose personal calligraphy adorns the lobby. So the spectacle of ambitious businesses paying money to pose with the leader of the world's most powerful country comes as little shock. In the Communist mainland, commented Columbia University China scholar Andrew Nathan, this ostentatious display of top connections - or "guanxi" - is more important because "rule of law is less available." "Westerners will also display photos of themselves with the president," Nathan noted. "But to the customer or client, this conveys more of a message of status than power because the person with the photo is more likely to go to court than through the back door if he gets involved in a conflict. Of course, it is not a black or white distinction. Even in the West there are plenty of fixed deals. But in China, the person is likely to get more out of the personal connections route than through the courts, in the present state of the courts." So why did Johnny Chung, a Taiwanese-American entrepreneur with a struggling business in Torrance, Calif., donate $366,000 to the Democratic National Committee and use his political largess as entree to escort Beijing beer executives and other businessmen from China on personalized White House tours? Commented a Hong Kong-based American business consultant and former diplomat who was present at one of the 49 visits Chung made to the White House: "He (Chung) was in an entrepreneurial spirit, using the aura or afterglow of his official connections to create confidence in himself or his ability to promote the visitors' business." Sun Jianfeng - chief executive for Taihe Enterprise Group, a conglomerate involved in real estate, hotels, trading and entertainment businesses in China's far Western Xinjiang region - was the member of one of Chung's White House delegations in late 1994. Like most Chinese businessmen who participated in the White House visits, Sun was tight-lipped when contacted by telephone. He said that, like others in the delegation including Chen Shizeng, a former beer company president who took a six-pack of his product with him to the White House, he was in the United States to "investigate" the American market. Sun declined to say if he paid Chung money for the honor of meeting Clinton at the White House. But he did say he "was very moved that (Chung) did not forget that he was of Chinese descent" and was making an effort to attract foreign technology and investment to China. CLINTON employed CULTURAL relativism in defense of his friends - John HUANG, the fund-raiser who was most successful at steering Asian-American money to the Democratic Party, and Yah Lin "Charlie" TRIE, the Little Rock, Ark., restaurant owner who diverted thousands of dollars from a Taiwan-based Buddhist cult to CLINTON'S legal defense fund. Much of the money raised by the two men was part of the $2.1 million that the Democratic National Committee ($1.5 million) and the president's legal defense fund ($600,000) have been forced to return to donors because of illegalities or irregularities. "The reason that I have not been more critical of Charlie TRIE or John HUANG," Clinton said in an interview with the Los Angeles Times Friday, "is that it is not clear to me . . . to what extent they knew exactly what they were doing and whether it was wrong." Word Count: 739 Los Angeles Times Copyright 1996 / The Times Mirror Company Wednesday, December 25, 1996 National Desk NEWS ANALYSIS Contribution Dispute That Is Front Page News in U.S. Doesn't Faze Asians Overseas Politics: For many, reports of illegal donations seem like business as usual. CLINTON employed such CULTURAL relativism in defense of his friends. RONE TEMPEST TIMES STAFF WRITER BEIJING -- "One thing we know," President Clinton said, explaining why he had not been more critical of two Taiwanese American friends at the center of the ongoing illegal campaign contributions scandal, "is that the culture out of which they come doesn't draw the same bright lines between politics, government and business that we do." Clinton's comments in an Oval Office interview on Friday reflected a view common here and in other Asian capitals. Much as President Nixon's ordeal with Watergate caused more puzzlement here than outrage, the reaction to the Asian campaign money issue in Asia itself has been mostly a big "So what?" Paying large sums to pose for photographs with senior leaders? Buddhist cult masters urging the faithful to direct their worldly goods to a needy candidate? Using money to lobby for a good seat at a political banquet? In most of Asia, this is just business--and politics--as usual. Even here in the People's Republic, where power still flows from the Communist Party Central Committee, the viability of a business venture is often judged by the status of the most senior official whose photograph or whose personal calligraphy adorns the lobby. So the spectacle of ambitious businessmen paying money to pose with the leader of the world's most powerful country comes as little shock. In the Communist mainland, commented Columbia University China scholar Andrew Nathan, this ostentatious display of top connections--or guanxi--is more important because "rule of law is less available." "Westerners will also display photos of themselves with the president," Nathan noted. "But to the customer or client, this conveys more of a message of status than power because the person with the photo is more likely to go to court than through the back door if he gets involved in a conflict. Of course, it is not a black or white distinction. Even in the West there are plenty of fixed deals. But in China, the person is likely to get more out of the personal connections route than through the courts, in the present state of the courts." So why did Johnny Chung, a Taiwanese American entrepreneur with a struggling business in Torrance, donate $366,000 to the Democratic National Committee and use his political largess as entree to escort Beijing beer executives and other businessmen from China on personalized White House tours? Commented a Hong Kong-based American business consultant and former diplomat who was present at one of the 49 visits Chung made to the White House: "He [Chung] was in an entrepreneurial spirit, using the aura or afterglow of his official connections to create confidence in himself or his ability to promote the visitors' business." Sun Jianfeng--chief executive for Taihe Enterprise Group, a conglomerate involved in real estate, hotels, trading and entertainment businesses in China's far Western Xinjiang region--was the member of one of Chung's White House delegations in late 1994. Like most Chinese businessmen who participated in the White House visits, Sun was tight-lipped when contacted by telephone. He said that, like others in the delegation including Chen Shizeng, a former beer company president who took a six-pack of his product with him to the White House, he was in the United States to "investigate" the American market. Sun declined to say if he paid Chung money for the honor of meeting Clinton at the White House. But he did say he "was very moved that [Chung] did not forget that he was of Chinese descent" and was making an effort to attract foreign technology and investment to China. CLINTON employed CULTURAL relativism in defense of his friends--John HUANG, the fund-raiser who was most successful at steering Asian American money to the Democratic Party, and Yah Lin "Charlie" TRIE, the Little Rock, Ark., restaurant owner who diverted thousands of dollars from a Taiwan-based Buddhist cult to CLINTON'S legal defense fund. Much of the money raised by the two men was part of the $2.1 million that the Democratic National Committee ($1.5 million) and the president's legal defense fund ($600,000) have been forced to return to donors because of illegalities or irregularities. "The reason that I have not been more critical of Charlie TRIE or John HUANG," Clinton said in an interview with The Times on Friday, "is that it is not clear to me . . . to what extent they knew exactly what they were doing and whether it was wrong." For the president, the CULTURAL relativism defense lets him avoid lashing out at devoted friends such as TRIE, whose Chinese food buffet table was a favorite luncheon stop during CLINTON'S Arkansas days. But the argument can also be used to explain why the front-page scandal in the United States seldom makes even the inside pages of publications in Asia. Asians involved in the funding scandal, commented USC political science professor Stanley Rosen, a frequent visitor to China, "are for the most part behaving according to standard procedure in Asia." "A Taiwanese teapot has the clear potential to become an American tempest," said Richard Baum, a UCLA China specialist now living in Hong Kong. "It is hardly a secret, even in the Puritanical U.S.A., that money talks. The key difference is that, in Asia, the language of monetized political exchanges--the buying and selling of influence--is understood and accepted as normal." In Asia, press coverage of the campaign contribution scandal has been limited. In mainland China, official newspapers have published extensive coverage of the Whitewater case but not a word about the campaign finance scandal, even when the allegations touched Chinese businessmen or officials. In Asian countries where the political contribution scandal has been covered, such as in Indonesia, it has not necessarily been to the detriment of those involved. Such was the case with another Clinton friend from the Little Rock days: James T. Riady, banker son of Indonesian billionaire Mochtar Riady, patriarch of the Lippo Group of businesses. Several newspapers in Indonesia--which is not known for its probing domestic press--published accounts of Riady's key role in raising money for the Democrats. But the result was the opposite of similar revelations in America. "Riady has increased popularity in Indonesia as a result of all the negative publicity from [New York Times columnist] William Safire and others," commented Rosen. Noting scandals in Asian capitals involving tens of millions of dollars, he added: "Clinton has been very adept at combining the American politician's need for funds--which still pales compared to the need for funds by Japanese, Taiwanese or, until recently, Korean politicians--with the Asian entrepreneur's willingness to 'purchase' access." *END*END*END*END*END*END*END*END*END*END*END*END*END*END*END*END*END*END*END* [LINK] [LINK] [LINK] EDITORIAL SEES POLITICIZATION OF ASIAN AMERICANS _________________________________________________________________ Los Angeles, Nov. 25 (CNA) The Los Angeles Times said in an editorial Monday that Asian Americans will make an increasing mark on politics in California and Washington. "Lost in the controversy over foreign political contributions and former Democratic National Committee fundraiser John Huang was the fact that 1996 was a defining moment in the politicization of Asian Americans. There was a surge in citizenship, voter registration and the turnout at the polls, and the result was a higher profile in elective offices. Among the notable firsts was the election of Gary Locke, son of an immigrant Chinese grocer, as Washington's governor, the first Asian American chosen to head a mainland statehouse," The Times said. It pointed out that there is talk of an Asian American being named to President Clinton's new Cabinet, and certainly there are well-qualified and experienced prospects. The National Asian Pacific American Political Almanac lists 2,000 Asian Americans in major elected or appointive offices in 31 states. More than 300 of them are elected officials, and they include two US senators, 83 city council members, 26 mayors and 41 state representatives. Among the newly elected officeholders is Mike Honda of Santa Clara, who become the second Asian American in the California State Assembly. The daily said "election of the Asian Americans has depended largely on coalition building rather than ethnic politics because Asian Americans, though the fastest-growing minority in the United States, account for only three percent of the population. In California, where Asian Americans account for 11 percent, their financial, educational and professional achievements have not transferred to electoral politics, especially in Southern California, at a rate to reflect their numbers. The record stems in part from historical immigration laws in 1965. Now two-thirds of Asian Americans are foreign-born." "This election year, issues such as immigration, welfare and affirmative action galvanized grassroots naturalization, voter registration and educational campaigns. Exit polls suggest that 33 percent of Asian Americans casting ballots in Southern California were first-time voters. Statewide, 53 percent of all Asian American voters went for Bill Clinton. They voted overwhelmingly against Proposition 209, the anti-affirmative action measure, and more than half of those polled responded in Chinese, Tagalog, Japanese, Korean or Vietnamese. Whatever the language, they will clearly make an increasing mark on politics in California and Washington." (By Philippe Liu) _________________________________________________________________ [LINK] [LINK] [LINK]