The Economics Section - Page A4
Special In-Depth Feature Story
October 21, 1996WHY BILL CLINTON SOLD OUT THE AMERICAN PEOPLE!
by Howard Hobbs, Ph.D., Economics Editor
WASHINGTON DESK - In an odd turn, the Clinton administration has decided to relax its trade policy with Indonesia and sell them nine F-16 jet fighters. Indonesia's human rights violations are extensive and have outraged the American people and the first lady. However, here are recent allegations that wealthy Indonesians have sought to buy political influence with the Clinton White House. Apparently there has been a dramatic turn-around in Clinton's Indonesian trade policy.
Senior administration officials said that the sale, the outlines of which were agreed to earlier this year, is likely to be completed early in 1997, after the new Congress convenes. The price was not disclosed.
The decision comes over the objections of human rights advocates and some U.S. lawmakers - who said that the White House should cancel the sale to protest Indonesia's continued subjugation of East Timor, where Indonesian troops reportedly have committed massacres.
House Speaker Newt Gingrich (R-Ga.) said Thursday that the deal should be suspended pending an investigation of donations by members of a rich Indonesian banking family to Democratic campaign coffers. Gingrich said Congress would conduct hearings on the contributions next spring.
Indonesia's human rights violations have been thrust into the spotlight again in recent days following the decision by the Nobel Prize Committee to award the 1996 Nobel Peace Prize to Carlos Filipe Ximenes Belo, East Timor's Catholic bishop, and a journalist there.
East Timor, a small island, was invaded and annexed to Indonesia in the mid-1970s, and Indonesian troops have slaughtered inhabitants in an effort to secure full control. President Clinton has called the situation 'unconscionable.'
Despite the protests, however, senior administration officials have insisted that Washington still believes the sale of the jet fighters would be in U.S. interests because it would help bolster stability in East Asia.
The administration also is counting on the deal to help end a long-standing U.S. dispute with Pakistan, which bought the same nine aircraft and 19 others in 1989 but was barred by U.S. law from taking delivery after the Pakistani government was found to be building nuclear weapons. The United States was paid for the planes by Pakistan but never delivered them.
Officials said that Pakistan, which under U.S. law would have been unable to get the money back if the planes had not been sold to another country, probably will use the proceeds from the Indonesian sale to buy reconditioned Mirage fighters from France.
State Department spokesman Phyllis Young said that the sale to Indonesia would not conflict with U.S. policies on human rights because it is unlikely that Indonesia would be able to use the aircraft to 'suppress legitimate dissent,' as it might with small arms.
The United States has objected formally to a variety of human rights violations by the Indonesian government over the past few years, from using the military to settle labor disputes to the torturing and beating of civilians to discourage separatist activities.
Rep. Benjamin A. Gilman (R-N.Y.), chairman of the House International Relations Committee, told State Department officials recently that if the Indonesian deal was proposed officially he would introduce legislation to block it.
Over the last four years, the Clinton administration has taken specific fund-raising improprieties. Bob Dole is charging that president Clinton's silence on the challenges amounts to an admission the he has been soliciting illegal contributions.
Dole also argued that the donations, which came from foreign businesses and individuals, are large enough to ‘substantially influence’ the American election in November.
Previous allegations of corruption and bribery in the Clinton White House have not been explicit and voters did not find them important, then.
Dole said on Sunday, 'The stone wall is beginning to tumble. The Democrats admitted yesterday, they better reimburse that Buddhist temple,' he said. Dole was referring to a fund-raiser in April at the non-profit Korean Buddhist temple in Hacienda Heights, Calif., where the vice-president Al Gore was present and where the DNC raised $140,000 through illegal contributions of Buddhists who were acting as fronts for the South Korean source of the funds.
Irregularities have been discovered this year. For example, there were the contributions of The John K. Lee of South Korea who was not a legal resident at the time the money changed hands.
This was a DNC scheme through Mr. Huang to obtain political contributions from a foreign national to finance Bill Clinton's campaign for the presidency. However, president Clinton and the DNC were caught accepting money from a foreign agent and had to return those funds.
An attorney representing a Hacienda Heights Buddhist temple swept up in a spreading controversy over Democratic presidential campaign finances confirmed Thursday that a member who gave $5,000 at a fund-raiser featuring Vice President Al Gore says she was given cash by another person to make the donation to the Clinton-Gore campaign.
The DNC, which organized the April 29 event at the huge Hsi Lai Temple, said it was reviewing the potentially illegal contribution by Man Ya Shih, a leader of the temple's branch in Richardson, Texas.
Describing the practice of disguising political contributions to the Clinton-Gore campaign, a temple official said Thursday that the practice of disguising the source of a gift is not unusual.
The DNC earlier had acknowledged that holding the fund-raiser, which brought in $140,000, at a tax-exempt religious institution was a mistake.
Committee officials, however, insisted all of the contributions were legal, even though several people who gave gifts in the $2,000 to $5,000 range listed the church building as their address.
A story in the Wall Street Journal played on Thursday. It told of the Buddhist Shih, who was acting as the conduit for a $5,000 'donation'. The story depicted Shih as only a visitor at the Hacienda Heights temple on April 29 when a fellow Buddhist devotee she knew to be active in Democratic politics gave her $5,000 in small bills and asked her to write a check to the DNC, the Wall Street Journal reported Thursday. Shih said a woman she could not identify told her someone else donated money but wished to remain anonymous, the paper said.
Federal laws prohibit the acceptance by the president of any 'gifts' of 'contributions' from foreign agents of any sort for any reason.
Concealing the true source of contributions is a form of conspiracy to commit a crime. Violations can lead to fines, criminal charges, and impeachment proceedings when the Office of th President is implicated or tainted by the actions of th president or vice-president in carrying out the duties of their Office. For example, if a South Korean, Indonesian or other foreign entity were to directly or indirectly benefit by any public policy or action of the United States following the illegal transaction, there would be grounds for impeachment.
'Obviously, we found it disturbing, and we're looking into it.' said DNC spokeswoman Amy Weiss Tobe. She said any improper donations would be returned. 'We are not denying that some one gave her $5,000' in cash, said the temple's attorney Peter Kelly, who spoke with Shih late Thursday. "I don't have the facts to confirm it,' Kelly said, adding that Shih is 'apparently . . . a woman of good faith and integrity.'
Kelly also said that Maria L. Hsia, a veteran Democratic fund-raiser and temple consultant who organized the April 29 event, flatly denied that she gave Shih cash or knew of any illicit donations. He said he had no indication that any other donations collected at the temple were improper.
Ho said. Al Gore also met with the temple's master, Shing Yun, at the Clinton White House shortly before the fund-raiser in a special session reportedly arranged by the DNC's top Asian American fund-raiser, John Huang.The meeting appears to tie-in the president, and the vice president in the selling of access for influence peddling by foreign agents.
Huang, a former Indonesian Lippo Bank executive, has brought in millions of dollars for the Clinton reelection bid. Recently, he has been linked to a series of questionable contributions that have focused attention on Democratic fund-raising in the Asian American community and long-standing ties between Clinton and the Indonesian owners of the bank.
Shing Yun, who was not in the United States and could not be interviewed by the Republicans this week donated $5,000 at the fund-raiser, according to DNC records.
Another glaring example of illegal political contributions being sought after and accepted by the DNC is the story of Lalit H. Gadhia. Before a federal judge sentenced him to prison, he had been very helpful to the Clinton Administration and the DNC.
Gadhia, an Indian American lawyer, contributed $46,000 to a congressmen considered sympathetic to India on such things as trade and military assistance.
So, what's new? Giving contributions in hopes of favorable consideration is standard operating procedure in American politics. The problem was that this money actually came from an official at the Indian Embassy in Washington and that Gadhia was only a 'conduit' for getting an illegal political bribe from a foreign nation into the hands od the an American congressman.That made the 'contributions' bribes. Bribes of public officials are illegal.
'The message must go out that these kinds of shenanigans simply cannot be tolerated,' Assistant U.S. Atty. Joseph L. Evans declared in demanding jail time for Gadhia.
Never before have so many foreign governments, foreign corporations and individuals felt they could gain political access through bribery of the White House officials. From federal policies on trade, labor, finance and the environment foreign interests act as though they think the Clintons presidency and the White House are for sale.
Consequently, there are huge incentives to try to influence the decisions of president Clinton in any way possible, including the time-honored practice of making political bribes.
'The problem is that noncitizens should have no influence on American election outcomes, just as Americans should not have influence on foreign election outcomes,' said University of Virginia political scientist Larry J. Sabato, a specialist in U.S. electoral politics. 'But in this case, you've got hundreds of thousands, probably millions of dollars being funneled in from foreign interests. And that's outrageous, and people are right to be upset about it.'
Ernest H. Preeg, a specialist in international business at the Center for Strategic and International Studies in Washington, said foreign companies and governments are 'very actively engaged' in trying to shape decisions in the executive branch and Congress.
The Democratic Party scrambled Friday to contain a spreading scandal. For starters, it reimbursed the California Buddhist temple $15,000 for 'hosting' a campaign fund-raising event and asking federal election officials for a swift investigation of controversial donations to the party.
The DNC also announced that John Huang, was being removed from his fund-raising duties and asked to respond to numerous questions that have arisen about major contributions that he helped obtain from the Asian American community.
At the same time, the Commerce Department formerly headed by Clinton fund raiser, Ron Brown, now headed by Mickey Cantor, where Huang worked before joining the DNC, acknowledged that it is trying to figure out what to do about possible violations of federal laws.
Huang, who had responded to media questions previously only through a DNC spokeswoman, announced that he would no longer answer any press questions.
The moves came as the Clinton White House urged DNC officials to shut down illegal operations before the American public begins to negatively react. The illegal contributions from foreign agents have become a daily subject for White House cabinet briefings.
White House Press Secretary Mike McCurry said that Clinton and Chief of Staff Leon E. Panetta told Sen. Christopher J. Dodd of Connecticut, the Democrats' national chairman, Friday: 'If there's a problem, let's 'fix' it.'
In a letter delivered Friday, DNC General Counsel Joseph E. Sandler asked the FEC to open an inquiry into a series of contributions made in the last two years to the Clinton-Gore campaign that have been the focus of news accounts in recent weeks.
The DNC did not specify which matters should be reviewed but said it was referring to those raised in news accounts and columns it provided to the commission.
These included stories on $140,000 raised at the Hsi Lai Buddhist Temple in Hacienda Heights, Calif., in April and large contributions from individuals and companies associated with the Lippo Group, an Indonesian conglomerate with ties to Clinton; $450,000 in donations from an Indonesian man and wife with ties to Lippo who gave much of the money after leaving the United States and two illegal contributions totaling $260,000 from a South Korean company and its chairman that subsequently were returned.
In addition to seeking the outside review of these and other donations, DNC spokeswoman Amy Weiss Tobe said that the party will 'continue to review any contribution where there's credible evidence of illegality.'
Among the most mysterious and potentially damaging matters is the April 29th fund-raiser at the Hsi Lai temple, where questions have surfaced about whether those listed by the DNC as donors gave their own money or were being used by the DNC as 'conduits' for transmitting illegal bribes to the Clinton-Gore campaign.
Huang was among the organizers of the event, which was attended by Vice President Al Gore. Gore's aides tried to distance Gore from the illegal transactions by saying Gore was there but that he was unaware that he was in a religious institution and that he knew nothing about the way the illegal money was being collected at the temple party.
Campaigning in Baton Rouge, La., Gore pleaded ignorance to the fact that he was heading-up the collection of illegal political contribution inside a tax-exempt religious sanctuary when he said in a radio interview about the continuing furor over the temple fund-raiser. 'The DNC set up the event,' he said. 'If there was anything untoward about the event, the DNC will find out and make it right.'
The DNC, which acknowledged earlier this week that it was improper to conduct a political fund-raiser at a religious institution, said it had sent a $15,000 check to the temple to cover the costs associated with putting on the church event, which is not considered an in-kind contribution under federal election law., because churches are tax-exempt organizations which are not permitted to be involved in partisan campaign fund raising events.
'We don't accept gifts or in-kind contributions from religious institutions,' Tobe said.
The DNC says now, that if a woman at the church fund raiser was handed $5,000 in cash by someone else who asked her to pass the money on to the party by writing a check, it would be illegal and possibly criminal.
Even as party officials sought to resolve those issues, new questions arose in Los Angeles about the event.
Though the DNC initially insisted that all of the donors had been confirmed as legal residents eligible to make contributions, an attorney for the temple said that the status of one donor listed at the temple address is uncertain.
Now, they say, they're not sure. Reporters learned that there are conflicting accounts about who was responsible for lining up donors and verifying that their contributions were proper. One Washington source familiar with the event said that Maria L. Hsia, a prominent Democratic fund-raiser and Buddhist church spokesperson who helped organize the event, was responsible for checking the donors.
But attorney, Kelly, who attended the event and who also is representing Hsia, said that she had led him to understand that the fund-raiser 'was basically a Huang show.'
Even more shocking was that Hsia has been unable to recognize several donors' names who listed the Buddhist church as their residence address on reports filed with the FEC.
The mystery deepens. The required information on employers and occupations is missing from FEC reports on many of the donors at the April 29th event.
Questions also were raised about a $5,000 contribution made the same day by Jou Shen, who gave his address as that of a Buddhist church in Maywood, Calif. But Penny Wong, an administrative volunteer familiar with that church's membership rolls, said there was no member or monk by that name associated with the facility. And members 'are not supposed to use' the temple address as their residence she said.
At the Clinton Commerce Department, the general counsel is trying to figure-out how Huang also got caught violating a law that generally prohibits federal employees from soliciting or accepting political contributions.
Huang said earlier this week that when he left government service at Commerce he had failed to fill out all of the paperwork necessary to complete his resignation. As a result, his last day at Commerce was officially Jan. 17th.
Huang's comments sparked ne inquiries on the competence of Mickey Kantor to run the Commerce Department. On Friday, however, Tobe said of Huang: ,He's no longer answering questions.
The other issues under most intense scrutiny include the generous donations from Arief and Soraya Wiriadinata, who have given as much as $320,000 to the DNC since returning to their native Indonesia about nine months ago.
The couple has a green card granting them legal residency status - which has been the sole test for contributing under the law - but by leaving the United States that forfeited their right to claim continuous residence necessary to use the green card.
Several political analysts said that, despite the intense media attention devoted to Huang's fund-raising operation, the flap appears to be doing little damage to Clinton's candidacy.
Foreign agents paying money to the Clinton White House for favors has been at the center of an expanding controversy that has spilled into the U.S. presidential race at the last moments before the November 5, 1996 election.
Clearly, president Clinton knew that it would come up. Several almost incredible elements are feeding the fires of rumor. in the hyper-charged atmosphere of the nearing presidential election.
They include president Clinton's personal and financial ties to Indonesian business people. Soraya Wiriadinata's father was a partner of one of Indonesia's wealthiest men, Mochtar Riady. Riady's banking, real estate and insurance interests have stretched from Jakarta to Little Rock, Ark., and his family has enjoyed an unusually close relationship to Clinton.
Also, there is the fact that the DNC fund-raiser involved, John Huang, is the same one who brought in an illegal $250,000 contribution from a company in South Korea. When the foreign source of the donation was identified, the DNC returned the money.
And there is the hiring of Clinton confidant Webster L. Hubbell by one of Riady's enterprises after Hubbell resigned as the No. 3 official in the Justice Department and before he went to jail for defrauding his Arkansas law firm.
Seeking to raise the political stakes, House Speaker Newt Gingrich (R-Ga.) called Sunday for congressional inquiries and maintained that a special counsel would have to be appointed to investigate the affair.
'This is a potential abuse of the American system on behalf of an Indonesia billionaire in a way that we have never seen in American history,' Gingrich said on CBS-TV's Face the Nation. 'It's almost unthinkable!'
When vice president Al Gore was asked to respond to the charges on NBC-TV's 'Meet the Press,' he begged off with the standard Clinton White House language we have heard endlessly over the past four years 'There have been absolutely no violations of any law or regulations ... There is nothing that has been done that's wrong.'
Isn't influence buying and bribery of public officials wrong?
The Riady family members and the U.S. subsidiaries and executives of the family's company, the Lippo Group, which includes Los Angeles-based Lippo Bank, have contributed lavishly to the Clinton re-election campaign. It has tried successfully to use its connections to the Clinton White House to influence American policies toward Asia to benefit its financial interests.
Since Clinton embarked on his initial presidential bid in 1991, members of the Riady family and Lippo Group's American subsidiaries and executives have contributed more than $475,000 to the Democratic Party and its candidates, according to a study of Federal Election Commission records done for The Times by the Campaign Study Group of Springfield, Va.
Mochtar Riady is barred by law from giving to U.S. campaigns because he is not a U.S. resident. But his son, James Riady, a longtime friend of Clinton, lived in the United States legally in 1991 and 1992, when he and his family gave $100,525 to the Democrats. James Riady has since returned to Indonesia.
At the bottom of the cozy relationship between the Clinton administration, the Democratic Party, the Wiriadinatas and the Riadys is Huang, the former president of Lippo Group U.S.A.. Clinton appointed Huang to the serve as the 'Deputy Assistant Director for International Economic Policy Commerce. He then joined the DNC, where he is vice chairman of the national finance committee. Huang specializes in raising money from Asian n donors - and he handled the Wiriadinatas contributions and those of the Buddhist monks in the most recent gaffe.
During the time Bill Clinton served as governor in Arkansas, Indonesian interests took hold of Clinton's Arkansas finances and bank-rolled his run for the presidency in 1992.
The Lippo Bank, formerly known as the Bank of Trade, was acquired by the Riady family of Indonesia in 1984. The Los Angeles-based bank also has branches in San Jose, Westminster and San Francisco. In the early 1990s, Lippo Bank was primarily engaged in assisting the shipment of goods from Indonesia to the United States.
The bank is a unit of Lippo Group, one of the top five Indonesian conglomerates with interests in financial services, urban development, manufacturing and retail. It has estimated assets of $5 billion to $6 billion and businesses located in Indonesia, Hong Kong, China, Singapore, Australia and North America. The conglomerate employs more than 30,000 people.
During the second year of the Clinton administration, 1994, his old friends, the Lippo Bank, came under investigation by the Federal Deposit Insurance Corp. The FDIC completed a money-laundering examination by gaining the bank's agreement to, in the future, keep precise track of the origin and destination of cash deposits at the bank.
Numerous players associated with the Lippo Group have been major donors to the Democrats and Democratic candidates since Jan. 1, 1991, according to the analysis for The Los Angeles Times.
In March 1993, two months after the new Clinton administration took office, the first lady, Hillary Rodham Clinton flew by government plane to a Little Rock banquet. There she received a March of Dimes award as Arkansas Citizen of the Year. Coincidentally, Mochtar Riady had also flown in from Indonesia for the affair. Which he and the first lady were in Little Rock that day, he gave the March of Dimes charity $50,000 in the Clintons' honor.
In 1993, a top priority of Suharto was to get a face-to-face meeting with Clinton and other world leaders.
That year, the G-7 summit meeting of the world's leading industrialized nations was to take place in Tokyo. Suharto was arguing that he should be permitted to attend the summit as a representative of the countries that make up the Non-Aligned Movement.
In May 1993, the Indonesian president dispatched an Indonesian political leader, Research and Technology Minister B.J. Habibie, to Washington to persuade the Clinton administration to grant the meeting with Suharto. James Riady came to Washington to help Habibie and arrange meetings for him, U.S. officials said.
On May 6, 1993, with Habibie in attendance, president Clinton showed up at a meeting of the Export-Import Bank. In the midst of a speech about global trade he began to talk about Indonesia. There was no apparent connection with Indonesia.
'I know we have someone here from Indonesia,' president Clinton said, referring to the Indonesian minister. ' . . . We have enormous opportunities there.'
In Tokyo, 'I'm going to meet with the president of Indonesia to send a signal to the . . . emerging nations of the world that the United States wants to be their partner in new trade relations.'
The foreign-policy staff members who had drafted Clinton's speech, were stunned. 'We never figured out how that [the promise to meet Suharto] got in there,' said one of these officials, who declined to be identified.
Clinton did meet with Suharto in Tokyo, one of the main issues Suharto raised was his irritation with American efforts to curb his country's trade privileges, according to U.S. officials.
In 1992, the United States had launched an intensive, yearlong, formal review of whether Indonesia should lose trade benefits known as the generalized system of preferences (GSP).
Under the GSP program, developing countries are permitted to export some goods to the United States without paying any duties. But the U.S. law includes a provision that the privileges can be cut off if a nation's treatment of its workers fails to live up to 'international labor standards.'
On June 25, 1993, Mickey Kantor, then U.S. trade representative, finished the review, which included several other countries besides Indonesia. He did not move to cut off Indonesia's GSP privileges. But Kantor did take a relatively tough action, announcing that the administration was going to continue its review of Indonesia, rather than ending the investigation.
U.S. labor officials considered Indonesia an especially egregious case because it paid workers extremely low wages, discouraged the development of independent unions and sometimes relied on the help of the military to keep labor from striking.
At the time, Indonesia's duty-free exports to the United States were valued at $643 million, according to the U.S. trade representative's office. They included electronics, toys and wood products. Without the GSP benefits, these goods would have been subject to average duties of 5.5%.
Pharis Harvey, executive director of the International Labor Rights Fund, noted that most of Indonesia's exports to the U.S. do not get GSP benefits and thus would have not been affected. However, Harvey said, 'what the Indonesian government seemed to fear more than anything else was [that] the loss of GSP status would have a dampening effect on foreign investors.'
As a result of Kantor's 1993 action, an interagency team of U.S. officials launched a more intensive review of Indonesian labor practices. They conducted meetings, both in Washington and in Indonesia. James Riady was present on at least two occasions, along with representatives of multinational companies and U.S. business representatives in Indonesia who were worried about the impact of the labor review on their firms' operations.
Joe Dimond, a U.S. trade official working on the case, recalled in an interview specifically meeting with Riady and Lippo officials.
'The U.S. Embassy [in Jakarta] is selecting for us people who they think are influential and important,' Dimond said. ' . . . [Riady] is a very prominent person. If he comes to one of these meetings, you're going to spend a certain amount of time with him. . . . He does have access to ministers and the [Indonesian] President's chief of staff." Dimond said he could not recall Riady advocating a specific position on labor issues.
So, on Feb. 16, 1994, Kantor reversed course and the review of Indonesian labor policies was suddenly ended. While saying that "more needs to be done," Kantor announced that Indonesia had recently made enough progress
Meanwhile, during fund-raising pleas in New Jersey, president Clinton was heckled by a woman who screamed that the Clinton White House blockade of Cuba and the economic sanctions against Iraq had killed one million children.
The president scowled at the woman and interrupted her with and angry outburst of 'Wait jus a minute. Wait. Wait. Hold it, Hold it. Hold it. Wait a minute. That's one of the biggest lies I have ever heard!' Clinton added, angrily, 'Saddam Hussein is oppressing his people we're not. Secondly, Fidel Castro had Americans murdered illegally and that was wrong, too, and I'm proud that we have a blockade against people who kill innocent Americans.'
The woman attempted to answer but as she did so, president Clinton said, 'This is a private meeting!' and with that Clinton's security detail hustled the woman out of the meeting.
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